Prakash Silk Mills Ltd.,, Surat v. The Income tax Officer, Ward-1(4),, Ahmedabad

ITA 1495/AHD/2010 | 1997-1998
Pronouncement Date: 25-03-2011 | Result: Dismissed

Appeal Details

RSA Number 149520514 RSA 2010
Assessee PAN AABCP4192L
Bench Ahmedabad
Appeal Number ITA 1495/AHD/2010
Duration Of Justice 10 month(s) 18 day(s)
Appellant Prakash Silk Mills Ltd.,, Surat
Respondent The Income tax Officer, Ward-1(4),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 25-03-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 25-03-2011
Date Of Final Hearing 23-03-2011
Next Hearing Date 23-03-2011
Assessment Year 1997-1998
Appeal Filed On 07-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' BEFORE SHRI MUKUL SHRAWAT JM & SHRI A N PAHUJA AM ITA NO.1495/AHD/2010 (ASSESSMENT YEAR:-1997-98) PRAKASH SILK MILLS LTD. N-1079 SURAT TEXTILE MARKET RING ROAD SURAT V/S INCOME-TAX OFFICER WARD- 1(4) SURAT PAN: AABCP 4192 L [APPELLANT] [RESPONDENT] ASSESSEE BY :- WRITTEN SUBMISSIONS REVENUE BY:- SHRI K MADHUSUDAN DR O R D E R A N PAHUJA: THIS APPEAL BY THE ASSESSEE AGAINST AN ORDER DATED 22- 02-2010 OF THE LD. CIT(APPEALS)-I SURAT FOR THE ASSESSMENT YEAR (AY) 1997-98 RAISES THE FOLLOWING GROUNDS:- (I) DEDUCTION U/S 80HHC OF THE ACT :- (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER LAW THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFI RMING RESTRICTION OF DEDUCTION U/S 80HHC OF THE ACT TO RS.1 19 934/- IN PLACE OF RS.19 78 544/-. (2) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) WAS NOT JUSTIFIED IN NOT GRANTING DEDUCTION U/S 80HHC IN RESPECT OF JOB WORK ACTIVITY. (3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE FULL AMOUNT OF DEDUCTION U/S 80HHC WAS REQUIRED TO BE GRANTED. (II) MISCELLANEOUS :- (1) THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) OUGHT TO HAVE DELETED INTEREST CHARGED U/S 234A OF THE ACT. (2) THE LEARNED COMMISSIONER OF INCOME-TAX (A PPEALS) OUGHT TO HAVE DELETED INTEREST CHARGED U/S 234B OF THE ACT. (3) THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) OUGHT TO HAVE DELETED INTEREST CHARGED U/S 234C OF THE ACT. ITA N O.1495/AHD/2010 2 (4) THE LEARNED COMMISSIONER OF INCOME-TAX ( APPEALS) OUGHT TO HAVE DELETED INTEREST CHARGED U/S 234D OF THE ACT. (5) THE APPELLANT CRAVES LEAVE TO ADD ALTER OR VARY ANY OF THE GROUNDS OF APPEAL. 2. AT THE OUTSET WE FIND THAT NONE APPEARED ON BEH ALF OF THE ASSESSEE; INSTEAD WRITTEN SUBMISSIONS HAVE BEEN FIL ED WHEREIN INTER ALIA IT IS MENTIONED THAT THE ISSUE IN TH IS APPEAL BEING SQUARELY COVERED BY THE JUDGMENT OF THE HONBLE SUP REME COURT IN CIT VS. K. RAVINDRANATHAN NAIR 295 ITR 228(SC) THI S MATTER BE DISPOSED OF IN ACCORDANCE WITH THE SAID JUDGMENT. CONSIDERING THE NATURE OF THE ISSUE INVOLVED AND THE FINDINGS OF TH E LEARNED CIT(A) AS ALSO THE WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE WE PROCEEDED TO DISPOSE OF THE APPEAL AFTER HEARING T HE LEARNED DEPARTMENTAL REPRESENTATIVE. 3. ADVERTING FIRST TO GROUND NOS.I (1 TO 3) IN THE APPEAL FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT RETURN DECL ARING INCOME OF RS.7 11 593/- AFTER CLAIMING DEDUCTION OF RS.23 70 252/- U/S 80HHC OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED T O AS THE ACT] WAS FILED ON 30-11-1997 BY THE ASSESSEE CARRYING ON D YEING & PRINTING WORK ON TEXTILES. THE ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) OF THE ACT ON 29.3.2000 DETER MINING INCOME OF RS.30 81 845/-. INTER ALIA NO DEDUCTION WAS ALLOWE D U/S 80HHC OF THE ACT. ON APPEAL THE LD. CIT(A) VIDE HIS ORDER D ATED 28-02-2001 DIRECTED TO ALLOW DEDUCTION U/S 80HHC OF THE ACT .C ONSEQUENTLY DEDUCTION OF RS.19 78 544/- WAS ALLOWED. ON FURTHER APPEAL THE ITAT VIDE ORDER DATED 12-09-2005 IN ITA NO.1022/AHD /2001 SET ASIDE THE ISSUE OF DEDUCTION U/S 80HHC OF THE ACT F OR FRESH CONSIDERATION. THEREAFTER THE AO FINALIZED THE ASS ESSMENT VIDE ORDER DATED 29-09-2006 DETERMINING INCOME OF RS.1 1 03 678/- AFTER ALLOWING DEDUCTION U/S 80HHC AT RS.19 78 167/-. SU BSEQUENTLY THE LD. CIT-I SURAT VIDE HIS ORDER DATED 27-03-2009 U/ S 263 OF THE ACT SET ASIDE THE ISSUE OF CLAIM OF DEDUCTION U/S 80HHC OF THE ACT ON ITA N O.1495/AHD/2010 3 THE AMOUNT OF JOB WORK CHARGES AND INSURANCE RECEIP TS WITH THE DIRECTIONS TO FRAME THE ASSESSMENT AFRESH AFTER PRO VIDING REASONABLE OPPORTUNITY TO THE ASSESSEE. IN TERMS OF THESE DIR ECTIONS OF THE LD. CIT THE AO SOUGHT CERTAIN DETAILS VIDE NOTICE U/ S 142(1) OF THE ACT. CONTENTS OF THE RELEVANT NOTICE EXTRACTED IN THE AS SESSMENT ORDER READ AS UNDER:- ' FURNISH FULL DETAILS OF THE INSURANCE CLAIM RECEIVE D BY THE ASSESSEE-COMPANY DURING THE YEAR UNDER CONSIDERATIO N. THE DETAILS SO FURNISHED SHOULD INVARIABLY INCLUDE - COPY OF THE I NSURANCE POLICY DETAILS OF THE DAMAGE OCCURRED DOCUMENTS RELATING LODGE OF CLAIM FOR DAMAGES TO THE INSURANCE COMPANY DETAILS OF THE CLAIM PASS ED BY THE INSURANCE COMPANY COPY OF SURVEY REPORT AVAILABLE (IF ANY). IN ABSENCE OF THE DETAILS SO FURNISHED YOU ARE REQUESTED TO SHOW CAU SE AS TO WHY THE INSURANCE CLAIM SO RECEIVED MAY NOT BE CONSIDERED A S 'CAPITAL RECEIPTS' IN LIGHT OF THE DECISION OF APEX COURT IN THE CASE OF VANIA SILK MILLS 191 ITR 671 (SC). ACCORDINGLY WHY IT MAY NOT BE CONSIDERED TO BE EXCLUDED FROM THE BUSINESS INCOME AND THUS NOT CONSIDERED OF BEIN G ELIGIBLE FOR THE DEDUCTION U/S. 80HHC OF THE ACT. 2. YOU ARE FURTHER REQUESTED TO FURNISH FULL BRE AK-UP OF THE JOB WORK INCOME CREDITED TO THE TRADING ACCOUNT UNDER THE HE AD 'DYEING PRINTING LABOUR CHARGES' AT RS.17 71 996/- IN THE FOLLOWING FORMAT: NAME & ADDRESS OF THE PARTY FOR WHOM JOB WORK WAS COMPLETED NATURE OF WORK COMPLETED QUANTITY OF WORK COMPLETED RATE CHARGED AMOUNT RECEIVED DURING THE YEAR BALANCE RECEIVABLE DO ATTACH COMES OF THE LEDGER ACCOUNTS OF THESE PAR TIES AS APPEARING IN ASSESSEE-COMPANY'S ACCOUNT. IT MAY FURTHER BE CLARI FIED AS IF THE INCOME SO RECEIVED WAS INCIDENTAL TO MAIN BUSINESS OF THE ASSESSEE-COMPANY OR WAS THE WORK DONE TO EARN EXTRA INCOME FOR UTILIZA TION OF THE EXTRA CAPACITY AND HAS NOTHING TO DO WITH THE EXPORT MADE BY THE C OMPANY. 3. PLEASE CLARIFY AS TO WHY YOU CONSIDER THIS INC OME CREDITED BY YOURSELF IN THE ASSESSEE-COMPANY'S ACCOUNTS AS 'OTHER INCOME ' IS ELIGIBLE FOR THE DEDUCTION U/S. 80HHC OF THE ACT. IN ABSENCE OF THES E DETAILS AND APPROPRIATE REPLY PLEASE SHOW CAUSE AS TO WHY INCO ME SO RECEIVED MAY NOT BE TAKEN AS 'OTHER INCOME' NOT BEING THE PART O F THE BUSINESS INCOME BEING ELIGIBLE FOR CLAIM OF DEDUCTION U/S. 80HHC OF THE ACT. 4. FURNISH YOUR OWN COMPUTATION OF THE ELIGIBLE DED UCTION U/S. 80HHC OF THE ACT AND REASONING FOR THE INCLUSION OF ALL I NCOMES BEING CONSIDERED ELIGIBLE FOR THE SAID DEDUCTION --- ITA N O.1495/AHD/2010 4 3.1 AFTER SEEKING A NUMBER OF ADJOURNMENTS THE ASS ESSEE DID NOT FURNISH THE DETAILS AND DOCUMENTS SOUGHT BY THE AO VIDE NOTICE DATED: 30/06/2009 U/S. 142(1) OF THE ACT. INSTEA D IN THE WRITTEN REPLY FILED ON BEHALF OF THE ASSESSEE-COMPANY ON 07 /10/2009 THE LD. AR WHILE NARRATING THE CHRONOLOGY OF EVENTS R ELIED UPON DECISION OF THE HONBLE KERALA HIGH COURT IN THE CA SE OF WILLIAM GOODCARE & SONS INDIA LTD. 220-CTR-293 WITH THE REQ UEST NOT TO EXCLUDE JOB CHARGES FORM THE INCOME ELIGIBLE FOR DE DUCTION U/S. 80HHC OF THE ACT. AS REGARDS EXCLUSION OF THE 'INSU RANCE CLAIM' FROM THE BUSINESS INCOME FOR THE PURPOSE OF DEDUCT ION U/S. 80HHC OF THE ACT THE LD. AR ON BEHALF OF THE ASSESSEE-CO MPANY WHILE REFERRING THE OBSERVATIONS OF THE CIT IN ORDER U/S 263 OF THE ACT AGREED THAT THE FULL INSURANCE CLAIM SHOULD BE EXC LUDED .IN THE LIGHT OF THESE SUBMISSIONS THE AO CONCLUDED AS UNDER:- 3.3 THE REPLY SUBMITTED BY THE ASSESSEE-COMPANY I S CONSIDERED BUT THE SAME IS NOT TENABLE IN LIGHT OF THE FOLLOWING: - DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE -COMPANY IN ITS PROFIT & LOSS ACCOUNT IT HAS DISCLOSED 'OTHER INCO ME' AGGREGATING RS.73 19 687/- WHICH INCLUDES INSURANCE CLAIM OF RS .14 44 706/- AND DYEING & PRINTING LABOUR CHARGES OF RS.17 71 99 6/- BESIDE THE 'SALES LOCAL' OF RS.1 23 74 489/- AND 'SALES EXPORT ' OF RS.2 69 08 985/-. FORM THIS ITSELF IT IS CLEAR THAT THE ASSESSEE- COMPANY ITSELF DOES NOT CONSIDER THE 'JOB WORK' ACT IVITY AS THE NORMAL BUSINESS INCOME RELATING TO EXPORT BUSINESS AND HAS THUS CATEGORIZED THE SAME UNDER THE HEAD 'OTHER INCOME'. - DETAILS OF INSURANCE CLAIM RECEIVED BY THE ASSESS EE-COMPANY ARE NOT AVAILABLE ON RECORD. ACCORDINGLY IT WAS NOT PO SSIBLE TO ADJUDGE THE NATURE OF RECEIPT OF THE INSURANCE CLAIM. IN TH IS CONTEXT AN OPPORTUNITY WAS GRANTED TO THE ASSESSEE VIDE THE NO TICE DATED: 30/06/2009 WHEREIN IT WAS SPECIFICALLY REQUESTED TO FURNISH THE DOCUMENTS/EVIDENCES RELATING INSURANCE CLAIM PASSED (SUPRA). - THE ASSESSEE-COMPANY'S CLAIM THAT AS MENTIONED IN THE ORDER PASSED U/S. 263 OF THE ACT THE INSURANCE CLAIM; SI NCE NOT TAXED AS 'CAPITAL GAINS' U/S. 45(1A) OF THE ACT PRIOR TO AME NDMENT W.E.F. 01/04/2000 IS 'CAPITAL RECEIPT' AND IS NOT INCLUDAB LE IN TOTAL INCOME. THIS FACT IS COMPLETELY OUT OF PLACE AS THE INSURANCE CLAIM RECEIVED BY THE COMPANY IS IN RELATION TO THE DESTR UCTION OF THE ITA N O.1495/AHD/2010 5 ''CAPITAL ASSETS' OR OTHERWISE IS NOT ASCERTAINABLE ; IN ABSENCE OF EVIDENCE(S) AVAILABLE ON RECORD. EVEN AFTER GRANT O F A FRESH OPPORTUNITY THE ASSESSEE-COMPANY FAILED TO PROVIDE ANY DETAILS REGARDING INSURANCE CLAIM. - AS THE JOB WORK ACTIVITIES CARRIED BY THE ASSESSE E-COMPANY DO NOT HAVE ANY DIRECT CONNECTION WITH THE EXPORT ACTIVITY CARRIED BY IT THE SAME IS TO BE EXCLUDED FROM THE BUSINESS PROFIT BEI NG CONSIDERED ELIGIBLE OF THE PURPOSE OF DEDUCTION U/S. 80 HHC OF THE ACT. RELIANCE IS BEING PLACED UPON THE DECISION IN THE C ASE OF CIT VS. GASKETS & RADIATORS DISTRIBUTORS 296 ITR 440 OF THE JURISDICTIONAL HIGH COURT OF GUJARAT WHEREIN IT IS CLEARLY HELD TH AT ONLY THOSE INCOME WHICH HAVE NEXUS WITH THE ASSESSEE'S EXPORT BUSINESS ARE ELIGIBLE FOR DEDUCTION U/S. 80HHC OF THE ACT. - THE ASSESSEE-COMPANY HAS PLACED RELIANCE UPON THE DECISION IN THE CASE OF WILLIAM GOODCARE & SONS INDIA LTD. (220 -CTR-293) OF KERALA HIGH COURT WHICH IS NEGATED BY THE EXACTLY C ONTRARY VIEW OF THE SAME KERALA HIGH COURT IN THE CASE OF PARRY AGR O INDUSTRIES VS. JT. CIT 94 ITR 19. - DESPITE GIVEN AN OPPORTUNITY THE ASSESSEE-COMPANY DID NOT FILE THE FRESH COMPUTATION OF THE DEDUCTION CLAIMED U/S. 80H HC OF THE ACT AND IT EVEN NOT SUPPLIED NAY OTHER DETAILS AS REQUE STED VIDE ABOVE MENTIONED NOTICE DATED: 30/06/2009. - PROVISO TO SECTION 80HHC AS INSERTED BY THE TAXAT ION LAWS (AMENDMENT) ACT 2005 W.E.F. 1992 ARE FULLY APPLICA BLE IN THE ASSESSEE-COMPANYS CASE UNDER CURRENT CIRCUMSTANCES . 3.4 IN LIGHT OF THE ABOVE DISCUSSION IT IS HELD TH AT THE SUMS CREDITED IN THE P&L ACCOUNT UNDER THE HEAD OTHER INCOME COMPR ISING OF INSURANCE CLAIM AND DYEING PRINTING LABOUR CHARGES ARE NOT TO BE INCLUDED IN THE BUSINESS BEING CONSIDERED ELIGIBLE FOR THE DEDUCTIO N U/S 80HHC OF THE ACT. ACCORDINGLY THE AO RESTRICTED THE CLAIM FOR DEDUC TION U/S 80HHC OF THE ACT TO RS.1 19 934/- . 4. ON APPEAL THE LEARNED CIT(A) UPHELD THE FINDING S OF THE AO IN THE FOLLOWING TERMS:- 2.2 DURING THE APPELLATE PROCEEDINGS THE APPELLAN T REPEATED THE SUBMISSION MADE BEFORE THE A.O. AND AGAIN RELIED ON THE DECISION OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF WILLIAM GO ODCARE & SONS INDIA LTD. (SUPRA). THE APPELLANT STATED THAT IN THIS CAS E KERALA HIGH COURT ITA N O.1495/AHD/2010 6 STATED THAT IF THE ASSESSEE EXPORTER HAS ALSO DONE JOB WORK FOR OTHERS AND HAS ALSO BORNE THE COST OF RAW MATERIALS USED IN SU CH JOB WORK AND WAS ENGAGED IN THE IMPROVEMENT IN VALUE ADDITION OF RAW MATERIAL THEN ENTIRE JOB WORK RECEIPTS ARE TO BE INCLUDED IN THE TOTAL P ROFIT AND NOT INCLUDED UNDER CLAUSE (BAA) OF EXPLANATION OF SECTION 80HHC. THE APPELLANT AGREED THAT THE INSURANCE CLAIM BEING CAPITAL RECEIPT IN T HE LIGHT OF DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF VANIA SILK MIL LS (SUPRA) AFTER 01.04.2000 AMENDMENT THE INSURANCE CLAIM RECEIVED I S TAXABLE AS CAPITAL GAIN. HOWEVER WITH RESPECT TO THE DYEING AND PRINT ING CHARGES THE APPELLANT STATED THAT IT HAS RECEIVED THE DYEING AN D PRINTING CHARGES OF RS.17 71 996/- THE ASSESSEE HAS TO SPENT ON CONSUM PTION OF RAW MATERIALS OF CLOTH AND COLOUR CHEMICALS. THE ASSESS EE HAS ALSO SPENT ON MANUFACTURING EXPENSES AND WAGES AND LABOUR EXPENSE S. THEREFORE THIS CASE IS COVERED BY THE DECISION OF THE HON'BLE KERA LA HIGH COURT IN THE CASE OF WILLIAM GOODCARE & SONS INDIA LTD. (SUPRA). 2.3 I HAVE CONSIDERED THE SUBMISSION MADE BY THE AP PELLANT AND THE OBSERVATION OF THE A.O. ADMITTEDLY THERE IS NO DISPUTE REGARDING INSURANCE CLAIM OF RS.14 44 706/-. THE ONLY DISPUTE IS REGARDING DYEING AND PRINTING LABOUR CHARGES OF RS.17 71 996/ -. IN RESPECT OF WHICH THE A.O. HAS REDUCED 90% OF THE SAME FROM THE PROFIT OF THE BUSINESS EVEN THOUGH THE DECISION OF THE KERALA HIG H COURT IN THE CASE OF WILLIAM GOODCARE & SONS INDIA LTD. (SUPRA) IS THERE BUT THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF GASKETS & RADITORS DISTRIBUTORS (SUPRA) BEING THE DECISION OF THE JURISDICTIONAL HI GH COURT IS APPLICABLE. IN THIS CASE AS STATED BY THE A.O. THAT THE HON'BLE G UJARAT HIGH COURT STATED THAT THOSE INCOMES WHICH HAVE NEXUS WITH THE ASSES SEE'S EXPORT BUSINESS ARE ELIGIBLE FOR DEDUCTION U/S. 80HHC. THE JOB WORK INCOME OF THE ASSESSEE IS A NET RECEIPT IT IS NOT A TURNOVER AS A DMITTED BY THE ASSESSEE ITSELF. THE TURNOVER WAS ALMOST RS.2.19 CRORES BUT INCOME IS ONLY RS.17 71 996/-. THIS JOB WORK RECEIPT HAS NOTHING T O DO WITH THE EXPORT DIRECTLY AND HENCE IT IS OF THE SAME TYPE AS VARIOU S RECEIPTS WHICH ARE CONSIDERED TO BE UNDER CLAUSE (BAA) OF EXPLANATION OF SECTION 80HHC. THEREFORE ACTION OF THE AO IS CORRECT AND THIS GRO UND OF APPEAL IS DISMISSED. 5. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LEARNED CIT(A). NONE APPEARED ON BE HALF OF THE ASSESSEE. INSTEAD WRITTEN SUBMISSIONS HAVE BEEN F ILED ON BEHALF OF THE ASSESSEE AND THESE READ AS UNDER:- (1) THE MAIN ISSUE IN THIS APPEAL RELATES TO THE T REATMENT TO BE GIVEN TO THE JOB WORK CHARGE OF RS.17 71 996/- EARNED BY THI S PROCESSING HOUSE THE .BUSINESS WHEREOF IS TO PROCESS GREY CLOTH INTO FIN ISHED CLOTH BY SALE AS ALSO BY DOING JOB WORK. ITA N O.1495/AHD/2010 7 (2) THE SECOND ISSUE RELATES TO THE RECEIPT OF INSU RANCE CLAIM OF RS.14 44 706/-. (3) PROCESSING OF CLOTH IS PART OF THE ACTIVITY OF THE APPELLANT WHO AS MENTIONED PROCESSES GREY CLOTH INTO FINISHED CLOTH AND MAKES DOMESTIC SALES OR EXPORT SALES. PROCESSING CHARGES IS FOR DO ING SAME WORK ON JOB BASIS. THEREFORE FOR THE PURPOSE OF CALCULATION OF RELIEF U/S. 80HHC IN THE WORKING TO BE GIVEN THE PROCESSING CHARGE OF RS.17 71 996/- HAS TO BE CONSIDERED TO BE PART OF TURNOVER AND CANNOT BE CON SIDERED TO BE IN THE NATURE OF BROKERAGE COMMISSION OR RENT. THE EXPENS ES FOR JOB WORK EARNED IS IN RESPECT OF COLOUR CHEMICAL WAGES POW ER STORES WHICH HAVE ALREADY BEEN DEBITED IN THE PROFIT & LOSS A/C. (4) THE RATIO OF KERALA HIGH COURT IN CASE OF WILLI AM GOODACRE & SONS INDIA LIMITED [220-CTR-293] WOULD DIRECTLY APPLY. C OPY OF THAT JUDGEMENT HAS ALREADY BEEN FURNISHED AND IT REFERS TO THE TRE ATMENT TO BE GIVEN TO JOB WORK EARNED. YOUR KIND ATTENTION IS DRAWN TO PAGE 2 93 AND 295. (5) GUJARAT HIGH COURT IN CASE OF GASKETS & RADIATO RS DISTRIBUTORS [206-CTR-209] HOLDS THAT INTEREST ON DEPOSITS EXPO RT INCENTIVE AND OCTROI REFUND DO NOT FORM PART OF TOTAL TURNOVER. THIS IS THE JUDGEMENT REFERRED TO BY THE DEPARTMENT BUT IT DOES NOT DEAL WITH JOB WOR K WHICH IS PART AND PARCEL OF BUSINESS ACTIVITY. (6) SIMILARLY THE JUDGEMENT OF KERALA HIGH COURT I N CASE OF PARRY AGRO INDUSTRIES LTD. [206-CTR-36] IS ALSO NOT APPLICABLE AS IT DEALS WITH DETERMINING INCOME FROM EXPORTS AS PER RULE 8 AND H AS NO APPLICATION TO THE FACTS OF THE CASE. (7) CHENNAI TRIBUNAL IN CASE OF VIRUDUHNAGAR TEXTIL E MILLS LIMITED [99- TTJ-500] HAS HELD THAT WHENEVER THERE IS A CASE OF COMPOSITE BUSINESS AND WHENEVER PROFIT ELEMENT THEREFROM IS INCLUDED T HEN DOMESTIC TURNOVER ON SUCH GOODS HAS TO BE INCLUDED. (8) AHMEDABAD TRIBUNAL IN CASE OF ABID CHEMICALS LT D. [8-SOT-29] COVERS THE ISSUE HAS HELD AS UNDER:- 'SO FAR AS THE CONVERSION CHARGES WERE CONCERNED T HE ASSESSING OFFICER HAD NOT EXCLUDED THE 90 PER CENT OF THE CONVERSION CHARGES WHILE WORKING OUT THE BUSINESS PROFIT AS PER EXPLANATION (BAA) OF SECTION 80HHC. THE PROFIT EARNED THROUGH THE CONVERSION CHARGES SINCE ALREADY HAD BEEN INCLUDED IN THE PROFIT FOR BUSINESS COULD NOT BE C ARVED OUT OF TOTAL TURNOVER. ' ITA N O.1495/AHD/2010 8 (9) IN THE BACKGROUND OF THE ABOVE IT IS RESPECTFU LLY SUBMITTED THAT THE ISSUE IS REQUIRED TO BE DECIDED IN FAVOUR OF THE AS SESSEE. (10) THE NEXT ISSUE RELATES TO INSURANCE CLAIM OF R S.14 44 706/-. THAT RELATES TO LOSS ON STOCK OF GOODS IN GODOWN DUE TO FIRE. (11) MUMBAI HIGH COURT IN CASE OF PFIZER LIMITED [4 2-DTR-32] HAS DEALT WITH THE SAME ISSUE AND HAS HELD IN FAVOUR OF THE A SSESSEE. (12) THEREFORE THE WORKING GIVEN BY THE ASSESSEE I S REQUIRED TO BE ACCEPTED AND THAT OF THE DEPARTMENT REJECTED. 5.1 IN CONSEQUENCE OF PENULTIMATE HEARING OF THE A PPEAL FURTHER WRITTEN SUBMISSIONS WERE FILED WHICH READ AS UNDER :- (1) AT THE LAST HEARING OF THE ABOVE APPEAL HON. MEMBERS HAD POINTED OUT THAT THE ISSUE IN APPEAL STANDS SQUARELY COVERE D BY THE JUDGEMENT OF SUPREME COURT IN CASE OF COMMISSIONER OF INCOME-TAX V/S. K. RAVINDRANATHAN NAIR (295-ITR-228) AND HAD ADJOURNED THE CASE TO STUDY THE IMPLICATION. (2) THE ASSESSEE AGREES THAT THE RATIO OF THE AFORE MENTIONED JUDGEMENT DIRECTLY APPLIES TO COMPUTATION OF DEDUCT ION U/S. 80HHC OF THE ACT IN RESPECT OF INCOME EARNED BY PROCESSING OF G OODS BELONGING TO THIRD PERSON. (3) IT IS THEREFORE RESPECTFULLY SUBMITTED THAT TH E ABOVE MATTER MAY BE DISPOSED OFF IN ACCORDANCE WITH THE AFOREMENTIONED JUDGEMENT OF THE SUPREME COURT BY GIVING DIRECTIONS TO THE ASSESSING OFFICER. RELEVANT PORTION OF ABOVE JUDGEMENT ON PAGE 240 IS REPRODUCE D. 'IN OUR VIEW FOR THE ABOVE REASONS THE SAID PROCE SSING CHARGES WHICH WAS PART OF GROSS TOTAL INCOME WAS AN INDEPENDENT INCOME LIKE RENT COMMISSION BROKERAGE ETC. AND THEREFORE 90 PER CENT OF THE SAID SUM HAD TO BE REDUCED FROM THE GROSS TOTAL INCOME TO AR RIVE AT THE BUSINESS PROFITS AND SINCE THE SAID PROCESSING CHARGE WAS AN IMPORTANT COMPONENT OF BUSINESS PROFITS IT ALSO HAD TO BE INCLUDED IN THE TOTAL TURNOVER IN THE SAID FORMULA TO ARRIVE AT THE BUSINESS PROFITS IN T ERMS OF CLAUSE (BAA) TO THE SAID EXPLANATION. 5.2 THE LEARNED DR ON THE OTHER HAND SUPPORTED TH E FINDINGS OF THE LD. CIT(A) IN THE LIGHT OF DECISION OF THE HO NBLE APEX COURT IN CIT V. K. RAVINDRANATHAN NAIR 295 ITR 228(SC) . ITA N O.1495/AHD/2010 9 6. WE HAVE HEARD THE LEARNED DR AND CONSIDERED THE WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE AS ALSO THE AFORESAID DECISION OF THE HONBLE APEX COURT. THE ONLY ISSUE BEFORE US IS IN RESPECT OF DEDUCTION U/S 80HHC OF THE ACT IN RELATI ON TO JOBWORK RECEIPTS. AS IS APPARENT FROM THE FACTS NARRATED IN THE IMPUGNED ORDERS THERE IS NOTHING TO SUGGEST THAT THE SAID JOBWORK RECEIPTS HAVE ANY NEXUS OR RELATION WITH THE EXPORTS MADE BY THE ASSESSEE . THE LD. DR APPEARING BEFORE US RELIED UPON THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF CIT V. K. RAVINDRANATHAN NAIR 295 ITR 228(SC) AND CONTENDED THAT THE ISSUE IS NOW SETTLED BY THE SAID DECISION. THE LD. AR ON BEHALF OF THE ASSESSEE IN THEIR LAST WRITTEN SUBMISSIONS ALSO SUPPORTED THE VIEW OF THE LD. DR. WE FIND THAT IN THEIR DECISION ON THE INTERPRETATION OF EXPLANATION (BAA) TO SECTION 80HHC OF THE ACT HONBLE SUPREME COURT IN THE CASE OF CIT V. K. RAVINDRANATHAN NAIR 295 ITR 228(SC) HELD THAT THE FORMULA IN SECTION 80HHC(3) PROVIDED FOR A FRACTION OF EXPORT TURNOVER DIVIDED BY THE TOTAL TURNOVER TO BE APPLIED TO BUSINESS PROFITS CA LCULATED AFTER DEDUCTING 90 PER CENT OF THE SUMS MENTIONED IN CLAUSE (BAA) OF THE EXPLAN ATION. PROFIT INCENTIVES LIKE RENT COMMISSION BROKERAGE CHARGES ETC. THOUGH THESE F ORMED PART OF THE GROSS TOTAL INCOME HAD TO BE EXCLUDED AS THESE WERE INDEPENDE NT INCOMES WHICH HAD NO ELEMENT OF EXPORT TURNOVER. ALL THE FOUR VARIABLES IN THE SECTION ARE REQUIRED TO BE KEPT IN MIND. IF ALL THE FOUR VARIABLES ARE KEPT IN MIND IT BECOMES CLEAR THAT EVERY RECEIPT IS NOT INCOME AND EVERY INCOME WOULD NOT NE CESSARILY INCLUDE THE ELEMENT OF EXPORT TURNOVER. CLAUSE (BAA) OF THE EXPLANATION STATES THAT 90 PER CENT. OF THE INCENTIVE PROFITS OR RECEIPTS BY WAY OF BROKERAGE COMMISSION INTEREST RENT CHARGES OR ANY OTHER RECEIPT OF LIKE NATURE INCLUDED IN BUS INESS PROFITS HAVE TO BE DEDUCTED FROM BUSINESS PROFITS COMPUTED IN TERMS OF SECTIONS 28 TO 44D. IN OTHER WORDS RECEIPTS CONSTITUTING INDEPENDENT INCOME HAVING NO NEXUS WITH EXPORTS WERE REQUIRED TO BE DEDUCTED FROM BUSINESS PROFITS UNDER CLAUSE ( BAA). HONBLE SUPREME COURT FURTHER OBSERVED THAT A BARE READING OF CLAUSE (BAA )(1) INDICATES THAT RECEIPTS BY WAY OF BROKERAGE COMMISSION INTEREST RENT CHARGES E TC. FORMED PART OF THE GROSS TOTAL INCOME BEING BUSINESS PROFITS. BUT FOR THE PURPOSE OF WORKING OUT OF FORMULA AND IN ORDER TO AVOID DISTORTION IN ARRIVING AT THE EXP ORT PROFITS CLAUSE (BAA) STOOD INSERTED TO SAY THAT ALTHOUGH INCENTIVE PROFITS AND INDEPENDENT INCOMES ITA N O.1495/AHD/2010 10 CONSTITUTED PART OF THE GROSS TOTAL INCOME THESE H AD TO BE EXCLUDED FROM GROSS TOTAL INCOME BECAUSE SUCH RECEIPTS HAD NO NEXUS WIT H THE EXPORT TURNOVER. HONBLE APEX COURT FURTHER HELD THAT PROCESSING CH ARGES WHICH ARE PART OF GROSS TOTAL INCOME FORM AN ITEM OF INDEPENDENT INCOME LI KE RENT COMMISSION BROKERAGE ETC. AND THEREFORE 90 PERCENT OF THE PROCESSING CHARGES HAVE ALSO TO BE REDUCED FROM THE GROSS TOTAL INCOME TO ARRIVE AT THE BUSINE SS PROFITS AND THEREFORE IT HAS ALSO TO BE INCLUDED IN THE TOTAL TURNOVER IN THE FORMULA FOR ARRIVING AT THE BUSINESS PROFITS IN TERMS OF THE CLAUSE (BAA) OF THE EXPLANATION TO SEC TION 80HHC(3). IT WAS FURTHER HELD BY THE HONBLE SUPREME COURT THAT IN THE ABOVE FORMULA THERE EXISTED FOUR VARIABLES NAMELY BUSINESS PROFITS EXPORT TURNOVER TOTAL TURNOVER AND 90 PER CENT. OF THE SUMS REFERRED TO IN CLAUSE (BAA) TO THE SAID EXPLANATION . IN THE COMPUTATION OF DEDUCTION UNDER SECTION 80HHC ALL FO UR VARIABLES HAD TO BE TAKEN INTO ACCOUNT. ALL FOUR VARIABLES WERE R EQUIRED TO BE GIVEN WEIGHTAGE. THE SUBSTITUTION OF SECTION 80HHC(3) SEC URES PROFITS DERIVED FROM THE EXPORTS OF ELIGIBLE GOODS. THEREFO RE IF ALL THE FOUR VARIABLES ARE KEPT IN MIND IT BECOMES CLEAR THAT E VERY RECEIPT IS NOT INCOME AND EVERY INCOME WOULD NOT NECESSARILY INCLU DE ELEMENT OF EXPORT TURNOVER. THIS ASPECT NEEDS TO BE KEPT IN MI ND WHILE INTERPRETING CLAUSE (BAA) TO THE SAID EXPLANATION. THE SAID CLAUSE STATED THAT 90 PER CENT. OF INCENTIVE PROFITS OR RE CEIPTS BY WAY OF BROKERAGE COMMISSION INTEREST RENT CHARGES OR A NY OTHER RECEIPT OF LIKE NATURE INCLUDED IN BUSINESS PROFITS HAD TO BE DEDUCTED FROM BUSINESS PROFITS COMPUTED IN TERMS OF SECTIONS 28 T O 44D OF THE INCOME-TAX ACT. IN OTHER WORDS RECEIPTS CONSTITUTI NG INDEPENDENT INCOME HAVING NO NEXUS WITH EXPORTS WERE REQUIRED T O BE REDUCED FROM BUSINESS PROFITS UNDER CLAUSE (BAA). A BARE RE ADING OF CLAUSE (BAA)(1) INDICATES THAT RECEIPTS BY WAY OF BROKERAG E COMMISSION INTEREST RENT CHARGES ETC. FORMED PART OF GROSS TOTAL INCOME BEING BUSINESS PROFITS. BUT FOR THE PURPOSES OF WORKING O UT THE FORMULA AND IN ORDER TO AVOID DISTORTION OF ARRIVING AT THE EXP ORT PROFITS CLAUSE (BAA) STOOD INSERTED TO SAY THAT ALTHOUGH INCENTIVE PROFITS AND 'INDEPENDENT INCOMES' CONSTITUTED PART OF GROSS TOT AL INCOME THEY HAD TO BE EXCLUDED FROM GROSS TOTAL INCOME BECAUSE SUCH RECEIPTS HAD NO NEXUS WITH THE EXPORT TURNOVER. THEREFORE I N THE ABOVE FORMULA WE HAVE TO READ ALL THE FOUR VARIABLES. ON READING ALL THE VARIABLES IT BECOMES CLEAR THAT EVERY RECEIPT MAY N OT CONSTITUTE SALE PROCEEDS FROM EXPORTS. THAT EVERY RECEIPT IS NOT I NCOME UNDER THE INCOME-TAX ACT AND EVERY INCOME MAY NOT BE ATTRIBUT ABLE TO EXPORTS. THIS WAS THE REASON FOR THIS COURT TO HOLD THAT IND IRECT TAXES LIKE EXCISE DUTY WHICH ARE RECOVERED BY THE TAXPAYERS FO R AND ON BEHALF OF THE GOVERNMENT SHALL NOT BE INCLUDED IN THE TOT AL TURNOVER IN THE ABOVE FORMULA. ITA N O.1495/AHD/2010 11 . BEFORE CONCLUDING WE STATE THAT THE NATURE OF EVER Y RECEIPT NEEDS TO BE ASCERTAINED IN ORDER TO FIND OUT WHETHER THE SAI D RECEIPT FORMS PART OF/OR THAT IT HAS AN ATTRIBUTE OF AN EXPORT TU RNOVER. WHEN AN INDIRECT TAX IS COLLECTED BY THE TAXPAYER ON BEHALF OF THE GOVERNMENT THE TAX RECOVERED IS FOR THE GOVERNMENT. IT MAY BE AN INCOME IN THE CONCEPTUAL SENSE OR EVEN UNDER THE INCOME-TAX ACT B UT WHILE WORKING OUT THE FORMULA UNDER SECTION 80HHC(3) OF T HE INCOME-TAX ACT AND WHILE APPLYING THE FOUR VARIABLES ONE HAS T O ASCERTAIN WHETHER THE RECEIPT HAS AN ATTRIBUTE OF EXPORT TURN OVER . 6.1 HONBLE GUJARAT HIGH COURT IN THE CASE OF AL EMBIC CHEMICAL WORKS LTD. VS. DCIT [ 266 ITR 47](GUJ) IN THE CONTEXT OF EXPLANATION (BAA) HAVE HELD THAT (D) WHETHER THE TRIBUNAL WAS RIGHT IN LAW IN HOLDI NG THAT FOR THE PURPOSE OF COMPUTATION OF DEDUCTION UNDER SECTION 8 0HHC 90 PER CENT. OF THE INCOME RELATABLE TO RENT COMPUTER CHA RGES SERVICE CHARGES MISCELLANEOUS INCOME AND INSURANCE CLAIM W AS REQUIRED TO BE DEDUCTED FROM THE PROFITS UNDER EXPLANATION (BAA ) TO SECTION 8OHHC(4A) IGNORING USE OF THE WORD OR BETWEEN RE FERENCE TO CLAUSES (IIIA) (IIIB) AND (IIIC) OF SECTION 28 IN CLAUSE (1) OF THE SAID EXPLANATION AND OTHER ITEMS ABOVE REFERRED TO AND FURTHER ERRED IN READING THE WORD OR AS AND ? . IV. DEDUCTION UNDER SECTION 80HHC OF THE ACT ON A PLAIN READING OF THE PROVISION AS IT STANDS IT IS APPARENT THAT WHAT THE PROVISION STIPULATES IS THAT PROFITS OF T HE BUSINESS FOR THE PURPOSE OF SECTION 80HHC OF THE ACT MEAN THE PROFIT S OF THE BUSINESS AS COMPUTED UNDER THE HEAD PROFITS AND GA INS OF BUSINESS OR PROFESSION. WHILE COMPUTING SUCH PROFITS UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION IF ANY SUM REF ERRED TO IN CLAUSE (IIIA) (IIIB) OR (IIIC) OF SECTION 28 OF THE ACT H AS BEEN INCLUDED IN SUCH PROFITS THE SAME HAS TO BE REDUCED BY 90 PER CENT. FROM THE PROFITS COMPUTED AS AFORESAID. SIMILARLY IF ANY RECEIPT BY WAY OF BROKERAGE COMMISSION INTEREST RENT CHARGES OR ANY OTHER R ECEIPT OF A SIMILAR NATURE IS INCLUDED IN SUCH PROFITS I.E. PROFITS OF THE BUSINESS SUCH PROFITS HAVE TO BE REDUCED BY THE SAID FIGURE I.E. BY 90 PER CENT. WHILE COMPUTING (PROFITS OF THE BUSINESS) FOR THE P URPOSE OF SECTION 8OHHC OF THE ACT. THEREFORE ONCE THE SUMS OR THE R ECEIPTS OF THE NATURE SPECIFIED IN SUB- CLAUSE (1) OF CLAUSE (BAA) OF THE EXPLANATION ARE INCLUDED WHILE COMPUTING THE PROFITS AND GAINS OF BUSINESS THEN SUCH SUMS OR RECEIPTS ARE TO BE REDUCED TO THE EXTE NT OF 90 PER CENT. FROM THE PROFITS OF THE BUSINESS. ONCE THE LANGUAGE EMPLOYED BY THE ITA N O.1495/AHD/2010 12 PROVISION IS CLEAR IT IS NOT NECESSARY FOR THE COUR T TO READ ANYTHING INTO THE SAID LANGUAGE NOR GO BEHIND THE LANGUAGE E MPLOYED BY THE LEGISLATURE SO AS TO ASCERTAIN THE INTENTION OF THE LEGISLATURE. THIS WOULD BECOME NECESSARY ONLY WHEN THE LANGUAGE EMPLO YED BY THE STATUTE IS AMBIGUOUS IN ANY MANNER. IN THE PRESENT CASE THAT CANNOT BE TERMED TO BE THE SITUATION. THEREFORE THE GROUN D RAISED ON BEHALF OF THE APPELLANT AS REGARDS THE INTERPRETATION TO B E PLACED ON CLAUSE (BAA) OF THE EXPLANATION TO SECTION 8OHHC OF THE AC T DOES NOT MERIT ACCEPTANCE AND FAILS. 6.2 IN VIEW OF THE AFORESAID JUDGMENT OF THE APEX COURT IN THE CASE OF K. RAVINDRANATHAN NAIR(SUPRA) IT IS EVIDENT THAT ANY INDEPENDENT INCOME WHICH IS NOT DERIVED FROM THE EXPORT ACTIVITIES IN TERMS OF SECTION 80HHC(2) OF THE ACT BUT IS OTHERWISE ASSESSED AS BUSINESS INCOME 90% OF SUCH RECEIPTS HAVE TO BE REDUCED FROM THE PROFITS OF THE BUSINESS IN TERMS O F EXPLANATION (BAA) TO SEC. 80HHC OF THE ACT. 6.3 HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS S.G.JHAVERI CONSULTANCY LTD. 245 ITR 854 HELD THAT LABOUR CHAR GES AND SERVICE CHARGES CAN NOT BE INCLUDED IN THE BUSINESS PROFITS FOR THE PUR POSE OF DEDUCTION U/S 80HHC OF THE ACT AS THESE ITEMS DO NOT HAVE ANY LINKAGE WIT H THE EXPORT ACTIVITIES. IN CIT VS. DEODHAR ELECTRO DESIGN (P) LTD. 300 ITR 103(BOM .) HONBLE HIGH COURT HELD THAT RECEIPTS BY WAY OF DEVELOPMENT & SERVICE CHARG ES WOULD NOT BE ENTITLED TO THE BENEFIT U/S 80HHC(3) OF THE ACT AND IT HAD TO B E COMPUTED BASED ON 90% OF THEIR EXCLUSION. 6.4 RECENTLY HONBLE BOMBAY HIGH COURT IN THEIR DECISION DATED 8.4.2010 IN ITA NO. 2186 OF 2009 IN THE CASE OF M/S DRESSER RAN D INDIA PVT. LTD. WHILE FOLLOWING THE AFORESAID DECISION OF HONBLE APEX CO URT IN THE CASE OF K. RAVINDRANATHAN NAIR(SUPRA) AND DISTINGUISHING THE D ECISION IN BANGALORE CLOTHING(SUPRA) CONCLUDED THAT RECOVERY OF FREIGHT INSURANCE AND PACKING RECEIPTS SALES TAX REFUND AND SERVICE INCOME BEIN G INDEPENDENT INCOMES 90% OF THESE RECEIPTS HAVE TO BE REDUCED FROM THE BUSIN ESS PROFITS IN TERMS OF EXPLANATION (BAA) TO SEC. 80HHC OF THE ACT. ITA N O.1495/AHD/2010 13 6.5 IN VIEW OF THE FOREGOING THE AMO UNT ON ACCOUNT OF JOB WORK RECEIPTS BEING INDEPENDENT INCOME AND ADMITTEDLY THESE REC EIPTS BEING NOT IN ANY MANNER RELATED TO EXPORT ACTIVITIES OF THE ASSESSEE THESE WOULD FALL WITHIN THE EXPLANATION (BAA) UNDER SECTION 80HHC OF THE ACT AN D THUS 90% OF SAID RECEIPTS HAVE TO BE EXCLUDED WHILE COMPUTING PROFITS OF THE BUSINESS IN TERMS OF THE SAID EXPLANATION FOR THE PURPOSE OF DEDUCTION UNDER SEC TION 80HHC OF THE ACT. IN NUTSHELL WE UPHOLD THE FINDINGS OF LD. CIT(A) IN THIS RESPECT .THEREFORE GROUND NOS. 1(1 TO 3) IN THE APPEAL OF THE ASSESSEE ARE DI SMISSED 7. GROUND NOS. II(1 TO4) RELATE TO LEVY OF INTEREST U/S 234A 234B 234C AND 234D OF THE ACT. THE LD. AR ON BEHALF OF T HE ASSESSEE DID NOT MAKE ANY SUBMISSIONS ON THESE GROUNDS IN HIS WRITTE N SUBMISSIONS. THE LEVY OF INTEREST U/S 234A 234B 234C & 234D OF THE ACT B EING MANDATORY [COMMISSIONER OF INCOME TAX. VS ANJUM M. H. GHASWAL A AND OTHERS 252 ITR 1(SC) AFFIRMED BY HON'BLE APEX COURT IN THE CASE O F CIT V. HINDUSTAN BULK CARRIERS [2003] 259 ITR 449 (SC) AND IN THE CASE OF CIT V. SANT RAM MANGAT RAM JEWELLERS [2003] 264 ITR 564 (SC) ] THESE GROUNDS ARE DISMISSED. 8. AS REGARDS DEDUCTION U/S 80HHC OF THE ACT ON TH E AMOUNT OF INSURANCE RECEIPTS WE FIND THAT NO SUCH GROUND H AS BEEN TAKEN BEFORE US NOR THE ASSESSEE MADE ANY SUBMISSIONS IN THEIR LAST LETTER PLACED BEFORE US. EVEN NO SUCH GROUND APPEAR S TO HAVE BEEN TAKEN OR PRESSED BEFORE THE LD. CIT(A) THE LATTE R HAVING OBSERVED THAT ADMITTEDLY THERE IS NO DISPUTE REGARDING INS URANCE CLAIM OF RS.14 44 706/-. IN THESE CIRCUMSTANCES EVEN THOU GH THERE IS NO SUCH ISSUE BEFORE US IN THEIR PENULTIMATE SUBMISS IONS THE LD. AR RELIED UPON A DECISION OF THE HONBLE MUMBAI HIGH COURT IN PFIZER LIMITED 42 DTR 32 WITHOUT DEMONSTRATING AS TO HOW T HIS ISSUE IS RELEVANT TO THE FACTS OF THE CASE ESPECIALLY WHEN DESPITE SUFFICIENT OPPORTUNITY ALLOWED BY THE AO THE ASSESSEE DID NOT SUBMIT THE DETAILS DESIRED BY THE AO IN HIS NOTICE U/S 142(1) OF THE ACT AND RATHER THE ASSESSEE DID NOT PRESS THEIR CLAIM BEFO RE THE AO. THUS ADMITTEDLY THE ASSESSEE DID NOT RAISE ANY SUCH DI SPUTE EVEN BEFORE ITA N O.1495/AHD/2010 14 THE AO. THE FINDINGS OF THE AO WERE ALSO NEVER DISP UTED IN APPEAL BEFORE THE LD. CIT(A) NOR ANY SPECIFIC GROUND WAS T AKEN. IN THESE CIRCUMSTANCES ESPECIALLY WHEN NO SUCH GROUND HAS EVEN BEEN TAKEN BEFORE US THE LD. AR WAS NOT JUSTIFIED IN RELYING UPON THE DECISION IN PFIZER LTD.(SUPRA) IN HIS WRITTEN SUBMISSIONS AND THAT TOO WHEN THE RELEV ANT FACTS WERE NEVER PLACED BEFORE THE AO/LD. CIT(A) AND EVEN BEFORE US. IF THE RE IS NO DECISION OF THE FIRST APPELLATE AUTHORITY AND NO GROUND IS TAKEN IN THE APPEAL FILED BEFORE HIM ON A PARTICULAR PORTION OF THE ASSESSMENT OR THE ISSUE W AS NOT AGITATED BEFORE THE LD. CIT(A) IT CAN NOT BE SAID THAT THE ASSESSEE IS STI LL AGGRIEVED BY THE DECISION OF THE FIRST APPELLATE AUTHORITY IN NOT GRANTING SUCH RELIEF TO HIM. HONBLE JURISDICTIONAL HIGH COURT IN THEIR DECISION IN CIT VS. KARAMCHAND PREMCHAND PRIVATE LTD. 74 ITR 254(GUJ) HELD THAT THE TRIBUNAL IS NOT ENTITL ED TO ALLOW THE ASSESSEE TO AGITATE AN ISSUE WHICH WAS NOT RAISED BEFORE THE FI RST APPELLATE AUTHORITY AND THERE IS NO DECISION OF SUCH AUTHORITY ON THE ISS UE EVEN IF THE ASSESSEE HAS RAISED THE ISSUE IN THE MEMORANDUM OF APPEAL AND SE EKS TO AGITATE IT. .SIMILARLY IN SMT. ARUDHANTI BALKRISHNA VS. ITO 103 ITR 763(GU J) THE HONBLE JURISDICTIONAL HIGH COURT HELD THAT THE ASSESSEE IS NOT ENTITLED T O QUESTION THE DECISION OF THE OFFICER ON A POINT IN AN APPEAL TO THE TRIBUNAL WH ICH WAS NOT RAISED OR DECIDED BY THE APPELLATE ASSISTANT COMMISSIONER. SIMILAR VIEW WAS TAKEN IN HUKAMCHAND & MANNALAL & CO. 126 ITR 251(MP) AND UGAR SUGAR WORKS LTD. VS. CIT 141 ITR 326(BOM.). WITH THESE OBSERVATIONS AND IN VIEW OF D ECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN ALEMBIC CHEMICAL WORKS LTD.(SUPRA) WE ARE OF THE OPINION THAT THE RELIANCE BY THE LD. AR ON THE DEC ISION OF THE HONBLE BOMBAY HIGH COURT IN PFIZER LTD. (SUPRA) IS TOTALLY MISPL ACED ESPECIALLY WHEN RELEVANT FACTS WERE NEVER PLACED BEFORE THE LOWER AUTHORITIE S NOR EVEN BEFORE US AND NOR EVEN ANY SPECIFIC GROUND HAS BEEN TAKEN BEFORE US. 9. NO ADDITIONAL GROUND HAVING BEEN RAISED IN TE RMS OF THE RESIDUARY GROUND NO. II(5) IN THE APPEAL ACCORDING LY THIS GROUND IS DISMISSED. 10. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. ITA N O.1495/AHD/2010 15 11. IN THE RESULT APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON25 -03-2011 SD/- SD/- (MUKUL SHRAWAT) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 25-3-2011 COPY OF THE ORDER FORWARDED TO: 1. PRAKASH SILK MILLS LTD. N-1079 SURAT TEXTILE M ARKET RING ROAD SURAT 2. ITO WARD-1(4) SURAT 3. CIT CONCERNED 4. CIT(A)-I SURAT 5. DR ITAT AHMEDABAD BENCH-A AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD