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Aarti Drugs Limited Versus The Addl. CIT, Range 6 (1) , Mumbai and Vica-Versa

2015 (9) TMI 383 - ITAT MUMBAI

Non consideration of sale of DEPB as export incentives for deduction u/s. 80HHC - Held that:- In view of the convergence of the stands the rival counsels, and noting that the issue raised are governed by the ratio of the judgment of Hon’ble Supreme Court in the case of Topman Exports vs. CIT (2012 (2) TMI 100 - SUPREME COURT OF INDIA) wherein the decision of CIT vs. Kalpataru Colors & Chemical (2010 (6) TMI 63 - BOMBAY HIGH COURT) has since been reversed to held that DEPB has direct nexus with t .....

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statistical purposes.

Deduction allowable under section 80HHC where the assessee is also eligible for deduction under section 80IB - Held that:- Tribunal following the decision ACIT vs. Hindustan Mint & Agro Products Pvt. Ltd.,(2009 (6) TMI 124 - ITAT DELHI-C ) decided the issue against the assessee in principle which was reversed by Hon’ble Bombay High Court in the case of Associated Capsules vs. CIT (2011 (1) TMI 787 - BOMBAY HIGH COURT) and, therefore, it is no longer a good law.Th .....

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10/2010. Subsequently, on a Miscellaneous Application preferred by the assessee, Tribunal vide its order in MA Nos.255 to259/Mum/2013 dated 3/1/2014 partially recalled the earlier order dated 27/10/2010 for re-adjudication on two issues, which is common in the three captioned assessment years. For the aforesaid purpose, the captioned appeals have been posted for hearing. 2. In the above background, the Ld. Representative for the assessee referred to the order of the Tribunal dated 3/1/2014(supra .....

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2005 passed under section 143(3) of the Income Tax Act, 1961 ( in short the Act ). 3. For the present, we are concerned with the issue raised in Grounds of appeal NO.6 & 10 of the assessee, which read as under: 6. Re: Non consideration of sale of DEPB as export incentives for deduction u/s. 80HHC. 6.1 On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in not considering the profit on sale of DEPB as export incentive for deduction u/s. 80HHC relying on .....

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0HHC and that the learned CIT(A) erred in considering the entire proceeds from the sale of DEPB as covered by the said amendment. 10.Re: Restriction of deduction u/s. 80HHC invoking sec. 80IB(13) /S.80IA(9). 10.1 The learned CIT(A) erred in giving effect to the provisions of / S. 80IB(13)/ S.80IA(9) for working out the deduction u/s. 80 HHC without appreciating that there was no double deduction as the total deductions u/s. 80IB and S.80HHC was less that the profits of the new industrial underta .....

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ice to the above, the learned CIT(A) ought to have excluded only the deduction u/s.80HHC computed in respect of the exports from the new industrial undertaking considering the profits of the new industrial undertaking as only in respect of that profit there could be double deduction. 4. Ground of appeal No.3, in the appeal of the Revenue, which has also been recalled for adjudication, reads as under: 3. On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing t .....

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ppeal No.6, the issue raised by the assessee related to non-consideration of profit on sale of DEPB Licences as an export incentive for the purposes of computing deduction under section 80HHC of the Act. On this aspect, the CIT(A) had decided the issue against the assessee. Furthermore, in the cross-appeal, by way of Ground of appeal No.3, Revenue had contested the decision of CIT(A), whereby the incomes on account of Advance Licence benefit, DEPB entitlement and DFRC benefits were held to be co .....

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cals, 192 Taxman 435(Bom), and, therefore, remanded the matter back to the file of Assessing Officer with such directions. 5.2 Presently, the contention of the assessee is that the issue is now liable to be decided in the light of the subsequent judgment of the Hon ble Supreme Court in the case of Topman Exports vs. CIT, 342 ITR 49(SC), wherein the decision of Hon ble Bombay High Court in the case of CIT vs. Kalpataru Colors & Chemical(supra) has since been reversed. 5.3 In the above backgro .....

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pra), we hereby set aside the impugned order of CIT(A) on the aforesaid aspects and the matter is restored back to the file of Assessing Officer for re-adjudication afresh in the light of judgment of Hon ble Supreme Court in the case of Topman Exports vs. CIT (supra). Needless to mention, the Assessing Officer shall allow the assessee a reasonable opportunity of being heard before passing an order on this aspect as per law. Accordingly, Ground of appeal No.6 in the appeal of the assessee and cro .....

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ection 80HHC of the Act, after reducing the amount of deduction allowed under section 80IA/80IB of the Act in view of the provisions of section 80IA(9)/80IB(13) of the Act. On the earlier occasion, the Tribunal, following the decision of the Special Bench of the Tribunal in the case of ACIT vs. Hindustan Mint & Agro Products Pvt. Ltd.,119 ITD 107(Del) (SB) decided the issue against the assessee in principle. However, the matter was set-aside to the file of the Assessing Officer for the limit .....

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Ltd., (supra) has since been reversed by Hon ble Bombay High Court in the case of Associated Capsules vs. CIT, 332 ITR 42(Bom) and, therefore, it is no longer a good law. This aspect of the matter has not been contested by the Revenue before us. Thus, following the ratio of the judgment of the Hon ble Bombay High Court in the case of Associated Capsules (supra), the issue raised by the assessee with regard to the computation of deduction under section 80HHC of the Act in the above stated of Gro .....

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us Application dated 3/1/2014(supra) to adjudicate the following Grounds of appeal:- Assessee s Grounds of Appeal:- 6. Re: Non consideration of sale of DEPB as export incentives for deduction u/s. 80HHC. 6.1 On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in not considering the profit on sale of DEPB as export incentive for deduction u/s. 80HHC relying on the recent amendment in section 80 HHC by virtue of the Taxation Laws amendment Act, 2005. 6.2 The .....

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covered by the said amendment. 9. Re: Not ignoring the loss from trading exports in working out the deduction u/s. 80HHC. 9.1 On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in considering the loss suffered from trading exports for working out the overall deduction u/s. 80HHC. The learned CIT(A) ought to have upheld the contention of the Appellant that the loss should be considered as Nil in working out the overall deduction u/s.80HHC and the deduction u/s. .....

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the interest cost in terms clause (e) of the Explanation to sub-section (3) of section 80HHC. 7.2 It was a common point between the parties that the aforesaid Grounds of appeal for A.Y 2003-04 are also liable to be decided in the light of our decision in the cross appeals for A.Y 2002-03 in the earlier paras. Thus, our decision in assessment year 2002-03 in earlier pars would apply mutatis mutandis in the cross-appeals for A.Y 2003-04 also. 8. Next, we may take-up the appeal for assessment year .....

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