EXCEL ICE SERVICES, MUMBAI V. ACIT 14(1), MUMBAI

ITA 5994/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48685 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 20-04-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 12-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D SONGATE
• Assessee Lawyers: N M PORWAL
• Section: 80HHC; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI RAJENDRA SINGH(AM) AND SHRI VIJAY PA L RAO (JM) ITA NO.5994/M/2009 ASSESSMENT YEAR 2002-03 M/S.EXCEL ICE SERVICES THE ACIT-14(1), MUMBAI 140, CAVEL CROSS LANE KALBADEVI ROAD MUMBAI 400 002. PAN : AAAFE 0495 B APPELLANT RESPONDENT ASSESSEE BY : SHRI N. M. PORWAL REVENUE BY : SHRI D. SONGATE O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 16.10.2007 OF CIT(A) FOR THE ASSESSMENT YEAR 2002-0 3. THE ONLY DISPUTE RAISED IN THIS APPEAL IS REGARDING ALLOWABILITY OF DEDUCTI ON UNDER SECTION 80HHC IN RELATION TO DEPB INCOME. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE FOR THE RELEVANT YEAR HAD CLAIMED DEDUCTION UNDER SECTION 80HHC IN R ESPECT OF DEPB INCOME AMOUNTING TO RS.95,79,696/-. THE AO NOTED THAT TURN OVER OF THE ASSESSEE WAS MORE THAN RS.10 CRORES AND THE ASSESSEE HAD NOT SAT ISFIED THE TWO CONDITIONS MENTIONED IN THE 3 RD PROVISO TO SECTION 80HHC(3) AND THEREFORE DEDUCTIO N 2 UNDER SECTION 80HHC IN RESPECT OF DEPB INCOME WAS N OT ALLOWABLE. ACCORDINGLY HE DISALLOWED THE CLAIM OF DEDUCTION. IN APPEAL CIT (A) CONFIRMED THE ORDER OF AO AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEF ORE THE TRIBUNAL. 3. WE HAVE HEARD BOTH THE PARTIES IN THE MATTER. TH E DISPUTE IS REGARDING ALLOWABILITY OF DEDUCTION UNDER SECTION 80HHC IN RE SPECT OF DEPB INCOME. UNDISPUTEDLY, THE TURNOVER OF THE ASSESSEE EXCEEDED RS.10 CRORES AND THEREFORE IN TERMS OF THE 3 RD PROVISO TO SECTION 80HHC(3) ASSESSEE CAN BE ALLOWED DEDUCTION IN RESPECT OF DEPB INCOME ONLY WH EN THE FOLLOWING TWO CONDITIONS ARE SATISFIED: (I) IT HAD AN OPTION TO CHOSE EITHER DUTY DRAW BACK OR DUTY ENTITLEMENT PASS BOOK SCHEME AND (II) THE RATE OF DUTY DRAW BACK CREDIT ATTRIBUTABLE TO T HE CUSTOM DUTY WAS HIGHER THAN THE RATE OF CREDIT ALLOWABLE UNDER AN ENTITLEMENT PASS BOOK SCHEME. 4. THERE IS NO DISPUTE THAT THE ABOVE TWO CONDITION S ARE NOT FULFILLED IN CASE OF THE ASSESSEE. THEREFORE DEDUCTION UNDER SECTION 80HHC IN RESPECT OF DEPB INCOME CANNOT BE ALLOWED. THE LEARNED AR HAS ARGUED THAT 3 RD PROVISO TO SECTION 80HHC(3) WILL NOT APPLY TO FACE VALUE OF DE PB CREDIT AS THE SAME WILL BE COVERED UNDER SECTION 28(IIIB) AND NOT UNDER SECTIO N 28(IIID). WE FIND THAT THESE ASPECTS ARE ALSO SETTLED BY THE JUDGMENT OF H ONBLE HIGH COURT OF MUMBAI IN CASE OF CIT VS KALPATARU COLOURS AND CHEM ICALS (328 ITR 451). IT HAS BEEN HELD IN THE SAID CASE THAT BOTH, THE FACE VALUE OF THE DEPB AND THE PROFIT ON SALE WILL BE COVERED UNDER SECTION 28(III D) AND IN CASE THE TWO CONDITIONS MENTIONED IN THE 3 RD PROVISO ARE NOT FULFILLED IN CASES WHERE TURNOVER 3 EXCEEDS RS.10 CRORES, DEDUCTION CANNOT ALLOWED. WE THEREFORE RESPECTFULLY FOLLOWING THE JUDGMENT OF HONBLE HIGH COURT (SUPRA ) CONFIRM THE ORDER OF CIT(A). 5. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISSE D. 6. THE DECISION PRONOUNCED IN THE OPEN COURT ON 27 .04.2011. SD/- SD/- ( VIJAY PAL RAO ) (RAJENDRA SIN GH) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATE : 27.04.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR E BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK