THE DCIT, CIRCLE-1(3), SURAT vs. M/S. SHREE VIJYA LAXMI EXPORTS, SURAT

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ITA 815/AHD/2016Status: DisposedITAT Surat24 July 2019AY 2012-1311 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that trading in the nature of re-export of imported goods from an SEZ unit is eligible for deduction under Section 10AA, following previous ITAT and High Court decisions. The deletion of additions for interest and remuneration was also upheld.

What were the facts?

The Revenue appealed against the CIT(A)'s decision to allow deduction under Section 10AA for profits from re-export of imported goods, arguing it was trading, not manufacturing. The Revenue also appealed the deletion of additions for excess interest and remuneration claims.

What were the issues?

Whether re-export trading activities in an SEZ are eligible for deduction under Section 10AA, and whether additions for partner interest and remuneration were justified.

Which sections of the Income-tax Act were involved?

Section 10AA

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Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: SHRI BHAVNESH SAINI & SHRI O.P.MEENA

For Respondent: Shri O.P.Singh –CIT(DR)
Hearing: 22.07.2019

Heard together (2 matters)

ITA No.2342/AHD/2014
I.T.A. No. 815/AHD/2016

Read from the judgment's own cause title. This page is filed under one of them.

Per contra, the ld.Counsel for the assessee submitted that the 19. issue is covered by the decision of Hon'ble Gujarat High Court in the case of PCIT Vs. Alidhara Taxspin Engineers, Tax Appeal No.265/2017 dated 02.05.2017 wherein the disallowance in respect of remuneration and interest to partners were deleted by the Tribunal were upheld by observing that the mere incorporation of interest of the partners capital and remuneration does not signify that same are mandatory in nature.

We have heard the rival submissions and we find that the 20. issue is squarely covered in favour of the assessee and against the Revenue by the decision of Hon'ble Jurisdictional High Court of Gujarat in the case of PCIT Vs. Alidhara Taxspin Engineers(supra),

Vijayalaxmi Exports /ITA No.2342/AHD/2014 & 815/Ahd/2016 : A.Y.2011-12 & 12-13 Page 11 of 11

dated 02.05.2017, accordingly this ground of appeal of the Revenue is dismissed.

In the result, both appeals filed by the Revenue are dismissed. 21.

The order pronounced in the open court on 24.07.2019. 22.

Sd/- Sd/- (BHAVNESH SAINI) (O.P.MEENA) (�याियकसद�यतथा/JUDICIAL MEMBER) (लेखासद�यकेसम� /ACCOUNTANT MEMBER) सुरत/ Surat, �दनांक Dated: 24th July, 2019/S.Gangadhara Rao, Sr.PS Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order / / TRUE COPY / / Assistant Registrar, Surat

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