AARTI DRUGS LTD, V. ADDL CIT 2(1),

MA 255/MUM/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1478 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-11-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 10-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, AM AND SHRI VIVEK VARMA, JM . / MA NOS. 255, 256 & 257/MUM/2013 (ARISING OUT OF ITA NOS.3945/MUM/2005, 3289 & 3290/ MUM/2006) ( / ASSESSMENT YEARS: 2001-02 TO 2003-04) AARTI DRUGS LIMITED 109-D, MAHENDRA INDL. ESTATE, ROAD NO.29, SION (EAST), MUMBAI-400 022 / VS. ADDL. CIT, RANGE 6(1) MUMBAI ! ./' ./PAN/GIR NO. AAACA 4410 D ASSESSEE : REVENUE & . / MA NOS. 258 & 259/MUM/2013 (ARISING OUT OF ITA NOS.3262 & 3263/MUM/2006) ( / ASSESSMENT YEARS: 2002-03 & 2003-04) ADDL. CIT, RANGE 6(1) MUMBAI / VS. AARTI DRUGS LIMITED 109-D, MAHENDRA INDL. ESTATE, ROAD NO.29, SION (EAST), MUMBAI-400 022 ! ./' ./PAN/GIR NO. AAACA 4410 D REVENUE : ASSESSEE #$ % & ASSESSEE BY : SHRI VIJAY MEHTA % & REVENUE BY : SHRI PITAMBAR DAS & SHRI O. P. SINGH ' ( % $ ) / DATE OF HEARING : 03.01.2014 *+, % $ ) / DATE OF PRONOUNCEMENT : 03.01.2014 2 MA NO. 255, 256, 257, 258 & 259/MUM/2013 (A.YS. 2001-02 TO 2003-04) AARTI DRUGS LIMITED - / O R D E R PER SANJAY ARORA, A. M.: THIS IS A SET OF FIVE MISCELLANEOUS APPLICATIONS BY THE ASSESSEE, I.E., IN RESPECT OF THE DISPOSAL BY THE TRIBUNAL OF THE ASSESSEES APPE AL FOR A.Y. 2001-02 AND THE CROSS APPEALS FOR A.YS. 2002-03 AND 2003-04. THE SAME CON CERNING COMMON ISSUES, WERE CLUBBED TOGETHER FOR HEARING; THE TRIBUNAL, IN FACT , HAVING DECIDED ALL THE APPEALS PER A COMMON ORDER; WERE HEARD TOGETHER, AND ARE TO BEING DISPOSED OF VIDE A COMMON, CONSOLIDATED ORDER. 2. WITH REGARD TO THE ASSESSEES APPEALS, THE ASSES SEES OBJECTION IS QUA ITS GROUND NO. 2 (FOR A.Y. 2001-02) AND GROUND NO.6 (FOR A.YS. 2002-03 AND 2003-04) BEFORE THE TRIBUNAL. THE SAME HAS BEEN DECIDED BY THE IT VIDE PARA 3 OF THE IMPUGNED ORDER BY SETTING ASIDE THE IMPUGNED ORDER AND REMITTING THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER (A.O.) WITH A DIRECTION TO DECIDE AFRESH IN LIGHT OF THE DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KALPATARU COLOURS & CHEMICALS [2010] 328 ITR 451 (BOM). THE ASSESSEE HAS MOVED THE MISCE LLANEOUS PETITION CONTENDING THAT THE SAID DECISION BY THE HONBLE HIGH COURT HAS SIN CE BEEN REVERSED BY THE HONBLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS VS. CIT [2012] 342 ITR 49 (SC). ACCORDINGLY, IT IS PRAYED THAT A DIRECTION, IN VIEW OF THE SAID DECISION BY THE APEX COURT, BE MADE BY STATING THAT THE PROFIT ON THE SALE OF T HE DEPB OUGHT TO BE EXCLUDED IN COMPUTING THE PROFITS OF THE BUSINESS UNDER EXPLANATION (BAA) TO SECTION 80-HHC INSTEAD OF EXCLUDING THE ENTIRE AMOUNT. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. IN OUR VIEW, IT WOULD NOT BE PROPER FOR US TO ISSUE ANY SPECIFIC DI RECTION, AS IS BEING SOUGHT BY THE ASSESSEE, AT THIS STAGE OF THE PROCEEDINGS. HOWEVER , THE DECISION BY THE HONBLE HIGH COURT IN THE CASE OF KALPATARU COLOURS & CHEMICALS (SUPRA), HAVING BEEN SINCE REVERSED BY THE APEX COURT, WE ONLY CONSIDER IT FIT AND PROP ER THAT THE MATTER BE DECIDED IN ACCORDANCE WITH THE LAW WITHOUT BEING BOUND BY THE DECISION BY THE HONBLE 3 MA NO. 255, 256, 257, 258 & 259/MUM/2013 (A.YS. 2001-02 TO 2003-04) AARTI DRUGS LIMITED JURISDICTIONAL HIGH COURT IN THE CASE OF KALPATARU (SUPRA), INASMUCH AS THE SAME NO LONGER REPRESENTS GOOD LAW IN VIEW OF THE DECISION BY THE APEX COURT IN THE CASE OF TOPMAN EXPORTS (SUPRA). WE DECIDE ACCORDINGLY. 4. THE SECOND ISSUE CONCERNS THE DISPOSAL BY THE TR IBUNAL OF THE ASSESSEES GROUND NO.3 (FOR A.Y. 2001-02) AND GROUND NO.10 (FOR A.YS. 2002-03 & 2003-04). THE SAME RELATES TO THE RESTRICTION OF THE DEDUCTION U/S.80- HHC IN VIEW OF SECTION 80-IB(13) (ERSTWHILE 80IA(9)) OF THE ACT. THE SAME STANDS DEC IDED BY THE TRIBUNAL VIDE PARA 9 OF ITS IMPUGNED ORDER BY FOLLOWING THE DECISION BY ITS SPE CIAL BENCH IN THE CASE OF ASST. CIT VS. HINDUSTAN MINT & AGRO PRODUCTS (P.) LTD. [2009] 119 ITD 107 (DEL.) (SB) AS WELL AS BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF GODREJ AGROVET LTD. VS. DY.CIT [ 2010 ] 323 ITR 97 (BOM). IT IS CLAIMED THAT THE DECISION B Y THE SPECIAL BENCH HAS SINCE BEEN REVERSED BY THE HONBLE JURISDICTIONAL HIGH CO URT VIDE ITS JUDGMENT IN ASSOCIATED CAPSULES (P.) LTD. VS. DY. CIT [2011] 332 ITR 42 (BOM) AND, AS SUCH, THE IMPUGNED ORDER BEARS A MISTAKE RECTIFIABLE U/S.254(2). 5. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE DECISION BY THE SPECIAL BENCH IN THE CASE OF HINDUSTAN MINT & AGRO PRODUCTS (P.) LTD. (SUPRA) HAS BEEN AFFIRMED BY THE HONBLE DELHI HIGH COURT IN THE CAS E OF GREAT EASTERN EXPORTS VS. CIT [2011] 332 ITR 14 (DEL.). THE HONBLE JURISDICTIONA L HIGH COURT IN THE CASE OF ASSOCIATED CAPSULES (P.) LTD. (SUPRA) HAS, HOWEVER, TAKEN A DIFFERENT VIEW, DISSE NTING FROM THE SAID DECISION. AS SUCH, FOLLOWING THE DECISION BY THE SP ECIAL BENCH WOULD NOT BE CONSISTENT WITH THE LAW AS EXPLAINED BY THE HONBLE JURISDICTI ONAL HIGH COURT. WE, THEREFORE, CONSIDERED IT PROPER TO AND, ACCORDINGLY, DIRECT A RECALL OF THE ASSESSEES APPEALS FOR ALL THE YEARS QUA THE SAID GROUND, TO BE DECIDED AFRESH BY THE TRIBUN AL IN ACCORDANCE WITH LAW AFTER HEARING THE PARTIES. WE DECIDE ACCORDINGLY. 6. THE ASSESSEES OBJECTION QUA THE REVENUES APPEALS RELATES TO THE DISPOSAL OF GROUND NO.3 OF THE REVENUES APPEAL FOR A.YS. 2002- 03 & 2003-04. VIDE THE SAME, THE REVENUE IMPUGNS THE DECISION BY THE FIRST APPELLATE AUTHORITY IN DIRECTING THE A.O. TO 4 MA NO. 255, 256, 257, 258 & 259/MUM/2013 (A.YS. 2001-02 TO 2003-04) AARTI DRUGS LIMITED CONSIDER THE ADVANCE LICENSE BENEFIT, DEPB AND DFRC BENEFIT AS COVERED U/S.28(IIIB) FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S.80-HHC OF THE ACT. THE TRIBUNAL DECIDED THE MATTER BY RESTORING IT BACK TO THE FILE OF THE A.O. TO DECIDE THE SAME IN LIGHT OF THE DECISION IN THE CASE OF KALPATARU COLOURS & CHEMICALS (SUPRA). THE SAME HAVING BEEN SINCE REVERSED, A LIKE MODIFICATION, AS IN RESPECT OF THE ASSESSEES GROUND QUA DEPB, I.E., FOR FOLLOWING THE DECISION IN TOPMAN EXPORTS (SUPRA), IS MOVED BY THE ASSESSEE. 7. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE LD. CIT(A) HAD EVEN AS CLARIFIED BY THE LD. AUTHORIZED REPRESENTAT IVE (AR) DURING HEARING, WHILE CONSIDERING THE DEPB BENEFIT AS BEING COVERED U/S.2 8(IIID), HELD THE ADVANCE LICENSE AND DFRC BENEFIT AS FALLING U/S.28(IIIB) (REFER PARA 10 .2 OF HIS SEPARATE ORDER FOR A.YS. 2002- 03 AND 2003-04). IN DOING SO, HE HAD CONSIDERED AND FOLLOWED THE DECISIONS BY THE TRIBUNAL IN THE CASE OF ASSTT. CIT V. PRATIBHA SYNTAX LTD. (1999) 63 TTJ (AHD) 409 AND P & G ENTERPRISES (P.) LTD. VS. DY. CIT [2005] 93 ITD 138 (DEL.). BEFORE THE TRIBUNAL, HOWEVER, IT WAS THE COMMON CONTENTION OF BOTH THE P ARTIES, THAT THE ISSUE IS COVERED BY THE DECISION IN THE CASE OF KALPATARU COLOURS & CHEMICALS (SUPRA), LEADING TO ITS DECISION UNDER REFERENCE (VIDE PARA 68 OF ITS ORDER ). 8. WE HAVE PERUSED THE DECISION BY THE HONBLE JURI SDICTIONAL HIGH COURT IN THE CASE OF KALPATARU COLOURS & CHEMICALS (SUPRA), TO FIND THAT THE ISSUE OF ADVANCE LICENSE, ETC. WAS NOT BEFORE THE HONBLE HIGH COURT, WHICH CONSID ERED ONLY THE ISSUE OF THE DEPB, FOR WHICH THERE IS A SPECIFIC PROVISION IN SECTION 28(I IID). THE FACT OF THE MATTER, HOWEVER, REMAINS THAT IT WAS THE COMMON CONTENTION (OR GROUN D) OF THE PARTIES BEFORE THE TRIBUNAL THAT THE REVENUES SAID GROUND IS COVERED BY THE SA ID DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT. THE SAME HAVING BEEN SIN CE REVERSED BY THE HONBLE APEX COURT IN THE CASE OF TOPMAN EXPORTS (SUPRA), THE TRIBUNALS ORDER DIRECTING THE FOLLOWI NG OF THE DECISION IN KALPATARU COLOURS & CHEMICALS (SUPRA) ALSO BECOMES LIKEWISE BAD IN LAW. UNDER THE CIRCUMSTANCES, THEREFORE, ACCEPTING THE A SSESSEES CLAIM, WE DIRECT FOR THE RESTORATION OF THE REVENUES APPEAL FOR BOTH A.YS. 2002-03 & 2003-04 QUA GROUND NO. 3 5 MA NO. 255, 256, 257, 258 & 259/MUM/2013 (A.YS. 2001-02 TO 2003-04) AARTI DRUGS LIMITED FOR AN ADJUDICATION AFRESH BY THE TRIBUNAL IN ACCOR DANCE WITH THE LAW AFTER HEARING THE PARTIES. WE DECIDE ACCORDINGLY. 9. THE APPEALS, AS AND TO THE EXTENT RECALLED BY TH IS ORDER SHALL BE POSTED FOR HEARING ON JANUARY 27, 2014, AS ANNOUNCED IN THE OPEN COURT ON THE CONCLUSION OF THE HEARING. NO SEPARATE NOTICE OF HEARING SHALL ACCORDINGLY BE SEN T TO THE PARTIES. 10. IN THE RESULT, THE MISCELLANEOUS APPLICATIONS A RE ALLOWED ON THE AFORESAID TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 03, 2 014 SD/- SD/- (VIVEK VARMA) (SANJAY AROR A) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ' .( MUMBAI; / DATED : 03.01.2014 .../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. 0 !1 / THE APPLICANT 2. 23!1 / THE RESPONDENT 3. ' 4$ ( 0 ) / THE CIT(A) 4. ' 4$ / CIT - CONCERNED 5. 7 8 2$9 , 0 ) 9, , ' .( / DR, ITAT, MUMBAI 6. 8 : ; ( / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , ' .( / ITAT, MUMBAI