M/s Cornell Overseas Private Ltd., New Delhi V. DCIT, New Delhi

MA 797/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2812 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-07-2022
• Assessment Year: 2004-2005
• Appeal Filed On: 21-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: NAVEEN GUPTA
• Section: 80HHC; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘SMC’ : NEW DELHI) SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER and SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER MA No.797/Del/2019 (in CO No.217/Del./2011) (in ITA No.2395/Del/2011) (ASSESSMENT YEAR : 2004-05) Cornell Overseas Pvt. Ltd., vs. ACIT, Circle 3 (1), 1502, 15 th Floor, Ambadeep Building, New Delhi. 14, K.G. Marg, Delhi – 110 001. (PAN : AAACC0034F) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Naveen Gupta, Advocate REVENUE BY : Ms. Anupama Singla, Sr. DR Date of Hearing : 08.07.2022 Date of Order : 15.09.2022 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : By way of this misc. application, assessee seeks rectification of mistaken apparent from record in the order of the Tribunal passed in ITA No.2395/Del/2011for the AY 2004-05 & CO No.217/Del/2011 by a common order dated 31.07.2019. 2. The misc. application filed by the assessee reads as under :- “1. The Hon'ble Tribunal has decided the aforesaid appeal vide order dated 31.07.2019. MA NO.797/Del/2019 2 2. The assessee has raised a cross objection in CO No.217/De1/2011 as under:- "1. DEPB Credit Ld AO has erred in interpreting the provisions of section 80HHC as amended retrospectively by the Taxation Laws Amendment Act 2005 and hence on non production of evidence required by third proviso to section 80HHC(3) ld AO has wrongly added entire sale receipts of DEPB amounting to Rs. 17,308,013/- ; whereas profit realized on transfer of DEPB is only Rs.5,48,411/-, therefore amount subject to add back under third proviso to Section 80HHC(3) is Rs.5,48,411/- 3. The above ground has been adjudicated by Hon'ble Bench at para 27 , page no. 25 of the order as under:- "So far as the issue relating to DEPB is concerned, we find the Assessing Officer held that since the assessee failed to furnish any evidence that the rate of Duty Drawback was higher than the rate of DEPB as per the amended provision, hence, the amount of DEPB of Rs.1,73,08,013/- shall not be included in 90% of the amount to be added to profits of business. We find the assessee before the CIT(A) submitted that the only profit component on the sale of DEPB licence was needed to be included on account of computation of deduction u/s 80HHC and not the face value and since, in this case, there was a loss, therefore, the entire amount needed to be excluded We find the ld CIT(A) directed the Assessing Officer to exclude the DEPB receipts amounting to Rs.1,73,08,013/- for the calculation of deduction u/s 80HHC by accepting the contention of the assessee and without examining the actual profit component or loss. Since the computation along with evidence was not submitted by the assessee either before the Assessing Officer or before the CIT(A) and since no such details are available in the audited accounts of the assessee as in the P&L Account, there is only one entry i.e., receipt of Rs.1,73,08,013/- on account of DEPB, therefore, we agree with the argument of the ld DR that this matter should be restored to the file of the Assessing Officer with a direction to examine the profit element in the sale of DEPB licence and to recompute the deduction u/s 80HHC in the light of the decision of the Hon'ble Supreme Court in the case of Topman Exports reported in 342 ITR 49. The Assessing Officer shall decide the issue as per fact and law, after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The issue relating to DEPB as per the first additional ground of the Cross Objections is allowed for statistical purposes. " MA NO.797/Del/2019 3 4. The assessee had raised an additional ground of appeal in cross objection no.217/Del/2011 which was admitted by the Hon'ble bench as per para 6 of order at page no.5:- "That the AO & CIT(A) erred on facts and in law in applying sec 80HHC as amended by Taxation Laws Amendment Act, 2005, with retrospective effect, and failed to appreciate that in view of the decision of Hon 'ble Supreme Court in CIT v Avani Exports [2005} 232 Taxman 357 (SC) and Delhi HC in the case of Pawan Kumar Jain v Union of India [2014} 224 taxman 169 (Delhi) the amendment is applicable only prospectively, therefore entire disallowance by AO & upheld by the CIT(A) is bad in law and deserves to be deleted" 5. However, the Hon'ble bench has not adjudicated the above additional ground of appeal raised in cross objection. The additional ground is a decision of Hon'ble Supreme Court in the favour of assessee. 6. This has resulted in mistake apparent from record in the order dt. 31.07.2019. A great prejudice has been caused to the assessee as the above additional ground has the effect that no re-computation of deduction u/s 80HHC is required from AO, as the amendment based on which addition is proposed by AO and upheld by CIT-A is prospective in nature and has no application during AY 2004-05.” 3. We have heard both the parties and perused the record. 4. Ld. counsel of the assessee pleaded that the additional ground taken in the cross objection has not been adjudicated inasmuch as Hon’ble Supreme Court decision in CIT vs. Avani Exports (2005) 232 taxman 357 (SC) and Hon’ble Delhi High Court decision in the case of Pawan Kumar Jain vs. UOI (2014) 224 taxman 169 (Delhi) was not considered and adjudicated. 5. Per contra, ld. DR for the Revenue objected to the same. 6. Upon careful consideration, we find that ITAT in its order dated 31.07.2019 has taken note of the additional ground no.1 in its order at MA NO.797/Del/2019 4 page 22 para 25 and thereafter had adjudicated the issue. However, neither in the ground noted nor in the body of the aforesaid order, the above two decisions of Hon’ble Supreme Court and Hon’ble jurisdictional High Court was dealt with. In our considered opinion, in such circumstances, decision of Hon’ble Apex Court in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd. 305 ITR 227 is applicable which mentions that non-consideration of Hon’ble Supreme Court decision and the Hon’ble jurisdictional High Court decision result in a mistake apparent on record in the order of the Tribunal. Accordingly, in such circumstances, we recall this appeal only to the extent of adjudicating upon the additional ground raised in the cross objection as above. The Registry is directed to list the case for hearing only for adjudication of additional ground raised in the cross objection. 7. In the result, the misc. application is allowed. Order pronounced in the open court on this 15 th day of September, 2022. Sd/- sd/- (CHALLA NAGENDRA PRASAD) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated the 15 th day of September, 2022 TS MA NO.797/Del/2019 5 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A) 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.