DCIT - 7(3), MUMBAI v. M/s. ZODIAC CLOTHING CO. LTD., MUMBAI

ITA 7249/MUM/2008 | 1996-1997
Pronouncement Date: 12-02-2010 | Result: Dismissed

Appeal Details

RSA Number 724919914 RSA 2008
Assessee PAN AAACZ0151A
Bench Mumbai
Appeal Number ITA 7249/MUM/2008
Duration Of Justice 1 year(s) 1 month(s) 19 day(s)
Appellant DCIT - 7(3), MUMBAI
Respondent M/s. ZODIAC CLOTHING CO. LTD., MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 12-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 12-02-2010
Date Of Final Hearing 29-01-2010
Next Hearing Date 29-01-2010
Assessment Year 1996-1997
Appeal Filed On 23-12-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI R.K. PAND A (AM) ITA NO.7249/MUM/2008 ASSESSMENT YEAR : 1996-97 DY. COMMISSIONER OF INCOME TAX -7(3) ROOM NO.615 6 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. ..( APPELLANT ) VS. M/S. ZODIAC CLOTHING CO. LTD. 10/76 OFF HAINES ROAD WORLI MUMBAI-18. ..( RESPONDENT ) P.A. NO. (AAACZ 0151 A) APPELLANT BY : SHRI SUSHIL KUMAR RESPONDENT BY : MS. VASANTI PATEL O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGA INST THE ORDER DATED 21.10.2008 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 1996-97 TAKING FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN HOLDING TH AT 90% OF NET RECEIPTS IN RESPECT OF LABOUR CHARGES ARE TO BE REDUCED INSTEAD OF 90% OF GROSS RECEIPTS FOR THE PURPOSE OF ARRIVING AT THE PROFIT OF THE BUSINESS FOR COMPUTING DEDUCTION U/S.80HHC IGNORING CLAUSE (BAA) OF EXPLANATION TO SECTION 80HHC? ITA NO.7249/M/08 A.Y: 96-97 2 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE A.O. RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND THAT MAY BE NECESSARY. 2. AT THE TIME OF HEARING THE LD. DR SUPPORTS THE ORD ER OF THE AO. 3. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE WH ILE RELYING ON THE ORDER OF THE LD. CIT(A) SUBMITS THAT THE ISSUE IS COVERED BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ZODIAC CLO THING COMPANY LTD. VS. ACIT AND VICE VERSA IN ITA NO.6771 AN D 7103/MUM/2005 FOR ASSESSMENT YEAR 2002-03 DATED 9.2.20 09 WHEREIN THE TRIBUNAL ON THE SIMILAR ISSUE HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. SHE ALSO PLACED ON RECORD THE COP Y OF THE SAID ORDER OF THE TRIBUNAL . 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE COMPANY IS ENGAGED IN THE MANUFACTURE OF GARMENTS ETC. THE AO WHILE MAKING THE IMPUGNED ASSESSMENT INTERALIA OBSER VED THAT FOR THE EARLIER YEARS THE DEPARTMENT HAS NOT ACCEPTED THE I TAT DECISION OF REDUCING 90% OF NET RECEIPTS INSTEAD OF GROSS RECEIPTS AND HAS FILED APPEAL U/S.260A THEREFORE FOR THE DETAILED DISCUSSIO NS MADE IN THE ASSESSMENT ORDER U/S.143(3) R.W.S.147 OF THE INCOME TAX A CT ITA NO.7249/M/08 A.Y: 96-97 3 1961(THE ACT) HE WORKED OUT THE SIMILAR CLAIM U/S.80HHC A S COMPUTED IN THE SAID ASSESSMENT AND ACCORDINGLY DETERMINED THE INCO ME AT RS.1 72 48 442/- AS ASSESSED U/S.143(3) R.W.S.147 DATED 26 .2.2001 VIDE ORDER DATED 20.12.2007 PASSED U/S.143(3) R.W.S. 14 7 OF THE ACT. ON APPEAL THE LD. CIT(A) FOLLOWING THE ORDER OF T HE TRIBUNAL AND HONBLE JURISDICTIONAL HIGH COURT DIRECTED THE AO TO FOL LOW THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT AND ACCOR DINGLY PARTLY ALLOWED THE APPEAL. 5. THE TRIBUNAL IN ASSESSEES OWN CASE SUPRA ON THE SIMIL AR ISSUE HAS HELD VIDE PARA-6 AS UNDER : IN EARLIER YEARS ALSO THE HONBLE ITAT IS FOLLOWIN G THE DECISIONS OF THE JURISDICTIONAL HIGH COURT IN T HE CASE OF BANGALORE CLOTHING CO. LTD. 260 ITR 371 HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. CONSEQUENTLY AS THE ISS UE IS HELD IN FAVOUR OF THE ASSESSEE THE ORDER OF THE LD. CIT(A) IS SET ASIDE ON THIS ISSUE AND WE HOLD THAT THE LAB OUR CHARGES ARE PART OF THE OPERATIONAL INCOME AND CONSEQUENTLY THE ENTIRE LABOUR CHARGES RECEIVED BY THE ASSESSEE WOULD FORM PART OF THE BUSINESS PROFIT AS WELL AS TURNOVER. THE ASSESSING OFFICER IS DIRECTED TO REC OMPUTE THE DEDUCTION ACCORDINGLY. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT O N RECORD BY THE REVENUE WE RESPECTFULLY FOLLOWING THE ORDER OF THE T RIBUNAL HOLD THAT THE LABOUR CHARGES ARE PART OF THE OPERATIONAL INCOME AND CONSEQUENTLY THE ENTIRE LABOUR CHARGES RECEIVED BY THE A SSESSEE WOULD FORM PART OF THE BUSINESS PROFIT AS WELL AS TURNOVER. THE AO IS DIRECTED ITA NO.7249/M/08 A.Y: 96-97 4 TO RECOMPUTE THE DEDUCTION ACCORDINGLY. THE GROUNDS T AKEN BY THE REVENUE ARE THEREFORE REJECTED. 6. IN THE RESULT REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.2.2010. SD/- SD/- ( R.K. PANDA ) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 12.2.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 29.1.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 2.2.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 12.2.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 15.2.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER