Income Tax Appellate Tribunal - Mumbai
Binayak Tex Processors Ltd, Mumbai vs Department Of Income Tax on 11 April, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES " B ", MUMBAI
BEFORE SHIRI G.E. VEERABHADRAPPA, HON'BLE PRESIDENT
AND SHRI AMIT SHUKLA, JUDICIAL MEMBER
ITA No.6316 /Mum/2010
Assessment Year: 2004-2005
DCIT CC, 39, GR. FLOOR, M/S BINAYAK TEX
AAYAKR BHAVAN, PROCESSORS LTD., 384-M,
M.K.RD., MUMBAI-400 Vs. DHABOLKARWADI, 5TH FLOOR,
020. KALBADEVI RD., MUMBAI
PAN NO.AAACB1554D
Appellant-Revenue Respondent-Assessee
Appellant-Revenue by : Mr. Pravin Varma
Respondent-assessee by : Mr. S.L.Jain
Date of hearing : 11th April 2012
Date of pronouncement : 18th April 2012
O R D E R
PER AMIT SHUKLA (J.M.) :
The revenue has preferred this appeal against the order dated 10-6-2010, passed by CIT(A)-41, Mumbai for the quantum of assessment determined under Section 143(3) read with Section 153A for the assessment year 2004-2005 on the following grounds of appeal :-
"1. On the facts and in the circumstances of the case and in law, the Ld. CIT(AS) erred in directing the A.O. to allow the deduction under section 80HHC as per decision given by the Hon'ble ITAT in the case of Topman Exports, 125 TTJ 289 (S.B.) Mumbai, ignoring the fact the Hon'ble Bombay High Court in the case of the Commissioner of Income Tax-14 Vs. Topman Exports (Income Tax 2 ITA No : 6316/Mum/2010 DCIT-41,Mumbai Vs. M/s Binayak Tex Processors Ltd.
Appeal (Lodg.) No.3019 of 2009] vide its order dated 29th June, 2010 decided the issue in favour of the Revenue ?
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(AS) erred in applying the decision of the Special Bench in the case of Topman Exports 125 TTJ 289 (S.B.) Mumbai, ignoring the fact that the Hon'ble Bombay High Court in the case of the Commissioner of Income Tax-14 vs Topman Exports followed its own decision dated 28th / 29th June, 2010 in the case of the Commissioner of Income Tax vs. Kalpataru Colours and Chemicals [ITA(L) 2887 of 2009] wherein it was held that the view of the Tribunal on the questions of law formulated by the Revenue was unsustainable."
2. The only issue involved is the allowance of deduction under Section 80HHC by the CIT (A) following the decision of Special Bench of ITAT in the case of Topman Exports Vs. ITO (2009) 318 ITR (AT) 87 (Mum)(SB). The relevant findings of the CIT(A) to this effect are reproduced herein below :-
"2.4 The Assessing Officer has also not allowed deduction u/s.80HHC on DEPB License in the original assessment which has been confirmed by the Honourable CIT(A). The Assessing Officer has also not allowed deduction u/s.80HHC in order u/s.143 r.w.s. 153A of the Act on 22.12.2010. The Honourable ITAT in the case of the appellant in the assessment year 2004-2005 itself have held that both parties agreed that the issue is covered by the decision of Special Bench in the case of Topman Exports Vs. ITO (2009) 318 ITR (AT) 87 (Mum)(SB), following the said decision, the issue has been set aside to the file of the AO for fresh adjudication in the light of the propositions laid down in this decision. In view of this fact, the Assessing Officer is directed to allow the deduction u/s. to the appellant u/s.80HHC on the basis co decision of the Honourable Special Bench in the case of Topman Exports Vs. ITO supra after allowing opportunity of being heard to the appellant in 3 ITA No : 6316/Mum/2010 DCIT-41,Mumbai Vs. M/s Binayak Tex Processors Ltd.
the light of the provisions laid down in the said decision. Ground of appeal lNo.3 & 4 are partly allowed."
3. The grievance of the Department in the grounds of appeal is that the said judgment of the Special Bench has been reversed by the Hon'ble Jurisdictional High Court in the case of CIT Vs. Topman Exports, following the decision of CIT Vs. Kalpataru Colours & Chemicals.
4. The learned AR appearing on behalf of the respondent- assessee submitted that now the said judgment of the Hon'ble High Court has been reversed by the Hon'ble Supreme Court in the case of Topman Exports Vs. CIT, reported in [2012] 342 ITR 49(SC).
5. The learned Senior DR in all fairness agreed that the issue is now stands covered by the judgment of the Hon'ble Apex Court in the case of Topman Exports (supra).
6. After hearing both the parties, we find that the issue is squarely covered by the judgment of the Hon'ble Supreme Court in the case of Topman Exports (supra), wherein the Bench of Three Judges after analyzing the provisions of Section 28(iiib) & (iiid) along with the rules of Duty Entitlement Passbook Scheme (DEPB) and Section 80HHC in detail, have summarized their finding in the following manner :-
"We are, thus, of the considered opinion that while the face value of the DEPB will fall under clause (iiib) of Section 28 of the 4 ITA No : 6316/Mum/2010 DCIT-41,Mumbai Vs. M/s Binayak Tex Processors Ltd.
Act, the difference between the sale value and the face value of the DEPB will fall under clause (iiid) of Section 28 of the Act and the High Court was not right in taking the view in the impugned judgment that the entire sale proceeds of the DEPB realized on transfer of the DEPB and not just the difference between the sale value and the face value of the DEPB represent profit on transfer of the DEPB".
Their Lordships have also analyzed the judgment of Hon'ble Bombay High Court in detail and disagreed with the interpretation and proposition laid down by the Hon'ble High Court.
7. Thus, respectfully following the aforesaid judgment of the Hon'ble Supreme Court, we dismiss the grounds taken by the Department and direct the Assessing Officer to recompute the deduction under Section 80HHC following the principle and ratio laid down by the Hon'ble Supreme Court in the case of Topman Exports (supra).
8. In the result, appeal filed by the revenue is hereby dismissed subject to the direction given as above..
Order pronounced on this 18th day of April, 2012.
Sd/- Sd/-
( G.E. VEERABHADRAPPA ) ( AMIT SHUKLA )
PRESIDENT JUDICIAL MEMBER
MUMBAI, Dt: 18th April, 2012
5
ITA No : 6316/Mum/2010
DCIT-41,Mumbai Vs. M/s Binayak Tex Processors Ltd. Copy forwarded to :
1. The Appellant,
2. The Respondent,
3. The C.I.T.
4. CIT (A)
5. The DR, B - Bench, ITAT, Mumbai //True Copy// BY ORDER ASSISTANT REGISTRAR ITAT, Mumbai Benches, Mumbai Pkm