M/S. HARIA EXPORTS LTD, MUMBAI v. THE DCIT WD 8(2), MUMBAI

ITA 7501/MUM/2007 | 1999-2000
Pronouncement Date: 09-03-2010 | Result: Partly Allowed

Appeal Details

RSA Number 750119914 RSA 2007
Bench Mumbai
Appeal Number ITA 7501/MUM/2007
Duration Of Justice 2 year(s) 2 month(s) 23 day(s)
Appellant M/S. HARIA EXPORTS LTD, MUMBAI
Respondent THE DCIT WD 8(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 09-03-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted H
Tribunal Order Date 09-03-2010
Date Of Final Hearing 04-03-2010
Next Hearing Date 04-03-2010
Assessment Year 1999-2000
Appeal Filed On 17-12-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI T.R. SOOD (AM) ITA NO.7501/MUM/2007 ASSESSMENT YEAR : 1999-2000 HARIA EXPORTS LTD. A-1 MATOSHREE RESIDENCY GROUND FLOOR PLOT NO.65 OFF PRATHANA SAMAJ ROAD VILE PARLE(E) MUMBAI-400 057. ..( APPELLANT ) P.A. NO. (AAACH 2129 L) VS. DY. COMMISSIONER OF INCOME TAX WARD 8(2) MUMBAI. ..( RESPONDENT ) APPELLANT BY : SHRI N.M. PORWAL AND SHRI V.P. MORE RESPONDENT BY : SHRI KE SHAV SAXENA AND SHRI S.K. PAHWA O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 23.10.2007 PASSED BY THE LD. CIT(A) FOR T HE ASSESSMENT YEAR 1999-2000 TAKING FOLLOWING GROUNDS OF APPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN CONFIRMING THE EXCLUS ION OF THE AMOUNT OF RS.1 54 29 197/- RECEIVED ON ACCOUNT OF DEPB AS EXPORT INCENTIVE FOR THE PURPOSE OF CLAIMI NG DEDUCTION UNDER SECTION 80HHC. ITA NO.7501/M/07 A.Y:99-00 2 2. THE LD. CIT(A) ERRED IN NOT APPRECIATING THAT THE ASSESSEE COMPANY IS HAVING EXPORT TURNOVER EXCEEDING RS.10.00 CRORES AND AS PER THE PROVISOS INSERTED BY THE TAXATION LAWS AMENDMENT ACT 2005 W ITH RETROSPECTIVE EFFECT FROM 1 ST APRIL 1998 THE DEPB AMOUNT OF RS.1 54 29 197/- OUGHT TO BE INCLUDED FO R THE PURPOSE OF CLAIMING DEDUCTION UNDER SECTION 80 HHC. 3. THE LD. CIT(A) ERRED IN NOT APPRECIATING THE HON BLE CALCUTTA HIGH COURT JUDGMENT IN THE CASE OF CIT VS . MAGNUM EXPORTS PVT. LTD. 262 ITR 10(CAL.) WHEREIN T HE HONBLE CALCUTTA HIGH COURT HELD THAT THE DEPB LICENS E SATISFIES THE DEFINITION OF CAPITAL ASSET AS DEFINE D IN SECTION 2(14). THE LD. ASSESSING OFFICER FAILED TO APPRECIATE THAT SINCE THERE IS NO COST OF ACQUISITI ON OF DEPB LICENSE DECISION OF THE SUPREME COURT IN CIT VS. B.C. SRINIVASA SHETTY 128 ITR 294 (SC) WILL SQUAREL Y APPLY TO PREMIUM ON TRANSFER OF DEPB CREDIT LICENSE . 2. AT THE TIME OF HEARING BOTH THE PARTIES HAVE AGRE ED THAT THE ISSUE IN GROUND NO.1 AND 2 STANDS COVERED BY THE DECISION OF THE ITAT MUMBAI SPECIAL BENCH IN THE CASE OF M/S. TOPMAN EXPORTS V S. ITO (2009) 318 ITR (AT) 87(MUM.)(SB) AND ALSO AGREED TH AT THE MATTER REQUIRES TO BE RESTORED TO THE FILE OF THE ASSESSING OFFI CER WITH A DIRECTION TO RECONSIDER THE ISSUE IN LINE WITH THE VIEW TAKEN IN THE AFORECITED DECISION. THE LD. COUNSEL FOR THE ASSESSEE FUR THER SUBMITS THAT HE IS NOT PRESSING GROUND NO.3 WHICH WAS NOT OBJECT ED TO BY THE LD. DR. 3. 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 BUSINESS OF MANUFACTURING ITA NO.7501/M/07 A.Y:99-00 3 TRADING AND EXPORT OF GARMENTS FABRICS ETC. DURING TH E COURSE OF ASSESSMENT PROCEEDING IT WAS OBSERVED BY THE AO THAT THE A SSESSEE COMPANY IS HAVING TURNOVER EXCEEDING RS.10.00 CRORES AND THEREFORE COVERED BY THE PROVISIONS OF SECTION 80 HHC OF THE INCOME T AX ACT 1961(THE ACT). THEREFORE THE ASSESSEE COMPANY WAS ASKED TO EXPLAIN AS TO HOW THE ASSESSEE IS ELIGIBLE FOR DEDUCTION CLAIMED U /S.80HHC ON THE RECEIPT OF RS.1 54 29 197/- FROM SALE OF DEPB. THE AO AFTER CONSIDERING ASSESSEES EXPLANATION WAS OF THE VIEW THAT TH E ASSESSEE COMPANY DOES NOT FULFILL CONDITIONS PRESCRIBED IN THE TAX ATION LAWS (AMENDMENT) ACT 2005 AND ACCORDINGLY HE TREATED THE D EPB ENTITLEMENT OF RS.1 54 29 197/- OTHER THAN BUSINESS RECE IPT AND ACCORDINGLY HE ALLOWED DEDUCTION U/S.80 HHC RS.58 55 952/ - AS AGAINST RS.81 92 210/- ALLOWED IN THE ORIGINAL ASSESSME NT VIDE IMPUGNED ORDER DATED 13.11.2006 PASSED U/S.143(3) R. W.S. 147 OF THE ACT. ON APPEAL THE LD. CIT(A) UPHELD THE VIEW TAKEN BY THE AO. WE FIND MERIT THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL SUPRA AND ACCORDINGLY WE SET ASIDE THE ORDERS PASSED BY THE TAX AUTHORITIES ON THIS ISSUE AND DI RECT THE ASSESSING OFFICER TO RECONSIDER THE CLAIM OF THE ASSESSEE IN ACCO RDANCE WITH THE LAW I.E. IN THE LIGHT OF THE DECISION OF TH E ITAT CITED (SUPRA) AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. THE GROUND NO.1 AND 2 TAKEN BY THE ASSESSEE ARE THEREFO RE PARTLY ITA NO.7501/M/07 A.Y:99-00 4 ALLOWED FOR STATISTICAL PURPOSES AND GROUND NO.3 IS TRE ATED AS DISMISSED BEING NOT PRESSED. 4. IN THE RESULT ASSESSEE'S APPEAL STANDS PARTLY ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9.3.2010. SD/- SD/- (T.R. SOOD) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 9.3.2010. 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 4.3.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 5.3.10 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 9.3.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 10.3.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER