Shasun Pharmaceuticals Limited, CHENNAI V. DCIT, CHENNAI

MA 209/CHNY/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4294 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 1999-2000
• Appeal Filed On: 23-11-2015
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: S SRIDHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] M.P.NO.209/MDS/2015 [IN I.T.A.NO.733/MDS/2014] ASSESSMENT YEAR : 1999-2000 M/S SHASUN PHARMACEUTICALS LTD. [FORMERLY M/S SHASUN CHEMICALS & DRUGS LTD] NO.28 SARDAR PATEL ROAD GUINDY, CHENNAI 600 032 VS. THE DY. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE VI(2) CHENNAI [PAN AAACS 5031 L] ( PETITIONER ) ( -./0 /RESPONDENT) PETITIONER BY : SHRI S. SRIDHAR, ADVOCATE RESPONDENT BY : DR. B. NISCHAL, JCIT / DATE OF HEARING : 05 - 02 - 2016 / DATE OF PRONOUNCEMENT : 22 - 0 4 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THE ASSESSEE FILED THE PRESENT MISCELLANEOUS PE TITION ON THE GROUND THAT THERE IS AN ERROR IN THE ORDER OF T HIS TRIBUNAL DATED 6.8.2015. 2. SHRI S. SRIDHAR, LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ISSUE RAISED BY THE REVENUE BEFORE THIS TRIBUNA L IN GROUND NO.4.1 IS WITH REGARD TO RECOMPUTATION OF DEDUCTION U/S 8 0HHC WITHOUT MP NO. 209/15 :- 2 -: REDUCING THE FOREIGN EXCHANGE GAIN TO THE EXTENT OF ` 89,46,150/-. HOWEVER, WHILE DISCUSSING THE MATTER AT PARA 12, AF TER REFERRING TO THE EXCHANGE RATE FLUCTUATION, THIS TRIBUNAL OMITTED TO CONSIDER THE ACTUAL GROUND RAISED BY THE REVENUE WITH REGARD TO RECOMPU TATION OF DEDUCTION U/S 80HHC. REFERRING TO THE ASSESSMENT ORDER, THE LOSS OR NEGATIVE FIGURE OF PROFIT OF THE BUSINESS WAS DISCU SSED BY THE ASSESSING OFFICER AT PARA 5.3 AND THIS WAS CONFIRME D BY THE CIT(A) AGAINST THE ASSESSEE. THE ASSESSEE IS NOT IN APP EAL BEFORE THIS TRIBUNAL, THEREFORE, THE NEGATIVE FIGURE OF PROFIT OF THE BUSINESS WAS NEVER A SUBJECT MATTER OF ADJUDICATION BEFORE THIS TRIBUNAL. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WHETHER THE EXCHA NGE RATE FLUCTUATION ATTRIBUTABLE TO THE EXPORT ACTIVITY IS TO BE REDUCE D FROM THE PROFIT OF THE BUSINESS WHILE COMPUTING DEDUCTION OR NOT? TH IS ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AGAINST WHICH TH E REVENUE IS IN APPEAL. THIS TRIBUNAL HAS NOT ADJUDICATED THIS ISS UE. 3. ON THE CONTRARY, DR. B. NISCHAL, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT AFTER REPRODUCING THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE, THIS TRIBUNAL FOUND T HAT THERE WAS A CONFUSION WHETHER THERE WAS ANY PROFIT ON EXPORT OR NOT. THEREFORE, THE MATTER WAS REMITTED BACK TO THE FILE OF THE ASS ESSING OFFICER FOR RECONSIDERATION. ACCORDING TO THE LD. DR, THERE IS NO ERROR IN THE ORDER OF THIS TRIBUNAL. MP NO. 209/15 :- 3 -: 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. TH E REVENUE HAS RAISED THREE GROUNDS BEFORE THIS TRIBUNAL. THE FI RST GROUND OF APPEAL IS WITH REGARD TO EXCHANGE RATE FLUCTUATION LOSS OF ` 41,87,255/-. THIS TRIBUNAL FOUND THAT THE LOSS SUFFERED BY THE ASSES SEE WAS ADMITTEDLY ON THE LOANS BORROWED AND USED AS WORKING CAPITAL/C IRCULATING CAPITAL, THEREFORE, THE LOSS SUFFERED BY THE ASSESSEE HAS T O BE ALLOWED AS REVENUE LOSS. WHILE CONSIDERING THE SECOND GROUND OF APPEAL WITH REGARD TO REDUCTION OF 90% OF THE MISCELLANEOUS REC EIPT FROM THE PROFIT OF BUSINESS, THIS TRIBUNAL REMITTED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO REEXAMINE THE ISSUE AND FIND O UT THE ACTUAL INSURANCE CLAIM IS EITHER FOR LOSS OF MACHINERY OR LOSS OF STOCK AND THEREAFTER THE ASSESSING OFFICER WAS DIRECTED TO DE CIDE THE ISSUE. WHILE CONSIDERING THE THIRD ISSUE WITH REGARD TO DE DUCTION U/S 80HHC, THE MAIN GRIEVANCE OF THE DEPARTMENT IS THAT THE CI T(A) DIRECTED THE ASSESSING OFFICER TO COMPUTE THE DEDUCTION U/S 80HH C WITHOUT REDUCING THE FOREIGN EXCHANGE GAIN. AFTER REPRODUC ING THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR, THIS TRIBUNAL OBSERVED THAT THE CLAIM OF THE ASSESSEE THAT DUE T O EXCHANGE RATE FLUCTUATION, THE PROFIT WAS RECEIVED ON EXPORT. TH EREAFTER, THIS TRIBUNAL REFERRED TO THE NEGATIVE FIGURE OF THE PR OFIT OF THE BUSINESS. AS RIGHTLY SUBMITTED BY THE LD. COUNSEL FOR THE ASS ESSEE, THE NEGATIVE MP NO. 209/15 :- 4 -: FIGURE OF THE PROFIT OF THE BUSINESS WAS NOT THE SU BJECT MATTER BEFORE THIS TRIBUNAL. THEREFORE, THERE WAS A FACTUAL ERRO R WHICH CREPT IN THE ORDER OF THIS TRIBUNAL. THE THIRD GROUND BEFORE TH IS TRIBUNAL IS ONLY WITH REGARD TO REDUCTION OF EXCHANGE RATE FLUCTUATI ON WHILE COMPUTING DEDUCTION U/S 80HHC. HOWEVER, WITHOUT ADJUDICATIN G THAT ISSUE, THIS TRIBUNAL REFERRED TO THE NEGATIVE FIGURE OF PROFIT OF BUSINESS, WHICH WAS NOT SUBJECT MATTER OF APPEAL. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT AN ERROR HAS CREPT IN THE O RDER WHICH NEEDS TO BE RECTIFIED. ACCORDINGLY, THE APPEAL IN I.T.A.NO. 733/MDS/2014 IS REOPENED AND THE REGISTRY IS DIRECTED TO POST THE A PPEAL ON 9.6.2016 FOR DISPOSAL OF THIRD GROUND, NAMELY, THE REDUCTION OF EXCHANGE RATE FLUCTUATION WHILE COMPUTING THE DEDUCTION U/S 80HH C OF THE ACT. 5. IN THE RESULT, THE MISCELLANEOUS PETITION OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND APRIL, 2016, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ) ) (N.R.S. GANESAN) / JUDICIAL MEMBER / CHENNAI / DATED: 22 ND APRIL, 2016 RD !' / COPY TO: 1 . PETITIONER 3. # # $ (! &) / CIT(A) 5. '(&# )* / DR 2. +#,- / RESPONDENT 4. # # $ / CIT 6. (./ 0 / GF