ANIL IMPEX, MUMBAI v. ITO 14(2)(1), MUMBAI

ITA 2088/MUM/2009 | 2000-2001
Pronouncement Date: 19-04-2010 | Result: Dismissed

Appeal Details

RSA Number 208819914 RSA 2009
Assessee PAN AAAFA7032L
Bench Mumbai
Appeal Number ITA 2088/MUM/2009
Duration Of Justice 1 year(s) 15 day(s)
Appellant ANIL IMPEX, MUMBAI
Respondent ITO 14(2)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 19-04-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 19-04-2010
Date Of Final Hearing 15-04-2010
Next Hearing Date 15-04-2010
Assessment Year 2000-2001
Appeal Filed On 03-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI. BEFORE SHRI R.V. EASWAR SENIOR VICE-PRESIDENT AND SHRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER. I.T.A. NO. 2 088/MUM/2009. ASSESSMENT YEAR : 2000-01. M/S ANIL IMPEX THE INCOME TAX OFFICER 27/31 OLD HANUMAN LANE VS. 14 (2)(1) MUMBAI. BOTWALA BLDG. 3 RD FLOOR KALBADEVI ROAD MUMBAI 400 002. PAN : AAAFA7032L APPELLANT RESPONDENT APPELLANT BY : SHRI MADHUSUDAN SARAF. RESPONDENT BY : SHRI VIKRAM GAUR. O R D E R PER J. SUDHAKAR REDDY A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE CIT(APPEALS)-XIV MUMBAI DATED 15-01-2 009 ON THE FOLLOWING GROUND : THE LEARNED CIT(A) ERRED IN ENHANCING THE ASSESSM ENT. HE FURTHER ERRED IN TREATING THE INTEREST INCOME OTHER THAN A BUSINESS INCOME AND ALLOWING ONLY 90% THEREOF FOR DEDUCTION U/S 80HHC. 2. THE SOLE ISSUE FOR OUR CONSIDERATION IS THE COM PUTATION OF RELIEF U/S 80HHC ON THE INTEREST INCOME RECEIVED BY THE ASSESSEE. THE ASSESSEE HAS EARNED INTEREST OF RS.7 86 644/-. THE FIRST APPELLATE AUTHORITY OBSERVED THAT THE INCOME TAX APPELLATE TRIBUNAL IN ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR 1999-2000 VIDE ITS ORDER DATED 20-04-2006 2 OBSERVED THAT THE BENEFIT OF NETTING OF INTEREST IN COME CAN BE ALLOWED TO THE ASSESSEE ONLY IN CASE WHERE THE NEXUS IS PROVE D. ON THE GROUND THAT THE ASSESSEE HAS NOT PROVED THE NEXUS THE FIRST AP PELLATE AUTHORITY DIRECTED TO EXCLUDE 90% OF THE TOTAL INTEREST INCOM E FROM THE PROFITS OF BUSINESS WHILE COMPUTING DEDUCTION U/S 80HHC IN VIE W OF CLAUSE (BAA) OF EXPLANATION TO SECTION 80HHC. AGGRIEVED THE ASS ESSEE FILED THIS APPEAL. 3. THE LEARNED COUNSEL FOR THE ASSESSEE MR. MADHUS UDAN SARAF SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF TH E ASSESSEE BY THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN ASS ESSEES OWN CASE FOR THE ASSESSMENT YEARS 995-96 AND 1996-97 IN ITA NO. 5751 & 5721/MUM/2000 ORDER DATED 16 TH OCT. 2001 AND THAT THE AO IN PURSUANCE OF THIS TRIBUNAL ORDER HAS GRANTED RELIEF TO THE AS SESSEE. 4. THE LEARNED DR ON THE OTHER HAND SUBMITTED TH AT THE ISSUE NOW STANDS COVERED AGAINST THE ASSESSEE BY THE JUDG MENT OF THE HONBLE BOMBAY HIGH COURT IN INCOME TAX APPEAL NO. 200 OF 2 009 IN THE CASE OF CIT VS. ASIAN STAR CO. LTD. ORDER DATED 18/19 TH MARCH 2010 WHERE THE HIGH COURT HELD AS FOLLOWS : (I) EXPLANATION (BAA) TO S. 80HHC REQUIRES THAT NINETY PER CENT OF RECEIPTS BY WAY OF BROKERAGE COMMISSION CHARGES OR ANY OTHER RECEIPT OF A SIMILAR NATURE HAVE TO BE REDUCED FROM THE PROFITS. THE REASON WHY ITEM ETC HAVE TO BE EXCLUDED IS BECAUSE THEY DO NOT POSSESS ANY NEXUS WITH EXPORT TURNOVER AND THAT THE PROFITS WOULD RESULT IN A DISTORTION OF THE FIGURE OF EXPORT PROF ITS. HOWEVER AS SOME EXPENDITURE INCURRED IN EARNING THESE INCOMES AN ADHOC DEDUCTION OF TEN PER CENT FROM SUCH INCOME IS ALLOW ED. (II) ONCE PARLIAMENT HAS LEGISLATED BOTH IN REGARD TO THE NATURE OF THE EXCLUSION AND THE EXTENT IT WOULD NOT BE OPEN TO THE COURT TO ORDER OTHERWISE BY REWRITING THE LEGISLATIVE PROVIS ION INTERPRETATION IS TO FIND OUT THE TRUE INTENT OF A LEGISLATIVE PRO VISION AND IT IS 3 CLEARLY NOT OPEN TO THE COURT SUBSTITUTING A FORMUL A OR PROVISION OTHER THAN WHAT HAS BEEN LEGISLATED BY PARLIAMENT. IT IS NOT SOMETHING MORE THAN THE 10% STATUTORILY PROVIDED SH OULD ALSO BE ALLOWED. IN SHRI RAM HONDA 1 ITR 475 THE DELHI HIGH COURT HAS NOT ADEQUATELY EMPHASIZED THE ENTIRE RATIONALE FOR CONFINING THE DEDUCTION OF NINETY PER CENT OF THE EXCLUDIBLE RECE IPTS AND IT CANNOT BE FOLLOWED. 5. HEARD THE RIVAL CONTENTIONS. RESPECTFULLY FOLLO WING THE JUDGMENT OF HONBLE BOMBAY HIGH COURT (SUPRA) WE U PHOLD THE ORDER OF THE CIT(APPEALS) THOUGH FOR DIFFERENT REASONS AND DISMISS THIS APPEAL OF THE ASSESSEE. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON THIS 19 TH DAY OF APRIL 2010. SD/- SD/- (R.V. EASWAR) (J. SUDHAKAR REDDY) SENIOR VICE-PRESIDENT. ACCOUNTANT MEMBER. MUMBAI DATED : 19 TH APRIL 2010. COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR A-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR ITAT MUMBAI BENCHES MUMBAI. WAKODE