M/s. SEKHSARIA CHEMICALS LTD., MUMBAI V. DCIT - 6(2), MUMBAI

ITA 557/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7506 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2002-2003
• Appeal Filed On: 17-01-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAVEEN GUPTA
• Assessee Lawyers: K SHIVARAM
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI P.M. JAGTAP (A.M.) AND SHRI N.V. VASUDE VAN (J.M.) ITA NO.557/MUM/2007 ASSESSMENT YEAR : 2002-2003 SEKHSARIA CHEMICALS LTD. 11A, MITTAL CHEMBERS, NARIMAN POINT, MUMBAI 400 021. PAN : AAACS9938C VS. DCIT 6(2) AAYAKAR BHAVAN, MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. SHIVARAM RESPONDENT BY : SHRI NAVEEN GUPTA O R D E R PER P.M. JAGTAP, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT (A) XXXII, MUMBAI DATED 06.11.2006. 2. GROUND NO.1 RAISED BY THE ASSESSEE IN THIS APPEA L IS GENERAL SEEKING NO SPECIFIC DECISION FROM US. 3. AS REGARDS TO GROUND NO.2, IT IS OBSERVED THAT T HE ISSUE RAISED THEREIN RELATING TO THE TREATMENT TO BE GIVEN TO THE EXPORT INCENTIVE BEING DEPB CREDIT WHILE COMPUTING DEDUCTION U/S.80HHC IS SQUAR ELY COVERED BY THE DECISION OF SPECIAL BENCH OF ITAT AT MUMBAI IN THE CASE OF TOPMAN EXPORT VS. ITO (125 TTJ 289) WHEREIN IT WAS HELD THAT SECT ION 28(III)(B) WHICH REFERS TO CASH ASSISTANCE AGAINST EXPORT IS WIDE ENOUGH TO COVER THE FACE VALUE OF THE DEPB BENEFIT. IT WAS ALSO HELD THAT SECTION 28(III)(D), ON THE OTHER HAND, REFERS TO THE PROFIT ON TRANSFER OF DEPB WH ICH CONTEMPLATES THE PROFIT ELEMENT AND NOT THE ENTIRE SALES PROCEEDS OF THE DEPB. IT WAS THUS HELD THAT ONLY THE AMOUNT OF PROFIT ON TRANSFER OF DEPB IS LIABLE TO BE EXCLUDED FROM THE PROFIT OF THE BUSINESS WHILE COMP UTING THE DEDUCTION ITA NO.557/MUM/2007 A.Y.: 2002-2003 2 U/S.80HHC AND THAT TOO IN THE CASE OF THE ASSESSEE HAVING EXPORT TURNOVER OF MORE THAN RS.10 CRORES. WE, THEREFORE, RESTOR E THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO RECOMPU TE THE DEDUCTION ADMISSIBLE TO THE ASSESSEE U/S.80HHC KEEPING IN VIE W THE DECISION OF SPECIAL BENCH OF ITAT IN THE CASE OF TOPMAN EXPORT (SUPRA). GROUND NO.2 OF THE ASSESSEES APPEAL IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 4. AS REGARD GROUND NO.3, THE LEARNED COUNSEL FOR T HE ASSESSEE HAS SUBMITTED THAT THE ISSUE RAISED THERE IN RELATING T O ASSESSEES CLAIM FOR DEDUCTION OF EXPORT PROFITS ELIGIBLE FOR DEDUCTION U/S.80HHC FOR THE PURPOSE OF COMPUTING BOOK PROFIT U/S. 115 JB IS CONSEQUENTI AL TO THE MAIN ISSUE OF TREATMENT TO BE GIVEN TO THE DEPB BENEFIT WHILE COM PUTING DEDUCTION U/S.80HHC. HE HAS CONTENDED THAT SINCE THE SAID MAIN ISSUE IS BEING SENT BACK TO THE ASSESSING OFFICER FOR RE-COMPUTING THE DEDUCTION U/S.80HHC IN THE LIGHT OF DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF TOPMAN EXPORT (SUPRA), THIS CONSEQUENTIAL I SSUE MAY ALSO BE SENT BACK TO THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH DEPENDING ON THE QUANTUM OF THE DEDUCTION FINALLY ALLOWABLE TO THE A SSESSEE U/S.80HHC. AS LEARNED D.R. HAS NO OBJECTION IN THIS REGARD, WE RESTORE THIS ISSUE ALSO TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH DEPENDING ON HIS DECISION ON THE MAIN ISSUE. GROUND NO.3 IS AC CORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 26 TH DAY OF FEBRUARY, 2010. SD/- (N.V. VASUDEVAN) (JUDICIAL MEMBER) SD/- (P.M. JAGTAP) (ACCOUNTANT MEMBER) MUMBAI, DATED 26 TH FEBRUARY, 2010. ITA NO.557/MUM/2007 A.Y.: 2002-2003 3 JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-IV, MUMBAI 4. COMMISSIONER OF INCOME TAX, CITY- IV, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH E, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO.557/MUM/2007 A.Y.: 2002-2003 4 DATE INITIALS 1. DRAFT DICTATED ON 12-11-09 PS 2. DRAFT PLACED BEFORE AUTHOR 13-11-09 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/J M 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER