ACIT, JODHPUR v. M/s. Traditional Handicrafts Centre, JODHPUR

ITA 427/JODH/2012 | 2003-2004
Pronouncement Date: 15-07-2013 | Result: Dismissed

Appeal Details

RSA Number 42723314 RSA 2012
Bench Jodhpur
Appeal Number ITA 427/JODH/2012
Duration Of Justice 7 month(s) 1 day(s)
Appellant ACIT, JODHPUR
Respondent M/s. Traditional Handicrafts Centre, JODHPUR
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 15-07-2013
Date Of Final Hearing 11-07-2013
Next Hearing Date 11-07-2013
Assessment Year 2003-2004
Appeal Filed On 14-12-2012
Judgment Text
[1] IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI N. K. SAINI ACCOUNTANT MEMBER I.T.A. NO.427/JODH/2012 ASSESSMENT YEAR:2003-04 A.C.I.T.-1 VS. M/S TRADITIONAL HANDICRAFTS CENTRE JODHPUR. 2-B NEAR CIRCUIT HOUSE JODHPUR. PAN:AAFT5092P (APPELLANT) (RESPONDENT) C.O. NO.01/JODH/2013 (IN I.T.A. NO.427/JODH/2012) ASSESSMENT YEAR:2003-04 M/S TRADITIONAL HANDICRAFTS VS. A.C.I.T.-1 CENTRE JODHPUR. JODHPUR. (OBJECTOR) (RESPONDENT) I.T.A. NO.356/JODH/2013 ASSESSMENT YEAR:2009-10 A.C.I.T.-1 VS. M/S TRADITIONAL HANDICRAFTS CENTRE JODHPUR. 2-B NEAR CIRCUIT HOUSE JODHPUR. PAN:AAFT5092P (APPELLANT) (RESPONDENT) REVENUE BY : SHRI G. R. KOKANI D.R. ASSESSEE BY : SHRI HAR NARAYAN RATHI A.R. DATE OF HEARING : 11/07/2013 DATE OF PRONOUNCEMENT : 15/07/2013 [2] ORDER PER BENCH: THE APPEAL BY THE DEPARTMENT AND THE CROSS OBJECTI ON BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2003-2004 ARE DIRE CTED AGAINST THE ORDER DATED 15/10/2012 WHILE THE APPEAL BY THE DEPARTMENT FOR THE ASSESSMENT YEAR 2009-10 IS DIRECTED AGAINST THE ORDER DATED 19 /03/2013 OF CIT(A) JODHPUR. 2. FIRST WE WILL DEAL WITH THE CROSS OBJECTION OF T HE ASSESSEE IN C.O.NO.01/JODH/2013 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT LEARNED CIT(A) JODHPUR HAS ERRED IN LAW A S WELL AS ON THE FACTS BY SUSTAINING REOPENING OF THE ASSESSM ENT U/S 147 OF THE I.T. ACT 1961. 2. THAT LEARNED CIT(A) JODHPUR HAS ERRED IN LAW AS WELL AS ON THE FACTS BY SUSTAINING THE DISALLOWANCE OF DEDU CTION U/S 80IB ON THE AMOUNT OF DEPB/DDB. 3. GROUND NO. 1 IS THE LEGAL GROUND VIDE WHICH REOP ENING OF THE ASSESSMENT U/S 147 OF THE I.T. ACT 1961 (HEREINAFT ER REFERRED TO AS THE ACT) HAS BEEN CHALLENGED. 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE AS SESSEE FILED THE RETURN OF INCOME ON 27/10/2003 DECLARING TOTAL INCOME AT R S.22 17 753/-. HOWEVER THE ASSESSMENT WAS FRAMED VIDE ORDER DATED 30/01/2006 AT A TOTAL INCOME OF RS.23 36 383/- U/S 143(3) OF THE AC T. THEREAFTER THE ASSESSING OFFICER ISSUED THE NOTICE U/S 148 OF THE ACT ON 26/03/2010 BY RECORDING THE FOLLOWING REASONS: [3] (I) IN VIEW OF DECISION OF HON'BLE SUPREME COURT I N THE CASE LIBERTY INDIA RECORDED IN 28 DTR 73 THE ASSES SING OFFICER HAS REASON TO BELIEVE THAT DDB & DEPB AMOUNTING TO RS.1 63 623/- WAS WRONGLY ALLOWED. (II) THE ASSESSEE WAS ALLOWED EXCESS DEDUCTION U/S 80HHC TO THE EXTENT OF RS.8 89 400/-. THE ASSESSEE OBJECTED BEFORE THE ASSESSING OFFICER REGARDING INITIATION OF PROCEEDINGS ON THE ISSUE OF DDB AND DEPB. IT WAS ALSO STRESSED UPON THE FACT THAT SECTION 80HHC ITSELF PROVIDES DEDUCTION W ITH SPECIFIC CALCULATION FOR THE INCENTIVES REFERRED IN SECTION 28(IIIC) AND SECTION 28(IIID) I.E. DUTY DRAW BACK AND DEPB RESPECTIVELY SO THERE WAS NO CA SE OF ANY ESCAPEMENT. HOWEVER THE CONTENTION OF THE ASSESSE E DID NOT FIND FAVOUR FROM THE ASSESSING OFFICER. 5. THE ASSESSEE CARRIED THE MATTER TO LEARNED CIT( A) AND SUBMITTED THAT IT WAS MERE CHANGE OF THE OPINION AND NOTHING ESCAPED ASSE SSMENT AS DEDUCTION U/S 80HHC WAS ALLOWED BY THE ASSESSING OF FICER AFTER INQUIRY DURING THE ORIGINAL ASSESSMENT U/S 143(3) OF THE AC T AND EVEN IN THE REASSESSMENT IT WAS ACCEPTED BY THE ASSESSING OFFIC ER THAT ON THE ISSUES RECORDED IN THE REASONS TO BELIEVE THAT THERE WAS E SCAPEMENT OF INCOME HAD BEEN DROPPED AND NO ADDITION WAS MADE ON THOSE ISSUES. IT WAS FURTHER STATED THAT THE ASSESSMENT COULD NOT BE REO PENED SINCE NO FRESH INFORMATION HAD COME INTO POSSESSION OF THE ASSESSI NG OFFICER. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: (I) KAMAL CHAND VS. ITO (1981)128 ITR 290 (MP) (II) FLUORESCENT FIXTURES (PVT.) LTD. VS. ITO 34 SOT 48 (MUM.) (III) CIT VS. JET AIRWAYS (I) LTD. REPORTED IN 195 TAXMAN 117 (BOM) [4] IT WAS FURTHER STATED THAT THE ASSESSING OFFICER AC CEPTED THE CONTENTION OF THE ASSESSEE AND HELD THAT THE INCOME FOR WHICH HE HAD INITIALLY FORMED A REASON TO BELIEVE THAT IT HAD ESCAPED ASSESSMENT H AD AS A MATTER OF FACT NOT ESCAPED ASSESSMENT SO IT WAS NOT OPEN TO HIM T O INDEPENDENTLY ASSESS SOME OTHER INCOME. 5.1 THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMI SSIONS OF THE ASSESSEE CONFIRMED THE ACTION OF THE ASSESSING OFF ICER BY OBSERVING IN PARA 3.3 TO 3.3.4 OF THE IMPUGNED ORDER WHICH READ AS U NDER: 3.3. I HAVE CONSIDERED THE ORDER OF THE ASSESSING OFFICER AND SUBMISSION OF APPELLANT AND I FIND THAT THE REASONS RECORDED BY THE ASSESSING OFFICER AND THE MATERIALS ON THE B ASIS OF WHICH THE ASSESSING OFFICER FORMED HIS BELIEF THAT CERTAIN INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT REQ UIRING INITIATION OF PROCEEDINGS U/S 147 I FIND THAT THE ASSESSING OFFICER HAD JUSTIFIABLY ARRIVED AT HIS CONCLUSION F ORMING A BELIEF THAT CERTAIN INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. I FIND THAT THERE WERE MATERIALS BEFORE THE ASSESSING OFFICER FROM WHICH A REASONABLE BELIEF CA N BE FORMED RATIONALLY THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. I THEREFORE HOLD THAT THE ASSESSING OF FICER WAS JUSTIFIED IN ENTERTAINING THE BELIEF THAT INCOME HA D ESCAPED ASSESSMENT AND THEREFORE HAD CORRECTLY INITIATED R E ASSESSMENT PROCEEDING AS PER THE PROVISIONS OF SEC. 147. THE INITIATION OF REASSESSMENT PROCEEDING IS UPHELD. 3.3.1 AS REGARDS CONTENTION THAT DECISION OF THE HO N'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA (SUPRA) I FIND THAT THERE IS CLEAR ESCAPEMENT OF ASSESSMENT BECAUSE THE APPELLANT HAS CLAIMED DEDUCTION ON DDB RECEIPT WHIC H IS TAXABLE IN VIEW OF HON'BLE SUPREME COURT JUDGMENT I N CASE OF LIBERTY INDIA LTD. REPORTED IN 317 ITR 218 SC. SO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA IS CLEARLY APPLICABLE IN THE CASE OF THE PRESENT APPEL LANT ASSESSEE. THE ASSESSING OFFICER REASON TO BELIEVE T HAT INCOME HAS BEEN ESCAPED WITHIN THE MEANING OF SEC. 147 OF THE I.T. [5] ACT 1961. SO THE APPELLANT'S CONTENTION IS REJECT ED. THEREFORE ON THIS GROUND THE PLEA OF THE APPELLAN T IS REJECTED AND REOPENING OF THE ASSESSMENT IS HOLD VALID. 3.3.2 THE PROVISION OF SEC. 147 PROVIDES THAT IF TH E ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARG EABLE TO TAX HAD ESCAPED ASSESSMENT HE MAY SUBJECT TO THE P ROVISION OF SEC. 148 TO 153 ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPE D ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENT LY IN THE COURSE OF THE PROCEEDINGS. THE PROVISION OF SEC. 14 8(2) PROVIDES THAT THE ASSESSING OFFICER SHALL BEFORE IS SUING ANY NOTICE U/S 148(1) RECORD HIS REASONS. IN THE PRESE NT CASE THE ASSESSING OFFICER ISSUED NOTICE U/S 148 IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA ON THE ISSUE THAT PROFIT/BENEFIT FROM DEPB & DDB DO NOT FO RM PART OF NET PROFIT OF ELIGIBLE INDUSTRIAL UNDERTAKING FOR T HE PURPOSE OF THE SEC. 80I/80IA/80IB OF THE IT ACT. 3.3.3 FURTHER THE ASSESSING OFFICER ALSO REASONE D TO BELIEVE THAT THE ASSESSEE WAS ALLOWED EXCESS DEDUC TION U/S 80HHC. EXPLANATION 2 TO SECTION 147 OF THE IN SUPPO RT OF HIS ACTION THAT EXCESSIVE RELIEF IS ALSO DEEMED ESCAPEM ENT AND APPELLANT'S CASE IS VERY WELL COVERED BY THE SAID S ECTION. 3.3.4 IN VIEW OF THE ABOVE PROVISIONS AND AS FACTS DISCUSSED BY THE ASSESSING OFFICER FOR ISSUE OF NOTICE IT IS OBSERVED THAT THE ASSESSING OFFICER BEFORE ISSUING NOTICE U/S 148 HAS RECORDED THE REASONS AS PROVIDED IN SEC. 148(2) A ND THE REASONS RECORDED ARE PRIMA FACIE FOUND TO BE TRUE A ND CORRECT. PRIMA FACIE THE REASONS RECORDED BY THE ASSESSING O FFICER ARE CORRECT AND TRUE AND ARE AVAILABLE ON RECORD TO FOR M A REASONABLE BELIEF THAT THE INCOME HAS ESCAPED TO AS SESSMENT. IN VIEW OF THE ABOVE I AM OF THE VIEW THAT THE ASSESSING OFFICER HAD ISSUED NOTICE U/S 148 AFTER R ECORDING THE REASONS AND AFTER MAKING A PROPER AND REASONABLE BE LIEF OF ESCAPEMENT OF ASSESSMENT THEREFORE THE PROCEEDING INITIATED U/S 147 IS IN ORDER. THE GROUND NO. 1 & 3 ARE DISMI SSED. [6] 6. NOW THE ASSESSEE IS IN APPEAL. DURING THE COURS E OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSE T STATED THAT THIS ISSUE IS CLEARLY COVERED BY THE DECISION OF THIS BENCH OF TH E TRIBUNAL IN THE CASE OF BOTHRA INTERNATIONAL VS. ITO -1(3) JODHPUR [2013] 3 2 TAXMAN.COM 264 (JODH. TRIB.) COPY OF THE SAME WAS FURNISHED. 7. IN HIS RIVAL SUBMISSIONS THE LEARNED D.R. STRON GLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A). 8. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSING THE MATERIAL ON RECORD IT APPEARS THAT THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS INVOLVED IN THE CASE OF BOTHRA INTERNATIONAL VS. ITO -1(3) JODHPUR (SUPRA) WHEREIN THE REOPENING IN SIMILAR CI RCUMSTANCES WAS HELD INVALID BY OBSERVING IN PARA 10 TO 17 OF THE IMPUGN ED ORDER WHICH READ AS UNDER: 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE O N RECORD. IN THE PRESENT CASE IT IS NOTICED THAT ASSESSING OFFI CER FRAMED THE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT ON 30 .3.2005. THE ASSESSING OFFICER IN THE ' OPENING PARA OF THE SAID ASSESSMENT ORDER CLEARLY STATED THAT THE ASSESSEE F ILED THE RETURN OF INCOME ON 11.11.2003 ALONG WITH AUDITED R EPORT IN FORM NO. 3CB 3CD 10CCB 10CCAC AND CLAIMED DEDUCTI ON U/S 80HHC 80IB AND 80G OF THE INCOME TAX ACT. HE ALSO MENTIONED THAT THE ASSESSEE HAD FURNISHED THE REQUI SITE DETAILS PRODUCED CASH BOOK LEDGER JOURNAL SALES BOOK PURCHASE BOOK SALARY & WAGES PAYMENT REGISTER BAN K PASS BOOK PURCHASES SALES & EXPENSES BILLS / VOUCHERS EXPORT INVOICES PACKING LISTS BILLS OF LADING SHIPPING BILLS ADVICES OF BANK REALIZATION FOR EXPORT SALE PROCEEDS AND THE S AME HAD BEEN EXAMINED ON TEST CHECK BASIS. HE ALSO MENTIONE D IN PAGE 2 OF THE ASSESSMENT ORDER THAT THE ASSESSEE WA S MANUFACTURING AND EXPORTED HANDICRAFT ARTICLES AND HAD [7] FULFILLED ALL THE CONDITIONS REQUIRED FOR ALLOWABIL ITY OF DEDUCTION U/S 80IB OF THE ACT. THE ASSESSING OFFICER DISCUSSE D THE ADMISSIBILITY OF DEDUCTION U/S 80HHC AND 80IB IN PA RA 5 AND 5.3 OF THE ASSESSMENT ORDER DATED 30.3.2005. THE AS SESSING OFFICER RAISED SPECIFIC QUERY REGARDING THE DEDUCTI ON U/S 80IB AND REPLY OF THE ASSESSEE DATED 23.3.2005 HAS BEEN REPRODUCED IN PARA 5.1 OF THE ASSESSMENT ORDER WHIC H AT THE COST OF REPETITION IS NOT REPRODUCED HEREIN. THE AS SESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS OF THE AS SESSEE AND EXAMINING THE ISSUE IN DETAIL ALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB ON ACCOUNT OF DEPB ALLOWANCE AND THE RELEVANT OBSERVATION HAVE BEEN MADE IN PARA 5.2 -OF THE ASSESSMENT ORDER WHICH READS AS UNDER:- '5.2 AFTER CAREFULLY CONSIDERING THE DETAILED SUBMI SSIONS OF THE LEARNED AR AND KEEPING IN VIEW THE JUDGMENT IN THE LIGHT OF THE PROVISIONS OF DEDUCTION U/S 80HHC AND U/S 80IB OF THE ACT. I AM OF THE VIEW THAT IT MAY CONSIDERABLY BE CONSTRUED THAT THOUGH THE INCOME EARNED ON SALE OF DEBP LICENSE BECOMES PART OF THE INCOME FROM THE BUSINESS ACTIVITIES OF THE ASSESSEE BUT AS FAR AS ITS CONSIDERATION FOR THE PURPOSES OF DED UCTION U/S 80HHC OF THE ACT IS CONCERNED IT DOES NOT FORM PART OF THE ELIGIBLE BUSINESS PROFIT. MOREOVER THE ABOV E CONTENTION OF THE AR IS CONSIDERABLY TAKEN INTO ACC OUNT AS FAR AS THE INCOME FROM SALE OF DEPB LICENSE FORM S PART OF BUSINESS INCOME FOR THE PROPOSE OF DEDUCTIO N U/S 80IB OF THE ACT.' 11. THE AFORESAID VIEW TAKEN BY THE ASSESSING OFFIC ER WAS IN CONSONANCE WITH THE VIEW TAKEN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SARAF SEAS ONING UDYOG (SUPRA) WHEREIN IT IS HELD AS UNDER:- (HEAD NOTE) 'DEDUCTION UNDER S. 80-IB - PROFITS AND GAINS DERIV ED FROM THE INDUSTRIAL UNDERTAKING -SALE OF DEPB LICEN SES - IN VIEW OF INSERTION OF CL.(IIID) IN S.28 BY THE TA XATION LAWS (AMENDMENT ) ACT 2005 RETROSPECTIVELY W.E.F. 1ST APRIL 1998 PROFIT FROM SALE OF DEPB LICENSES ARE PROFIT DERIVED FROM ELIGIBLE BUSINESS FOR PURPOSE OF DEDUC TION U/S 80IB.' [8] 12. NOW THE QUESTION ARISES AS TO WHETHER REOPENIN G WAS VALID WHEN THERE IS A CHANGE OF OPINION. IN THIS RE GARD THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF BA BU LAI JUG. RAJ CO. (SUPRA) HAS HELD AS UNDER:- 'ASSESSING OFFICER HAVING NOWHERE ALLEGED THAT INCO ME CHARGEABLE TO TAX FOR THE RELEVANT ASSESSMENT YEAR HAS ESCAPED ASSESSMENT ON ACCOUNT OF FAILURE OR OMISSIO N ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND F ULLY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT THE IMPUGN ED NOTICE U/S 148 ISSUED AFTER EXPIRY OF PERIOD OF FOU R YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IS LIA BLE TO BE QUASHED.' 13. A SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE B OMBAY HIGH COURT IN THE CASE OF PRASHANT PROJECTS LTD. (S UPRA) WHEREIN IT HAS BEEN HELD AS UNDER:- 'IN THE ORIGINAL ASSESSMENT ORDER THE ASSESSING OFF ICER HAD SPECIFICALLY HELD THAT THE ASSESSEE WAS CARRYIN G ON MANUFACTURING ACTIVITY AND HAVING EXPORTED MANUFACTURED GOODS COULD CLAIM A DEDUCTION UNDER SECTION 80HHC ONLY AS A MANUFACTURER. DURING THE COURSE OF THE APPELLATE PROCEEDINGS BEFORE THE COMMISSIONER (APPEALS) A REMAND REPORT WAS CALLED FOR AND THE ASSESSING OFFICER AFTER CONSIDERING THE MA TERIAL WHICH WAS PRODUCED BY THE ASSESSEE CONCLUDED THAT GOODS HAD BEEN PURCHASED BY THE ASSESSEE WHICH WERE THEN EXPORTED AND THAT THE CASE OF THE ASSESSEE FAL L WITHIN THE PURVIEW OF SUB-SECTION (3)(B) OF SECTION 80HHC. THE COMMISSIONER (APPEALS) ACCEPTED THE CONTENTION OF THE ASSESSEE. THIS SHOWED THAT THERE WAS A FULL AND TRUE DISCLOSURE OF THE FACTS BY THE ASSE SSEE; AND THAT THERE WAS A DUE APPLICATION OF MIND BY THE ASSESSING OFFICER. THE SECOND PROVISO TO SECTION 14 7 PROVIDES THAT THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOME OTHER THAN THE INCOME INVOLVI NG MATTERS WHICH ARE THE SUBJECT-MATTER OF ANY APPEAL REFERENCE OR REVISION WHICH IS CHARGEABLE TO TAX A ND HAS ESCAPED ASSESSMENT. THE VERY ISSUE ON WHICH THE [9] ASSESSMENT WAS SOUGHT TO BE REOPENED WAS CANVASSED IN APPEAL AND WAS DETERMINED IN THE APPELLATE PROCEEDINGS BY THE COMMISSIONER (APPEALS). THE SAME ISSUE COULD NOT LAWFULLY FORMED THE BASIS OF THE NO TICE FOR REOPENING THE ASSESSMENT. THE REASSESSMENT PROCEEDINGS WERE NOT VALID.' 14. SIMILARLY THE HON'BLE MADHYA PRADESH HIGH COU RT IN THE CASE OF STEEL TUBES OF INDIA LTD. (SUPRA) HELD AS U NDER:- 'UNDER SECTION 147 THE ASSESSING OFFICER CAN REOPEN AN ASSESSMENT IF HE HAS REASON TO BELIEVE THAT ANY INC OME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR. IN TERMS OF THE PROVISO TO SECTION 147 OF THE ACT ACTION UNDER SECTION 147 OF THE ACT CAN NOT BE TAKEN AFTER THE EXPIRY OF FOUR YEARS FROM THE EN D OF THE RELEVANT ASSESSMENT YEAR UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY REASON TO FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETUR N UNDER SECTION 139 OR IN RESPONSE TO A NOTICE UNDER SECTION 142(1) OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSME NT FOR THAT ASSESSMENT YEAR.' 15. THE HON'BLE BOMBAY HIGH COURT ALSO IN THE CASE OF INDIAN OIL CORPORATION LTD. (SUPRA) HELD AS UNDER: THE ASSESSEE HAD DISCLOSED FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT INSOFAR AS IT HAD A BEARING ON THE ISSUE IN QUESTION. THE ASSESSI NG OFFICER SPECIFICALLY APPLIED HIS MIND TO THE QUESTI ON AS TO WHETHER THE ENTIRE DIVIDEND INCOME COULD BE CLAIMED AS EXEMPT WITHOUT A DISALLOWANCE FOR EXPENDITURE. AS A MATTER OF FACT EVEN DURING THE COURSE OF THE ASSESSMENT YEAR 2000-01 THE ASSESSING OFFICER HAD APPLIED HIS MIND TO THE SAME ISSUE WHILE PASSING TH E ORDER OF ASSESSMENT UNDER SECTION 143(3). THE CONDITION PRECEDENT TO THE EXERCISE OF THE STATUTOR Y POWER TO REOPEN AN ASSESSMENT AFTER THE EXPIRY OF F OUR YEARS WAS NOT FULFILLED IN THE PRESENT CASE. THE REASSESSMENT PROCEEDINGS WERE NOT VALID.' [10] 16. IN THE INSTANT CASE ALSO THE ASSESSEE FURNISH ED ALL THE DETAILS RELATING TO ITS CLAIM FOR DEDUCTION U/S 80I B OF THE ACT AND THE ASSESSING OFFICER THOROUGHLY EXAMINED THE C LAIM WHILE FRAMING THE ASSESSMENT U/S 143(3) AND ON BEING SATI SFIED THE CLAIM WAS ALLOWED. THEREFORE IN THE PRESENT CASE REOPENING OF THE ASSESSMENT BY ISSUING NOTICE U/S 148 OF THE ACT IS DEFINITELY A CHANGE OF OPINION WHICH IS NOT MAINTAI NABLE AND THEREFORE THE REASSESSMENT FRAMED BY THE ASSESSING OFFICER U/S 147 OF BY ISSUING NOTICE U/S 148 OF THE ACT AFT ER COMPLETING THE ASSESSMENT U/S 143(3) OF THE ACT BY TAKING A VIEW WHICH WAS IN CONSONANCE WITH THE JUDGMENT OF T HE HON'BLE JURISDICTIONAL HIGH COURT WAS NOT VALID. 17. SINCE WE HAVE HELD THAT RE-ASSESSMENT U/S 147 O F THE ACT AS INVALID NO FINDING HAS BEEN GIVEN ON OTHER ISSU ES RAISED BY THE ASSESSEE IN THIS APPEAL. 8.1 IN THE PRESENT CASE ALSO THE ORIGINAL ASSESSMEN T WAS FRAMED BY THE ASSESSING OFFICER ON 30/01/2006 FOR THE ASSESSMENT YEAR 2003-2004 AND THE REOPENING U/S 147 OF THE ACT COULD HAVE BEEN DO NE UPTO 31/01/2008. HOWEVER THE NOTICE U/S 148 OF THE ACT WAS ISSUED O N 26/03/2010 I.E. AFTER THE PERMISSIBLE TIME ONLY ON THE BASIS OF SUBSEQUEN T JUDGMENT OF HON'BLE SUPREME COURT WHICH WAS NOT AVAILABLE TO THE ASSESS ING OFFICER AT THE TIME OF FRAMING THE ASSESSMENT ON 30/01/2006 U/S 143(3) OF THE ACT AFTER MAKING DEEP SCRUTINY. SO RESPECTFULLY FOLLOWING TH E AFORESAID REFERRED TO ORDER OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF BOTHRA INTERNATIONAL (SUPRA) THE REOPENING BY ISSUING THE NOTICE U/S 14 8 OF THE ACT ON 26/03/2010 IS HELD TO BE INVALID. SINCE THE REOPEN ING HAS BEEN HELD INVALID THEREFORE REASSESSMENT ORDER DATED 16/12/2010 WILL NOT SURVIVE. ACCORDINGLY NO FINDING IS REQUIRED TO BE GIVEN ON THE ISSUES RAISED EITHER BY THE DEPARTMENT OR BY THE ASSESSEE ON MERIT. [11] 9. NOW WE WILL DEAL WITH THE APPEAL OF THE DEPARTME NT IN I.T.A. NO.356/JODH/2013 FOR THE ASSESSMENT YEAR 2009-2010. IN THIS APPEAL THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS: 1. THE CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 10BA IN RESPECT OF INCOME RECEIVED / ACCRUED FROM DDB OF RS.34 26 464/- AND INSURANCE ON EXPORT BILL OF RS.1 94 324/- TOTALING TO RS.36 20 788/-. 2. THE CIT(A) HAS ERRED IN NOT FOLLOWING DECISION O F HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA REPORTED IN 317 ITR 218 M/S STERLING FOODS 237 ITR 579 (SC) AND M/ S HINDUSTAN LEVER LTD. 239 ITR 297 (SC). 3. THE CIT(A) HAS ERRED IN IGNORING THE SIMILAR EXP RESSION USED IN THE PROVISIONS OF SECTION 10BA AS USED IN S ECTION 80IA OF THE I.T. ACT. IN THE SECTION 10BA(1) THE EXPRESSION IS AS 'A DEDUCTION OF SUCH PROFITS AND G AINS AS ARE DERIVED BY AN UNDERTAKING FROM EXPORT' AND IN S ECTION 80IA(1) 'INCLUDES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING'. HENCE THE CIT(A) OUGHT TO HAVE FOLLO WED DECISION OF THE HON'BLE SC IN CASE OF M/S LIBERTY I NDIA. 4. THE CIT(A) HAS ERRED IN GIVING FINDING THAT THE PROVISIONS OF SECTION 10BA ARE SIMILAR TO THE PROVISIONS OF SE CTION 80HHC. THE CIT(A) HAS NOT NOTICED THAT IN CLAUSE 'B BA' OF EXPLANATION TO SECTION 80HHC THE EXPRESSION 'PROFI TS OF THE BUSINESS' IS DEFINED AND IT INCLUDES INCOME ACCRUED/RECEIVED FROM DEPB/DDB WHEREAS THERE IS NO SUCH DEFINITION IN SECTION 10BA. THE SUB SECTION 4 OF SECTION 10BA GIVES A FORMULA FOR DETERMINATION OF E LIGIBLE DEDUCTION ONLY. 10. FROM THE ABOVE GROUNDS IT IS GATHERED THAT THE ONLY GRIEVANCE OF THE DEPARTMENT IN THIS APPEAL RELATES TO THE DEDUCTION U/S 10BA IN RESPECT OF INCOME RECEIVED/ACCRUED FROM DDB AMOUNTING TO RS.34 26 464/- AND INSURANCE ON EXPORT BILL OF RS.1 94 324/- TOTALLING TO RS.36 20 788/-. [12] 11. DURING THE COURSE OF HEARING THE LEARNED COUNS EL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 31/01/2013 OF THIS BENCH OF THE TR IBUNAL IN THE CASE OF SURAJ EXPORTS INDIA VS. ITO IN I.T.A. NO.336/JODH/2 011 WHICH HAS BEEN FOLLOWED BY THE LEARNED CIT(A). 12. THE ABOVE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS NOT CONTROVERTED BY THE LEARNED D.R. 13. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSING THE MATERIAL ON RECORD IT IS NOTICED THAT THIS ISSU E HAS BEEN DECIDED BY LEARNED CIT(A) BY OBSERVING IN PAGES 4 TO 6 OF THE IMPUGNED ORDER AS UNDER: I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS MADE. I FIND THE ISSUE INVOLVED IN THIS GROUND IS THAT THE INCOME FROM DEPB AND DDB ARE NOT ALLOWABLE DEDUCTION U/S 10BA IN VIEW OF THE HON'BLE SUPREME C OURT DECISION IN THE CASE OF LIBERTY INDIA PVT. LTD. HOW EVER THE APPELLANT HAS SUBMITTED THAT THE HON'BLE ITAT JODH PUR BENCH HAS RECENTLY DECIDED THE ISSUE IN VARIOUS CASES THA T DDB AND DEPB CLAIM IS ALLOWABLE U/S 10BA. I HAVE GONE THROUGH THE ORDER DATED 31.01.2013 OF THE HON'BLE ITAT JODHPUR BENCH. THE HON'BLE BENCH OBSERVED AS UNDER :- 'WE HAVE COGITATED RIVAL ARGUMENTS VIS-A-VIS EVIDEN CE ON RECORD. WE HAVE EXAMINED THE DECISIONS ON WHICH PARTIES HAVE PLACED THEIR RESPECTIVE RELIANCE. WE H AVE FOUND THAT THE RATIO OF THE DECISION OF HON'BLE APE X COURT RENDERED IN THE CASE OF LIBERTY INDIA V/S CIT REPORTED 225 CTR 233 (HON'BLE SUPREME COURT) IS NOT APPLICABLE TO THE FACTS OF THIS CASE. THE SECTION U NDER INTERPRETATION BEFORE HON'BLE SUPREME COURT WAS 80I A. IN SECTION 801 A NO FORMULA FOR COMPUTATION OF PRO FIT DERIVED BY THE UNDERTAKING IS LAID DOWN WHEREAS IN [13] SECTION 10BA AND SECTION 80HHC FORMULA IS PRESCRIBE D FOR THE PURPOSE. THEREFORE IN OUR CONSIDERED OPINI ON SECTION 10BA AND 80HHC ARE MUCH NEARER TO EACH OTHER AND WHATEVER INTERPRETATION OF 'DERIVED FROM ' IS GIVEN IN ANY DECISION IN WHICH SECTION 80HHC IS INVOLVED WOULD ALSO MUTATIS-MUTANDIS TO THE INTERPRETATION OF SECTION 10BA. THE HON'BLE APEX CO URT IN THE CASES OF TOPMAN EXPORTS VS. CIT REPORTED IN 67 DTK 185 (SC) AND ACG ASSOCIATED CAPSULES PVT. LTD. V/S CIT REPORTED IN 67 DTK 205 HAS RECENTLY HELD TH AT DEPB IS CHARGEABLE AS INCOME AND CLAUSE (IIIB) OF SECTION 28 IN THE YEAR IN WHICH THE ASSESSEE APPLIE S FOR DEPB CREDIT AGAINST THE EXPORTS WHEREAS THE PROFIT ON TRANSFER OF DEPB BY THE ASSESSEE IS CHARGEABLE AS INCOME UNDER CLAUSE (IIID) OF SECTION 28 IN HIS HAN DS IN THE YEAR IN WHICH HE MAKES THE TRANSFER. THE MUMBAI BENCH OF HON'BLE INCOME TAX APPELLATE TRIBUNAL IN T HE CASE ARTS AND CRAFTS EXPORTS VS. INCOME TAX OFFICER REPORTED IN 66 DTR 69 (MUMBAI) AFTER CONSIDERING T HE DECISION OF LIBERTY INDIA (SUPRA) HAS TAKEN A CLEAR CUT DECISION IN FAVOUR OF THE ASSESSEE. FURTHER HON'BLE ITAT BENCH HAS OBSERVED THAT 'IN TH E LIGHT OF THE ABOVE DISCUSSION WE FIND THAT THE ASS ESSEE IS ENTITLED TO DEDUCTION U/S 10BA ON DEPB AS IN ACCORD ANCE WITH SECTION 28 OF THE ACT THESE ARE BUSINESS INCOME. SINCE THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT THAT FACTS OF LIBERTY INDIA IS NOT APPLIC ABLE WHERE THE ISSUE OF DDE FORM PART OF THE ELIGIBLE PROFIT DERIV ED U/S 10BA. SO RESPECTFULLY FOLLOWING THE DECISION OF THE HON'B LE JURISDICTIONAL ITAT JODHPUR BENCH I HOLD THAT THE APPELLANT IS ELIGIBLE FOR DEDUCTION ACCOUNT OF DDB WHICH ARE PAR T OF THE ELIGIBLE PROFIT DERIVED U/S 10BA. REGARDING INSURAN CE CHARGES THE A/R CONTENTION IS CORRECT. HENCE THE ADDITION MADE BY AO ON BOTH THE POINT IS DELETED. THE APPELLANT SUCCEED S ON THIS GROUND. 13.1 FROM THE ABOVE OBSERVATION OF THE LEARNED CIT( A) IT IS CRYSTAL CLEAR THAT THE ISSUE HAS BEEN DECIDED BY HIM BY FOLLOWING THE ORDER OF THIS BENCH [14] OF THE TRIBUNAL IN THE CASE OF SURAJ EXPORTS INDIA VS. ITO (SUPRA) AND NO CONTRARY DECISION IS BROUGHT ON RECORD BY THE LEARN ED D.R. WE THEREFORE DO NOT SEE ANY INFIRMITY IN THE IMPUGNED ORDER PASS ED BY LEARNED CIT(A). IN THAT VIEW OF THE MATTER WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 14. IN THE RESULT THE APPEALS OF THE DEPARTMENT IN I.T.A. NO.427/JODH/2012 AND 356/JODH/2013 FOR ASSESSMENT Y EAR 2003-2004 AND 2009-2010 RESPECTIVELY ARE DISMISSED AND THE CROSS OBJECTION NO. 01/JODH/2013 FOR THE ASSESSMENT YEAR 2003-2004 FILE D BY THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 15/07/2013) SD/. SD/. ( HARI OM MARATHA ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:15/07/2013 *CL SINGH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. D.R. ASSISTANT REGISTRAR