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Income Tax Appellate Tribunal, MUMBAI “B” BENCH, MUMBAI
Before: SHRI SHAILENDRA KUMAR YADAV, JUDICIAL & SHRI RAJESH KUMAR.
अपीलाथ� क� ओर से/By Appellant : Shri Jitendra Shangvi, ��यथ� क� ओर से/By Respondent :Shri Chandra Vijay,DR सुनवाई क� तार�ख/Date of Hearing : 16.08.2016 घोषणा क� तार�ख/Date of Pronouncement : 24.08.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M:
This appeal has been filed by assessee against the order of Commissioner of Income-Tax (Appeals)-XXVI, Mumbai, dated 12.10.2007 for A.Y. 2004-05 on following ground:
A.Y. 2004-05 [My Favourite Lady Exports P. Ltd. vs. ITO] Page 2
“1. That the learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of deduction u/s.80HHC amounting to Rs.38,18,344/- on export profit including DEPB incentive, excise duty refund and duty drawback.”
Issue before us is regarding disallowance of deduction u/s.80 HHC amounting to Rs.38,18,344/- on export profit including DEPB incentive, excise duty refund and duty drawback.
Learned Authorized Representative submitted that this issue is duly covered by the order of Hon’ble ITAT ‘C’ Bench Mumbai in case of Pahilajrai Jaikishin v/s. JCIT Mumbai. Learned AR also pointed out that this appeal is delayed in filing the appeal. The similar delay has also been condoned in the case of Pahilajrai Jaikishin v/s. JCIT Mumbai by observing as under:
“2.2 We have perused the records and considered matter carefully. Considering the facts and circumstances of the case, we are satisfied that there was reasonable cause for delay in filing the appeal. We therefore, in the interest of justice, condone the delay and admit the appeal for adjudicating the dispute.”
Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so, following same reasoning, we are of the view that there is a reasonable cause for delay in filing the appeal, so in the interest of natural justice we condone the delay in filing the appeal and admit the appeal for adjudication. A.Y. 2004-05 [My Favourite Lady Exports P. Ltd. vs. ITO] Page 3
Now coming to the merits of the case, we find that in the similar case issue was restored to the file of the Assessing Officer with the following direction.
“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 of DEPB has to be considered as business income u/s 28(iii b) and in case of sale the excess of sale price over the face value has to be considered as business profit u/s 28(iii d) and deduction u/s 80HHC had to be computed accordingly. The said decision of Tribunal has however not been upheld by Hon'ble High Court of Bombay in case of CIT Vs. Kalpataru Colours & Chemicals Ltd.(328 ITR 451) in which it was held that the entire DEPB income including the face value has to be considered as a profit 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 is-sue, 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 deduction u/s 80HHC is, therefore, required to be computed accordingly. We, therefore, set aside the order of CITA) arid direct the AO to re compute the deduction u/s 80HHC in respect of DEPB income in the light of Judgment of Hon'ble Supreme Court in case of Top-man Exports Ltd (Supra).
Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so, following same reasoning, we therefore set aside the order of the CIT(A) and direct the Assessing Officer to recomputed the deduction u/s.80HHC in respect of DEPB income in the light of the judgment of Hon’ble A.Y. 2004-05 [My Favourite Lady Exports P. Ltd. vs. ITO] Page 4 Supreme Court in the case of Topman Exports Ltd., 33 SOT 337.
In the result the appeal filed by the assessee is allowed for statistical purpose as indicated above.
Pronounced in the open Court on this the 24th day of August, 2016.
Sd/- Sd/- (RAJESH KUMAR) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai: Dated 24/08/2016 True Copy Prabhat kesarwani आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार, आयकर अपील�य अ�धकरण, मुंबई ।