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Income Tax Appellate Tribunal - Delhi

Ito, New Delhi vs M/S. Xlnc Fashions, New Delhi on 28 September, 2017

          IN THE INCOME TAX APPELLATE TRIBUNAL
                DELHI BENCH 'D', NEW DELHI
         Before Sh. N. K. Saini, AM and Sh. K. N. Chary, JM
             ITA No. 3520/Del/2014 : Asstt. Year : 2010-11
Income Tax Officer,             Vs M/s XLNC Fashions,
Ward-22(2),                        A-14, New Friends Colony,
New Delhi                          New Delhi-110065
(APPELLANT)                        (RESPONDENT)
PAN No. AAAFX0026B

                 Assessee by : None
                 Revenue by : Sh. Sampoornanand, Sr. DR
Date of Hearing : 28.09.2017    Date of Pronouncement : 28.09.2017

                               ORDER

Per N. K. Saini, AM:

This is an appeal by the department against the order dated 14.03.2014 of ld. CIT(A)-XXIII, New Delhi.

2. During the course of hearing nobody was present on behalf of the assessee neither any adjournment was sought. We, therefore, proceeded ex-parte qua the assessee and the appeal is decided after hearing the ld. DR.

3. The only effective ground raised in this appeal reads as under:

"1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in holding that 2 ITA No. 3520/Del/2014 XLNC Fashions exemption u/s 10B was admissible to assessee on duty draw back receipt?"

4. Facts of the case in brief are that the assessee filed the return of income on 27.09.2010 declaring total income of Rs.25,109/-. Later on, the case was selected for scrutiny. The assessee during the year under consideration was engaged in the business of Manufacturing and Export of Garment accessories and was a hundred percent export oriented unit set-up at Noida. The assessee declared net profit of Rs.2,03,60,877/- and claimed exemption u/s 10B of the Income Tax Act, 1961 (hereinafter referred to as the Act) which included duty draw back amounting to Rs.1,09,47,425/-. The AO observed that since, the assessee had included the duty draw back for computing deduction u/s 10B of the Act which is on identical lines as the deductions u/s 80I and 80IB of the Act, he, therefore, disallowed the same on the basis that the Hon'ble Delhi High Court and the Hon'ble Supreme Court had not considered the duty draw back as eligible profit for computing deduction u/s 80I and 80IB of the Act.

5. Being aggrieved the assessee carried the matter to the ld. CIT(A) who directed the AO to allow the claim of the assessee by following the decision of the ITAT Delhi Bench in assessee's own case for the assessment year 2009-10. The relevant findings have been given in para 4.3 of the impugned order which read as under:

XLNC Fashions "4.3 I have carefully considered the submission of the appellant and the arguments of the Id. AR. I have also carefully perused the order of Hon'ble ITAT, New Delhi in the appellant's own case for A.Y. 2009-10, as mentioned supra. Although, in similar cases of claim of deduction u/s.

10B of the Act, where the appellant has credited duty drawback in its P&L A/c. during the year under consideration, I have taken a contrary view to that of the Hon'ble ITAT, Delhi in the appellant's own case for A.Y. 2009-10, which was based on the following judgments :

(a) CIT Vs. Menon Impex Pvt. Ltd. 259 ITR 403 (Mad)

(b) CIT Vs. Sterling Foods 237 ITR 579 (SC)

(c) Liberty India Vs. CIT (2009) 317 ITR 0218 (SC)

(d) ITO Vs. Banyan Chemicals Pvt. Ltd. 310 ITR (AT) 384 (Ahd)(TM)

(e) India Comnet International Vs. ITO 304 ITR 322 (Mad) However, in the instant case, I am bound by the judgment pronounced by Hon'ble ITAT, New Delhi, which is the jurisdictional bench of Hon'ble ITAT, in the appellant's own case for A.Y.2009-10, which is the immediately preceding assessment year, on exactly similar facts. Therefore, respectfully following the above mentioned judgment of Hon'ble ITAT in the appellant's case for A.Y. 2009-10, relief is granted to the appellant and the AO is directed to give deduction u/s. 10B of the Act as claimed by the appellant at Rs.2,03,84,339/-."

6. Now the department is in appeal. The ld. DR strongly supported the order of the AO and reiterated the observations made in the assessment order dated 04.02.2013.

XLNC Fashions

7. We have considered the submissions of the ld. DR and perused the material available on the record, it is noticed that the ld. CIT(A) by following the earlier order dated 27.01.2014 of the ITAT Delhi Bench 'H', New Delhi in ITA No. 4712/Del/2012 for the assessment year 2009-10 in assessee's own case has directed the AO to allow the deduction u/s 10B of the Act. We, therefore, do not see any valid ground to interfere with the findings of the ld. CIT(A) and accordingly do not see merit in this appeal of the department.

8. In the result, the appeal of the department is dismissed. (Order Pronounced in the Court on 28/09/2017) Sd/- Sd/-

   (K. N. Chary)                                   (N. K. Saini)
JUDICIAL MEMBER                               ACCOUNTANT MEMBER
Dated: 28/09/2017
*Subodh*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5.DR: ITAT
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