M/S. TRANSASIA BIO-MEDICALS LTD, MUMBAI V. THE ACIT RG 8(3),

ITA 5863/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7345 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 15-03-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 12-09-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MADHUK
• Assessee Lawyers: ASHOK SUTHAR
• Keywords: Set aside
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI. BEFORE SHRI R.V.EASWAR, SR.VP AND SHRI R.K. PAND A, AM I.T.A. NO.5863/MUM/2007 (ASSESSMENT YEAR: 2004-05) TRANSASIA BIO-MEDICALS LTD., TRANSASIA HOUSE, 8, CHANDIVALI STUDIO ROAD, ANDHERI(E), MUMBAI-400 072. PAN:AAACT2038C VS. THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-8(3), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. ASHOK SUTHAR RESPONDENT BY : MR.S.K.MADHUK, DR O R D E R PER R.V.EASWAR, SENIOR VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE RELATES TO THE ASSESSMENT YEAR 2004-05 AND THE ONLY QUESTION BEFORE US IS REGARDING DEDUCTION AVAILABLE TO THE ASSESSEE UNDER SECTION 80HHC OF THE INCOME TAX ACT . 2. THE ASSESSEE IS A COMPANY ENGAGED IN THE MANUFAC TURE AND EXPORT OF MEDICAL EQUIPMENT. THERE IS NO DISPUT E THAT IT IS ENTITLED TO THE DEDUCTION UNDER SECTION 80HHC. THE QUESTION BEFORE THE ASSESSING OFFICER HOWEVER WAS WHETHER TH E FOLLOWING ITEMS OF INCOME WERE ELIGIBLE FOR THE DEDUCTION:- (I) PRODUCTION FEES RECEIVED FROM SYSMEX TRANSASIA (JOINT VENTURE COMPANY) RS.16,90,350/- (II) INSURANCE CLAIM RECEIVED RS. 49,075/- (III) LIABILITY NO LONGER EXISTING RS.10,71,156/- THE ASSESSING OFFICER TREATED THE AFORESAID RECEIPT S AS OTHER INCOME AND EXCLUDED 90% OF THE SAME BY INVOKING EX PLANATION (BAA) OF SECTION 80HHC. ACCORDINGLY THE DEDUCTION WAS REDUCED. ON APPEAL, THE CIT(A) AGREED WITH THE DEC ISION OF THE ASSESSING OFFICER AND HENCE THE PRESENT APPEAL. ITA NO.5863/M/07 2 3. AT THE TIME OF THE HEARING, THE LEARNED REPRESEN TATIVE FOR THE ASSESSEE DREW OUR ATTENTION TO THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 2002-03 & 2003-04 DATED 30 TH DECEMBER, 2009 AND SUBMITTED THAT IN THIS ORDER, IN PARAGRAPH 5.11, THE TRIBUNAL RESTORED THE MATTER TO THE FILE OF THE ASS ESSING OFFICER WITH THE DIRECTION THAT THE ASSESSEES ELIGIBILITY FOR THE DEDUCTION MAY BE DECIDED AFRESH IN ACCORDANCE WITH LAW AND CO NSIDERING THE DISCUSSION CONTAINED IN THE TRIBUNALS ORDER. A CCORDINGLY IT WAS PRAYED THAT THE ISSUE MAY BE RESTORED TO THE AS SESSING OFFICER. 4. WE HAVE GONE THROUGH THE ORDER OF THE TRIBUNAL. THE FOLLOWING DIRECTIONS HAVE BEEN GIVEN IN PARAGRAPH 5 .11 OF THE TRIBUNALS ORDER:- 5.11 IN THE LIGHT OF ABOVE DISCUSSIONS IF WE CONSIDER THE NATURE OF AMOUNTS OF INSURANCE CLAIM, SCRAP SALES, LIABILITIES NO LONGER EXISTING, ORDER CANCELLATION CHARGES AND INTEREST, WE FIND THAT SCR AP SALE IS OUT OF BUSINESS OPERATION OF ASSESSEE HAVI NG INCLUDED IN THE TURNOVER THEREFORE, WE FIND THAT CIT(A) HAS RIGHTLY ALLOW THE CLAIM OF THE ASSESSEE ON SCRAP. HOWEVER, THE NATURE OF OTHER ITEMS, INSURANC E CLAIM AND LIABILITIES NO LONGER EXISTING, ORDER CANCELLATION CHARGES AND INTEREST ARE TO BE DETERMINED IN THE LIGHT OF ABOVE DISCUSSIONS. WE THEREFORE, SEND BACK THE ISSUE RELATED TO THESE ITE MS TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW AFTER CONSIDERING THE ABOVE DISCUSSION AND AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE FACTS IN THE YEAR UNDER APPEAL ARE THE SAME AND THE CONTROVERSY IS ALSO THE SAME. IN THE TRIBUNALS ORD ER ONLY TWO ITEMS HAVE BEEN CONSIDERED NAMELY INSURANCE CLAIM A ND LIABILITIES NO LONGER EXISTING. IT HAS BEEN STATED BEFORE US THAT EVEN WITH REGARD TO THE PRODUCTION FEES RECEIVED FR OM SYSMEX TRANSASIA, THE MATTER REQUIRES TO BE GONE INTO AFRE SH, SINCE THERE IS NO SEPARATE OR DETAILED DISCUSSION IN THE ASSESSMENT ORDER. IN THE ABSENCE OF ANY OBJECTION ON BEHALF OF THE ITA NO.5863/M/07 3 DEPARTMENT AND IN THE LIGHT OF THE ORDER OF THE TRI BUNAL CITED ABOVE, WHICH HAS BEEN PASSED IN THE ASSESSEES OWN CASE AND CONSIDERING THAT THE FACTS ARE THE SAME, RESPECTFUL LY FOLLOWING THE SAID ORDER, WE SET ASIDE THE DECISION OF THE IN COME-TAX AUTHORITIES WITH REGARD TO ALL THE THREE ITEMS OF RECEIPT AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFIC ER WITH THE SAME DIRECTIONS AS WERE CONTAINED IN THE ORDER OF T HE TRIBUNAL CITED ABOVE. THE ASSESSING OFFICER WILL DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. 5. THE APPEAL IS THUS ALLOWED BUT ONLY FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED ON THIS 26 TH DAY OF MARCH, 2010. SD/- ( R.K. PANDA ) SD/- ( R.V.EASWAR ) ACCOUNTANT MEMBER SENIOR VICE PRESIDENT MUMBAI, DATED 26 TH MARCH , 2010. SOMU COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-8, MUMBAI. 4. THE CIT(A)-XXIX, MUMBAI 5. THE DR J BENCH /TRUE COPY/ BY ORDE R ASSTT. REGISTRAR, I.T.A.T, MUMBAI