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Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा लेखा सद�य लेखा लेखा सद�य सद�य राजे�� सद�य राजे�� राजे�� केकेकेके अनुसार राजे�� अनुसार अनुसार PER RAJENDRA, AM- अनुसार Challenging the order dated 15.01.2013 of CIT(A)-34, Mumbai the assessee has filed the present appeal.Assessee-firm,engaged in the business of manufacturing and trading of pens, ballpens, mechanical pencil and their parts and components etc., filed its return on 30.9.2008 declaring total income at Rs.NIL.The Assessing Officer (AO) completed assessment u/s. 143(3) of the Act on 30.05.10 determining the income of the assessee at Rs.20.60 lakhs.
2.The effective Ground of appeal is about deduction under Chapter- VIA of the Act on DEPB/Duty Drawback benefits,amounting to Rs.12.44 lakhs.During the assessment proceedings,the AO found that the assessee had claimed deduction u/s. 80IB(4) of the Act on the receipt of Duty Drawback and FDR interest of Rs.12,44,012/- and Rs.83,648/- respectively. He held that as per the provisions of section 80IB(4) the deduction in case of an industrial undertaking was admissible only in respect of profits and gains derived from such undertaking,that receipt of export incentives could not be considered as derived from industrial undertaking,that the language used in section 80IB(4) was the same as that of section 80HH/80I of the Act. Referring to the cases of Sterling Foods (234ITR579) and Pandian Chemicals (264ITR378),he held that the assessee was not entitled to deduction of Rs.12.44 lakhs in respect of duty drawback.
3.Aggrieved by the order of the AO, assessee preferred an appeal before the First Appellate Authority(FAA) and made submissions before him.It relied upon the cases of Eltak SGS
4483/M/14-Prayas WI P.Ltd.(300ITR6) and India Gelatine & Chemicals Ltd. (275ITR284). After considering the assessment order and the submission of the assessee, the FAA held that the issue before him was to decide as to whether the receipt arising out of sale of DEPB credits had to be taken in entirety for computation of 80HHC of the Act or not.He referred to the cases of Topman Exports (31 ITR 87-SB-AT) and Kalpataru Colours and Chemicals Ltd. (328 ITR 451). He also referred to the judgment of the Hon'ble Supreme Court delivered in the case of Topman Exports and held that the assessee was entitled to deduction as per the provisions of section 80HHC on export profit and that the benefit of such deduction could not be denied to the assessee.Accordingly, he directed the AO to follow the judgment of the Apex Court and to bifurcate the total sale proceeds of DEPB into two compartments. Finally, he allowed the appeal filed by the assessee.
4.As stated earlier no one appeared on behalf of the assessee. The DR, on a query by the Bench stated that assessee had made a claim u/s. 80IB(4) of the Act, that the FAA had not dealt with the issue and had allowed the appeal of the assessee, that he had wrongly held that the assessee was entitled to claim deduction u/s. 80HHC.
5.We have gone through the material available on record. We find that the FAA had, while deciding the appeal, referred to the provisions of section 80HHC and had allowed the appeal, that the AO had made disallowance with regard to claim made u/s. 80IB(4) of the Act. We find that assessee had not filed any application u/s.154 of the Act for rectifying the mistake apparent on record. Considering the facts of the case,we are of the opinion that matter needs re-adjudication by the FAA. Therefore, in the interest of justice, matter is restored back to the file of FAA for fresh adjudication who would afford a reasonable opportunity of hearing to the assessee. Effective Ground of appeal (GOA) is decided in favour of the assessee in part. Rest of the grounds raised by the assessee are consequential in nature. As a result appeal filed by the assessee stands partly allowed. फलतः िनधा�रती �ारा दािखल क� गई अपील अंशतः मंजूर क� जाती है. Order pronounced in the open court on 21st , June, 2016. आदेश क� घोषणा खुले �यायालय म� �दनांक 21 जून, 2016 को क� गई । Sd/- Sd/- ( पवन �सह / Pawan Singh) (राजे�� / RAJENDRA) �याियक सद�य / JUDICIAL MEMBER लेखा लेखा लेखा सद�य लेखा सद�य सद�य / ACCOUNTANT MEMBER सद�य मुंबई Mumbai; �दनांकDated : 21.06.2016. Jv.Sr.PS.