PROCTER AND GAMBLE HYGIENE AND HEALTH CARE LTD, V. DCIT CIR 7(1),

MA 37/MUM/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0598 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2001-2002
• Appeal Filed On: 28-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY
• Assessee Lawyers: HARESH G BUCH
• Keywords: Depreciation; Capital expenditure
• Section: 80HHC; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, M UMBAI !'# !'# !'# !'# $ $ $ $ % % % % &' &' &' &' !'# !'# !'# !'# !( !( !( !( BEFORE SHRI B. RAMAKOTAIAH, AM, AND SHRI AMIT SHUKL A, JM MISCELLANEOUS APPLICATION NO. 37/MUM/2013 ARISING OUT O ( F ITA NO. 1500/MUM/2005) ( ) * ) * ) * ) * $+* $+* $+* $+* / ASSESSMENT YEAR: 2001-02) M/S. PROCTER & GAMBLE HYGIENE & HEALTH CARE LIMITED, P&G PLAZA, CARDINAL GRACIAS ROAD, MUMBAI -400 099. ) ) ) ) / VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7(1), AAYKAR BHAWAN, MUMBAI - 20 #, ! /. -. ! /. PAN/GIR NO. : AAACP 6332M ( ,/ / APPELLANT ) : ( 01,/ / RESPONDENT ) ,/ 2 ! / APPELLANT BY : MR. HARESH G. BUCH 01,/ 2 ! / RESPONDENT BY : MR. AJAY !)$ % / DATE OF HEARING : 05. 07. 2013 5+ % /DATE OF PRONOUNCEMENT : 31 .07. 2013 '& / O R D E R PER :AMIT SHUKLA , JM THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY TH E ASSESSEE, WHICH IS ARISING OUT ORDER DATED 25.01.2012 IN ITA NO. 1500/MUM/2005 FO R THE ASSESSMENT YEAR 2001-02. IN THE SAID APPLICATION, THE ASSESSEE HAS POINTED OUT THAT THERE ARE TWO MISTAKES IN THE ORDER OF THE TRIBUNAL WHICH ARE APPARENT ON RECORD:- 2 M.A. 37 MUM 201 MS. PROCTER AND GAMBLE HYGIENE AND HEALTH LIM ITED. FIRSTLY, WHILE ADJUDICATING GROUND NO. XI THE TRIBU NAL HAS NOT ADJUDICATED SUB GROUND 2, WHICH WAS AN INDEPENDENT GROUND; AND SECONDLY, THERE IS A TYPOGRAPHICAL MISTAKE IN PARA NO. 57, WHEREIN THE TRIBUNAL WHILE ADJUDICATING GROUND NO. XII(1) HAS DIRECTED T HE AO TO INCLUDE THE AMOUNT IN QUESTION AS PART OF THE TURNOVER FOR THE PURPOSE OF CALCUL ATION OF DEDUCTION U/S 80HHC, INSTEAD IT SHOULD HAVE BEEN EXCLUDE, BECAUSE THE TRIBUNAL V IDE PARA 56 HAS FOLLOWED, EARLIER YEAR ORDER WHEREIN THIS AMOUNT WAS EXCLUDED FROM THE TUR N OVER. 2. LEARNED COUNSEL ON BEHALF OF THE ASSESSEE ON THE FIRST ISSUE SUBMITTED THAT GROUND NO. XI CONTAINED THREE GROUNDS AND THE TRIBUNAL HAS ONLY ADJUDICATED GROUND NO. 1 FOLLOWING THE EARLIER TRIBUNAL ORDER FOR THE ASSESS MENT YEAR 1995-96. THE GROUND NO. 3 WAS GENERAL, HOWEVER SUB GROUND NO. 2 BEING NUMBERE D AS XI(2) WAS AN INDEPENDENT GROUND, WHEREIN THE ASSESSEE HAS CHALLENGED THE AC TION OF THE AO FOR REDUCING THE PROFITS OF THE ELIGIBLE UNITS BY EXCLUDING CERTAIN ITEMS OF OTHER INCOME FROM THE PROFITS OF ELIGIBLE UNITS. THIS GROUND BY MISTAKE HAS BEEN O MITTED TO BE CONSIDERED BY THE TRIBUNAL. REGARDING SECOND ISSUE, HE SUBMITTED THAT THE TRIB UNAL IN PARA 56 HAS REFERRED TO ITS OWN ORDER FOR THE ASSESSMENT YEAR 1999-2000 & 2000-2001 , WHEREIN THE TRIBUNAL HAS DECIDED THIS ISSUE IN THE FAVOUR OF THE ASSESSEE BY HOLDING THAT INCOME GENERATED FROM SCRAP SALE CANNOT BE HELD TO BE FORMING PART OF THE TOTAL TURN OVER. THUS, WHILE DIRECTING THE AO INSTEAD OF THE WORD EXCLUDE THE WORD INCLUDE HA S BEEN WRITTEN, THEREFORE, SAME SHOULD BE RECTIFIED TO BE READ AS EXCLUDE. 3. THE LEARNED DR ADMITTED THAT SUB GROUND NO. 2 OF GROUND NO. XI HAS NOT BEEN ADJUDICATED BY THE TRIBUNAL AND ALSO THERE IS A TYP OGRAPHICAL MISTAKE IN PARA 57, IN VIEW OF THE DECISION GIVEN IN PARA-56 OF THE SAID ORDER. 3 M.A. 37 MUM 201 MS. PROCTER AND GAMBLE HYGIENE AND HEALTH LIM ITED. 4. WE HAVE CONSIDERED THE MISCELLANEOUS APPLICATION OF THE ASSESSEE, VIS--VIS THE MISTAKES POINTED OUT IN THE ORDER DATED 25.01.2012. IN THE CASE OF THE ASSESSEE THE TRIBUNAL HAS PASSED CONSOLIDATED ORDER FOR THE ASSESSMENT YE ARS 1999-2000 AND 2001-2002. IN ASSESSEES APPEAL BEING ITA NO. 1500/MUM/2005, FOR THE ASSESSMENT YEAR 2001-02, THE ASSESSEE HAS RAISED GROUND NO. XI WHICH READS AS UN DER: 1. THE CIT(A) ERRED IN CONFIRMING THE ACTION OF TH E A.O. OF REDUCING THE DEDUCTION U/S 80IB IN RESPECT OF HONDA AND KUNDIAM UNITS (ELIGIBLE UNITS) BY ALLOCATING EMPLOYEE COST, DEPRECIATION, CAPITAL EXPENDITURE ON R & D OF HEAD OFFICE TO THE ELIGIBLE UNITS AND THEREB Y ALLOWING ONLY AT RS. 16,32,20,354/- AND RS. 39, 63,17,937/- AS AGAINST R S. 24,98,92,706/- AND RS. 48,54,31,689/- RESPECTIVELY CLAIMED BY THE APPELLAN T. 2. HE FURTHER ERRED IN CONFIRMING THE ACTION OF THE A.O. OF REDUCING PROFITS OF ELIGIBLE UNITS BY EXCLUDING CERTAIN ITEM S OF OTHER INCOME FROM THE PROFITS OF ELIGIBLE UNITS. 3. THE APPELLANT PRAYS THAT THE DEDUCTION U/S 801A OF THE ACT BE ALLOWED AS CLAIMED BY THE APPELLANT. WHILE ADJUDICATING THE SAID GROUND, THE TRIBUNAL HA S FOLLOWED THE EARLIER YEAR ORDER OF THE TRIBUNAL IN ASSESSEE OWN CASE FOR THE ASSESSMENT YE AR 1995-96 WHICH PERTAINED TO ALLOCATION OF HEAD OFFICE EXPENSES TO THE ELIGIBLE UNIT VIDE PARAS 53 & 54. SUB GROUND NO. 2 HAS NOT BEEN ADJUDICATED UPON BY THE TRIBUNAL, DU E TO OVERSIGHT. THIS IS AN INDEPENDENT GROUND WHEREIN THE ASSESSEE HAS CHALLENGED THE DIRE CTION OF THE AO OF REDUCING THE ELIGIBLE PROFITS OF THE BUSINESS BY EXCLUDING CERTAIN ITEMS OF OTHER INCOME FROM THE PROFITS OF THE BUSINESS FOR THE PURPOSE OF DEDUCTION U/S 80HHC. TH E DETAILS OF THE OTHER ITEM AS REQUIRED BY THE BENCH WAS ALSO FILED BY THE LEARNED COUNSEL. SINCE THIS GROUND HAS NOT BEEN 4 M.A. 37 MUM 201 MS. PROCTER AND GAMBLE HYGIENE AND HEALTH LIM ITED. ADJUDICATED UPON, WE ARE OF THE OPINION THAT IT AMO UNTS TO MISTAKE APPARENT FROM RECORD RECTIFIABLE WITHIN SECTION 254(2). ACCORDINGLY ONLY FOR THE LIMITED PURPOSE OF ADJUDICATING GROUND NO. XI(2), THE SAID ORDER IS RECALLED FOR AD JUDICATING THIS ISSUE OF AFRESH. 5. AS REGARDS THE SECOND ISSUE, IT IS SEEN THAT THE TRIBUNAL WHILE ADJUDICATING GROUND NO. XII HAS FOLLOWED THE EARLIER ORDER OF THE TRIBU NAL WHEREIN THE ISSUE SIMILAR ISSUE WAS INVOLVED, WHETHER THE AMOUNT RECEIVED FROM SALE OF SCRAP AND DISPOSAL OF EMPTY CONTAINERS IS A PART OF THE TURN OVER OR NOT. THIS WAS DECIDED IN THE FAVOUR OF THE ASSESSEE BY HOLDING THAT INCOME GENERATED FROM SCRAP SALES CANNOT BE HE LD TO BE PART OF THE TOTAL TURNOVER, THAT IS, IT CANNOT BE INCLUDED IN THE TURNOVER. THE TRIB UNAL WHILE REPRODUCING THE RELEVANT PARA OF THE EARLIER ORDER IN PARA 56, HAS GIVEN DIRECTION TO THE AO VIDE PARA-57 BY HOLDING AS UNDER: RESPECTFULLY FOLLOWING THE SAID DECISION WE DIRECT THE AO TO INCLUDE THE AMOUNT IN QUESTION AS PART OF THE TURNOVER FOR THE PURPOSE OF CALCULATION OF DEDUCTION UNDER SECTION 80HHC OF THE ACT. THE WORD INCLUDE SEEMS TO BE TYPOGRAPHICAL MISTAK E BECAUSE IN PARA 56, IT HAS BEEN CLEARLY HELD THAT INCOME GENERATED FROM SCRAP SALES CANNOT BE PART OF THE TOTAL TURNOVER FOR THE PURPOSE OF CALCULATION OF DEDUCTIO N U/S 80HHC. INSTEAD THE WORD EXCLUDE SHOULD HAVE BEEN MENTIONED. THIS IS CLEARLY A MIST AKE APPARENT FROM RECORD. THE SAID PARAGRAPH 57 WILL NOW READ AS UND ER. RESPECTFULLY FOLLOWING THE SAID DECISION WE DIREC T THE AO TO EXCLUDE THE AMOUNT IN QUESTION AS PART OF THE TURNOVER FOR THE PURPOSE OF CALCULATION OF DEDUCTION UNDER SECTION 80HHC OF THE ACT. 5 M.A. 37 MUM 201 MS. PROCTER AND GAMBLE HYGIENE AND HEALTH LIM ITED. 6. ACCORDINGLY, MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS TREATED AS ALLOWED AND REGISTRY IS DIRECTED TO FIX THE APPE AL IN DUE COURSE, WHICH WILL BE HEARD ONLY FOR THE LIMITED PURPOSE AS INDICATED ABOVE. 7. IN THE RESULT, MISCELLANEOUS APPLICATION FILED BY T HE ASSESSEE IS ALLOWED. %7 ) *% $$ $') #$9% -% :; ORDER PRONOUNCED ON 31 ST DAY OF JULY, 2013 . '& 5+ ')7 31.07.2013 = SD/- SD/- ( B. RAMAKOTAIAH ) ( AMIT SHUKLA ) !'# / ACCOUNTANT MEMBER !'# !'# !'# !'# /JUDICIAL MEMBER MUMBAI: ') DATED : 31. 07. 2013 ) . ! /. PRAMOD KUMAR, PS '& '& '& '& 0% 0% 0% 0% >+% >+% >+% >+% / COPY OF THE ORDER FORWARDED TO : 1. ,/ / THE APPELLANT 2. 01,/ / THE RESPONDENT 3. ? ) ( / THE CIT(A) 4. ? / CIT - CONCERNED 5. $@= 0% ) , , / DR, ITAT, MUMBAI 6. =A* / GUARD FILE '&)! '&)! '&)! '&)! / BY ORDER, B BB B / !: !: !: !: - - - - (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI.