M/s. Jayshri Exports(India), Jetpur V. The DCIT, Circle-1, Rajkot

ITA 56/RJT/2020

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9497 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-12-2023
• Assessment Year: 2004-2005
• Appeal Filed On: 05-03-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Retrospective amendment
• Section: 143(3); 80HHC; 80IB; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted Through Virtual Court) Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Jayshri Exports (India) Dhoraji Road Navagadh Jetpur-360370, Gujarat PAN No: AABFJ8267B (Appellant) Vs The DCIT, Circle-1, Rakot (Respondent) Assessee Represented: None Revenue Represented: Shri Ashish Kumar Pandey, Sr.D.R. Date of hearing : 11-12-2023 Date of pronouncement : 15-12-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the exparte order dated 30.07.2019 passed by the Commissioner of Income Tax (Appeals), Jamnagar, arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2004-05. ITA No. 56/Rjt/2020 Assessment Year: 2004-05 I.T.A No. 56/Rjt/2020 A.Y. 2004-05 Page No M/s. jayshri Exports (India) Vs. DCIT 2 2. The brief facts of the case is that the assessee is a Firm engaged in the manufacturing and export of fabrics. For the Assessment Year 2004-05, assessee filed its Return of Income declaring Nil income after claiming deduction u/s. 80HHC of the Act of Rs.25,90,947/- and deduction u/s. 80IB of Rs. 1,81,465/-. The Assessing Officer while making assessment order applied Section 80HHC as amended by the Taxation Laws (Amendment) Act, 2005 with retrospective effect and quantified the deduction u/s. 80HHC as Rs. 2,17,759/- as against the claim made by the assessee of Rs. 25,90,947/-. The A.O. observed that the assessee’s case is covered under the second proviso to sub-section (3) of Section 80HHC of the Act which is applicable to the assessee having export turnover not exceeding Rs. 10 crores during the previous year, whereas assessee’s export sales is Rs. 5,25,90,979/-. Thus restricted the deduction u/s. 80HHC to Rs. 2,17,759/-. 2.1. Similarly on the claim of u/s. 80IB, the Assessing Officer noticed that the assessee does not own any manufacturing plant or even any machinery which is required for bleaching, printing, finishing etc. Even in the preceding assessment years, the claim of deduction was rejected by the Assessing Officer following the same, the claim of deduction u/s. 80IB of the Act was also denied to the assessee. 3. Aggrieved against the same, the assessee filed an appeal before Commissioner of Income Tax (Appeals). The Ld. CIT(A) offered 13 hearing opportunities from 11.11.2011 to 12.09.2017, however I.T.A No. 56/Rjt/2020 A.Y. 2004-05 Page No M/s. jayshri Exports (India) Vs. DCIT 3 none appeared on behalf of the assessee. Therefore the Ld. CIT(A) confirmed the additions observing as follows: “.....6.2. On the other hand the AR of the appellant as per the submission dated 27.08.2012 has stated that the amendment made in section 80HHC by the Taxation Law (Amendment) Act., 2005 applies only to the case of the assessee whose turnover exceeds Rs. 10 crores. As per the AR of the appellant the turnover of the appellant is Rs.5,25,19,979/- (export sales) and therefore the entire profits qualifies for the deduction u/s.80HHC @ 30% i.e. the rates of deduction applicable for AY 2004-05 The AR of the appellant has relied upon the decision of Hon'ble Supreme Court as given in the case of Topman Exports (Civil application No.1699 of 2012 arising out of SLP (C) No. 26558 of 2010) wherein it is held by the Hon'ble Apex Court that it is only the surplus on the transfer of DEPB (i.e. transfer price less face value of (DEPB) on which the assessee is not entitled to the deduction u/s.80HHC as per the amended law. The AR of the appellant in his written submissions has further stated that the appellant has filed a writ petition before the Hon'ble High Court of Gujarat for the amendment made in section 80HHC by the Taxation Law (Amendment) Act, 2005. But this entire submission of AR of the appellant is not found to be acceptable. First of all it is mentioned that many assessees had challenged the constitutional validity of insertion of condition in the 3 rd and the 4 th proviso to section 80HHC(3) of the Act by amendment of Taxation Law (Second Amendment) Act, 2005 and accordingly Hon'ble High Court of Gujarat has given its decision in the case of Avani Exports and Others vs. CIT, Rajkot in special application No.7926 of 2006. But this decisions of Hon'ble High Court of Gujarat is given in the cases of those assessees in whose cases the export turnover exceeds Rs.10 crores. Thus, this decision of Hon'ble High Court of Gujarat is not applicable to the case of the appellant as the export turnover of the appellant is below Rs.10 crores. Again the decision of Hon'ble Supreme Court is also not applicable to the case of the appellant as the AO in the assessment order u/s. 143(3) of the Act has considered the export incentives and other receipts for the purpose of calculating the deduction u/s.80HHC of the Act. In this regard the second part of calculation of profit u/s.80HHC of the Act as made by the AO on page No. 4 of this assessment order u/s.143(3) of the Act may be referred to while calculating the eligible deduction of Rs.2,17,759) u/s 80HHC, the AO as per his working as given on page No.4 of the assessment order has considered 90% of the exports incentives Income as per form No.10CCAC in view of the amended provisions of section 80HHC as amended by Taxation Law (Amendment) Act, 2005. Considering these facts, it is held that the AO as per his working of deduction u/s.80HHC of the Act as given on page Nos. 3 & 4 of the assessment order has correctly calculated the eligible deduction of Rs.2,17,759/- being 30% of the profit of Rs.7,25,862/- and therefore such action of the AO is confirmed hereby confirmed.” I.T.A No. 56/Rjt/2020 A.Y. 2004-05 Page No M/s. jayshri Exports (India) Vs. DCIT 4 4. Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal: 1. The grounds raised in this appeal are without prejudice to one another. 2. The Ld.CIT [A] erred in law and on facts in limiting u/s.80HHC to the extent of Rs.2,17,759/- against the claim of deduction of Rs.25,90,947/-. 3. On the facts and circumstances of the case it is contended that the claim ought to be allowed as per the return of income. 4. The grounds on the basis of which the deduction u/s.80HHC has been scaled down are factually incorrect and not in accordance with law and the Ld.CIT[A] erred in law and on facts in accepting the deduction u/s.80HHC as allowed by the Assessing Officer in assessment order instead of Rs.25,90,947/- as claimed by the assessee. 5. Your appellant craves leave to add, alter, amend or withdraw any of the grounds stated here above. 5. The registry has noted that there is a delay of 152 days in filing the above appeal by the assessee. The assessee filed affidavit explaining that the impugned order was received by post and taken delivery by one of its employee Shri Atulbhai Domadia. It was only in the last week of Feb-2020, Shri Atulbhai Domadia came out with the copy of the appellate order to the Partner of the Firm. It is thereafter they have filed the above appeal with the delay of 152 days, the same may be requested to condone. 5.1. This affidavit is filed before this Tribunal on 09.02.2023. Today is the 17 th time of hearing of the above appeal. Even in the previous hearings, NONE appeared on behalf of the assessee and no authorization given in favour of any Representative. This clearly shows that the assessee is not interested in pursuing the above appeal, in spite of service of notices to the assessee. Further there is no documents placed before us, in support of the grounds raised I.T.A No. 56/Rjt/2020 A.Y. 2004-05 Page No M/s. jayshri Exports (India) Vs. DCIT 5 by the assessee and adjudicate on merits of the case. In the above circumstances, there will not be any useful purpose in condoning the delay in filing the above appeal. Therefore the above appeal is hereby dismissed in limine. 6. In the result, the appeal filed by the Assessee is dismissed in limine. Order pronounced in the open court on 15-12-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 15/12/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, राजकोट