THE ACIT 23(3), MUMBAI V. M/S. SIMPLEX INDUSTRIES, MUMBAI

ITA 6867/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2308 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: K
• Next Hearing Date: 07-04-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 14-11-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SAMEER G DALAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH K, MUMBAI BEFORE SHRI SHRI A.L. GEHLOT, A.M. & SMT. ASHA VIJ AYRAGHAVAN, J.M. ITA NO. 6867/M/2007 ASSESSMENT YEAR: 2003-04 ASSTT. COMMISSIONER OF INCOME-TAX, APPELLANT 23(3), 4 TH FLOOR, C-10, PRATYAKSHAKAR BHAVAN, BANDRA (E), MUMBAI 400 051 VS. M/S SIMPLEX INDUSTRIES, RESPONDENT GALA INDUSTRIAL ESTATE SHED NO. 14, DUMPING ROAD, MULUND (W), MUMBAI - 80 (PAN AAGFS4488N) APPELLANT BY : M/MR. T.T. JACOB/AMOL KAMAT/ S.S. RANA RESPONDENT BY : MR. SAMEER G. DALAL ORDER PER A.L. GEHLOT, A.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-XXIII, MUMBAI, PASSED ON 17 TH SEPTEMBER, 2007 FOR THE ASSESSMENT YEAR 2003-04 WHEREIN THE REVENUE HAS RAI SED THE FOLLOWING GROUNDS OF APPEAL:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO RECOMPUTED DEDU CTION U/S 80 HHC BY GRANTING THE SAME ON TOTAL PROFITS DERIVED B Y THE APPELLANT WITHOUT INCLUDING RECOVERY ON ACCOUNT OF SALES ALONG WITH SALES TAX THEREON OF SCRAP IN THE TOTAL TURNOV ER DEFINED IN EXPLANATION (BA) OF SECTION 80 HHC OF IT ACT. 2. AT THE TIME OF HEARING, THE LEARNED REPRESENTATI VES OF THE PARTIES SUBMITTED THAT THE ISSUE RELATING TO CALCULATE DEDU CTION U/S 80 HHC IN RESPECT OF SCRAP HAS BEEN DECIDED BY THE ITAT IN ASSESSEES OWN ITA NO. 6867/M/07 M/S SIMPLEX INDUSTRIES 2 CASE FOR AY 2001-02 VIDE ITA NO. 4844/MUM/2004 ORDE R DATED 30 TH NOVEMBER, 2007 WHEREIN THE ITAT HELD AS UNDER:- 4SIMILAR IS THE DECISION IN THE CASE OF JAGRA ON EXPORTS. THE ISSUE IN QUESTION IS AS TO HOW TO ARRI VE AT THE COST OF RAW MATERIAL. THE AMENDMENT TO SECTION 80HHC(3) WIT H EFFECT FROM 1.4.1992, IN OUR CONSIDERED OPINION, DOES NOT AFFECT THE BINDING PRECEDENCE OF THESE TWO DECISIONS OF THE HO NBLE TRIBUNAL. THUS WE DIRECT THE AO TO REDUCE NOT ONLY THE TURNOVER BY THE AMOUNT OF RECEIPTS GENERATED FROM SALES OF S CRAP BUT ALSO TO REDUCE THE COST OF RAW MATERIAL TO THAT EXTENT A ND RE-COMPUTE THE DEDUCTION U/S 80 HHC. 3. SINCE THE FACTS AND GROUNDS RAISED IN THIS APPEA L ARE IDENTICAL TO THAT OF AY 2001-02, WHICH HAS BEEN DECIDED BY TH E ITAT, WE RESPECTFULLY FOLLOW THE ORDER OF ITAT IN THAT YEAR AND IN THE LIGHT OF THAT WE DIRECT TO THE AO TO RECOMPUTED THE DEDUCTIO N U/S 80 HHC IN ACCORDANCE WITH THE ABOVE DECISION OF ITAT, AFTER P ROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. PRONOUNCED ON THIS 13 TH DAY OF APRIL, 2010. SD/- SD/- (ASHA VIJAYRAGHAVAN) (A.L. GEHL OT) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: 13 TH APRIL, 2010. COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, K BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV ITA NO. 6867/M/07 M/S SIMPLEX INDUSTRIES 3 S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON 7.4.10 SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 8`.4.10 SR.P.S/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.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER