M/s. Koshambh Multitred Pvt. Ltd.,, Baroda v. The ACIT, Circle-1(2),, Baroda

ITA 3920/AHD/2007 | 2000-2001
Pronouncement Date: 09-02-2012 | Result: Partly Allowed

Appeal Details

RSA Number 392020514 RSA 2007
Assessee PAN AAACK7744A
Bench Ahmedabad
Appeal Number ITA 3920/AHD/2007
Duration Of Justice 4 year(s) 3 month(s) 17 day(s)
Appellant M/s. Koshambh Multitred Pvt. Ltd.,, Baroda
Respondent The ACIT, Circle-1(2),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 09-02-2012
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 09-02-2012
Date Of Final Hearing 17-01-2012
Next Hearing Date 17-01-2012
Assessment Year 2000-2001
Appeal Filed On 22-10-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI A. K. GARODIA ACCOUNTANT MEMBER I.T.A. NO.3920 3921 / AHD/2007 (ASSESSMENT YEAR 2000-01 & 2001-02) M/S. KOSHAMBH MULTITRED P. LTD. 507 CITI PLAZA DANDIA BAZAR BARODA VS. ACIT CIRCLE 1(2) BARODA PAN/GIR NO. : AAACK7744A (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI M G PATEL AR RESPONDENT BY: SHRI S S PARIDA CIT DR DATE OF HEARING: 17.01.2012 DATE OF PRONOUNCEMENT: 09.02.2012 O R D E R PER SHRI A. K. GARODIA AM:- BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AGAIN ST TWO SEPARATE ORDERS OF CIT(A)-I BARODA BOTH DATED 30.08.2007 FO R THE ASSESSMENT YEARS 2000-01 & 2001-02. FOR THE SAKE OF CONVENIEN CE BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS COMMON ORDER. 2. GROUND NO.1 OF APPEAL IN BOTH THESE YEARS IS REG ARDING VALIDITY OF REOPENING OF THE ASSESSMENT. THIS GROUND WAS NOT PRESSED BY LD. A.R. IN ASSESSMENT YEAR 2000-01. HENCE IN THAT YEAR T HIS GROUND IS REJECTED AS NOT PRESSED. FOR ASSESSMENT YEAR 2001-02 IT WA S SUBMITTED BY THE LD. A.R. THAT REOPENING IS NOT VALID IN VIEW OF THE JUD GEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF KELVINATOR (INDI A) LTD. AS REPORTED IN I.T.A.NO. 3920 & 3921 /AHD/2007 2 320 ITR 561(S.C.) BECAUSE REOPENING IS ON MERE CHAN GE OF OPINION. HE ALSO PLACED RELIANCE ON THE TRIBUNAL DECISION RENDE RED IN THE CASE OF ACIT VS HYCRON INDIA AS REPORTED IN 143 TTJ 226 (JD.). 3. AS AGAINST THIS IT IS SUBMITTED BY THE LD. D.R. OF THE REVENUES THAT THE REOPENING IS VALID AND HE SUPPORTED THE ORDER O F LD. CIT(A) ON THIS ISSUE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE JUDGEMENT CITED BY THE LD. A.R. OF THE ASSESSEE. IN ASSESSMENT YEAR 2001-02 THERE WAS SCRUTINY ASSESSMENT ALSO AS PER THE ASSESSMENT ORDER DATED 20.03.2003 BUT THE CASE WAS REOPENED BY ISSUI NG A NOTICE U/S. 148 ON 24.03.2005 I.E. WITHIN FOUR YEARS FROM THE END O F THE RELEVANT ASSESSMENT YEAR AND HENCE THE PROVISO TO SECTION 1 47 IS NOT APPLICABLE. AS PER THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF KELVINATOR (INDIA) (SUPRA) IT WAS HELD THAT THE A. O. HAS POWERS TO REOPEN THE ASSESSMENT PROVIDED THERE IS TANGIBLE MATERIAL ON WHICH HE CAME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. THE REASON FOR REOPENING ARE REPRODUCED BY THE A.O. IN THE ASSESSMENT ORDER ITSELF IN ASSESSMENT YEAR 2001-02 AND THE SAM E ARE REPRODUCED HEREIN BELOW FROM PAGES 1 & 2 OF THE ASSESSMENT ORD ER OF THAT YEAR:- IN VIEW