DCIT - 16(3), MUMBAI v. M/s. MEHTA RATTONSEY EXPORTS, MUMBAI

ITA 629/MUM/2007 | 2003-2004
Pronouncement Date: 27-01-2010 | Result: Dismissed

Appeal Details

RSA Number 62919914 RSA 2007
Assessee PAN AAEFM6227R
Bench Mumbai
Appeal Number ITA 629/MUM/2007
Duration Of Justice 3 year(s) 7 day(s)
Appellant DCIT - 16(3), MUMBAI
Respondent M/s. MEHTA RATTONSEY EXPORTS, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 27-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 27-01-2010
Assessment Year 2003-2004
Appeal Filed On 19-01-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B: MUMBAI BEFORE SHRI PRAMOD KUMAR (AM) AND SHRI R.S. PADVEKAR (JM) ITA NO. 629/MUM/2007 (ASSTT. YEAR :2003-04 ) DY. COMMISSIONER OF INCOME TAX 16(3) APPELLAN T MATRU MANDIR TARDEO ROAD MUMBAI 400 007 V/S. M/S. MEHTA RATTONSEY EXPORTS RESPONDENT 1202 PRASAD CHAMBERS OPERA HOUSE MUMBAI 400 004 PAN AAEFM6227R APPELLANT BY : MR. VIKRAM GAUR/MR.S.S. R ANA/ MR. M. KHARE (DR RESPONDENT BY : MR. SATISH R. M ODY : O R D E R : PER R.S. PADVEKAR J.M THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD CIT(A) XVII MUMBAI DT. 8.11.2006 FOR THE A.Y. 20 03-04. THIS APPEAL WAS ORIGINALLY DECIDED VIDE ORDER DT.4.12.2008. IT APP EARS THAT SUBSEQUENTLY THE MISCELLANEOUS APPLICATION WAS MOVED BY THE ASSESSEE U/S. 254(2) OF THE ACT AND TO THE EXTENT OF RE-CALLING THE ORDER ON GROUND NO. 2 THE M.A. WAS ALLOWED VIDE ORDER DT. 17.8.2009. WE ARE THEREFO RE CONFINED TO DECIDE GROUND NO. 2 IN THIS APPEAL WHICH READS AS UNDER : 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE A.O. TO TREAT TO EXCLUDE THE RE-EXPORT OF ROUGH DIAMONDS AMOUNTING TO RS.13 34 79 302/- FROM THE TOTAL TURNOVER I.E. T O MAINTAIN PARITY ITA NO. 629/MUM/2007 2 BETWEEN NUMERATOR AND DENOMINATOR WITHOUT APPRECIAT ING THE FACT THAT THE DEFINITION OF THE TOTAL TURNOVER AS PER THE PRO VISIONS OF SEC. 80HHC CLEARLY INCLUDES THE EXPORT SALES OF ROUGH REJECTED DIAMONDS OR ANY OTHER SALE RECEIPT OF THE ASSESSEE. 2. THE FACTS PERTAINING TO THE ISSUE BEFORE US ARE AS UNDER : THE ASSESSEE FIRM IS ENGAGED IN MANUFACTURING AND EXPORT OF CUT AND POLISHED DIAMONDS. THE ASSESSEE FILED THE RETURN O F INCOME DECLARING THE TOTAL INCOME OF RS. 3 21 97 090/- AND CLAIMED THE DEDUCTI ON U/S. 80HHC AT RS. 3 14 18 197/-. IT WAS NOTICED BY THE A.O THAT THE ASSESSEE HAS EXPORTED ROUGH DIAMONDS OF RS. 13 34 79 302/-. THE ASSESSE E HAD NOT INCLUDED THE SAID AMOUNT IN THE TOTAL TURNOVER AND HAS ALSO REDU CED THE SAME FROM THE PURCHASE OF THE ROUGH DIAMOND. THE A.O SOUGHT THE ASSESSEES EXPLANATION WHY THE EXPORT OF THE ROUGH DIAMOND SHOULD NOT BE I NCLUDED IN THE TOTAL TURNOVER AND ALSO TO RE-WORK OUT THE DEDUCTION U/S. 80HHC. THE ASSESSEE FILED THE EXPLANATION BUT THAT WAS REJECTED AND TH E A.O RE-WORKED OUT THE DEDUCTION U/S. 80HHC AFTER ENHANCING THE TOTAL TUR NOVER BY INCLUDING THE EXPORT OF THE ROUGH DIAMONDS. THE ASSESSEE CHALLEN GED THE DEDUCTION WORKED OUT BY THE A.O U/S. 80HHC BY INCLUDING THE EXPORT OF THE ROUGH DIAMONDS IN THE TOTAL TURNOVER BEFORE THE LD CIT(A ). THE LD CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE THAT THE RE-EXPORT OF THE ROUGH DIAMONDS WHICH WERE REJECTED SHOULD BE REDUCED FROM THE COST OF PURCHAS ES RELYING ON THE DECISION OF THE ITAT A BENCH MUMBAI IN THE CASE OF M/S. SHEETAL MANUFACTURING CO. ITA NO. 1143/MUM/2002 AND ACCORDINGLY DIRECTED THE A.O TO RECOMPUTE THE DEDUCTION AFTER REDUCING THE SAME FROM THE TOTA L EXPORT TURNOVER AS WELL AS FROM THE TOTAL TURNOVER ALSO. THE REVENUE CHALL ENGED THE FINDING OF THE LD CIT(A) ON THIS ISSUE IN THIS APPEAL BY RAISING GROU ND NO. 2. 3. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE SEARCH AND SEIZURE OPERATION U/S. 132 OF THE I.T. ACT WAS CARRIED AGAI NST THE ASSESSEE ON 11.7.2006 AND IN CONSEQUENCE OF THE SEARCH ACTION THE ASSESSEE WAS REQUIRED TO FILE ITS RETURN OF INCOME IN RESPONSE TO THE NO TICE U/S. 153A ON 29.12.2006. THE RETURN FILED BY THE ASSESSEE WAS TAKEN UP FOR S CRUTINY AND THE ASSESSMENT OF THE ASSESSEE WAS COMPLETED FOR THE A.Y. 2003-04 U/S. 143(3) R.W.S. 153A OF ITA NO. 629/MUM/2007 3 THE ACT. THE LD COUNSEL FILED THE COPY OF THE ASSE SSMENT ORDER AND SUBMITTED THAT THE RE-EXPORT OF THE ROUGH DIAMONDS WAS REDUCE D FROM THE TOTAL TURNOVER AND AS PER THE ORIGINAL PLEA OF THE ASSESSEE THE DEDUCTION U/S. 80HHC WAS ALLOWED BY THE A.O. HE THEREFORE PLEADED THAT TH E SAID ISSUE HAS NOW REACHED THE FINALITY IN VIEW OF THE FACT THAT THE A SSESSEES PLEA IS ACCEPTED BY THE A.O HIMSELF IN THE ASSESSMENT FRAMED U/S. 153A. WE HAVE ALSO HEARD THE LD D.R. IN THIS CASE WHEN THE ORIGINAL ASSESSMENT ORDER WAS IN LITIGATION THE SEARCH AND SEIZURE OPERATION U/S. 132 WAS CARRIED O UT AGAINST THE ASSESSEE AND NOTICE WAS ISSUED AS PER THE NEW PROCEDURE PR ESCRIBED U/S. 153A TO 153C OF THE ACT IN RESPECT OF THE ASSESSMENT TO BE MADE IN CONSEQUENCE OF THE SEARCH AND SEIZURE OPERATIONS. THE A.O COMPLET ED THE ASSESSMENT OF THE ASSESSEE. ON THE PERUSAL OF THE ASSESSMENT ORDER P ASSED U/S. 153A DT. 30.12.2009 IT IS SEEN THAT THE TOTAL INCOME OF THE ASSESSEE IS DETERMINED AT RS.3 26 88 354/- AS AGAINST RS. 3 60 85 306/- WHICH WAS ORIGINALLY DETERMINED WHILE COMPLETING THE ASSESSMENT U/S. 143 (3). IT IS ALSO SEEN THAT THE A.O HAS ALLOWED THE DEDUCTION U/S. 80HHC AT RS. 3 09 26 929 WHILE FRAMING THE ASSESSMENT U/S 153A AS AGAINST RS. 2 75 29 977/- WHICH WAS ALLOWED WHILE FRAMING THE ASSESSMENT U/S. 143(3). A S THE A.O. SUBSEQUENTLY HAS ACCEPTED THE CLAIM OF THE ASSESSEE WHILE FRAMIN G THE ASSESSMENT UNDER SEC. 153A IN OUR OPINION THE APPEAL FILED BY THE R EVENUE HAS BECOME INFRUCTUOUS AND WE HAVE NO OPTION BUT TO DISMISS TH E SAME. WE ACCORDINGLY DO SO. 4. IN THE RESULT THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 27TH DAY OF JANUARY 2010. SD/- SD/- (PRAMOD KUMAR) (R. S. PADVEKAR) ACCOUNTANT MEMBER JUDIC IAL MEMBER MUMBAI ON THIS 27TH DAY OF JANUARY 2010. :US ITA NO. 629/MUM/2007 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3.THE CIT(A)- XVII MUMBAI 4.THE CIT MC-XVI MUMBAI 5.THE DR B BENCH MUMBAI 6.GUARD FILE BY ORDER TRUE COPY ASSTT..REGISTRAR ITAT MUMBAI. ITA NO. 629/MUM/2007 5 US DATE INITIALS 1. DRAFT DICTATED ON 6/1/10 --------------- SR.P.S. 2. DRAFT PLACED BEFORE AUTHORITY 7/1/10 --------- ----- SR.P.S. 3. DRAFT PROPOSED & PLACED ----------- ---------- --- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED ----------- ----------- -- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO ----------- ------------ - SR.P.S. THE SR. P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON --------- ----------- -- SR.P.S. 7. FILE SENT TO THE BENCH CLERK --------- --------- ---- SR.P.S. 8. DATE ON WHICH FILE GOES TO THE ------- --------- ---- 9. DATE OF DISPATCH OF ORDER --------- --------- ----