METRO EXPORTERS LTD., V. DCIT Rg. - 6(3),

MA 9/MUM/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6417 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Assessment Year: 2003-2004
• Appeal Filed On: 04-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Difference of opinion
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, K BENCH, MUMBAI. BEFORE S/SHRI D.K. AGARWAL, JM & RAJENDRA SINGH, AM M.A NO. 09/MUM/2011: ASSESSMENT YEAR: 2003-04 M/S. METRO EXPORTS LTD. V. DCIT, RANGE 6 (3) KAKAD CHAMBERS AAYAKAR BHAVBAN 132 DR. ANNIE BESANT ROAD M.K. ROAD WORLI, MUMBAI 400018 MUMBAI-400020. PA NO. AABCM 0349 J ASSESSEE BY: SHRI H.M. MOTIWALLA/SHRI PIYUSH CHHAJ ED REVENUE BY : SHRI R.K. GUPTA O R D E R PER RAJENDRA SINGH, AM THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY T HE ASSESSEE POINTING OUT SOME MISTAKES IN THE ORDER OF THE TRIBUNAL DATE D 19.11.2010 IN ITA NO.10/M/2007. 2. THE FIRST MISTAKE POINTED OUT IS REGARDING THE C LAIM OF DEDUCTION IN RELATION TO DEPB INCOME. SINCE THE TURNOVER IN CASE OF THE ASSESSEE EXCEEDED RS.10 CRORES THE DEDUCTION COULD BE ALLOWED ONLY AF TER FULFILLMENT OF TWO CONDITIONS MENTIONED IN THE THIRD PROVISO TO SECTIO N 80HHC(3). THE TRIBUNAL OBSERVED THAT THE AUTHORITIES BELOW HAD GIVEN A CLE AR FINDING THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO SHOW THAT THE SAI D CONDITIONS WERE FULFILLED AND NO EVIDENCES WERE PRODUCED AT THE STAGE OF TRIB UNAL ALSO AND THEREFORE TRIBUNAL CONFIRMED THE DISALLOWANCE. IN THE MISCELL ANEOUS APPLICATION THE ASSESSEE HAS SUBMITTED THAT THE CONDITIONS WERE FUL FILLED IN THIS CASE AND THE ASSESSEE HAD NOT GIVEN THE DETAILS AS THE ASSESSEE HAD RELIED ON THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y.2004-05 IN ITA NO.2027/M/2008 IN WHICH IDENTICAL ISSUE HAD BEEN RESTORED TO THE AO. THE TRIBUNAL AT THE TIME OF 2 HEARING OF THE PRESENT APPEAL HAD ALSO GIVEN SIMILA R INDICATION. THE LEARNED AR ALSO FILED DETAILED COMPUTATION TO SHOW THAT CONDIT IONS WERE FULFILLED AND THE ASSESSEE WAS ENTITLED TO DEDUCTION IN RESPECT OF DE PB INCOME. 3. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECO RDS AND CONSIDERED THE MATTER CAREFULLY. A PERUSAL OF THE LOG BOOK SHOWS T HAT THE LEARNED AR IS CORRECT IN STATING THAT HE HAD RELIED ON THE DECISION OF TH E TRIBUNAL IN ASSESSMENT YEAR 2004-05 IN ASSESSEES OWN CASE IN WHICH IDENTICAL I SSUE HAD BEEN RESTORED TO THE AO. THEREFORE IN OUR VIEW THIS YEAR ALSO THE IS SUE WAS REQUIRED TO BE RESTORED TO THE FILE OF AO, FACTS BEING IDENTICAL. WE THEREFORE AGREE THERE IS AN APPARENT MISTAKE IN THE ORDER TO THAT EFFECT. WE TH EREFORE AMEND THE ORDER AND RESTORE THE ISSUE TO THE FILE OF AO FOR PASSING A F RESH ORDER AFTER NECESSARY EXAMINATION IN THE LIGHT OF JUDGMENT OF HONBLE HIG H COURT OF MUMBAI IN CASE OF KALPATARU COLOURS & CHEMICALS (233 CTR 313) AND AFT ER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. THE SECOND MISTAKE POINTED OUT IS IN RELATION TO APPLICABILITY OF THE EXPLANATION (BAA) OF SECTION 80HHC IN RELATION TO I NCOME ON ACCOUNT OF WRITE BACK OF EXPENDITURE AND PURCHASES CLAIMED IN THE EA RLIER YEARS. THE TRIBUNAL REFERRED TO THE JUDGMENT OF HONBLE HIGH COURT OF M UMBAI IN CASE OF CIT VS DRESSER RAND INDIA PVT. LTD. (323 ITR 429) IN WHICH IT WAS HELD THAT INCOME ON ACCOUNT OF RECOVERY OF FREIGHT, INSURANCE, PACKING CHARGES, SALES TAX REFUND AND SERVICE INCOME WERE INDEPENDENT ITEMS OF INCOME NOT HAVING ELEMENT OF TURNOVER AND THEREFORE THE SAME WERE REQUIRED TO BE EXCLUDED AS PER EXPLANATION (BAA). FOLLOWING THE SAID JUDGMENT THE TRIBUNAL HELD THAT INCOME ON ACCOUNT OF WRITE BACK OF EXPENDITURE AND PURCHAS ES OF EARLIER YEAR WILL BE COVERED BY EXPLANATION (BAA). 3 4.1 THE ASSESSEE IN THE MISCELLANEOUS APPLICATION H AS SUBMITTED THAT THE JUDGMENT OF HONBLE HIGH COURT OF MUMBAI IN CASE OF CIT VS DRESSER RAND INDIA PVT. LTD. (SUPRA) RELIED BY THE TRIBUNAL WAS DISTINGUISHABLE AND THIS FACT HAD BEEN POINTED OUT AT THE TIME OF HEARING OF THE APPEAL. THE LEARNED AR SUBMITTED THAT INCOME ON ACCOUNT OF WRITE BACK OF E XPENDITURE CLAIMED IN THE EARLIER YEAR WAS DIFFERENT FROM THE NATURE OF INCOM E MENTIONED IN THE CASE OF CIT VS DRESSER RAND INDIA LTD. AND THEREFORE THE EX PLANATION (BAA) WAS NOT APPLICABLE IN CASE OF THE ASSESSEE. THE LEARNED DR SUBMITTED THAT THE TRIBUNAL HAD PASSED A REASONED AND SPEAKING ORDER AND THEREF ORE WAS NO APPARENT MISTAKE. 4.2 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE MATTER CAREFULLY. THE HONBLE HIGH COURT OF MUMBAI IN CASE OF CIT VS DRES SER RAND INDIA PVT. LTD. HELD THAT INCOME ON ACCOUNT OF RECOVERY OF FREIGHT, INSURANCE, PACKING RECEIPTS, SALES TAX REFUND AND SERVICE WERE INDEPENDENT ITEMS OF INCOME HAVING NO ELEMENT OF TURNOVER AND THEREFORE THESE WILL BE COV ERED FOR REDUCTION @ 90% IN TERMS OF EXPLANATION (BAA). THE JUDGMENT CLEARLY SH OWS THAT IN CASE THERE IS ANY INCOME ON ACCOUNT OF RECOVERY OF FREIGHT, PACKA GING RECEIPT, ETC. IT HAS TO BE TREATED AS INDEPENDENT ITEM OF INCOME TO BE COVE RED BY EXPLANATION (BAA). IN CASE OF THE ASSESSEE THERE HAS BEEN WRITE BACK O F INCOME ON ACCOUNT OF EXPENDITURE AND PURCHASES CLAIMED AS DEDUCTION IN T HE EARLIER YEAR. THEREFORE THE NATURE OF INCOME IN CASE OF THE ASSESSEE IS SIM ILAR TO THOSE CONSIDERED IN CASE OF CIT VS DRESSER RAND INDIA PVT. LTD. THE TRI BUNAL HAS PASSED A REASONED AND SPEAKING ORDER AND IT WAS A CONSCIOUS DECISION FOLLOWING THE JUDGMENT IN CASE OF CIT VS DRESSER RAND INDIA PVT. LTD. (SUPRA) . WE DO NOT SEE ANY APPARENT MISTAKE. THE ISSUE IS ARGUABLE AND THERE C OULD BE DIFFERENCE OF OPINION BUT IN SUCH CASES NO ACTION CAN BE TAKEN UN DER SECTION 254(2) ON THE 4 GROUND OF ANY APPARENT MISTAKE. THE TRIBUNAL HAS NO POWER TO REVIEW ITS OWN DECISION. WE THEREFORE REJECT THE PLEA OF APPARENT MISTAKE ON THIS ACCOUNT. 5. IN THE RESULT THE MISCELLANEOUS APPLICATION OF T HE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 25 TH MAY, 2011 SD/- (D.K. AGARWAL) JUDICIAL MEMBER SD/- (RAJENDRA SINGH (ACCOUNTANT MEMBER) MUMBAI, DATED 25 TH MAY, 2011 ALK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-XXXII, MUM BAI 4. COMMISSIONER OF INCOME TAX-3, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH K, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI 5 DATE INITIALS 1. DRAFT DICTATED ON 20.05.2011 PS 2. DRAFT PLACED BEFORE AUTHOR 23.05.2011 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/J M 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE A.R. 9. DATE OF DISPATCH OF ORDER