C.S.Specialty Chemicals P. Ltd.,, Vapi v. The ACIT, Vapi Circle,, Vapi

CO 26/AHD/2014 | 2009-2010
Pronouncement Date: 29-11-2017 | Result: Dismissed

Appeal Details

RSA Number 2620523 RSA 2014
Assessee PAN AAACE5227E
Bench Ahmedabad
Appeal Number CO 26/AHD/2014
Duration Of Justice 3 year(s) 9 month(s) 24 day(s)
Appellant C.S.Specialty Chemicals P. Ltd.,, Vapi
Respondent The ACIT, Vapi Circle,, Vapi
Appeal Type Cross Objection
Pronouncement Date 29-11-2017
Appeal Filed By Assessee
Tags 26
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 29-11-2017
Date Of Final Hearing 13-07-2017
Next Hearing Date 13-07-2017
First Hearing Date 13-07-2017
Assessment Year 2009-2010
Appeal Filed On 04-02-2014
Judgment Text
*MH *MH*MH *MH* ** * IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD JUDICIAL MEMBER ./ I.T.A. NOS.2128 & 2129/AHD/2013 ( / ASSESSMENT YEARS : 2009-10 & 2010-11) ASSISTANT COMMISSIONER OF INCOME TAX VAPI CIRCLE VAPI 396 195 / VS. M/S. C.S. SPECIALITY CHEMICALS PVT. LTD. (FORMELY KNOWN AS JAMES ROBINSON PVT. LTD.) PLOT NO.6101/11 GIDC VAPI CROSS OBJECTION NOS. 26 & 27/AHD/2014 (ASSESSMENT YEARS : 2009-10 & 2010-11) M/S. C.S. SPECIALITY CHEMICALS PVT. LTD. (FORMELY KNOWN AS JAMES ROBINSON PVT. LTD.) PLOT NO.6101/11 GIDC VAPI / VS. ASSISTANT COMMISSIONER OF INCOME TAX VAPI CIRCLE VAPI 396 195 ./ ./ PAN/GIR NO. : AAACE 5227 E ( ! ' / APPELLANT ) .. ( #' / RESPONDENT ) REVENUE BY : SHRI V. K. SINGH SR. D.R. ASSESSEE BY : SHRI PARIN SHAH A.R. $ % & ' ( ) / DATE OF HEARING 17/11/2017 *+ - ' ( ) / DATE OF PRONOUNCEMENT 29/11/2017 . / O R D E R ITA NOS. 2128 & 2129/AHD2013 CROSS OBJECTION NOS.26 & 27/AHD/2014 ASST.YEAR 2009-10 & 2010-11 - 2 - PER MAHAVIR PRASAD JUDICIAL MEMBER : THESE ARE TWO APPEALS BY THE REVENUE ALONGWITH T WO CROSS OBJECTIONS BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-VALSAD DATED 10/06/2013 FOR TH E ASSESSMENT YEARS (AYS) 2009-10 & 2010-11. 2. SINCE ISSUES ARE COMMON ONLY FIGURES AND ASSESS MENT YEARS ARE DIFFERENT THEREFORE FOR THE SAKE OF CONVENIENCE WE WOULD DISPOSE ALL THESE APPEALS BY WAY OF A COMMON ORDER. FOLLOWING G ROUNDS HAS TAKEN BY THE DEPARTMENT IN BOTH THE APPEALS: I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN DELETING THE INCLUSION OF EXCIS E DUTY SALES TAX INSURANCE AND FREIGHT CHARGES FROM ITS TOTAL T URNOVER TO QUANTIFY THE DEDUCTION U/S.10B. II. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD.CIT(A) ERRED IN DELETING THE INCLUSION OF TRANSF ER VALUE OF GOODS TRANSFERRED FROM ONE EOU TO ANOTHER IN TOTAL TURNOVER TO QUANTIFY THE DEDUCTION. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF M ANUFACTURING AND SALES OF HAIR DYE INTERMEDIARIES FLUORESCENT D YE 2:5 DIAMINO TOLUENE SULPHATE DYES AND FULE MARKER DYES. THE HAI R DYE INTERMEDIARIES ARE USED FOR MANUFACTURING HAIR DYES COLOURS DEVELOPER IS A CHEMICAL USED FOR DEVELOPMENT OF NEGATIVE OF T HE PHOTOGRAPHS AND FLUORESCENT IS THE CHEMICAL WHICH PROVIDES GLOWING ATTRIBUTES TO ITEMS SUCH AS MARKER PENS LIFE VESTS ETC. ITA NOS. 2128 & 2129/AHD2013 CROSS OBJECTION NOS.26 & 27/AHD/2014 ASST.YEAR 2009-10 & 2010-11 - 3 - 3.2 ON PERUSAL OF THE FORM NO.56G FILED WITH THE RE TURN OF INCOME REVEALED THAT ASSESSEE HAS COMPUTED DEDUCTION U/S.1 0B WITHOUT INCLUDING THE SALES-TAX AND EXCISE IN THE TOTAL TUR NOVER. 3.4 WHEN BEING ASKED TO EXPLAIN THE ASSESSEE REITE RATED THE CONTENTIONS MADE AND DELIBERATED IN THE EARLIER YEA RS ALSO. ACCORDING TO THE ASSESSEE IT IS NOW AN ACCEPTED PRINCIPLE THAT EXCISE DUTY AND SALES TAX SHOULD NOT BE INCLUDED IN THE TOTAL TURNOVER WHILE CALCULATING DEDUCTION UNDER SECTION 80HHC OF THE INCOME-TAX ACT 1961. IT IS FURTHER CONTENDED THAT EVEN THOUGH SECTION 10B DOES NOT DEF INE TOTAL TURNOVER. THIS WAS INTRODUCED FOR PROVIDING FISCAL BENEFITS T O THE EXPORT ORIENTED UNDERTAKINGS AND FURTHER STATED THAT DEDUCTION U/S. 10B THUS REQUIRES TO BE CALCULATED BASED ON THE AMOUNT OF TOTAL TURNOVER AS PER AUDITED ACCOUNTS OF THE ASSESSEE AND THE DEDUCTION AMOUNT H AS TO BE CERTIFIED IN THE FORM OF SPECIFIED IN INCOME-TAX RULES 1962. 3.5 THE ARGUMENTS OF THE ASSESSEE WERE CONSIDERED B Y THE LD. AO AND HELD THAT INCLUSION OF SALES TAX EXCISE DUTY IN TO TAL TURNOVER WERE THEREFORE REJECTED AND HELD THAT SALES TAX AND EXCI SE DUTY TO BE ADDED IN TOTAL TURNOVER FOR THE PURPOSE OF 10B OF THE I.T. A CT. 3.6 FURTHER THE PERUSAL OF THE FORM NO.56G REVEALE D THAT ASSESSEE HAS EXCLUDED THE FREIGHT AND INSURANCE FROM THE TOTAL T URNOVER WHILE WORKING OUT THE DEDUCTION U/S.10B OF THE ACT. DURING THE CO URSE OF THE ASSESSMENT PROCEEDINGS ASSESSEE WAS ASKED TO EXPLAIN AS TO WH Y NOT THE TURNOVER ITA NOS. 2128 & 2129/AHD2013 CROSS OBJECTION NOS.26 & 27/AHD/2014 ASST.YEAR 2009-10 & 2010-11 - 4 - SHOULD BE TAKEN WITHOUT DEDUCTION THE INSURANCE AND FREIGHT AS THERE IS NO DEFINITION OF TOTAL TURNOVER IN THE PROVISION OF SECTION 10B. THE AR OF THE ASSESSEE ONLY EXPLAINED THAT THE TOTAL TURNOVER SHOULD BE EXCLUSIVE OF INSURANCE AND FREIGHT AS LIKE PROVISIONS