ITO, Jaipur v. M/S HUES INDIA PVT. LTD., Jaipur

ITA 1035/JPR/2011 | 2003-2004
Pronouncement Date: 05-11-2014 | Result: Dismissed

Appeal Details

RSA Number 103523114 RSA 2011
Assessee PAN AAACH4541G
Bench Jaipur
Appeal Number ITA 1035/JPR/2011
Duration Of Justice 2 year(s) 11 month(s) 5 day(s)
Appellant ITO, Jaipur
Respondent M/S HUES INDIA PVT. LTD., Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 05-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 05-11-2014
Date Of Final Hearing 19-07-2012
Next Hearing Date 19-07-2012
Assessment Year 2003-2004
Appeal Filed On 30-11-2011
Judgment Text
IN THE INCOMETAX APPELLATE TRIBUNAL JAIPUR BENCH: JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. MEENA) I.T.A. NO. 1035/JP/2011 ASSTT. YEAR- 2003-04 PAN NO. AAACH 4541 G THE I.T.O. M/S HUES INDIA PVT. LTD. WARD 6(1) JAIPUR. VRS. 37 UNIARA GARDEN JAIPU R. (APPELLANT) (RESPONDENT) C.O. NO. 12/JP/2012 (ARISING OUT OF I.T.A. NO. 1035/JP/2011) ASSTT. YEAR- 2003-04 PAN NO. AAACH 4541 G M/S HUES INDIA PVT. LTD. VRS. THE I.T.O. 37 UNIARA GARDEN JAIPUR. WARD 6(1) JAIPUR. (APPELLANT) (RESPONDENT) DEPARTMENT BY :- SHRI RAJESH OJHA ASSESSEE BY :- SHRI P.C. PARWAL. DATE OF HEARING : 10/09/2014 DATE OF PRONOUNCEMENT : 05/11/2014 O R D E R PER: T.R. MEENA A.M. THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE AGAINST THE ORDER DATED 14/09/2011 OF THE LEARNED ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 2 C.I.T.(A)-II JAIPUR FOR THE A.Y. 2003-04. THE SOLE GROUND OF REVENUES APPEAL IS AGAINST DELETING THE TRADING ADDITION OF RS. 32 86 536/- MADE BY THE ASSESSING OFFICER BY HOLDING THAT NON-MAINTE NANCE OF STOCK REGISTER BY THE ASSESSEE DOES NOT CONSTITUTE ANY DE FECT IN THE BOOKS OF ACCOUNT. 2. THE LEARNED ASSESSING OFFICER OBSERVED THAT THE A SSESSEE IS A MANUFACTURER AND EXPORTER OF READYMADE GARMENTS. HE OBSERVED THAT DURING THE YEAR G.P. RATE HAD DECLINED COMPARED TO PRECEDING YEAR SUBSTANTIALLY WHICH WAS IN CURRENT YEAR 16.22% AGAIN ST 28.14% IN PRECEDING YEARS. THE ASSESSING OFFICER GAVE REASONAB LE OPPORTUNITY OF BEING HEARD AND ASKED TO EXPLAIN THE REASONS FOR DE CLINING OF G.P. RATE. IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE AS SESSING OFFICER THAT THERE WAS SUBSTANTIAL CHANGE IN THE NATURE OF R EADYMADE GARMENTS. DURING THE YEAR THE ASSESSEE HAD PURCHAS ED MOSTLY GREY FABRIC DUE TO HAVING ORDERS FOR SUPPLY OF BETTER QU ALITY OF PRODUCTS AS COMPARED TO LAST YEAR. AFTER PURCHASING GREY FABRIC THE ASSESSEE HAD GOT PRINTED/PROCESSED AND GREY FABRIC FROM PROCESS HOUSES/PRINTERS. THE ASSESSEE HAD MADE 100% EXPORT OF READYMADE GARME NTS. DURING A.Y. 2003-04 THE PRINTING AND DYEING COST OUT OF T OTAL MANUFACTURING ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 3 COST WAS 6.60% HIGHER AS COMPARED TO PREVIOUS YEAR. FURTHER TOTAL RAW MATERIAL COST WAS ALSO HIGHER BY 2.96%. THE ASSESS EE HAD FILED CALCULATION SHEETS ALONGWITH AN EXPLANATION FILED DU RING THE COURSE OF ASSESSMENT PROCEEDINGS. THE REPLY OF THE ASSESSEE WAS NOT FOUND CONVINCING TO THE ASSESSING OFFICER DUE TO THE COST OF SALES ALSO INCREASED WHICH DID NOT ADVERSELY IMPACT THE PROFIT MARGINS. THE ASSESSEE HIMSELF ADMITTED THAT AVERAGE COST OF RAW M ATERIAL PER METER HAD COME DOWN FROM RS. 51.44 TO RS. 39.08 IN COMPARI SON TO JUST PRECEDING YEAR WHICH HAS BEEN SUBMITTED BY THE ASSE SSEE VIDE LETTER DATED 11/10/2010. THE ASSESSEE WAS MAINTAINING SALE AND PURCHASE REGISTER BUT NO DAY TO DAY STOCK REGISTER WAS MAINTA INED. IN RESPECT OF QUANTITATIVE DETAILS OF RAW MATERIAL FINISHED PRODU CTS AND BY- PRODUCTS THE LEARNED AUDITOR REPORTED IN COLUMN N O. 28(B) OF HIS AUDIT REPORT DATED 27/10/2003 THAT THE RECORD MAINT AINED BY THE ASSESSEE IS NOT IN PROPER MANNER AS EXPLAINED TO US . IT CAN BE PRESUMED THAT THE ASSESSEE HAD NOT MAINTAINED QUANT ITATIVE TALLY OF THE OPENING STOCK AND CLOSING STOCK PROPERLY. HENCE QUANTITATIVE VERIFICATION OF THE STOCK CANNOT BE MADE OUT. THE DI FFICULTY TO VERIFY THE PURCHASES OF RAW MATERIAL IN METERS AND READYMAD E GARMENTS ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 4 WERE SOLD IN PIECES AND SHORTAGE CANNOT BE CALCULATE D WITHOUT SPECIFIC QUANTITATIVE DETAILS. IT IS FURTHER OBSERVED THAT S ALES PRICE PER PIECE WAS LESS THAN PER PIECE COST OF MANUFACTURING. HE FU RTHER RELIED THE DECISION IN THE CASE OF CIT VS. BRITISH PAINT INDIA LTD. (188 ITR 44) WHEREIN REJECTION OF BOOKS U/S 145(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) HELD JUSTIFIED ON THE BASIS OF VALUA TION OF CLOSING STOCK. THE ASSESSING OFFICER ALSO REJECTED THE BOOK OF THE ASSESSEE AND FURTHER CONSIDERING THE PAST HISTORY OF THE ASSESSE E HE APPLIED 25% G.P. FOR THE YEAR UNDER CONSIDERATION AND DIFFERENC E OF R. 32 86 536/- WAS ADDED IN THE INCOME OF THE ASSESSEE. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED ASSE SSING OFFICER THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A ) WHO HAD ALLOWED THE APPEAL BY OBSERVING THAT THE OBSERVATION S MADE BY THE ASSESSING OFFICER WERE MERELY THEORETICAL AND NO MAT ERIAL DISCREPANCY WAS POINTED OUT BY HIM AND ON THAT BASIS BOOK RESUL T CANNOT BE REJECTED U/S 145(3) OF THE ACT. NON-MAINTAINING OF STOCK REGISTER WAS NOT SUFFICIENT TO REJECT THE BOOKS OF ACCOUNT. THE APPELLANT WAS DEALING IN VARIETIES OF READYMADE GARMENTS.. THERE WE RE THOUSANDS OF DESIGNS DIFFERENT TYPES OF COLOURS DIFFERENT SIZE S AND DIFFERENT ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 5 VARIETIES OF GARMENTS. THEREFORE IT WAS IMPOSSIBLE TO MAINTAIN QUALITATIVE AND QUANTITATIVE DETAILS OF GOODS TRADE D. ALL THE PURCHASES AND SALES WERE COMPLETELY VOUCHED AND NO DEFECTS WERE POINTED OUT BY THE ASSESSING OFFICER. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT SALES WERE UNDERSTATED OR PURCHASES/EXPENSES WER E INFLATED. HE FURTHER RELIED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. JAS JACK ELEGANCE EXPORTS (324 ITR 95 ) HONBLE JODHPUR ITAT DECISION IN THE CASE OF HARIDAS PARIKH VS. ITO (113 TTJ 274) HONBLE HYDERABAD ITAT DECISION IN THE CASE OF VISHAL INFRASTRUCTURE LTD. VS. ACIT (104 ITD 537) AND HONB LE DELHI HIGH COURT DECISION IN THE CASE OF CIT VS. SMT. POONAM RA NI (326 ITR 223). HE FURTHER OBSERVED THAT THE G.P. RATE GONE D OWN TO INCREASE IN THE TURNOVER COMPARED TO PRECEDING YEAR. THE AVERAGE MANUFACTURING COST WOULD DEPEND UPON THE COMPOSITION OF ITEM. MORE OVER THOUGH THE AVERAGE RATE OF MANUFACTURED GOODS WORKED OUT TO RS. 168.46 PER PIECE BUT THE APPELLANT HAD VALUED THE CLOSING STOC K AT RS. 241.54 PER PIECE. HE FOUND THAT ON THE BASIS OF AVERAGE SALE P RICE WITH AVERAGE MANUFACTURED COST THE REJECTION OF BOOKS OF ACCOUN T IS TO BE SUBSTANTIATED BY BRINGING MATERIAL ON RECORD THAT S ALES OF ASSESSEE ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 6 HAD BEEN SUPPRESSED. HE FURTHER RELIED THE DECISION IN THE CASE OF CIT VS. GOTAN LIME KHANIZ UDYOG (256 ITR 243) (RAJ HC) W HEREIN IT HAS BEEN HELD THAT MERELY BOOKS WERE REJECTED U/S 145 OF THE ACT DOES NOT LEAD TO ADDITION TO THE RETURNED INCOME. ACCORD INGLY HE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. 5. THE LEARNED D.R. REITERATED THE FACTS MENTIONED B Y THE ASSESSING OFFICER IN ASSESSMENT ORDER AND ARGUED TH AT THE ASSESSEE HAD NOT MADE OUT VARIOUS DISCREPANCIES FOUND BY THE ASSESSING OFFICER IN ASSESSMENT ORDER BEFORE THE LEARNED CIT(A) THER EFORE THE ORDER OF THE LEARNED CIT(A) MAY BE REVERTED. 6. AT THE OUTSET THE LEARNED AR FOR THE ASSESSEE S UBMITTED THAT THE ASSESSEE HAS BEEN MAINTAINING REGULAR BOOKS OF ACCO UNT. ALL THESE BOOKS ALONGWITH THE BILLS AND VOUCHERS WERE PRODUCED BEFOR E THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS NOT POINTED OUT A NY DEFECTS IN THE BOOKS OF ACCOUNT. THE ENTIRE ADDITION HAD BEEN MADE AS DAY TO DAY STOCK RECORDS WAS NOT PROPERLY MAINTAINED AND THE G. P. RATE DECLINED DURING THE YEAR COMPARED TO PRECEDING YEAR. HE FURT HER ARGUED THAT THE ASSESSEES TURNOVER HAS SUBSTANTIALLY INCREASED FRO M 2 CRORES TO 3.74 ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 7 CORES AND GROSS PROFIT ALSO IN TOTAL HAS INCREASED WHICH CAN ONLY BE ACHIEVED BY REDUCING THE SALE PRICE OR CHANGING THE COMPOSITION OF THE SALES. HE ALSO EXPLAINED THE REASONS FOR DECLINING ON G.P. I.E. PURCHASED GREY FABRIC AND PRINTED OUTSIDE. HE ALSO ARGUED THA T THE COST OF PRINTING AND DYING HAS INCREASED WITH COST OF RAW MATERIAL. THE AVERAGE PRICE OF MATERIAL COST WAS LESS COMPARED TO PRECEDING YEAR DU E TO CHANGE OF THE ITEMS PURCHASED AND EXPORTED. SELLING PRICE INCLUDE S RAW MATERIAL COST PLUS PRINTING COST AND PROFIT THEREFORE IT WAS MOR E THAN PREVIOUS YEAR. HE RELIED UPON THE CASE LAWS REFERRED BY THE LEARNED CIT(A) IN APPELLATE ORDER BESIDES THIS HE ALSO REFERRED THE FOLLOWING C ASE LAWS: (I) GANESH FOUNDRY VS. ACIT 78 TTJ 736 (JODH) (II) M/S ANTIQUARIAT VS. ACIT XXXVII TAX WORLD 145 ( JP) (III) DCIT VS. PARAS DYEING AND PRINTING MILLS P. L TD. 4 ITR 29 (TRIB) (AHD.). (IV) DCIT VS. ASSOCIATED STONE INDUSTRIES LTD. 22 TW 155 (JP) (V) CIT VS. OM OVERSEAS 315 ITR 185 (P&H) (VI) MALANI RAMJIVAN JAGANNATH VS. ACIT 207 CTR (RAJ ) 19. (VII) CIT GOTAN LIME KHANIZ UDYOG 256 ITR 243 (RAJ.) . (VIII) SUPER CONSTRUCTION CO. VS. ITO 45 DTR 138 (AH D) (TRIB). THEREFORE HE PRAYED TO CONFIRM THE ORDER OF THE LEA RNED CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE AS SESSEES BUSINESS ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 8 IS FOR EXPORTING OF READYMADE GARMENTS. IT REQUIRES VARIOUS STAGES TO PRODUCE FINISHED PRODUCTS I.E. FROM GREY FABRIC TO PRINTING DESIGNING STITCHING ETC. IT GOES UNDER VARIOUS PROCESSES BEF ORE FINAL PRODUCT OF THE READYMADE GARMENTS. IT IS DIFFICULT FOR THE ASS ESSEE TO MAINTAIN STAGE WISE STOCK REGISTER. THE ASSESSEE WAS MAINTAIN ING REGULAR BOOKS OF ACCOUNT WITH SALES PURCHASE VOUCHERS AND BOOKS WE RE AUDITED BUT THE AUDIT REPORT SHOWS THAT RECORD MAINTAINED BY THE ASSESSEE IS NOT IN PROPER MANNER AS EXPLAINED TO THEM. THE ASSESSEE CHANGED THE STRATEGY OF EXPORTING THE READYMADE GARMENTS BY PUR CHASING THE GREY FABRIC AND PRINTING IT BUT THESE DEFECTS ARE NOT SU FFICIENT TO REJECT THE BOOKS RESULT U/S 145(3) OF THE ACT AS HELD BY THE V ARIOUS COURTS AND ESTIMATE THE PROFIT BY THE ASSESSING OFFICER. THE LE ARNED CIT(A) HAS THOROUGHLY EXAMINED ALL THE ASPECTS OF ALL THE DEFE CTS POINTED OUT BY THE ASSESSING OFFICER IN HIS ORDER WHICH HAS NOT BE EN CONTROVERTED BY THE LEARNED DR. THEREFORE WE UPHOLD THE ORDER OF T HE LEARNED CIT(A). ACCORDINGLY THE REVENUES APPEAL IS DISMISS ED. 8. THE GROUNDS OF THE C.O. ARE AS UNDER:- 1. THE LEARNED CIT(A) HAS ERRED ON FACT AND IN LAW I N UPHOLDING THE VALIDITY OF ASSESSMENT FRAMED U/S 147 . ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 9 2. THE LEARNED CIT(A) HAS ERRED ON FACT AND IN LAW IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN N OT ALLOWING THE CLAIM OF DEDUCTION U/S 80IB ON DUTY DRAWBACK. 3. THE ASSESSEE CRAVES RIGHT TO ADD AMEND ALTER AN D MODIFY ANY OF THE GROUND OF CROSS OBJECTION. 4. NECESSARY COST BE AWARDED TO THE ASSESSEE. 9. THE FIRST AND SECOND GROUND OF C.O. ARE AGAINST C HALLENGING THE VALIDITY OF REOPENING U/S 147 OF THE ACT. THE ASSESS ING OFFICER REOPENED THE ASSESSEES CASE U/S 148 BY RECORDING T HE REASONS THAT THE ASSESSEE HAS CLAIMED 80IB DEDUCTION ON DUTY DRA WBACK WHICH WAS ALLOWED U/S 143(1) OF THE ACT WHICH IS NOT ALLOWABLE AS PER THE HON'BLE SUPREME COURT DECISION IN THE CASE OF LIBER TY INDIA LTD. VS. CIT (2009) 317 ITR 218. ACCORDINGLY NOTICE U/S 148 O F THE ACT WAS GIVEN TO THE ASSESSEE WHICH WAS CONFIRMED BY THE LEA RNED CIT(A) BY RELYING THE DECISION OF HONBLE KERALA HIGH COURT I N THE CASE OF CIT VS. BEST WOOD INDUSTRY AND SAW MILLS 331 ITR 63. NOTICE U /S 148 WAS ISSUED FOR THE WITHDRAWAL OF DEDUCTION U/S 80IB ON DU TY DRAWBACK OF RS. 44 27 103/-. THE ASSESSING OFFICER HAS WITHDRAWN THE DEDUCTION OF RS. 2 72 148/- BY COMPLETING THE REASSESSMENT ORDER . DURING THE ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 10 REASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS REJECTED THE BOOKS OF ACCOUNT AND MADE TRADING ADDITION ALSO. NO FAULT WOULD BE FOUND WITH THE APPROACH OF THE ASSESSING OFFICER ACC ORDINGLY THE LEARNED CIT(A) CONFIRMED THE ADDITION. 10. NOW THE ASSESSEE IN C.O. BEFORE US. IT IS CONTEN DED BY THE LEARNED AR THAT THE ASSESSING OFFICER IN THE REASSE SSMENT PROCEEDINGS HAS DISALLOWED THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB OF THE ACT ON DUTY DRAWBACK BASED ON THE DECISION IN THE CASE O F LIBERTY INDIA LTD. (SUPRA) SIMILAR DISALLOWANCE WAS MADE BY THE A.O . IN CASE OF SARRAF EXPORTS VS. ITO (2013) 142 ITD 388 (JODH.)(TR IB) U/S 154. IN THIS CASE THE ASSESSEE CREDITED AN AMOUNT OF RS. 1 24 312/- AS DEPB IN ITS P&L A/C AND CLAIMED DEDUCTION U/S 80IB ON TH IS AMOUNT. INITIALLY THE A.O. ALLOWED THIS CLAIM WHILE COMPLETI NG THE ASSESSMENT U/S 143(3) OF THE ACT. SUBSEQUENTLY HE NOTICED THA T SUCH CLAIM IS NOT ALLOWABLE AS PER THE VERDICT OF HONBLE APEX COURT R ENDERED IN THE CASE OF LIBERTY INDIA VS. CIT REPORTED IN 317 ITR 21 8. THEREFORE HE TREATED THIS ACTION AS A MISTAKE RECTIFIABLE U/S 15 4 OF THE ACT AND INITIATED PROCEEDINGS U/S 154 OF THE ACT BY ISSUING NOTICE PROPOSING THE WITHDRAWAL OF DEDUCTION. THE ASSESSEE OBJECTED TO THIS ACTION OF ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 11 THE A.O. STATING THAT CLAUSE (IIID) IN SEC. 28 INSE RTED BY THE TAXATION LAWS (AMENDMENT) ACT 2005 W..E.F. 01/4/1998 HAS NOT BEEN CONSIDERED BY THE HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA WHICH HAS BEEN APTLY DISCUSSED IN THE CASE OF SARAF SEASONING UDHYOG VS. ITO REPORTED IN 40 TW PAGE 165. SO BASED ON THE VIEW OF LIBERTY INDIA THE ORDER CANNOT BE SUBJECTED TO SECTION 154 PROCEEDINGS. BUT THE A.O. DID NOT AGREE AND WITHDREW THE DEDUCTION EA RLIER ALLOWED U/S 80IB QUA THE DEPB AMOUNT. THIS ORDER WAS CHALLENGED B EFORE THE LEARNED CIT(A) WHO ALSO APPROVED THE ACTION OF THE A.O. THE HONBLE ITAT HELD AS UNDER:- 2.7 IT IS AN UNDENIABLE AND UNDISPUTED FACT THAT TH E A.O. HAS PASSED THE IMPUGNED ORDER BASED ON THE VERDICT GIVE N IN LIBERTY INDIA (SUPRA). THE PERUSAL OF THE JUDGMENT R EVEALS THAT THEIR LORDSHIPS HAVE NOT CONSIDERED THE AMENDED PRO VISION. AS AGAINST WHICH AS RIGHTLY POINTED BY THE LEARNED AR THE HONBLE RAJASTHAN HIGH COURT IN THE DECISION OF SARAF SEASO NING UDHYOG (SUPRA) HAVE DISCUSSED AND RELIED ON EVEN THE AMEND ED PROVISION. FURTHER IT IS TRITE THAT WHEN ANY AMENDE D PROVISION IS NOT CONSIDERED OR FOR THAT MATTER ANY RELEVANT PRO VISION OF THE ACT IS NOT CONSIDERED WHILE GIVING A JUDGMENT IT IS TREATED AS IN PER CURIUM. 2.9. SIMILAR VIEW THAT BEEN TAKEN BY THE JODHPUR BEN CH IN THE CASE OF M/S BOTHRA INTERNATIONAL JODHPUR IN ITA NO . 37/JU/2011 A.Y. (2002-03) DATED 21/09/2012. THEREFO RE THE DECISION OF LIBERTY INDIA WILL; NOT RULE THE FIELD A FTER ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 12 AMENDMENT. MOREOVER IN ASSESSMENT YEAR CASE THE I SSUE BECOMES A DEBATABLE ONE IN THE LIGHT OF THE ABOVE D ECISION. IT IS SETTLED POSITION OF LAW THAT WHERE ANY ISSUE IS DEBA TABLE IT CANNOT BE CORRECTED U/S 154 OF THE ACT. THE HONBLE ITAT IN THIS CASE THUS HELD THAT THE DEC ISION OF LIBERTY INDIA WILL NOT RULE THE FIELD AFTER AMENDMENT. FURTH ER THE HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA HAS NOT CONSIDERED THE DIFFERENCE IN THE LANGUAGE EMPLOYED IN SECTION 80I AND 80IB. IN SEC. 80I THE PHRASEOLOGY USED IS ANY PROFITS AND GAINS DERIVED FROM AN INDUSTRIAL UNDERTAKING WHEREAS IN SEC. 80IB THE PH RASEOLOGY USED IS ANY PROFITS AND GAINS DERIVED FROM ANY BUSINESS OF AN INDUSTRIAL UNDERTAKING. THUS THE LANGUAGE OF SECTION 8-IB IS BROADER TO COVER PROFITS AND GAINS DERIVED FROM ANY BUSINESS OF AN I NDUSTRIAL UNDERTAKING. SEC. 29(IIID) SPECIFICALLY PROVIDES TH AT PROFIT ON TRANSFER OF DEPB IS CHARGEABLE TO INCOME TAX UNDER THE HEAD PRO FITS AND GAINS OF BUSINESS. THEREFORE PROFIT ON TRANSFER OF DEPB IS P ROFIT DERIVED FROM ANY BUSINESS OF INDUSTRIAL UNDERTAKING ELIGIBLE FOR DEDUCTION U/S 80IB. THEREFORE HE PRAYED TO HOLD ACTION OF THE ASSESSING OFFICER IS NOT JUSTIFIABLE. ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 13 11. AT THE OUTSET THE LEARNED DR SUPPORTED THE ORD ER OF THE LEARNED CIT(A). 12. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IT IS UNDISPUTED TH AT THE ASSESSEES RETURN WAS ONLY PROCESSED U/S 143(1) OF THE ACT AND THERE WAS NO SCRUTINY ASSESSMENT. THE HON'BLE SUPREME COURT IN TH E CASE OF RAJESH JHAWERI 291 ITR 500 HAS SQUARELY HELD THAT IN SUCH CA SE THERE BEING NO ASSESSMENT NO OPINION HAS FORMED BY THE ASSESSI NG OFFICER. THUS IN SUCH CASE IF A 148 NOTICE IS ISSUED IT DOES NO T AMOUNT TO ANY CHANGE OF OPINION SINCE THERE WAS NO OPINION IN EXIS TENCE AT ALL. THE HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA (SUPRA) SETTLED THE ISSUE ABOUT DUTY DRAWBACK TREATMENT FOR 80IB DEDUCTI ON. IT IS TRITE LAW THAT THE LAW DECLARED BY THE HON'BLE SUPREME COURT I S THE LAW OF THE LAND AS IT EXISTED AT THE TIME OF INCORPORATION OF THE LAW. THE HON'BLE SUPREME COURT DELIVERED THE VERDICT ON A PARTICULAR ISSUE THE ASSESSING OFFICER IS DUTY BOUND TO TAKE DUE NOTICE OF THE JUDGMENT AND GIVE REMEDIAL EFFECT IN ACCORDANCE WITH LAW. SIN CE THERE WAS NO OPINION THE ASSESSING OFFICER RIGHTLY RELYING ON H ON'BLE SUPREME COURT JUDGMENT REOPENED THE ASSESSMENT U/S 147 OF THE ACT. IN OUR ITA 1035/JP/2011 & CO 12/JP/2012 ITO VS. M/S HUES INDIA P LTD. 14 CONSIDERED VIEW THE ASSESSING OFFICER HAS ACTED WITH IN THE PARAMETERS OF LAW AND REOPENING OF THE ASSESSMENT HA S BEEN RIGHTLY INITIATED. THEREFORE THE VALIDITY OF THE REOPENING ASSESSMENT IS UPHELD. THIS GROUND OF THE C.O. IS DISMISSED. IN ADV ERTING BACK OF THE MERITS OF THE ISSUE THE DEDUCTION U/S 80IB OF THE ACT IS ALSO NOT ALLOWABLE TO THE ASSESSEE BY RESPECTFULLY FOLLOWING T HE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA (SUPRA). THE ASSESSEES CLAIMS ON MERIT IS ALSO DISMISSED. 13. IN THE RESULT APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 05/11/2014. SD/- SD/- (R.P. TOLANI) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED : 05 TH NOVEMBER 2014 * RANJAN COPY FORWARDED TO :- 1. THE ITO WARD 6(1) JAIPUR. 2. M/S HUES INDIA PVT. LTD. JAIPUR. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (I.T.A. NO. 1035/JP/2011) BY ORDER AR ITAT JAIPUR.