ACIT 8(3), MUMBAI V. TRANSASIA BIO-MEDICALS LTD, MUMBAI

ITA 5646/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78844 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 19-05-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 07-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAURYA PRATAP
• Assessee Lawyers: ASHOK SUTHAR
• Section: 143(3); 80HHC; 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEM BER . / ITA NO. 5646 / MUM./201 2 ( / ASSESSMENT YEAR : 20 04 05 ) ASSTT. COMMISSIONER OF INCOME TAX RANGE 8 (3), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .. / APPELLANT V/S M/S. TRANSASIA BIO MEDICALS LTD. 8, TRANSASIA HOUSE, CHANDIVALI STUDIO ROAD, ANDHERI (E), MUMBAI 400 072 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AAACT2038C / REVENUE BY : MR. MAURYA PRATAP / ASSESSEE BY : MR. ASHO K SUTHAR / DATE OF HEARING 19.05.2014 / DATE OF ORDE R 19.05.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE AFORESAID APPEAL HA S BEEN PRE FERRED BY THE ASSESSEE CHALLENGING THE IMPUGNED ORDER DATED 7 TH JUNE 2012 , PASSED BY HE LEARNED COMMISSIONER (APPEALS) X VII I, MUMBAI, FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 M/S. TRANSASIA BIO MEDICALS LTD. 2 (FOR SHORT 'THE ACT' ) FOR THE ASSESS MENT YEAR 20 04 05, ON THE FOLLOWING GROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 80HHC WITHOUT REDUCING THE DEDUCTION ALLOWED U/S 80IB WITHOUT A PPRECIATING THAT AS PER SECTION 80IB(13) R/W CLAUSE (9) OF SECTION 80IA, THE DEDUCTION U/S 80HHC IS ALLOWABLE ONLY ON THE BALANCE PROFIT AFTER ALLOWING DEDUCTION U/S 80IB . 2 . BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2000 01, VIDE ORDER DATED 18 TH JULY 2012, IN ITA NO.5853/MUM./2011 AND APPEAL FOR THE ASSESSMENT YEAR 2002 03 AND 2003 04 IN ITA NO.1683/MUM./2007 AND 7591/MU M./2005. COPY OF THESE ORDERS HAS BEEN FILED BEFORE US. FURTHER, IT HAS BEEN SUBMITTED THAT OTHERWISE ALSO, THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN ASSOCIATE CAPSULES PVT .LTD. V/S CIT, [2011] 332 ITR 42 ( BOM.). 3 . THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, ALSO ADMITTED THAT THE ISSUE RAISED BY THE REVENUE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT EVEN THOUGH THE CONTRARY DECISIONS OF OTHER HIGH COURTS ARE AVAILABLE. 4 . AFTER CAREFULLY CONSIDERING THE ORDERS OF THE TRIBUNAL PASSED IN ASSESSEES OWN CASE FOR EARLIER YEARS AND ALSO THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT CITED SUPRA, WE FIND THAT THE ISSUE WHETHER THE DEDUCTION UNDER SECTION 80HHC CAN BE ALLOWED WITHOUT REDUCING THE DEDUCTION UNDER SECTION 80IB, HAS BEEN ALLOWED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE M/S. TRANSASIA BIO MEDICALS LTD. 3 ASSESSMENT YEAR 2000 01. IN THIS CASE, THE TRIBUNAL HAS RELIED UPON THE DECISION OF THE HON'BLE JURI SDICTIONAL HIGH COURT AFTER OBSERVING AND HOLDING AS UNDER: 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND MERIT IN THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ISSUE S TANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ASSOCIATED CAPSULES PVT. LTD. (SUPRA) WHEREIN IT HAS BEEN HELD BY THEIR LORDSHIPS (HEADNOTE PAGES 42 & 43) : SECTION 80 - IA(9) OF THE INCOME - T AX ACT, 1961, PROVIDES THAT THE DEDUCTION TO THE EXTENT OF PROFITS ALLOWED UNDER SECTION 80 - IA(1) WOULD NOT BE ALLOWED UNDER ANY OTHER PROVISIONS. IT MEANS THAT THE DEDUCTIONS ALLOWABLE UNDER OTHER PROVISIONS UNDER HEADING C OF CHAPTER VI - A WOULD BE ALLOWE D TO THE EXTENT OF PROFITS AS REDUCED BY THE PROFITS ALLOWED UNDER SECTION 80 - IA(1). THE SECOND PART OF SECTION 80 - IA(9) DOES NOT REFER TO THE METHOD OF COMPUTING DEDUCTION UNDER OTHER PROVISIONS UNDER HEADING C OF CHAPTER VI - A. THUS, SECTION 80 - IA(9) SEEK S TO CURTAIL THE ALLOWANCE OF DEDUCTION AND NOT THE COMPUTATION OF DEDUCTION UNDER ANY OTHER PROVISIONS UNDER HEADING C OF CHAPTER VI - A OF THE ACT. THE LEGISLATURE HAS USED SPECIFIC WORDS WHENEVER IT INTENDS TO AFFECT THE COMPUTATION OF DEDUCTION. AS THE W ORDS USED IN SECTION 80 - IA(9) RELATE TO ALLOWANCE AND NOT COMPUTATION OF DEDUCTION, IT CANNOT BE INFERRED THAT SECTION 80 - IA(9) WAS INSERTED WITH A VIEW TO AFFECT COMPUTATION OF DEDUCTION UNDER ANY OTHER PROVISIONS UNDER HEADING C OF CHAPTER VI - A. SINCE SE CTION 80 - IA(9) USES THE WORDS 'SHALL NOT BE ALLOWED', THE SECTION SEEKS TO RESTRICT THE ALLOWANCE OF DEDUCTION AND NOT THE COMPUTATION OF DEDUCTION UNDER ANY OTHER SECTIONS UNDER HEADING C OF CHAPTER VI - A OF THE ACT. THEREFORE THE REASONABLE CONSTRUCTION O F SECTION 80 - IA(9) WOULD BE THAT WHERE THE DEDUCTION IS ALLOWED UNDER SECTION 80 - IA(1), THEN THE DEDUCTION COMPUTED UNDER OTHER PROVISIONS UNDER HEADING C OF CHAPTER VI - A HAVE TO BE RESTRICTED TO THE PROFITS OF THE BUSINESS THAT REMAIN AFTER EXCLUDING THE PROFITS ALLOWED AS DEDUCTION UNDER M/S. TRANSASIA BIO MEDICALS LTD. 4 SECTION 80 - IA, SO THAT THE TOTAL DEDUCTION ALLOWED UNDER THE HEADING C OF CHAPTER VI - A DOES NOT EXCEED THE PROFITS OF THE BUSINESS. HELD, ACCORDINGLY, THAT THE TRIBUNAL WAS NOT RIGHT IN HOLDING THAT SECTION 80 - IA(9) OF TH E ACT, MANDATES THAT THE AMOUNT OF PROFITS ALLOWED AS DEDUCTION UNDER SECTION 80 - IA(1) OF THE ACT HAVE TO BE REDUCED FROM THE PROFITS OF THE BUSINESS OF THE UNDERTAKING WHILE COMPUTING DEDUCTION UNDER ANY OTHER PROVISIONS UNDER HEADING C IN CHAPTER VI - A OF THE ACT. 7. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE REVENUE AND KEEPING IN VIEW THAT THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IS BINDING, WE ARE OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC OF THE ACT. THE A.O. IS DIRECTED TO ALLOW THE SAME AS PER DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA). THE GROUND TAKEN BY THE R EVENUE IS, THEREFORE, REJECTED. 5 . IN VIEW OF THE AFORESAID JUDICIAL PRECEDENCE OF THE TRIBUNAL, WHI CH IS BASED ON THE RATIO DECIDENDI OF THE JURISDICTIONAL HIGH COURT, THE GROUND RAISED BY THE REVENUE ARE TREATED AS DISMISSED. 6 . 4. IN THE RESULT, REVENUE S APPEAL IS DISMISSED. 19 TH MAY 2014 ORDER PRONOUNCED IN THE OPEN COURT O N 19 TH MAY 2014 SD/ - SANJAY ARORA ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 19 TH MAY 2014 M/S. TRANSASIA BIO MEDICALS LTD. 5 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE D R, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI / / 19997 98 2000 01 / / / / / / / / / /