YUVAK FINE FAB LTD, MUMBAI V. DCIT 8(3), MUMBAI

ITA 9174/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8743 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2001-2002
• Appeal Filed On: 30-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAVEEN GUPTA
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH: MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 9174/MUM/2010 (ASSESSMENT YEAR: 2001-02) YUVAK FINE FAB LIMITED, 160-161-B, SANJAY BUILDING NO.5, MITTAL INDUSTRIAL ESTATE, ANDHERI (E), MUMBAI -400 059 PAN : AAACY1074F VS. DY. COMMISSIONER OF INCOME-TAX, RANGE 8(3), AAYAKAR BHAVAN, 6TH FLOOR, M.K. MARG, MUMBAI - 400 020 APPELLANT RESPONDENT APPELLANT BY : SHRI HARIDAS BHAT RESPONDENT BY : SHRI NAVEEN GUPTA DATE OF HEARING : 11.09.2012 DATE OF PRONOUNCEMENT : 26.09.2012 O R D E R PER VIVEK VARMA, JM: THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORD ER OF CIT(A) 18, MUMBAI, DATED 10.10.2010, WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUND: THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)1 8 HAS ERRED IN CONFIRMING THE DISALLOWANCE U/S 80HHC TO THE EXTENT OF RS. 8,08,887/- INSPITE OF THE FACT THE HONOURABLE TRIBUNAL HAS ALLOWED THE SIMILAR DEDUCTION IN THE APPELLANTS OWN CASE IN ASSESSMENT YEAR 2003-04 & CO PY OF THE SAME WAS SUBMITTED TO THE LEARNED CIT(A)18. THE APPELLANT M AY ADD, ALTER, AMEND, OR DELETE ANY OF THE AFORE SAID GROUND BEFORE OR AT TH E TIME OF HEARING AS IF MAY BE ADVISED FROM TIME TO TIME. 2. THE SOLITARY ISSUE IS DENIAL OF DEDUCTION OF RS. 8,08,887/- CLAIMED U/S 80HHC. 3. THE FACTS ARE THAT THE ASSESSEE FILED ITS RETURN SHOWING A LOSS OF RS. 38,22,314/-. HOWEVER, THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS. 8,08,887/-. THIS WAS THE RESULT OF DISALLOWANCE OF DEDUCTION CLAIMED U/S ITA NO.9174/MUM/2010 YUVAK FINE FAB LIMITED 2 80HHC AT RS. 57,84,001/-. THE MATTER WAS TAKEN BEFO RE THE CIT(A), WHO, DIRECTED THE AO TO ALLOW THE AGGREGATION OF DEDUCTI ON WORKED OUT U/S 80HHC(3) AND ELIGIBLE DEDUCTION ON EXPORT INCENTIVE S AND WORKED IT OUT AT RS. 3,84,580, WHICH IS DIRECTED TO ALLOW. 4. NOT SATISFIED, THE ASSESSEE TOOK THE ISSUE BEFOR E ITAT AND THE ITAT IN ITA NO. 3723/M/04 DATED 04.07.2007, DIRECTED TO REC ONSIDER THE ALLOWABILITY OF THE DEDUCTION IN THE LIGHT OF THE A MENDED PROVISIONS OF SECTION 80HHC. 5. IN THE SECOND ROUND OF PROCEEDINGS, THE AO CAME TO THE CONCLUSION THAT ASSESSEE WAS CLAIMING EXPORT INCENTIVES IN THE NATURE OF DEPB. THE AO, IN THE ORDER, AS PER THE DIRECTIONS OF THE COORDINA TE BENCH, CAME TO CONCLUDE THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE AND FULFIL THE TWIN CONDITIONS FOR THE CLAIM OF EXPORT INCENTIVES AND T HEREFORE, HE HELD THAT THE ASSESSEE WAS NOT ENTITLED FOR DEDUCTION U/S 80HHC. 6. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT(A), WHO, CITING THE CASE OF LIBERTY INDIA VS CIT, REPORTED I N 317 ITR 218 (SC), WHEREIN IT WAS HELD THAT, NO DEDUCTION U/S 80HHC CAN BE ALLOWED ON THE EXPOR T INCENTIVES GIVEN BY THE GOVT. OF INDIA, AS IN SUCH CASES, THE BENEFIT IS ARISING FROM THE SCHEME FROM GOVT OF INDIA AND NOT FROM THE INDUSTRIAL ACTIVITY . THE CIT(A), THUS DENIED THE ALLOWANCE OF DEDUCTION U/S 80HHC. 7. THE ASSESSEE, IS BEFORE THE ITAT. 8. BEFORE US, THE AR SUBMITTED THE ISSUE NOW, STAND S SETTLED BY THE HONBLE APEX COURT IN THE CASE OF TOPMAN EXPORTS VS CIT, REPORTED IN 342 ITR 49 (SC), WHEREIN THE HONBLE SUPREME COURT HELD (HEAD NOTE) : IT IS A WELL-SETTLED PRINCIPLE OF STATUTORY INTERP RETATION OF A TAXING STATUTE THAT A SUBJECT WILL BE LIABLE TO TAX AND WILL BE ENTITLE D TO EXEMPTION FROM TAX ACCORDING TO THE STRICT LANGUAGE OF THE TAXING STAT UTE AND IF AS PER THE WORDS USED IN EXPLANATION(BAA) TO SECTION 80HHC READ WITH THE WORDS USED IN CLAUSES (IIID) AND (IIIE) OF SECTION 28, THE ASSESS EE WAS ENTITLED TO A DEDUCTION ITA NO.9174/MUM/2010 YUVAK FINE FAB LIMITED 3 UNDER SECTION 80HHC ON EXPORT PROFITS, THE BENEFIT OF SUCH DEDUCTION CANNOT BE DENIED TO THE ASSESSEE. THE AR ALSO PLACED A COPY OF ITS OWN CASE IN ASSESS MENT YEAR 2003-04 IN ITA NO. 3585/MUM/2007, WHEREIN, THE ISSUE OF MAINTAININ G SEPARATE BOOKS FOR THE PURPOSE EXPORT BUSINESS AND CONSEQUENT ALLOWANC E OF DEDUCTION U/S 80HHC AS CLAIMED. THE AR, THEREFORE, PLEADED THAT THE DEDUCTION AS CLAIMED BE ALLOWED. 9. THE DR HAS RELIED ON THE DECISION OF THE REVENUE AUTHORITIES. 10. WE HAVE HEARD THE ARGUMENTS OF THE PARTIES AND HAVE PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AND THE COORDINAT E BENCHES. 11. THE ISSUE IS WHETHER AN EXPORT INCENTIVES, DEDU CTION U/S 80HHC IS AVAILABLE. THE ANSWER HAS BEEN GIVEN BY HONBLE SUP REME COURT IN THE CASE OF TOPMAN EXPORTS (SUPRA) , AS REPRODUCED HERE IN ABOVE. 12. IN THE LIGHT OF THIS DECISION OF HONBLE SUPREM E COURT, WE, RESPECTFULLY, FOLLOWING THE SAME, SET ASIDE THE ORD ERS OF THE REVENUE AUTHORITIES AND DIRECT THE AO TO ALLOW THE DEDUCTIO N U/S 80HHC, AS CLAIMED BY THE ASSESSEE. 13. THUS THE APPEAL AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 6 TH SEPTEMBER, 2012. SD/- SD/- ( P.M. JAGTAP ) ACCOUTANT MEMBER ( VIVEK VARMA ) JUDICIAL MEMBER MUMBAI, DATE: 26 TH SEPTEMBER, 2012 ITA NO.9174/MUM/2010 YUVAK FINE FAB LIMITED 4 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)-18, MUMBAI. 4) THE CIT -8, MUMBAI, 5) THE D.R. G BENCH, MUMBAI. 6) COPY TO GUARD FILE. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN