M/s. Steelar International, Ahmedabad v. The ACIT.,Circle-10,, Ahmedabad

ITA 588/AHD/2010 | 2001-2002
Pronouncement Date: 23-07-2010 | Result: Dismissed

Appeal Details

RSA Number 58820514 RSA 2010
Assessee PAN AAKFS8952K
Bench Ahmedabad
Appeal Number ITA 588/AHD/2010
Duration Of Justice 5 month(s)
Appellant M/s. Steelar International, Ahmedabad
Respondent The ACIT.,Circle-10,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 23-07-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 23-07-2010
Assessment Year 2001-2002
Appeal Filed On 23-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH SMC SMC SMC SMC BEFORE BEFORE BEFORE BEFORE SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER DATE OF HEARING : 19-7-10 DRAFTED ON: 19-7-10 ITA NO.588 /AHD/2010 ASSESSMENT YEAR :2001-02 M/S.STEELAR INTERNATIONAL 206 AKRUTI COMPLEX NR.STADIUM CIRCLE NAVRANGPURA AHMEDABAD. VS. ASSISTANT COMISSIONER OF INCOME TAX CIRCLE-10 NARAYAN CHAMBERS AHMEDABAD. PAN/GIR NO. :AAKFS 8952 K (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI S. N.DIVATIA RESPONDENT BY: SHRI B.D. BAROT D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THIS APPEAL IS FILED BY THE ASSESSEE AGAINST ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XVI A HMEDABAD DATED 26-11-2009. 2 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL:- 1. THE ORDER PASSED UNDER SECTION 250 OF THE I.T. ACT ON 26-11- 09 FOR A.Y. 2001-02 BY CIT(A)-XVI AHMEDABAD IS WHOLLY ILLEGAL UNLAWFUL AND AGAINST THE PRINCIP LES OF NATURAL JUSTICE. 2. THE LD. LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN DIRECTING THE LEARNED ASSESSING OFFICER TO CONSIDER THE CLAIM THAT ONLY PROFIT ON SALE OF DFRC LICENCE SHOU LD BE CONSIDERED FOR THE PURPOSE OF SECTION 80HHC ONLY IF THE CLAIM IS MADE BEFORE LEARNED ASSESSING OFFICER IN ASSESSMENT PROCEEDINGS OR RETURN OF INCOME. THE AFORESAID DIRECTIONS GIVEN BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ARE WHOLLY ILLEGAL AND WITHOUT JURISDICTION. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LD. CIT(A) OUGHT TO HAVE DIRECTED LEARNED ASSESSING OFFICER TO CONSIDER THE CLAIM OF ONLY PROFIT ON SALE OF DFRC LICENCES FOR COMPUTATION OF DEDUCTION UNDER SECTION 80HHC WITHOUT ANY RIDER T HAT SUCH CLAIM SHOULD HAVE BEEN MADE DURING THE ASSESSMENT PROCEEDINGS OR IN THE RETURN. 4. THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN DISPOSING OFF THE APPEAL BY GIVING A SINGLE OPPORTUNITY. THERE WERE SUFFICIENT CAUSE FOR FAILURE ON PART OF THE APPELLA NT TO ATTEND ON 25.11.09. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ORIGINA L RETURN OF INCOME WAS FILED ON 30-10-2001 DECLARING TOTAL INCO ME OF `.60 730/-. THE ASSESSMENT WAS COMPLETED UNDER SECT ION 143(3) OF THE ACT ON 18-3-2004 AT AN INCOME OF `.13.94 791/-B Y DISALLOWING THE CLAIM OF DEDUCTION UNDER SECTION 80HHC IN RESP ECT OF SALE OF DFRC. ON APPEAL THE TRIBUNAL RESTORED THE ISSUE OF ALLOWANCE OF DEDUCTION IN RESPECT OF SALE OF DFRC UNDER SECTION 80HHC TO THE FILE OF THE LEARNED ASSESSING OFFICER VIDE ORDER DA TED 16-1-2009 IN ITA NO.11/AHD/05. THE LEARNED ASSESSING OFFICER THE REAFTER COMPLETED THE FRESH ASSESSMENT TREATING THE SALES P ROCEEDS OF 3 DFRC OF ` 17 23 846/- ELIGIBLE UNDER SECTION 80HHC( 3). ACCORDING TO THE LEARNED ASSESSING OFFICER THE ASSESSEES EXP ORT TURNOVER FOR THE YEAR IS ` 99 25 378/-.THE ASSESSEE INCURRED IND IRECT COST OF ` 95 87 000 AND INDIRECT COST OF `.4 95 049/- FOR MAK ING THE EXPORTS. THUS THE TOTAL COST OF THE ASSESSEE IS `. 1 00 82 0 49/-. THE LOSS INCURRED BY THE ASSESSEE FROM EXPORT IS `. 1 56 671 /- AS PER SECTION 80HHC (3)(B). THE LEARNED ASSESSING OFFICER OBSERVE D THAT AS PER THE 5 TH PROVISO TO SECTION 80HHC (3) SINCE COMPUTATION UND ER SECTION 80HHC(3) (B) IS A LOSS SUCH LOSS SHALL BE SET OFF AGAINST THE AMOUNT WHICH BEARS TO 90% OF THE SUM REFERRED TO IN SECTION 28(IIIE) THE SAME PROPORTION AS THE EXPORT TURNOVER BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE AS SESSEE. SINCE THE ENTIRE TURNOVER OF THE ASSESSEE WAS OF EXPORT SALE HE THEREFORE SET OFF `. 1 56 670/- FROM THE 90% OF `.17 23 846/- WHI CH WORKED OUT TO `. 13 94 791/-. HENCE HE ALLOWED DEDUCTION UNDER SE CTION 80HHC OF 80% OF `. 13 94 791/- WHICH WAS `. 11 15 832/-. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESSING OFFICE R. 5. BEFORE US THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE LEARNED ASSESSING OFFIC ER OUGHT TO HAVE ALLOWED DEDUCTION UNDER SECTION 80HHC AT `.12 41 169/- BEING 80% OF `.15 51 461/- WHICH IS 90% OF THE SALE PROCEEDS OF DRFC OF `. 17 23 846/-. 6. THUS IN OTHER WORDS THE CLAIM OF THE ASSESSEE I S THAT LOSS DETERMINED UNDER SECTION 80HHC(3)(B) SHOULD BE IGNO RED AND ONLY 90% OF EXPORT INCENTIVE SHOULD HAVE BEEN CONSIDERED AS ELIGIBLE UNDER SECTION 80HHC AND 80% THEREOF SHOULD HAVE BEE N ALLOWED AS DEDUCTION. 7. I FIND THAT THE ISSUE IS CLEAR FROM 5 TH PROVISO TO SUB-SECTION (3) OF SECTION 80HHC OF THE ACT WHICH PROVIDES THAT THE LOSS COMPUTED 4 UNDER CLAUSE (A) (B) OR (C) OF SECTION 80HHC (3) S HALL BE SET OFF AGAINST THE AMOUNT OF 90% OF EXPORT INCENTIVE. THUS I FIND NO ERROR IN THE ORDERS OF THE LOWER AUTHORITIES. THEREFORE THIS GROUND OF APPEAL OF THE ASSESSEE HAS NO MERIT AND THE SAME IS DISMISSED. 8. BEFORE PARTING WITH THE ORDER I WOULD LIKE TO ST ATE THAT THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE S UBMITTED THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S OBSERVED THAT ONLY PROFIT ON SALE OF DRFC LICENCE SHOULD BE CONSIDERED AS PER MUMBAI SPECIAL BENCH DECISION IN THE CASE OF TOPMAN EXPORTS VS. ITO (2009) 318 ITR (AT) 0087 BUT THE ASSESSEE HAS T AKEN THIS GROUND FOR THE FIRST TIME BEFORE HIM AND AS THE LEA RNED ASSESSING OFFICER HAS PASSED ORDER UNDER SECTION 143(3) R.W. S. 254 IN RESPECT OF SPECIFIC DIRECTION OF THE TRIBUNAL THE GROUND R AISED BEFORE HIM IS NOT ARISING FROM THE ASSESSMENT ORDER OR FROM THE C LAIM OF THE ASSESSEE MADE BEFORE THE LEARNED ASSESSING OFFICER AND EVEN BEFORE THE APPELLATE AUTHORITY IN THE FIRST ROUND O F APPEAL AND DISMISSED THE APPEAL OF THE ASSESSEE. IT WAS THE CO NTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE T HAT AS A LEGAL GROUND COULD BE TAKEN BY THE AGGRIEVED PARTY AT ANY STAGE OF THE PROCEEDINGS PROVIDED THE RELEVANT FACTS AND MATERIA LS ARE ON RECORD THEREFORE THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) WAS NOT JUSTIFIED IN DIRECTING THE LEARNE D ASSESSING OFFICER TO CONSIDER THE CLAIM OF ONLY PROFIT ON SAL E OF DFRC LICENCES FOR COMPUTATION OF DEDUCTION UNDER SECTION 80HHC WI TH A RIDER THAT SUCH CLAIM SHOULD HAVE BEEN MADE DURING THE ASSESSM ENT PROCEEDINGS OR IN THE RETURN. THE LEARNED AUTHORISE D REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT IN VI EW OF THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. KALPATRU COLOURS AND CHEMICALS IN INCOME TAX APPEAL (LODG) NO.2887 OF 2009 DATED 29-6-2009 THE APPEAL OF THE A SSESSEE HAS TO BE DISMISSED. 5 4. THEREFORE THE APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 23RD DAY OF JULY 2010. SD/- ( N. S. SAINI ) ACCOUNTANT MEMBER AHMEDABAD; ON THIS 23 RD DAY OF JULY 2010 PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. TH E RESPONDENT 3. THE CIT CONCERNED 4. THE LD . (APPEALS)XVI ABAD 5. THE DR AHMEDABAD BENCH 6. THE GUARD FIL E. BY ORDER //T (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 22-7-10 ------------ ---- 2. DRAFT PLACED BEFORE AUTHORITY 22-7-10 -- -------------- 3. DRAFT PROPOSED & PLACED ---- -----------JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER - ------------------ 5. APPROVED DRAFT COMES TO P.S --------------- - -------------------- 6. KEPT FOR PRONOUNCEMENT ON --------------- - -------------------- 7. FILE SENT TO THE BENCH CLERK ------------ ---- --------------------- 8. DATE ON WHICH FILE GOES TO THE -------------- -- -------------------- 9. DATE OF DISPATCH OF ORDER --------------- - ---------------------