Appeal details
Counselvise Citation
[2011] 134 COUNSELVISE.COM (IT) 4749 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 1 month(s) 21 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
15-07-2011
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
26-05-2011
Assessment Year
1998-1999
Appeal Filed On
25-05-2010
Judgement Text
IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI A BENCH, CHENNAI. BEFORE SHRI.U.B.S. BEDI J.M. & SHRI. N.S. SAINI A.M . I.T.A. NO. 806/MDS/2010 ASSESSMENT YEAR: 1998-99 M/S. VANAVIL DYES & CHEMICALS LTD., (NOW KNOWN AS CLARIANT CHEMICALS INDIA LTD.), II, FLOOR, KENCES TOWERS, RAMAKRISHNA STREET, T. NAGAR, CHENNAI 600 017. [PAN: AAACV2989G] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III(4), CHENNAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SAROJ KUMAR PARIDA REVENUE BY : SHRI K.E.B. RENGARAJAN, JR. STANDING COUNSEL ORDER PER U.B.S. BEDI, J.M . THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER UNDER SECTION 263 PASSED BY THE LD.CIT, CHENNAI-I, CHENNAI DATED 23.03.2010 RELEVANT TO THE ASSESSMENT YEAR 1998-99, WHEREBY THE ACTION OF THE LD. CIT IN INVOKING THE REVISIONAL POWER TO MODIFY THE ORDER OF THE ASSESSM ENT DATED 31.12.2007 SUITABLY BY RECOMPUTING THE DEDUCTION UNDER SECTION 80HHC AFTER REDUCING DEDUCTION ALLOWED UNDER SECTION 80IA FROM THE BUSIN ESS PROFITS AND ALSO MAT CREDIT IN ACCORDANCE WITH LAW AFTER TAKING INTO CON SIDERATION THE POINT MENTIONED IN THE SAID ORDER HAS BEEN CHALLENGED. 2. FACTS INDICATE THAT THE ASSESSEE DEALS IN MANUF ACTURE/TRADING OF DYES, FINE CHEMICALS AND PIGMENTS. THE RETURN OF INCOME F OR THE ASSESSMENT YEAR 1998-99 WAS FILED BY THE ASSESSEE ON 30.11.1998 ADM ITTING INCOME OF I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NO. .. .806 806806 806/MDS/1 /MDS/1 /MDS/1 /MDS/10 00 0 2 ` .1,28,96,611/-. THE ASSESSMENT UNDER SECTION 143(3) READ WITH 147 WAS COMPLETED ON 24.03.2003 AND THE ASSESSED INCOME WAS AT ` .3,62,14,138/-. THE ORDER WAS REVISED UNDER SECTION 154 ON 12.05.2003 A ND THE REVISED INCOME IS ` .1,63,39,530/-. THE ASSESSEE WENT ON APPEAL. THE LD . CIT(A) VIDE ITA NOS. 42 & 43/2003-04-AIII PASSED THE APPELLATE ORDER ON 13. 08.2004. GIVING EFFECT TO THIS THE ASSESSMENT ORDER WAS REVISED ON 24.09.2004 AND THE REVISED INCOME WAS ` 1,31,75,318/-. APPEAL WAS FILED BOTH BY THE DEPARTM ENT AND THE ASSESSEE AND THE ITAT C BENCH VIDE ORDER IN ITA NO. 2744 & 2745(MDS)2004 PASSED THE ORDER ON 29.01.2007. IN THE ORDER, THE ITAT SET ASIDE SOME ISSUES AND REMANDED THEM TO THE FILE OF THE ASSESSING OFFICER. 3. THE ASSESSING OFFICER, PURSUANT TO THE DIRECTIO N OF THE ITAT IN ORDER DATED 29.01.2007 FIXED SUCH CASE FOR HEARING AND AF TER DISCUSSING THE CASE WITH ASSESSEES REPRESENTATIVE AND AFTER EXAMINING THE D ETAILS, COMPLETED SUCH ASSESSMENT/PASSED FRESH ORDER DATED 31.12.2007, WHI CH HAS BEEN REVISED BY THE LD. CIT, WHILE INVOKING THE PROVISIONS OF SECTI ON 263 AND AFTER CONSIDERING THE OBJECTIONS FILED BY THE ASSESSEE VIDE ORDER DAT ED 23.03.2010 AGAINST WHICH, THE ASSESSEE HAS COME UP IN APPEAL. IT WAS SUBMITTE D THAT FIRSTLY THERE WAS NO ERROR IN THE ORDER PASSED BY THE ASSESSING OFFICER PURSUANT TO THE ORDER PASSED BY THE ITAT AND IF AT ALL THERE IS ANY ERROR OF NOT DEDUCTING THE RELIEF UNDER SECTION 80IA FROM PROFITS IN COMPUTING RELIEF UNDER SECTION 80HHC, THE SAME IS IN ORIGINAL ORDER OF ASSESSMENT DATED 27.03.2003. I N SUCH A CASE THE ORDER OF THE LD. CIT DATED 23.03.2010 IS TIME BARRED. IT WAS SUBMITTED THAT THE RELIEF UNDER SECTION 80IA WAS NOT DEDUCTIBLE FROM PROFITS AND GAINS OF BUSINESS BEFORE I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NO. .. .806 806806 806/MDS/1 /MDS/1 /MDS/1 /MDS/10 00 0 3 COMPUTING RELIEF UNDER SECTION 80HHC. IT WAS ALSO F URTHER SUBMITTED THAT IF TWO VIEWS ARE POSSIBLE THEN THE REVISION UNDER SECTION 263 IS NOT PERMISSIBLE. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT AS PER THE LATEST DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF GENERA L OPTICS ASIA LTD. VS. DCIT 315 ITR 400, THE AMENDED PROVISION IS EFFECTIVE FRO M THE ASSESSMENT YEAR 1999-2000 SO ON THIS COUNT ALSO ORDER COULD NOT BE REVISED. IT WAS, THUS PLEADED THAT THE ORDER PASSED BY THE LD. CIT SHOULD BE QUASHED. 4. THE LD. DR, WHILE RELYING UPON THE ORDER OF THE LD. CIT HAS PLEADED FOR ITS CONFIRMATION. IT WAS SUBMITTED THAT THE ORDER WHICH HAS BEEN REVISED AND IS UNDER CHALLENGE WAS PASSED ON 23.03.2010, IN WHICH RELIEF UNDER SECTION 80IA TO BE NOT DEDUCTIBLE FROM PROFIT AND GAINS BEFORE C OMPUTING DEDUCTION UNDER SECTION 80HHC HAS BEEN CHALLENGED, BUT IF FACTS AND MATERIAL ON RECORD IS LOOKED INTO, THERE WAS DECISION OF SPECIAL BENCH OF ITAT, CHENNAI IN THE CASE OF ACIT V. ROGINI GARMENTS 294 ITR 15 (AT)(SB) AT T HAT TIME, THEREFORE, IT CANNOT BE SAID THAT INVOCATION OF PROVISIONS OF SEC TION 263 BY LD. CIT IS IN ANY WAY NOT LEGALLY CORRECT, BUT SO FAR AS AMENDMENT TO THE PROVISION IS CONCERNED, THE SAME HAS BEEN HELD TO BE EFFECTIVE FROM ASSESSM ENT YEAR 1999-2000 AND NOT FROM 1998-99 AS HELD BY THE HONBLE JURISDICTIO NAL HIGH COURT. THEREFORE, IN ALL FAIRNESS, INVOCATION OF PROVISIONS OF SECTION 2 63 SHOULD BE UPHELD EVEN IF RELIEF AS CLAIMED BY THE ASSESSEE IS TO BE ALLOWED. 5. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MA TERIAL ON RECORD AND FIND THAT IN VIEW OF THE LATEST DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF GENERAL OPTICS ASIA LTD. VS. DCIT (SUPR A), WHILE COMPUTING I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NO. .. .806 806806 806/MDS/1 /MDS/1 /MDS/1 /MDS/10 00 0 4 DEDUCTION UNDER SECTION 80HHC RELIEF UNDER SECTION 80IA IS NOT DEDUCTIBLE FROM PROFIT AND GAINS OF THE BUSINESS AND THEREFORE, THE ORDER OF THE LD. CIT, EVEN IF TECHNICALLY UPHELD, DEDUCTION AS ARRIVED AT BY THE ASSESSING OFFICER CANNOT BE FOUND FAULTED WITH. AS SUCH, WHILE ACCEPTING THE AP PEAL OF THE ASSESSEE, WE HOLD THAT DEDUCTION UNDER SECTION 80HHC CAN BE COMP UTED WITHOUT GRANTING RELIEF UNDER SECTION 80IA FROM THE PROFITS AND GAIN S OF THE BUSINESS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE GETS ACCEPTED. ORDER PRONOUNCED ON 15.07.2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI, DATED, THE 15.07.2011 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.
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