M/S. SANJAY SALES CORPORATION, MUMBAI v. THE ACIT CIR 18(2), MUMBAI

ITA 7519/MUM/2007 | 2004-2005
Pronouncement Date: 07-05-2010 | Result: Allowed

Appeal Details

RSA Number 751919914 RSA 2007
Assessee PAN AAMFS3154P
Bench Mumbai
Appeal Number ITA 7519/MUM/2007
Duration Of Justice 2 year(s) 4 month(s) 19 day(s)
Appellant M/S. SANJAY SALES CORPORATION, MUMBAI
Respondent THE ACIT CIR 18(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 07-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted J
Tribunal Order Date 07-05-2010
Date Of Final Hearing 28-04-2010
Next Hearing Date 28-04-2010
Assessment Year 2004-2005
Appeal Filed On 18-12-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J MUMBAI BEFORE SHRI. N.V. VASUDEVAN (J.M.) AND SHRI. PRAMOD KUMAR (A.M) ITA NO.7519/MUM/2007 ASSESSMENT YEAR: 2004-2005 M/S. SANJAY SALES CORPORATION ALTA BHAVAN 532 S.B. MARG DADAR MUMBAI 400 028. PAN : AAMFS3154P VS. ACIT CIR 18(2) PIRAMAL CHAMBER 1 ST FLR. LALBAUG PAREL MUMBAI 400 012. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI L.N. JOY RESPONDENT BY : SHRI L.K. AGARWAL O R D E R PER N.V. VASUDEVAN J.M. THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 29.08.2007 OF LEARNED CIT(A)-XVIII MUMBAI RELATING TO ASSESSM ENT YEAR 2004-05. GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS FO LLOWS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER IN BRINGING TOO TAX U/S.2 8(IIID) OF THE I.T. ACT 1961 THE ENTIRE SALE PROCEEDS OF DEPB LIC ENCES INSTEAD OF ONLY THE PROFIT ON TRANSFER OF THE DEPB LICENCES I.E. THE EXCESS OF SALES REALIZATION OVER THE BASIC VALUE THEREOF E ARNED ON EXPORT OF THE GOODS. 2. WITHOUT PREJUDICE TO THE ABOVE ON THE FACTS AN D IN THE CIRCUMSTANCE OF THE CASE AND IN LAW THE LEARNED CI T(A) ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFI CER IN BRINGING TO TAX AS DEPB INCOME AN AMOUNT OF RS.71 1 2 442/- WHEN AT THE HIGHEST ONLY THE PROFIT ON DEPB LICENCE S SOLD DURING THE YEAR COULD HAVE BEEN BROUGHT TO TAX AND NOT THE AMOUNT OF DEPB CREDIT TAKEN IN THE ACCOUNTS ON ACCR UAL BASIS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) ERRED IN CONFIRMING HE A CTION OF THE LEARNED ASSESSING OFFICER IN NOT ACCEPTING THE CONT ENTION OF THE APPELLANT IN THE MATTER OF ALLOCATING INDIRECT EXPE NSES TO EXPORT INCENTIVES AND THEREBY DETERMINING A HIGHER AMOUNT OF INDIRECT EXPENSES ATTRIBUTABLE TO THE EXPORT OF TRADING GOOD S. ITA NO.7519/MUM/2007 A.Y.: 2004-2005 2 4. THE LEARNED ASSESSING OFFICER BE DIRECTED TO RE - COMPUTE THE DEDUCTION U/S.80HHC OF THE I.T. ACT 19 61 BY ACCEPTING THE APPELLANTS CONTENTION AS ABOVE. 2. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN TH E BUSINESS OF EXPORTS OF BULK DRUGS DYES AND PIGMENT. THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION U/S.80HHC OF THE ACT. THE ASSESSEE HAD CLAIMED DEDUCTION U/S.80HHC OF THE ACT AT RS.37 84 233/-. THE ASSE SSING OFFICER ON SCRUTINY OF THE WORKING OF DEDUCTION MADE BY THE AS SESSEE FOUND THAT THE ASSESSEE HAD INCLUDED 90% OF DEPB RECEIPTS. FOR T HE REASONS GIVEN ON IDENTICAL ISSUES IN THE CASE OF THE ASSESSEE IN THE ASSESSMENT YEAR 2003-04. THE ASSESSING OFFICER HELD THAT THE DEPB RECEIPTS W ILL NOT CONSIDERED WHILE WORKING OUT DEDUCTION U/S.80HHC OF THE ACT. THE C IT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY FOLLOWING HIS OWN ORDER IN ASSESSEES CASE FOR ASSESSMENT YEAR 2003-04. 3. AT THE TIME OF HEARING OF THIS APPEAL IT WAS BR OUGHT TO OUR NOTICE THAT THE ITAT IN ITA NO.750/MUM/07 FOR ASSESSMENT YEAR 2 003-04 HELD HAS FOLLOWS: WE HAVE HEARD LEARNED D.R. AND PERUSED MATERIAL ON RECORD. THE LEARNED DR AGREED THAT THE FACTS AND CIRCUMSTAN CES OF THIS APPEAL ARE MUTATIS MUTANDIS SIMILAR TO THOSE DECIDE D BY THE SPECIAL BENCH (MUMBAI) OF THE TRIBUNAL IN THE CASE OF M/S TOPMAN EXPORTS (ITA NO.5769/MUM/2006) AND M/S KALPA TARU COLOURS & CHEMICALS (ITA 5651/MUM/2006) (2009-TIOL- 531- ITAT-MUM-SB). THE SPECIAL BENCH VIDE ITS ORDER DATED 11.08.2009 HAS RESTORED THE MATTER TO THE FILE OF T HE ASSESSING OFFICER FOR CONSIDERING THE FACE VALUE OF DEPB AS C OVERED U/S.28(IIIB) AND PROFIT ON TRANSFER OF DEPB I.E. EX CESS OF SALE PRICE OVER THE FACE VALUE OF DEPB AS FALLING U/S.28 (IIID). IT HAS FURTHER BEEN HELD THAT THERE IS NO SCOPE FOR ALLOWI NG SEPARATE DEDUCTION FOR INDIVIDUAL EXPENSES CONNECTED WITH TH E SALE OF DEPB DUE TO THE SCHEME OF SECTION 80 HHC. WE THERE FORE SET ASIDE THE IMPUGNED ORDER ON THIS ISSUE AND DIRECT T HE ASSESSING OFFICER TO RECOMPUTED THE DEDUCTION U/S.8 0HHC IN ACCORDANCE WITH THE VIEW TAKEN BY THE SPECIAL BENCH IN THE AFORE MENTIONED CASE . NEEDLESS TO SAY THE ASSESS EE WILL BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD BY THE ASSESSING OFFICER IN THE FRESH PROCEEDINGS. 4. RESPECTFULLY FOLLOWING THE AFORESAID ORDER OF T HE TRIBUNAL WE DIRECT THE ASSESSING OFFICER TO CONSIDER THE DECISION OF T HE SPECIAL BENCH REFERRED ITA NO.7519/MUM/2007 A.Y.: 2004-2005 3 TO ABOVE AND DECIDE THE ISSUE AFRESH AFTER GIVING O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. IN THE RESULT APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 7 TH DAY OF MAY 2010. SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) SD/- (N.V. VASUDEVAN) (JUDICIAL MEMBER) MUMBAI DATED 7 TH MAY 2010. JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- MUMB AI 4. COMMISSIONER OF INCOME TAX CITY- MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH J MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI