THE ACIT, CIRCLE-1(2), SURAT vs. M/S. MUKTA ENTERPRISES, MUMBAI

Assessee by Ms. Mitali Mehta, CA Revenue by Shri H.P. Meena, CIT-DR Date of hearing 14.12.2021 Date of pronouncement 10.01.2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by Revenue is directed against the order of ld. Commissioner of Income tax (Appeals)-1, Surat [‘CIT(A)’ for short] dated 09.05.2016 for assessment year (AY) 2012-13, which in turn the assessment order under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 30.03.2015. The Revenue has raised the following grounds of appeal:- “[1] On the facts and circumstances of the case and in law, the ld. CIT(A)-1 has erred in considering the trading turnover in the form of import of goods for the purpose of re-export to the tune of Rs.86,53,16,970/-. [2] On the facts and circumstances of the case and in law, the ld. CIT(A)-1, Surat has erred in allowing deduction claimed u/s (A.Y.12-13) M/s Mukta Enterprises 10AA (shown in form No.56F) on the profit made on the trading turnover in the form of import for the purpose of re- export to the tune of Rs.6,41,14,813/-. [3] On the facts and circumstances of the case and in law, the ld. CIT(A)-1, Surat has erred in defining the term ‘services’ u/s 2(z) of the SEZ Act by considering trading as one of the services. [4] On the facts and in the circumstances of the case and in law, the Ld. CIT(A)-1, Surat has erred in considering section 51 of the SEZ Act and the Instruction No. 4/2006 dated 24th May, 2006, issued by the Ministry of Commerce & Industry. [5] On the facts and in the circumstances of the case and in law, the Ld. CIT(A) -1, Surat ought to have upheld the order of the Assessing Officer. [6] It is, therefore, prayed that the order of the CIT(A) may be set aside and that of Assessing Officer maybe restored to the above extent.”

2. Initially this appeal was adjudicated vide order dated 22.06.2021. However, the order dated 22.06.2021 was suo motu recalled by this Tribunal while hearing the appeal for AY 2013-14 in IRTA No. 287/SRT/2017 adjudicated vide order dated 09.11.2021 as there was certain mistake apparent in the order dated 22.06.2021. At the time of re-calling the order dated 22.06.2021, the appeal was fixed for hearing afresh on 14.12.2021. In the circumstances, this appeal came for hearing afresh. At the time of hearing, Ld. Authorized Representative (AR) for the assessee submits that ground No.1 raised by Revenue is squarely covered by the order of co- 2 (A.Y.12-13) M/s Mukta Enterprises ordinate bench of this Tribunal in assessee’s own case AY 2013-14 in ITA No.287/SRT/2017.

in assessee’s own case for AY 2013-14 (supra) of this combination has passed the following order:

4. We have considered the rival submission of both the parties and have gone through the orders of Lower Authorities. We find that the almost similar set of facts, the Hon'ble jurisdictional High Court in PCIT vs. Florence Exports (supra) while considering the question of law – “whether on the facts and circumstances of the case and the law, Hon'ble ITAT has wrongly allowed deduction u/s 100 to the assessee. By importing the word “Trading” from SEZ Act, 2005 into Income Tax Act, 1961. The legislature has allowed deduction u/s 10AA to business doing activities of “manufacturing” and “providing services” from SEZ area. Trading of goods from SEZ is nowhere the intention of legislature. Whether on the facts of the act and law, Hon'ble ITAT has erred in importing the word “Trading” from SEZ Act, 2005 into Income Tax Act, 1961 and gone beyond the intended scope of Section 10AA of the I.T. Act”. The Hon'ble High Court while considering the (A.Y.12-13) M/s Mukta Enterprises aforesaid question of law, referred the decisions of Jaipur Bench of Tribunal in DCIT Vs. Goenka Diamond & Jewellers Ltd. in and in ACIT vs. Gitanjali Exports Corporation Limited in ITA No. 7662/Mum/2013,and held that decision of Jaipur and Mumbai Tribunal are directly on the same point. The said decisions are not challenged by the Revenue, therefore, while referring those decisions, the Tribunal allowed the relief in favour of Florence Exports (Assessee in that case), the Tribunal held that assessee is entitled to exemption / deduction under section 10AA, it cannot be said the Tribunal committed any error and dismissed the appeal of Revenue. We find that the Jaipur Tribunal in Goenka Diamond & Jewellers Ltd. (supra) while considering the similar grounds of appeal held that deduction under section 10AA of the Act is available in respect of trading in nature of re-export of imported goods. We find that similar view was taken on almost similar fact in Geetanjali Export Corporation Ltd. (supra). Considering the consistent view of the Tribunal on similar ground of appeal, we affirm the order of ld. CIT(A). In the result, Ground No.1 of appeal is dismissed.”

wherein, appeal of revenue was dismissed and the issues were decided in favour of assessee. Thus, following decision for the AY 2013-14 (supra) the ground of Revenue’s appeal for the year under consideration is dismissed.

6. In the result, the appeal of the Revenue is dismissed.

(A.Y.12-13) M/s Mukta Enterprises Order pronounced on 10/01/2022 by placing the result on the Notice Board as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rule, 1963.