The DCIT, Circle-1(3), Surat V. M/s. Shree Vijya Laxmi Exports, Surat

ITA 815/AHD/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7240 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 01-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SINGH
• Assessee Lawyers: RASESH SHAH
• Keywords: Additional evidence; Set aside
• Section: 10AA

Judgement Text

VIJAYALAXMI EXPORTS /ITA NO.2342/AHD/2014 & 815/AHD/2016 : A.Y.2011-12 & 12-13 PAGE 1 OF 11 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A. NO.2342/AHD/2014 [ [ / ASSESSMENT YEAR : 2011-12 THE INCOME TAX OFFICER, WARD-3(4), SURAT. VS. VIJAYA LAXMI EXPORTS, 5-15, PATEL PARK, TADWADI, RANDER ROAD, SURAT 395 009. [PAN: AAIFV 1685 J] APPELLANT /RESPONDENT . . ./ I.T.A. NO. 815/AHD/2016 [ [ / ASSESSMENT YEAR : 2012-13 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(3), SURAT. VS. M/S.SHREE VIJAYA LAXMI EXPORTS, S-15, PATEL PARK, TADWADI, RANDER ROAD, SURAT 395 009. [PAN: AAIFV 1685 J] APPELLANT /RESPONDENT [ /ASSESSEE BY SHRI RASESH SHAH CA /REVENUE BY SHRI O.P.SINGH CIT( DR ) / DATE OF HEARING: 22 . 0 7 .201 9 /PRONOUNCEMENT ON: 24 .0 7 .2019 /O R D E R PER O.P.MEENA, AM: 1. THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF LD. COMMISSIONER OF INCOME TAX(APPEALS)- IV, SURAT(IN SHORT THE CIT(A)) DATED 02.05.2014 AND LD.COMMISSIONER OF INCOME TAX(APPEALS)-II, SURAT DATED VIJAYALAXMI EXPORTS /ITA NO.2342/AHD/2014 & 815/AHD/2016 : A.Y.2011-12 & 12-13 PAGE 2 OF 11 21.01.2016 PERTAINING TO ASSESSMENT YEARS 2011-12 AND 2012-13 RESPECTIVELY. 2. THE GROUNDS RAISED BY THE REVENUE IN ITA NO.2342/AHD/2014 READ AS UNDER : [1] THE LD.CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE IN RESPECT TO DISALLOWANCE MADE BY THE AO IN RESPECT TO THE DEDUCTION U/S 10AA OF THE I.T.ACT, IN SPITE OF THE FACT DULY ESTABLISHED BY THE AO THAT THERE WAS NO MANUFACTURING ACTIVITIES DONE BY THE ASSESSEE AND RE-EXPORTS OF THE GOODS (TRADING) NOT COVERED UNDER THE DEFINITION OF SERVICES PROVIDED BY THE ASSESSEE. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. [3] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT (A) MAY BE SET-ASIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. 3. THE GROUNDS RAISED BY THE REVENUE IN ITA NO.815/AHD/2016 READ AS UNDER : [1] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE IN RESPECT TO DISALLOWANCE MADE BY THE A.O. IN RESPECT TO THE DEDUCTION U/S.10AA OF THE IT ACT, IN SPITE OF THE FACT DULY ESTABLISHED BY THE A.O. THAT THERE WAS NO MANUFACTURING ACTIVITIES DONE BY THE ASSESSEE AND RE-EXPORTS OF THE GOODS (TRADING) NOT COVERED UNDER THE DEFINITION OF SERVICES PROVIDED BY THE ASSESSEE. [2] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY A.O. ON ACCOUNT OF EXCESS