OF SECTION 80HHC OF THE ACT. BUT ARGUMENTS OF THE ASSESSEE WERE NOT ACCEPTABLE TO TH E LD. AR AND HELD THAT SALES TAX EXCISE DUTY INSURANCE AND FREIGHT EXPEN SES INCURRED BY IT ARE TO BE INCLUDED IN THE TURNOVER FOR THE PURPOSES OF COM PUTATION OF DEDUCTION U/S.10B OF THE ACT. 3.7 DURING THE COURSE OF SCRUTINY PROCEEDINGS IT WA S NOTICED THAT THERE HAS BEEN A TRANSFER OF GOODS WORTH RS.5 56 53 920/- FROM FLUORESCENT UNDERTAKING AND EOU UNIT TO ANOTHER EOU UNIT NAMEL Y FUEL MARKER UNDERTAKING. FOR THE PURPOSE OF COMPUTATION OF INC OME THE SAME HAS BEEN SEPARATELY SHOWN OUTSIDE THE SUM TOTAL OF SALE S. A PERUSAL OF THE WORKING OF THE DEDUCTION U/S.10B FOR THE FLUORESCEN T UNDERTAKING REVEALED THAT THIS AMOUNT HAS ALSO NOT BEEN INCLUDE D IN THE TURNOVER OF THE SAID UNDERTAKING FOR THE PURPOSES OF ARRIVING A T THE DEDUCTION ALLOWABLE ON THIS UNIT U/S.10B. IN VIEW OF THE SAME ASSESSEE WAS GIVEN FOLLOWING SHOW-CAUSE NOTICE AS UNDER: A. GIVE DETAILED BREAKUP OF THE ITEMS TRANSFERRED. B. VALUE ADOPTED-MANUFACTURING COST/MARKET VALUE FOR T HE ACCOUNTING PURPOSES. C. SHOW CAUSE AS TO WHY THE SAME SHOULD NOT BE INCLUDE D IN THE TURNOVER OF FLUORESCENT UNDERTAKING FOR COMPUTING DEDUCTION U/S.10B OF THE IT ACT. ITA NOS. 2128 & 2129/AHD2013 CROSS OBJECTION NOS.26 & 27/AHD/2014 ASST.YEAR 2009-10 & 2010-11 - 5 - 3.8 ASSESSEES REPLY AS FOLLOWS: I. THE ASSESSEE-COMPANY RUNS FOUR MANUFACTURING UN ITS INCLUDING THREE EOUS WHICH ARE AS UNDER: A. THE OLD INDUSTRIAL UNDERTAKING IS ENGAGED IN MANUFACTURING OF COLOUR DEVELOPER. B. THE INDUSTRIAL UNDERTAKING WHICH IS ENGAGED IN THE MANUFACTURING OF FLUORESCENT DYES IS A 100% EOU UNI T AND ENJOYS DEDUCTION U/S.10B OF THE ACT. C. THE INDUSTRIAL UNDERTAKING WHICH IS ENGAGED IN T HE MANUFACTURING OF 2:5 DIAMINO TOLUENE SULPHATE DYES IS A 100% EOU UNIT AND ENJOYS DEDUCTION U/S.10B OF THE A CT. D. THE INDUSTRIAL UNDERTAKING WHICH IS ENGAGED IN THE MANUFACTURING OF FUEL MARKER DYES IS A 100% EOU UNI T AND ENJOYS DEDUCTION U/S.10B OF THE ACT. II. THE FLUORESCENT UNDERTAKING IS INTO THE PRODUCT ION OF 'ACID YELLOW250 SY44 FYAA223 SY43 SY131 AND SY124INTE R. ALL ARE REPORTEDLY PRODUCED AS RESULT OF SEPARATE MANUF ACTURING ACTIVITY AND DISTINCT RAW MATERIALS. NO PRODUCT IN TURN IS AN INTERMEDIATE OR RAW MATERIAL FOR ANY OTHER PRODUCT BEING PRODUCED WITHIN THIS UNDERTAKING. III. THE TOTAL VALUE OF GOODS SOLD DURING THE YEAR UNDER CONSIDERATION BY FLUORESCENT UNDERTAKING IS RS.9 00 06 301/- OF WHICH EXPORTS & OTHER LOCAL SALES ACCOUNT FOR 38.16 % WHILE 'SY124 INTER' ALONE ACCOUNTS FOR 61.84%. THIS PRODU CT IS TRANSFERRED TO ITS OTHER UNDERTAKING NAMELY 'FUEL M ARKER UNDERTAKING' FOR FURTHER MANUFACTURING ACTIVITY AND FINALLY BEING EXPORTED. IV. THE FUEL MARKER UNDERTAKING PRODUCES FM460 FM500HF FM500LF FM500 FM512 FM913 FM890 FM882 FM456 FM515 FM560 FM459 AND SY INTER. ALL HAVE DISTINCT RAW MATERIALS AND SEPARATE PROCESSES OF MANUFACTURING A CTIVITY. 'SY124 INTER' IS THE RAW MATERIAL FOR THE MANUFACTU RE OF 'FM 456' ONLY. 'FM 456' IS THE BRAND NAME GIVEN BY THE ASSESSEE TO SY124 A FUEL MARKER. 3.9 BUT AO WAS NOT CONVINCED WITH THE PLEA OF THE A SSESSEE AND AN ADDITION OF RS.5 56 53 920/- TO THE TOTAL TURNOVER OF THE FLUORESCENT UNDERTAKING FOR 10B PURPOSES. ITA NOS. 2128 & 2129/AHD2013 CROSS OBJECTION NOS.26 & 27/AHD/2014 ASST.YEAR 2009-10 & 2010-11 - 6 - 3.10 ON PERUSAL OF THE COMPUTATION OF THE DEDUCTION U/S.10B AS SUBMITTED THROUGH FORM NO.56G REVEAL THAT CERTAIN I NCOMES THAT HAVE NOT BEEN DERIVED FROM EXPORT ACTIVITY HAVE ALSO BEEN IN CLUDED IN THE PROFITS OF THE ELIGIBLE UNDERTAKINGS FOR THE PURPOSE OF COM PUTATION OF DEDUCTION U/S.10B OF THE I.T. ACT. PARTICULARS FLUORESCENT TDS UNDERTAKING FUEL MARKER UNDERSTANDING MISCELLANEOUS INCOME 92557 196017 906880 SERVICE CHARGES --- --- 370320 TOTAL 92557 196017 1277200 TOTAL 1565774 3.11 LD. AO HELD THAT RS.15 65 774/- EXCLUDED FROM THE PROFITS OF THE ELIGIBLE UNDERTAKINGS FOR THE COMPUTATION OF DEDUCT ION U/S.10B OF THE I.T. ACT. 3.12 DURING THE COURSE OF PROCEEDING IT WAS NOTICE D THAT THE ASSESSEE HAS TREATED GOODS IN-TRANSIT AMOUNTING TO VALUE RS. 36 999 737/- AS SALES FOR THE YEAR UNDER CONSIDERATION EVEN THROUGH THE O THER PARTY HAS NOT ACCEPTED THE SAME. THE CONTRA CONFIRMATION OF THE S AID PARTIES IS DIFFERING FROM THE ASSESSEES ACCOUNT TO THE EXTENT. THE STAT UTORY AUDITOR ALSO MADE AN OBSERVATION IN THIS CONNECTION VIDE 5(F) OF HIS REPORT DATED 25.09.2009. RELEVANT PORTION REPRODUCED BELOW FOR READY REFEREN CE: 'SALES INCLUDE RS.36 999 737/- BEING REVENUES ACCOU NTED BY THE COMPANY IN RESPECT OF EXPORTS MADE ON CIF TERMS BUT PENDING DELIVERY TO THE OVERSEAS BUYER. VALUE OF SUCH DISPATCHES HAV ING BEEN EXCLUDED BY THE BUYER WHILE CONFIRMING THE BALANCE DUE TO TH E COMPANY AS OF THE YEAR END THE TRANSFER OF PROPERTY IN SUCH CONSIGNM ENTS TO THE BUYER AS ITA NOS. 2128 & 2129/AHD2013 CROSS OBJECTION NOS.26 & 27/AHD/2014 ASST.YEAR 2009-10 & 2010-11 - 7 - REQUIRED UNDER ACCOUNTING STANDARD 9 'REVENUE RECOG NITION' IS IN OUR OPINION NOT COMPLETE AS OF THE YEAR END. ACCORDINGL Y SALES ARE OVERSTATED BY LIKE AMOUNT INVENTORIES ARE UNDERSTA TED BY RS.30 855 065/- AND PROFIT BEFORE TAX IS OVERSTATED BY RS.6 144 672/-.' 3.13 THEREAFTER A SHOW CAUSE NOTICE AS FOLLOWS WAS ISSUED BY THE AO AND ASSESSEES REPLY AS UNDER: 'DURING THE COURSE OF DISCUSSION ON THE ISSUE OF RE COGNITION OF EXPORTS AS PER AS-9 HIS ATTENTION WAS DRAWN TO THE FACT THA T THE ACCOUNTING STANDARDS ARE EQUALLY APPLICABLE EVEN FOR PREPARATI ON B/S & P &L A/C AS PER COMPANIES ACT. HE WAS REQUIRED TO EXPLAIN & JUSTIFY THE CORRECTNESS OF THE BOOK PROFIT ADOPTED BY HIM FOR T HE PURPOSES OF 115JB AND ALSO SUBSTANTIATE HIS CLAIM OF THE SAME BEING N OT AVAILABLE TO THE A.O. FOR MODIFICATION. ASSESSEE'S SUBMISSION IN THI S REGARD TO BE SUBMITTED BY 12.02.2013.' (VIDE ORDER SHEET ENTRY DATED 30.01.2013). '1) THE COMPANY HAS CONSISTENTLY ACCOUNTED FOR EXPO RT SALES TRANSACTION DURING THE YEAR AND ALSO IN EARLIER YEARS ON THE BA SIS OF DATE OF BILL OF LANDING FOR EACH CONSIGNMENT. THE STATUTORY AUDITOR S HAVE QUALIFIED THEIR REPORT ON THE ACCOUNT OF THE COMPANY FOR THE REASON THAT THE OVERSEAS CUSTOMER OF THE COMPANY HAS NOT ACCOUNTED FOR THE CORRESPONDING PURCHASES BASED ON THE DATE OF BILL O F LADING. HOWEVER THE COMPANY HAS CORRECTLY ACCOUNTED FOR ITS EXPORT SALES TRANSACTIONS AND THUS THE QUESTION OF REGROUPING/REVISION TO THE SE AMOUNTS DOES NOT ARISE. THE DETAILS OF SUCH EXPORT SALES TRANSACTION WERE SUBMITTED ALONGWITH OTHER DETAILS AS PER SUBMISSIONS DATED DE CEMBER 5 2012. FURTHER AS PRONOUNCED BY THE HONOURABLE SUPREME CO URT IN APOLLO TYRES LTD VS COMMISSIONER OF INCOME TAX (2002) 255 ITR 273 (SC). WHILE ASSESSING A COMPANY FOR INCOME TAX UNDER SECT ION 115] OF THE INCOME TAX ACT 1961 THE CORRECTNESS OF THE PROFIT AND LOSS ACCOUNT PREPARED BY THE COMPANY AND CERTIFIED BY THE STATUT ORY AUDITORS OF THE COMPANY AS HAVING BEEN PREPARED IN ACCORDANCE WITH THE REQUIREMENTS OF PARTS I! AND III OF SCHEDULE VI OF THE COMPANIES ACT CANNOT BE EXAMINED BY THE AO; AO DOES NOT HAVE THE JURISDICTI ON TO GO BEHIND THE NET PROFIT SHOWN IN PROFIT AND LOSS ACCOUNT EXCEPT TO THE EXTENT PROVIDED IN THE EXPLANATION TO SECTION 115] OF THE INCOME TAX ACT 1961. COPY OF THE JUDGMENT OF HONOURABLE SUPREME CO URT IS ENCLOSED HEREWITH. THE HONOURABLE BOMBAY HIGH COURT HAS HELD THE SAME ITA NOS. 2128 & 2129/AHD2013 CROSS OBJECTION NOS.26 & 27/AHD/2014 ASST.YEAR 2009-10 & 2010-11 - 8 - RELYING ON THE AFORESAID DECISION OF HONOURABLE SUP REME COURT IN CIT VS ADBHUT TRADING CO. PVT. LTD (2011) 338ITR 94 (BO M.).' 3.14 LD. AO HELD THAT NET CONSEQUENCE FOR TAX PURPO SES IS THAT THE DEDUCTION U/S.10B FOR THE ASSESSEE ARE CLAIMED ONE YEAR AHEAD OF THEIR ACTUAL ELIGIBILITY AND THE SAME ARE BROUGHT TO TAX UNDER MAT ONE YEAR EARLY. HOWEVER IT IS PERTINENT TO NOTE THAT THE RA TE OF MAT FOR A.Y.2009- 10 IS 10% WHILE THAT FOR A.Y.2010-11 IS 15%. CONSEQ UENTLY THESE RECEIPTS HAVE BEEN SUBJECT TO LESSER RATES OF MAT. 3.15 AS PER ASSESSING OFFICER THE CLAIM OF THE ASSE SSEE THAT THE TREATMENT IS REVENUE NEUTRAL IS NOT CORRECT AND FINALLY LD. A O COMPUTED THE INCOME AS FOLLOWS: 1. TAX U/S. 115JB IN A.Y. 2008 - 09 RS.19 49 291/ - 2. TAX UNDER NORMAL PROVISION OF THE ACT IN A.Y. 2008- 09 RS.5 58 186/- 3. AMOUNT OF MAT LIABILITY IN RESPECT OF A.Y. 2008-09 AVAILABLE FOR CREDIT IN SUBSEQUENT YEARS (1 - 2) RS.13 91 105/- 4. TAX U/S.115JB IN A.Y. 2009 - 10 RS.36 35 776/ - 5. TAX UNDER NORMAL PROVISION OF THE ACT IN A.Y. 2009- 10 RS.48 40 368/- 6. AMOUNT OF TAX AGAINST WHICH CREDIT IN RESPECT OF 3 IS AVAILABLE (5 - 4) RS.12 04 592/- 7. AMOUNT OF TAX CREDIT U/S.115JAA (LOWER OF 3 & 6) RS .12 04 592/- 8. BALANCE MAT LIABILITY IN RESPECT OF A.Y. 2008-09 AVAILABLE FOR CREDIT IN SUBSEQUENT A.Y.S RS.1 86 513/- 4. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO ALLOW THE APPEAL OF THE A SSESSEE. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. SO FAR AS INCLUSION OF EXCISE DUTY SALES TAX INSURAN CE AND FREIGHT CHARGES FROM ITS TOTAL TURNOVER TO QUALIFY THE DEDUCTION U/ S.10B OF THE ACT ARE ITA NOS. 2128 & 2129/AHD2013 CROSS OBJECTION NOS.26 & 27/AHD/2014 ASST.YEAR 2009-10 & 2010-11 - 9 - CONCERNED. THE LD. AO HAS DEALT THE ISSUES ON PAGE NO.2-5 PARA 4.1/4.2 AND CIT(A) HAS DEALT THE ISSUE IN PAGE NO.4-5 IN PA RA 6. IN THIS CASE LD. CIT(A) HELD THAT ISSUE WAS DECIDED IN FAVOUR OF THE APPELLANT IN HIS OWN CASE VIDE APPEAL NO.CIT(A)/VLS/287/08-09 DATED 24/0 2/2011 FOLLOWING THE PRECEDENT LD. CIT(A) ALLOWED THIS GROUND OF APP EAL IN FAVOUR OF THE ASSESSEE. 5.2 LD. AR HAS SUBMITTED A COPY OF AN ORDER OF COOR DINATE BENCH IN ITA NO.2239/AHD/2012 FOR ASST. YEAR 2008-09. SIMILA R MATTER CAME BEFORE THE HONBLE BENCH AND IT WAS HELD THAT ISSUE IN THE PRESENT CASE IS AS TOGETHER. EXCISE DUTY SALES TAX INSURANCE AND FREIGHT CHARGES ARE TO BE INCLUDED IN THE TOTAL TURNOVER FOR THE PURPOSE OF C OMPUTATION OF DEDUCTION U/S.10B OF THE ACT. IT WAS HELD THAT SALES TAX EXC ISE DUTY INSURANCE AND FREIGHT ARE TO BE INCLUDED IN THE TOTAL TURNOVER FO R THE PURPOSE OF COMPUTATION OF DEDUCTION U/S.10B OF THE ACT. THEREF ORE RESPECTFULLY FOLLOWING THE DECISION OF OUR COORDINATE BENCH WE ALLOW THIS GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. GROUND NO.1 IS TH US DISMISSED. 6. SO FAR AS GROUND DELETING INCLUSION OF TRANSFER VALUE OF GOODS TRANSFERRED FROM ON EOU TO ANOTHER IN TOTAL TURNOVE R TO QUANTIFY THE DEDUCTION IS CONCERNED. LD. AO HAS DEALT THE ISSUE ON PAGE NO.5-18 PARA 4.3. IN THE INSTANT CASE OF THE APPELLANT BOT H THE EOUS INVOLVED ARE ENTITLED FROM 10B BENEFITS. SUPPLY OF MANUFACTURED GOODS FROM ONE EOU TO ANOTHER EOU/STP/EHTP OR SEZ UNITS ARE COUNTED TO WARDS FULFILLMENT OF NFE FOR THE SUPPLYING EOU/EHTP/STP UNITS UNDER P ARAGRAPH 6.9(C) ITA NOS. 2128 & 2129/AHD2013 CROSS OBJECTION NOS.26 & 27/AHD/2014 ASST.YEAR 2009-10 & 2010-11 - 10 - OF FOREIGN TRADE POLICY. HOWEVER SUCH SUPPLIES ARE CONSIDERED TO BE IMPORTED GOODS OR THE RECIPIENT UNIT AND VALUE OF S UCH GOODS ARE TAKEN INTO CONSIDERATION FOR COMPUTATION OF NFE OF THE RE CIPIENT UNIT. THIS CLEARLY INDICATES THAT THE ELIGIBLE UNITS ENJOYS DE EM EXPORT BENEFITS ON THE VALUE OF THE TRANSFERRED GOODS. THE NATURAL COROLLA RY IS THE PROCEEDS OUT OF SUCH TRANSFERRED GOODS IS DEEMED TO BE EXPORT PR OCEEDS AND SHOULD BE INCLUDED IN THE EXPORT TURNOVER FOR THE PURPOSE OF COMPUTATION OF ELIGIBLE PROFIT U/S.10B OF THE ACT. THEREFORE IN OUR CONSID ERED OPINION THIS GROUND OF APPEAL IS DISMISSED. 7. SO FAR AS CROSS OBJECTIONS ARE CONCERNED. SINCE WE HAVE DISMISSED THE APPEALS OF THE DEPARTMENT AND WE DO NOT FIND AN Y MERIT IN THE CROSS OBJECTIONS OF THE ASSESSEE THEREFORE WE ALSO DISMIS S THESE CROSS OBJECTIONS. 8. IN THE RESULT BOTH THE APPEALS AND CROSS OBJECT IONS FILED BY THE DEPARTMENT AND ASSESSEE ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 29 / 11 /201 7 SD/- SD/- IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRAMOD KUMAR) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 29/11/2017 ITA NOS. 2128 & 2129/AHD2013 CROSS OBJECTION NOS.26 & 27/AHD/2014 ASST.YEAR 2009-10 & 2010-11 - 11 - ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. ! ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. /01( $ 2( / CONCERNED CIT 4. $ 2( ( !) / THE CIT(A)-VALSAD. 5. 56 7 (%01 !) 01- / / DR ITAT AHMEDABAD 6. 7 8 9 & / GUARD FILE. ! ( / BY ORDER # 5!( ( //TRUE COPY// )/ * ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD TRUE COPY