SYSTEMATIC EXPORTS, MUMBAI v. ACIT 20(3), MUMBAI

ITA 2938/MUM/2010 | 2001-2002
Pronouncement Date: 09-09-2011 | Result: Allowed

Appeal Details

RSA Number 293819914 RSA 2010
Assessee PAN AAAFS6049M
Bench Mumbai
Appeal Number ITA 2938/MUM/2010
Duration Of Justice 1 year(s) 4 month(s) 26 day(s)
Appellant SYSTEMATIC EXPORTS, MUMBAI
Respondent ACIT 20(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 09-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted J
Tribunal Order Date 09-09-2011
Date Of Final Hearing 06-09-2011
Next Hearing Date 06-09-2011
Assessment Year 2001-2002
Appeal Filed On 13-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J MUMBAI BEFORE S/SHRI D.K.AGARWAL (JM) AND RAJENDRA SINGH(A .M ) ITA NO.2938/MUM/2010 (ASSESSMENT YEAR : 2001-02) SYSTEMATIC EXPORTS PLOT NO.6 F-11 &12 SEEPZ CENTRAL ROAD MIDC ANDHERI (E) MUMBAI-400093 PAN: AAAFS6049M ASSISTANT COMMISSIONER OF INCOME TAX 20(3) MUMBAI. APPELLANT V/S RESPONDENT DATE OF HEARING : 6.9.2011 DATE OF PRONOUNCEMENT : 9.9.2011 APPELLANT BY : SHRI RISHABH CHA TURVEDI RESPONDENT BY : SHRI D.S.SUNDER O R D E R PER D.K.AGARWAL (JM) THIS APPEAL FOR THE ASSESSMENT YEAR 2001-02 PREFER RED BY THE ASSESSEE IS DIRECTED AGAINST THE COMMON ORD ER DATED 21.1.2010 PASSED BY THE LD. CIT(A) FOR THE AS SESSMENT YEARS 2000-01 AND 2001-02. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE FIRM IS ENGAGED IN THE BUSINESS AS EXPORTER OF RE ADYMADE GARMENTS FILED RETURN DECLARING TOTAL INCOME AT R S.NIL. ITA NO.2938/MUM/2010 (ASSESSMENT YEAR : 2001-02) 2 HOWEVER THE ASSESSMENT WAS COMPLETED DETERMINING TOTAL INCOME AT RS.1 12 64 570/-. ON APPEAL THE LD. CIT (A) PARTLY ALLOWED THE APPEAL THEREAFTER THE AO AFTER GIVING EFFECT TO THE ORDER OF THE LD.CIT(A) COMPUTED THE ASSESSEE S REVISED INCOME AT RS.1 11 06 660/-. THE ASSESSEE AND REV ENUE BOTH PREFERRED THE SECOND APPEAL BEFORE THE ITAT. THE ITAT VIDE ITS ORDER DATED 18.8.2006 SET ASIDE THE ASSESSMENT TO THE FILE OF THE AO WITH CERTAIN DIREC TIONS WHICH INTERALIA INCLUDED TO ALLOW DEDUCTION U/S 80IB AND U/S 80HHC. PURSUANT TO THE ORDER OF THE TRIBUNAL THE AO COM PUTED DEDUCTION U/S 80IB AT RS.60 28 404/- AND U/S 80HHC AT RS.3 86 37 106/- AGGREGATING TO RS.4 46 65 510/- AN D COMPLETED THE ASSESSMENT AT AN INCOME OF RS.73 54 3 40/- VIDE ORDER DATED 31.12.2007 PASSED U/S 143(3) R.W .S. 253 OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). ON APPEAL THE LD. CIT(A) WITH REGARD TO THE DEDUCTION U/S 80I B AND 80HHC WHILE FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S GITANJALI CHEMICALS (P) LTD. V/S ITO IN ITA NO.1385/MUM/2004 UPHELD THE ORDER OF THE AO ON THI S ACCOUNT. 3. BEING AGGRIEVED BY THE ORDER OF THE LD.CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US TAKING THE FOLLOWIN G GROUNDS OF APPEAL : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASES AN D IN LAW THE LEARNED COMMISSIONER OF INCOME TAX ITA NO.2938/MUM/2010 (ASSESSMENT YEAR : 2001-02) 3 (APPEAL)-XXXI MUMBAI [CIT(A)] HAS ERRED IN UPHOLD ING THE ORDER OF THE AO WHO HAD ERRED IN APPLYING THE DIRECTIONS GIVEN BY HONBLE ITAT VIDE ITS ORDER DA TED 18 AUGUST 2006 THAT THE DEDUCTIONS UNDER SECTION 80- IB AND 80-HHC WERE TO BE CALCULATED INDEPENDENTLY ON T HE ELIGIBLE PROFITS OF THE APPELLANT AND INSTEAD CAL CULATED DEDUCTION U/S 80HHC ON THE RESIDUAL PROFITS AFTER REDUCING THEREFROM AMOUNT OF DEDUCTION U/S 80IB 4. AT THE TIME OF HEARING BOTH THE PARTIES HAVE AG REED THAT THIS ISSUE IS COVERED BY THE DECISION OF THE H ONBLE JURISDICTIONAL HIGH COURT THEREFORE THE ISSUE MA Y BE DECIDED ACCORDINGLY. 5. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON REC ORD WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVOU R OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF ASSOCIATED CAPSULES P. LTD. V /S DCIT (2011) 332 ITR 42 (BOM.) WHEREIN IT HAS BEEN HELD BY THEIR LORDSHIPS THAT (HEADNOTE PAGES 42 &43): SECTION 80-IA(9) OF THE INCOME-TAX ACT 1961 PROV IDES THAT THE DEDUCTION TO THE EXTENT OF PROFITS ALLOWED UNDER SECTION 80-IA(1) WOULD NOT BE ALLOWED UNDER ANY OTH ER PROVISIONS. IT MEANS THAT THE DEDUCTIONS ALLOWABLE UNDER OTHER PROVISIONS UNDER HEADING C OF CHAPTER VI-A WO ULD BE ALLOWED TO THE EXTENT OF PROFITS AS REDUCED BY T HE PROFITS ALLOWED UNDER SECTION 80-IA(1). THE SECOND PART OF SECTION 80-IA(9) DOES NOT REFER TO THE METHOD OF COMPUTING DEDUCTION UNDER OTHER PROVISIONS UNDER HEADING C OF CHAPTER VI-A. THUS SECTION 80-IA(9) S EEKS TO CURTAIL THE ALLOWANCE OF DEDUCTION AND NOT THE COMPUTATION OF DEDUCTION UNDER ANY OTHER PROVISIONS UNDER HEADING C OF CHAPTER VI-A OF THE ACT. THE LEGISLATURE HAS USED SPECIFIC WORDS WHENEVER IT INT ENDS TO AFFECT THE COMPUTATION OF DEDUCTION. AS THE WORD S ITA NO.2938/MUM/2010 (ASSESSMENT YEAR : 2001-02) 4 USED IN SECTION 80-IA(9) RELATE TO ALLOWANCE AND NO T COMPUTATION OF DEDUCTION IT CANNOT BE INFERRED THA T SECTION 80-IA(9) WAS INSERTED WITH A VIEW TO AFFECT COMPUTATION OF DEDUCTION UNDER ANY OTHER PROVISIONS UNDER HEADING C OF CHAPTER VI-A. SINCE SECTION 80-I A(9) USES THE WORDS 'SHALL NOT BE ALLOWED' THE SECTION SEEKS TO RESTRICT THE ALLOWANCE OF DEDUCTION AND NOT THE COMPUTATION OF DEDUCTION UNDER ANY OTHER SECTIONS U NDER HEADING C OF CHAPTER VI-A OF THE ACT. THEREFORE THE REASONABLE CONSTRUCTION OF SECTION 80-IA(9) WOULD B E THAT WHERE THE DEDUCTION IS ALLOWED UNDER SECTION 80-IA( 1) THEN THE DEDUCTION COMPUTED UNDER OTHER PROVISIONS UNDER HEADING C OF CHAPTER VI-A HAVE TO BE RESTRICT ED TO THE PROFITS OF THE BUSINESS THAT REMAIN AFTER EXCLU DING THE PROFITS ALLOWED AS DEDUCTION UNDER SECTION 80-IA S O THAT THE TOTAL DEDUCTION ALLOWED UNDER THE HEADING C OF CHAPTER VI-A DOES NOT EXCEED THE PROFITS OF THE BUSINESS. HELD _ ACCORDINGLY THAT THE TRIBUNAL WAS NOT RIGHT IN HOLDING THAT SECTION 80-IA(9) OF THE ACT MANDATES THAT THE AMOUNT OF PROFITS ALLOWED AS DEDUCTION UNDER SE CTION 80-IA(1) OF THE ACT HAVE TO BE REDUCED FROM THE PRO FITS OF THE BUSINESS OF THE UNDERTAKING WHILE COMPUTING DEDUCTION UNDER ANY OTHER PROVISIONS UNDER HEADING C IN CHAPTER VI-A OF THE ACT. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROU GHT ON RECORD BY THE REVENUE AND KEEPING IN VIEW THAT TH E DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IS BINDING WE ARE OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE FO R DEDUCTION FOR BOTH SECTIONS 80IB AND 80HHC. THE AO IS DIREC TED TO ALLOW THE SAME AS PER DECISION OF THE HONBLE JURIS DICTIONAL HIGH COURT (SUPRA). THE GROUND TAKEN BY THE ASSESSE E IS THEREFORE ALLOWED. ITA NO.2938/MUM/2010 (ASSESSMENT YEAR : 2001-02) 5 6. IN THE RESULT THE ASSESSEES APPEAL STANDS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 9TH SEPTEMBER 2011. SD SD (RAJENDRA SINGH) (D. K.AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 9TH SEPTEMBER 2011 SRL: COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI