M/s. SAY INDIA JEWELLERS P. LTD., MUMBAI V. ACIT - 9(3), MUMBAI

ITA 66/MUM/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1624 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 27-10-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 04-01-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS VANDANA SAGAR
• Keywords: Set aside
• Section: 80HHC; 80HH; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH: MUMBAI BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI V D RAO, JUDICIAL MEMBER ITA NO 66/MUM/2007 (ASSESSMENT YEAR: 2002-03) SAY INDIA JEWELLERS PVT LTD , DYNAMIX HOUSE, GEN A K VIDYA MARG, YASHODHAM, GOREGAON (EAST), MUMBAI -400 063 PAN: AAACM 7171 K VS ACIT- 9(3) , AAYAKAR BHAVAN, M K ROAD, MUMBAI -400 020 APPELLANT RESPONDENT APPELLANT BY: MS AARTI VISSANJI RESPONDENT BY: MRS VANDANA SAGAR ORDER PER PRAMOD KUMAR 1. BY WAY OF THIS APPEAL, DIRECTED AGAINST THE CIT (A)S ORDER DATED 8 TH SEPTEMBER 2006, FOR THE ASSESSMENT YEAR 2002-03, THE FIRST GR IEVANCE RAISED BY THE ASSESSEE IS AS FOLLOWS:- I . THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN - (A) HOLDING THAT THE PREMIUM RECEIVED ON SALE OF RE P LICENCES IS COVERED UNDER CLAUSE (IIID) OF SECTION 28 OF THE ACT AND CO NSEQUENTLY, DENYING THE CLAIM OF ADMISSIBLE DEDUCTION UNDER SECTION 80HHC O F THE ACT ON ACCOUNT OF NON-SATISFACTIONS OF THE CONDITIONS LAID DOWN BY TH IRD PROVISO TO SECTION 80HHC(3) OF THE ACT. (B) REDUCING RS 69,327/-, BEING 90% OF INTEREST INC OME IN QUANTIFYING THE PROFITS OF THE BUSINESS RELEVANT FOR THE PURPOSE OF QUANTIFYING THE ADMISSIBLE DEDUCTION UNDER SECTION 80HHC OF THE ACT. 2. LEARNED REPRESENTATIVES AGREE THAT THE ABOVE ISS UES ARE NOW COVERED BY SPECIAL BENCH DECISION IN THE CASE OF TOPMAN EXPORT S VS INCOME TAX OFFICER (125 TTJ 389). ITA 66/M/2007 SAY INDIA JEWELLERS PVT LTD 2 3. IN THE IMPUGNED ORDER, THE CIT (A) HAD REMITTED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR WORKING NECESSARY RELIEF U/S 80HHC, AS PER AMENDED LAW, TO THE FILE OF THE ASSESSING OFFICER. 4. CONSIDERING THAT THE ASSESSING OFFICER IS ALREAD Y IN SEISIN OF THE MATTER, AS A REQUEST OF AFORESAID DIRECTIONS OF THE CIT (A), WE MODIFY THE DIRECTIONS OF THE CIT (A) TO THE EFFECT THAT THE ASSESSING OFFICER WILL RECOM PUTE DEDUCTION U/S 80HHC IN THE LIGHT OF THE LAW LAID DOWN BY SPECIAL BENCHS DECIS ION IN THE CASE OF TOPMAN EXPORTS (SUPRA). A COPY OF THE SAID SPECIAL BENCH ORDER IS DEEMED TO BE ATTACHED TO AND FORMING PART OF THIS ORDER. ACCORDINGLY, GROUND 1 IS SET ASIDE. 5. GROUND 2 READS AS UNDER:- 2 . THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUG HT TO HAVE - (A) HELD THAT THE PREMIUM RECEIVED ON SALE OF REP L ICENCES IS COVERED BY CLAUSE (IIIA) OF SECTION 28 OF THE ACT AND CONSEQUE NTLY, OUGHT TO HAVE REDUCED 90% OF THE PREMIUM RECEIVED ON SALE OF REP LICENCES IN QUANTIFYING THE PROFITS OF THE BUSINESS RELEVANT FOR QUANTIFYING THE ADMISS IBLE DEDUCTION UNDER SECTION 80HHC OF THE ACT IN TERMS OF EXPLANATION TO SECTION 80HHC OF THE ACT AND GRANTED DEDUCTION UNDER SECTION 80HHC OF THE ACT, I N TERMS OF THE FIRST PROVISO TO SUB-SECTION (3) OF SECTION 80HHC OF THE ACT, ON THE AMOUNT OF PREMIUM RECEIVED ON THE SALE OF REP LICENCES. (AI) WITHOUT PREJUDICE TO THE ABOVE AND IN ALTERNA TE, HELD THAT THE PREMIUM RECEIVED ON SALE OF REP LICENCES UNDER SECTION 80HH C OF THE ACT, IS COVERED UNDER CLAUSE 28(I) AND OR 28(IV) OF THE ACT AND CON SEQUENTLY, FORMS PART AND PARCEL OF PROFITS OF THE BUSINESS RELEVANT FOR QU ANTIFYING THE ADMISSIBLE DEDUCTION UNDER SECTION 80HHC OF THE ACT. (B) NETTED OF RS 69,327/-, BEING 90% OF INTEREST IN COME AGAINST THE INTEREST EXPENSES AND REDUCED 90% OF SUCH NET INTEREST INCOM E IF ANY, IN QUANTIFYING THE PROFITS OF THE BUSINESS RELEVANT FOR THE PURP OSE OF QUANTIFYING THE ADMISSIBLE DEDUCTION UNDER SECTION 80HHC OF THE ACT . 6. AS REGARDS THIS ISSUE, THE LEARNED COUNSEL FOR T HE ASSESSEES CONTENTION IS THAT MOST OF THE INTEREST EXPENDITURE IN QUESTION IS REL ATING TO INTEREST ON REFUND OF TAXES AND, THEREFORE, NEXUS OF THE SAME WITH THE BUSINESS IS CLEAR AND UNAMBIGUOUS. LEARNED DEPARTMENTAL REPRESENTATIVE DOES NOT DISPUT E THIS FACTUAL CONTENTION. IN ITA 66/M/2007 SAY INDIA JEWELLERS PVT LTD 3 THIS VIEW OF THE MATTER WE DIRECT THE ASSESSING OFF ICER TO EXAMINE THE NATURE OF INTEREST RECEIVED BY THE ASSESSEE AND AS LONG AS NE XUS OF SUCH INTEREST CAN BE ESTABLISHED WITH THE INTEREST EXPENDITURE THE NETTI NG IS REQUIRED TO BE DONE. WITH THIS DIRECTION THE MATTER IS RESTORED TO THE FILE O F THE ASSESSING OFFICER. ACCORDINGLY GROUND 2 IS SET ASIDE. 7. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT TODAY ON THE 28TH OCT OBER 2009. SD/- (V D RAO) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATE: 28TH OCTOBER 2009 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)-IX, MUMBAI. 4) THE CIT - IX, MUMBAI. 5) THE D.R. E BENCH, ITAT, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR CHAVAN* I.T.A.T., MUMBAI ITA 66/M/2007 SAY INDIA JEWELLERS PVT LTD 4 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 27.10.09 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 28.10.09 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS 7 FILE SENT TO THE BENCH CLERK SR.PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER