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TMI Blog2013 (8) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Commissioner of Income-tax Versus Steel Tubes of India Ltd. [2010 (1) TMI 406 - MADHYA PRADESH HIGH COURT] - Decided against Revenue. - I.T.A. No.427/Jodh/2012, C.O. No.01/Jodh/2013, I.T.A. No.356/Jodh/2013 - - - Dated:- 15-7-2013 - Shri Hari Om Maratha And Shri N. K. Saini,JJ. For the Petitioner : Shri G. R. Kokani, D.R. For the Respondent : Shri Har Narayan Rathi, A.R. ORDER Per Bench: The appeal by the Department and the Cross Objection by the assessee for the assessment year 2003-2004 are directed against the order dated 15/10/2012 while the appeal by the Department for the assessment year 2009-10 is directed against the order dated 19/03/2013 of CIT(A), Jodhpur. 2. First we will deal with the Cross Objection of the assessee in C.O.No.01/Jodh/2013 wherein the assessee has raised the following grounds: "1. That learned CIT(A), Jodhpur has erred in law as well as on the facts by sustaining reopening of the assessment u/s 147 of the I.T. Act, 1961. 2. That learned CIT(A), Jodhpur has erred in law as well as on the facts by sustaining the disallowance of deduction u/s 80IB on the amount of DEPB/DDB." 3. Ground No. 1 is the legal ground vide which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to him to independently assess some other income. 5.1 The learned CIT(A), after considering the submissions of the assessee, confirmed the action of the Assessing Officer by observing in para 3.3 to 3.3.4 of the impugned order, which read as under: "3.3. I have considered the order of the Assessing Officer and submission of appellant and I find that the reasons recorded by the Assessing Officer and the materials on the basis of which the Assessing Officer formed his belief that certain income chargeable to tax had escaped assessment requiring initiation of proceedings u/s 147, I find that the Assessing Officer had justifiably arrived at his conclusion forming a belief that certain income chargeable to tax had escaped assessment. I find that there were materials before the Assessing Officer from which a reasonable belief can be formed rationally that income chargeable to tax had escaped assessment. I therefore, hold that the Assessing Officer was justified in entertaining the belief that income had escaped assessment and therefore, had correctly initiated re assessment proceeding as per the provisions of sec. 147. The initiation of reassessment proceeding is upheld. 3.3.1 As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Assessing Officer had issued notice u/s 148 after recording the reasons and after making a proper and reasonable belief of escapement of assessment, therefore, the proceeding initiated u/s 147 is in order. The ground no. 1 3 are dismissed." 6. Now the assessee is in appeal. During the course of hearing, the learned counsel for the assessee, at the very outset, stated that this issue is clearly covered by the decision of this Bench of the Tribunal in the case of Bothra International vs. ITO -1(3) Jodhpur [2013] 32 Taxman.com 264 (Jodh. Trib.) Copy of the same was furnished. 7. In his rival submissions the learned D.R. strongly supported the impugned order passed by the learned CIT(A). 8. After considering the submissions of both the parties and perusing the material on record it appears that the facts of the present case are similar to the facts involved in the case of Bothra International vs. ITO -1(3) Jodhpur (supra) wherein the reopening in similar circumstances was held invalid by observing in para 10 to 17 of the impugned order, which read as under: "10. We have considered the submissions of both the parties and carefully gone through the material available on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s 80IB of the Act." 11. The aforesaid view taken by the Assessing Officer was in consonance with the view taken by the Hon'ble jurisdictional High Court in the case of Saraf Seasoning Udyog (supra) wherein it is held as under:- (Head Note) "Deduction under s. 80-IB - Profits and gains derived from the industrial undertaking -Sale of DEPB Licenses - In view of insertion of cl.(iiid) in s.28 by the Taxation Laws (Amendment ) Act, 2005 retrospectively w.e.f. 1st April, 1998, profit from sale of DEPB licenses are profit derived from eligible business for purpose of deduction u/s 80IB." 12. Now the question arises as to whether reopening was valid when there is a change of opinion. In this regard, the Hon'ble jurisdictional High Court in the case of Babu Lai Jug. Raj Co. (supra) has held as under:- "Assessing Officer having nowhere alleged that income chargeable to tax for the relevant Assessment Year has escaped assessment on account of failure or omission on the part of the assessee to disclose truly and fully all material facts necessary for assessment, the impugned notice u/s 148 issued after expiry of period of four years from the end of the relevant Assessment Year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. The Hon'ble Bombay High Court also in the case of Indian Oil Corporation Ltd. (supra) held as under: "the assessee had disclosed fully and truly all the material facts necessary for the assessment insofar as it had a bearing on the issue in question. The Assessing Officer specifically applied his mind to the question as to whether the entire dividend income could be claimed as exempt without a disallowance for expenditure. As a matter of fact, even during the course of the assessment year 2000-01, the Assessing Officer had applied his mind to the same issue while passing the order of assessment under section 143(3). The condition precedent to the exercise of the statutory power to reopen an assessment after the expiry of four years was not fulfilled in the present case. The reassessment proceedings were not valid." 16. In the instant case also, the assessee furnished all the details relating to its claim for deduction u/s 80IB of the Act and the Assessing Officer thoroughly examined the claim while framing the assessment u/s 143(3) and on being satisfied the claim was allowed. Therefore, in the present case, reopening of the assessment by issuing notice u/s 148 of the Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns derived by an undertaking". Hence, the CIT(A) ought to have followed decision of the Hon'ble SC in case of M/s Liberty India. 4. The CIT(A) has erred in giving finding that the provisions of section 10BA are similar to the provisions of section 80HHC. The CIT(A) has not noticed that in clause "bba" of explanation to section 80HHC, the expression "profits of the business" is defined and it includes income accrued/received from DEPB/DDB, whereas there is no such definition in section 10BA. The sub section 4 of section 10BA gives a formula for determination of eligible deduction only." 10. From the above grounds it is gathered that the only grievance of the Department in this appeal relates to the deduction u/s 10BA in respect of income received/accrued from DDB amounting to Rs.34,26,464/- and insurance on export bill of Rs.1,94,324/- totalling to Rs.36,20,788/-. 11. During the course of hearing, the learned counsel for the assessee, at the very outset, stated that this issue is covered in favour of the assessee vide order dated 31/01/2013 of this Bench of the Tribunal in the case of Suraj Exports India vs. ITO in I.T.A. No.336/Jodh/2011 which has been followed by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Mumbai), after considering the decision of Liberty India (supra) has taken a clear cut decision in favour of the assessee. Further Hon'ble ITAT Bench has observed that "in the light of the above discussion, we find that the assessee is entitled to deduction U/s 10BA on DEPB as in accordance with section 28 of the Act these are business income." Since the issue has been decided in favour of the appellant that facts of Liberty India is not applicable where the issue of DDE form part of the eligible profit derived U/s 10BA. So respectfully following the decision of the Hon'ble Jurisdictional ITAT, Jodhpur Bench, I hold that the appellant is eligible for deduction account of DDB which are part of the eligible profit derived U/s 10BA. Regarding insurance charges the A/R contention is correct. Hence, the addition made by AO on both the point is deleted. The appellant succeeds on this ground." 13.1 From the above observation of the learned CIT(A), it is crystal clear that the issue has been decided by him by following the order of this Bench of the Tribunal in the case of Suraj Exports India vs. ITO (supra) and no contrary decision is brought on record by the learned D.R. We, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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