9911796707
TMI Blog2014 (7) TMI 1372X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in upholding denial of deduction from the income of the appellant of a sum of Rs. 10,35,39,731/- being the amount of credit under DEPB scheme which was not actually utilized before the close of the relevant previous year for payment of duty on the importation of goods. 2. The Ld CIT (A) has further erred in upholding disallowance of alleged bogus purchases in the amount of Rs. 38,80,657/-. Without prejudice to the generality, the Ld CIT (A) has erred in alleging unclarified discrepancies. Your appellant is aggrieved by the denial of opportunity to clarify the alleged discrepancies. Your appellant seeks the opportunity to clarify to the Hon'ble Tribunal that the alleged discrepancies are amenable to appropriate explanation with reference to the material on record and such supplementary material which may be requisitioned in the course of the proceedings. 3. The Ld CIT (A) has further erred in upholding disallowance of Rs. 73,75,369/- under section 14A of the Act. 4. The Ld CIT (A) has erred in upholding the denial of weighted deduction under section 35(2AB) of the Income Tax Act read with the Explanation thereto with reference to the expenditure of Rs. 37.34 lakhs incur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the opinion that the assessee is entitled to relief. Accordingly, ground no.1 raised by the assessee is allowed. 7. Referring to grounds no.2 & 3, Ld Counsel for the assessee mentioned that the said grounds require revisit to the file of the AO considering the fact that the assessee was not given a proper opportunity to clarify the allegations against the bogus purchases on one side and the Assessing Officer failed to record his dissatisfaction with regard to the claim of the assessee that no expenditure was incurred for earning of the exempt income and this is relevant for the issue raised in ground no.3. Considering the concurrence of both the parties for remanding these two issues to the file of the AO, we accordingly allow the grounds no.2 and 3 raised by the assessee for statistical purposes. 8. Ground no.4 relates to the denial of weighted deduction under section 35(2AB) of the Income Tax Act with regard to the expenditure of Rs. 37.34 lakhs incurred on scientific research. In this connection, Ld Counsel brought our attention to the contents of para 10 of the impugned order and mentioned that certain expenses were disallowed by the DSIR and the said expenses incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue) 12. This appeal filed by the Revenue on 23.8.2010 is against the order of the CIT (A)-36, Mumbai dated 11.6.2010. In this appeal, Revenue raised the following grounds which read as under: "1. On the facts and in the circumstances of the case and in law, the ld CIT (A) erred in not confirming the basis adopted by AO for computing 80IB deduction admissible to the eligible units and in holding that the AO was not justified in invoking the provisions of section 80IB(13) r.w. proviso to section 80IA (8) of the Act, when the assessee was under obligation of law to adopt the 'market value' for the goods transferred to and from the 80IB undertaking. 2. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in holding that the assessee is eligible for claiming deduction u/s 80IB on the profits derived from the work / manufacturing got done through Lease and License Manufacturing (LLMs). 3. On the facts and in the circumstances of the case and in law, the Ld CIT (A) was not justified in holding that DEPB Credit is eligible for computation of profits for the purpose of claiming deduction u/s 80IB when ITAT has decided this matter against assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in this appeal relate to the basis adopted by the Assessing Officer for computing deduction under section 80IB admissible to the eligible units. The learned Counsel for the assessee has invited our attention that the identical ground was raised in the assessee's own case for the assessment year 2002-2003 and the Tribunal has confirmed the order of the CIT (A) after holding that the CIT (A) has decided the issue following the order for the Tribunal for the AY 1995-96 to 1997-98 as discussed in para 7 of the CIT (A)'s order. The relevant observation of the Tribunal is extracted here under: "6. Revenue is aggrieved on the decision of the CIT (A) in not upholding the basis adopted by the AO. We find that the CIT (A) has relied on the order of the ITAT for the AY 1995-96 to 1997-98 as discussed in para 7 of the Tribunal order of the CIT (A). Para 40 to 51 and 55 of the ITAT order vide ITA No.4619, 4731, 3036, 3057 and 2062 dated 14.2.2005 deals with this issue. The Tribunal, after considering the departmental argument that the AO has correctly invoked the proviso to section 80IA(a) as well as in applying the "global profit percentage method", relied on the decision reported in 48 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal held that the assessee is entitled to relief as discussed in para 5 and 5.1 of the order of ITA No. 4142/Mum/2005 which is placed at pages 17 to 20 of the paper book. 17. We have perused the same and relevant pats of paras 5 and 5.1 reads as under: "Ground no.2 and 3 are against deduction allowed u/s 80IBon the profit derived from manufacturing done by the assessee from Loan License Manufacturers (LLM) etc. "The Ld CIT (A) allowed the issue in favour of the assessee following the order of the earlier year. Earlier order of the Ld CIT (A) in group concern for AY 1998-99 and 2001-02 have been confirmed by the Tribunal. The order of the earlier year in group concerns i.e., M/s. Okasa Pvt Ltd have been confirmed by the Tribunal in ITA No.4140 and 4141/M/2005. Copy of the same is placed on record at page 100 of the paper book. Since the facts are identical in the present case also, therefore following the order of the Tribunal in case of group concerns of the assessee (supra) we confirm the order of the Ld CIT (A) here also. This ground of the department also fails." 18. In view of the above, we find no reason to interfere with the order of the CIT (A). Accordingly, ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal vide para 6 & 7 of the said order of the Tribunal 2.1.2009 (supra). For the sake of completeness of this order, the said paras are reproduced here under: "6. The next ground relate to the finding of the CIT (A) that other income like processing charges and miscellaneous receipts etc had arisen to the assessee in the course of manufacturing activities of the assessee's industrial undertaking and such as they have direct nexus with the operation of manufacturing activities of the assessee and should not be excluded from the eligible profits of the unit for the purpose of deduction under section 80IB of the Act. In this regard, it was contended that identical issue was raised in assessee's own case for the assessment year 2002- 2003 before the Tribunal and the Tribunal has held that the said receipts / income are derived from the industrial undertaking under section 80IB of the Act. The relevant observation of the Tribunal is extracted hereunder: "13. We have noticed that these incomes are earned by the assessee by use of the infrastructure of the unit directly for the purpose of earning receipts by way of job works extended by the assessee. In these circumstances, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in not allowing the weighted deduction under section 35(2AB) on Revenue and capital expenditure on approved R & D centre of Rs. 57,15,86,155/- and Rs. 7,43,26,886/-. 4. The Ld CIT (A) erred in restoring back to the file of the AO the disallowance of Rs. 46,48,287/- under section 14A of the Income Tax Act." 27. At the outset, Ld Counsel for the assessee, brought our attention to the above grounds and mentioned that ground no.1 is not pressed. After hearing the Ld DR in this regard, the said ground no.1 is dismissed as not pressed. 28. Ground no.2 and 4 relate to the disallowance of alleged bogus expenses and disallowance u/s 14A respectively. These two grounds are exactly identical to that of the grounds raised by the assessee in its appeal for the AY 2008-2009, which is adjudicated by us in the above mentioned paragraphs of this order. Since, the grounds no.2 and 4 of the present appeal are similar to that of the grounds raised by the assessee for the AY 2008-09, therefore, the decision given by us while adjudicating the ground no.2 and 3 of the said assessee's appeal for the AY 2008-09 squarely applies to the instant grounds too. Therefore, ground no.2 and 4 of the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in law, the ld CIT (A) erred in deleting the disallowance of provision of loss of Rs. 1,04,96,93,011/- representing provision for unsettled forward contract without appreciating the fact that the amount claimed by the assessee represented the deduction in the notional value of outstanding forward contract revaluation which was yet to be settled and loss claimed cannot be allowed being a notional or contingent which view is supported by decision of the Hon'ble Madras High Court in the case of CIT vs. Indian Overseas Bank 151 ITR 446, Hon'ble Uttarakhand High Court in the case of CIT vs. ONGC and Hon'ble Bombay High Court in the case of CIT vs. Kamani Metal Products." 32. At the outset, Ld Counsel for the assessee brought our attention to the above grounds and mentioned that ground no.1 and 2 of the appeal are similar to that of the grounds no.1 and 2 raised by the Revenue for the AY 2008-09. Considering the similar nature of the grounds, we are of the opinion that the adjudication and decision given by us with regard to grounds no.1 and 2 in the said appeal for the AY 2008-2009, which is decided in the above paragraphs of this order, squarely applies to the grounds no.1 and 2 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r considering the submissions of the assessee, CIT (A) deleted the disallowance made by the AO vide decision given in page 19 and 20 of his order . Aggrieved with the decision of the CIT (A), Revenue is in appeal before the Tribunal by raising the above mentioned ground no.4 of the appeal. 36. During the proceedings before us, Ld DR relied on the order of the AO. 37. On the other hand, Ld Counsel for the assessee heavily relied on the order of the CIT (A) and reiterated the submissions made before the lower authorities. 38. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. On perusal of the order of the CIT (A) we find the following portions of his decision are relevant in this regard and the same read as under: "10........... The tests laid down by the Hon'ble Supreme Court in the case of Wodward Governor (supra) are satisfied in the appellant's case on the basis that the appellant is following mercantile system of accounting, the accounting policy in this behalf has been consistently followed by the appellant and the claim made by the appellant is bona fide. Therefore, I hold that the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
