M/s. Harsh International,, JAMNAGAR v. The Assistant Commissioner of Income Tax, Circle-2,, JAMNAGAR

MA 10/RJT/2014 | 2005-2006
Pronouncement Date: 07-04-2014 | Result: Allowed

Appeal Details

RSA Number 1024924 RSA 2014
Assessee PAN AADFH1518B
Bench Rajkot
Appeal Number MA 10/RJT/2014
Duration Of Justice 1 month(s)
Appellant M/s. Harsh International,, JAMNAGAR
Respondent The Assistant Commissioner of Income Tax, Circle-2,, JAMNAGAR
Appeal Type Miscellaneous Application
Pronouncement Date 07-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 07-04-2014
Assessment Year 2005-2006
Appeal Filed On 07-03-2014
Judgment Text
: : IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI T K SHARMA JM AND SHRI N S SAINI AM M.A. NO. 10/RJT/2014 (ARISEN OUT OF THE ORDER IN ITA NO.347/RJT/2011) / ASSESSMENT YEAR 2005-06 M/S. HARSH INTERNATIONAL SHED NO.711 GIDC PHASE-II DARED JAMNAGAR PAN : AADFH 1518 B ( / APPELLANT) THE ACIT CIRCLE-2 JAMNAGAR / RESPONDENT ITA NO.347/RJT/2011 ASSESSMENT YEAR : 2005-06 M/S. HARSH INTERNATIONAL PAN : AADFH 1518 B ( / APPELLANT) THE ACIT CIRCLE-2 JAMNAGAR / RESPONDENT ! '# / ASSESSEE BY SHRI P.M. MAHARISHI CA $ ! '# / REVENUE BY SHRI JAYANT JHAVERI DR ' % & ' / DATE OF HEARING 27.03.2014 ( ' / DATE OF PRONOUNCEMENT 07.04.2014 )#* / O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER : THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASS ESSEE FOR RECALLING THE ORDER OF THE TRIBUNAL DATED 25.04.2012 IN ITA NO.347/RJT/ 2011 FOR THE ASSESSMENT YEAR 2005-06 WHEREBY THE APPEAL OF THE ASSESSEE WAS DIS MISSED IN LIMINE FOLLOWING THE RATIO OF DECISION ON HONBLE DELHI HIGH COURT IN TH E CASE OF MULTIPLAN INDIA LTD 39 ITD 320 (DEL.) AND THE DECISION OF THE HONBLE MADH YA PRADESH HIGH COURT IN THE CASE OF LATE TUKAOJIRAO HOLKAR 223 ITR 480 (MP). 2. AT THE TIME OF HEARING THE MISCELLANEOUS APPLICA TION ON BEHALF OF THE ASSESSEE SHRI P.M. MAHARISHI CA APPEARED AND CON TENDED THAT THE ASSESSEE FILED THIS APPEAL ON 12.09.2011 WHICH WAS DISMISSED DUE TO THE FACT THAT THE ASSESSEE SHIFTED TO THE NEW ADDRESS WITHOUT INTIMA TING THE CHANGE OF ADDRESS AT THE TIME OF FILING REVISED FORM NO.36. IT IS SUBMI TTED THAT THE ASSESSEE WAS SHIFTED TO THE FOLLOWING ADDRESS:- M/S. HARSH INTERNATIONAL SHED NO.711 GIDC PHASE II DARED JAMNAGAR MA 10-RJT-2014 (OUT OF ITA NO. 347-RJT-2011) HARSH INTERNATIONAL - 2 - 3. THE LD. COUNSEL OF THE ASSESSEE PLEADED THAT NON -APPEARANCE ON THE DATE OF HEARING WAS ON ACCOUNT OF NON-SERVICE OF NOTICE; TH EREFORE IN THE INTEREST OF JUSTICE TRIBUNAL MAY RECALL ITS ORDER AND THEREAFTER THE AP PEAL OF THE ASSESSEE BE DECIDED IN FAVOUR OF THE REVENUE BECAUSE THE CONTROVERSY IN VOLVED IN THIS APPEAL IS SQUARELY COVERED IN FAVOUR OF THE REVENUE BY THE DE CISION OF TRIBUNAL DATED 03.01.2014 IN ASSESSEES OWN CASE FOR AY 2006-07 AN D 2007-08 IN ITA NOS.409/RJT/2013 AND 1079/RJT/2010 RESPECTIVELY. 4. ON THE OTHER HAND SHRI JAYANT JHAVERI DR APPE ARED FOR THE REVENUE STATED THAT HE HAS NO OBJECTION FOR RECALLING THE O RDER. HE FURTHER SUBMITTED THAT THE TRIBUNAL MAY ALSO DECIDE THE APPEAL OF THE ASSESSEE IN FAVOUR OF THE REVENUE FOLLOWING THE DECISION OF THE TRIBUNAL DATED 03.01. 2014 IN ASSESSEES OWN CASE FOR AY 2006-07 AND 2007-08 IN ITA NOS.409/RJT/2013 AND 1079/RJT/2010 RESPECTIVELY. 5. WITH THE CONSENT OF BOTH THE PARTIES THE APPEAL WAS ALSO HEARD ON MERITS. KEEPING IN VIEW THE AVERMENTS MADE IN THE MISCELLAN EOUS APPLICATION WE RECALL THE ORDER DATED 25.04.2012 IN ITA NO.347/RJT/2011 AND P ROCEED TO DECIDE THE APPEAL ON MERIT AS UNDER. ITA NO.347/RJT/2011 FOR AY 2005-06 6. THE ONLY GROUND RAISED IN THIS APPEAL IS AS UNDE R:- LEARNED A.O. ERRED IN LAW AS WELL AS ON FACTS IN D ENYING DEDUCTION U/S 10B OF THE ACT OF RS.59 19 377/- ON SALE OF GOODS TO AN OTHER 100% EXPORT ORIENTED UNITS. 7. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS IN MANUFACTURING OF BRASS PARTS ELECTRICAL PARTS AND ITS EXPORTS. FOR THE ASSESSMEN T YEAR UNDER APPEAL IT FILED THE RETURN OF INCOME ON 21.12.2005 DECLARING TOTAL INCO ME AT RS.7 96 565/- ALONGWITH AUDIT REPORT IN FORM NO.3CD. THE ASSESSING OFFICER FRAMED ASSESSMENT U/S 143(3) AND 254 OF THE INCOME-TAX ACT ON 24.12.2010 WHEREI N HE HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 10B IN RESPECT OF SA LES WORTH RS.3 77 81 905/- MADE TO ANOTHER EOU WHEREIN THE SALE CONSIDERATION IS NO T RECEIVED BY THE ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE. ON APPEAL IN THE IMP UGNED ORDER LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. AGGRIEVED WIT H THE ORDER OF LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 8. AT THE TIME OF HEARING BEFORE US AS ALREADY STA TED BOTH THE SIDES AGREED THAT THE CONTROVERSY INVOLVED IN THIS APPEAL IS COV ERED IN FAVOUR OF THE REVENUE AS PER THE DECISION OF THE TRIBUNAL DATED 03.01.2014 IN ASSESSEES OWN CASE FOR AY MA 10-RJT-2014 (OUT OF ITA NO. 347-RJT-2011) HARSH INTERNATIONAL - 3 - 2006-07 AND 2007-08 IN ITA NOS.409/RJT/2013 AND 107 9/RJT/2010 RESPECTIVELY. IN THE AFORESAID DECISION FOLLOWING THE DECISION DATE D 28.09.2012 OF ITAT RAJKOT BENCH IN THE CASE OF ITO V. MONARCH OVERSEAS IN ITA NO.253/RJT/2011 FOR AY 2007- 08 THE TRIBUNAL HELD THAT THE ASSESSEE FIRM IS NOT ELIGIBLE FOR DEDUCTION U/S 10B OF THE ACT IN RESPECT OF SALES MADE TO ANOTHER E.O.U. WHEREIN THE SALE CONSIDERATION WAS NOT RECEIVED BY THE ASSESSEE IN CONVERTIBLE FOR EIGN EXCHANGE. THE RELEVANT DISCUSSION RELIED BY THE TRIBUNAL IN ASSESSEES OW N CASE FOR AY 2006-07 & 2007- 08 IS CONTAINED IN PARAGRAPH 6 OF THE DECISION IN THE CASE OF ITO V. MONARCH OVERSEAS (SUPRA) WHICH IS REPRODUCED HEREUNDER:- 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CO NSIDERED THEIR SUBMISSIONS. IT IS CLEAR ON PLAIN READING OF SUB-SE CTION (3) OF SECTION 10B THAT SECTION 10B APPLIES TO THE UNDERTAKING IF THE SALE PROCEEDS OF ARTICLES OR THINGS OR COMPUTE SOFTWARE EXPORTED OUT OF INDIA ARE RECEIVED IN OR BROUGHT INTO INDIA BY THE ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE WITHIN A PERIOD OF SIX MONTHS FROM THE END OF THE PREVIOUS Y EAR OR WITHIN SUCH FURTHER PERIOD AS THE COMPETENT AUTHORITY MAY ALLOW IN THIS BEHALF. IT IS QUITE APPARENT THAT TWO CONDITIONS ARE STIPULATED BY SUB- SECTION (3) FOR AVAILING THE RELIEF UNDER SECTION 10B. FIRST CONDITION IS THAT T HE ARTICLES OR THINGS OR COMPUTER SOFTWARE MUST BE EXPORTED OUT OF INDIA W HILE THE SECOND CONDITION IS THAT THE SALE PROCEEDS THEREOF MUST BE RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE WITHIN THE STIPULATED PERIOD. BOTH THE AFORESAID CONDITIONS ARE CUMULATIVE AND THEREFORE BOTH OF THEM HAVE TO B E SATISFIED TOGETHER. MERE RECEIPT OF CONVERTIBLE FOREIGN EXCHANGE IS NOT SUFFICIENT UNLESS THE ASSESSEE ALSO ESTABLISHES THAT THE CONVERTIBLE FORE IGN EXCHANGE SO RECEIVED REPRESENTS SALE PROCEEDS OF ARTICLES OR THINGS OR C OMPUTER SOFTWARE EXPORTED OUT OF INDIA. PLAIN AND SIMPLE MEANING O F THE TERM EXPORTED OUT OF INDIA AS USED IN SECTION 10B(3) WOULD ENTAIL TH E TRANSFER OF GOODS OUT OF THE TERRITORY OF INDIA AND THEREFORE THE GOODS MUST PHYSICALLY MOVE OUT OF INDIA. IN OUR CONSIDERED VIEW THE ASSESSEE NEEDS T O SATISFY FIRSTLY THAT IT HAS EXPORTED SPECIFIED GOODS OUT OF INDIA AND THEREAFTE R IT HAS ALSO TO SATISFY THAT THE SALE PROCEEDS THEREOF HAVE BEEN RECEIVED IN CON VERTIBLE FOREIGN EXCHANGE WITHIN THE STIPULATED PERIOD. THE AFORESAI D POSITION IS WELL BROUGHT OUT ON PLAIN READING OF SUB-SECTION (3) OF SECTION 10B AND THEREFORE DOES NOT REQUIRE ANY AUTHORITY TO SUPPORT IT. HOWEVER THE J UDGMENT DATED 26.4.2011 OF THE HONBLE ANDHRA PRADESH HIGH COURT IN M/S SWA YAM CONSULTANCY PRIVATE LTD. V. ITO TAX APPEAL NO.62 OF 2011 AND O F THE HONBLE DELHI HIGH COURT INDIA DEL (P) LTD VS. CIT (2012) 250 CTR (DEL ) 344 ARE QUITE APPOSITE. 7. AS EVIDENT FROM THE AFORESAID DISCUSSION RELIEF U/S 10B IS NOT AVAILABLE UNLESS THE GOODS OF SPECIFIED NATURE ARE SHOWN TO HAVE BEEN EXPORTED BY THE ASSESSEE OUT OF INDIA AND THE SALE PROCEEDS THEREOF HAVE BEEN RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE WITHI N THE SPECIFIED PERIOD. THE ASSESSEE APART FROM PLEADING THAT THE GOODS HA VE BEEN SOLD TO 100% E.O.U. HAS PLACED NO MATERIAL ON RECORD TO ESTABLI SH THAT THE GOODS OF SPECIFIED NATURE HAVE REALLY BEEN EXPORTED OUT OF I NDIA BY HIM. THE ASSESSEE DOES NOT THEREFORE SATISFY THE PRIMARY CON DITION OF HAVING EXPORTED SPECIFIED GOODS OUT OF INDIA AND IS THEREFORE NOT E NTITLED TO RELIEF U/S 10B ON THE SOLE BASIS THAT IT HAS SOLD GOODS OF SPECIFIED NATURE TO 100% EOU OR RECEIVED THEIR SALE PROCEEDS IN CONVERTIBLE FOREIGN EXCHANGE. IN THIS VIEW OF THE MATTER THE ORDER OF THE CIT(A) DESERVES TO BE REVERSED AND IS ACCORDINGLY REVERSED. RESULTANTLY THE ORDER OF THE ASSESSING OFFICER IN THIS BEHALF IS RESTORED. APPEAL FILED BY THE DEPARTMENT IS ALLOWED. MA 10-RJT-2014 (OUT OF ITA NO. 347-RJT-2011) HARSH INTERNATIONAL - 4 - 9. IN VIEW OF THE FOREGOING FOLLOWING THE DECISION OF TRIBUNAL DATED 03.01.2014 IN ASSESSEES OWN CASE FOR AY 2006-07 AND 2007-08 I N ITA NOS.409/RJT/2013 AND 1079/RJT/2010 RESPECTIVELY WE UPHELD THE ACTION OF LD. CIT(A) IN THIS REGARD AND DISMISS THE APPEAL OF THE ASSESSEE. 10. IN THE RESULT FOR STATISTICAL PURPOSES THE MI SCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED AND THE APPEAL OF THE ASSES SEE IS DISMISSED. 11. SINCE ONE OF US (THE AM) IS NOT AVAILABLE AT RA JKOT THIS ORDER SHALL BE DEEMED TO HAVE BEEN PRONOUNCED ON THE DATE ON WHICH IT IS NOTIFIED ON THE NOTICE BOARD OF RAJKOT BENCH IN TERMS OF RULE 34 OF THE IN COME-TAX (APPELLATE TRIBUNAL) RULES. SD/- SD/- (N.S. SAINI) (T. K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER )#* +) / ORDER DATE 07.04.2014 /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- M/S. HARSH INTERNATIONAL SHED NO.711 GIDC PHASE-II DARED JAMNAGAR 2. / RESPONDENT- THE ACIT CIRCLE-2 JAMNAGAR 3. ' 1 % 2 / CONCERNED CIT JAMNAGAR 4. % 2- / CIT (A) JAMNAGAR 5. 678 / DR ITAT RAJKOT 6. 8; <= / GUARD FILE. \ \ \ )#* '# / BY ORDER TRUE COPY PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL RAJKOT