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TMI Blog2017 (7) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (Assessments) [1998 (12) TMI 51 - GUJARAT High Court] . - Decided in favour of assessee. - SPECIAL CIVIL APPLICATION NO. 18772 of 2014 - - - Dated:- 12-7-2017 - MR. AKIL KURESHI AND MR. BIREN VAISHNAV, JJ. For The Petitioner : Mr B S Soparkar, Advocate For The Respondent : Mr Nitin K Mehta, Advocate ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Petitioner has challenged the notice dated 27.01.2014 as at Annexure A to the petition issued by the respondent Assessing Officer for reopening the petitioner s assessment for the assessment year 2009-10. 2. Brief facts are as under: 2.1 Petitioner is a company registered under the Companies Act and is engaged in the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total turnover (Rs.446504479/-) = ₹ 31,20,06,199/- However, it was noticed from assessment records that the assessee had included Freight Insurance amounting to ₹ 15253173/- (15047262+205911) in the export turnover which resulted in over statement of export turnover to that extent and incorrect computation of deduction u/s.10A. Statement showing the details of Freight Insurance included in enclosed. The correct computation of exemption u/s.10A, would be as under: Profit of business(33,47,92,754/-) X Export Turnover (Rs 416114637-Rs15253173) Total Turnover (Rs 44,65,04,479/-) = Rs.30,05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, counsel for the petitioner raised the following contentions: /(I) In the reasons recorded, the Assessing Officer has objected to the freight and insurance charges forming part of the numerator in the formula for working out deduction under Section 10A of the Act. If at all, such amount would have to be removed both from the export turnover i.e. the numerator and from the total turnover i.e. the denominator. He submitted that this principle is laid down through series of judgements of different courts. The reason on which the notice for reopening is issued, lacks validity. (II) The claim of deduction under Section 10A of the Act was examined by the Assessing Officer during original scrutiny assessment. Any re-examination o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th this ground at all. Therefore, we had called upon the counsel for the revenue to produce the original file to put this factual aspect beyond controversy. Upon perusal of the file, we notice that the audit party had raised an objection of the freight and insurance charges being included in the export turnover for computation of benefit under Section 10A of the Act. We may recall, this was the sole ground on which notice for reopening of the assessment has been issued. In response to such audit query, the then Assessing Officer under his letter dated 29.02.2012 had conveyed to the Commissioner of Income Tax as under: 3. The assessee claimed exemption u/s.10A of the Act for A.Y.2009-10 of ₹ 33,47,92,754/-. The claim of deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e should be excluded from the T.T.O, as the ETO TTO of the eligible undertaking being the same, as the undertaking is a 100% EOU and the freight and insurance is included in both the ETO and TTO. Therefore, if the freight and insurance is to be excluded from the export turnover the same should also be excluded from the total turnover to arrive at the actual claim of deduction u/s.10A. Therefore, the objection raised by the RAP is not acceptable. 4. However, in view of instruction No.9 of CBDT, remedial action may be taken. In this case, the assessment proceedings have been finalized on 14/12/2009 u/s143 of the Act and hence the time limit for various remedial actions is as under:- u/s. 263 of the Act -31.03.2013 u/s. 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t objection is not valid. 11. Despite such internal correspondences, apparently the notice for reopening came to be issued which was passed solely on the ground of the assessee s claim of deduction under Section 10A of the Act and reduction of the freight and insurance charges from the export turnover. Thus, clearly the notice for reopening was issued under the directives and compulsion of the audit party, a mode which is not permissible as held by the decision of this Court in the case of Adani Exports vs. Deputy Commissioner of Income Tax (Assessments) reported in [1999] 240 ITR 224. 12. In the result, the impugned notice dated 27.01.2014 is set aside. Petition is allowed and accordingly disposed of. - - TaxTMI - TMITax - In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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