ACIT CIR 13(3), MUMBAI V. ANIL & COMPANY, MUMBAI

ITA 732/MUM/2010

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6369 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2000-2001
• Appeal Filed On: 29-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Assessee Lawyers: I P RATHI
• Section: 143(3); 80HHC

Judgement Text

I.T.A NO.732/ MUM/2010 ASSESSMENT YEAR: 2000-2001 1 IN THE INCOME TAX APPELLATE TRIBUNAL, G BENCH, MUMBAI. BEFORE SHRI N.V.VASUDEVAN (JUDICIAL MEMBER) AND SHRI PRAMOD KUMAR(ACCOUNTANT MEMBER) I.T.A NO.732/ MUM/2010 ASSESSMENT YEAR: 2001-2002 ASST. COMMISSIONER OF INCOME TAX, CIRCLE 13(3) .. APPELLANT R.NO.430, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. VS ANIL & COMPANY ,. RESPONDENT 212, ADAMJI BUILDING, 2 ND FLOOR, 413, N.N. STREET, KATHA BAZAR, MUMBAI. PA NO.AAEFA 6583 G APPELLANT BY: SHRI JITENDRA YADAV RESPONDENT BY : SHRI I.P.RATHI O R D E R PER PRAMOD KUMAR: 1. THIS IS AN APPEAL FILED BY THE ASSESSING OFFICE R AND IS DIRECTED AGAINST THE ORDER DATED 19 TH NOVEMBER, 2009 PASSED BY THE CIT(A)-24, MUMBAI IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE IN COME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2001-02. THE GROUNDS RAISED BY THE REVENUE ARE AS FOLLOWS: I.T.A NO.732/ MUM/2010 ASSESSMENT YEAR: 2000-2001 2 1.(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (A) HAS ERRED IN DIRECTING THE AO TO RECOMPUTE THE DEDU CTION U/S. 80HHC BY CONSIDERING THE INCOME OF ` . 12,75,419/- AS INCOME U/S.28(IIIB) OF I.T.ACT. ((II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN NOT APPRECIATING THAT REVENUE HAS FILED AP PEAL U/S.260 AGAINST THE CASE CITED. 2. BRIEF FACTS OF THE CASE ARE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIM ED A DEDUCTION OF ` ` . 12,75,419/- ON A SUM RECEIVED AS DEPB LICENSE INCOME. HE DENIE D THE CLAIM ON THE GROUND THAT THE SAME WAS NOT COVERED UNDER SECTION 28(IIIB) AND THE ASSESSEE DID NOT FULFIL THE TWIN CONDITIONS OF 3 RD PROVISO TO SECTION 80 HHC(3), THE TURNOVER BEING M ORE THAN `. 10 CRORES. THE ASSESSEE CARRIED THE MATTER IN APPE AL BEFORE THE CIT (A). THE CIT (A) FOLLOWING THE DECISION OF THE ITAT MUMBAI IN THE CA SE OF TOPMAN EXPORTS V ITO, DIRECTED THE AO TO RE-COMNPUTE THE DEDUCTION UNDER SECTION 80 HHC BY CONSIDERING THE AMOUNT OF RS 12,75,419/- AS INCOME UNDER SECTIO N 28(IIIB) OF THE INCOME TAX ACT. BEING AGGRIEVED THE ORDER OF THE CIT (A), THE ASSES SING OFFICER IS IN APPEAL BEFORE US. 3. HAVING CONSIDERED THE RIVAL CONTENTIONS AND HAVI NG PERUSED THE RECORD OF THE CASE, WE ARE OF THE OPINION THAT THE MATTER NEEDS T O BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE AS PER TH E PRINCIPLES LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. KAL PATARU COLOURS & CHEMICALS, 233 CTR 313, WHEREIN, IT HAS BEEN HELD THAT THE ENT IRE AMOUNT RECEIVED ON TRANSFER OF THE DEPB CREDIT IS PROFITS AND FALLS UNDER S. 28(IIID), THEREBY REVERSING THE VIEW OF THE SPECIAL BENCH OF THE ITAT IN THE CASE OF TOP MAN EXPORTS V ITO, 318 ITR (AT) 87 (MUM)(SB) TO THE EFFECT THAT THE FACE VALUE ACCR UES AS INCOME ON MAKING EXPORTS, WHICH FALLS U/S.28(IIIB) AND PROFIT ON SALE OF DEPB U/S.28(IIID) IS ONLY THE AMOUNT WHICH IS IN EXCESS OF SALES PRICE OVER FACE VALUE. CONSEQUENTLY, WE SET ASIDE THE ORDER OF THE CIT (A) AND RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR DECISION AFRESH AS PER THE DECISION IN THE CASE OF KALPATARU COLOURS (SUPRA). I.T.A NO.732/ MUM/2010 ASSESSMENT YEAR: 2000-2001 3 4. IN THE RESULT, THE APPEAL STANDS ALLOWED FOR STA TISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26 TH NOVEMBER, 2010 SD/- (N.V.VASUDEVAN) (JUDICIAL MEMBER) SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI, DATED 26 TH NOVEMBER , 2010 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-24, MUMBAI 4. COMMISSIONER OF INCOME TAX, 13, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH D, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI I.T.A NO.732/ MUM/2010 ASSESSMENT YEAR: 2000-2001 4 I.T.A NO.732/ MUM/2010 ASSESSMENT YEAR: 2000-2001 5