ACIT 17(3), MUMBAI v. B.S INTERNATIONAL (BOMBAY), MUMBAI

ITA 4184/MUM/2010 | 2001-2002
Pronouncement Date: 22-07-2011 | Result: Allowed

Appeal Details

RSA Number 418419914 RSA 2010
Assessee PAN AAAFB1725D
Bench Mumbai
Appeal Number ITA 4184/MUM/2010
Duration Of Justice 1 year(s) 1 month(s) 29 day(s)
Appellant ACIT 17(3), MUMBAI
Respondent B.S INTERNATIONAL (BOMBAY), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted H
Tribunal Order Date 22-07-2011
Date Of Final Hearing 13-07-2011
Next Hearing Date 13-07-2011
Assessment Year 2001-2002
Appeal Filed On 24-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI P.M.JAGTAP ACCOUNTANT MEMBER & SHRI R.S. PADVEKAR JUDICIAL MEMBER. I.T.A. NO. 4184/MUM/2010. ASSESS MENT YEAR : 2001-02. ASSTT. COMMISSIONER OF INCOME-TAX M/S B.S. INTERNATIONAL (BOMBAY) 17(3) MUMBAI. VS. 37 BARISTER NATH PAI MARG COTTON GREEN MUMBAI 400 033. PAN AAAFB 1725D. APPELLANT. RESPONDENT. APPELLANT BY : SHRI M.R.KUBAL. RESPO NDENT BY : MS. MRUGAKSHI K. JOSHI. O R D E R. PER P.M. JAGTAP A.M. : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF LEARNED CIT(APPEALS)-29 MUMBAI DATED 08-03-2010 WHEREBY HE DIRECTED THE AO TO ALLOW THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80HHC I N RESPECT OF DEPB RECEIPT. 2. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM WHICH IS ENGAGED IN THE BUSINESS OF EXPORT OF AUTOMOBILE LEAF SPRINGS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS ORIGINALLY FILED BY THE ASS ESSEE DECLARING A TOTAL INCOME OF RS.42 80 997/-. IN THE SAID RETURN DEDUCTION OF R S.1 72 45 987/- WAS CLAIMED BY THE ASSESSEE WHICH WAS INITIALLY ALLOWED BY THE AO. SINCE THE EXPORT TURNOVER OF THE ASSESSEE WAS MORE THAN RS.10 CRORES AND IT WAS NOT ENTITLED FOR DEDUCTION U/S 80HHC IN RESPECT OF DEPB RECEIPTS AS A RESULT OF AM ENDMENT MADE BY THE 2 ITA NO.4184/MUM/2010 ASSESSMENT YEAR : 2001-02. TAXATION LAWS (AMENDMENT) ACT 2005 THE AO REOPENE D THE ASSESSMENT BY ISSUING NOTICE U/S 148. IN THE ASSESSMENT COMPLETED U/S 143(3) READ WITH SECTION 147 BY AN ORDER DATED 25-11-2008 THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80HHC IN RESPECT OF DEPB RECEIPTS WAS DISALLOWED BY THE AO AS THE REQUIRED CONDITIONS TO GET THE SAID DEDUCTION WERE NOT SATIS FIED IN THE ASSESSEES CASE. THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80HHC ACCOR DINGLY WAS RESTRICTED BY THE AO TO RS.36 19 245/-. THE MATTER WAS CARRIED BEFORE THE LEARNED CIT(APPEALS) WHO DIRECTED THE AO TO ALLOW THE CLAIM OF THE ASSES SEE FOR DEDUCTION IN RESPECT OF DEPB RECEIPTS MAINLY RELYING ON THE ORDER OF THE MU MBAI SPECIAL BENCH OF ITAT IN THE CASE OF TOPMAN EXPORTS REPORTED IN 318 ITR (AT) 87 (MUM.)(SB) WHEREIN IT WAS HELD THAT ON SALE OF DEPB ENTITLEMENTS BOOK VALUE OF DEPB IS TAXABLE AS BUSINESS INCOME U/S 28(IIIB) AND DEDUCTION U/S 80HH C WILL BE AVAILABLE ON THIS AMOUNT IN THE YEAR OF ACCRUAL. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(APPEALS) ALLOWING THIS RELIEF TO THE ASSESSEE THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS AGREED BY THE LEARNED REPRES ENTATIVES OF BOTH THE SIDES THE ISSUE INVOLVED IN THIS APPEAL NOW STANDS SQUARELY C OVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. KA LPATARU COLOURS AND CHEMICALS REPORTED IN 328 ITR 451 WHEREIN IT IS HEL D THAT AMOUNT EQUIVALENT TO THE FACE VALUE OF DEPB AS WELL AS THE AMOUNT RECEIVED I N EXCESS OF DEPB CREDIT CONSTITUTE PROFITS OF BUSINESS U/S 28(IIID) AND NOT U/S 28(IIIB) AS HELD BY THE TRIBUNAL IN THE CASE OF TOPMAN EXPORTS (SUPRA). IT WAS HELD THAT WHERE THE ASSESSEE HAS AN EXPORT TURNOVER EXCEEDING RS.10 CRORES AND D OES NOT FULFILL THE CONDITIONS SET OUT IN THIRD PROVISO TO SECTION 80HHC(3) HE IS NOT ENTITLED TO A DEDUCTION U/S 80HHC ON THE AMOUNT RECEIVED ON TRANSFER OF DEPB. R ESPECTFULLY FOLLOWING THE 3 ITA NO.4184/MUM/2010 ASSESSMENT YEAR : 2001-02. DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F KALPATARU COLOUR AND CHEMICALS (SUPRA) WE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(APPEALS) ON THE ISSUE UNDER CONSIDERATION AND RESTORE THE MA TTER TO THE FILE OF THE AO FOR RECOMPUTING THE DEDUCTION AVAILABLE TO THE ASSESSEE U/S 80HHC IN THE LIGHT OF THE SAID DECISION OF HONBLE JURISDICTIONAL HIGH COURT. 4. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLO WED AS INDICATED ABOVE. . ORDER PRONOUNCED ON THIS 22 ND DAY OF JULY 2011. SD/- SD/- (R.S. PADVEKAR) (P.M. JAGTAP) JUDICIAL MEMBER A CCOUNTANT MEMBER MUMBAI DATED: 22 ND JULY 2011. WAKODE COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR H-BENCH. (TRUE COPY ) BY ORD ER ASSTT. R EGISTRAR ITAT MUMBAI BEN CHES MUM BAI.