M/s Dimple Exports, Ludhiana V. ACIT, Ludhiana

ITA 724/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73456 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-01-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 04-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: RAJEEV SHARMA
• Keywords: Principle of natural justice
• Section: 80HHC; 80IB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS. 723 & 724/CHD/2012 ASSESSMENT YEAR: 2001-2002 & 2002-03 M/S DIMPLE EXPORTS VS THE ACIT 617, KASHMIR NAGAR, CENTRAL CIRCLE-IV LUDHIANA LUDHIANA PAN NO. AACFD1837E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJEEV SHARMA RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 29/01/2014 DATE OF PRONOUNCEMENT : 11.02.2014 ORDER PER T.R.SOOD, AM BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 13.01.2012 OF CIT(A)-II, LUDHIANA 2. IN BOTH THESE APPEALS, A DEFECT WAS POINTED OUT THAT THE FEE PAID FOR FILING OF THE APPEALS IS DEFICIENT BECAUSE ASSESSEE HAD PA ID ONLY RS. 500/- FOR EACH APPEAL. TODAY, LD. COUNSEL FOR THE ASSESSEE FILED CHALLANS FOR RS. 9,500/- EACH FOR BOTH THESE APPEALS VIDE CHALLAN NOS. 00001 & 00 002 DATED 28.1.2014, PAID THROUGH SBI. SINCE, DEFECTS HAVE BEEN REMOVED, THE REFORE, APPEALS HAVE BEEN TAKEN UP FOR HEARING. FURTHER, IN ITA NO. 724/CHD/ 2012 FOR ASSESSMENT YEAR 2002-03, THE APPEAL IS LATE BY 108 DAYS. THE ASSESS EE HAS FILED A CONDONATION APPLICATION. BOTH PARTIES WERE HEARD ON CONDONATI ON OF DELAY. 2 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS ON CONDO NATION OF DELAY, WE FIND THAT IN THE CONDONATION PETITION IT HAS BEEN POINTE D OUT THAT APPEAL WAS TO BE FILED BEFORE 17.3.2012 AND WAS HANDED OVER TO THE C OUNSEL OF THE ASSESSEE ON 3..3.2012 BUT THE OFFICE CLERK OF THE COUNSEL WRONG LY KEPT THE APPEAL DOCUMENTS IN THE HIGH COURT FILES BECAUSE THERE WAS A CASE GO ING ON IN THE HIGH COURT IN RESPECT OF SOME LABOUR EXPENSES. LATER ON, IT WAS DETECTED THAT APPEAL WAS NOT FILED AND HENCE THE DELAY. WE ARE SATISFIED THAT T HE ASSESSEE HAS SUFFICIENT CAUSE FOR FILING THE APPEAL LATE. 4. IN BOTH THE CASES THE ASSESSEE HAS RAISED THE ID ENTICAL GROUNDS OF APPEAL WHICH ARE AS UNDER:- 1. THAT THE ORDER OF LD. CIT(A) IS BAD IN LAW AND UNC ALLED FOR. 2. THAT THE ORDERS OF LD. CIT(A) U/S 250(6) OF THE INCOME TAX ACT, 1961 IN CONCURRING WITH THE ORDER OF LD. A.O., U/S 154 IS BAD IN LAW HAVING BEEN PASSED WITHOUT APPRECIATING THE CORRECT PROVISIONS OF LAW AND THAT OF NATURAL JUSTICE. 3. THAT THE ORDERS OF LD. CIT(A) U/S 250(6) OF THE INCOME TAX ACT, 1961 IN CONCURRING WITH THE FINDINGS OF LD. A. O., AND THEREBY HOLDING THAT DEDUCTION U/S 80IB IS TO BE ALLOWED AF TER REDUCING DEDUCTION U/S 80HHC WITHOUT APPRECIATING THE FACTS AND PROVISIONS OF LAW THAT BOTH THE DEDUCTIONS ARE TO B E COMPUTED AND ALLOWED INDEPENDENTLY AS PER PROVISIONS OF SECTION 80B(5) SUBJECT TO BE RESTRICTED TO THE GROSS TOTAL INCOME OF THE A PPELLANT AS PER PROVISIONS OF SECTION 80A(2) OF THE INCOME TAX ACT, 1961. 5. GROUND NO.1 IS OF GENERAL NATURE AND DOES NOT RE QUIRE SEPARATE ADJUDICATION 6. GROUND NOS. 2 & 3: AFTER HEARING BOTH THE PARTI ES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD AL LOWED DEDUCTION U/S 80HHC 3 AS WELL AS 80 IB OF THE ACT. HOWEVER, THE DEDUCTIO N U/S 80 IB WAS ALLOWED FROM THE TOTAL PROFITS AFTER REDUCING THE DEDUCTION ALLOWED U/S 80HHC. LATER ON, THE ASSESSEE FILED A RECTIFICATION APPLICATION THAT DEDUCTION U/S 80HHC HAS BEEN WRONGLY ALLOWED. IT HAS ALSO BEEN POINTED OUT THAT WHILE ALLOWING DEDUCTION U/S 80 IB, THE AMOUNT OF DEDUCTION U/S 80 HHC CANNOT BE REDUCED. THE ASSESSING OFFICER FOUND THAT AMOUNT OF DEDUCTION U/ S 80HHC WAS NOT CORRECTLY ALLOWED AND, THEREFORE, HE PASSED AN ORDER U/S 154 OF THE ACT BY ENHANCING THE DEDUCTION U/S 80HHC. HOWEVER, BEFORE ALLOWING DEDUC TION U/S 80 IB, THE AMOUNT OF DEDUCTION ALLOWED U/S 80HHC WAS REDUCED F ROM THE TOTAL PROFITS. 7. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION O F THE ASSESSING OFFICER. 8. BEFORE US LD. COUNSEL FOR THE ASSESSEE STRONGLY RELIED ON THE GROUNDS OF APPEAL. 9. ON THE OTHER HAND, LD. DR SUBMITTED THAT THIS I SSUE NOW STANDS CONCLUDED BY THE DECISION OF 05 MEMBERS BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V HINDUSTAN MINT & AGRO PRODUCTS (P) LTD 119 ITD 107 WHEREIN IT HAS BEEN CLEARLY HELD THAT BEFORE ALLOWING DEDUCTION U/S 80I A / 80 IB, THE DEDUCTION U/S 80HHC HAS TO BE REDUCED IN VIEW OF THE PROVISIONS O F SUB SECTION (9) OF SECTION 80IA(9). THIS POSITION HAS BEEN CONFIRMED BY THE H ON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF BROADWAYS OVERSEAS LTD., SURANUSSI V CIT, JALANDHAR IN ITA NO. 234 OF 2009 (O&M) AND ITA NO. 277 OF 200 9(O&M). 10. AFTER CONSIDERING THE RIVAL SUBMISSIONS CAREFUL LY, WE FIND THAT HEAD NOTE IN THE CASE OF ACIT V HINDUSTAN MINT & AGRO PRODUCT S (P) LTD (SUPRA) READS AS UNDER:- DEDUCTION UNDER S.80HHC COMPUTATION TREATMENT OF DEDUCTION UNDER S.80-IB-DECISION OF THE SPECIAL BEN CH IN THE CASE OF ROGINI GARMENTS HAS NOT BEEN OVERRULED BY THE 4 MADRAS HIGH COURT IN THE CASE OF SCM CREATIONS- IN THE CASE OF SCM CREATIONS, THE COURT MERELY FOLLOWED AN D APPLIED THE EARLIER DECISIONS AS PER AGREEMENT AND PRAYER MADE BEFORE THE COURT BY THE PARTIES NO REFERENCE WAS MADE TO THE STATUTORY PROVISION NOR THE COURT WAS C ALLED UPON TO DECIDE ANY ISSUE COUNSEL APPEARING ON BEH ALF OF THE REVENUE HAD FAIRLY CONCEDED THE ISSUE WITHOUT T ALKING INTO ACCOUNT OR WITHOUT BRINGING TO THE NOTICE OF T HE COURT, THE CHANGE MADE IN STATUTORY PROVISIONS OF SUB-S.(9 ) OF S.80- IA W.E.F. 1 ST APRIL, 1999 EVEN OTHERWISE, S.80-IA(9) PROVIDES TWO RESTRICTIONS VIZ. (A)WHERE AN ASSESSEE IS ALLOWED DEDUCTION UNDER S.80-IA OR S. 80-IB, DEDUCT ION TO THE EXTENT OF SUCH PROFIT AND GAIN SHALL NOT BE ALL OWED UNDER ANY OTHER PROVISION OF PART C OF CHAPTER VI-A, AN D (B) DEDUCTION SHALL NOT EXCEED THE PROFIT AND GAIN OF T HE UNDERTAKING OR THE HOTEL, AS THE CASE MAY BE IF TH E PROFIT WHICH HAS ALREADY BEEN ALLOWED AS A DEDUCTION IS AG AIN TAKEN INTO CONSIDERATION FOR COMPUTING DEDUCTION UN DER ANY OTHER PROVISION REFERRED TO ABOVE, IT WOULD MEAN TH AT RESTRICTION (A) IS DISREGARDED AND IGNORED- THIS CA NNOT BE DONE WITHOUT DOING VIOLENCE TO THE LANGUAGE OF THE PROVISION CIRCULAR NO. 772, DT. 23 RD DEC., 1998 CLARIFIED AND ONLY DEALT WITH RESTRICTION (B) AND DID NOT MAKE REFEREN CE TO RESTRICTION (A)- ALTHOUGH THE STATUTORY PROVISION O F S. 80AB PROVIDES THAT DEDUCTION UNDER EACH SECTION OF CHAPT ER VI-A IS TO BE COMPUTED INDEPENDENTLY, THE TOTAL SCHEME O F THE STATUTE AS WELL AS SCHEME OF EVERY SECTION IS TO BE READ AND INTERPRETED AND EVERY WORD BE GIVEN ITS PROPER MEAN ING READING RESTRICTION IN ALL RELEVANT PROVISIONS UNDE R PART C OF CHAPTER VI-A LEADS TO NO CONTRADICTION OR ABSURD ITY AND IS REASONABLE THERE IS ABSOLUTELY NO JUSTIFICATIO N FOR ALLOWING REPEATED DEDUCTIONS ON PROFIT AND GAIN ON WHICH DEDUCTION HAS BEEN ALLOWED UNDER S.80-IA OR S. 80-I B- THEREFORE, DEDUCTION ALLOWABLE UNDER ANY OTHER PROV ISION OF PART C OF CHAPTER VI-A IS TO BE REDUCED BY THE AMOU NT OF DEDUCTION ALLOWED UNDER S.80-IA/80-IB. 11. THIS POSITION HAS BEEN FURTHER CONFIRMED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF BROADWAYS COMPANY LTD V CIT IN ITA NO.. 234 OF 5 2009 VIDE ORDER DATED 22.11.2013, THEREFORE, WE FIN D NOTHING WRONG WITH THE ORDER OF CIT(A) AND CONFIRM THE SAME. 12. IN THE RESULT, ASSESSEES APPEAL ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.02.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 11 TH FEBRUARY, 2014 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH