ITO, RAJSAMAND V. M/s. Karnawat International Pvt. Ltd., RAJSAMAND

ITA 66/JODH/2013

• Counselvise Citation: 6623314 RSA 2013
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-09-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 13-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: PRAKUL KHURANA
• Section: 80IB; 10B; 154

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.66/JODH/2013 (A.Y. 2006-07) ITO, VS. M/S. KARNAWAT INTERNATIONAL PVT. LTD. WARD-1, KALPANA KUNL, N.H. 8, RAJASMAND. DISTT. RAJSAMAND. PAN NO. AACCK0290P ASSESSEE BY : SHRI PRAKUL KHURANA DEPARTMENT BY : SHRI N.A. JOSHI- D.R. DATE OF HEARING : 05/09/2013. DATE OF PRONOUNCEMENT : 09/09/2013. O R D E R PER N.K.SAINI, A.M THIS APPEAL BY THE DEPARTMENT HAS BEEN FILED AGAIN ST THE ORDER DATED 15/11/2012 OF LEARNED CIT(A), UDAIPUR. THE O NLY GROUND IN THIS APPEAL READ AS UNDER: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A) HAS ERRED IN DIRECTING THE AO TO CONSIDER THE DISAL LOWANCE MADE U/S 40(A)(IA) OF THE IT ACT CONSIDERING THE SAME AS PRO FIT DERIVED FROM UNDERTAKING AND TO RECALCULATE EXEMPTION U/S 10B OF THE I.T. ACT. 2 2 FACTS OF THIS CASE IN BRIEF ARE THAT ASSESSEE FILE D AN APPLICATION DATED 14/09/2011 U/S 154 OF I.T. ACT, 1961 (HEREINA FTER REFERRED TO AS ACT, FOR SHORT) REQUESTING THE ASSESSING OFFICER TO ALLOW EXEMPTION U/S 10B OF THE ACT IN RESPECT OF DISALLOWANCE MADE U/S 40(A)(IA) OF THE ACT. HOWEVER, ASSESSING OFFICER DID NOT ACCEPT THE CONTE NTION OF THE ASSESSEE. 3. THE ASSESSEE CARRIED THE MATTER TO LEARNED CIT(A), WHO ALLOWED THE CLAIM BY OBSERVING IN PARA 2.3 OF THE IMPUGNED ORDE R, WHICH READ AS UNDER:- 2.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPE LLANT AS WELL AS THE FINDINGS OF THE LD. A.O. GIVEN IN THE A SSESSMENT ORDER. IT IS SEEN THAT THE APPELLANT COMPANY IS A 100% EXPORT ORIENTED UNIT. THE APPELLANT CLAIMED EXEMPTION U/S . 10B ON THE DISALLOWANCES MADE U/S. 40(A)(IA) OF THE ACT BY FILING APPLICATION UNDER SECTION 154 OF THE ACT ON 01/09/2 011 I.E. AFTER THE DECISION OF APPEAL FILED AGAINST THE ASSE SSMENT ORDER AS WELL AS THE ORDER U/S. 154 PASSED BY THE LEARNED CIT(A) FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. HOWEVER, THE LD. A.O. REJECTED THE APPLICATION ON THE GROUND THAT HI S PREDECESSOR AND THE LEARNED CIT(A) HAS ALREADY CONS IDERED THE ISSUE OF EXEMPTION U/S. 10B OF THE ACT AND THE DECI SION OF THE LD. CIT(A) HAS BEEN ACCEPTED BY THE APPELLANT AS NO FURTHER APPEAL HAS BEEN FILED. THE LD. A.O. HAS ALSO TAKEN THE PLEA THAT THE DISALLOWANCE MADE U/S 40(A)(IA) IS NOT ELI GIBLE FOR EXEMPTION U/S. 10B OF THE ACT AS IT IS NOT AN INCOM E DERIVED FROM THE BUSINESS OF INDUSTRIAL UNDERTAKING. IN THIS CONNECTION, IT MAY BE MENTIONED HERE THAT THIS ISSUE HAS BEEN CONSIDERED BY ME IN DETAIL IN THE CA SE OF THE APPELLANT COMPANY FOR THE ASSESSMENT YEAR 2009-10 I N APPEAL NO. 241/IT/UDR/2011-12 DATED 15/11/2012 AND THE CLA IM OF 3 THE APPELLANT THAT THE DISALLOWANCE MAY BE CONSIDER ED FOR THE PURPOSE OF CALCULATION IS HELD TO BE ACCEPTABLE AS UNDER:- IN THIS CONTEXT, IT MAY BE MENTIONED THAT FOR THE PURPOSE OF COMPUTATION OF PROFIT AND GAIN OF THE BUSINESS OF 1 00% EXPORT ORIENTED UNIT, INCOME HAS TO BE COMPUTED IN ACCORDA NCE WITH THE CHAPTER IV(D) AS PER SECTION 30 TO 43D AND EFFECT H AS TO BE GIVEN TO DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE AC T. IN THIS CONTEXT, THE DECISION OF HONOURABLE ITAT AHMADABAD IS RELEVANT IN THE CASE OF RAMESH INDUSTRIES VS. ITO, ITA NO. 3148 /AHD/2008 DATED 21/01/2011 AS PER WHICH DEDUCTION UNDER SECTI ON 80IB WAS ALLOWED FOR THE DISALLOWANCE MADE UNDER SECTION 40( A)(IA) OF THE ACT WHILE RELYING ON THE TRIBUNALS DECISION IN THE CASE OF ITO V. CHIRAG PLAST IN IT NO. 2415/AHD/2009 ASSTT. YEAR 20 06-07 DATED 23/10/2009. FURTHER IT WAS ALSO HELD THAT THERE AR E ENOUGH LEGAL RECOURSES OPEN TO PREVENT THE CLAIM OF DOUBLE DEDUC TION ONCE DEDUCTION HAS ALREADY BEEN ALLOWED. IT IS APPARENT THAT THE EXPENSES OF THE ASSESSEE HAS BEEN REDUCED BY THE SUM DISALLOWED UNDER SECTION 40(A)(I A) THEREBY INCREASING THE BUSINESS PROFIT OF THE 100% EXPORT O RIENTED UNIT AND THE CLAIM UNDER SECTION 10B IS NOT DISPUTED BY THE A.O. IN RESPECT OF ABOVE EXPORT UNIT. AS THE ISSUE INVOLVED FOR DECISION IN THIS APPEAL IS THE SAME AS MENTIONED ABOVE, THE LD. A.O. IS DIRECTED T O CONSIDER THE DISALLOWANCE U/S 40(A)(IA) TO CALCULATE THE EXE MPTION U/S. 40(A)(IA) OF THE ACT AND ALLOW THE SAME ACCORDINGLY . HOWEVER, WHILE ALLOWING THE SAME, THE LD. A.O. SH OULD ENSURE THAT THE APPELLANT HAS NOT CLAIMED AND ALLOW ED THE SET OF SUCH DISALLOWANCE IN ANY OF THE ASST. YEAR ON PA YMENT BASIS AND IF SO, THE SAME MAY BE WITHDRAWN AS PER THE LAW . NOW THE DEPARTMENT IS IN APPEAL. 4. LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF ASSES SING OFFICER. 5. IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE IS COVERED BY THE DECISIONS OF THIS BENCH OF THE TRIBUNAL DATED 20/04/2012 IN ASSESSEES OWN CASE IN I.T.A.NO . 302 & 4 303/JODH/2010 FOR THE A.YS. 2003-04 & 2006-07 AND O RDER DATED 11/07/2013 IN I.T.A.NO. 67/JODH/2013 FOR THE A.Y.20 09-10, COPIES OF THE SAID ORDERS WERE FURNISHED. 6. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PART IES AND THE MATERIAL AVAILABLE ON RECORD, IT IS NOTICED THAT TH E LD. CIT(A) FOLLOWED HIS EARLIER ORDER DATED 05/11/2012 FOR THE A.Y.2009-10, WHICH WAS SUBJECT MATTER OF THE DEPARTMENTAL APPEAL IN I.T.A.NO. 67/J ODH/2013 (SUPRA) BEFORE THIS BENCH OF THE ITAT, WHEREIN BY FOLLOWING THE EARLIER ORDER OF THIS BENCH OF THE TRIBUNAL DATED 20/04/2012 FOR THE A.Y. 2006-07 (SUPRA), THE DEPARTMENTAL APPEAL WAS DISMISSED. THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 3 OF THE ORDER DATED 11/07/2013 FOR T HE A.Y. 2009-10 IN I.T.A.NO. 67/JODH/2013, WHICH READ AS UNDER:- BEFORE US, BOTH THE PARTIES HAVE REITERATED SIMIL AR ARGUMENTS FOR AND AGAINST THEIR STAND. AFTER CONSIDERING THEM IN THE LIGHT OF THE OBTAINING FACTS OF THIS CASE WE ARE OF THE CONSIDER ED OPINION THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES OF THE CASE THE ITAT WHILE DECIDING THE CASE OF THIS VERY ASSESSEE COMPANY FO R A.Y. 2006-07 IN ITA NOS. 302 & 303/JU/2010 VIDE ORDER DATED 20/04/2 012 HAS HELD THAT THE ASSESSEE- COMPANY IS ELIGIBLE FOR THIS EXE MPTION U/S 10B OF THE ACT. WE HAVE FOUND THAT THE ACTIVITIES CARRIED OUT IN THIS A.Y. AND A.Y. 2006-07, IN RESPECT OF MARBLE BLOCKS ARE E XACTLY SAME AND THIS ISSUE WAS EXAMINED IN DETAIL BY THE TRIBUNAL I N THEIR ORDER DATED 20/04/2012. NO NEW FACTS HAVE BEEN BROUGHT O N RECORD BY THE REVENUE. THE RULE OF LAW IS STARE DECISIS AND UPHOLDING THE PRINCIPLES OF CONSISTENCY, THEREFORE, WE DONT SEE ANY VALID REASON FOR DEVIATING FROM THE EARLIER STAND. AS A RESULT, WE ARE LEFT WITH NO OTHER OPTION BUT TO DISMISS THE REVENUE APPEAL. 5 7. SO, BY RESPECTFULLY FOLLOWING THE AFORESAID REFE RRED TO ORDER DATED 11/07/2013 OF THIS BENCH OF THE TRIBUNAL IN ASSESSE ES OWN CASE FOR THE A.Y. 2009-10 IN I.T.A.NO. 67/JODH/2013, WE DO NOT S EE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 8. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. (ORDER PRONOUNCED IN THE COURT ON 09 TH SEPTEMBER, 2013). (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 09 TH SEPTEMBER, 2013. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.