M/s. Cotton Base, Tiruppur V. ITO, Tiruppur

ITA 55/CHNY/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57915 (ITAT-CHENNAI)
• Duration Of Justice: 4 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-02-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 10-01-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: G STANLY
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI BEFORE SHRI N. S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 55/MDS/2008 ASSESSMENT YEAR : 2004-05 M/S. COTTON BASE, NO.1, GANDHI NAGAR 5 TH STREET, TIRUPUR-641 603. V. THE INCOME-TAX OFFICER, WARD-I(3), TIRUPUR. (PAN: AACFC4003H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G. STANLY, ADVOCATE RESPONDENT BY : SHRI SHAJI P. JACOB, ADDL. CIT DATE OF HEARING : 08-02-2012 DATE OF PRONOUNCEMENT : 10 /02/2012 O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED CIT(APPEALS)-II, COIMBATORE IN I.T. APPEAL NO. 491C /2006-07 DATED 09-10-2007 FOR THE ASSESSMENT YEAR 2004-05. 2. SHRI G. STANLEY, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI SHAJI P. JACOB, LEARNED SR. DR REPRESENTED ON BEHAL F OF THE REVENUE. AT THE I.T.A. NO.55/MDS/2008 2 TIME OF HEARING SHRI G. STANLEY, ADVOCATE PRAYED FO R AN ADJOURNMENT WITHOUT ADEQUATE CAUSE. CONSEQUENTLY, THE PRAYER WAS REJEC TED. 3. IT WAS SUBMITTED BY THE LEARNED DR THAT THE ONLY ISSUES IN THE APPEAL WERE AGAINST THE ACTION OF THE LEARNED CIT(A) IN CO NFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING 90% OF THE GROSS I NTEREST RECEIVED FROM BANKS ON DEPOSITS FOR SECURING EXPORT CREDIT FACILITIES FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 80HHC OF THE INCOME-TAX ACT , 1961 (THE ACT FOR SHORT). IT WAS THE FURTHER SUBMISSION THAT ANOTHER ISSUE WA S AGAINST THE ACTION OF THE ASSESSING OFFICER IN REDUCING THE DEDUCTION CLAIMED UNDER SECTION 80-IB FROM THE PROFIT OF THE UNDERTAKING WHILE COMPUTING DEDUCTION UNDER SECTION 80HHC OF THE ACT. IT WAS SUBMITTED THAT IN REGARD TO THE ISSUE OF DISALLOWANCE OF 90% OF THE INTEREST RECEIVED, THE ISSUE WAS SQUARELY COVERED B Y THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF DOLLAR APP ARELS, REPORTED IN 294 ITR 484 AS ALSO THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF AMBATTUR CLOTHING CO. LTD. V. CIT, REPORTED IN 326 ITR 245. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD FOLLOWED THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF DOLLAR APP ARELS, REFERRED TO SUPRA. CONSEQUENTLY, THE ORDER OF THE LEARNED CIT(A) IS LI ABLE TO BE UPHELD. 4. IN REGARD TO THE ISSUE OF THE REDUCTION OF THE D EDUCTION U/S 80-IB FOR COMPUTING THE DEDUCTION U/S 80HHC OF THE ACT, IT WA S SUBMITTED THAT THE ISSUE I.T.A. NO.55/MDS/2008 3 WAS COVERED BY THE DECISION OF THE HON'BLE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ROGINI GARMENTS REPORTED IN 294 ITR 15 (AT) . 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN RE GARD TO THE ISSUE OF THE DISALLOWANCE OF 90% OF THE INTEREST INCOME WHILE CO MPUTING THE DEDUCTION UNDER SECTION 80HHC, IT IS NOTICED THAT THE ISSUE IS COVE RED BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF DO LLAR APPARELS AS ALSO THE DECISION IN THE CASE OF AMBATTUR CLOTHING CO. LTD., REFERRED TO SUPRA. IT IS FURTHER NOTICED THAT THIS ISSUE IS ALSO IN PRINCIPLE HELD A GAINST THE ASSESSEE BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F CIT V. K. RAVINDRANATHAN NAIR, REPORTED IN 295 ITR 228. IN THE CIRCUMSTANCE S, RESPECTFULLY FOLLOWING THE DECISIONS OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF DOLLAR APPARELS AND IN THE CASE OF AMBATTUR CLOTHING CO. LTD. AS AL SO THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF K. RAVINDR ANATHAN NAIR, REFERRED TO SUPRA, THE FINDING OF THE LEARNED CIT(A) ON THIS IS SUE STANDS CONFIRMED. 6. IN REGARD TO THE ISSUE OF THE ALLOWABILITY OF TH E REDUCTION TO THE EXTENT OF THE DEDUCTION CLAIMED U/S. 80-IB FROM THE PROFITS O F THE UNDERTAKING WHILE COMPUTING THE DEDUCTION UNDER SECTION 80HHC OF THE ACT, IT IS NOTICED THAT THIS ISSUE IS COVERED BY THE DECISION OF THE HON'BLE JUR ISDICTIONAL HIGH COURT IN THE CASE OF MRF LIMITED IN TAX CASE (APPEALS) NO. 1020 OF 2009 DATED 27-10-2009. IN THE CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE DE CISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MRF LIMITE D, REFERRED TO SUPRA, THIS ISSUE I.T.A. NO.55/MDS/2008 4 IS HELD IN FAVOUR OF THE ASSESSEE AND THE ASSESSING OFFICER IS DIRECTED TO COMPUTE THE DEDUCTION UNDER SECTION 80HHC WITHOUT REDUCING THE DEDUCTION CLAIMED UNDER SECTION 80-IB OF THE ACT. IN THE CIRCUMSTANC ES, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 7. THE ORDER WAS PRONOUNCED IN THE COURT ON 10/02/2 012. SD/- SD/- (N. S. SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 10 TH FEBRUARY, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE