S. HARJINDER SINGH, MUMBAI v. ITO 8(1)(3), MUMBAI

ITA 2080/MUM/2012 | 2003-2004
Pronouncement Date: 14-11-2014 | Result: Allowed

Appeal Details

RSA Number 208019914 RSA 2012
Assessee PAN ACHPC1681Q
Bench Mumbai
Appeal Number ITA 2080/MUM/2012
Duration Of Justice 2 year(s) 7 month(s) 15 day(s)
Appellant S. HARJINDER SINGH, MUMBAI
Respondent ITO 8(1)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 14-11-2014
Date Of Final Hearing 16-10-2014
Next Hearing Date 16-10-2014
Assessment Year 2003-2004
Appeal Filed On 29-03-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI BEFORE : SHRI I.P.BANSAL JM & SHRI R.C.SHARMA A M ITA NO. 2080 / MUM/20 1 2 ( ASSESSMENT YEAR : 200 3 - 200 4 ) SHRI S. HARJINDER SINGH 22/99 KSHITIJ APARTMENT HILL ROAD BANDRA (WEST) MUMBAI - 400050 VS. ITO - 8(1)(3) MUMBAI PAN/GIR NO. : A CHPC 1681 Q ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI SASHI TULSIYAN /REVENUE BY : SHRI VIJAY KUMAR BORA DATE OF HEARING : 16 TH OCT . 201 4 DATE OF PRONOUNCE MENT : 14 TH NOV 201 4 O R D E R PER R.C.SHARMA ( A .M.) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 12 - 10 - 2011 FOR ASSESSMENT YEAR 2003 - 04 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S.254 OF THE I.T. ACT WHEREIN FOLLOWING GROUNDS HAVE BEEN TAKEN : - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO WHEREBY THE BENEFIT U/S 80HHC WAS RESTRICTED TO RS. 2 57 40 385/ - AS AG AINST TH E CLAIM OF THE APPELLANT AT RS.3 26 19 544/. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) SHOULD HAVE TAKEN INTO ACCOUNT ONLY THE PROFIT ON THE TRANSFER OF DEPB FOR THE PURPOSES OF EXCL USION FOR COMPUTING DEDUCTION U/ S. 80HHC AND NOT THE ENTIRE VALUE OF DEPB. 3. THAT WHILE COMPUTING THE DEDUCTION U/ S 80HHC(3) OF THE I T. ACT THE LD. CIT(A) SHOULD HAVE DEDUCTED THE COST OF DEPB FOR ARRIVING AT THE PROFIT ON TRANSFER OF DEPB. ITA NO. 2080/12 2 2 . RIVAL CONTENTIONS HAVE BEEN HEARD AND R ECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL HAVING PROPRIETORSHIP CONCERN NAMELY M/S G. INTERNATIONAL WHICH IS ENGAGED IN THE BUSINESS OF EXPORT OF FABRICS FURNISHING FABRICS SAREES ETC. THE ASSESSEE FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME AT RS. 3 32 83 687/ - AFTER CLAIMING DEDUCTION U/S.80HHC TO THE TUNE OF RS. 3 26 19 544/ - AND DEDUCTION U/S. 80 - I OF RS. 12 000/ - . HOWEVER THE AO RESTRICTED THE ADDITION U/S. 80HHC TO RS.2 57 40 385/ - . IN APPEAL FILED BEFORE THE CIT(A) T HE CIT(A) CONFIRMED THE ACTION OF THE AO BY RELYING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASED OF KALPATARU COLOURS & CHEMICALS REPORTED IN (2010) 328 ITR 451 . THE CONCERNED CA OF THE ASSESSEE ADVISED FOR NOT FILING SECOND APPEAL BEFORE TH E TRIBUNAL IN VIEW OF THE FACT THAT THE CIT(A) HAS DISMISSED THE ASSESSEES APPEAL BY RELYING THE DECISION OF THE HONBLE BOMBAY HIGH COURT. HOWEVER THE DECISION OF THE HONBLE BOMBAY HIGH COURT WAS SET ASIDE BY THE HONBLE SUPREME COURT IN THE CASE OF TO PMAN EXPORTS REPORTED IN (2012) 342 ITR 49 (SC) . AFTER PRONOUNCEMENT OF THE DECISION OF THE HONBLE SUPREME COURT ASSESSEE AGAIN APPROACHED FOR CONSULTATION FOR FILING SECOND APPEAL BEFORE THE TRIBUNAL AND HE WAS ADVISED TO FILE THE APPEAL. IN VIEW OF AL L THESE FACTS AND CIRCUMSTANCES THERE WAS DELAY OF 78 DAYS IN FILING THE APPEAL. 3 . LEARNED AR PLACED ON RECORD THE ORDER OF THE TRIBUNAL IN THE CASE OF DICITEX EMBROIDERY EXPORTS VS. ITO (OSD) DECIDED IN ITA NO. 5376 - 5378/MUM/2009 WHEREIN UNDER SIMILAR FACTS AND CIRCUMSTANCES DELAY IN FILING APPEAL WAS CONDONED. RELIANCE WAS ALSO PLACED BY LEARNED AR ON THE DECISION OF CHENNAI BENCH OF THE TRIBUNAL IN ITA NO. 2080/12 3 THE CASE OF SMT. VARANANDHINI RAGHAVAN VS. ITO (2008) 15 DTR (CHENNAI)(TRIB) 140 WHEREIN DELAY CAUSED DUE TO ADVISE OF CA WAS CONDONED. 4 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE INSTANT CASE ASSESSEE HAS DULY EXPLAINED THE DELAY ON ACCOUNT OF ADVISE RECEIVED FROM HIS CA FOR NOT FILING APPEAL DUE TO THE ORDER OF THE HONBLE BO MBAY HIGH COURT. HOWEVER AFTER THE ORDER OF THE HONBLE SUPREME COURT REVERSING THE DECISION OF THE BOMBAY HIGH COURT IT WAS CONSIDERED APPROPRIATE TO FILE APPEAL. ACCORDINGLY THE CA ADVISED THE ASSESSEE TO FILE APPEAL. IN THE INTEREST OF SUBSTANTIAL JU STICE THE DELAY CAUSED IN FILING APPEAL DESERVES TO BE CONDONED IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI: 167 ITR 471 WHEREIN FOLLOWING WAS THE OBSERVATION OF COURT : '3. THE LEGISLA TURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING SECTION 51 OF THE LIMITATION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON DE MERITS. THE EXPRESSION 'SUFFICIENT CAUSE' EMPLOYED BY THE L EGISLATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE THAT BEING THE LIFE - PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COURTS . IT IS COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAK ING A JUSTIFIABLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHERS COURTS IN THE HIERARCHY. THE HONBLE SUPREME COURT IN THE AFORESAID CASE FURTHER OBSERVED THAT : - ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. EVERY DAY'S DELAY MUST BE EXPLAINED ' DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY EVERY SECOND'S DELAY? THE DOCTRINE MUST BE APPLI ED ITA NO. 2080/12 4 IN A RATIONAL COMMON SENSE AND PRAGMATIC MANNER. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJ USTICE BEING DONE BECAUSE OF A NON - DELIBERATE DELAY. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY OR ON ACCOUNT OF CULPABLE NEGLIGENCE OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT HE R UNS A SERIOUS RISK. IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 5 . FURTHERMORE THE HON'BLE SUPREME COU RT IN THE CASE OF VEDABAI ALIA VAIJAYANATABAI BABURAO PATIL VS . SHANTARAM BABURAO PATIL 253 ITR 798 HELD THAT THE COURT HAS TO EXERCISE THE DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSTRUING THE EXPRESSION ' SUFFICIENT CAUSE' THE PRI NCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE. THE COURT HELD THAT THE EXPRESSION 'SUFFICIENT CAUSE' SHOULD RECEIVE LIBERAL CONSTRUCTION. 6 . IN VIEW OF THE ABOVE WE CONDONE THE DELAY OF 78 DAYS IN FILING THE APPEAL AND APPEAL IS BEING HEARD ON MERITS. 7 . ON MERITS ALSO LEARNED AR RELIED ON THE ORDER OF DICITEX EMBROIDERY EXPORTS (SUPRA) WHEREIN THE ISSUE WITH REGARD TO ALLOWING DEDUCTION OF DEPB ENTITLEMENT WAS RESTORED TO THE AO FOR DECIDING AFRESH IN THE LINE WITH THE DECISION OF IT AT SPECIAL BENCH IN THE CASE OF TOPMAN EXPORTS 318 ITR 87. 8 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND FROM THE RECORD THAT THE AO HAS COMPUTED DEDUCTION U/S.80HHC BY EXCLUDING DEPB PREMIUM HOWEVER THE AO DID NOT CONVINCE WITH THE EXCLUSION OF PR OFIT ON DEPB. THE CIT(A) HAS ALSO CONFIRMED THE ACTION OF THE AO BY RELYING ON ITA NO. 2080/12 5 THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF KALPATARU COLOURS & CHEMICALS (SUPRA) . THIS DECISION OF THE HONBLE HIGH COURT HAS BEEN REVERSED BY THE HONBLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS (SUPRA) . IT HAS BEEN HELD BY THE HONBLE SUPREME COURT THAT : - WHERE DEPB ACCRUES TO THE ASSESSEE IN ONE PREVIOUS YEAR AND IT TRANSFERS THE DEPB CERTIFICATE IN ANOTHER PREVIOUS YEAR ONLY NINETY PER CENT OF THE PROFITS ON THE TRANSFER OF THE DEPB COVERED UNDER CI. (IIID) OF S. 28 AND NOT NINETY PER CENT OF THE ENTIRE SALE VALUE INCLUDING THE FACE VALUE OF THE DEPB HAS TO BE EXCLUDED TO ARRIVE AT THE 'PROFITS OF THE BUSINESS' UNDER CI. (BAA) OF EXPLANATION TO S. 80HHC; WH ERE THE EXPORT TURNOVER OF AN ASSESSEE EXCEEDS RS. 10 CRORES IT DOES NOT GET THE BENEFIT OF ADDITION OF NINETY PER CENT OF EXPORT INCENTIVES UNDER CI. (IIID) OF S. 28 TO ITS EXPORT PROFITS BUT IT WOULD HAVE THE BENEFIT OF EXCLUSION OF A SMALLER FIGURE FR OM THE 'PROFITS OF THE BUSINESS' UNDER CI. (BAA) OF EXPLANATION TO S. 80HHC WHICH WOULD ULTIMATELY RESULT IN COMPUTATION OF A BIGGER EXPORT PROFIT . 9 . IN VIEW OF THE ABOVE DISCUSSION WE RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR DECIDING THE ISSU E AFRESH WITH REGARD TO COMPUTATION OF DEDUCTION U/S.80HHC ON ACCOUNT OF DEPB RECEIPTS IN TERMS OF DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS (SUPRA). 10 . IN THE RESULT APPEAL OF THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 / 1 1 / 201 4 . / 1 1 / 2014 SD/ - SD/ - ( ) ( I.P.BANSAL ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MU MBAI ; DATED 14 / 1 1 /2014 /PKM PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. ITA NO. 2080/12 6 / BY ORDER ( ASSTT. REGISTRAR) / ITAT MUMBAI 3. / THE CIT(A) MUMBAI. 4. / CIT 5. / DR ITAT MUMBAI 6. GUARD FILE. //TRUE COPY//