CLAIM OF INTEREST AND REMUNERATION. [3] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. [4] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT (A) MAY BE SET ASIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. ITA NO.2342/AHD/2014 FOR A.Y. 2011-12 ( BY REVENUE ):- 4. THOUGH, REVENUE HAS TAKEN THREE GROUNDS OF APPEAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE LD.CIT(A) HAS ERRED VIJAYALAXMI EXPORTS /ITA NO.2342/AHD/2014 & 815/AHD/2016 : A.Y.2011-12 & 12-13 PAGE 3 OF 11 IN GRANTING DEDUCTION TO THE ASSESSEE UNDER SECTION 10AA OF THE INCOME TAX ACT, 1961. 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SITUATED IN SEZ WAS ENGAGED IN TRADING ACTIVITY IN THE NATURE OF RE-EXPORT OF THE IMPORTED GOODS. THE PROFIT OF RS.86,19,599/- FROM THIS ACTIVITY WAS CLAIMED AS EXEMPT U/S.10AA OF THE ACT. THE LD. ASSESSING OFFICER (AO) OBSERVED THAT NO MACHINES WERE INSTALLED DURING THE YEAR AND CONCLUDED THAT NO MANUFACTURING ACTIVITIES WERE UNDERTAKEN AT THE BUSINESS PREMISES. THE ASSESSING OFFICER FURTHER OBSERVED THAT PURCHASES WERE MADE FROM DUBAI PARTY ON 21.03.2011 AND ON THE VERY NEXT DAY THE ENTIRE PURCHASES WERE SOLD TO ANOTHER DUBAI BASED PARTY AND HE WAS OF THE OPINION THAT UNDER THESE CIRCUMSTANCES THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S.10AA OF THE ACT BY ISSUING A SHOW CAUSE NOTICE TO THE ASSESSEE TO GIVE REASONS AS TO WHY THE CLAIM OF EXEMPTION OF RS.86,19,599/- NOT BE DISALLOWED. 6. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT HE IS ENGAGED IN TRADING ACTIVITY IN THE NATURE OF RE-EXPORT OF IMPORTED GOODS DURING THE RELEVANT YEAR AND SECTION 10AA OF THE ACT PROVIDES THE DEDUCTION OF 100% OF PROFITS DERIVED FROM THE UNIT VIJAYALAXMI EXPORTS /ITA NO.2342/AHD/2014 & 815/AHD/2016 : A.Y.2011-12 & 12-13 PAGE 4 OF 11 WHICH BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR PROVIDE ANY SERVICE DURING THE YEAR SUBJECT TO PRESCRIBED CONDITIONS. IN THE OPINION OF THE AO, THE ASSESSEE WAS NOT MANUFACTURING ANYTHING. IT WAS ONLY PROVIDING SERVICES IN ITS SEZ UNITS. ACCORDING TO THE AO, THE ASSESSEE HAS EARNED PROFIT OUT OF TRADING I.E. IMPORT WHICH IS RE- EXPORTED. THE LD. AO HAD IMPORTED DEFINITION OF SERVICES FROM SERVICE TAX ACT AND OTHER STATUTES LIKE CONSUMER PROTECTION ACT AND HELD THAT THE ASSESSEE IS NOT ENTITLED FOR THE DEDUCTION U/S. 10AA OF THE INCOME TAX ACT. 7. BEING AGGRIEVED, THE ASSESSEE FILED THIS APPEAL BEFORE THE LD.CIT(A) WHEREIN THE LD.CIT(A) STATED THAT THE ASSESSING OFFICER HAS NOT DISPUTED THE FACT THAT THE APPELLANT OPERATES FROM A UNIT IN THE SEZ. THE ONLY DISPUTE IS WHETHER TRADING ACTIVITY IN THE NATURE OF RE-EXPORT OF IMPORT GOODS IS ELIGIBLE FOR EXEMPTION U/S.10AA. THE LD.CIT(A) FURTHER HELD THAT THE ISSUE SQUARELY COVERED IN FAVOUR OF THE APPELLANT BY DECISION OF HON'BLE ITAT JAIPUR BENCH IN THE CASE OF M/S.GOYENKA DIAMOND AND JEWELLERS LTD., IN ITA NO.509/JP/2011 DATED 31.01.2012 HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION U/S.10AA OF THE ACT IF THE TRADING IS IN THE NATURE OF EXPORT OF IMPORTED GOODS AND FURTHER HELD THAT ONE WILL HAVE TO CONSIDER THE VIJAYALAXMI EXPORTS /ITA NO.2342/AHD/2014 & 815/AHD/2016 : A.Y.2011-12 & 12-13 PAGE 5 OF 11 IMPLICATION OF SECTION 51 OF THE SEZ ACT. IT MEANS THAT ANYTHING IN- CONSISTENT TO THE PROVISION OF THE SEZ ACT WILL NOT BE CONSIDERED. THUS THE WORD SERVICES AS MENTIONED IN SECTION 10AA CANNOT BE CONSTRUED IN-CONSISTENTLY WITH THE DEFINITION OF SERVICES GIVEN IN THE SEZ ACT. UNDER THE SEZ ACT, THE TRADING IS INCLUDED IN THE SERVICES PROVIDED THE TRADING IS EXPORT OF IMPORTED GOODS. WE, THEREFORE, FEEL THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.10AA OF THE ACT AND THEREFORE, THE LD.CIT(A) WAS JUSTIFIED IN ALLOWING THE EXEMPTION. THE LD.CIT(A) ALSO TAKEN INTO CONSIDERATION IN THE CASE OF HON'BLE ITAT, MUMBAI BENCH WHICH IS EXPRESSING SIMILAR VIEW IN THE CASE OF M/S.GITANJALI EXPORTS CORPORATION LTD., THE LD.CIT(A) HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.10AA ON PROFITS DERIVED FROM RE-EXPORT OF IMPORTED GOODS BY DIRECTING THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S.10AA TO THE ASSESSEE, ACCORDINGLY ALLOWED THE APPEAL OF THE ASSESSEE. 8. BEING AGGRIEVED THE ORDER OF LD.CIT(A), THE REVENUE HAS FILED APPEAL BEFORE THIS TRIBUNAL. 9. THE LD. COUNSEL FOR THE ASSESSEE, AT THE VERY OUTSET CONTENDED THAT THE ISSUE IN DISPUTE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE VIJAYALAXMI EXPORTS /ITA NO.2342/AHD/2014 & 815/AHD/2016 : A.Y.2011-12 & 12-13 PAGE 6 OF 11 ORDERS OF THE ITAT PASSED IN THE FOLLOWING CASES IN ITA NO.2574/AHD/2014 FOR A.Y. 2011-12 DATED 07.07.2017 (COPY FILED): I) ACIT VS. GOENKA DIAMOND & JEWELLERS, ITA NO.645/JP/2012; II) GITANJALI EXPORTS CORPORATION LTD. VS. ACIT, ITA NO.6947 AND 6948/MUM/2011; II) ZAVERI & CO. P. LTD VS. CIT, 48 TAXMANN.COM 153 (AHD.TRIB). IV) DCIT VS. M/S. FLORENCE EXPORT (ITA NO. 2574/AHD/2014) FOR A.Y. 2011-12. V) DCIT VS. M/S. FLORENCE EXPORT ( ITA NO.2616/AHD/2016) FOR A.Y. 2013-14 DATED 17.05.2019. THE LD. COUNSEL PLACED ON RECORD COPIES OF THESE DECISIONS. 10. ON THE OTHER HAND, THE LD. DR WAS UNABLE TO CONTROVERT THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS, WE FIND THAT THE ISSUE OF DEDUCTION IN RESPECT OF PROFIT EARNED BY THE UNIT OF THE SEZ IS SQUARELY COVERED IN FAVOUR OF THE APPELLANT BY DECISIONS OF ITAT IN THE CASE OF GITANJALI EXPORTS CORPORATION LTD., VS. ACIT (ITA NO.6947, 6948, 6781, 6783, 6949, 6950, 6785, 6787/MUM/2011) AND GOENKA DIAMOND & JEWELLERY LTD., (ITAT JAIPUR BENCH). THE RELEVANT PARA OF DECISION OF HON'BLE JAIPUR BENCH IN THE CASE OF GOENKA DIAMOND & JEWELLERY LTD., IS REPRODUCED HEREUNDER : VIJAYALAXMI EXPORTS /ITA NO.2342/AHD/2014 & 815/AHD/2016 : A.Y.2011-12 & 12-13 PAGE 7 OF 11 WE HAVE ALSO REPRODUCED SECTION 51 OF THE SEZ ACT. AS PER THIS SECTION, IT IS MENTIONED THAT NOTWITHSTANDING ANYTHING INCONSISTENT THEREWITH CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE OR IN ANY INSTRUMENT HAVING EFFECT BY VIRTUE OF ANY LAW OTHER THAN THIS ACT, THE PROVISIONS OF SEZ ACT WILL PREVAIL. THE HONBLE APEX COURT IN THE CASE OF TAX RECOVERY OFFICE V/S. CUSTODIAN APPOINTED UNDER THE SPECIAL COURT, 293 ITR 369 HAD AN OCCASION TO CONSIDER THE MEANING OF LANGUAGE EMPLOYED IN SECTION 13 OF THE SPECIAL COURT ACT. IN SECTION OF THE SPECIAL COURT ACT, IT WAS STATED THAT PROVISION OF THE ACT SHALL HAVE EFFECT NOTWITHSTANDING ANYTHING INCONSISTENT THEREWITH CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE. THE HONBLE APEX COURT HELD THAT THERE CAN BE NO MANNER OF DOUBT THAT THE PROVISIONS OF SPECIAL COURT ACT WHEREVER THEY ARE APPLICABLE SHALL PREVAIL OVER THE PROVISIONS OF THE INCOME-TAX ACT. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V/S. VASISTH CHAY VYAPAR LTD 330 ITR 440 HELD THAT WHEN THERE IS A PROVISION IN ANOTHER ENACTMENT WHICH CONTAINS A NON OBSTENTE CLAUSE THAN THAT WOULD OVERRIDE THE PROVISIONS OF THE INCOME TAX ACT. THUS, ONE WILL HAVE TO CONSIDER THE IMPLICATION OF SECTION 51 OF THE SEZ ACT. IT MEANS THAT ANYTHING INCONSISTENT TO THE PROVISIONS OF THE SEZ ACT WILL NOT BE CONSIDERED. THUS THE WORD SERVICES AS MENTIONED IN SECTION 10AA CANNOT BE CONSTRUED IN-CONSISTENTLY WITH THE DEFINITION OF SERVICES GIVEN IN THE SEZ ACT. UNDER THE SEZ ACT, THE TRADING IS INCLUDED IN THE SERVICES PROVIDED THE TRADING IS EXPORT OF IMPORTED GOODS. WE, THEREFORE, FEEL THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S. 10AA OF THE ACT AND, THEREFORE, THE LEARNED CIT(A) WAS JUSTIFIED IN ALLOWING THE EXEMPTION. IN VIEW OF THE ABOVE, I HOLD THAT DISALLOWANCE OF CLAIM ON DEDUCTION U/S.10AA OF THE ACT ON SPECIFIC TRADING PROFITS OF RS.8,10,61,763/- IS DELETED AND HENCE THIS GROUND OF APPEAL IS ALLOWED. 12. WE FURTHER FIND THAT TRIBUNAL IN ITA NO.2574/AHD/2014 FOR A.Y. 2011-12 IN THE CASE OF FLORENCE EXPORT, HELD AS UNDER: WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT IN THE CASE OF GOENKA DIAMOND & JEWELLERS (SUPRA), THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PRECIOUS AND SEMI- PRECIOUS STONES. IT HAS HEAD OFFICE AT JAIPUR AND UNITS AT SURAT AND MUMBAI. THE ASSESSEE HAD BEEN IMPORTING PRECIOUS STONES AND RE- EXPORTING THOSE GOODS. THE ASSESSEE CLAIMED DEDUCTION U/S. 10AA WHICH WAS DISALLOWED BY THE AO. THE TRIBUNAL HAS MADE A DETAILED ANALYSIS WITH REGARD TO THE PROVISIONS OF SEZ ACT, 2005 VIS--VIS APPLICABILITY FOR THE PURPOSE OF SECTION 10AA OF THE ACT. THE TRIBUNAL HAS UPHELD ALLOWANCE OF CLAIM OF ASSESSEE AND REJECTED THE APPEAL OF THE REVENUE. THE ORDER OF THE TRIBUNAL IS REPORTED IN (2012) 19 TAXMANN.COM 91 (JP). CATCH-NOTE OF THE ORDER NOTED IN THE JOURNAL READS AS UNDER: SECTION 10AA OF THE INCOME-TAX ACT, 1961, READ WITH SECTION 2(20) OF THE SPECIAL ECONOMIC ZONES ACT, 2005-SPECIAL ECONOMIC ZONES-ASSESSMENT YEAR 2008-09-ASSESSEE-FIRM WAS ENGAGED IN BUSINESS OF TRADING AND MANUFACTURING OF PRECIOUS AND SEMI- PRECIOUS STONES, DIAMOND AND STUDDED GOLD JEWELLERY - IT CLAIMED DEDUCTION U/S. 10AA IN RESPECT OF ITS SURAT UNIT WHICH WAS VIJAYALAXMI EXPORTS /ITA NO.2342/AHD/2014 & 815/AHD/2016 : A.Y.2011-12 & 12-13 PAGE 8 OF 11 ENTIRELY ENGAGED IN TRADING IN FORM OF RE-EXPORT OF IMPORTED GOODS- REVENUE DISALLOWED CLAIM U/S. 10AA ON GROUND THAT NO MANUFACTURING ACTIVITY WAS UNDERTAKEN BY SAID UNIT- IT WAS APPARENT FROM RECORD THAT VIDE INSTRUCTION NO. 1/2006, DATED 24- 03-2006 OF MINISTRY OF COMMERCE, IT WAS CLARIFIED THAT TRADING UNITS CAN BE SET UP IN SEZ-FURTHER, MODIFICATION WAS MADE TO IT BY ANOTHER INSTRUCTION, DATED 24-05-2006 IN WHICH IT WAS MADE CLEAR THAT DEDUCTION U/S. 10AA WILL BE AVAILABLE IN RESPECT OF TRADING IN NATURE OF RE-EXPORT OF IMPORTED GOODS-WHETHER SINCE SAID INSTRUCTION WAS NOT FOUND TO BE WITHDRAWN OR BOARD HAS NOT ISSUED ANY OTHER INSTRUCTION MODIFYING IT, THAT SAME WOULD NOT BE APPLICABLE FOR PURPOSE OF ALLOWING EXEMPTION U/S. 10AA, ASSESSEE WAS ENTITLED FOR DEDUCTION U/S. 10AA-HELD, YES [IN FAVOUR OF ASSESSEE]. CIRCULARS & CLARIFICATIONS: INSTRUCTION NO. 1/2006, DATED 24-3- 2006 & INSTRUCTION NO. 4/2006, DATED 24-5-2006, ISSUED BY MINISTRY OF COMMERCE. WE FIND THAT THE LD. CIT(A) HAS RELIED UPON THIS ORDER OF THE TRIBUNAL IN THE FINDING EXTRACTED (SUPRA). IN OUR OPINION, THE LD. CIT(A) HAS RIGHTLY APPRECIATED THE FACTS AND CIRCUMSTANCES, AND HAS RIGHTLY PUT RELIANCE UPON THE ORDERS OF THE ITAT. THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE IN THE IMPUGNED ORDER OF THE LD. CIT(A). THIS APPEAL IS ACCORDINGLY DISMISSED. 13. WE FIND THAT THE ISSUE IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN THE CASE OF DCIT VS. M/S. FLORENCE EXPORT (ITA NO. 2574/AHD/2014) FOR A.Y. 2013-14 CITED (SUPRA) AND OTHER CASE REPRODUCED ABOVE. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, THIS APPEAL OF REVENUE IS DISMISSED, AS THE FACTS ARE IDENTICAL. 14. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ITA NO.815/AHD/2016 FOR A.Y. 2012-13 (BY REVENUE):- 15. GROUND NO.1 ARE OF APPEAL AND FACTS OF THE REVENUE APPEAL FOR ASSESSMENT YEAR 2011-12 ARE IDENTICAL AND SIMILAR TO THAT ITA NO.2342/AHD/2014 FOR A.Y. 2011-12. HENCE, OUR FINDINGS IN THE VIJAYALAXMI EXPORTS /ITA NO.2342/AHD/2014 & 815/AHD/2016 : A.Y.2011-12 & 12-13 PAGE 9 OF 11 ABOVE APPEAL WOULD MUTATIS MUTANDIS APPLY TO THIS GROUND ALSO. HENCE, FOLLOWING THE SAME REASONING, THIS GROUND OF THE REVENUE IS DISMISSED. 16. GROUND NO.2 STATES THAT THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXCESS CLAIM OF INTEREST AND REMUNERATION. 17. BRIEF FACTS OF THE CASE ARE THAT THE AO DID NOT RAISE THE ISSUE OF INTEREST AND REMUNERATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND NO SHOW CAUSE OR QUERY WAS MADE BY HIM, THEREFORE, THE ASSESSEE HAD NO OPPORTUNITY TO FURNISH THE SUPPLEMENTARY DEED DURING THE ASSESSMENT PROCEEDINGS, THEREFORE, LD.CIT(A) AS ADMITTED ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES. THE LD.CIT(A) NOTED THAT ASPER SUPPLEMENTARY PARTNERSHIP DEED DATED 18.01.2011 WHICH WAS VERIFIED BY THE AO DURING THE REMAND PROCEEDINGS. THE COPY OF NOTARY REGISTER WAS OBTAINED WHERE THE SUPPLEMENTARY DEED WAS FOUND MENTIONED AT SL.NO.176 DATED 31.03.2015 AND PARTNER HAD SIGNED THE REGISTER ALSO. THEREFORE, AS PER CLAUSE OF SUPPLEMENTARY DEED OF PARTNERSHIP VIJAYALAXMI EXPORTS /ITA NO.2342/AHD/2014 & 815/AHD/2016 : A.Y.2011-12 & 12-13 PAGE 10 OF 11 INTEREST OR REMUNERATION WAS MODIFIED AND THEREFORE THE ADDITION MADE ON THE ASSESSING OFFICER ON ACCOUNT OF EXCESS CLAIM OF INTEREST WAS DELETED. 18. BEING AGGRIEVED, THE REVENUE HAS FILED APPEAL BEFORE THIS TRIBUNAL. THE LD.DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 19. PER CONTRA, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF PCIT VS. ALIDHARA TAXSPIN ENGINEERS, TAX APPEAL NO.265/2017 DATED 02.05.2017 WHEREIN THE DISALLOWANCE IN RESPECT OF REMUNERATION AND INTEREST TO PARTNERS WERE DELETED BY THE TRIBUNAL WERE UPHELD BY OBSERVING THAT THE MERE INCORPORATION OF INTEREST OF THE PARTNERS CAPITAL AND REMUNERATION DOES NOT SIGNIFY THAT SAME ARE MANDATORY IN NATURE. 20. WE HAVE HEARD THE RIVAL SUBMISSIONS AND WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF PCIT VS. ALIDHARA TAXSPIN ENGINEERS(SUPRA), VIJAYALAXMI EXPORTS /ITA NO.2342/AHD/2014 & 815/AHD/2016 : A.Y.2011-12 & 12-13 PAGE 11 OF 11 DATED 02.05.2017, ACCORDINGLY THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 21. IN THE RESULT, BOTH APPEALS FILED BY THE REVENUE ARE DISMISSED. 22. THE ORDER PRONOUNCED IN THE OPEN COURT ON 24.07.2019. SD/- SD/- (BHAVNESH SAINI) (O.P.MEENA) ( /JUDICIAL MEMBER) ( /ACCOUNTANT MEMBER) / SURAT, DATED : 24 TH JULY , 2019/ S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT