ACIT 6(3), MUMBAI V. MERCK LTD, MUMBAI

ITA 6031/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7838 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1998-1999
• Appeal Filed On: 13-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANIL KUMAR SINGH
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 6031/MUM/2009 (ASSESSMENT YEAR: 1998-99) ACIT, CIRCLE 6(3) M/S. MERCK LIMITED ROOM NO. 522, 5TH FLOOR SHIVSAGAR ESTATE, DR. ANNE BESANT AAYAKAR BHAVAN, M.K. ROAD VS. ROAD, WORLI, MUMBAI 400018 MUMBAI 400020 PAN - AAACE 2616 F APPELLANT RESPONDENT CO NO. 207/MUM/2010 (ASSESSMENT YEAR: 1998-99) M/S. MERCK LIMITED ACIT, CIRCLE 6(3) SHIVSAGAR ESTATE, DR. ANNE BESANT ROOM NO. 522, 5TH FLOOR ROAD, WORLI, MUMBAI 400018 VS. AAYAKAR BHAVAN, M.K. ROAD PAN - AAACE 2616 F MUMBAI 400020 CROSS OBJECTOR APPELLANT IN APPEAL ASSESSEE BY: SHRI ANIL KUMAR SINGH REVENUE BY: SHRI AJIT SHAH O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF THE CIT(A) VI, MUMBAI DATED 21.08.2009. 2. REVENUE HAS RAISED THE FOLLOWING GROUND: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ADOPT THE INDIRECT COST @ 10% OF EXPORT TRADING TURNOVER & RE COMPUTE THE DEDUCTION U/S. 80HHC BY RELYING ON THE DECISION IN THE CASE OF SURENDRA ENGINEERING CORPORATION 86 ITD 121, ALTHOU GH THE FACTS OF THE CASE ARE ENTIRELY DIFFERENT FROM FACTS OF THE ASSESSEES CASE. 3. THE ISSUE ARISES OUT THE ITAT ORDER DATED 25 TH SEPTEMBER 2007 ON THE APPEAL ARISING IN ITA NO. 4690/MUM/2001 IN WHICH TH E A.O. HAS ADOPTED ITA 6031/M/2009 & CO 207/M/2010 M/S. MERCK LIMITED 2 AN AMOUNT OF ` 21,16,828/- AS INDIRECT COST IN RESPECT OF TRADING GOODS INSTEAD OF ` 50,000/- COMPUTED BY THE ASSESSEE COMPANY. ON THAT DISPUTE THE ITAT DIRECTED THE A.O. TO MODIFY THE ORDER IN T HE LIGHT OF THE DECISION OF THE SPECIAL BENCH IN THE CASE OF SURENDRA ENGINEERI NG CORPORATION 86 ITD 121. THE A.O. WHILE GIVING EFFECT TO THE ORDER OF T HE ITAT, HOWEVER, DID NOT FOLLOW THE DIRECTIONS STATING THAT THE THEN REPRESE NTATIVE OF THE ASSESSEE COMPANY HAS MISREPRESENTED BEFORE THE ITAT BUT THE FACTS OF THE CASE ARE ENTIRELY DIFFERENT. ACCORDINGLY THE A.O. DID NOT FO LLOW THE DIRECTIONS OF THE ITAT AND RE-ESTIMATED THE INDIRECT COST OF TRADING GOODS AT ` 21,16,828/-. ASSESSEE TOOKUP THE MATTE AGAIN BEFORE THE CIT(A) W HO AFTER EXAMINING THE DIRECTIONS OF THE ITAT HELD THAT THERE IS NO JURISD ICTION TO THE A.O. TO WORK OUT THE INDIRECT COST IN ANY OTHER MANNER. THEREFOR E HE WORKED THE INDIRECT COST AT 10% OF THE EXPORT TRADING TURNOVER WHICH WO RKS OUT TO ` 9,47,818/- AND DIRECTED TO RECOMPUTE THE DEDUCTION UNDER SECTI ON 80HHC ACCORDINGLY. THE REVENUE IS AGGRIEVED ON THE ABOVE DIRECTION. 4. WE ARE UNABLE TO APPROVE THE STAND OF THE AO. SINCE THE ITAT HAS SPECIFICALLY DIRECTED THE A.O. TO CONSIDER THE JUDG EMENT OF THE SPECIAL BENCH THE A.O. HAS NO OPTION THAN TO FOLLOW THE DIRECTION S WHILE GIVING EFFECT TO THE ORDER. IF THERE WAS ANY GRIEVANCE THE SAME SHOULD H AVE TAKEN UP IN APPEAL BEFORE THE HON'BLE HIGH COURT. HOWEVER THE A.O. CAN NOT ACT DIFFERENTLY THAN WHAT WAS DIRECTED TO BE DONE. IN VIEW OF THIS THE C IT(A)S DIRECTION HAS TO BE APPROVED. HE NOT ONLY FOLLOWED THE DIRECTIONS OF TH E ITAT BUT ALSO WORKED OUT THE AMOUNT TO BE CONSIDERED. IN VIEW OF THIS, W E DO NOT SEE ANY REASON TO INTERFERE WITH THE DIRECTIONS OF THE CIT(A). ACCORD INGLY THE REVENUE APPEAL IS DISMISSED. 5. ASSESSEE HAS RAISED CO NO. 207/MUM/2010 WITH REFERE NCE TO THE DIRECTIONS OF THE CIT(A). WE DO NOT SEE ANY REASON TO INTERFERE WITH THE DIRECTIONS OF THE CIT(A) AS THE ASSESSEE HAS NOT MA DE OUT A CASE THAT THE DIRECTIONS ARE NOT CORRECT. MOREOVER THE CROSS OBJE CTION WAS NOT SIGNED BY ITA 6031/M/2009 & CO 207/M/2010 M/S. MERCK LIMITED 3 THE ASSESSEE OR THE PRINCIPAL OFFICER OF THE ASSESS EE COMPANY BUT BY A CHARTERED ACCOUNTANT, WHO IS NOT EMPOWERED TO SIGN FORM NO. 36A EITHER IN THE COLUMN OF VERIFICATION OR THE GROUNDS OF APPEAL . EVEN THE AUTHORISATION PLACED ON RECORD ONLY AUTHORISES M/S. M.A. PARIKH & CO., CHARTERED ACCOUNTANTS TO APPEAR, REPRESENT, PRODUCE BOOKS OF ACCOUNT AND OTHER EVIDENCE, ETC. BUT NOT TO FILE ANY APPEAL/CROSS OBJ ECTION. THE CO IS NOT MAINTAINABLE, AND SO, THE SAME IS DISMISSED AS UNAD MITTED. 6. IN THE RESULT, APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH 2011. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 30 TH MARCH 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) VI, MUMBAI 4. THE CIT VI, MUMBAI CITY 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.