Premier Pipes Ltd.,, Kanpur v. Asstt. Commissioner of Income Tax ,5,, Kanpur

ITA 754/LKW/2011 | 2000-2001
Pronouncement Date: 11-04-2014 | Result: Dismissed

Appeal Details

RSA Number 75423714 RSA 2011
Assessee PAN AAACQ0251E
Bench Lucknow
Appeal Number ITA 754/LKW/2011
Duration Of Justice 2 year(s) 3 month(s) 14 day(s)
Appellant Premier Pipes Ltd.,, Kanpur
Respondent Asstt. Commissioner of Income Tax ,5,, Kanpur
Appeal Type Income Tax Appeal
Pronouncement Date 11-04-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 11-04-2014
Date Of Final Hearing 27-02-2014
Next Hearing Date 27-02-2014
Assessment Year 2000-2001
Appeal Filed On 28-12-2011
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NOS.754 & 755/LKW/2011 ASSESSMENT YEARS:2000 - 01 & 2001 - 02 M/S PREMIER PIPES LTD. SOM BUSINESS XQUIRE 4 TH FLOOR 1 THE MALL KANPUR. PAN:AAACQ0251E VS. A.C.I.T. - 5 KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER SUNIL KUMAR YADAV: THESE APPEALS ARE PREFERRED ON BEHALF OF ASSESSEE AGAINST THE RESPECTIVE ORDERS OF CIT(A) ON COMMON GROUNDS THAT THE CIT(A) HAS ERRED IN HOLDING THAT THE RECEIPT UNDER THE HEAD PROCESSING CHARGES REPRESENTED INCOME FROM INDEPENDENT SOURCE AND IN EXCLUDING THE SAME FROM THE COMPUTATION OF ELIGIBLE PROFIT FOR THE PURPOSE OF GRANTING RELIEF U/S 80HHC OF THE INCOME - TAX ACT (HEREINAFTER REFERRED TO AS THE ACT). 2. DURING THE COURSE OF HEARING OF THE APPEALS OUR ATTENTION W AS INVITED TO THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF COMMISSIONER OF INCOME - TAX VS K. RAVINDRANATHAN NAIR [2007] 295 ITR 228 (SC) AND ACG ASSOCIATED CAPSULES PVT. LTD. VS COMMISSIONER OF INCOME - TAX [2012] 343 ITR 89 (SC) WITH THE SUBMISSIONS THA T THE IMPUGNED ISSUE IS SQUARELY APPELLANT BY SHRI P. K. KAPOOR C.A. RESPONDENT BY SHRI AJAY KUMAR D.R. DATE OF HEARING 27/02/2014 DATE OF PRONOUNCEMENT 1 1 / 0 4 / 2 0 1 4 2 COVERED AGAINST THE ASSESSEE THEREFORE THE ASSESSEE HAS NO MERIT IN ITS APPEALS. 3. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND HAS SUBMITTED THAT 90% OF THE NET INCOME FROM PROCESSING CHARGES SHOULD BE REDU CED AS PER CLAUSE BAA OF EXPLANATION OF SECTION 80HHC WHILE COMPUTING THE PROFITS OF THE BUSINESS FOR THE PURPOSE OF DETERMINATION OF CLAIM OF DEDUCTION U/S 80HHC OF THE ACT . OUR ATTENTION WAS ALSO INVITED TO ORDERS OF THE TRIBUNAL IN SUPPORT OF ITS CONTE NTION THAT 90% OF THE NET RECEIPTS ARE TO BE REDUCED AND NOT OF THE GROSS RECEIPTS. 4. THE LEARNED D.R. REFUTING THE CONTENTION OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS NOT MAINTAINED SEPARATE SET OF BOOKS FOR PROCESSING CHARGES. IF SEPARATE BOOKS OF ACCOUNT ARE NOT MAINTAINED THE NET RECEIPT OF PROCESSING CHARGES CANNOT BE WORKED OUT. HE FURTHER INVITED OUR ATTENTION TO EXPLANATION BAA OF SECTION 80HHC OF THE ACT WITH THE SUBMISSION THAT 90% OF THAT SUM IS TO BE REDUCED FROM THE PROFITS & GAINS OF BUSINESS AND PROFESSION WHICH WERE INCLUDED IN SUCH PROFIT. IF THE NET AMOUNT OF RECEIPT BY WAY OF BROKERAGE COMMISSION INTEREST RENT OR A NY OTHER RECEIPT OF SIMILAR NATURE ARE INCLUDING ANY PROFITS & GAINS OF BUSINESS AND PROFESSION THE 90% OF THE SAME WOULD BE REDUCED FROM PROFITS & GAINS OF BUSINESS AND PROFESSION IN ORDER TO COMPUTE PROFIT OF THE BUSINESS AS PER EXPLANATION BAA OF SECTI ON 80HHC OF THE ACT. 5 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW WE ARE IN AGREEMENT WITH THE PROPOSITION LAID DOWN BY LEARNED D.R. AS PER EXPLANATION BAA THE PRO FITS OF THE BUSINESS MEANS THE PROFITS OF THE BUSINESS AS COMPUTED UNDER THE HEAD PROFITS & GAINS OF THE BUSINESS AND PROFESSION AS REDUCED BY 90% OF ANY SUM REFERRED TO IN CLAUSE (IIIA) (IIIB) 3 (IIIC) AND (IIID) OF SECTION 28 OR ANY OTHER RECEIPT BY WAY OF BROKERAGE COMMISSION RENT INTEREST OR ANY OTHER RECEIPT OF A SIMILAR NATURE INCLUDED IN SUCH PROFITS. FROM A BARE READING OF THIS EXPLANATION IT IS ABUNDANTLY CLEAR THAT 90% OF THAT RECEIPT WHICH WAS INCLUDED IN THE PROFIT & GAINS OF BUSINESS AND PROFESSION IS TO BE REDUCED FROM THE SAID PROFIT IN ORDER TO COMPUTE PROFITS OF THE BUSINESS FOR THE PURPOSE OF SECTION 80HHC OF THE ACT IN ORDER TO DETERMINE THE DEDUCTIONS U/S 80HHC. IF THE NET AMOUNT OF SUCH RECEIPT HAS BEEN INCLUDED IN THE PROFIT & G AINS OF BUSINESS AND PROFESSION THE 90% OF THE SAME IS TO BE REDUCED FROM SUCH PROFITS IN ORDER TO COMPUTE PROFITS OF BUSINESS. IN ORDER TO VERIFY THE FACTS A SPECIFIC QUERY WAS RAISED FROM SHRI P. K. KAPOOR THE LEARNED COUNSEL FOR THE ASSESSEE AS TO WHETHER THE ASSESSEE HAS MAINTAINED THE SEPARATE SET OF BOOKS OF ACCOUNT FOR THE PROCESSING CHARGES RECEIVED. HE WAS ALSO ASKED TO SPECIFY AS TO WHETHER THE NET AMOUNT OF PROCESSING CHARGES WAS INCLUDED IN THE PROFITS & GAINS OF BUSINESS AND PROFESSION A S COMPUTED BY THE ASSESSEE BUT SHRI P. K. KAPOOR C.A. COULD NOT CLARIFY THE FACTS WITH SPECIFIC AVERMENTS. IT WAS FURTHER SUBMITTED BY LEARNED D.R. THAT THE ASSESSEE HAS MAINTAINED A COMPOSITE BOOKS OF ACCOUNT AND THE GROSS RECEIPTS OF PROCESSING CHARGES WAS INCLUDED IN PROFITS & GAINS OF BUSINESS AND PROFESSION THEREFORE 90% OF THE SAME WAS TO BE REDUCED. 6 . WE HAVE ALSO CAREFULLY EXAMINED THE JUDGMENT OF APEX COURT IN THE CASE OF COMMISSIONER OF INCOME - TAX VS K. RAVINDRANATHAN NAIR [2007] 295 ITR 228 (SC) AND ACG ASSOCIATED CAPSULES PVT. LTD. VS COMMISSIONER OF INCOME - TAX [2012] 343 ITR 89 (SC) AND OTHER ORDERS OF THE TRIBUNAL REFERRED TO BY THE ASSESSEE AND WE FIND THAT THE IMPUGNED ISSUE IS SQUARELY COVERED BY THE AFORESAID JUDGMENTS OF HON'BLE APEX COURT IN WHICH IT WAS CATEGORICALLY HELD THAT WHERE THE PROCESSING CHARGES ARE INCLUDED IN THE PROFITS & GAINS OF BUSINESS AND PROFESSION THE 90% OF THE 4 SAME IS TO BE REDUCED FOR COMPUTING THE PROFITS OF THE BUSINESS IN ORDER TO DETERMINE THE AMOUNT OF D EDUCTION U/S 80HHC. SINCE THE GROSS RECEIPTS OF PROCESSING CHARGES WAS INCLUDED IN THE PROFITS & GAINS OF BUSINESS AND PROFESSION THE 90% OF THE SAME WAS TO BE REDUCED TO COMPUTE THE PROFITS OF THE BUSINESS WHICH HAS BEEN DONE BY THE LOWER AUTHORITIES. WE THEREFORE FIND NO MERIT IN THE ASSESSEES APPEALS. 7 . IN THE RESULT THE APPEALS OF THE ASSESSEE ARE DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON 1 1 / 0 4 / 2 0 1 4 ) SD/. SD/. ( A. K. GARODIA ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 1 / 0 4 / 2 0 1 4 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R. I.T.A.T. LUCKNOW ASSTT. REGISTRAR