The ITO, Ward-2(1), JAMNAGAR V. M/s Harsh International, JAMNAGAR

ITA 903/RJT/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50000 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 22-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAI RAJ KUMAR
• Assessee Lawyers: PM MAHARSHI
• Keywords: Opportunity of being heard; Deemed export
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.903/RJT/2009 (ASSESSMENT YEAR 2006-07) ITO, WD.2(1) VS HARSH INTERNATIONAL JAMNAGAR PLOT NO.633 GIDC, PHASE-II, JAMANGAR PAN : AADFH1518B (APPELLANT) (RESPONDENT) C.O. NO.14/RJT/2010 (ARISING OUT OF I.T.A. NO.903/RJT/2009) HARSH INTERNATIONAL VS ITO, WD.2(1) JAMNAGAR JAMNAGAR (CROSS OBJECTOR) (RESPONDENT) REVENUE BY : SHRI JAI RAJ KUMAR ASSESSEE BY : SHRI PM MAHARSHI O R D E R PER N.R.S. GANESAN, JM THIS APPEAL FILED BY THE REVENUE AND THE CROSS OBJ ECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT( A), JAMNAGAR DATED 25-05- 2009 AND PERTAIN TO ASSESSMENT YEAR 2006-07. THE O NLY ISSUE ARISES FOR CONSIDERATION IS DEDUCTION U/S 10B OF THE I.T. ACT, 1961. 2. SHRI JAI RAJ KUMAR, THE LEARNED DEPARTMENTAL REP RESENTATIVE SUBMITTED THAT THE ASSESSEE HAS NOT EXPORTED ANYTHING OUT OF INDIA. ADMITTEDLY, THE ASSESSEE SOLD BRASS INGOTS TO M/S APPLE INTERNATION AL ENGINEERING WORKS WHICH IS AN INDIAN BUYER AGAINST FORM CT-3. M/S APPLE IN TERNATIONAL ENGINEERING WORKS, IN TURN, MANUFACTURED THE GOODS AND EXPORTED THE FINISHED GOODS TO THE FOREIGN COUNTRY. ACCORDING TO THE LEARNED DR, THE RAW MATERIAL, VIZ. BRASS INGOTS WAS NOT UTILIZED BY THE ASSESSEE IN THE MANUFACTURI NG PROCESS AND THE RESULTANT ITA NO.903/RJT/2009 CO NO.14/RJT/2010 2 PRODUCT WHICH IS ENTIRELY DISTINCT AND SEPARATE FRO M WHAT WAS SOLD BY ASSESSEE WAS EXPORTED BY APPLE INTERNATIONAL ENGINEERING WOR KS. THEREFORE, ACCORDING TO THE LD. DR, THE ASSESSEE HAS NOT SOLD ANY FINISHED PRODUCT TO APPLE INTERNATIONAL ENGINEERING WORKS. HENCE, THE CIT(A) HAS COMMITTED AN ERROR IN TREATING THE SALE OF RAW MATERIAL TO APPLE ENGINEERING WORKS AS DEEMED EXPORT. 3. ON THE CONTRARY, SHRI PM MAHARSHI, THE LEARNED R EPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IMPORTED BRASS INGOTS AND THEN MANUFACTURED GOODS AND THE FINISHED GOODS ONLY SOLD TO APPLE INTERNATIONAL ENGINEERING WORKS. THE SALE CONSIDERATION IS RECEI VED IN CONVERTIBLE FOREIGN EXCHANGE. THEREFORE, THERE WAS A DEEMED EXPORT AS FOUND BY THE CIT(A). THE LD.REPRESENTATIVE FOR THE ASSESSEE FAIRLY SUBMITTED THAT SINCE THERE IS A FACTUAL CONFUSION WITH REGARD TO THE NATURE OF GOODS SOLD T O APPLE INTERNATIONAL ENGINEERING WORKS AND THE GOODS ACTUALLY EXPORTED, THE MATTER MAY BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS RIGHT LY POINTED OUT BY THE LD. REPRESENTATIVE OF THE ASSESSEE, THERE IS A CONFUSIO N WITH REGARD TO THE NATURE OF GOODS SOLD BY THE ASSESSEE TO APPLE INTERNATIONAL E NGINEERING WORKS AND THE GOODS ACTUALLY EXPORTED BY APPLE INTERNATIONAL ENGI NEERING WORKS. THEREFORE, THE REAL FACTS HAVE TO BE BROUGHT ON RECORD FOR THE PURPOSE OF DECIDING THE CLAIM OF THE ASSESSEE U/S 10B OF THE ACT. ACCORDINGLY WE FIND JUSTIFICATION IN THE CONTENTION OF THE ASSESSEE THAT THE MATTER MAY BE R EMANDED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. ACCORDI NGLY, THE ORDER OF THE LOWER AUTHORITY IS SET ASIDE AND THE ENTIRE ISSUE WITH RE GARD TO THE CLAIM OF DEDUCTION U/S 10B IS REMANDED BACK TO THE FILE OF THE ASSESSI NG OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE ISSUE AFRESH IN THE LI GHT OF THE MATERIAL AVAILABLE ON RECORD AND THEREAFTER DECIDE THE ISSUE AFRESH IN AC CORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. ITA NO.903/RJT/2009 CO NO.14/RJT/2010 3 5. IN THE CROSS OBJECTION, THE ASSESSEE AGITATES TH AT THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN D ENYING DEDUCTION U/S 10B AMOUNTING TO RS.8,71,580 ON EXPORT OF GOODS TO DRA UNITS WHERE CONVERTIBLE FOREIGN EXCHANGE WAS NOT RECEIVED BY THE ASSESSEE. SINCE WE HAVE RESTORED BACK THE ISSUE IN REVENUES APPEAL TO THE FILE OF T HE ASSESSING OFFICER, THIS ISSUE IS ALSO RESTORED TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH IN LINE WITH THE DIRECTION ISSUED ABOVE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS THE CROSS OBJECTION FILED BY THE ASSESSEE ARE TREATED AS ALLOWED, FOR STATIST ICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 29-04-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 29 TH APRIL, 2011 PK/- COPY TO: 1. THE INCOME TAX OFFICER, WARD-2(1), JAMNAGAR 2. HARSH INTERNATIONAL, JAMNAGAR 3. THE CIT(A), JAMNAGAR 4. THE CIT, JAMNAGAR 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT