JINDAL METAL INDUSTRIES, V. ACIT CIR 23(2),

MA 819/MUM/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 3845 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2002-2003
• Appeal Filed On: 04-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Assessee Lawyers: PARDIP KAPASI
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'J' BENCH, MUMBAI BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER MA MO. 819/MUM/2009 (ARISING OUT OF ITA NO. 4403/MUM/2008) (ASSESSMENT YEAR: 2002-03) M/S. JINAL METAL INDUSTRIES ACIT, RANGE 23(2) 3, RAM GOPAL INDUSTRIES ESTATE PRATYAKSHKAR BHAVAN OPP. JAWAHAR TALKIES VS. MUMBAI MULUND (W), MUMBAI 400080 PAN - AAAFJ 2641 Q APPLICANT RESPONDENT APPLICANT BY: SHRI PARDIP KAPASI RESPONDENT BY: SHRI HARI GOVIND SINGH O R D E R PER B. RAMAKOTAIAH, A.M. THE ASSESSEE THROUGH THIS MISCELLANEOUS APPLICATION REQUESTS THE TRIBUNAL TO CONSIDER ITS ORDER DATED 23 RD OCTOBER 2009 IN ITA NOS. 4403 & 4367/MUM/2008 AND DIRECT THE A.O. TO ALLOW 10% OF T HE EXPORT INCENTIVES WHILE COMPUTING THE DEDUCTION UNDER SECTION 80HHC T OWARDS INDIRECT EXPENSES IN THE LIGHT OF THE DECISION OF THE HON'BL E SUPREME COURT IN THE CASE OF HERO EXPORTS VS. CIT 295 ITR 454. 2. THE ASSESSEE HAS MOVED THE PRESENT MA HOLDING THAT THERE IS NO SPECIFIC DIRECTION FOR ALLOWING 10% OF THE EXPENDIT URE WHILE DIRECTING THE A.O. TO RE-EXAMINE THE ALLOCATION OF DIRECT AND IND IRECT EXPENSES VIDE PARA 5 OF THE ORDER. 3. BRIEFLY STATED, THE ISSUE IS THAT THE ASSESSEE CLAI MED INCOME OF RS.2,27,413/- AFTER DEDUCTION UNDER SECTION 80HHC. THE A.O. OPINED THAT INDIRECT EXPENDITURES HAVE NOT BEEN WORKED OUT CORR ECTLY IN FORM NO. 10CCAC AND ALLOCATED CERTAIN INDIRECT EXPENDITURES. FURTHER, HE ALSO NOT ALLOWED DEDUCTION ON 10% OF EXPORT INCENTIVES WHILE WORKING OUT DIRECT AND INDIRECT COST HOLDING THAT THERE IS NO PROVISION IN THE ACT. THIS ISSUE WAS MA MO. 819/MUM/2009 M/S. JINAL METAL INDUSTRIES 2 CARRIED UPTO THE ITAT AS CIT(A), FOLLOWING THE DECI SION OF THE HON'BLE P&H HIGH COURT DECISION IN THE CASE OF HERO EXPORTS VS. CIT 292 ITR 571, DID NOT ALLOW DEDUCTION OF 10% INCENTIVES. SINCE THE ABOVE SAID DECISION WAS REVERSED BY THE HON'BLE SUPREME COURT IN 295 ITR 45 4, THE ITAT FELT THAT THE ISSUE IS TO BE EXAMINED AFRESH BY THE A.O. AND DIRECTED AS UNDER: - CONSIDERING THE FACTS AS SUBMITTED BY THE ASSESSEE AND ALSO OF LAW, WE ARE OF THE VIEW THAT COMPUTATION OF 80HHC DEDUCTION REQUIRE EXAMINATION BY THE A.O. AS FAR AS ALLOCATION OF DIRECT AND INDI RECT EXPENSES AND FRESH ADJUDICATION BY THE A.O. IN VIEW OF THE LAW ON THE ISSUE. ACCORDINGLY, THE ISSUE IN 80HHC WITH REFERENCE TO CLAIM OF DEDUCTION IS RESTORED BACK TO THE FILE OF THE A.O., WHO HAS TO LOOK INTO THE ALLO CATION OF VARIOUS EXPENSES. 4. IT WAS THE CONTENTION OF THE ASSESSEE THAT THERE IS NO SPECIFIC DIRECTION TO ALLOW 10% OF THE EXPORT INCENTIVES AS DEDUCTION. ACCORDINGLY THE PRESENT MA IS RAISED. 5. AFTER CONSIDERING THE ARGUMENTS OF THE LEARNED A.R. AND LEARNED D.R., WE ARE OF THE OPINION THAT THERE IS NO NEED FOR ANY DIRECTION OF THE ITAT AS THE ISSUE IN THE APPEAL WAS EXCLUSIVELY WITH REFERENCE TO ALLOWANCE OF 10% OF THE EXPORT INCENTIVES AS DISCUSSED IN PARA 3, 4 AND 5 O F THE ORDER. NATURALLY THE A.O. HAS TO CONSIDER THE SAME ISSUE WHEN THE ISSUE WAS RESTORED BACK TO THE A.O. FOR FRESH CONSIDERATION. ACCORDINGLY, WE ARE O F THE OPINION THAT THERE IS NO NEED TO MODIFY THE DIRECTIONS. HOWEVER, IN ORDER TO CLARIFY ANY DOUBT ON THIS ISSUE, THE A.O. IS DIRECTED TO WORKOUT THE 80H HC DEDUCTION CONSIDERING ALLOWANCE OF 10% OF EXPORT INCENTIVES AS AN EXPENDI TURE WHILE WORKING OUT DIRECT AND INDIRECT EXPENSES FOLLOWING THE JUDGEMEN T OF THE HON'BLE SUPREME COURT IN THE CASE OF HERO EXPORT 295 ITR 454. 6. IN THE RESULT, THE MA IS CONSIDERED ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JULY 2010. SD/- SD/- (N.V. VASUDEVAN) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 30 TH JULY 2010 MA MO. 819/MUM/2009 M/S. JINAL METAL INDUSTRIES 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXIII, MUMBAI 4. THE CIT XXIII, MUMBAI CITY 5. THE DR, J BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.