Missionpharma Logistics (India) Pvt.Ltd.,, