Tulip Granites Private Ltd., Hyd, Hyderabad V. DCIT, Circle-2(3) Hyderabad, Hyderabad

ITA 601/HYD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2523 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MOHAN REDDY
• Assessee Lawyers: S RAMA RAO
• Keywords: Deemed export
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NOS. 601 & 602/HYD/2015 ASSESSMENT YEAR S 2009 - 10 & 2010 - 11 TULIP GRANITES PVT LTD, HYDERA BAD. PAN: AABCT7314E VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 2(3), RANGE - 2, HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO FOR REVENUE : SHRI MOHAN REDDY, DR DATE OF HEARING : 27.09.2017 DATE OF PRONOUNCEMENT : 1 7 .10 .2017 ORDER PER SMT. P. MADHAVI DEVI, J.M. BOTH THESE APPEALS ARE FILED BY ASSESSEE AGAINST THE ORDERS OF LD. CIT(A) - 2, HYDERABAD COMMONLY DATED 19 TH FEBRUARY, 2012 FOR THE ASSESSMENT YEARS 2009 - 10 AND 2010 - 11 RESPECTIVELY . IN BOTH THE SE APPEALS , THE ISSUE IS COMMON EXCEPT FOR THE QUANTUM INVOLVED AND THEREFORE FOR THE SAKE OF BREVITY AND CONVENIENCE, GROUNDS OF APPEAL FOR THE A.Y. 2009 - 10 ARE REPRODUCED HEREUNDER: - 1. THE ORDER OF LD. CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LD. CIT(A) ERRED IN NOT DECIDING THE APPEAL ON MERITS. 3. THE LD. CIT(A) ERRED IN HOLDING THAT THE DECISION OF THE HONBLE ITAT FOR THE EARLIER YEARS COVER ALL THE GROUNDS. 4. THE LD. CIT(A) ERRED IN CONFIRMING ACTION OF A.O. IN HOLDING THAT THE APPELLANT IS NOT ENTITLED FOR EXEMPTION U/S 10B OF THE IT ACT IN RESPECT OF ENTIRE EXPORT TURNOVER OF RS. 32,65,30,080/ - . 5. THE LD. CIT(A) ERRED IN CONFIRMING ACTION OF THE A.O. IN WORKING OUT THE EXEMPTION U/S 10B TO RS. 52,34,603/ - AS AGAINST THE RS. 2,39,36,557 / - . 6. THE LD. CIT(A) ERRED IN CONFIRMING LEVY OF INTEREST U/S 234B, 234C AND 234D OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE - COMPANY , WHICH IS ENGAGED IN GRANITES BUSINESS, FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR CLAIMING DEDUCTION U/S 10B OF THE ACT. DURING ASSESSMENT PROCEED ING S, A.O. OBSERVED THAT THE 2 ASSESSEE HAS RECEIVED SALE PROCEEDS FROM THIRD PARTY IN THE FORM OF INDIAN CURRENCY, WHICH IT CLAIMED AS A DEDUCTION U/S 10B OF THE ACT. BY O BSERVING THAT IT IS FUNDAMENTALLY AGAINST THE PROVISIONS OF SECTION 10B(3) OF THE INCOME TAX ACT, 1961, A.O. ASKED ASSESSEE TO SHOW CAUSE AS TO HOW THIS SATISFIES THE DEFINITION OF CONVERTIBLE FOREIGN EXCHANGE UNDER EXPLANATION (2)(II) TO SECTION 10B OF THE ACT . IN RESPONS E TO THE SAME, ASSESSEE EXPLAINED THAT IT IS HAVING EXPORTS OTHER THAN THIRD PARTY EXPORT ALSO. THE ASSESSEE THEREFORE WAS ASKED TO SHOW THE PROOF FOR REMITTANCES IN FOREIGN CURRENCY TO THE EXTENT OF ITS CLAIM. HOWEVER, ASSESSEE ADMITTED THAT IT IS NOT R ECEIVING ANY INWARD REMITTANCE IN FOREIGN CURRENCY CORRESPONDING TO THIRD PARTY EXPORTS. THEREFORE, A.O. DISALLOWED THE CLAIM OF DEDUCTION U/S 10B AND BROUGHT IT INTO TAX FOR BOTH THE ASSESSMENT YEARS. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A), WHO FOLLOWED THE DECISION OF ITAT, HYDERABAD BENCH IN ASSESSEES OWN CASE FOR THE A.Y. 2008 - 2009 AND DECIDED THE APPEAL IN FAVOUR OF REVENUE. AGGRIEVED, ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. THOUGH THE LD COUNSEL FOR THE ASSESSEE PLACED RELIANCE UPON THE GROUNDS OF APPEAL RAISED BY ASSESSEE BEFORE US, HE FAIRLY ADMITTED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEAR 200 8 - 09 . 5. LD DR HAS FILED A COPY OF THE SAID ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.502/HYD/2012, DATED 06.11.2012 BEFORE US. 6. HAVING REGARD TO THE MATERIAL ON RE CORD, WE FIND THAT VIDE PARA 8 OF ITS ORDER FOR THE AYS 2006 - 07 AND 2007 - 08 (ITA NOS. 238 AND 239/HYD/2009, DATED 21.04.2011), THE TRIBUNAL DEALT WITH THE ISSUE AT LENGTH AND FOR THE SAKE OF READY REFERENCE THE SAME IS REPRODUCED HERE UNDER: - 8. IN OUR OPINION, IN VIEW OF THE ABOVE PROVISIONS OF THE IT ACT, DEEMED EXPORT IS NOT RECOGNIZED BY THE PROVISIONS OF IT ACT. EVEN OTHERWISE, AS SEEN FROM THE FACTS OF THE CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE IS NOT THE EXPORTER OF THE GOODS. THE ASSESSEE DELIVERED THE GOODS TO THE BUYER IN INDIA ONLY. THEREFORE, IT IS NOT THE CA SE THAT THE ASSESSEE HAD SOLD THE GOODS TO OTHER EOU AGAINST RELEVANT DECLARATION IN FORM CT 3, SO AS TO CONSIDER THE TRANSACTION AS AN EXPORT. IN VIEW OF THIS FACT, WE DO NOT FIND ANY MERIT IN THE CONTENTION TH A T THERE WAS A CASE OF SALE FROM ONE EOU TO ANOTHER. THEREFORE, FOR THE MERE FACT THAT THERE WAS MOVEMENT OF GOODS FROM ONE PLACE TO ANOTHER WITHIN INDIA, IT CANNOT BE TAKEN TO CONSIDER THAT THERE WAS AN EXPORT. IN ORDER TO CLAIM DEDUCTION U/S 10B, IT MUST BE PROVED BY THE ASSESSEE THAT SUCH SAL E TRANSACTION MUST INVOLVE CLEARANCE AT ANY CUSTOMS STATION AS DEFINED IN THE CUSTOMS ACT. OTHERWISE, THERE WAS POSSIBILITY THAT GOODS AFTER THE PURCHASE MAY NOT BE EXPORTED AT 3 ALL AND YET THE BENEFIT MAY BE CLAIMED. SINCE IN THE PRESENT CASE, THE TRANSACT ION INVOLVES NO CLEARANCE AT THE CUSTOMS STATION, IT CANNOT BE TREATED AS EXPORT OUT OF INDIA. IN THE PRESENT CASE THERE IS NO EVIDENCE TO SHOW THAT THE GOODS MOVED OUT OF INDIA SO AS TO FALL WITHIN THE DEFINITION OF EXPORTS. FURTHER, DELIVERING OF THE GOODS TO LOCAL PERSON CANNOT BE CONSIDERED AS EXPORT. IN OUR OPINION, THE LD. CIT(A) CONSIDERED ALL RELEVANT FACTS OF THE CASE AND NOT CONSIDERED ANY IRRELEVANT MATERIAL AND THE CONCLUSION ARRIVED BY HIM IS NOT PERVERSE AND IS BASED ON THE FACTS OF THE C ASE. THE ORDER OF THE LD. CIT(A) NEED NOT BE SCRUTINIZED WORD BY WORD MERELY TO FIND OUT WHETHER ALL THE FACTS HAVE BEEN SET OUT BY HIM IN DETAIL OR NOT. THE READING OF THE LD. CIT(A) SHOWS THAT HE HAS TAKEN INTO ACCOUNT THE RELEVANT FACTS OF THE CASE AN D CAME TO RIGHT CONCLUSION. WE CANNOT FIND ANY INFIRMITY IN HIS ORDER. THUS, THE GROUND RAISED BY THE ASSESSEE IS REJECTED. 7. SINCE THE FACTS AND CIRCUMSTANCES OF THE CASE BEFORE US ARE SIMILAR, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE B ENCH, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). 8. IN THE RESULT, ASSESSEES APPEALS FOR BOTH THE ASSESSMENT YEARS 2009 - 10 AND 2010 - 11 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 7 T H OCTOBER, 2017. S D / - S D / - ( S. RI FAUR RAHMAN) ( SMT. P. MADHAVI DEVI ) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 1 7 T H OCTOBER, 2017 OKK, SR.PS COPY TO 1. SRI S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, 3 - 6 - 643, STREET NO.9, HIMAYAT NAGAR, HYDERABAD 500 029. 2. DCIT, CIRCLE 2(3), INCOME TAX TOWERS, A.C. GUARDS, HYDERABAD. 3. CIT (A) - 2, HYDERABAD. 4. PR. CIT - 2, HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD. 6. GUARD FILE