Income Tax Appellate Tribunal - Chandigarh
Trb Exports (P) Ltd., Ludhiana vs Assessee on 16 February, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES 'A' CHANDIGARH
BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT
AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER
ITA No. 1255/Chd/2011
Assessment Year:2004-05
M/s TRB Exports (P) Ltd., Vs The ACIT, Circle V,
Ludhiana Ludhiana
PAN No. AAACT8590M
(Appellant) (Respondent)
Appellant By : Shri Sudhir Sehgal
Respondent By : Shri N.K. Saini
Date of hearing : 16.2.2012
Date of Pronouncement : 21.2.2012
ORDER
PER H.L.KARWA, VP This appeal by the assessee is directed against the order of CIT(A)-II, Ludhiana dated 25.10.2011 relating to assessment year 2004-05
2. In this appeal, the assessee has raised the following grounds of appeal:-
1. That the Ld. CIT(A) has erred in upholding the order of the Assessing Officer in not allowing deduction u/s 80HHC in respect of incentive on account of DFRC and DEPB licenses.
2. That the Ld. CIT(A) has erred in not considering that the 2 Hon'ble ITAT had set-aside the issue in respect of deduction u/s 80HHC to the file of Assessing Officer to be decided in the light of judgment of Mumbai Bench of the ITAT in the case of M/s Topman Exports.
3. That the Ld. CIT (A) has erred in not considering that the Assessing Officer was duty bound to follow the s pecific instruction of Hon'ble ITAT to follow the decision of the Mumbai Bench of ITAT in the case of M/s Topman Exports.
4. That Without prejudice to above said grounds of appeal, it is submitted that even otherwise deduction u/s 80HHC had been rightly claimed by the appellant and as such, The Worthy CIT(A) has erred in upholding the action of Assessing Officer in not giving the benefits of deduction u/s 80HHC on DEPB/DFRC licenses as claimed by the appellant.
5. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.
3. Briefly stated, the facts of the case are that the assessee filed the original return of income at an income of Rs. 1,41,06,460/- which was subsequently revised at an income of Rs. 1,30,37,198/-. First assessment in this case was made u/s 143(3) of the Income Tax Act, 1961 (in short 'the Act') vide order dated 28.12.2006 wherein the income was assessed at Rs. 1,63,85,747/- by disallowing deduction u/s 80HHC on various issues and disallowances of personal and Director's wife expenses on foreign visit. The assessee went in appeal before the CIT(A) who vide order dated 20.2.2008 partly allowed the appeal on the issue of deduction u/s 80HHC and the disallowance of foreign travel expenses was confirmed. In second appeal, the Tribunal vide order dated 31.8.2009 restored the iss ue in respect of deduction u/s 80HHC to the file of the Assessing Officer to be decided in the light of the decision of Mumbai (Special Bench ) of ITAT in the case of M/s Topman 3 Exports . Based on the above order of Tribunal, the Assessing Officer framed the assessment vide order dated 20.12.2010 wherein he has again assessed income at a figure of Rs. 1,63,85,747/- which was income assessed in the original assessment order. On appeal, the CIT(A) rejected the claim of the assessee observing as under:-
"5. The next issue raised by the appellant is the legality of the action of the AO in disallowing the deduction u/s 80HHC on the DEPB/DFRC Licenses. The ld. AR has basically stressed upon the fact that the AO was required to follow the decision of the Hon'ble Chandigarh Bench in the case of M/s Topman Exports had been referred. However, the fact of the matter is that the above decision of the Special Bench has since been reversed by the Hon'ble Bombay High Cour t in the case of CIT v. Kalaptru Colours and Chemicals, 42 DTR 193 and thereafter even the Hon'ble Punjab & Haryana High Court in the number of cases which have been mentioned by the AO in its assessment order have held that the said decision of the Hon'ble Bombay High Court should be considered by the Hon'ble Chandigarh ITAT and its earlier decision has been set aside. Thus, under the circumstances, the action of the AO is justified. Though, I am in agreement with the ld. counsel for the appellant that the Hon'ble Chandigar h Bench has directed the AO to decide the issue afresh on merits, but nevertheless, the decision of the Kalaptru Colours (supra) wherein it has been clearly decided that the complete sales proceeds of the DEPB/DFRC Licenses is to be consider ed as profits for the purpose of computing deduction u/s 80HHC. This being the legal position, I have no hesitation in upholding the action of the AO. Therefore, the assessment made by the AO is in order and the appeal of the appellant is dismissed."
4. We have heard the rival submissions and have also perused the materials available on record. At the very outset, Shri Sudhir Sehgal, Ld. Counsel for the assessee submitted that the issue is no longer res-intgra. The Hon'ble Supreme Court in the case of M/s Topman Exports v CIT, Mumbai in Civil Appeal No. 1699 of 2012 (arising out of SLP (C) No. 26588 of 2010) & others vide judgment dated February 8, 2012 set-aside the judgment and orders of Hon'ble Bombay High Court in the case of CIT V Kalapataru 4 Colours and Chemicals (2010) 328 ITR 451, M/s Topman Exports and other connected appeals. A copy of the judgment of the Hon'ble Supreme Court was filed before us. Shri Sudhir Sehgal, Ld. Counsel f or the assessee submitted that the issue may be restored to the file of the As sessing Officer with a direction to decide the same afresh in accordance with law following the ratio laid down by the Hon'ble Supreme Court in the case of M/s Topman Exports v CIT, Mumbai (supra) and compute the deduction u/s 80HHC on DEPB/DFRC licenses in this case as per judgment of the Hon'ble Supreme Court referred to above. For statistical purposes, the appeal is allowed.
5. In the result, appeal is allowed for statis tical purposes .
Order Pronounced in the Open Court on this 21 s t day of February,
2012
Sd/- Sd/-
(MEHAR SINGH) (H.L.KARWA)
ACCOUNTANT MEMBER VI CE PRESIDENT
Dated : 21 s t February, 2012
Rkk
Copy to:
1. The Appellant
2. The Respondent
3. The CIT
4. The CIT(A)
5. The DR
True Copy
By Order
Assistant Registrar