K.Raveendrnathan Nair, Kollam V. DCIT, Kollam

ITA 524/COCH/2007

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0990 (ITAT-COCHIN)
• Duration Of Justice: 5 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 18-12-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 07-06-2007
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Keywords: Reopening of assessment; Retrospective amendment; Reason to believe
• Section: 80HHC; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO.524 /COCH/2007 ASSESSMENT YEAR : 1999-2000 SHRI K. RAVINDRANATHAN NAIR, PROP. VIJAYALAXMI CASHEW COMPANY, KOCHUPILAMMOODU, KOLLAM. [PAN:AEJPP 9867M] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, KOLLAM. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY NONE REVENUE BY SMT. S. VIJAYAPRABHA, JR. DR DATE OF HEARING 18/12/2012 DATE OF PRONOUNCEMENT 15/02/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20-03-2007 PASSED BY THE LD. CIT(A)-I, KOCHI AND IT RELATES TO THE AS SESSMENT YEAR 1999-2000. NONE APPEARED ON BEHALF OF THE ASSESSEE AND HENCE THE AP PEAL WAS HEARD EX-PARTE, QUA THE ASSESSEE. 2. THE ASSESSEE IS ASSAILING THE DECISION OF LD CIT(A) ON THE FOLLOWING TWO ISSUES:- (A) VALIDITY OF RE-OPENING OF ASSESSMENT U/S 147 OF THE ACT. (B) DENIAL OF DEDUCTION U/S 80HHC OF THE ACT ON I MPORT ENTITLEMENTS. 3. THE FACTS RELATING TO THE ABOVE SAID TWO ISS UES ARE STATED IN BRIEF. THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80HHC OF THE ACT ON THE I MPORT ENTITLEMENT (DEPB) RECEIPTS IN ITS ORIGINAL RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION. THE SAID RETURN OF I.T.A. NO.524/COCH/2007 2 INCOME WAS PROCESSED U/S 143(1)(A) OF THE ACT. THE TAXATION LAWS (AMENDMENT) ACT, 2005 INSERTED 3 RD AND 4 TH PROVISO TO SUB-SECTION 3 OF SEC. 80HHC OF THE ACT WITH RETROSPECTIVE EFFECT FROM 01-04-1998, AS PER WHICH THE ASSESSEES HAVING EXPORT TURNOVER EXCEEDING RS.10.00 CRORES HAVE TO SATISFY THE CONDITIONS STATED IN THE ABOVE SAID PROVISOS IN ORDER TO ELIGIBLE FOR DEDUCTION U/ S 80HHC OF THE ACT. THE AO NOTICED THAT THE ASSESSEE COULD NOT SATISFY THE CONDITIONS SPECIFIED IN THE PROVISO 3 AND 4, REFERRED ABOVE AND HENCE HE REOPENED THE ASSESSMENT OF THE YEAR UNDER CONSIDERATION IN ORDER TO WITHDRAW DEDUCTION ALLOWED U/S 80HHC ON THE DEPB RECEIPTS. IN THE REOPENED ASSESSMENT, THE AO DISALLOWED THE CLAIM OF DEDUCTION U/S 80HHC ON DEPB RECEIPTS. THE LD CIT(A) ALSO CONFIRMED THE ORDER P ASSED BY THE AO. THE LD CIT(A) ALSO UPHELD THE VALIDITY OF REOPENING OF ASSESSMENT. AGG RIEVED BY THE ORDER OF LD CIT(A), THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 4. WITH REGARD TO THE VALIDITY OF REOPENING OF ASSESSMENT, WE NOTICE THAT THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSE D U/S 143(1)(A) OF THE ACT. IN VIEW OF THE AMENDMENT BROUGHT IN BY THE TAXATION LAWS (A MENDMENT) ACT, 2005, THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT THE IN COME HAS ESCAPED THE ASSESSMENT. IN THIS FACTUAL SITUATION, WE DO NOT FIND ANY INFIR MITY IN THE DECISION OF LD CIT(A) IN UPHOLDING THE VALIDITY OF REOPENING. THE VIEW TAKE N BY THE LD CIT(A) GETS SUPPORT FROM THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F ASST. CIT VS. RAJESH JHAVERI STOCK BROKERS P LTD (291 ITR 500)(SC). 5. WITH REGARD TO THE ISSUE RELATING TO DEDUCTIO N U/S 80HHC OF THE ACT IN RESPECT OF DEPB RECEIPTS, IT WAS SUBMITTED THAT VARIOUS ASSESSE E FILED WRIT PETITIONS BEFORE THE HONBLE HIGH COURT OF KERALA CHALLENGING THE RETROS PECTIVE AMENDMENTS REFERRED SUPRA. SINCE MANY APPEALS/WRIT PETITIONS WERE FILED BEFORE VARIOUS HIGH COURTS ON THE VERY SAME ISSUE, THE HONBLE SUPREME COURT CLUBBED ALL T HOSE APPEALS AND WRIT PETITIONS THAT WERE PENDING BEFORE VARIOUS HIGH COURTS AND POSTED THEM BEFORE THE HONBLE GUJARAT HIGH COURT FOR FINAL DISPOSAL. ACCORDINGLY, THE HO NBLE GUJARAT HIGH COURT, VIDE ITS ORDER DATED 02-07-2012, IN THE CASE OF AVANI EXPORTS AND O THERS VS. CIT (2012)(348 ITR I.T.A. NO.524/COCH/2007 3 391) HAS RENDERED ITS DECISION ON THE ABOVE SAID IS SUE. THE OPERATIVE PORTION OF THE SAID ORDER READS AS UNDER:- 27. WE, ACCORDINGLY, QUASH THE IMPUGNED AMENDMENT ONLY TO THIS EXTENT THAT THE OPERATION OF THE SAID SECTION COULD BE GIVEN E FFECT FROM THE DATE OF AMENDMENT AND NOT IN RESPECT OF EARLIER ASSESSMENT YEARS OF THE ASSESSES WHOSE EXPORT TURNOVER IS ABOVE RS. 10 CRORE. IN O THER WORDS, THE RETROSPECTIVE AMENDMENT SHOULD NOT BE DETRIMENTAL TO ANY OF THE ASSESSEES. 6. ACCORDINGLY LD D.R SUBMITTED THAT THIS APPEAL MA Y BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE IMPUGNED ISSUE I N ACCORDANCE WITH THE DECISION RENDERED BY THE HONBLE HIGH COURT OF GUJARAT, REFE RRED SUPRA. THE LD. DR FURTHER SUBMITTED THAT THE ISSUE OF TAXABILITY OF DEPB CREDI TS HAS SINCE BEEN SETTLED BY THE HONBLE APEX COURT IN THE CASE OF TOPMAN EXPORTS (34 2 ITR 49) AND ALSO IN THE CASE OF VIKAS KALRA VS. CIT (2012)(345 ITR 557) AND ACCORDI NGLY SUBMITTED THAT THE ASSESSING OFFICER MAY BE DIRECTED TO CONSIDER THE IMPUGNED IS SUE IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TOPMAN EXPO RTS AND VIKAS KALRA, REFERRED SUPRA. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE RECORD. WE FIND FORCE IN THE CONTENTIONS MADE BY LD D.R. ACCORDINGLY, WE ARE OF THE VIEW THAT THE ISSUE RELATING TO THE TAXABILITY OF DEPB BENEFITS AND THE APPLICABILIT Y OF THE 3 RD AND 4 TH PROVISO TO SEC. 80HHC(3) DURING THE YEARS UNDER CONSIDERATION NEED TO BE EXAMINED AFRESH IN THE LIGHT OF THE DECISIONS REFERRED SUPRA. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE LD. CIT(A) ON THE IMPUGNED ISSUE AND RESTORE THE SAME TO THE F ILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE ISSUE AFRESH IN THE LIGHT OF THE DECISIONS RENDERED BY HONBLE GUJARAT HIGH COURT AND HONBLE APEX COURT, REFERRED SUPRA AND DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER AFFORDING NECESSARY OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE . I.T.A. NO.524/COCH/2007 4 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 15-02-20 13. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 15TH FEBRUARY, 2013 GJ COPY TO: 1. SHRI K. RAVINDRANATHAN NAIR, PROP. VIJAYALAXMI C ASHEW COMPANY, KOCHUPILAMMOODU, KOLLAM. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, KOLLAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, KOCHI . 4.THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR ) I.T.A.T, COCHIN I.T.A. NO.524/COCH/2007 5