SARAF EXPORT, CHURU V. ASSIATANT COMMISSIONER OF INCOME TAX, CIRCLE, JHUNJHUNU

ITA 778/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2111 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 16-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR AASHWINI D HOSMANI JCIT DHK
• Keywords: Business income; Rule of consistency; Question of law
• Section: 143(3); 80HHC; 80IB; 10B

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 777 & 778/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 & 2012-13 M/S SARAF EXPORT, RIICO INDUSTRIAL AREA, SARDARSHAHAR, DISTT. CHURU. CUKE VS. ASS. COMMISSIONER OF INCOME TAX, CIRCLE- JHUNJHUNU. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AATFS 9394 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SURESH OJHA (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : DR. AASHWINI D. HOSMANI (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13/02/2018 MN?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 21/02/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, JM THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AG AINST TWO SEPARATE ORDERS OF LD. CIT(A)-3, JAIPUR BOTH DATED 21.08.201 7 PERTAINING TO THE ASSESSMENT YEARS 2010-11 & 2012-13. THE ASSESSEE H AS RAISED THE COMMON GROUNDS IN BOTH THESE APPEALS. THE GROUNDS RAISED FOR THE ASSESSMENT YEAR 2010-11 ARE AS UNDER:- 1. THAT THE ORDER PASSED BY THE CIT(A)-III JAIPUR IS ILLEGAL AND AGAINST THE LAW. 2. THAT THE ORDER PASSED BY THE COMMISSIONER OF INC OME-TAX (APPEALS) IS AGAINST THE JUDICIAL DECORUM AND DISCI PLINE BECAUSE THE JUDGMENT OF SUPREME COURT REFERRED IN 247 CTR P AGE 353 WAS NOT FOLLOWED BY THE AO AS WELL AS BY THE CIT(A) . 2 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. 3. THAT THE C.I.T. (A) SHOULD HAVE DECIDED THE EACH GROUNDS OF MEMO OF APPEAL AS PER THE JUDGMENT OF HONBLE RAJAS THAN HIGH COURT REPORTED IN 249 ITR 323 WHERE AS GROUND NO. & NOT DECIDED. FURTHER THE ARGUMENTS WERE NOT APPRECIATE D, WHICH SHOULD HAVE DECIDED AS PER LAW. 4. THAT IF THE DEDUCTION HAS BEEN ALLOWED IN THE IN ITIAL YEAR CANNOT BE REJECTED IN THE SUBSEQUENT YEAR, WAS NOT ADJUDIC ATED BY THE C.I.T. (A). 5. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) SH OULD HAVE APPRECIATED THAT THE PROVISIONS OF THE STATUTE IS B INDING ON THE REVENUE OFFICER WHICH WAS NEITHER DECLARED UNCONSTI TUTIONAL NOR STAYED BY ANY OF THE COMPETENT COURT. 6. THAT THE C.I.T. (A) SHOULD HAVE APPRECIATED THE WRITTEN SUBMISSION, SUBMITTED BEFORE HIM. IF NOT ADJUDICAT ED IS AN ILLEGALITY. 2. THE GROUND NO. 1 TO 3 ARE REGARDING VALIDITY OF THE IMPUGNED ORDER OF THE LD. CIT(A). THE ASSESSEE ENGAGED IN THE BUSINE SS OF MANUFACTURING OF WOODEN HANDICRAFT ITEM AND HAS SHOWN INCOME BY SALE S THEREOF. THE ASSESSEE CLAIMED DEDUCTION U/S 80IB OF THE ACT. THE AO NOTE D THAT THE ASSESSEE HAS CREDITED IN ITS PROFIT AND LOSS ACCOUNT THE FOLLOWI NG AMOUNTS:- I. VISHESH KRISHI UPAJ YOJANA RS. 42,55,715/- II. DRAWBACK DUTY RS. 23,51,125/- TOTAL RS. 66,06,840/- THE AO ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE CLAIM OF DEDUCTION U/S 80IB ON BOTH THESE AMOUNTS BE NOT DISALLOWED IN VIE W OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT 317 ITR 218 . AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE AO DISALLOWED THE CLAIM 3 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. OF DEDUCTION U/S 80IB TO THE EXTENT OF 25% THE AMOU NT OF RS. 66,06,840/-. ON APPEAL THE ASSESSEE SUBMITTED THAT THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS VS. 342 ITR 49 AS TO BE FOLLOWED TO ALLOW THE DEDUCTION U/S 80IB. IT WAS FURTHER CONTENDED TH AT WHEN THE HONBLE SUPREME COURT HAS DELIVERED THE DECISION IN CASE OF TOPMAN EXPORTS VS. CIT, SUBSEQUENT TO THE DECISION IN CASE OF LIBERTY INDIA (SUPRA) THEN THE CLAIM OF THE ASSESEE U/S 80IB SHOULD BE ALLOWED. T HE ASSESSEE HAS ALSO RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ART AND CRAFT EXPORT ART 246 CTR 463 AND SUBMITTED THAT WHEN THE CLAIM OF THE ASSESSEE WAS ALLOWED IN THE EARLIER YEAR THEN AS PE R RULE OF CONSISTENCY SUCH DEDUCTION HAS TO BE ALLOWED FOR SUBSEQUENT YEAR. T HE LD. CIT(A) DID NOT ACCEPT THESE CONTENTIONS OF THE ASSESSE AND CONFIRM THE DISALLOWANCE MADE BY THE AO IN RESPECT OF DEPB RECEIPTS, AS NOT PART OF THE PROFITS OF THE UNDERTAKINGS BY FOLLOWING THE DECISIONS OF THE HON BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT (SUPRA) AS WELL AS THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE ASSESSEES OWN CAS E FOR THE ASSESSMENT YEAR 2008-09. 3. BEFORE US, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) IS ILLEGAL, SO FAR T HE LD. CIT(A) HAS NOT DEALT WITH THE DECISIONS RELIED UPON BY THE ASSESSE IN CA SE OF TOPMAN EXPORTS VS. CIT (SUPRA) AS WELL AS DECISION OF BOMBAY HIGH COUR T IN THE CASE OF ART AND CRAFT EXPORT ART (SUPRA). HE HAS FURTHER CONTENTED THE JURISDICTIONAL HIGH 4 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. COURT IN THE CASE OF CIT VS. RAMESH CHAND MODI 249 ITR 323 HAS HELD THAT NON ADJUDICATION OF GROUNDS RAISED BY THE ASSE SSEE RENDERS THE IMPUGNED ORDER OF THE LD. CIT(A) AS ILLEGAL. THE LD . AR HAS FORCEFULLY CONTENDED THAT EACH GROUND TAKEN IN THE APPEAL SHOU LD HAVE BEEN DECIDED. THE QUESTION WHETHER EACH GROUND OF APPEAL HAS BEEN DEALT WITH OR NOT HAS TO BE TAKEN INTO CONSIDERATION AS HELD BY THE HONB LE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S SHRI RAM & COMPANY DBIT APPEAL NO. 101/2008 DATED 28.7.2008. 3.1 THUS, THE LD. AR HAS CONTENDED THE IMPUGNED ORD ER PASSED BY THE LD. CIT(A) WITHOUT DISCUSSING ALL THE CONTENTIONS AND D ECISIONS RELIED UPON BY THE ASSESSEE IS ILLEGAL. THE ARGUMENTS OF THE ASSESSEE WERE NOT CONSIDERED WHILE DECIDING THE APPEAL AND THEREFORE IT WOULD TANTAMOU NT TO ILLEGALITY. IN SUPPORT OF HIS CONTENTIONS, HE HAS RELIED UPON THE DECISIONS IN THE CASE OF LAXMI ELECTRONIC CORPORATION LIMITED VS. COMMISSION ER OF INCOME TAX 188 ITR 398 . HE HAS ALSO RELIED UPON THE VARIOUS DECISIONS AS UNDER:- 1. MULCHAND PATTI MANUFACTURE COMPANY VS. CIT 215 ITR 746 2. MUNIBYRAPPA VS. CIT 168 CTR 640. 3. JT. CIT VS. SAHELI LEASING & INDUSTRIES LTD. 4. MANGALORE GANESH BEEDI WORKS VS. CIT & ANOTHER 273 ITR 56. 5. HUKAMCHAND SHANKARLAL VS. CWT 163 ITR 1. 5 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. HENCE, THE LD. AR HAS CONTENDED THE IMPUGNED ORDERS OF THE LD. CIT(A) MAY BE SET ASIDE AND MATTER MAY BE REMANDED TO THE RECO RD OF THE LD. CIT(A) FOR CONSIDERING THE CONTENTIONS AND DECISIONS AS RAISED BY THE ASSESSEE. 4. ON THE OTHER HAND, LD. D/R HAS VEHEMENTLY ARGUED THAT WHEN THE ISSUE IN THE APPEAL IS COVERED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE ASSESSEES OWN CASE AS WELL AS DECISION OF HON BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT 317 ITR 218, THEN THE APPEAL FILED BY THE ASSESSEE IS DEVOID OF ANY MERIT OR SUBSTANCE. HE HA S RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE LD. AR OF THE ASSESSEE HAS GIVEN MU CH STRESS TO THE VALIDITY OF THE IMPUGNED ORDER PASSED BY THE LD. CIT(A), ON THE GROUND THAT THE LD. CIT(A) HAS NOT DISCUSSED THE DECISIONS RELIED UPON BY THE ASSESSEE AND FURTHER EACH AND EVERY GROUND RAISED BY THE ASSESSE E HAS NOT BEEN DEALT WITH BY THE LD. CIT(A). HENCE, IT WAS CONTENDED THAT TH E ARGUMENTS ADVANCE BY THE ASSESSEE BEFORE THE LD. CIT (A) HAVE NOT BEEN D EALT WITH BY THE LD. CIT(A) AND THEREFORE CIT(A) HAS NOT PASSED A SPEAKI NG ORDER WHICH DESERVES TO BE SET ASIDE. THOUGH, PRINCIPALLY THERE IS NO QUARREL ON POINT THAT THE DECISIONS AND ARGUMENTS PUT FORTH BY THE ASSESSEE O UGHT TO HAVE BEEN CONSIDERED AND DEALT WITH BY THE LD. CIT(A) HOWEVER , THIS IS NOT A CASE OF DECIDING A ISSUE BY THE LD. CIT(A) HAVING DISCRETIO N BUT THE ISSUE HAS ALREADY BEEN DECIDED BY THE HONBLE JURISDICTIONAL HIGH COU RT IN ASSESSEES OWN CASE 6 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. AND THEREFORE THE LD. CIT(A) WAS BOUND TO FOLLOW TH E DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE. THIS IS ALSO REQUIRED TO MAINTAIN THE JUDICIAL DISCIPLINE ON THE PART OF THE LOWER AUTHORITIES AND COURTS INCLUDING THIS TRIBUNAL TO FOLLOW THE BINDING PRECE DENTS OF HONBLE JURISDICTIONAL HIGH COURT WHEN THE DECISION IS REND ER IN ASSESSEES OWN CASE. THUS, WE FIND THAT THOUGH THE ASSESSEE RAISED VARIO US CONTENTIONS BEFORE THE LD. CIT(A), HOWEVER, WHEN THE ISSUE IS COVERED BY T HE BINDING PRECEDENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE THEN THE LD. CIT(A) WAS NOT REQUIRED TO DISCUSS EACH AND EVERY C ONTENTIONS OF THE ASSESSEE BUT TO DECIDE THE ISSUE BY FOLLOWING THE B INDING PRECEDENTS. WE FIND THAT THE LD. CIT(A) RECORDED ALL THE ARGUMENTS ADVA NCED BY THE ASSESSEE IN THE IMPUGNED ORDER IN PARA 5.2 AND THEN DECIDED THE ISSUE IN PARA 5.3 AS UNDER:- 5.2 DURING THE APPELLATE PROCEEDING THE APPELLANT HAS F ILED WRITTEN SUBMISSION AS UNDER AND ALSO ARGUED THE CAS E ON THE SAME BASIS. 'THAT ORDER PASSED BY THE ASSESSING OFFICER IS ILLE GAL AND AGAINST THE LAW. IN THIS CONNECTION, IT IS SUBMITTED THAT THE A SSESSING OFFICER, AT THE TIME OF FINALIZING ASSESSMENT, NOT ACCEPTED THE GRA NT OF DEDUCTION CLAIMED U/S. 801-A FOLLOWING THE ORDER OF 317 ITR P AGE 218 DELIVERED IN CASE OF M/S. LIBERTY INDIA V/S. CIT. 7 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX IS ILLEGAL BECAUSE THE STATUE IS HAVING PROVISION IN RESPECT OF TREATING THE DETB HAS TO BE TREATED AS B USINESS INCOME. THE PROVISION HAS NEITHER BEEN STAYED NOR H AS BEEN DECLARED AS UN-CONSTITUTIONAL TILL DATE BY ANY COUR T. THE CASE ORDER IS ILLEGAL AND AGAINST THE LAW. THIS ISSUE WA S NOT CONSIDERED IN CASE OF THE ASSESSEE EVER TILL DATE B Y ANY OF THE AUTHORITY IN ANY YEAR. IN THIS CONNECTION, IT IS SUBMITTED WITH DUE RESPEC T AND REGARD THAT THE JUDGMENT OF M/S. LIBERTY (INDIA) IS DELIVERED WITHOUT CONSIDERING THE AMENDMENT TOOK PLACE. THERE FORE, IT IS SUBMITTED THAT THE SAME IS AGAINST THE LAW AND NOT HAVING THE CHARACTER OF BINDING NATURE. IT WILL BE WORTHWHILE TO SUBMIT HERE THAT THOUGH IN CASE THE ASSESSEE HIMSELF, THE HONBLE RAJASTHAN HIGH COURT DELIVERED JUDGMENT IN THE ASSESSMENT YEAR THE JUDGMENT OF M/S. LIBERT Y INDIA IS APPLICABLE. THE ASSESSEE WENT IN THE APPEAL BEFORE HONBLE SUPR EME COURT AND THE SAME IS STILL PENDING. IN THESE FACTS AND CIRCUMSTA NCES, YOU ARE REQUESTED THAT THE ADDITION MADE MAY KINDLY BE DECL ARED AS ILLEGAL. IT WILL BE FURTHER WORTHWHILE TO SUBMIT HERE THAT T HE ASSESSING OFFICER SHOULD HAVE APPRECIATED THE CASE REPORTED I N 247 CTR PAGE 353, ON THE SAME SUBJECT, WHERE THE COURT DELIVERED THE JUDGMENT AFTER CONSIDERING THE AMENDMENT, WHICH WAS DELIVERED AFTE R THE PRONOUNCEMENT OF JUDGMENT OF M/S. LIBERTY INDIA. IT WILL BE FURTHER WORTHWHILE TO DRAW YOUR KIND ATT ENTION TOWARDS THE FACT THAT IF IN THE INITIAL YEAR, DEDUCTION OR EXEMPTION HAS BEEN GRANTED IN THAT CASE, NO INFERENCE IN RESPECT OF TH E DEDUCTION OR EXEMPTION CAN BE MADE IN THE SUBSEQUENT ORDER. 8 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. IN THIS CASE THE DEDUCTION WAS ALLOWED IN THE INITI AL ASSESSMENT YEAR 2005-06, AS SUCH IN THE SUBSEQUENT YEAR, NO IN TERFERENCE CAN BE MADE BY THE A.O. THE ACT OF THE A.O. IS ILLEGAL. IN THIS RESPECT IT IS STATED AS UNDER:- ' IF ALLOWED IN THE INITIAL YEAR CANNOT REJECTED IN SUBSEQUENT YEAR AS FAR AS THE ISSUE IN RESPECT OF THE FACT IN WHICH IF IN THE INITIAL YEAR THE DEDUCTION HAS BEEN ALLOWED IN THE SUBSEQUENT YEAR SAME CANNOT BE CHANGED. IN THIS RESPECT I WANT TO DRAW YOUR KIND ATTENTION TOWARDS THE ORDER OF INCOME TAX APPELLATE TRIBUNAL DELIVERED IN CASE OF TYCO VALVES & CONTROLS (INDIA) ... VS DEPARTMENT OF INCOME TAX ON 23 AUGUST, 2012 THE RELEVANT FEW PORTION ARE BEING REPRODUCED HEREUNDER : 'THEREFORE, THE START POINT OF THE LIMITATION FOR C LAIMING THE BENEFIT FLOWING FROM SECTION 10B WOULD COMMENCE FROM THE YEAR OF MANUFACTURE OR PRODUCTION OF THE UNDERTAKING. IF THE CONDITIONS PRESCRIBED IN THE SE CTION ARE NOT SATISFIED IN THE YEAR OF COMMENCEMENT OF PRODUCTION, WE HOLD THAT IN THE ABSENCE OF ANY DISTURBANCE IN R ESPECT OF RELIEF GRANTED IN INITIAL YEAR, THERE WAS NO LEG AL JUSTIFICATION TO DISTURB THE CONTINUOUS DEDUCTION O F SECTION 10B IN ANY OF THE SUBSEQUENT ASSESSMENT YEA R.' THE ABOVE ORDER OF THE HON'BLE TRIBUNAL IS CRYSTAL CLEAR IN RESPECT OF FACT THAT IF IN THE INITIAL YEAR THE DED UCTION HAS BEEN 9 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. CLAIMED CANNOT BE DISTURBED IN THE SUCCEEDING YEAR. THE RATIO OF THE ORDER OF THE TRIBUNAL IS APPLICABLE IN TOTO. I FURTHER WANT TO DRAW YOUR KIND ATTENTION TOWARDS THE ORDER OF TRIBUNAL IN CASE OF SAMRUDDHI INDUSTRIES L TD. DELIVERED BY THE ITAT PUNE BENCH IN WHICH THE HON'BLE BENCH I S ALSO OF THE SAME VIEW. I AM REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE ORDER OF TRIBUNAL (PARA 14) AS UNDER FOR YOUR R EADY REFERENCE: 'ASSESSEE AND WITHOUT ANY CHANGED CIRCUMSTANCES, TH E SAID CLAIM WAS SOUGHT TO BE DENIED IN A SUBSEQUENT YEAR, AND SUCH AN ATTEMPT WAS NEGATED BY THE HON'BLE HIGH COURT. IN THE INSTANT CASE, AS WE HAVE NOTED EARLIE R THE CIRCUMSTANCES HAVE CHANGED AFTER THE INITIAL ASSESS MENT YEAR AND THEREFORE, THE CLAIM IS SOUGHT TO BE DENIE D ON VALID GROUNDS AND WITHOUT DISTURBING THE CLAIM IN T HE INITIAL YEAR BECAUSE THE CIRCUMSTANCES IN THE INITI AL YEAR HAVE NOT UNDERGONE ANY CHANGE.' I WANT TO ALSO DRAW YOUR KIND ATTENTION TOWARDS THE JUDGMENT DELIVERED BY KARNATAKA HIGH COURT IN CASE OF ACE MULTI AXES SYSTEM LTD. THE RELEVANT PORTION THEREOF IS BE ING REPRODUCED HEREUNDER: 'INDUSTRIAL GROWTH WHICH IS REQUIRED TO BE ACHIEVED , IF TWO INTERPRETATIONS ARE POSSIBLE, THE COURTS HAVE T O LEARN IN FAVOUR OF EXTENDING THE BENEFIT OF DEDUCTION TO AN ASSESSEE WHO HAS AVAILED THE OPPORTUNITY GIVEN TO H IM UNDER LAW AND HAS GROWN IN HIS BUSINESS. THEREFORE WE ARE OF THE VIEW, IF A SMALL SCALE INDUSTRY, IN THE COURSE OF 10 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. 10 YEARS, STABILIZES EARLY, MAKES FURTHER INVESTMEN TS IN THE BUSINESS AND IT RESULTS IN IT'S GOING OUTSIDE T HE PURVIEW OF THE DEFINITION OF A SMALL SCALE INDUSTRY , THAT SHOULD NOT COME IN THE WAY OF ITS CLAIMING BENEFIT UNDER SEC. 80IB FOR 10 CONSECUTIVE YEARS, FROM THE INITIA L ASSESSMENT YEAR. THEREFORE THE APPROACH OF THE AUTHORITIES RUNS COUNTER TO THE SCHEME AND THE INTE NT OF THE LEGISLATURE. THEREBY THEY HAVE DENIED THE LEGIT IMATE BENEFIT, AN INCENTIVE GRANTED TO THE ASSESSEE. BOTH THE SAID ORDERS CANNOT BE SUSTAINED THEREFORE THE SUBST ANTIAL QUESTION OF LAW IS ANSWERED IN FAVOUR OF THE ASSESS EE AND AGAINST THE REVENUE. HENCE WE PASS THE FOLLOWING.' THE RATIO OF THE JUDGMENT IS ALSO APPLICABLE IN CAS E OF THE ASSESSEE. IN THE DECISION OF CIT VS. ART AND CRAFT EXPORT ART AND CRAFT EXPORT REPORTED IN 246 CTR PAGE 463 DELIVERED BY TH E HON'BLE HIGH COURT BOMBAY THE HON'BLE COURT HELD THAT ONCE EXEMPTION HAS BEEN ACCEPTED IN THE EARLIER YEAR THAN IN THE S UBSEQUENT YEAR FOR THE RULE OF CONSISTENCY SUCH DEDUCTION / EXEMPT ION HAS TO BE ALLOWED. THE SAME HAS BEEN REPRODUCED AS UNDER: - 'AS REGARDS QUESTIONS (A) AND (B) ARE CONCERNED, CO UNSEL FOR THE REVENUE FAIRLY STATED THAT THE DECISION OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE EARLIE R YEARS IN HOLDING THAT ASSESSEE IS ENGAGED IN THE MANUFACT URING ACTIVITY AND, THEREFORE, ENTITLED TO DEDUCTION UNDE R SECTION 80IB OF THE IT ACT, 1961 HAS BEEN ACCEPTED BY THE 11 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. REVENUE IN THE EARLIER YEARS. NO ARGUMENT IS ADVANC ED TO ESTABLISH THAT THE SAID DECISION OF THE TRIBUNAL FO R THE EARLIER YEARS IS ERRONEOUS. IN THESE CIRCUMSTANCES, QUESTION (A) AND (B) RAISED BY THE REVENUE CANNOT B E ENTERTAINED.' FROM THE PERUSAL OF ABOVE YOU WILL OBSERVE THAT IT IS A RULE OF LAW THAT IF THE EXEMPTION / DEDUCTION HAVE BEEN ALLOWED IS INITIAL YEAR IN THAT CASE SAME CANNOT BE DISTURBED IN THE SUBSEQUENT YEAR. IT WILL BE WORTHWHILE TO MENTION HERE THAT THE ORDE R OF THE ASSESSING OFFICER IS STILL A VALID ORDER NEITHER RE VERSE NOR STAYED BY ANY OF THE COMPETENT COURT THEREFORE IN THESE FA CT AND CIRCUMSTANCES THE ORDER IS A GOOD ORDER AND FOLLOWI NG THE SAME THE DEDUCTION CLAIMED MAY KINDLY BE ALLOWED. IT WIL L BE WORTHWHILE TO MENTION AND DRAW YOUR KIND ATTENTION FURTHER TOWARDS THE FOLLOWING ORDER OF INCOME TAX APPELLATE TRIBUNAL DELIVERED IN CASE OF SINT. URMILA BHANDARI ITA NOS. 766, 2593/DEL/2013 BY THE ITAT, DELHI BENCH H NEW DELHI WHEREIN IN THE SAME SET OF CIRCUMSTANCES THE HON'BLE TRIBUNAL DISMISSED THE APPEAL OF THE DEPARTMENT. THE RELEVANT PORTION IS B EING REPRODUCED HEREUNDER: 'IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: 'H' NEW DELHI BEFORE SHRI I.C. SUDHIR, J.M. AND SHRI J. SUDHAKAR REDDY, A.M. ITA NOS. 766,2593/DEL/2013 12 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. ASSESSMENT YEARS: 2009-10, 2010-11 ITO, WARD-2, ROOM NO. 210, 1 ST FLOOR, INCOME TAX BUILDING, IDPL VEERBHADRA, RISHIKESH, UTTRAKHAND VS. SMT. URMILA BHANDARI PROP. M/S HOTEL NARAYANA PALACE, TAPOVAN BADRINATH MARG, TEHRI GARHWAL, RISHIKESH, UTTRAKHAND 15. THE PROPOSITION LAID DOWN IN THIS JUDGMENT APPL IES TO THE FACTS OF THIS CASE. THE AO HAS EXAMINED THE CON DITION OF ALLOWABILITY OF THE CLAIM U/S 80IC IN THE INITIA L ASSESSMENT YEAR OF THE CLAIMS I.E. A.Y. 2005-06 ITS ELF IN AN ORDER PASSED U/S 143(3) OF THE ACT. THIS WAS FOL LOWED IN THE SUBSEQUENT A.Y. THESE ASSESSMENTS ARE NOT DISTURBED TILL DATE. THERE IS NO CHANGE IN THE FACT S AND CIRCUMSTANCES OF THE CASE. ONLY FRESH VIEW, CONTRAR Y TO THE EARLIER VIEW IS TAKEN DURING THIS IMPUGNED ASSESSMENT YEAR ON THE SAME SET OF FACTS AND EXEMPT ION IS DENIED. THIS CANNOT BE PERMITTED AS HELD BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF DELHI PATR A PRAKASHAM LTD. (SUPRA). RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE ORDER OF THE LD. CIT(A) FOR DIFFERENT REASONS.' FROM THE PERUSAL OF ABOVE JUDGMENT YOU WILL OBSERVE THAT THE DISALLOWANCES OF CLAIM OF THE ASSESSEE ARE AGAINST THE LAW. YOU ARE REQUESTED TO KINDLY ACCEPT THE APPEAL OF THE AS SESSEE.' 13 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. IT IS FURTHER SUBMITTED THAT THE JUDGMENT DELIVERED IN CASE OF M/S. SARAF SEASONING UDYOG BY THE HONBLE RAJASTHAN HIGH COURT WAS ALSO NOT DISTINGUISHED WHICH IS A JUDGMENT APPLICABLE IN THE CASE OF ASSESSEE DELIVERED AFTER CONSIDERING THE JUDGMENT OF HONBLE SUPREME COURT AVAILABLE AT THAT TIME AS WELL AS AFTER CONSIDERING THE AMENDMENT WHICH IS AT STATUE IN RESPECT OF SECTION 28, FOR TREATING THE INCOME AS BUSINESS INCOME. THE AO ONLY REFERRED AND REJECTED THE JUDGMENT BY M ENTIONING THE NAME IN THE ORDER. IN THESE FACTS AND CIRCUMSTA NCES, YOU WILL OBSERVE THAT THE ORDER PASSED BY THE ASSESSING OFFI CER IS ILLEGAL AND AGAINST THE LAW. IT IS ALSO SUBMITTED THAT EACH GROUND AND ARGUMENT MAY KINDLY BE DECIDED CONSIDERING THE JUDGMENT REFERRED ABOVE. YOU ARE REQUESTED TO KINDLY ACCEPT THE APPEAL AND O RDER PASSED BY THE A.O. MAY KINDLY BE DECLARE AS ILLEGAL.' 5.3 I HAVE CAREFULLY CONSIDERED THE MATERIAL BEFORE M E. I FIND THAT HON'BLE SUPREME COURT IN THE CASE OF LIBERTY I NDIA VS CIT REPORTED IN 317 ITR 218 (SC) HAS CLEARLY HELD THAT THE RECEI PTS OF DUTY DRAWBACK AND DEFB DO NOT FORM PART OF THE NET PROFIT OF ELIG IBLE INDUSTRIAL UNDERTAKING FOR THE PURPOSE OF THE DEDUCTION UNDER SECTION 80I/80IB OF THE IT ACT, 1961. THEREFORE FOLLOWING THE DECISION OF THE SUPREME COU RT IN THE CASE OF LIBERTY INDIA VS CIT 317 ITR 218 (SC) AND THE DE CISION OF HON'BLE RAJASTHAN HIGH COURT IN THE APPELLANT OWN CASE FOR THE A.Y. 2008-09 HELD THAT THE DECISION OF THE SUPREME COURT OF LIBE RTY INDIA IS APPLICABLE ON THE APPELLANT. I AM THE VIEW THAT DUT Y DRAWBACK AMOUNT OF RS.6,44,740/- IS NOT FORM PART OF NET PROFIT OF ELIGIBLE UNDER TAKING FOR 14 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. THE PURPOSE OF THE DEDUCTION U/S 80IB OF THE LT. AC T. THEREFORE THE AO RIGHTLY REJECTED THE CLAIM OF THE APPELLANT U/S 80I B ON DUTY DRAWBACK. HENCE I CONFIRM THE ACTION OF THE AO. THESE GROUNDS ARE NOT ALLOWED. 5.1 THE LD. AR HAS NOT DISPUTED THIS FACT THAT THE HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE FOR THE AY 2008-0 9 AS DECIDED THIS ISSUE AGAINST THE ASSESSEE BY FOLLOWING THE DECISION OF H ONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT (SUPRA). THUS, W HEN THE HONBLE HIGH COURT IN ITS WISDOM HAS TAKEN A VIEW THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB IN RESPECT OF VISHESH KRISHI UPAJ YOJANA A ND DRAWBACK DUTY THEN, THE SAID DECISION OF HONBLE JURISDICTIONAL HIGH CO URT IS BINDING ON THE AUTHORITIES BELOW INCLUDING THIS TRIBUNAL. THE LD. AR HAS REITERATED ITS CONTENTIONS BEFORE US. HOWEVER, WE FIND THAT THE D ECISION IN CASE OF TOPMAN EXPORTS VS. CIT (SUPRA) HAS BEEN RENDERED BY THE HO NBLE SUPREME COURT IN RESPECT OF DEDUCTION U/S 80HHC AND NOT IN RESPECT O F THE DEDUCTION U/S 80IB. FURTHER, EVEN IF THERE IS A MERIT IN THE CONTENTION S OF THE ASSESSEE THAT THE DECISION IN CASE OF TOPMAN EXPORT IS APPLICABLE BUT ONCE THE HONBLE HIGH COURT HAS ALREADY DECIDED THIS ISSUE BY UNDERSTANDI NG THE IMPLICATIONS OF THE JUDGMENTS OF HONBLE SUPREME COURT, THEN THE AUTHOR ITIES BELOW ARE NOT SUPPOSED TO TAKE A DIFFERENT VIEW AS TAKEN BY THE H ONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE. IT APPEARS THAT THE ASSESSEEE IS MORE INTERESTED IN CRITICIZING THE IMPUGNED ORDER OF THE LD. CIT(A) THAN THE MERITS 15 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. OF THE ISSUE. ACCORDINGLY, WE DO NOT FIND ANY SUBS TANCE OR MERIT IN THE GROUNDS NOS. 1 TO 3 OF THE ASSESSEES APPEAL CHALLE NGING THE VALIDITY OF THE IMPUGNED ORDER OF THE LD. CIT(A). 6. GROUND NO. 4 IS REGARDING THE DEDUCTION ALLOWED IN THE INITIAL YEAR BUT WAS DENIED IN THE SUBSEQUENT YEAR. 6.1 WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE ON THE POINT THAT IF THE ASSESSEE WAS FOUND TO BE ELIGIBLE FOR DEDUCTION U/S 80IB IN THE INITIAL YEAR OF CLAIM THEN THE ASSESSING OFFICER CANNOT DENY THE BE NEFIT OF CLAIM IN THE SUBSEQUENT YEARS WITHOUT DISTURBING THE ORDER OF EA RLIER YEAR. HOWEVER, IN THE CASE IN HAND, THE ASSESSEE WAS NOT DENIED THE E LIGIBILITY OF DEDUCTION U/S 80IB BUT ONLY A PARTICULAR RECEIPTS/INCOME HAS BEEN HELD AS NOT ELIGIBLE FOR DEDUCTION U/S 80IB ON THE GROUND THAT IT IS NOT AN INCOME DERIVED BY THE INDUSTRIAL UNDERTAKING. THEREFORE, A PARTICULAR RE CEIPT WHICH IS FOUND TO BE NOT INCOME/PROFIT DERIVED FROM THE BUSINESS OF THE ELIGIBLE UNDERTAKING HAS TO BE EXCLUDED FOR THE PURPOSE OF COMPUTING THE DEDUCT ION U/S 80IB. HENCE, WE FIND THAT THE CASE OF THE ASSESSEE DOES NOT FALL IN THE CATEGORY WHERE THE ASSESSING OFFICER HAS ACCEPTED THE BUSINESS OF THE ASSESSEE UNDERTAKING AS ELIGIBLE FOR DEDUCTION U/S 80IB IN THE INITIAL YEAR BUT HAS TAKEN A DIFFERENCE STANDS IN THE SUBSEQUENT YEARS. FURTHER, A YEAR BE FORE US IS NOT THE FIRST YEAR IN WHICH THE CLAIM OF THE ASSESSEE U/S 80IB IN RESP ECT OF VISHESH KRISHI UPAJ YOJANA AND DRAWBACK DUTY HAS BEEN DENIED BUT THIS W AS DENIED IN THE EARLIER 16 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. YEARS AND FOR THE ASSESSMENT YEAR 2008-09, THE MATT ER HAS BEEN CARRIED TO THE HONBLE JURISDICTIONAL HIGH COURT BUT THE ASSES SEE COULD NOT SUCCEED. HENCE, WE DO NOT FIND ANY SUBSTANCE IN THE GROUND N O. 4 OF THE ASSESSEES APPEAL SAME IS DISMISSED. 7. GROUND NOS. 5 TO 6 ARE ONLY IN SUPPORT OF THE GROUND NO. 1 TO 3 AND THEREFORE NO SPECIFIC ADJUDICATION IS REQUIRED. 7.1 AS IT IS APPARENT FROM THE GROUNDS RAISED BY TH E ASSESSEE IN THE PRESENT APPEAL AS WELL AS CONTENTIONS AND ARGUMENTS ADVANCE D BY THE LD. AR BEFORE US THAT THE ASSESSEE IS MORE INTERESTED IN CRITICIZ ING THE IMPUGNED ORDER OF THE LD. CIT(A) THAN THE MERITS OF THE ISSUE. THOUG H THE ASSESSEE IS HAVING A LEGAL RIGHT TO CHALLENGE THE IMPUGNED ORDER TO KEEP THE ISSUE ALIVE HOWEVER, THE ASSESSEE HAS NOT RAISED THE GROUND ON THE MERIT S OF THE ISSUE BUT THE PRESENT APPEAL HAS BEEN FILED ONLY TO CRITICIZE THE IMPUGNED ORDER OF THE LD. CIT(A) THAT TOO ON THE ISSUE WHICH IS PURELY LEGAL IN NATURE. THEREFORE, WE FIND THAT THE ASSESSEE IS MORE INTERESTED IN SETTIN G ASIDE THE MATTER TO THE RECORD OF THE LD. CIT(A) AND TO KEEP THE LITIGATION PENDING INSTEAD OF GETTING THE MATTER AND DISPUTE TO AN END. THUS, THE PROCES S OF LAW FOR FILING THE APPEAL CANNOT BE MISUSED TO ACHIEVE ITS MALAFIDE MO TIVE AND PURPOSE. WE FIND THAT THE ASSESSEE INSTEAD OF CONTESTING THE IS SUE ON MERIT HAS MISUSED THE PROCESS OF LAW ONLY TO CRITICIZE THE IMPUGNED O RDER AND KEEPING THE PROCEEDINGS PENDING. THE ASSESSEE INSTEAD OF COMING WITH CLEAN HAND AND ACCEPTING THE FACT THAT THE ISSUE INVOLVED IN THE A PPEAL IS COVERED BY THE 17 ITA NO. 777 & 778/JP/ 2017. M/S SARAF EXPORT, RIICO INDUSTRIAL AREA. DECISION OF HONBLE HIGH COURT IN ASSESSEES OWN CA SE HAS ARGUED AT LENGTH TO FIND FAULT IN THE IMPUGNED ORDER OF THE LD. CIT(A). ACCORDINGLY, WE DISMISS BOTH THESE APPEALS OF THE ASSESSEE WITH A COST OF R S. 5,000 EACH. THE REGISTRY IS DIRECTED TO ENSURE THAT THE ASSESSEE SHOULD FILE RECEIPTS OF PAYMENTS OF THE COST OF RS. 10,000/- FAILING, WHICH THE MATTERS IF ANY FILED BY THE ASSESSEE IN FUTURE SHALL NOT BE REGISTERED TILL THE COMPLIANCE OF THE COST. 8. IN THE RESULT, APPEALS OF THE ASSESSEE ARE DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/02/2018. SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 21/02/2018. POOJA/- VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S SARAF EXPORT RIICO INDUSTRIAL AR EA, DISTT. CHURU. 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-JHUNJHUNU. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE [ITA NO. 777 & 778/JP/2017] VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR