ZAM ZAM ENTERPRISES, MUMBAI V. ADDL CIT RG 15(1), MUMBAI

ITA 7728/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8459 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2004-2005
• Appeal Filed On: 15-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVIN VARMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G , MUMBAI BEFORE SHRI I. P. BANSAL, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER ITA NO. : 7728/MUM/2011 ASSESSMENT YEAR : 2004-05 M/S. ZAM ZAM ENTERPRISES ALLANA HOUSE, 4 J. A. ALLANA MARG, COLABA, MUMBAI-400 001 PAN NO: AAAFZ 0100 C VS. ACIT, RANGE 15(1), MATRU MANDIR, 1 ST FLOOR, TARDEO ROAD, MUMBAI-400 034 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI APURVA SHAH RESPONDENT BY : SHRI PRAVIN VARMA DATE OF HEARING : 2 3 .1 0.2012 DATE OF PRONOUNCEMENT : 23.10.2012 ORDER PER RAJENDRA SINGH, A.M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 16.08.2011 OF CIT(A)-26, MUMBAI FOR THE A.Y. 2004-0 5. THE DISPUTE RAISED BY THE ASSESSEE IN THIS APPEAL IS REGARDING THE ALLOWABILITY OF DEDUCTION U/S.80HHC. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE RETURN OF INCOME FOR THE A.Y. 2004-05 CLAIMED DEDUCTION U/S.80HHC(1A) IN RESPECT OF SALE OF FROZEN FOODSTUFFS TO M/S. ALLANASONS LTD., AN EXPOR T HOUSE. THE ITA NO : 7728/MUM/2011 M/S. ZAM ZAM ENTERPRISES 2 ASSESSEE HAD MADE THE CLAIM AS SUPPORTING MANUFACTU RER ON THE BASIS OF DISCLAIMER CERTIFICATE ISSUED BY THE EXPORT HOUSE I N FORM NO.10CCAB IN WHICH IT WAS CERTIFIED THAT THE EXPORT HOUSE HAD NO T CLAIMED DEDUCTION U/S.80HHC IN RESPECT OF TURNOVER OF `. 18.32 CRORES. THE A.O. HOWEVER, OBTAINED THE DETAILS OF INCOME DECLARED BY M/S. ALL ANASONS LTD. AND NOTED THAT THEY HAD INCURRED LOSS ON EXPORT FROM TR ADING GOODS AND THERE WAS ALSO OVERALL LOSS IN THE BUSINESS. THE A.O., T HEREFORE, FOLLOWING THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF IP CA LABORATORIES LTD. (266 ITR 521) HELD THAT THE ASSESSEE AS A SUPPORTIN G MANUFACTURER WAS NOT ELIGIBLE FOR DEDUCTION U/S.80HHC, AS NO SUCH DE DUCTION WAS ALLOWABLE TO THE EXPORT HOUSE. THE A.O. ACCORDING LY DENIED THE CLAIM OF THE DEDUCTION. 3. THE ASSESSEE DISPUTED THE DECISION OF THE A.O. A ND SUBMITTED BEFORE THE CIT(A) THAT THE ASSESSEE HAD MADE THE CL AIM OF DEDUCTION U/S.80HHC(1A) AND ALL THE CONDITIONS MENTIONED IN T HE SAID SUB-SECTION WERE SATISFIED BY THE ASSESSEE AND, THEREFORE, THE CLAIM WAS ALLOWABLE EVEN IF THE EXPORT HOUSE HAD INCURRED LOSSES. THE ASSESSEE DISTINGUISHED THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CA SE OF IPCA LABORATORIES LTD. (SUPRA) ON THE GROUND THAT THE HO N'BLE SUPREME COURT WAS CONSIDERING THE ISSUE OF THE EXPORT HOUSE AND N OT THE SUPPORTING MANUFACTURER. THERE WERE NO ISSUES RAISED BEFORE T HE HON'BLE SUPREME COURT THAT IN CASE THE EXPORT HOUSE IS NOT ELIGIBLE FOR DEDUCTION ITA NO : 7728/MUM/2011 M/S. ZAM ZAM ENTERPRISES 3 U/S.80HHC THE SUPPORTING MANUFACTURER WILL ALSO BE INELIGIBLE. THE CIT(A) HOWEVER, WAS NOT SATISFIED BY THE ARGUMENTS ADVANCED. HE REFERRED TO THE JUDGMENT OF THE HON'BLE SUPREME COU RT IN THE CASE OF IPCA LABORATORIES LTD. (SUPRA) IN WHICH IT WAS CLEA RLY HELD THAT IF NO DEDUCTION WAS ALLOWABLE TO THE EXPORT HOUSE BECAUSE THERE WAS A LOSS, THEN THE EXPORT HOUSE COULD NOT PASS ON OR GIVE CRE DIT OF SUCH NON EXISTENCE DEDUCTION TO A SUPPORTING MANUFACTURER. THE CIT(A) ACCORDINGLY CONFIRMED THE DISALLOWANCE AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. BEFORE US, THE LEARNED AR FOR THE ASSESSEE AT TH E OUTSET SUBMITTED THAT IN THE ASSESSEES OWN CASE IN THE A.Y. 2003-04 , THE TRIBUNAL HAD RESTORED THE ISSUE TO THE FILE OF THE A.O. FOR FRES H ADJUDICATION ON THE BASIS OF FINAL OUTCOME OF THE APPEAL REGARDING THE ALLOWABILITY OF DEDUCTION U/S.80HHC IN THE CASE OF M/S. ALLANASONS LTD. THE LEARNED DR, ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER S OF THE AUTHORITIES BELOW. 5. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE M ATTER CAREFULLY. THE DISPUTE IS REGARDING THE ALLOWABILITY OF DEDUCT ION IN THE CASE OF THE ASSESSEE WHO WAS A SUPPORTING MANUFACTURER AND HAD SUPPLIED THE GOODS TO THE EXPORT HOUSE I.E. M/S. ALLANASONS LTD. . THE CLAIM HAD BEEN DISALLOWED BY THE AUTHORITIES BELOW ON THE GROUND T HAT THE EXPORT HOUSE ITA NO : 7728/MUM/2011 M/S. ZAM ZAM ENTERPRISES 4 HAD INCURRED LOSS AND WAS NOT ELIGIBLE FOR DEDUCTIO N U/S.80HHC. THE AUTHORITIES BELOW HAVE FOLLOWED THE JUDGMENT OF HON 'BLE SUPREME COURT IN THE CASE OF IPCA LABORATORIES LTD. (SUPRA). WE FIND THAT THE SAME ISSUE HAD CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL I N CASE ASSESSEES OWN CASE IN THE A.Y. 2003-04, IN WHICH THE TRIBUNAL VID E ORDER DATED 30.11.2006 IN ITA NO.6043/MUM/06 RESTORED THE ISSUE TO THE FILE OF THE A.O. FOR FRESH ADJUDICATION ON THE BASIS OF FINAL O UTCOME OF THE APPEAL BY M/S. ALLANASONS LTD. REGARDING THE ALLOWABILITY OF DEDUCTION U/S.80HHC IN THEIR CASE. THE FACTS THIS YEAR ARE IDENTICAL. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO T HE FILE OF THE A.O. FOR FRESH ADJUDICATION ON THE BASIS OF FINAL OUTCOME IN THE CASE OF THE EXPORT HOUSE AND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD OCTOBER, 2012. SD/- SD/- ( I. P. BANSAL ) ( RAJENDRA SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT: 23.10.2012 ITA NO : 7728/MUM/2011 M/S. ZAM ZAM ENTERPRISES 5 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI