TECHNOCRAFT INDUSTRIES (I) LTD, V. DCIT RG 8(3),

MA 326/MUM/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1674 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 30-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P K
• Assessee Lawyers: PANKAJ TOPRANI
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI . . , , BEFORE SHRI B. R. MITTAL, JM AND SHRI SANJAY ARORA , AM ! ' . / MA NO. 326/MUM/2013 (ARISING OUT OF ITA NO. 5689/MUM/2006) ( / ASSESSMENT YEAR: 2003-04) TECHNOCRAFT INDUSTRIES (INDIA) LTD. A-25, MIDC MAROL INDUSTRIAL AREA, STREET NO.3, OPP. ESIS HOSPITAL, ANDHERI (E), MUMBAI-400 093 / VS. DY. CIT, RANGE 8(3), AAYAKAR BHAVAN, MUMBAI-400 020 $ ./% ./PAN/GIR NO. AAACT 2724 P APPLICANT : RESPONDENT APPLICANT BY : SHRI PANKAJ TOPRANI RESPONDENT BY : SHRI B. P. K. PANDA & ' ' ( ) / DATE OF HEARING : 07.02.2014 *+, ( ) / DATE OF PRONOUNCEMENT : 12.02.2014 - / O R D E R PER SANJAY ARORA, A. M.: THIS IS A MISCELLANEOUS APPLICATION BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE TRIBUNAL U/S.254(1) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) IN ITS CASE FOR THE ASSESSMENT YEAR (A.Y.) 2003-04 DATED 29.10.2010 , DECIDING THE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE, I.E., QUA THE REVENUES GROUND NO. 10. 2. EXPLAINING THE ASSESSEES GRIEVANCE, IT WAS EXPL AINED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, THAT T HE ISSUE WITH REGARD TO THE TREATMENT OF THE SCRAP SALES IN THE COMPUTATION OF DEDUCTION U/S .80-HHC AROSE, AND WHICH WAS THE SUBJECT MATTER OF BOTH THE ASSESSEES (IN ITA NO.47 92/MUM/2006) AND THE REVENUES (IN 2 MA NO. 326/MUM/2013 (A.Y. 2003-04) TECHNOCRAFT INDUSTRIES (INDIA) LTD. VS. DY. CIT ITA NO.5689/MUM/2006) APPEAL. THE ASSESSEE, PER ITS GROUND NO. 4(D), HAD CHALLENGED THE INCLUSION OF THE SCRAP SALES IN THE TOTAL TURNO VER IN THE COMPUTATION OF DEDUCTION U/S.80-HHC. THE SAME WAS DECIDED BY THE TRIBUNAL AG AINST THE ASSESSEE BY FOLLOWING ITS EARLIER ORDER IN THE ASSESSEES OWN CASE FOR A.Y. 2 001-02 (IN ITA NO.2477/MUM/2004), CONFIRMING THE DIRECTION BY THE LD. CIT(A) IN INCLU DING THE SCRAP SALE IN THE TOTAL TURNOVER (VIDE PARAS 23 TO 25). VIDE ITS GROUND NO. 10, THE REVENUE HAD ALSO IMPUGNED THE SIMULTANEOUS DIRECTION BY THE LD. CIT(A) TO EXCLUDE THE SCRAP SALES FROM THE PROFITS OF THE BUSINESS; THE SAME READING AS UNDER (REFER PARA 75 OF THE IMPUGNED ORDER) : 10. THE LD. CIT(A) ERRED IN DIRECTING THE A.O. NOT TO E XCLUDE SCRAP SALE FROM PROFITS OF BUSINESS BUT INCLUDE THE SAME IN TO TAL TURNOVER WHILE CALCULATING DEDUCTION U/S 80HHC . THE TRIBUNAL, HOWEVER, RENDERED NO DECISION IN THE MATTER, MERELY STATING THAT THE SAID ISSUE STANDS COVERED BY ITS DECISION IN THE AS SESSEES APPEAL. THIS IS FACTUALLY INCORRECT AND, BESIDES, ALSO INCONSISTENT INASMUCH AS IF THE SCRAP SALE IS TO BE INCLUDED IN THE TURNOVER, THE SAME COULD NOT BE AT THE SAME TIM E EXCLUDED FROM THE PROFITS OF THE BUSINESS, WHICH ARE REQUIRED TO BE APPORTIONED (TO THE EXPORT BUSINESS ON THE BASIS OF THE RATIO OF THE EXPORT TURNOVER TO THE TOTAL TURNOVER OF THE BUSINESS) IN COMPUTING THE DEDUCTION U/S.80-HHC, DRAWING OUR ATTENTION TO PARA 75 AND 76 OF THE TRIBUNALS ORDER. THE LD. DEPARTMENTAL REPRESENTATIVE (DR), ON BEING CONFRONTED THEREWITH, COULD NOT REBUT THE FACTUAL ASSERTION MADE BY THE LD. AR. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE TRIBUNALS DECISION IN RESPECT OF THE REVENUES GROUND # 10 IS CONTAINED AT PARA 76 OF ITS IMPUGNED ORDER, WHICH READS AS UNDER: 76. HAVING HEARD THE RIVAL CONTENTIONS AND ON PERU SAL OF THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT SINCE THE ISSUE H AS BEEN DECIDED BY US IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE IN A SSESSEES OWN CASE IN ITA NO.4792/MUM./ 2006, FOR ASSESSMENT YEAR 2003-04 , VIDE PARAS23, 24 AND 25 OF THIS ORDER. THUS, THE GROUND RAISED BY TH E ASSESSING OFFICER IS ALLOWED. 3 MA NO. 326/MUM/2013 (A.Y. 2003-04) TECHNOCRAFT INDUSTRIES (INDIA) LTD. VS. DY. CIT AT THE SAME TIME, THE ASSESSEES GROUND NO. 4(D), R EPRODUCED BY THE TRIBUNAL AT PARA 23 OF ITS ORDER, READS AS UNDER: 4. THE LD. CIT(A) ERRED IN CONFIRMING THE FOLLOWING AC TIONS OF THE A.O. IN CALCULATING DEDUCTION U/S 80HHC. (A). (B).. (C).. (D) DIRECTING TO INCLUDE SCRAP SALE IN TOTAL TURNOV ER . THE SAME STOOD DISPOSED OF BY THE TRIBUNAL VIDE PAR A 24 OF ITS ORDER, WHICH READS AS UNDER: 24. LEARNED COUNSEL FOR THE ASSESSEE FAIRLY CONCED ES BEFORE US THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE AND IN FAVOUR OF REVENUE BY THE DECISION OF A CO-ORDINATE BENCH OF THIS TRIBUNAL, I N ASSESSEES OWN CASE, DECIDED IN ITA NO.2477/MUM/2004, FOR ASSESSMENT YEA R 2001-02. AS WOULD BE APPARENT, WHILE THE ASSESSEE ASSAILS TH E INCLUSION OF THE SCRAP SALE IN THE TOTAL TURNOVER, THE SUBJECT MATTER OF THE REVEN UES GRIEVANCE IS THE SIMULTANEOUS DIRECTION BY THE LD. CIT(A) TO EXCLUDE THE SAME FRO M THE PROFITS OF THE BUSINESS. IN FACT, IN ORDER TO SATISFY OURSELVES IF THE ASPECT OF THE REDUCTION OF SCRAP SALES FROM THE PROFITS OF THE BUSINESS IS ALSO COVERED BY THE TRIBUNALS ORDE R FOR A.Y. 2001-02 (COPY ON RECORD), FOLLOWED BY IT FOR THE CURRENT YEAR, WE FIND THAT T HE SAME IN FACT STANDS PASSED BY FOLLOWING ITS ORDER FOR A.Y. 2000-01 (REFER PARA 4 THEREOF) AND, FURTHER, THAT ITA NO.2477/MUM/2004 STATED THEREIN PERTAINS TO A.Y. 20 00-01. THE ORDER FOR AY 20001-01 IS NOT ON RECORD. AS IT WOULD THEREFORE APPEAR TO U S, THE TRIBUNAL DECIDED THE ASSESSEES GD. # 4(D) FOLLOWING ITS ORDER FOR AY 2000-01. FURT HER, THE APPEAL NUMBERS FOR A.Y. 2001-02 ARE ITA NO.5787/MUM/2004 AND ITA NO.7281/MU M/2004, I.E., IN THE ASSESSEES AND THE REVENUES APPEAL RESPECTIVELY. THE TRIBUNAL S ORDER FOR A.Y. 2001-02 IS DATED 13.06.2007, AND SURPRISINGLY BEARS NO GROUND IN RES PECT OF SCARP SALES, EITHER BY THE ASSESSEE OR BY THE REVENUE. THERE IS THUS APPARENTL Y NO ADJUDICATION BY THE TRIBUNAL, WHILE DECIDING THE ASSESSEES GD. # 4(D), OF THE LA TTER PART OF THE DIRECTION BY THE LD. CIT(A), IMPUGNED BY THE REVENUE PER ITS GROUND NO. 10. AS SUCH, THE TRIBUNAL STATING 4 MA NO. 326/MUM/2013 (A.Y. 2003-04) TECHNOCRAFT INDUSTRIES (INDIA) LTD. VS. DY. CIT THAT THE SAME STANDS COVERED BY ITS DECISION IN THE ASSESSEES APPEAL QUA ITS GROUND NO. 4(D) IS CLEARLY A MISTAKE APPARENT FROM THE RECORD. IN VIEW OF OUR FINDINGS AFORE-STATED, WE, ACCORDING LY, ADMITTING THE SAID MISTAKE, RECALL THE ASSESSEES APPEAL AND THE REVENUES APPE AL FOR ADJUDICATION AFRESH QUA THEIR GROUNDS 4(D) AND 10 RESPECTIVELY, I.E., IN RESPECT OF THE TREATMENT OF THE SCRAP SALES FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S. 80-HHC. WE MAY CLARIFY THAT IN DOING SO WE ARE NOT EXPRESSING ANY OPINION ON MERITS, WHICH SHA LL BE DECIDED BY THE TRIBUNAL AFTER HEARING THE PARTIES. THE APPEALS SHALL, ACCORDINGLY , BE FIXED FOR HEARING (ON THE SPECIFIED GROUNDS) IN THE REGULAR COURSE, TO BE FIXED BY THE REGISTRY. SIMULTANEOUSLY, THE NUMERAL OF 2001-02 OCCURRING AT PARA 24 OF THE IMPUGNED O RDER SHALL BE READ AS 2000-01. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES MA IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 12, 2014 SD/- SD/- (B. R. MITTAL) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER & ' MUMBAI; .' DATED : 12.02.2014 .'../ ROSHANI , SR. PS !' # $%&' (!'% / COPY OF THE ORDER FORWARDED TO : 1. / $0 / THE APPLICANT 2. 1$0 / THE RESPONDENT 3. & 2 ( / ) / THE CIT(A) 4. & 2 / CIT - CONCERNED 5. 56 1 '7! , / ) 7!, , & ' / DR, ITAT, MUMBAI 6. 689 :' / GUARD FILE !' / BY ORDER, )/* + (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI