M/s. Gopal Fabrics, Ahmedabad V. The ACIT.,Circle-6, Ahmedabad

MA 143/AHD/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8459 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-07-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 01-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MRS URVASHI SHODHAN
• Keywords: Difference of opinion; Change of opinion
• Section: 80HHC; 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI MUKUL KR. SHRAWAT, JM AND SHRI A. MOHA N ALANKAMONY, AM) M. A. NO.143/AHD/2011 (IN ITA NO.3214/AHD/2010 - AY: 2003-04) M/S. GOPAL FABRICS, GOPAL FABRICS, B/H INTERNATIONAL HOTEL, MOHAN HOUSING SOCIETY, ISANPUR, NAROL, AHMEDABAD P.A. NO. AABFG 5396 A VS THE A. C. I. T., CIRCLE-6, AHMEDABAD (APPLICANT) (RESPONDENT) APPLICANT BY MRS. URVASHI SHODHAN, AR RESPONDENT BY SHRI RAVINDRA KUMAR WITH R. K. VOHRA, DRS DATE OF HEARING: 06-07-2012 DATE OF PRONOUNCEMENT: 06-07-2012 ORDER PER A. MOHAN ALANKAMONY : THIS MISC. APPLICATION IS FILED BY THE ASSESSEE FOR RECALLING OF THE ORDER PASSED BY THE TRIBUNAL IN ITA NO.3214/AHD/2011 FOR THE ASSESSMENT YEAR 2003-04 DATED 17-06-2011. 2. THE LEARNED AR IN HIS WRITTEN SUBMISSION HAS ST ATED AS UNDER: THE APPELLANT FILED APPEAL BEFORE THE HON'BLE IT A T AS PER THE FOLLOWING GROUNDS- MA NO.143/AHD/2011 (IN ITA NO.3214/AHD/2011AY: 2003-04) M/S. GOPAL FABRICS VS THE ACIT, CIR-6, AHMEDABAD 2 1. NOTICE U/S 148 OF THE ACT ISSUED ON CHANGE OF OPINION WHEN FULL DETAILS & RELEVANT MATERIAL DISCLOSED IN SCRUTINY ASSESSMENT. LD. CIT (A) ERRED IN DISMISSING THE GRO UND CHALLENGING VALIDITY OF RE ASSESSMENT PROCEEDINGS. 2. LD. CIT (A) ERRED IN CONFIRMING ACTION OF AO IN RESTRICTING THE DEDUCTION CLAIMED U/S 80HHC OF THE ACT OF REDUCING 90% OF THE MISCELLANEOUS INCOME OF RS.6, 95, 840/-, INTEREST OF RS.17,443/- & INSURANC E CLAIM OF RS.19, 091 /- THE HON'BLE ITAT ON THE APPEAL BEING FIXED FOR HEAR ING ON 03/06/2011 ERRED IN NOT TAKING INTO CONSIDERATION T HE ADJOURNMENT APPLICATION FILED ON 01/06/2011 THROUGH REGISTRY AND FURTHER ERRED IN PASSING EX PARTE ORDER ON 17/0 6/2011. THE HON'BLE ITAT HELD THAT NO INTERFERENCE WAS CALLED FOR IN THE ORDER OF ID. CIT (A) SINCE REOPENING OF THE ASSESSM ENT WAS VALID BECAUSE IT WAS MADE WITHIN 4 YEARS OF RELEVAN T ASSESSMENT YEAR. IT IS RESPECTFULLY SUBMITTED THAT REASSESSMENT PROC EEDINGS IN SOME CASES EVEN WITHIN 4 YEARS OF THE ASSESSMENT YEAR BASED ON CHANGE OF OPINION WHEN FULL AND RELEVANT M ATERIAL FACTS ARE DISCLOSED BY THE APPELLANT IN THE ORIGINA L ASSESSMENT IS HELD TO BE INVALID BY COURTS. THIS IS A DEBATABLE ISSUE AND THE APPELLANT OUGHT TO HAVE BEE N GRANTED OPPORTUNITY TO MAKE GOOD HIS SUBMISSIONS. ON SECOND GROUND CHALLENGING RESTRICTION OF DEDUCTI ON CLAIMED U/S 80HHC OF THE ACT ON CERTAIN RECEIPTS, THE HON'BLE BENCH OBSERVED THAT ISSUE WAS DIRECTLY COVERED BY THE TWO DECISIONS REFERRED BY ID. CIT (A) IN HIS ORDER. THE HON'BLE B ENCH FURTHER OBSERVED THAT THE JUDGMENT OF THE APEX COURT IN CIT VS RAVINDRANATHAN NAIR IS FURTHER FOLLOWED BY THE HON'BLE BOMBAY HC IN CIT VS DRESSER RAND INDIA (P) LTD. 323 ITR 42 9 WHEREIN FREIGHT, INSURANCE AND PACKING RECEIPTS WERE NOT CO NSIDERED PART OF TURNOVER AND THEREFORE NOT ENTITLED TO FULL DEDUCTION U/S 80HHC OF THE ACT. MA NO.143/AHD/2011 (IN ITA NO.3214/AHD/2011AY: 2003-04) M/S. GOPAL FABRICS VS THE ACIT, CIR-6, AHMEDABAD 3 IT IS RESPECTFULLY SUBMITTED THAT DEDUCTIONS U/S 80 HHC OF THE ACT HAS BEEN A HIGHLY DEBATABLE ISSUE AND OVER THE PERI OD OF TIME JUDGMENTS HAVE BEEN OVERRULED AND DEDUCTION RESTRIC TED IS HELD TO BE ALLOWABLE TO THE APPELLANT. IN RECENT JUDGMEN T OF THE APEX COURT IN ACG ASSOCIATED CAPSULES PVT. LTD. (343 ITR 89) IT IS HELD THAT 90% OF ONLY NET RECEIPT OF INTEREST INCOM E IS TO BE REDUCED FROM PROFITS OF BUSINESS FOR COMPUTATION OF DEDUCTION U/S 80HHC OF THE ACT. SIMILARLY THE HON'BLE BOMBAY HC IN PFIZER LIMITED (330 ITR 62) HELD THAT INSURANCE CLA IM ON ACCOUNT OF STOCK IN TRADE DOES NOT CONSTITUTE AN IN DEPENDENT INCOME OR A RECEIPT OF A NATURE SIMILAR TO BROKERAG E, COMMISSION, INTEREST, RENT OR CHARGES. HENCE SUCH A RECEIPT WOULD NOT BE SUBJECT TO DEDUCTION OF 90% AS UNDER C LAUSE 1 OF EXPLANATION (BAA) TO SECTION 8OHHC OF THE ACT. IN LIGHT OF THE ABOVE NARRATION THE APPELLANT RESPE CTFULLY SUBMITS THAT THE APPEAL FILED BY THE APPELLANT DISMISSED EX PARTE BY THE HON'BLE ITAT HAS CAUSED GRAVE INJUSTICE TO THE APPE LLANT. IT IS PRAYED THAT THE ORDER PASSED WITHOUT GRANTING OPPOR TUNITY TO THE APPELLANT TO MAKE HIS SUBMISSIONS IS ERRONEOUS AND CONSTITUTES MISTAKE APPARENT ON RECORD THAT DESERVES TO BE RECA LLED AND APPEAL BE HEARD SO AS APPROPRIATE ORDERS BE PASSED. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORDS ALONG WITH THE ORDER OF THE TR IBUNAL. THOUGH THE TRIBUNAL HAD PASSED THE EX-PARTE ORDER ON MERIT WE ARE OF THE CONSIDERED VIEW THAT IN THE INTEREST OF JUSTICE ONE MORE OPPORTUNITY SHOULD BE PROVIDED TO THE ASSESSEE OF BEING HEARD, SINCE THE ASSESSEE COULD NOT DEFEND ITS CASE DUE TO ITS NON A PPEARANCE ON THE EARLIER OCCASION BEFORE THE TRIBUNAL. FURTHER THE I SSUES IN THE APPEAL ARE DEBATABLE IN NATURE AS IT PERTAINS TO VALIDITY OF RE-ASSESSMENT PROCEEDINGS AND CLAIM OF DEDUCTION U/S 80 HHC WITHO UT REDUCING 90% OF THE MISCELLANEOUS INCOME, INTEREST INCOME AN D INSURANCE MA NO.143/AHD/2011 (IN ITA NO.3214/AHD/2011AY: 2003-04) M/S. GOPAL FABRICS VS THE ACIT, CIR-6, AHMEDABAD 4 CLAIM . THEREFORE IN THE INTEREST OF JUSTICE, WE HEREBY R ECALL THE ORDER OF THE TRIBUNAL DATED 17-07-2011 AND DIRECT T HE REGISTRY TO POST THE CASE ON 07-09-2012 FOR THE CASE TO BE HEAR D AFRESH. SINCE, THE DATE OF HEARING IS INTIMATED TO BOTH THE PARTIES IN THE OPEN COURT, NO NOTICE OF HEARING IS REQUIRED TO BE ISSUED. 4. IN THE RESULT, THE MISC. APPLICATION FILED BY TH E ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06-07-2012. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD MA NO.143/AHD/2011 (IN ITA NO.3214/AHD/2011AY: 2003-04) M/S. GOPAL FABRICS VS THE ACIT, CIR-6, AHMEDABAD 5 1. DATE OF DICTATION: 06-07-12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 09-07-12 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S ./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: