Income Tax Appellate Tribunal - Chennai
Atlas Metal Processors P Ltd., Chennai vs Acit Corporate Circle 1(1), Chennai on 3 October, 2019
आयकर अपील य अ धकरण ,' बी (SMC) ' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL
"B(SMC)" BENCH, CHENNAI
ी एन.आर.एस .गणेशन, या यक सद य एवं
ी एस जयरामन, लेखा सद य के सम"
BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND
SHRI S. JAYARAMAN, ACCOUNTANT MEMBER
आयकर अपील सं/.I.T.A. Nos. 1994 & 1995/Chny/2018
नधारण वष/Assessment Years : 2001-02 & 2004-05
M/s. Atlas Metal Processors P. Ltd., Assistant Commissioner of Income
29/69, Eldams Road, Vs. Tax,
Teynampet, Corporate Circle 1(1),
Chennai - 600 018. Chennai.
[PAN: AAACA 7401Q]
(अपीलाथ /Appellant) (#$यथ&/Respondent)
अपीलाथ& क' ओर से/Appellant by : Shri. M. Karunakaran, Advocate
#$यथ& क' ओर से/Respondent by : Shri. P. Muthushankar, JCIT
सुनवाईक'तार ख/Date of Hearing : 03.10.2019
घोषणाक'तार ख/Date of Pronouncement : 23.12.2019
आदे श/ O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The assessee filed these appeals against the consolidated order passed by the Commissioner of Income Tax (Appeals)-1, Chennai in ITA Nos. 21,20,23&22/CIT(A)-1/2007-08 dated 27.03.2018 for the assessment years 2001-02 & 2004-05, respectively.
:-2-: ITA No.1994 & 1995/Chny/2018
2. The assessee filed the above appeals with a delay of 18 days. In the condonation petitions, it was submitted that the director of the assessee company was out of station and he returned to Chennai on 21.6.2018. Therefore, these appeals could not be filed in time and hence it was pleaded that the delay in filing these appeals be condoned and justice be rendered.
2.1 We heard the rival submissions and condone the delay in filing the above appeals.
3. M/s. Atlas Metal Processors Ltd., the assessee, is a 100% manufacturer-exporter of stainless steel articles. While making the assessment for assessment year 2001-02, the AO restricted the assessee's claim for deduction u/s. 80HHC by invoking the provisions of section 80IA(9). In the assessment made for the assessment year 2004-05, the AO denied the deduction u/s. 80IA in respect of profit on sale of DEPB licenses, excluding the deduction claimed u/s. 80IA from the profits for the computation of deduction u/s. 80HHC and denied the deduction u/s. 80HHC in respect of profit on sale of DEPB licenses. Aggrieved, the assessee filed appeals before the CIT(A). The Ld. CIT(A) dismissed those appeals.
:-3-: ITA No.1994 & 1995/Chny/2018
4. Aggrieved against those orders, the assessee filed these appeals with following grounds :
For the assessment year 2001-02 "1. The learned Commissioner of Income-tax (Appeals) erred in sustaining the order of the assessing officer in disallowing the appellant's claim of Deduction under section 80HHC after Deduction u/s 801A.
2. The appellant submits that in computation of deduction U/s 80HHC has reduced Deduction u/s 80lA of Rs 2,84,670/- which was not correct as independent calculation has to be made for each of the deductions as per Apex court order in ACIT vs Micro Lab Ltd Appeal No 7427 of 2012 confirming Bombay High Court Judgement in Associated Capsules P Ltd Vs DCIT Central Circle 43, Mumbai in Appeal No 3036 of 2010 (332 ITR 42). The Hon'ble Supreme Court has noted the difference of opinion of the various courts on this issue and referred the matter to a larger Bench and the reference is pending as on date.
3. The appellant submits that the Commissioner of Income-
tax(Appeals) dismissed the appeal on this grounds in haste was not justified and could have kept the matter in abeyance and pass favourable orders.
4. The appellant therefore prays that the Hon'ble Income-tax Appellate Tribunal may be pleased to permit the claim of deduction u/s 80 HHC independently without deducting amount of deduction u/s 80lA and render justice."
For the assessment year 2004-05.
"1. The learned Commissioner of Income-tax (Appeals) erred in sustaining the order of the assessing officer in disallowing the appellant's claim of Deduction under section 80HHC after Deduction u/s 80lA and not allowing the claim of Duty Draw bak and DEPB License sale in calculation of deduction U/s 80HHC relying on retrospective amendment to section.
2. The appellant submits that in computation of deduction U/s 80HHC has reduced Deduction u/s 80lA of Rs4,25,540/- which was not correct as independent calculation has to be made for each of the deductions as per Apex court order in ACIT vs Micro Lab Ltd Appeal No 7427 of 2012 confirming Bombay High Court Judgement in Associated Capsules P Ltd Vs DCIT Central Circle 43, Mumbai in Appeal No 3036 :-4-: ITA No.1994 & 1995/Chny/2018 of 2010 (332 ITR 42). The Hon'ble Supreme Court has noted the difference of opinion of the various courts on this issue and referred the matter to a larger Bench and the reference is pending as on date.
3. The appellant submits that the retrospective amendment to Sec 80 HHC regarding non allowance of deduction for Sale of License and Duty Draw Back was quashed as it was a retrospective amendments by the Hon'ble Supreme Court in the case of Pritvi Cotton Mills Ltd which stated that the legislature does not possess or exercise power to reverse the decision in exercise of judicial power with regards to the retrospective amendment and hence the Appellant's claim of deduction u/s 80HHC was correct as per return of income. The same judgement was followed in Avani Export & Others Vs CIT Rajkot in Gujarat High Court SLP No 7926 of 2006
4. The appellant submits that the Commissioner of Income- tax(Appeals) dismissed the appeal on this grounds in haste was not justified and could have kept the matter in abeyance and pass favourable orders.
5. The appellant therefore prays that the Hon'ble Income-tax Appellate Tribunal may be pleased to permit the claim of deduction u/s 80 HHC independently without deducting amount of deduction u/s 80lA and render justice."
4. The ld AR argued on the above lines and submitted that the jurisdictional High Court in the case of CIT-1, Chennai vs MRF Ltd in TC(A) No 1020 of 2009 dt 27.10.2009 following the decision of the division bench in the case of SCM Creation vs ACIT reported in 304 ITR 319 decided the issue in favour of the assessee ie the relief under section 80 IA should be deducted from profits and gains of business before computing relief under section 80 HHC. Thus, the ld CIT(A) :-5-: ITA No.1994 & 1995/Chny/2018 erred in not following the decision of the jurisdictional High Court and hence pleaded to allow the above appeals. With regard to the claim for deduction u/s. 80IA in respect of profit on sale of DEPB licenses amounting to Rs.14,99,196/- and the duty drawback of Rs.89,374/- for the assessment year 2004-05, the ld AR invited our attention to the decision of ld CIT(A) in the assesssee's own case rendered for the assessment year 2003-04, in the same consolidated order, wherein the ld CIT(A) applying the Hon'ble Apex court decision in the case of CIT vs Avani Exports (2015) 58 taxmann.com 100 (SC) that, the provision of taxation law amendment Act 2005 can only have prospective effect and the exporters having a turnover of below Rs. 10 Crores and the exporters having a turnover of above Rs. 10 Crores should be treated similarly, allowed the assesssee's appeal. However, for this assessment year ie ay 2004-05 , a subsequent one, the ld CIT(A) wrongly failed to allow the appeal and hence pleaded to allow the appeal on this issue.
5. Per contra, the ld DR invited our attention to the relevant portion of the ld C'sIT (A) observation that "It is found that the said issue came before the Hon'ble Supreme Court in the case of ACIT vs. Micro labs Lid (2015) 64 taxman.com 199 (SC). The Hon'ble Supreme Court has noted the difference of opinion of the various High Courts on this issue and :-6-: ITA No.1994 & 1995/Chny/2018 referred the matter to a larger Bench and the reference is pending as on date. It is observed that on the same issue, the Delhi High Court in the case of Great Eastern Exports Vs CIT (2011) 332 ITR 14 and the Kerala High Court in the case of Olam Exports India Ltd vs CIT [2011] 332 ITR 40 and the Gujarat High Court in the case of CIT vs Atul Intermediates [2014] 45 taxman.com 275 (Gujarat) have held in favour of revenue. The ITAT Special Bench Chennai in the case of CIT vs Rogini Garments (2007) 108 ITD 49 had also held a similar view. Respectfully following the same, this ground of appeal us dismissed." and then supported the orders of the ld CIT(A).
6. We heard the rival submissions and considered them carefully. It is clear from the above that the issue, whether the relief u/s. 80IA should be deducted from profits and gains of business before computing the relief under section 80HHC or not, is before the larger bench of the Hon'ble Supreme Court. However, when such decision is pending, since the jurisdictional high court decision is in favour of the assessee, as pleaded by the ld AR supra, following it we allow the assessee's appeal. With regard to the assessee's claim for the deduction u/s. 80IA in respect of profit on sale of DEPB licenses amounting to Rs.14,99,196/- and the duty drawback of Rs.89,374/- for the assessment year 2004-05, it is clear from the above that the ld CIT(A) in the assesssee's own case for the assessment year 2003-04, :-7-: ITA No.1994 & 1995/Chny/2018 in the same consolidated order, applying the Hon'ble Apex court decision in the case of CIT vs Avani Exports (2015) 58 taxmann.com 100 (SC) that, the provision of taxation law amendment Act 2005 can only have prospective effect and the exporters having a turnover of below Rs. 10 Crores and the exporters having a turnover of above Rs. 10 Crores should be treated similarly, allowed the assesssee's appeal. However, for this assessment year ie ay 2004-05, it appears by a mistake , the Ld. CIT(A) failed to allow the appeal. Therefore, we find merit in the assessee's corresponding grounds and hence allow the appeal on this issue.
7. In the result, the assessee's appeals for the assessment years 2001-02 and 2004-05 are allowed.
Order pronounced on 23rd December, 2019 at Chennai.
Sd/- Sd/-
(एन.आर.एस .गणेशन) (एसजयरामन)
(N.R.S. GANESAN) (S. JAYARAMAN)
या यकसद य/Judicial Member लेखासद य/Accountant Member
चे नई/Chennai,
0दनांक/Dated: 23rd December, 2019
JPV
आदे शक'# त1ल2पअ3े2षत/Copy to:
1. अपीलाथ&/Appellant 2. #$यथ&/Respondent 3. आयकरआय4 ु त) अपील(/CIT(A)
4. आयकरआय4 ु त/CIT 5. 2वभागीय# त न ध/DR 6. गाड7फाईल/GF