OF JUDGMENT OF HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS A M MOOSA 272 ITR 29 WHEREIN IT HAS BEEN HEL D THAT IF RESULT OF COMPUTATION U/S 80HHC(3)(A) (B) OR (C) I S A LOSS THE PROVISO WOULD NOT OPERATE. HERE DURING THE YEAR N ET RESULT OF AGGREGATION WORKED OUT U/S 80HHC(3)(C)(I) & (II) IS A LOSS. HENCE CLAIM OF DEDUCTION ON INCENTIVE IS CLAIMED EXCESSIV E AMOUNTING TO RS.1 29 43 654/-. HENCE THE CLAIM OF EXCESSIVE DE DUCTION U/S 80HHC HAS RESULTED IN ESCAPEMENT OF INCOME TO THAT EXTENT. I.T.A.NO. 3920 & 3921 /AHD/2007 3 5. FROM THE ABOVE REASONS RECORDED BY THE A.O. FOR REOPENING OF THE ASSESSMENT IT IS SEEN THAT TANGIBLE MATERIAL WAS A VAILABLE BEFORE THE A.O. TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT BECAUSE IT IS NOTED BY THE A.O. THAT THE RE WAS LOSS BEFORE THE PROVISO TO SECTION 80HHC AND AS PER THE JUDGMENT OF HONBLE KERALA HIGH COURT RENDERED IN THE CASE OF CIT VS A M MOOSA AS REPORTED 272 ITR 29 IN CASE OF LOSS THE PROVISO TO SECTION 80H HC WILL NOT OPERATE. HENCE IN OUR CONSIDERED OPINION THIS JUDGEMENT OF HONBLE APEX COURT IS OF NO HELP TO THE ASSESSEE IN THE FACTS OF THE P RESENT CASE BECAUSE IN THE PRESENT CASE TANGIBLE MATERIAL WAS AVAILABLE BEFOR E THE A.O. TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. 6. REGARDING THE TRIBUNAL DECISION CITED BY THE LD. A.R. RENDERED IN THE CASE OF HYCRON INDIA (SUPRA) WE FIND THAT IN T HAT CASE THE ISSUE INVOLVED WAS AS TO WHETHER THE ASSESSEE WAS ELIGIBL E FOR DEDUCTION U/S 80- 0IA AND SECTION 80HHC BOTH OR WHETHER THE DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 80-IA WAS TO BE REDUCED FROM THE PROFI TS OF THE BUSINESS FOR COMPUTING DEDUCTION U/S 80HHC OF THE INCOME TAX ACT 1961. IT IS NOTED BY THE TRIBUNAL THAT THERE WAS DECISION IN FAVOUR O F THE ASSESSEE AND ON THIS BASIS IT IS HELD BY THE TRIBUNAL THAT IF THER E IS A DECISION IN FAVOUR OF THE ASSESSEE THEN THE SAME IS TO BE APPLIED AND IF THE A.O. HAS TAKEN ONE OF THE POSSIBLE VIEWS REOPENING IS NOT VALID BECAU SE IT IS MERE CHANGE OF OPINION. IT IS ALSO NOTED BY THE TRIBUNAL IN THAT CASE THAT FROM THE ASSESSMENT ORDER IT IS SEEN THAT THE ORDER WAS PASS ED BY THE A.O. AFTER DISCUSSION WITH THE ADDITIONAL CIT AND THE A.O. CON SIDERED ALL THE ASPECTS. UNDER THESE FACTS IT WAS HELD BY THE TRI BUNAL THAT REOPENING WAS ON MERE CHANGE OF OPINION BUT IN THE PRESENT CASE FACTS ARE DIFFERENT AND THEREFORE THIS TRIBUNAL DECISION IS ALSO OF NO HEL P TO THE ASSESSEE IN THE PRESENT CASE. GROUND NO.1 OF THE ASSESSEE IS REJEC TED IN THIS YEAR ALSO. I.T.A.NO. 3920 & 3921 /AHD/2007 4 7. REGARDING GROUND NO.2 IN ASSESSMENT YEAR 2000-01 WHICH IS REGARDING DISALLOWANCE OF RS.17 812/- IN RESPECT OF THE CONTRIBUTION TO PF IT WAS SUBMITTED THAT THIS ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF HONBLE APEX COURT REN DERED IN THE CASE OF CIT VS ALOM EXTRUSIONS LTD. AS REPORTED IN 319 ITR 306 (S.C.). BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF HONBLE APE X COURT THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. GROUND NO.2 IN ASSESSMENT YEAR 2000- 01 IS ALLOWED. 8. GROUND NO.3 &4 IN ASSESSMENT YEAR 2000-01 AND GR OUND NO.2 IN ASSESSMENT YEAR 2001-02 ARE IN CONNECTION WITH DISA LLOWANCE OF CLAIM OF THE ASSESSEE REGARDING DEDUCTION U/S 80HHC OF THE I NCOME TAX ACT 1961. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IN BOT H THESE YEARS IS ALSO IN RESPECT OF THE SAME ISSUE. 9. IT WAS SUBMITTED BY THE LD. A.R. THAT THIS ISSUE IS PENDING BEFORE HONBLE GUJARAT HIGH COURT REGARDING CONSTITUTIONAL VALIDITY OF SECTION 80HHC OF THE INCOME TAX ACT 1961. HE SUBMITTED TH AT LD. CIT(A) HAS DECIDED THIS ISSUE IN BOTH THE YEARS WITHOUT CONSID ERING THIS ASPECT AND HENCE THIS ISSUE SHOULD GO BACK TO THE FILE OF LD. CIT(A) FOR A FRESH DECISION IN BOTH THESE YEARS ON THE BASIS OF THE DE CISION OF HONBLE GUJARAT HIGH CORRUPT ON THIS ISSUE. LD. D.R. SUPPO RTED THE ORDERS OF AUTHORITIES BELOW IN BOTH THE YEARS. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW IN BOTH THE YEARS. WE FIND THAT THIS ISSUE IS PENDING BEFORE T HE HONBLE GUJARAT HIGH COURT REGARDING CONSTITUTIONAL VALIDITY OF SECTION 80HHC OF THE INCOME TAX ACT 1961. COPY OF THIS JUDGMENT OF HONBLE GU JARAT HIGH COURT IN VARIOUS SPECIAL CIVIL APPLICATIONS OF 2006 IS AVAI LABLE ON PAGES 66 TO 73 OF THE PAPER BOOK FILED BY THE ASSESSEE. AS PER TH IS JUDGMENT OF HONBLE I.T.A.NO. 3920 & 3921 /AHD/2007 5 GUJARAT HIGH COURT THE DEPARTMENT HAS BEEN BARRED FROM TAKING ANY COERCIVE ACTION AGAINST THE ASSESSEE AND THE DEPART MENT CAN COMPLETE THE ASSESSMENT ORDER BUT DEPARTMENT IS BARRED FROM GIVI NG ANY EFFECT TO SUCH ASSESSMENT ORDER. UNDER THESE FACTS WE FEEL THAT THIS ISSUE SHOULD BE DECIDED AFTER FINAL DECISION OF HONBLE GUJARAT HIG H COURT ON THIS ASPECT AND SINCE IT WAS NOT DONE BY LD. CIT(A) WE FEEL IT PROPER THAT THIS ISSUE SHOULD GO BACK TO THE FILE OF LD. CIT(A) FOR A FRES H DECISION IN THE LIGHT OF THE JUDGMENT OF HONBLE GUJARAT HIGH COURT TO BE PASSED REGARDING CONSTITUTIONAL VALIDITY OF SECTION 80HHC ON THIS AS PECT. WE THEREFORE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE IN BOTH THESE YEARS AND RESTORE THE MATTER BACK TO HIS FILE FOR A FRESH DEC ISION AS PER ABOVE DISCUSSION AFTER PROVIDING REASONABLE OPPORTUNITY O F BEING HEARD TO BOTH THE SIDES. 11. THE REMAINING GROUND REGARDING CHARGEABILITY OF INTEREST U/S 234A 234B 234C AND 234D OF THE INCOME TAX ACT 1961 WA S NOT PRESSED BY THE LD. A.R. OF THE ASSESSEE IN BOTH THESE YEARS AN D HENCE THE SAME IS REJECTED AS NOT PRESSED IN BOTH THESE YEARS. 12. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. 13. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (BHAVNESH SAINI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP I.T.A.NO. 3920 & 3921 /AHD/2007 6 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR AHMEDABAD BY ORDER 6. THE GUARD FILE AR ITAT AHMEDABAD 1. DATE OF DICTATION 6/2 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 7/2.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.8/2 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 9/2 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.9/2 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 09/02/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .