METROPOLITAN EXIMCHEM LTD, MUMBAI V. ACIT CIR 6(3), MUMBAI

ITA 8339/MUM/2010

• Counselvise Citation: 833919914 RSA 2010
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-12-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 01-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K SAHU
• Assessee Lawyers: SATISH R MODY
• Keywords: Principle of natural justice
• Section: 80HHC

Judgement Text

, CH CHCH CH INCOME TAX APPELLATE TRIBUNA L MUMBAI - B BENCH MUMBAI . . , / ! ! ! ! , BEFORE S/SH.B.R.MITTAL,JUDICIAL MEMBE R & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 8339/MUM/2010, ' ' ' ' # # # # / ASSESSMENT YEAR 2002-03 M/S METROPOLITAN EXIMCHEM LTD. NO.5, MEGHDOOT BUILDING, 283, FLANK ROAD, SION(W), MUMBAI-400022 VS. ACIT 6(3) AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 PAN: AAACM9514C ( $% / ASSESSEE ) ( &'$% / RESPONDENT) $% $% $% $% ( (( ( ) ) ) ) / ASSESSEE BY :SHRI SATISH R. MODY &'$% ( ) / RESPONDENT BY :SHRI R.K.SAHU ' ' ' ' ( (( ( *+ *+ *+ *+ / DATE OF HEARING : 12 . 12 .2013 ,-# ( *+ / DATE OF PRONOUNCEMENT : 24 . 12 .2013 ' ' ' ' , 1961 ( (( ( 254 )1( *.* *.* *.* *.* / / / / ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,A.M: CHALLENGING THE ORDER DTD.08.09.2010 OF THE CIT(A)- 12,MUMBAI,ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL: 1) THE LD. ASSESSING OFFICER HAS ERRED IN NOT CONSIDER ING AN AMOUNT OF RS. 11,36,833/- BEING THE FOREIGN EXCHANGE FLUCTUATION GAIN EARNED BY YOUR PE TITIONER FOR THE PURPOSE OF COMPUTATION OF RELIEF U/S. 80HHC OF THE INCOME-TAX ACT, 1961.YOUR PETITIO NER SUBMITS THAT IT IS AN EXPORTER ENTITLED TO RELIEF U/S. 80HHC. 2) YOUR PETITIONER SUBMITS THAT IN PURSUANCE OF THE OR DER PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL IN ITA NO.5614/MUM/2005 PASSED BY THE LD. MEMBERS O F THE INCOME-TAX APPELLATE TRIBUNAL, THE INCOME-TAX OFFICER WAS REQUIRED TO WORK OUT THE REL IEF BY TAKING INTO ACCOUNT THE GAIN EARNED BY YOUR PETITIONER ON ACCOUNT OF FOREIGN EXCHANGE FLUC TUATION. 3) THE LD. INCOME-TAX OFFICER HAS ERRED IN IGNORING TH E CONTENTS OF THE LETTER DATED 10.06.2009 SUBMITTED TO HIM BY YOUR PETITIONER IN THIS RESPECT . 4) THE CIT(A) HAS ERRED IN CONFIRMING THAT THE3 ASSESS EE WAS NOT ENTITLED TO RELIEF U/S. 80HHC IN RESPECT OF FOREIGN EXCHANGE FLUCTUATION GAINS AS, A CCORDING TO THE LD. CIT, NO DETAILS WERE SUPPLIED TO THE ASSESSING OFFICER. 5) THE LD. COMMISSIONER INCOME-TAX HAS ERRED IN IGNORI NG THE FACT THAT ALL THE DETAILS OF OF FOREIGN EXCHANGE FLUCTUATION GAIN EARNED BY YOUR PETITIONER WERE SUBMITTED TO HER AT THE TIME OF HEARING OF THE APPEAL FOR ASST. YEAR: 2002-03. 6) THE ORDER APPEALED AGAINST IS BAD IN LAW AND IS AGA INST THE PRINCIPLE OF NATURAL JUSTICE. 7) THE ORDER APPEALED AGAINST IS BASED ON SURMISES AND CONJECTURES. 8) YOUR PETITIONER RESERVES THE RIGHT TO ADD, TO DELET E AND/OR AMEND ANY OF THE FOREGOING GROUNDS. THOUGH THERE ARE EIGHT GROUNDS OF APPEAL,BUT THE EF FECTIVE GROUND OF APPEAL IS ABOUT DISALLOWANCE OF RS.11. 36 LACS MADE UNDER THE HEAD FOREIGN EXCH ANGE FLUCTUATION GAINS(FEFG). 2 ITA NO.8339/MUM/2010 M/S METROPOLITAN EXIMCHEM LTD. BRIEF FACTS OF THE CASE: 2. ASSESSEE-COMPANY ENGAGED IN THE BUSINESS OF DYES AN D CHEMICALS,FILED ITS RETURN OF INCOME ON 24.10.02 DECLARING TOTAL INCOME OF RS.1.31 CRORES.A SSESSING OFFICER(AO)FINALISED THE ASSESSMENT ON 31.1.2005,U/S.143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.1.60 CRORES. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY(FAA) WHO ALLOWED PARTIAL RELIEF. MATTER WAS AGITATED BEFORE THE TRIBUNAL BY THE ASSE SSEE AND VIDE ITS ORDER DATED 23.6.2008,TRIBUNAL SET ASIDE TWO ISSUES-MODVAT CREDIT AND COMPUTATION OF DEDUCTION U/S.80HHC- TO THE FILE OF THE AO.IN PURSUANCE OF THE DIRECTIONS OF THE TRIBUNAL,A O PASSED ORDER U/S.143(3)R.W.S.254 OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 1.60 CROES,AFTER ALLOWING DEDUCTION OF RS.1.90 CRORES, U/S.80HHC OF THE ACT. 2.1. AGAISNT THE ORDER OF THE AO,ASSESSEE-COMPANY FILED AN APPEAL BEFORE THE FAA.AFTER CONSIDERING THE ORDER OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE AND THE ORDER OF TH E TRIBUNAL DATED 23.06.2008,HE HELD THAT WITH REGARD TO THE IS SUE OF EXCHANGE RATE FLUCTUATION AO HAD TO REWORK - THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH DIRECT IONS GIVEN BY THE TRIBUNAL IN THE MATTER OF KIRAN EXPORTS (10 SOT 148), THAT THE TRIBUNAL HAD D IRECTED THE ASSESSEE TO FURNISH DETAILS/ BIFURCATION OF EXCHANGE RATE DIFFERENCE,THAT THE AO WAS DIRECTED TO INCLUDE THE SAME IN EXPORT TURNOVER IN THE RELEVANT ASSESSMENT YEARS IF THE SA ME WAS QUALIFIED FOR INCLUSION IN THE EXPORT TURNOVER AS PER CLAUSE (A) OF SUB.SEC. (2) U/S. 80 HHC OF THE ACT,THAT THE APPELLANT HAD NOT PROVIDED ANY DETAILS. DURING THE APPELLATE PROCEEDI NGS THE APPELLANT HAD CLAIMED THAT IT WOULD BE DIFFICULT TO CO-RELATE EXCHANGE RATE FLUCTUATION GA IN TO THE EXPORT MADE IN CURRENT YEAR AND THAT EXPORTS WERE MADE IN EARLIER YEARS. THE APPELLANT F URTHER ARGUED THAT IF THE ENTIRE EXCHANGE FLUCTUATION GAIN WAS TREATED AS THE PART OF THE EXP ORT TURNOVER IN THE CURRENT YEAR IT WOULD BE REVENUE NEUTRAL AND THEREFORE THE SAME SHOULD BE AL LOWED.FAA, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HELD THAT THE ARGUMENT DID NOT CARR Y WEIGHT IN THE LIGHT OF THE ITATS DIRECTION AND THE DIRECTIONS CONTAINED IN THE ORDER OF KIRAN EXPO RTS WHICH WAS REQUIRED TO BE FOLLOWED,THAT THE APPELLANT COULD NOT CHOOSE TO IGNORE THE BASIC DIRE CTIONS OF THE COURT TO SUIT ITSELF,THAT ONE OF THE GROUNDS OF APPEAL OF THE APPELLANT HAD BEEN THAT TH E AO HAD NOT FOLLOWED THE DIRECTIONS OF THE TRIBUNAL,THAT IF SAID GROUND OF APPEAL WAS TO BE CO NSIDERED THEN IT HAD TO BE EXAMINED THAT THE DIRECTIONS OF THE TRIBUNAL WERE FOLLOWED IN TOTALIT Y BOTH BY THE APPELLANT AND THE AO,THAT THE APPELLANT COULD NOT BE AGGRIEVED BY THE AOS ACTION OF NOT ADHERING TO THE DIRECTIONS OF THE TRIBUNAL IF IT ITSELF WAS GUILTY OF THE SAME,THAT T HE APPELLANT WAS REQUIRED TO SUBMIT DETAILS AS DIRECTED BY THE TRIBUNAL TO AVAIL THE BENEFIT REQUI RED,THAT IT WAS NOT ABLE TO PROVIDE REQUIRED DETAIL S BEFORE THE AO OR DURING THE APPELLATE PROCEEDINGS.F INALLY,HE CONFIRMED THE ORDER OF THE AO. 2.2.BEFORE US,AR SUBMITTED THAT FEFG WAS TO BE TREA TED AS PART OF THE EXPORT TURNOVER,THAT IT WAS REVENUE NEUTRAL.DR SUPPORTED THE ORDER OF THE FAA. 2.3.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT TRIBUNAL WHILE DECIDING THE APPEAL FILED BY THE ASSESSEE FOR THE AY.UNDER CONSIDERATION HAD ,VIDE ITS ORDER DATED 23/06/2008, HELD AS UNDER:(PARA 10 OF T ORDE R). FROM THE ABOVE ORDER IT IS CLEAR THAT AO HAD TO VER IFY THE CLAIM OF THE ASSESSEE AS PER THE DIRECTIONS GIVEN BY THE TRIBUNAL.WE FIND THAT AO HAD DIRECTED THE ASSESSEE TO FILE THE NECESSARY DETAILS,SO THAT ORDERS OF THE TRIBUNAL COULD BE COMPLIED WITH.BUT,A SSESSEE CHOOSE NOT TO FILE THE REQUISITE DETAILS EITHER BEFORE THE AO OR BEFORE THE FAA.IT HAS ALSO NOT FILED ANY DETAILS BEFORE US.AS PER THE ESTABLI -SHED PRINCIPLES OF TAXATION JURISPRUDENCE IF A CLA IM FOR EXPENDITURE OR DEDUCTION IS MADE BY AN ASSESSEE,PRIMA FACIE ONUS LIES ON HIM TO BRING ON R ECORD SUCH EVIDENCES THAT CAN PROVE THAT SAME WAS ALLOWABLE. IN THE CASE UNDER CONSIDERATION ASSE SSEE HAS FAILED TO SUPPORT HIS CLAIM MADE U/S. 3 ITA NO.8339/MUM/2010 M/S METROPOLITAN EXIMCHEM LTD. 80HHC OF THE ACT.IN THESE CIRCUMSTANCES WE ARE OF T HE OPINION THAT ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL OR FACTUAL INFIRMITY.SO, UPHO LDING HIS ORDER WE DISMISS THE APPEAL FILED BY THE ASSESSEE-COMPANY. AS A RESULT APPEAL FILE D BY THE ASSESSEE STANDS DISMISSED. 0 *1'0* 3 4 ( . ' 5 ( * 67. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH DECEMBER, 2013. / ( ,-# 9 24 FNLACJ FNLACJ FNLACJ FNLACJ 2013 - ( . . SD/- SD/- ( . . . B.R.MITTAL ) ( ! ! ! ! / RAJENDRA ) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, :' /DATE: 24.12.2013 SK / / / / ( (( ( &*; &*; &*; &*; < ;#* < ;#* < ;#* < ;#* / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / $% 2. RESPONDENT / &'$% 3. THE CONCERNED CIT(A)/ = > , 4. THE CONCERNED CIT / = > 5. DR B BENCH, ITAT, MUMBAI / ;?. &*' . CH CHCH CH , . . . 6. GUARD FILE/ . @ . ';* &* //TRUE COPY// /' / BY ORDER, A / 6 DY./ASST. REGISTRAR , /ITAT, MUMBAI.