M/s Royal Impex (India), Jetpur V. The Additional Commissioner of Income Tax, Rajkot Range-1, RAJKOT-GUJARAT

ITA 642/RJT/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7368 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 25-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JM SAHAY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI T.K. SHARMA (JM) AND SHRI A.L. GEHLOT ( AM) I.T.A. NO.642/RJT/2010 (ASSESSMENT YEAR 2006-07) M/S. ROYAL IMPEX (INDIA), VS.. THE A.C.I.T., NATIONAL HIGHWAY 8/B, RAJKOT RANGE 1, PEDHLA, JETPUR. RAJKOT. PAN:AAEFR5521M. (APPELLANT) (RESPONDENT) DATE OF HEARING : 02-12-2011 DATE OF PRONOUNCEMENT : 22-12-2011 REVENUE BY : SHRI J. M. SAHAY, D.R. ASSESSEE BY : NONE.. O R D E R PER T.K. SHARMA (JM): THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 10-11-2009 OF CIT (A)-I, RAJKOT. FOR THE ASSESSMENT YEAR 2006-07. 2. AT THE TIME OF HEARING, NONE WAS PRESENT FROM TH E SIDE OF THE ASSESSEE. AN APPLICATION FOR ADJOURNMENT WAS DISMISSED BY THE TRIBUNAL ON 01-12-2011. SHRI J. M. SAHAY, D.R.APPEARING FOR THE REVENUE, OB JECTED TO THE REQUEST OF ASSESSEEE TO GRANT THE ADJOURNMENT. HE POINTED OUT THAT THE CONTROVERSY INVOLVED IN THIS APPEAL IS NOW SETTLED BY HONBLE S UPREME COURT IN THE CASE OF M/S. LIBERTY INDIA VS. CIT REPORTED IN 317 ITR 218. THE LD. D.R. ALSO DREW OUR ATTENTION TO THE FACT THAT IN THIS CASE EARLIER ALS O THE ASSESSEE TOOK THE ADJOURNMENT BY POINTING OUT THAT THE HONBLE GUJARA T HIGH COURT HAS HEARD ABOUT 28 CASES ON 03-08-2011 AND THE DECISION IS OF SAME AS EXPECTED VERY SHORTLY. IT WAS POINTED OUT THAT ISSUES THEREIN PERTAIN TO DEDU CTION U/S.80HHC. THE LD. D.R. POINTED OUT THAT CONTROVERSY INVOLVED IN THIS APPEA L OF THE ASSESSEE IS REGARDING ALLOWANCE OF DEDUCTION U/S.80HHC IN RESPECT OF DUTY DRAW BACK. THEREFORE, THE PLEA OF THE ASSESSEE THAT THIS ISSUE IS PENDING OR HEARD BY HONBLE HIGH COURT IS OF NO RELEVANCY. HE POINTED OUT THAT ON ONE PRETEX T OR THE OTHER, THE ASSESSEE IS ITA NO.642/RJT/2010. 2 SEEKING THE DATE. THEREFORE, SAME BE REFUSED AND T HE APPEAL OF THE ASSESSEE BE DECIDED ON THE BASIS OF RATIO OF HONBLE SUPREME COURT IN THE CASE OF M/S. LIBERTY INDIA (SUPRA). 3. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF AUTH ORITIES BELOW IN THE IMPUGNED ORDER. THE LD. CIT(A) FOR THE DETAILED RE ASON GIVEN AT PARA-8 THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCT THE ALLOWANCE U/ S.80HHCTO THE DUTY DRAW BACK. THE SAID PARA-8 READS AS UNDER:- 8. I HAVE CAREFULLY CONSIDERED THE ISSUE. I FIND THAT THIS ISSUE HAS NOW BEEN SETTLED BY THE HONBLE SUPREME COURT IN THE CA SE OF M/S. LIBERTY INDIA VS. CIT REPORTED IN 317 ITR PAGE 218. THE HO NBLE APEX COURT HAS CLEARLY HELD THAT DUTY DRAWBACK RECEIPTS / DEPB BEN EFITS CANNOT BE TREATED AS PROFIT DERIVED FROM THE UNDERTAKING SO AS TO ENTITLE IT TO DEDUCTION U/S.80IB. IN THE ORDER, THE HONBLE APEX COURT HAS HELD THAT DUTY DRAWBACK RECEIPT/ DEPB BENEFITS DO NOT FORM PA RT OF THE NET PROFITS OF ELIGIBLE INDUSTRIAL UNDERTAKING FOR THE PURPOSE OF SECTIONS 80I/80IA/80IB OF THE ACT. IN VIEW CLEAR-CUT DECISION OF THE HONBLE SUPREME COURT, THE APPELLANT IS NOT ENTITLED TO ANY DEDUCTION U/S.80IB IN RESPECT OF DUTY DRAW BACK. AOS ACTION IN THIS REGARD IS UPHELD. HOWEV ER, IN RESPECT OF FIRST GROUND RELIEF HAS BEEN ALLOWED TO THE APPELLANT. T HEREFORE, DEDUCTION U/S.80IB WILL HAVE TO BE RE-COMPUTED BECAUSE OF DIS ALLOWANCE OF EXPENSES BEING DELETED. THE AO WILL THEREFORE, WOR K OUT ELIGIBLE DEDUCTION U/S.80IB AND WHILE DOING SO, NO BENEFIT I S TO BE ALLOWED IN RESPECT OF DUTY DRAW BACK INCOME. 4. ADMITTEDLY, THE ONLY ISSUE INVOLVED IN THIS APPE AL IS COVERED AGAINST THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF M/ S. LIBERTY INDIA (SUPRA). IN THE IMPUGNED ORDER, THE LD. CIT(A) AFTER FOLLOWING THIS JUDGMENT OF HONBLE SUPREME COURT HELD THAT THE ASSESSEE IS NOT ENTITLE D TO ANY DEDUCTION U/S.80IB IN RESPECT OF DUTY DRAW BACK AND UPHELD THE ACTION OF AO IN THIS REGARD. THE VIEW TAKEN BY LD. CIT(A) IS FAIR AND REASONABLE. WE THE REFORE, REFUSE THE ADJOURNMENT AND UPHELD THE ORDER OF LD. CIT(A) ON THIS ISSUE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. THIS ORDER PRONOUNCED IN THE OPEN COURT ON 22-12-20 11. SD/- SD/- (A.L. GEHLOT) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 22-12-2011. ITA NO.642/RJT/2010. 3 NVA/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-XXI, AHMEDABAD 4. THE CIT-III, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT