M/s. Patspin India Ltd, Cochin v. DCIT, Ernakulam

IN THE INCOME TAX APPELLATE T RIBUNAL COCHIN BENCH COC HIN BEFORE S/SHRI N.VIJAYAKUMARAN JM AND SANJAY ARORA AM I.T.A. NOS. 537 TO 540/CO CH/2009 ASSESSMENT YEARS : 2001-02 2002-03 2003-04 AND 2004-05 THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2(1) RANGE- II ERNAKULAM VS. PATSPIN INDIA LTD. PALAL TOWERS M.G. ROAD ERNAKULAM KOCHI-16.. [PAN: AABCP 6647G] (APPELLANT) (RESPONDENT) C.O. NOS. 34 35 & 36/2009 (ARISING OUT OF I.T.A. NOS. 537 538 & 540/COCH/ 2009) ASSESSMENT YEARS : 2001-02 2002-03 & 2004-05 PATSPIN INDIA LTD. PALAL TOWERS M.G. ROAD ERNAKULAM KOCHI- 16. [PAN: AABCP 6647G] VS. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2(1) RANGE-II ERNAKULAM (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI V.SATYANARAYANAN CA REVENUE BY SHRI T.J. VINCENT DR. O R D E R PER BENCH: THESE ARE A SET OF SEVEN (7) APPEALS BY THE REVENU E AND CORRESPONDING CROSS OBJECTIONS (COS) BY THE ASSESSEE PERTAINING TO FOUR CONSECUTIVE ASSESSMENT YEARS (AYS) BEING THE YEARS 2001-02 TO 2004-05. ITA. NOS.537 TO 540/COCH/09 AND C.O. NOS.34 TO 36/COCH/09 2 2. THE APPEALS BY THE REVENUE ARE IN RELATION TO TH E ASSESSMENTS FRAMED U/S. 143(3)/147 R.W.S. 263 OF THE ACT I.E. FOR A.Y. 20 01-02 TO 2003-04 VIDE SEPARATE ORDERS OF EVEN DATE (12.12.2008) AND CONSEQUENTLY DISPOSED OF BY THE COMMISSIONER OF INCOME TAX (APPEALS)-II KOCHI (CIT(A) FOR SHORT) VIDE SEPAR ATE ORDERS OF EVEN DATE (28.8.2009); THE APPEAL NUMBERS BEING ITA NOS. 537 TO 539 OF 2009. 3. THE THREE APPEALS RAISES A COMMON ISSUE; THE REV ENUE BEING AGGRIEVED BY THE DIRECTION BY THE LD. CIT(A) FOR COMPUTING THE PROFI T OF THE ASSESSEES EXPORT-ORIENTED UNDERTAKING (EOU) BY ALLOWING DEDUCTION UNDER SECTI ON 10B BEFORE SETTING OFF THE UNABSORBED DEPRECIATION. ON PERUSAL OF THE IMPUGNED APPELLATE ORDER IT IS FOUND THAT THE LD. CIT(A) HAS ALLOWED THE ASSESSEES CLAIM ON THE BASIS OF THE TRIBUNALS ORDER DATED 24.7.2009 (IN ITA NOS. 582 TO 587 & 897/COCH/2008 / COPY ON RECORD) IN ASSESSEE'S OWN CASE FOR AYS 2001-02 TO 200-06. THE ISSUE HAD COME UP FOR CONSIDERATION BY THE TRIBUNAL IN THE FIRST INSTANCE IN APPEALS CHALLENGI NG THE DIRECTION BY THE LD. CIT TO THE ASSESSING OFFICER (A.O.) TO COMPUTE THE PROFIT OF T HE ASSESSEES ELIGIBLE UNDERTAKINGS ( UNIT A AND UNIT B) AFTER SET OFF OF UNABSORBED DEPRECIATION OF THE UNDERTAKINGS U/S. 32(2) OF THE ACT I.E. FOR THE PURPOSE OF COMPUTIN G DEDUCTION EXIGIBLE U/S. 10B(4) OF THE ACT WHICH STOOD SET ASIDE BY THE TRIBUNAL VIDE ITS SAID ORDER. THE LD. DR BEFORE US ALSO CONCEDED TO THIS STATE OF AFFAIRS. 4.1 WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD INCLUDING THE ORDER DATED 24.7.2009 (SUPRA) BY THE TRIBUNAL IN THE ASSE SSEE'S OWN CASE. VIDE PARA 11 THEREOF AFTER CONSIDERING THE RIVAL CONTENTIONS IT HELD IN ASSESSEES FAVOUR SETTING ASIDE THE DIRECTION BY THE LD. CIT TO THE EFFECT STATED ABOVE . THE PRESENT ASSESSMENTS FRAMED IN PURSUANCE TO THE SAID DIRECTION SINCE SET ASIDE BY THE TRIBUNAL ARE RESULTANTLY OF NO CONSEQUENCE OR BASIS IN LAW. ACCORDINGLY THE APPEA LS THERE-FROM ARE NOT MAINTAINABLE AS THE ASSESSMENT ITSELF TO THAT EXTENT IS BAD IN LAW AND THE ASSESSEES CLAIM STOOD RIGHTLY UPHELD BY THE LD. CIT(A). WE DECIDE ACCORDINGLY. ITA. NOS.537 TO 540/COCH/09 AND C.O. NOS.34 TO 36/COCH/09 3 4.2 THE ASSESSEE HAS ALSO PRESSED CROSS OBJECTI ONS FOR AY 2001-02 & 2002-03. THE ONLY ISSUE ARISING PER THESE COS IS THE DEDUCTION QUA CLAIM U/S. 80HHC IN THE COMPUTATION OF THE BOOK PROFIT U/S. 115 JB. THE ASS ESSEE WE FIND HAD PRESSED ITS CLAIM AT THE TIME OF ASSESSMENT WHICH THOUGH NOT MATERIAL AT THE RELEVANT TIME IN VIEW OF THE ASSESSED INCOME BEING BASED ON THE REGULAR PROVISIO NS OF ACT COULD ASSUME RELEVANCE SUBSEQUENTLY SO THAT WHERE PRESSED WOULD REQUIRE P ROPER ADJUDICATION BY THE AUTHORITIES. UNDER THE CIRCUMSTANCES WE ONLY CONSIDER IT FIT AND PROPER UNDER THE CIRCUMSTANCES TO RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSIN G AUTHORITY TO BE DECIDED AFTER AFFORDING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE IN A CCORDANCE WITH THE LAW WITH THE VARIOUS APPELLATE FORUMS INCLUDING THE SPECIAL BENCH OF TH E TRIBUNAL HAVING EXPRESSED ITS OPINION IN THE MATTER. NO OTHER GROUNDS STAND RAISED BY THE ASSESSEE PER ITS COS. FOR AY 2004-05 THE ASSESSEES GRIEVANCE IS NON-ADJUDICATION OF ITS CLAIM QUA DEDUCTION U/S. 80HHC GROUND IN RESPECT OF WHICH WE FIND STANDS RAISED BY IT BEFORE THE FIRST APPELLATE AUTHORITY VIDE GROUND # 4 OF ITS GROUNDS OF APPEAL BEFORE IT. THE SAME THUS WOULD WARRANT ADJUDICATION ON MERITS AND FOR WHICH THEREFORE W E REMIT THIS ISSUE BACK TO ITS FILE TO BE DECIDED PER A SPEAKING ORDER AFTER ALLOWING BOTH TH E SIDES A PROPER OPPORTUNITY OF HEARING IN ACCORDANCE WITH LAW. WE DECIDE ACCORDINGLY. THE FACTS AND CIRCUMSTANCES OF THE REVENUES APPEAL FOR AY 2004-05 ARE ALSO THE SAME WARRANTING THE SAME DECISION IN ITS RESPECT I.E. AS FOR AY 2001-02 & 2002-03. 5. IN THE RESULT THE REVENUE APPEALS NOS. 537 TO 540 OF 2009 ARE DISMISSED AND THE ASSESSEES COS FOR AYS 2001-02 2002-03 & 2004-05 ARE ALLOWED SD/- SD /- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 30TH APRIL 2010 GJ/COPY TO: 1. PATSPIN INDIA LTD. PALAL TOWERS M.G. ROAD ER NAKULAM. 2. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2( 1) RANGE-II ERNAKULAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-II KOC HI. 4. THE COMMISSIONER OF INCOME-TAX KOCHI. 5. D.R./I.T.A.T. COCHIN BENCH COCHIN. ITA. NOS.537 TO 540/COCH/09 AND C.O. NOS.34 TO 36/COCH/09 4 6. GUARD FILE. BY ORDER (ASSIS TANT REGISTRAR)