ANANDSONS OVERSEAS TRADING P. LTD, MUMBAI V. ACIT 6(1), MUMBAI

ITA 7941/MUM/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2767 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-10-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 24-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 80HHC

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI , , BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.7941/MUM/2011 ASSESSMENT YEAR 2002-03 ANANDSONS OVERSEAS TRADING PVT. LTD. 1 ST FLOOR, ANAND APARTMENTS, 1 ST MOTISHAW CROSS LANE, BYCULLA (E), MUMBAI 400027 PAN: AAACA4012D (APPELLANT ) VS. THE ACIT 6(1), MUMBAI. (RESPONDENT) APPELLANT BY : SHRI BHUP ENDRA SHAH RESPONDENT BY : SHRI R.A.D YANI DATE OF HEARING 29/10/2015 DATE OF PRONOUNCEMENT 29/10/2015 ORDER PER BEENA PILLAI J.M: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE , AGAINST THE ORDER PASSED BY LD. CIT(A)-14, MUMBAI VIDE ORDER DATED 14/10/201 1, FOR ASSESSMENT YEAR 2002-03. THE ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER ERRED IN ASSESSING TOTAL INCOME AT RS.80,60,225/- A S AGAINST RETURNED INCOME OF RS.31,65,660/-. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED ASSESSING OFFICER ERRED IN DISALLOWING DEDUCTION UNDER SECTION 80HHC AMOUNTING TO RS.46,76,641/- EVEN THOUGH THE APPELLANT IS AN EXPORTER, BY WRONGLY IN TERPRETING SEC. 80HHC PARTICULARLY WHEN THE DECISION OF THE APEX COURT IS YET TO BE P ASSED IN RESPECT OF TOPMAN AND KALPATARU CHEMICALS ETC. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED ASSESSING OFFICER ERRED IN DISALLOWING DEDUCTION UNDER SECTION80HHC A MOUNTING TO RS.46,76,641/- BY ITA NO.7941/MUM/2011 ASSESSMENT YEAR 2002-03 2 HOLDING THAT AFTER REDUCING THE FIGURE OF DEPB , BU SINESS INCOME IS REDUCED TO NEGATIVE FIGURE. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED ASSESSING OFFICER ERRED IN DISALLOWING DEDUCTION UNDER SECTION80HHC A MOUNTING TO RS.46,76,641/- EVEN THOUGH AS PER THE AMENDED PROVISIONS, THE DEPB HAS TO BE INCLUDED IN BUSINESS PROFITS & THE ASSOCIATIONS HAVE REPRESENTED BEFORE THE GOVERN MENT TO TREAT ALL EXPORTERS ALIKE IRRESPECTIVE OF THEIR TURNOVERS. 2. THE BRIEF FACTS OF THE CASE AS RECORDED BY THE L D.AO ARE AS UNDER. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING T OTAL INCOME OF RS.31,65,660/- ON 29/10/2002. THE TOTAL INCOME WAS WORKED OUT AFTER CLAIMING DEDUCTION UNDER SECTION 80HHC OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AMOUNTING TO RS.46,76,641/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(1) OF THE ACT, COMPUTING THE TOTAL INCOME AS PER THE RETURNED INCO ME. SUBSEQUENTLY, IT WAS NOTICED BY THE ASSESSING OFFICER THAT, DURING THE R ELEVANT PREVIOUS YEAR, THE ASSESSEE HAD RECEIVED EXPORT INCENTIVES, BEING DEPB AMOUNTING TO RS.1,28,20,204/-, WHICH WAS CREDITED TO THE P&L ACC OUNT. HE HAS ALSO NOTED FROM THE COMPUTATION OF DEDUCTION UNDER SECTION 80HHC TH AT, THE TOTAL BUSINESS INCOME OF THE ASSESSEE WAS RS.80,35,225/-, WHICH INCLUDED THE EXPORT INCENTIVES. THEREFORE, IF THE EXPORT INCENTIVES ARE REDUCED FRO M THE BUSINESS INCOME, THE ELIGIBLE PROFIT FOR DEDUCTION UNDER SECTION 80HHC BECOMES A NEGATIVE FIGURE. THE ASSESSING OFFICER ACCORDINGLY FOLLOWING THE JUDGME NT IN THE CASE OF IPCA LABORATORIES P. LTD., 251 ITR 401(MUM), AND DISALLO WED THE DEDUCTION UNDER SECTION 80HHC OF THE ACT. AGGRIEVED BY THE ORDER O F THE ASSESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). 3. THE CIT(A) HELD AS UNDER: 5. I HAVE CONSIDERED THE ABOVE SUBMISSION OF THE A PPELLANT. IT IS SEEN THAT THE EXPORT TURNOVER OF THE APPELLANT IS MORE THAN RS.10.00 CRO RES. HENCE, IN VIEW OF THE AMENDED PROVISIONS OF SEC.80HHC, APPLICABLE TO THE RELEVANT YEAR, DEDUCTION UNDER SECTION 80HHC IN RESPECT OF DEPB IS ALLOWABLE ONLY IF THE C ONDITIONS GIVEN IN THE 3 RD AND 4 TH PROVISO OF SEC. 80HHC(3) ARE SATISFIED. IN THIS RE GARD, HONBLE BOMBAY HIGH COURT HAVE IN THE CASE OF KALPATARU COLOURS & CHEMICALS ( SUPRA) HAVE HELD THAT IF THE ASSESSEE DID NOT PROVE THAT IT HAS BEEN FULFILLED THE CONDIT IONS SET OUT IN THE 3 RD PROVISO TO SEC. ITA NO.7941/MUM/2011 ASSESSMENT YEAR 2002-03 3 80HHC(3), HE IS NOT ENTITLED TO DEDUCTION UNDER SEC TION80HHC. SINCE THE FACTS OF THE CASE OF THE APPELLANT ARE IDENTICAL, I HOLD THAT TH E APPELLANT IS NOT ENTITLED TO DEDUCTION UNDER SECTION80HHC AND THE ASSESSING OFFICER HAS RI GHTLY DISALLOWED THE DEDUCTION. HIS ORDER IS THEREFORE, UPHELD. 4. AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US. THE ASSESSEE SUBMITS THAT THE ISSUE IS SQUARELY COV ERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS VS. CIT , REPORTED IN 342 ITR 49(SC). LD. DR, FAIRLY CONCEDED THAT THE ISSUE S TANDS COVERED BY THE AFORESAID DECISION IN THE CASE OF TOPMAN EXPORTS (SUPRA). R ESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE HONBLE SUPREME COURT, WE ALLOW THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/10/20 15 29/10/2015 SD/- SD/- ( , /RAJENDRA ) ( / BEENA PILLAI) /ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; #$ DATED 29/10/2015 !' #$ / COPY OF THE ORDER FORWARDED TO : 1. %&'( / THE APPELLANT 2. )*'( / THE RESPONDENT. 3. +, ( %& ) / THE CIT(A)- 4. +, / CIT 5. -. ),$/0 , %&1 %/0 , / DR, ITAT, MUMBAI 6. 2 / GUARD FILE. / BY ORDER, *-&, ), //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI