RAVI SANGHAI, MUMBAI V. ACIT 14(1), MUMBAI

ITA 5582/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70891 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 07-08-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 29-07-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHEKHAR L GAJBHIYE
• Assessee Lawyers: SHANKARLAL JAIN
• Keywords: Opportunity of being heard
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENC H, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.5582/M/2011 ( / ASSESSMENT YEAR : 2004-2005 ) RAVI SANGHAI, C/O, SHANKARLAL JAIN & ASSOCIATES, 12, ENGINEERING BUILDING, 256 PRINCES STREET, MUMBAI-02. / VS. ACIT-14(1), MUMBAI. ./PAN : AAGPS 7969 A ( /APPELLANT) .. ( / RESPONDENT) / APPELLANT BY : SHRI SHANKARLAL JAIN / RESPONDENT BY : SHRI SHEKHAR L. GAJBHIYE, DR ! /DATE OF HEARING : 7.8.2013 '# ! /DATE OF PRONOUNCEMENT : 30.8.2013 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 29.7.2011 IS AGAINST THE ORDER OF CIT (A)- 25, MUMBAI DATED 13.7.2011 FOR THE ASSESSMENT YEAR 2004-2005. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GRO UNDS WHICH READ AS UNDER: 1. THE LD CIT (A) ERRED IN HOLDING THAT APPELLANT I S NOT ENTITLED FOR DEDUCTION U/S 80HHC FOR DEPB LICENSES RECEIVED DURING THE YEAR FOLLOWING THE DECISION OF HIGH COURT OF MUMBAI IN THE CASE OF KALPATARU COLOUR S & CHEMICALS. IT IS SUBMITTED THAT IN VIEW OF THE DECISION OF SUPREME COURT IN THE CASE OF TOPMAN EXPORTS 342 ITR 49 (SC) APPELLANT IS ENTITLED FOR NECESSARY DEDUCTION. 2. THE LD CIT (A) SHOULD HAVE APPRECIATED THAT RELI EFS WERE GRANTED OUT OF THE EXPENSES DISALLOWED OF RS. 20,116/- BY THE LD CIT (A) AND OF RS. 38,347/- BY THE HONBLE ITAT IN THE ORIGINAL ORDER PASSED WHICH SHOULD HAVE BEEN GRANTED WHILE GIVING EFFECT TO APPELLATE ORDER. 3. THE LD CIT (A) ERRED IN CONFIRMING AOS ACTION I N NOT GRANTING DEDUCTION U/S 80HHC ON EXCISE DUTY REFUND OF RS. 49,66,579/- IN SPITE OF SPECIFIC DIRECTIONS IN THE ORDER ITAT IN PARA 5 DATED 24.11. 2009 AND THERE BEING NO APPEAL TO HONBLE HIGH COURT ON THE SAID ISSUE. 4. THE APPELLANT PRAYS THAT THE DEDUCTION BE DIRECT ED TO BE ALLOWED U/S 80HHC ON DEPB LICENSE AS WELL AS EXCISE REFUND AND VARIOU S DISALLOWANCES MADE OUT OF THE EXPENSES AS DELETED BY CIT (A) / ITAT BE DIRECTED T O BE REDUCED WHILE CALCULATING INCOME OF THE APPELLANT. 2 2. AT THE OUTSET, SHRI SHANKARLAL JAIN, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE REVISED GROUNDS AND MENTIONED THAT THE GROUND NO.1 RELATES TO THE ALLOWABILITY OF DEDUCTION U/S 80HHC OF THE ACT IN R ESPECT OF THE DEPB LICENSES. IT IS THE PRAYER OF THE ASSESSEE THAT THIS ISSUE MUST BE DECIDED IN THE LIGHT OF THE BINDING SUPREME COURT JUDGMENT IN THE CASE OF TOPMAN EXPORTS 342 ITR 49 (SC). 3. LD DR HAS NO OBJECTION IN THIS REGARD AND HOWEVE R, HE DUTIFULLY RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 4. CONSIDERING THE FACT THAT THE SAID SUPREME COURT JUDGMENT WAS NOT AVAILABLE TO THE REVENUE AT THE RELEVANT POINT OF TIME, THE M ATTER SHOULD BE REMANDED TO THE FILES OF THE AO FOR COMPUTING THE ALLOWABLE DEDUCTI ON U/S 80HHC OF THE ACT IN THE LIGHT OF THE SAID SUPREME COURT JUDGMENT IN THE CAS E OF TOPMAN EXPORTS (SUPRA). ACCORDINGLY, GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED PRO-TANTO . 5. GROUND NO.2 RELATES TO THE ALLOWABILITY OF CERTA IN EXPENSES. AT THE OUTSET, LD COUNSEL MENTIONED THAT THIS ISSUE WAS NOT ADJUDICAT ED BY THE REVENUE AUTHORITIES DESPITE THE WRITTEN DIRECTIONS OF THE TRIBUNAL IN T HE MATTER. IDEALLY, THIS ISSUE SHOULD BE SET ASIDE TO THE FILES OF THE CIT(A) WHICH IS DE FICIENT FOR ADJUDICATION OF THIS GROUND. HOWEVER, CONSIDERING THE FACT THAT THE GROU ND NO.1 IS BEING REMANDED TO THE FILES OF THE AO, TO AVOID THE CONFUSION IF ANY, THE GROUND NO.2 IS ALSO SET ASIDE TO THE FILES OF THE AO FOR FRESH ADJUDICATION AFTER GR ANTING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AO SHALL HONOUR THE CO NCLUSIONS / DIRECTIONS OF THE TRIBUNAL, IF ANY, IN THE MATTER. ACCORDINGLY, GROUN D NO.2 IS SET ASIDE . 6. GROUND NO.3 RELATES TO THE ALLOWABILITY OF DEDUC TION U/S 80HHC ON THE EXCISE DUTY REFUND. IT IS THE CLAIM OF THE LD COUNSEL FOR THE ASSESSEE THAT THIS GROUND STANDS ALLOWED IN THE FIRST ROUND VIDE ITAT ORDER D ATED 24.11.2009. HE RELIED ON THE CONTENTS OF PARA 4 & 5 OF THE SAID ORDER OF ITAT, M UMABI WHICH READ AS FOLLOWS. 4. GROUND NO.4 & 5 RELATE TO THE ALLOWABILITY OF DEDUCTION U/S 80HHC ON EXCISE DUTY REFUND. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. SIMILAR ISSUE CAME UP FOR HEARING BEFORE US IN THE CASE OF M/S. SUPER TRADING 3 CO IN ITA NOS. 4249 & 4250/MUM/2006. WE HAVE PASSED A DETAILED ORDER DATED 17 TH NOVEMBER, 2009 IN THAT CASE BY HOLDING THAT THE EXC ISE DUTY REFUND WILL NOT BE REDUCED FROM THE COST OF GOODS BUT WILL BE CONSIDERED AS IN COME FALLING U/S 28(IIIB). IN THE ABSENCE OF ANY DISTINGUISHING FEATURE HAVING BROUGH T TO OUR NOTICE, WE SET ASIDE THE IMPUGNED ORDER ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO RECOMPUTED THE DEDUCTION U/S 80HHC BY CONSIDERING THE AMOUNT OF EXCISE DUTY REFUND AS FALLING U/S 28(IIIB ). 7. ON PERUSAL OF THE ASSESSMENT ORDER AND THE ORDER OF THE CIT (A), WE FIND THAT THIS GROUND IS NOT PROPERLY ADJUDICATED BY GIVING A DETAILED REASONING. THEREFORE, WE DIRECT THE AO TO DECIDE THIS ISSUE AFRESH AFTER CONSIDERING THE ABOVE CITED DECISIONS OF THE TRIBUNAL AND ANY OTHER BINDING LAW IN FORCE. ACCORDINGLY, GROUND NO.2 IS SET ASIDE . 8. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST, 2013. SD/- SD/- (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; $% 30.8.2013 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & ( ) / THE CIT(A)- 4. & / CIT 5. '() * , ! * , / DR, ITAT, MUMBAI 6. )+ , / GUARD FILE. ' //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI