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M/s Nulux Engineers Versus Addl. Commissioner of Income Tax Ward-20 (2) , Mumbai And Vice-Versa

2017 (9) TMI 526 - ITAT MUMBAI

Disallowance of claim of deduction under section 80HHC of DEPB profit - Held that:- We find that this issue is clearly covered by the decision of Hon’ble Bombay High Court in the case of CIT vs Kalpataru Colours and Chemicals (2010 (6) TMI 63 - BOMBAY HIGH COUR) and also followed by Mumbai Tribunal [2013 (8) TMI 1049 - ITAT MUMBAI] whereby Tribunal has directed the AO to recompute the deduction under section 80HHC of the Act in respect of DEPB profit in the light of judgement of Hon’ble Supreme .....

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out of the different orders of CIT(A)-XX & CIT(A)-31, Mumbai, in appeal Nos. CIT(A)XX/IT-197/Addl.cit.20(2)/2005-06 & CIT(A)-31/IT-204/ACIT 20(20)/13-14 dated 27-12-2006 & 24-09-2014. The Assessments were framed by ACIT, Mumbai for the A.Ys. 2003-04 & 2002-03 vide orders dated 20-02-2006 & 30-08-2013 under section 143(3) and 154 of the Income Tax Act, 1961(hereinafter the Act ). 2. At the outset, the learned Counsel for the assessee stated that this appeal is time barred by 2 .....

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he appeal was to be filed before Tribunal against this order on or before CIT(A) 28-02-2007. He stated that actually, the appeal was filed only on 22-03-2013 thereby this delay of filing in appeal by 2216 days. For this the learned Counsel for the assessee stated that following reasons for the delay: - 5. I say that although we had informed our tax consultant that Federation of Indian _Exports Association (of which we are also member) is contesting the retrospectivity on behalf of all the member .....

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Income Tax Appellant Tribunal being creature of the Act cannot decide the constitutional validity of such an amendment. He also opinioned that in view of aforesaid it is not advisable to litigate and he even opinioned that the argument that only "profit" is to be excluded and whole is against the assessee as is evident by the Commissioner of Income Tax (Appeal)'s order who has followed binding decision of Income Tax Appellant Tribunal. 6. I say that the argument on "profit&quo .....

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ed assessment year, they have pointed out that as per Supreme Court decision in the case of Topman Exports Vs. Commissioner of Income Tax (2012) 67 DIR (SC) 185 the assessee firm would be eligible for deduction u/s 80NHC on the face value of DEPS which will be considered as "cash assistance" and would be taxable under section 28(iiib) and not u/s 28(iiid) of the Income Tax Act and hence the 3rd proviso to section SOHHC would not apply to such receipt. Based on this correct legal positi .....

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R 566 (Born) in which Mumbai High Court has held that the amendment in sec 80HHC relating to DEPB benefits deprives the benefit granted earlier to a class of assessee's and is accordingly violative for its retrospective operation. This decision was delivered on 16.08.2012. I say that these decisions of Supreme Court and High Court were not brought to our notice by anyone prior to February 2013. 9. I say that the firm relied on tax consultant's advice in taking a decision that due to retr .....

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firm decided to file appeal belated by 2214 days. I say and pray that the facts constitute "sufficient cause" for delay in filing appeal. 3. The learned Counsel for the assessee filed copy of Tribunal order of Kolkata Bench in the case of Magnum Exports Vs. ACIT in ITA No. 1111/Kol/2012 for the AY 2003-04 wherein facts are exactly identical. The delay of 2078 days was condoned exactly on identical circumstances. We find that exactly identical facts and circumstances are here in the pr .....

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me Tax(Appeals) - XX (hereinafter referred to as CIT(A) has heard in considering benefit under Duty Entitlement Pass Book Scheme ('DEPB') a DEPB' instead of 'cash assistance' and accordingly applying the 3rd Proviso to section BOHHC of the Income Tax Act, as inserted by Taxation Laws (Amendments Acts) Act, 2005. 2. Without prejudice to ground no. 1, the appellant submits that Bombay High Court in the case of Vijay Silk House (Banglore) Limited vs. Union of India & Anr has .....

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has directed the AO to recompute the deduction under section 80HHC of the Act in respect of DEPB profit in the light of judgement of Hon ble Supreme Court in the case of M/s Topman Exports (2012) 342 ITR 49 (Mum) by observing as under: - 4. We have perused the records and considered the matter carefully. The dispute is regarding allowability of claim of deduction in relation to DEPB income. The special bench of Tribunal in case of Topman Exports Ltd.(33 SOT 337) had earlier held that face value .....

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rofit u/s 28(iii d). However the Hon ble Supreme Court recently in case of Topman Exports Ltd. (Supra) have not upheld the view taken by the Hon ble High Court of Bombay and have confirmed the order passed by special bench of Tribunal on this issue, as per which the face value of DEPB has to be considered as income u/s 28 (iiib) and excess of sale price over the face value has to be considered as profit u/s 28(iii d). The deductor u/s 80HHC is, therefore, required to be computed accordingly. We, .....

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