DCIT, CENTRAL CIR.- XXVII, Kolkata v. M/S. MALHOTRA GLOBAL EXIMP PVT. LTD., Kolkata

ITA 1726/KOL/2009 | 2003-2004
Pronouncement Date: 18-03-2010

Appeal Details

RSA Number 172623514 RSA 2009
Bench Kolkata
Appeal Number ITA 1726/KOL/2009
Duration Of Justice 5 month(s) 10 day(s)
Appellant DCIT, CENTRAL CIR.- XXVII, Kolkata
Respondent M/S. MALHOTRA GLOBAL EXIMP PVT. LTD., Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2010
Appeal Filed By Department
Bench Allotted D
Tribunal Order Date 18-03-2010
Assessment Year 2003-2004
Appeal Filed On 08-10-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH : KOLKATA [ BEFORE SHRI D.K. TYAGI J.M. & SHRI B.C. MEENA A.M. ] I.T.A.NO.1726 (KOL) OF 2009 ASSESSMENT YEAR 2003-04 DY.COMMISSIONER OF INCOME-TAX -VS- MALHOTRA GLOBAL EXIMP (PVT) LTD. CENTRAL CIRCLE-XXVII KOLKATA. KOLKATA.(PAN-AA BCM7146F) ( APPELLANT ) ( RESPONDEN T ) APPELLANT BY : SMT. JYOTI KUMARI RESPONDENT BY : SRI N.K. PODDA R O R D E R PER SRI B.C.MEENA A.M. : THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 20 03-04 IS DIRECTED AGAINST THE ORDER OF C.I.T.(A) -I KOLKATA DATED 29/6/2009. IN THIS APPEAL BY THE REVENUE THE FOLLOWING GROUNDS ARE RAISED :- 1(A). THAT ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE THE LD. CIT(A) HAS ERRED IN HOLDING THE EXPORT INCENTIVE OF RS.78 98 550/- PASS ED BY THE ASSESSEE COMPANY TO THE MANUFACTURER AS PER AGREEMENT WITH THE MANUFACT URER AS PER AGREEMENT WITH THE MANUFACTURER AS ADMISSIBLE EXPENDITURE WITHOUT APPRECIATING THAT THE ASSESSEE COULD NOT PRODUCE DISCLAIMER CERTIFICATE IN FORM NO .10CCAB AS REQUIRED BY THE PROVISION OF SECTION 80HHC(1A). (B) IN DOING SO THE LD. CIT(A) HAS ERRED I N NOT APPRECIATING THAT MERE AGREEMENT WITH THE MANUFACTURER CANNOT OVERRIDE THE SPECIFIC PROVI SION OF SECTION IN THE INCOME TAX ACT. (C) IN DOING SO THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THAT AS PER PROVISIONS OF CLAUSES (IIIA) (IIIB) & (IIIC) OF SECTION 28 CASH C OMPENSATORY SUPPORT DUTY DRAW BACK AND PROFIT ON SALE OF IMPORT ENTITLEMENT LICENSE SH ALL BE TAXABLE UNDER THE HEAD PROFIT AND GAINS OF BUSINESS AND PROFESSION AND T HEREFORE EXPORT INCENTIVE OF RS.78 98 550/- WOULD HAVE TO BE INCLUDED IN THE PRO FIT OF THE BUSINESS FOR COMPUTATION OF DEDUCTION U/S.80HHC. 2 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE BY NOT TREATING FREIGHT AND INSURANCE AS A PART OF INDIRECT COST ATTRIBUTABLE TO TRADING GOODS REL YING ON THE ORDER OF THE HONBLE TRIBUNAL FOR ASSESSMENT YEAR 2001-02 WHICH HAS NOT REACHED ITS FINALITY. 2. THE A.O. TREATED THE AMOUNT OF RS.78 98 550/- R ECEIVED ON ACCOUNT OF SALE OF D.E.P.B. LICENSE AND TRANSFERRED TO THE SUPPORTING MANUFACTURERS BY THE ASSESSEE AS INCOME OF THE ASSESSEE FROM EXPORT INCENTIVE AND CO NSIDERED THE SAME FOR THE PURPOSE 2 OF DETERMINING DEDUCTION U/S. 80HHC OF THE ACT. BE FORE THE LD. C.I.T.(A) THE ASSESSEE SUBMITTED THAT THE SIMILAR DISALLOWANCE WAS DECIDED BY THE I.T.A.T. KOLKATA IN THE CASE OF THE ASSESSEE ITSELF FOR ASSESSMENT YEAR 2001-02 VIDE ORDER DATED 20/10/2005 IN ITA NO. 500 (KOL)/2005. THE C.I.T.(A) FOLLOWING THE SA ID ORDER OF THE TRIBUNAL HELD THAT THE INCENTIVE PASSED BY THE ASSESSEE TO THE MANUFACTURE R AS PER AGREEMENT WITH THE MANUFACTURER WAS AN ADMISSIBLE EXPENDITURE. HE AC CORDINGLY DIRECTED THE A.O. TO RECOMPUTE THE DEDUCTION U/S. 80HHC OF THE ACT. THE REVENUE IS IN APPEAL AGAINST SUCH DIRECTION OF C.I.T.(A). 3. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL PLACED BEFORE US. WE FIND THAT THE IDENTICAL ISSUE IN THE CASE OF THE ASSESSE E HAS BEEN DECIDED BY THE TRIBUNAL FOR EARLIER ASSESSMENT YEARS. I.T.A.T. E BENCH CALC UTTA VIDE ORDER DATED 18/1/1999 IN I.T.A.NO.1338 (CAL)/1997 FOR ASSESSMENT YEAR 1993-9 4 ALLOWED THE CLAIM OF THE ASSESSEE. FOLLOWING THE AFORESAID ORDER THE ITAT D BENCH KOLKATA VIDE ORDER DATED 22/4/2002 IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1995-96 ALLOWED THE APPEAL OF THE ASSESSEE ON THIS ISSUE. THE DEPARTMENT MADE A REFERENCE U/S. 260A BEFORE THE HONBLE CALCUTTA HIGH COURT AND THE HONBLE HIGH CO URT VIDE ORDER DATED 20/2/2007 IN ITA NO. 265 OF 2005 DISMISSED THE APPEAL BY HOLDING AS UNDER :- WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES. PERU SED THE RECORDS. WE DO NOT FIND THAT ANY SUBSTANTIAL QUESTION OF LAW IS INVOLV ED IN THIS MATTER. FURTHERMORE THE MATTER HAS ALREADY BEEN DECIDED BY THE DIVISION BENCH OF THIS HIGH COURT IN SIMILAR MATTER REPORTED IN 276 ITR PAGE 299 (CIT KO LKATA VS. H.M. EXPORTS LTD.). HENCE THIS APPEAL IS DISMISSED. IDENTICAL ISSUE AGAIN CAME BEFORE THE TRIBUNAL FOR ASSESSMENT YEARS 2000-01 AND 2001- 02 AND THE TRIBUNAL VIDE ORDERS DATED 12/6/2006 AND 20/10/2005 IN ITA NOS. 2614 & 2626/KOL/2005 AND ITA NO. 500 (KOL)/2005 RESPECTIVE LY FOLLOWING THE EARLIER ORDERS OF THE TRIBUNAL REFERRED TO ABOVE DISMISSED THE REVE NUES APPEAL AND THUS ALLOWED THE CLAIM OF THE ASSESSEE HOLDING THAT SUM RECEIVED FRO M SALE OF DEPB LICENCE HAS BEEN TRANSFERRED WHOLLY TO THE SUPPORTING MANUFACTURER A ND THIS AMOUNT SHOULD BE PROPORTIONATELY REDUCED WHILE CALCULATING DEDUCTION U/S. 80HHC OF THE ACT. FACTS AND CIRCUMSTANCES OF THE YEAR UNDER APPEAL BEING IDENTI CAL WE RESPECTFULLY FOLLOWING THE AFORESAID ORDER OF HONBLE CALCUTTA HIGH COURT AND ALSO THE ORDERS OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE UPHOLD THE ORDER OF THE C.I.T .(A) ON THIS ISSUE AND ANSWER GROUND 3 NOS. 1(A) TO (C) ABOVE OF THE REVENUES APPEAL AGAI NST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 4. NOW COMING TO THE SECOND ISSUE RAISED IN THIS A PPEAL BY THE REVENUE WHICH RELATES TO FREIGHT & INSURANCE TREATED BY THE A.O. AS PART OF INDIRECT COST ATTRIBUTABLE TO TRADING GOODS. THIS ISSUE ALSO IS COVERED BY THE E ARLIER ORDERS OF THE TRIBUNAL DATED 18/1/1999 AND 12/6/2006 FOR ASSESSMENT YEARS 1993-9 4 AND 2000-01 RESPECTIVELY. AS FACTS AND CIRCUMSTANCES IN THIS REGARD FOR THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THOSE OF ASSESSMENT YEARS 1993-94 AND 2000-01 THER EFORE RESPECTFULLY FOLLOWING THE ORDER OF HONBLE JURISDICTIONAL HIGH COURT AS ALSO ORDERS OF THE TRIBUNAL PASSED IN THE CASE OF THE ASSESSEE AS REFERRED TO ABOVE WE UPHO LD THE ORDER OF THE C.I.T.(A) ON THIS ISSUE ALSO DIRECTING THE A.O. TO EXCLUDE FREIGHT AN D INSURANCE CHARGES FOR THE PURPOSE OF CALCULATION OF EXPORT BENEFIT. WE ORDER ACCORDINGL Y. THIS GROUND OF THE REVENUE ALSO FAILS. 5. IN THE RESULT THE REVENUES APPEAL IS DISMISSE D. ORDER IS PRONOUNCED IN THE COURT ON 18.3.10. SD/- SD/- [D.K. TYAGI] [B.C. M EENA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18-3-2010 COPY FORWARDED TO : 1. MALHOTRA GLOBAL EXIMP P. LTD. P-12 NEW CIT ROAD KOLKATA-700 073. 2. D.C.I.T. C.C.-XXVII KOLKATA. (3) THE C.I.T.(A) - I KOLKATA. 4. CIT KOL- 5. THE DEPARTMENTAL REPRESENTATIVE ITAT KOL KATA. TRUE COPY BY OR DER [DKP] DY. REGISTRAR.