BANCO PRODUCTS (INDIA) LTD., Baroda V. The Dy.CIT, CIRCLE-1(1), Baroda

MA 13/AHD/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0395 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 05-07-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 31-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: NIKITA BRAHMBHATT
• Section: 80HHC; 28

Judgement Text

MA.NO. 13/A/2013(IN IT A NO. 3184/A/2010 . A.Y. 2004- 05 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI MUKUL KR. SHRAWAT J.M. & SHRI ANIL CHA TURVEDI, A.M.) M.A. NO. 13/AHD/2013 (IN ITA NO. 3184/AHD/2010) (ASSESSMENT YEAR:2004-05) BANCO PRODUCTS (INDIA) LTD. BIL, NEAR BHAILI RAILWAY STATION PADRA ROAD, VADODARA (APPELLANT) VS. THE ACIT, CIRCLE-1(1) AAYKAR BHAVAN VADODARA (RESPONDENT) PAN: AAACB 8630 L APPELLANT BY : MS. NIKITA BRAHMBHATT RESPONDENT BY : SHRI O.P. BATHEJA ( )/ ORDER DATE OF HEARING : 05-07-20 13 DATE OF PRONOUNCEMENT : 19 -07-2013 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS MISC. PETITION DATED 04.01.2013 IS FILED BY TH E ASSESSEE IN RESPECT OF ITA NO. 3184/AHD/2010 FOR A.Y. 2004-05 (ORDER DATED 31.07.2012) WHEREIN THE ASSESSEE VIDE GROUND NO. 1.2. HAD CHALL ENGED THE ACTION OF CIT(A) IN CONFIRMING THE ORDER OF ASSESSING OFFICER IN NOT ALLOWING DEDUCTION UNDER SECTION 80HHC ON THE EXPORT INCENTI VES. MA.NO. 13/A/2013(IN IT A NO. 3184/A/2010 . A.Y. 2004- 05 2 2. IN THE MISC. APPLICATION, IT HAS BEEN POINTED OUT T HAT THE AFORESAID GROUND HAS NOT BEEN ADJUDICATED AND THEREFORE, THE ORDER M AY BE RECALLED FOR ITS ADJUDICATION. 3. BEFORE US, THE LD. A.R. REITERATED THE SUBMISSIONS MADE IN M.A. AND ON THE OTHER HAND LD. D.R. OBJECTED TO THE PRAYER OF L D. A.R. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ON PERUSING THE ORDER DATED 31.07.2012 IT IS SEEN T HAT THE GROUND WITH RESPECT TO DEDUCTION ON EXPORT INCENTIVES HAS NOT B EEN ADJUDICATED. WE THEREFORE NOW PROCEED TO THE ISSUE. 5. BEFORE US, THE LEARNED A.R. SUBMITTED THAT FOR COMP UTATION OF DEDUCTION UNDER 80HHC, ASSESSEE HAD REDUCED 90% OF EXPORT BEN EFITS EARNED DURING THE YEAR. ON PERUSING THE SUBMISSIONS OF TH E ASSESSEE, ASSESSING OFFICER WAS OF THE VIEW THAT THE DUTY FREE ENTITLEM ENT BEING ADVANCE LICENSE BENEFITS WAS NOT A LICENSE MENTIONED UNDER SECTION 28(III)(A) OF THE ACT. HE FURTHER NOTED THAT SINCE THE EXPORT TU RNOVER WAS IN EXCESS OF RS.10 CRORE AND SINCE THE ASSESSEE HAS FAILED TO SA TISFY THE CONDITIONS FORMING PART OF PROVISO INSERTED WITH EFFECT FROM 1 .04.1998 BY TAXATION LAWS (AMENDMENT) ACT, 2005, THE SAID PROVISO WOULD NOT BE APPLICABLE TO THE ASSESSEE IN RESPECT OF RS. 1,66,34,766/- ON ACCOUNT OF DUTY FREE ENTITLEMENT AND, THEREFORE, THE ASSESSEE WAS NOT EN TITLED TO DEDUCTION UNDER 80HHC ON IT. CIT(A) UPHELD THE ORDER OF ASS ESSING OFFICER. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW I N APPEAL BEFORE US. MA.NO. 13/A/2013(IN IT A NO. 3184/A/2010 . A.Y. 2004- 05 3 6. BEFORE US, THE LEARNED A.R. SUBMITTED THAT THE HON. APEX COURT IN THE CASE OF TOPMAN EXPORTS LTD. VS. CIT 342 ITR 49 HAS HELD THAT ONLY 90% OF THE PROFIT ON SALE OF DEPB LICENSE IS TO BE EXCL UDED AND NOT THE ENTIRE SUM FOR WORKING OUT DEDUCTION UNDER 80HHC. THE LEAR NED A.R. THEREFORE, SUBMITTED THAT THE ISSUE MAY BE REMITTE D TO THE FILE OF ASSESSING OFFICER AND HE MAY BE DIRECTED TO CONSIDE R THE DEDUCTION UNDER 80HHC, IN VIEW OF THE AFORESAID DECISION OF APEX C OURT. THE LEARNED D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF ASSES SING OFFICER. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT ASSESSEE HAD RECEIVED EXPORT INCENTIVES OF RS. 16634766/- AND IT HAD REDUCED 90% OF IT FOR THE PURPOSE OF CLAIMING DEDUCTION U/S 80 HHC. IN THE CASE OF TOPMAN EXPORTS VS. CIT. THE HON. APEX COURT HAS HELD AS UNDER: UNDER SECTION 28 OF THE ACT CASH ASSISTANCE RECE IVED OR RECEIVABLY BY ANY PERSON AGAINST EXPORTS SUCH AS THE DEPB CREDIT AND PROFIT ON TRANSFER OF THE DEPB CREDIT ARE TREATED AS TWO SEP ARATE ITEMS OF INCOME UNDER CLAUSES (IIIB) AND (IIIB) OF SECTION 28 IN TH E YEAR IN WHICH THE PERSON APPLIES FOR THE DEPB CREDIT AGAINST THE EXPO RTS AND THE PROFIT ON TRANSFER OF THE DEPB CREDIT BY THAT PERSON WILL BE CHARGEABLE AS INCOME UNDER CLAUSE (IIID) OF SECTION 28 IN HIS HANDS IN T HE YEAR IN WHICH HE MAKES THE TRANSFER. 8. IN THE PRESENT CASE, THERE IS NO FINDING OF ASSESSI NG OFFICER AS TO THE QUANTUM OF PROFIT EARNED BY ASSESSEE ON SALE OF EXP ORT ENTITLEMENTS. IN VIEW OF THE AFORESAID FACTS AND IN THE LIGHT OF AFO RESAID DECISION OF HON. APEX COURT, WE REMIT THIS ISSUE TO THE FILE OF ASS ESSING OFFICER AND DIRECT HIM TO DECIDE THE ISSUE OF PROFITS EARNED ON DUTY FREE ENTITLEMENT. MA.NO. 13/A/2013(IN IT A NO. 3184/A/2010 . A.Y. 2004- 05 4 9. IN THE LIGHT OF RATIO LAID DOWN BY THE AFORESAID D ECISION OF HON. APEX COURT. THUS THIS GROUND OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SINCE REST OF THE GROUNDS OF THE APPEAL NO. 3184/AH D/2010 HAS ALREADY BEEN ADJUDICATED UPON, VIDE ORDER DATED 31.07.2012 AND THEREFORE, AFTER DECIDING THE ABOVE MENTIONED GROUND, THE RESULT OF THIS APPEAL SHALL CONTINUE TO BE PARTLY ALLOWED. 10. IN THE RESULT THE PRESENT M.A. IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 19 - 07 -2013. SD/- SD/- (MUKUL KR. SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/A SSTT.REGISTRAR ITAT,AHMEDABAD