Income Tax Appellate Tribunal - Chennai
A.Ramanathan, Chennai vs Assessee on 15 May, 2006
IN THE INCOME TAX APPELLATE TRIBUNAL
BENCH "C" CHENNAI
(Before Shri Abraham P. George, Accountant Member
and Shri George Mathan, Judicial Member)
.....
I.T.A. No. 735/Mds/2010
Assessment Year : 2003-04
Shri A. Ramanathan The Income Tax Officer,
Sri Devi Leathers Ward 1(2),
No. 26, [Old 23/1] v. Pudukottai - 622 002.
V.V. Koil Street
Periamet, Chennai - 600 003.
PAN : AAHPR 7260 A (Respondent)
(Appellant)
Appellant by : Shri V. Subbarayan
Respondent by : Shri B. Srinivas
O R D E R
PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER :
This appeal filed by the assessee raises a grievance that it was denied deduction u/s 80HHC(3) of the Income-tax Act, 1961 [in short, the Act] on the duty drawback incentive received by it under the Duty Drawback Rules, 1995.
2 I.T.A. No. 735/Mds/10
2. Assessee, an exporter of leather and leather goods, claiming deduction u/s 80HHC of the Act, had while filing its return for the impugned Assessment Year, declared a total income of Rs. 88, 203/-. The deduction claimed u/s 80HHC of the Act was Rs. 6,55,544/-. On being denied the deduction claimed under the Duty Drawback Rules, 1995, assessee moved in appeal before the ld. CIT(A). Ld. CIT(A) upheld the order of the Assessing Officer holding that the Assessing Officer was right in considering the duty draw back incentive received by assessee as one not under the Customs and Central Excise Duty Drawback Rules, 1971.
3. Now before us, the ld. A.R. strongly assailing the orders of the authorities below, submitted that Circular No.5 dated 15.5.2006 [F. No. 153/41/2006-TPL] of the CBDT was entirely in its favour. According to him, CBDT Circular substantiated the claim of the assessee and benefit u/s 80HHC of the Act could not be denied to assessee claiming duty drawback under Duty Drawback Rule, 1995. Reliance was also placed on the decision of the co-ordinate bench of this Tribunal in the case of M/s Jai Hind Looms Exports Vs. ACIT ITA No. 1199/Mds/2006 dated 13.11.2009.
3 I.T.A. No. 735/Mds/10
4. Per contra, the ld. D.R. submitted that the Circular relied on by assessee was subsequent to the date of assessment order and hence not applicable.
5. We have heard the rival submissions and perused the orders. CBDT Circular No.5 dated 15.5.2006 relied on by the ld. A.R. is clarificatory in nature. Paras 4 and 7 of the said circular is reproduced hereunder:
"4. References have been received by the Board indicating that the assessing officers are denying the claim of deduction under section 80HHC on account of duty drawback granted to the assessee in accordance with Customs and Central Excise Duties Drawback Rules, 1995 as clause (iiic) of section 28 refers to Customs and Central Excise Duty Drawback Rules, 1971.
5. ................................................................................
6. ................................................................................
7. By virtue of provisions of section 8 of General Clauses Act, 1897, read with Rule 18 of the 4 I.T.A. No. 735/Mds/10 Customs and Central Excise Duties Drawback Rules, 1995, which provides for repeals and savings of the 1971 Rules, the benefit of section 80HHC cannot be denied to an assessee claiming refund of the duty drawback under Duty Drawback Rules, 1995. However, the claim of deduction has to be allowed subject to fulfillment of all other conditions provided under section 80HHC."
We are of the opinion that such clarificatory circular, whether issued after the date of the assessment order or before that, would have to be given full effect. In any case, this Circular was very well there when the ld. CIT(A) considered the appeal of the assessee. Despite this, he failed to give relief to the assessee, which it was eligible to get. We are of the opinion that the Circular clearly brings the duty draw back received by assessee under Duty Drawback Rules, 1995 as an item eligible for claim of deduction u/s 80HHC of the Act. There is no dispute that assessee had satisfied all other conditions mentioned in section 80HHC of the Act. Therefore, we have no hesitation to direct the Assessing Officer to give deduction claimed by assessee u/s 80HHC of the Act on the duty drawback amount. In 5 I.T.A. No. 735/Mds/10 taking this view, we are fortified by the decision of the co-ordinate bench in the case of M/s Jai Hind Looms Exports Vs. ACIT [supra].
6. In the result, appeal of the assessee is allowed.
The order was pronounced in the Court on 13.08.2010.
sd/- sd/-
(George Mathan) (Abraham P. George)
Judicial Member Accountant Member
Chennai,
Dated the 13th August, 2010.
VL
Copy to: (1) Appellant
(2) Respondent
(3) CIT(A), Chennai-34
(4) CIT-II, Chennai-34
(5) D.R.
(6) Guard file