DCIT CC 38, MUMBAI V. EXCEL INDUSTRIES LTD, MUMBAI

ITA 8468/MUM/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71499 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 25-09-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 06-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, A.M. AND SHRI AMIT SHUKL A, J.M. ./ I.T.A. NO. 8468/MUM/2010 ( / ASSESSMENT YEAR: 2007-08) DY. CIT, CENTRAL CIRCLE-38, ROOM NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, MUMBAI-400 020 / VS. EXCEL INDUSTRIES LTD. 184/187, S. V. ROAD, JOGESHWARI (W), MUMBAI-400 102 # ./$ ./PAN/GIR NO. AAACE 2488 F ( % /REVENUE ) : ( &' () / ASSESSEE ) & ./ I.T.A. NO. 9132/MUM/2010 ( / ASSESSMENT YEAR: 2007-08) EXCEL INDUSTRIES LTD. 184/187, S. V. ROAD, JOGESHWARI (W), MUMBAI-400 102 / VS. DY. CIT, CENTRAL CIRCLE-38, ROOM NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, MUMBAI-400 020 # ./$ ./PAN/GIR NO. AAACE 2488 F ( &' () / ASSESSEE ) : ( % /REVENUE ) % * + / REVENUE BY : SHRI P. K. SINGH &' () * + / ASSESSEE BY : MS. SAISUDHA MULTANI &% * , / DATE OF HEARING : 25.09.2013 - ./ * , / DATE OF PRONOUNCEMENT : 09.10.2013 2 ITA NOS. 8468 & 9132/MUM/2010 (A.Y. 2007-08) EXCEL INDUSTRIES LTD. / O R D E R PER SANJAY ARORA, A. M.: THESE ARE THE CROSS APPEALS, I.E., BY THE REVENUE A ND THE ASSESSEE, ARISING OUT OF THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEAL S)-41, MUMBAI (CIT(A) FOR SHORT) DATED 18.10.2010, PARTLY ALLOWING THE ASSESS EES APPEAL CONTESTING ITS ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT H EREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2007-08 VIDE ORDER DATED 30.11.2009. 2. OPENING THE ARGUMENTS FOR AND ON BEHALF OF THE A SSESSEE, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), ITS COUNSEL, TH AT THE ONLY ISSUE IN THE ASSESSEES APPEAL (IN ITA NO.9132/MUM/2010) RELATES TO THE DIS ALLOWANCE OF INTEREST ATTRIBUTABLE TO A LOAN TO A SUBSIDIARY COMPANY, INCURRED AND CLAIME D IN THE SUM OF RS.24.08 LACS FOR THE RELEVANT YEAR. THIS HAS BEEN A SUBSISTING ISSUE IN THE ASSESSEES CASE, WITH THE TRIBUNAL, FOR THE EARLIER YEARS, RESTORING THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER (A.O.) FOR AN EXAMINATION OF THE FACTS AND A DECISION IN A CCORDANCE WITH LAW, RELYING ON THE DECISION IN THE CASE OF S. A. BUILDERS LTD. VS. CIT [2007] 288 ITR 1 (SC). FOR THE SAME, SHE WOULD TAKE US TO PARA 3 OF THE ORDER BY THE TRI BUNAL IN ITS OWN CASE FOR A.Y. 2000-01 (IN ITA NO.2825/MUM/2007 DATED 15.06.2012/PB PGS.3- 40). A SIMILAR COURSE FOR THE CURRENT YEAR WAS PRAYED FOR. THE LD. DEPARTMENTAL R EPRESENTATIVE (DR) COULD NOT BRING ANY ADVERSE MATERIAL TO OUR NOTICE. 3. WE OBSERVE THIS TO BE A SUBSISTING ISSUE IN THE ASSESSEES CASE, WITH THE TRIBUNAL CONSISTENTLY RESTORING THE MATTER BACK TO THE FILE OF THE A.O. FOR AN EXAMINATION OF FACTS AND A DECISION IN LIGHT THEREOF IN ACCORDANCE WITH LAW. IT WOULD, THEREFORE, ONLY BE APPROPRIATE THAT THE MATTER IS ACCORDINGLY SET ASID E TO THE FILE OF THE A.O. TO BE DECIDED LIKEWISE, I.E., AFTER AN EXAMINATION OF THE FACTS A ND IN ACCORDANCE WITH THE LAW AFTER ALLOWING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD . WE DECIDE ACCORDINGLY. THIS DECIDES THE ONLY ISSUE ARISING IN THE ASSESSEES APPEAL. 4. THE REVENUES APPEAL (IN ITA NO.8468/MUM/2010), THE LD. AR WOULD CONTINUE, IS IN RESPECT OF ISSUES THAT STAND COVERED BY THE ORDE RS BY THE TRIBUNAL IN THE ASSESSEES OWN 3 ITA NOS. 8468 & 9132/MUM/2010 (A.Y. 2007-08) EXCEL INDUSTRIES LTD. CASE FOR THE EARLIER YEARS, SUBMITTING A SUMMARY IN THIS RESPECT. PROCEEDING GROUND-WISE, THE FIRST ISSUE IS QUA DISALLOWANCE U/S.14A IN RESPECT OF DIVIDEND INCOME RECEIVED BY THE ASSESSEE FOR THE RELEVANT YEAR (RS.137.18 LACS), WH ICH IS CLAIMED AND ALLOWED AS EXEMPT U/S. 10(15) OF THE ACT. WHILE THE TRIBUNAL FOR THE EARLIER YEARS, I.E., A.YS. 2000-01 AND 2004-05, HAD RESTRICTED THE DISALLOWANCE TO 2% OF T HE DIVIDEND INCOME, FOR THE LATER YEARS, I.E., A.YS 2005-06 AND 2006-07, THE MATTER H AS BEEN SET ASIDE TO THE FILE OF THE A.O. TO BE DECIDED AFRESH IN TERMS OF THE DECISION BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ AND BOYCE MANUFACTURING CO. LTD. VS. DY. CIT [2010] 328 ITR 81 (BOM). SHE WOULD THEN TAKE US TO THE RELEVAN T PART OF THE SAID ORDERS, BEING PARA 11 (IN ITA NO.4134/MUM/2009 FOR A.Y. 2005-06 DATED 13.07.2011/PB PGS.43-55) AND PARA 2 (IN ITA NO.3457/MUM/2010 FOR A.Y. 2006-07 DA TED 18.11.2011/PB PGS.56-66). A SIMILAR TREATMENT FOR THE CURRENT YEAR WAS ALSO S OUGHT, WITH THE LD. DR BEING UNABLE TO REBUT OR CONTROVERT THE SAID STATEMENT OF THE CASE BY THE LD. AR IN ANY MANNER. 5. IN VIEW OF THE CONSISTENT STAND BY THE TRIBUNAL; THE MATTER BEING EVEN OTHERWISE REQUIRED TO BE DECIDED IN TERMS OF THE BINDING DECI SION BY THE HON'BLE JURISDICTIONAL HIGH COURT, WE HAVE NO HESITATION IN LIKEWISE RESTORING THE MATTER BACK TO THE FILE OF THE A.O., FOR BEING DECIDED IN LIGHT THEREOF AFTER ALLOWING T HE ASSESSEE REASONABLE OPPORTUNITY TO STATE ITS CASE. WE DECIDE ACCORDINGLY. 6. ALL THE OTHER GROUNDS OF THE REVENUES APPEAL, I T WAS SUBMITTED BY THE LD. AR, RAISE ONE PRINCIPAL, COMMON ISSUE, I.E., WHETHER TH E BENEFIT ARISING OUT OF THE ADVANCE LICENSE (OR FOR THAT MATTER ANY OTHER SCHEME), VIZ. DEPB PASS BOOK SCHEME OR DFRC BENEFIT, ACCRUES TO THE ASSESSEE IN THE YEAR IN WHI CH THE EXPORT IS MADE, OR THE YEAR IN WHICH THE LICENSE HAS ACTUALLY BEEN EITHER SOLD OR OTHERWISE AVAILED OF THROUGH IMPORTS. THE MATTER HAS SINCE BEEN DECIDED BY THE HON'BLE JU RISDICTIONAL HIGH COURT IN FAVOUR OF THE ASSESSEE, REFERRING TO ITS DECISION DATED 25.11.201 1 (IN ITA (L) NO.1183 OF 2011), SO THAT THE SAME WOULD BE IN THE YEAR OF SALE/TRANSFER OF T HE LICENSE, AND NOT THE YEAR OF ITS GRANT (COPY ON RECORD/PB PGS.1-2). THE MATTER WAS THUS PL EADED TO BE COVERED IN ITS FAVOUR. 4 ITA NOS. 8468 & 9132/MUM/2010 (A.Y. 2007-08) EXCEL INDUSTRIES LTD. 7. WE OBSERVE THAT THE AO HAS RELIED ON THE DECISIO N IN THE CASE OF CIT VS. PUNJAB BONE MILLS [1998] 232 ITR 795 (P&H), WHICH IS ON THE POINT AN D, FURTHER, SINCE UPHELD BY THE APEX COURT (AT [2001] 251 ITR 780 (SC)), CLA RIFYING THAT ACCRUAL, WHICH IN THAT CASE WAS IN CONTEXT OF CASH INCENTIVE ON EXPORTS, WOULD BE WHEN THE RIGHT TO RECEIVE THE INCENTIVE AROSE, I.E., WHEN A VALID CLAIM FOR CASH INCENTIVE WAS FILED BY THE ASSESSEE WITH THE RELEVANT DEPARTMENT OF THE GOVERNMENT AFTER THE EXECUTION OF THE EXPORT. THE SAME IS, IN FACT, ALSO CONSISTENT WITH THE GUIDANCE NOTE ISS UED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA IN THE MATTER, AND TOWARD WHIC H THE AO HAS RELIED ON THE DECISION IN THE CASE OF CIT V. U.P. STATE INDUSTRIAL CORPORATION LTD . [1997] 225 ITR 703 (SC). ON THIS BEING POINTED OUT TO THE LD. AR, SHE WOULD SUB MIT THAT THE SPECIAL LEAVE PETITION (SLP) BY THE REVENUE AGAINST THE DECISION BY THE HO N'BLE JURISDICTIONAL HIGH COURT DATED 25.11.2011 IN ITS FAVOUR (SUPRA) HAS SINCE BEEN ADM ITTED BY THE APEX COURT, AND IN FACT EVEN THE HEARING IN THE MATTER CONCLUDED ON 19.09.2 013, FURNISHING THE DETAILS OF THE RELEVANT APPEALS, BEING CIVIL APPEAL NO.19898 OF 20 12 AND CA NO.125 OF 2013. ACCORDINGLY, IT WAS PROPOSED BY THE BENCH, AND AGRE ED TO BY THE PARTIES, THAT THE MATTER IN RESPECT OF THE REVENUES GROUND NOS.3 TO 6 BE RE STORED BACK TO THE FILE OF THE A.O. TO BE DECIDED IN ACCORDANCE WITH THE LAW AND IN LIGHT OF THE DECISION BY THE APEX COURT THEREON, WHICH, IN ANY CASE, BEING BINDING, IS TO BE FOLLOWE D. WE DISPOSE OF THE REVENUES GROUND NOS.3 TO 6 IN THESE TERMS. WE DECIDE ACCORDINGLY. 8. IN THE RESULT, THE BOTH THE REVENUES AND THE AS SESSEES APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. )/ 0 % 1 &' () * 2 3* 456 7 % 8 * 9: ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 09, 2 013 SD/- SD/- (AMIT SHUKLA) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ; MUMBAI; <& DATED : 09.10.2013 5 ITA NOS. 8468 & 9132/MUM/2010 (A.Y. 2007-08) EXCEL INDUSTRIES LTD. %.&../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. #= / THE APPELLANT 2. >?#= / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. B%C D >&E' , , E'/ , ; / DR, ITAT, MUMBAI 6. D F( G / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , ; / ITAT, MUMBAI