HARIA EXPORTS LTD, MUMBAI v. DCIT WD 8(2), MUMBAI

ITA 2225/MUM/2009 | 2002-2003
Pronouncement Date: 25-03-2011 | Result: Partly Allowed

Appeal Details

RSA Number 222519914 RSA 2009
Assessee PAN THMAR2011S
Bench Mumbai
Appeal Number ITA 2225/MUM/2009
Duration Of Justice 1 year(s) 11 month(s) 15 day(s)
Appellant HARIA EXPORTS LTD, MUMBAI
Respondent DCIT WD 8(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 25-03-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted H
Tribunal Order Date 25-03-2011
Date Of Final Hearing 21-03-2011
Next Hearing Date 21-03-2011
Assessment Year 2002-2003
Appeal Filed On 09-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI BEFORE SHRI S V MEHROTRA ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO JUDICIAL MEMBER ITA NO.2225/MUM/2009 (ASSESSMENT YEAR 2002-03) HARIA EXPORTS LTD HARIA CENTTRE 8 SUBHASH ROAD VILE PARLE(E) MUMBAI-400057. PAN:AAACH2129L APPELLANT VS DCIT WARD 8(2) MUMBAI. RESPONDENT APPELLANT BY : SHRI N M PORWAL RESPONDENT BY : SHRI S T BIDURI O R D E R PER VIJAY PAL RAO JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 21.1.2009 OF CIT(A) FOR THE ASSESSMENT YEAR 2002-03. 2. THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN THIS APPEAL HOWEVER THE ONLY ISSUE ARISES FOR OUR CONSIDERATIO N AND ADJUDICATION IS WHETHER IN THE FACTS AND CIRCUMSTAN CES OF THE CASE THE CIT(A) IS JUSTIFIED IN CONFIRMING THE R EDUCTION OF DEDUCTION CLAIMED U/S 10B OF THE ACT FROM RS.92 24 893/- TO ITA NO.2225/MUM/2009 (ASSESSMENT YEAR 2002-03 2 RS.63 58 243/- BY ALLOCATING CERTAIN EXPENSES AGAIN ST THE 100% EXPORT ORIENTED UNIT WHICH WERE CLAIMED BY THE ASESEEE AGAINST THE NON-EXPORT ORIENTED UNIT. 2.1 THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING TRADING IMPORTING AND EXPORTING OF TEXTILES READY-MADE GARMENTS BLINDS AND OTHER CLOTHING MATE RIAL MANUFACTURED AT ITS NON-EXPORT ORIENTED UNIT AND EX PORT ORIENTED UNIT ELIGIBLE FOR DEDUCTION U/S 10B OF THE ACT. 2.2 THE AO NOTICED THAT THE ASSESSEE COMPANY HAS SH OWN THE FOLLOWING EXPENSES IN RESPECT OF THEIR NON-EOU S- COMMISSION AGAINST EXPORT INVOICE RS.1 00 97 285 QUOTA CHARGES RS.2 72 157 ECGC PREMIUM RS.6 67 660 TOTAL RS.1 10 37 102 2.3. THE AO ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THESE EXPENSES SHOULD NOT BE ALLOCATED IN PROPORTIONATE T O THE SALES OF THE TWO UNITS AND DEDUCTION U/S 10B BE RESTRICTE D ACCORDINGLY. THE ASSESSEE CONTENDED BEFORE THE AO THAT THESE EXPENSES WERE RELATING ONLY TO NON-EOU. THE AO CONCLUDED THAT THE ASSESSEE FAILED TO PRODUCE ANY E VIDENCE TO ITA NO.2225/MUM/2009 (ASSESSMENT YEAR 2002-03 3 PROVE THAT ALL THE EXPENSES ARE RELATING TO NON-EOU THEREFORE THE ENTIRE EXPENDITURE WAS ALLOCATED BETWEEN EOU AN D NON- EOU IN PROPORTIONATE TO THEIR TURNOVER. 2.4 ON APPEAL THE CIT(A) HAS RECORDED IN THE IMPU GNED ORDER THAT IN RESPECT OF THE EXPENSES RELATING T O THE QUOTA CHARGES AND ECGC PREMIUM THE COUNSEL FOR THE ASS ESSEE HAS AGREED ON THE DECISION OF THE AO AND THE ASSES SEE HAS DISPUTED ONLY THE AMOUNT OF COMMISSION AGAINST THE EXPORT INVOICE OF RS.1 00 97 285/- .ACCORDINGLY THE CI T(A) HAS CONFIRMED THE ALLOCATION OF THE EXPENDITURE MADE BY THE AO INCLUDING THE COMMISSION AGAINST THE EXPORT INVOICE ON THE GROUND THAT THE ASSESSEE FAILED TO FILE THE REQUIRE D DOCUMENTARY EVIDENCE BEFORE THE AO. 2.5 BEFORE US THE LEARNED AR OF THE ASSESSEE HAS A RGUED ONLY IN RESPECT OF COMMISSION AGAINST THE EXPORT IN VOICE AND QUOTA CHARGES. 2.6 THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS FILED A LETTER DATED 7.11.2007 BEFORE THE AO EXPLAINING TO THE QUERIES RAISED BY THE AO ALONG WITH THE DETAILS OF THE COMMISSION PAID DURING THE YEAR ON E XPORT INVOICE. HE TOOK US TO THE LETTER DATED 07.11.200 7 ALONG WITH THE DETAILS AT PAGES 25 TO 31 OF THE PAPER BOOK AND SUBMITTED ITA NO.2225/MUM/2009 (ASSESSMENT YEAR 2002-03 4 THAT THE ASSESSEE HAD GIVEN THE DETAILS OF THE COMM ISSION PAID WITH INVOICE NUMBER PARTY NAME AS WELL AS AMOUNT OF THE INVOICE AND COMMISSION PAID. THE LD. AR OF THE ASS ESSEE HAS FURTHER POINTED OUT THAT THE ASSESSEE IS SHOWING SE PARATE AND DISTINCT INVOICES IN RESPECT OF THE SALE OF THE PR ODUCT OF THE EOU AND NON-EOU. HE POINTED OUT FROM THE COPIES OF THE INVOICE AT PAGES 48 TO 56 OF THE PAPER BOOK AND SUB MITTED THAT INVOICE IN RESPECT OF NON-EOU BEARING THE NUMERICAL NUMBERS WHEREAS THE INVOICES PERTAINING TO THE EOU AT PA GES 72 TO 91 OF THE PAPER BOOK PRE-FIX 100% EOU. HE HAS FU RTHER POINTED OUT THAT ALL THE INVOICES OF THE 100% EOU ARE HAVING CERTIFICATE FROM THE CUSTOMS AND EXCISE OFFICE AT T HE BACK OF THE INVOICE. THUS THE LEARNED AR HAS POINTED OUT THAT THE DETAILS FILED BY THE ASESEEE BEFORE THE AO HAVE DU LY MENTIONED THE SPECIFIC INVOICE NUMBERS AND THE PART IES NAME WHICH ARE ONLY IN RESPECT OF NON-EOU AS CAN BE SEEN FROM DETAILS FILED BY THE ASSESSEE IN RESPECT OF THE COM MISSION PAID AND THE INVOICES OF THE NON EOU. THE LD. AR HAS F URTHER SUBMITTED THAT THE ASSESSEE HAS ALSO FILED THE LET TER DATED 6.12.2008 BEFORE THE CIT(A) EXPLAINING ALL THE DETA ILS BUT BOTH AO AS WELL AS THE CIT(A) FAILED TO CONSIDER AND APP RECIATE THE EVIDENCE AND RELEVANT MATERIAL PRODUCED BY THE ASSE SSEE TO ESTABLISH THE COMMISSION PAID ON THE INVOICES OF TH E NON- EOU. ITA NO.2225/MUM/2009 (ASSESSMENT YEAR 2002-03 5 2.7 ON THE OTHER HAND THE LD. DR HAS SUBMITTED THA T THE AO AS WELL AS THE CIT(A) HAS GIVEN A FINDING THAT THE ASSESSEE HAS FAILED TO PROVE THE CLAIM OF THE COMMISSION PA ID ONLY IN RESPECT OF EXPORT FROM NON-EOU AND THE SAME WAS NOT FROM EOU. HE HAS RELIED UPON THE ORDERS OF THE LOWER AU THORITIES. 2.8 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD. IT IS EVIDENT FROM THE DETAILS FILED BY T HE ASSESSEE BEFORE THE AO AS PLACED AT PAGES NO. 27 TO 31 ALON G WITH THE LETTER DATED 11.7.2007 THE ASSESSEE HAS GIVEN THE DETAILS OF INVOICE NO. PARTIES NAME AMOUNT OF INVOICE AND CO MMISSION PAID IN RESPECT OF THE EXPORT ON WHICH THE COMMISSI ON WAS PAID. WE FIND THAT THE INVOICE NUMBER AND PARTIES NAMES GIVEN IN THE DETAILS FILED BY THE ASESEEE ARE RELAT ING ONLY TO THE INVOICE OF NON-EOU. IT IS ALSO CLEAR FROM THE INVOICE OF NON-EOU AND EOU THAT THE INVOICE OF THE NON-EOU BEA RS ONLY NUMERICAL NUMBERS WHEREAS THE INVOICE OF THE EOU BEARING INVOICE NUMBER IS PRE-FIX WITH THE 100% EOU. FURTH ER THE COMMISSION PAID TO THE PARTIES ARE NOT IN CASE OF EOU AS IT IS CLEAR FROM THE INVOICE AND THE OTHER RECORD. WHEN T HE INVOICES OF THE EOU ARE ALTOGETHER DISTINCT AND SEPARATE AND THE DETAILS OF THE PARTIES AND THE INVOICES IN RESPECT OF WHI CH THE COMMISSION WAS PAID ARE NOT PERTAINING TO THE EOU THEN THERE IS NO JUSTIFICATION IN ALLOCATING THE COMMIS SION PAID TO ITA NO.2225/MUM/2009 (ASSESSMENT YEAR 2002-03 6 THE 100% EOU. ACCORDINGLY WE SET ASIDE THE ORD ERS OF THE LOWER AUTHORITIES TO THE EXTENT OF ALLOCATION OF T HE EXPENDITURE OF COMMISSION PAID AGAINST THE EXPORT INVOICE WHILE COMPUTING THE DEDUCTION U/S 10B. 2.9 AS REGARDS THE ALLOCATION OF QUOTA CHARGES IS CONCERNED. AFTER HEARING BOTH THE PARTIES AND GOING THOUGH TH E RECORD. WE FIND THAT THE ASSESSEE HAS NOT PRODUCED ANY EV IDENCE TO ESTABLISH THE CLAIM THAT THE QUOTA CHARGES ARE PERT AINING TO THE NON-EOU. EVEN OTHERWISE THE ASSESSEE ACCEPTED THE PROPORTIONATE ALLOCATION OF THIS EXPENDITURE BEFORE THE CIT(A) THE RELEVANT PORTION OF THE CIT(A)S ORDER IS REPR ODUCED BELOW : 1.6 I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE. AS THERE WAS NO REASONABLE CAUSE BEFOR E THE APPELLANT FOR NOT SUBMITTING THESE DOCUMENTS BEFORE THE AO AS THESE WERE SPECIFICALLY ASKED DURI NG THE ASSESSMENT PROCEEDINGS. RELYING ON THIS DECISIO N OF THE HON. COURT THAT THE APPELLANT HAS NO RIGHT T O PRODUCE ADDITIONAL EVIDENCE ARE NOT ADMITTED AND HEREBY REJECTED. THE DECISION RELIED UPON BY THE APPELLANT IS DISTINGUISHABLE ON FACTS ON WHICH THE HON. COURT HAS HELD THAT IF THE APPELLATE AUTHORITIES RE QUIRE ADDITIONAL EVIDENCE TO DISPOSE OFF A CERTAIN ISSU E THEN THEY CAN ADMIT ADDITIONAL EVIDENCE. FURTHER T HE FACTS OF THIS CASE ARE DIFFERENT THAT THE AO HAS GI VEN OPPORTUNITY TO SUBMIT THE EVIDENCE DURING THE ASSESSMENT PROCEEDINGS BUT THE APPELLANT HAS NOT SUBMITTED WITHOUT ANY REASONABLE CAUSE. ON MERITS I HAVE CONSIDERED THE FACTS THAT THE EXPENDITURE RELATING TO QUOTA CHARGES AND ECGC PREMIUM O F RS.2 72 157/- AND RS.6 67 660/- RESPECTIVELY THE COUNSEL FOR THE APPELLANT HAS AGREED ON THE DECISIO N ITA NO.2225/MUM/2009 (ASSESSMENT YEAR 2002-03 7 OF THE AO AND HE HAS DISPUTED ONLY THE AMOUNT OF COMMISSION AGAINST EXPORT INVOICE OF RS.1 00 97 285 . SINCE THE APPELLANT HAS FAILED TO FILE THE REQUIRED EVIDENCES BEFORE THE AO THEREFORE I AM OF THE VI EW THAT THE AO HAS RIGHTLY RECOMPUTED THE ALLOCATION OF THESE EXPENSES PROPORTIONATELY ON THE BASIS OF TURNOVER OF EXPORT AND DOMESTIC SALE 2.10 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES O F THE CASE WE DO NOT FIND ANY MERIT OR SUBSTANCE IN THE CLAIM OF THE ASESEEE WITH RESPECT OF THE QUOTA CHARGES ALLOCATIO N. ACCORDINGLY WE CONFIRM AND UPHOLD THE ORDERS OF TH E LOWER AUTHORITIES QUA ALLOCATION OF QUOTA CHARGES. 3. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25TH MAR 2011 SD SD (S V MEHROTRA ) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI DATED 25 TH MAR 2011 SRL:23311 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI