TMI Blog2023 (2) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... en the supreme court pass the order the consequential relief be implemented in the years also. The bench fairly admitted the plea of the assessee and the assessing officer is directed to give necessary appeal effect arising out of the order of the supreme court in the case of the assessee. As decided in assessee own case [ 2018 (2) TMI 1704 - ITAT JAIPUR ] particular receipt which is found to be not income/profit derived from the business of the eligible undertaking has to be excluded for the purpose of computing the deduction u/s 80IB. Hence, we find that the case of the assessee does not fall in the category where the Assessing Officer has accepted the business of the assessee undertaking as eligible for deduction u/s 80IB in the initial year but has taken a difference stands in the subsequent years. Further, a year before us is not the first year in which the claim of the assessee u/s 80IB in respect of Vishesh Krishi Upaj Yojana and Drawback Duty has been denied but this was denied in the earlier years and for the Assessment Year 2008-09, the matter has been carried to the Hon ble Jurisdictional High Court but the assessee could not succeed. Hence, we do not find any sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question. The brief fact of the case is that the assessee had filed its return of income for A.Y. 2011-12 on 30.09.2011 declaring total income at INR 28,25,680/- The same was finally assessed u/s 143(3) of the Act on 28.01.2014 and certain additions were made to the total income which was determined at INR 34,98,760/-. 3.1 The AO had noted that the assessee has claimed Exhibition Expense of INR 1,74,509/- on which TDS @0.01% should have been done. However, the assessee failed to do so and therefore the exhibition expenses were not allowed as a deduction by the AO in view of the provisions of section 40(a)(ia) of the Act. 3.2 The AO also noted that the assessee has claimed refreshment expenses amounting to INR 17,436/- but it has failed to produce the complete evidences of these expenses and therefore, the AO disallowed 20% of the same which comes to INR 3487/-. 3.3 The AO also noted that the assessee has claimed Petrol Diesel expenses of INR 1,04,982/-. The AO disallowed 20% of these expenses amounting to INR 20,996/- in view of absence of complete details. 3.4 The AO also noted that the assessee has claimed telephone expenses at INR 55183/-. The AO held that the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Rules, 1962. This indicates that the assessee is not entitled to any relief. Lastly the claim of the assessee that there was no amount payable to M/s Export Promotion Council for Handicraft at the end of the previous year and therefore section 40(a)(ia) is not applicable is not relevant. Various High Court decisions are there which have taken the view that the word 'payable' in section 40(a)(ia) also includes 'paid'. A few such case laws in favour of Revenue are: CIT vs. Crescent Export Syndicate (20130 216 Taxman 258 (Cal); CIT vs. Sikandarkhan N Tunvar (2013) 357 ITR 312 (Guj) etc. STAX DEPARTMENT 4.2.2 In view of the above facts, it is held that the AO has correctly denied the deduction u/s 40(a) (ia) of the Act. All the grounds of appeal of the assessee in this context are dismissed. It is also mentioned that though the assessee has argued that it has deducted TDS in a subsequent financial year on 09.07.2016 relevant to AY 2017-18 and that it is enclosing evidence for the same, no evidence to this effect is seen in the documents available in this office and in any case the TDS has not been verified by any authority. Therefore, no comments are given on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t including those from the jurisdictional High Court of Rajasthan have taken the same view as above. In the case of CIT vs. Garment Crafts [2016] 68 taxmann.com 222 (Rajasthan) the High Court has reiterated that the duty drawback and DEPB are not eligible for deduction u/s 801B of the Act. The High Court has referred to the Liberty India decision (supra) and held that the decision is directly and squarely on the issue and that the issue is no more res integra, The Rajasthan High Court has also observed that its own previous judgments in the case of Saraf Seasoning Udyog [2009] 317 ITR 202 and Chokshi Contacts (P) Ltd. [2001] 251 ITR 587) were given prior to the judgment of the Hon'ble Apex Court in the case of Liberty India (supra) and thus are per-incurium. The Rajasthan High Court also held that the judgments in the case of Topman Exports [2012] 342 ITR 49 (SC) and Vikas Kalra v. CIT [2012] 345 ITR 557 (SC) cited before it, are in context of sec. 80HHC read with Explanation (baa) of the Income Tax Act, and accordingly are distinguishable. INCOME TAX DEPARTMENT 5.3 Therefore, following the decision of the Supreme Court in the case of Liberty India (supra) and the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouncil for Handicraft i.e. the recipient of expenses must has been completed by now and the amount of Exhibition charges must has been shown in his income at the time of assessment. Therefore, you will observe that if the tax has been paid by the recipient on income which is subject matter. In these circumstances the expenses cannot be under the said section. It is therefore, requested that the amount disallowed may kindly be deleted. Further without prejudice to above it is further submitted that recipient of the expenses is also existing assessee assessed to tax. The tax was not too deducted on the prescribe rate therefore, being income tax assessee applied for lower tax deduction before the competent authority. For the purpose of lower deduction of tax U/s 197 of Income Tax Act, the recipient M/s. Export Promotion Council of Handicraft applied for Deduction certificate and same was granted to him by his assessing officer. A copy thereof was submitted before the Assessing Officer and copy of order of AO being attached. From perusal of the same, you will observe that tax @0.01% is to be deducted and it is admitted that necessary evidence was submitted before the AO. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court against everyone. I hope you will consider and accept my prayer. As regards charging of interest same is consequential. It is therefore submitted that necessary order may kindly be passed. 7. Per contra, the ld. Sr. DR has relied upon the orders of the ld. CIT(A) and submitted their counter written submission on 13.02.2023 along with the supporting case laws which reads as under:- The assessee had filed its return of income for A.Y 2011-12 on 30.09.2011 at total income of Rs 28,25,680/-. The same was finally assessed u/s 143(3) On 28.01.2014 at Rs. 34,98,760/-. The AO had made additions u/s 40(a)(ia) for non-deduction of TDS on Exhibition expenses of Rs. 174509/-. The AO also noted that the assessee has claimed a deduction u/s 801B in respect of Duty Drawback of Rs. 1852184/- which was restricted to Rs. 473840/-. The assessee approached the CIT(A) who confirmed the additions made by the AO. Aggrieved by the above decisions the assessee approached the ITAT. Ground No. 1 Regarding disallowance u/s 40(a)(ia) The assessee has claimed deduction for exhibition expenses of Rs.174509/- which were paid to M/s Export Promotion Council for Handicraf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R of the assessee which is dated 26.09.2022 where in he has contended that the he has appeared before the bench and has argued the case. This fact mentioned by the ld. AR of the assessee are not correct. As the assessee sought an adjournment of the hearing fixed on 26.09.2022 stating that the ld. AR of the assessee he is going to argue the bench of ITAT at Jodhpur and therefore, not been able to appear before us. The relevant letter is placed on record here in below:- Sir, With reference to the above, I want to submit that our above case is listed on the 26th of this month. In this connection it is stated that our advocate Shri Suresh Ojha Shall be at Jodhpur before the camp of the Honorable Income Tax Appellate Tribunal. It is requested that the appeal fixed for hearing may kindly be adjourned to another day on Monday for a virtual hearing. Hope you will consider the request. Inconvenience course to your regretted. Thanking you, Date:- 23.09.2022 Yours Faithfully For Saraf Exports 8.1 Thereafter vide letter dated 29.09.2022 letter addressed to CBDT chairmen sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee claimed that the appeal of the assessee was fixed on 15.11.2022 and stated that why the same is not decided. On 15.11.2022 bench adjourned the case on 18.1.2023, on that date the ld. DR given copy of the submission and email received stating that the appeal be decided based on the written submission filed. The same were informed to ld. DR, and the matter was adjourned to 08.02.2023. On 08.02.2023 ld. DR seek time to file written submission matter adjourned to 14.02.2023. On 14.02.20233 the ld. DR also filed the written submission and since the ld. AR of the assessee already informed that the matter be decided based on the written submission already filed. Taking into consideration all these facts this appeal of the assessee decided based on the written submission filed by both the party. 8.3 We have persuaded the written submission, orders of the lower authorities and legal decision relied upon by both the parties to drive home their contentions. The bench noted that the assessee time and again contended that the matter was argued by him on 26.09.2022 but the same as it evident the assessee seek time on that date. Therefore, the contentions raised are far from trut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. AR as well as Ld. DR and considered the relevant material on record. There is no dispute on the point that if the assessee was found to be eligible for deduction u/s 80IB in the initial year of claim then the Assessing Officer cannot deny the benefit of claim in the subsequent years without disturbing the order of earlier year. However, in the case in hand, the assessee was not denied the eligibility of deduction u/s 80IB but only a particular receipts/income has been held as not eligible for deduction u/s 80IB on the ground that it is not an income derived by the industrial undertaking. Therefore, a particular receipt which is found to be not income/profit derived from the business of the eligible undertaking has to be excluded for the purpose of computing the deduction u/s 80IB. Hence, we find that the case of the assessee does not fall in the category where the Assessing Officer has accepted the business of the assessee undertaking as eligible for deduction u/s 80IB in the initial year but has taken a difference stands in the subsequent years. Further, a year before us is not the first year in which the claim of the assessee u/s 80IB in respect of Vishesh Krishi Upaj Yo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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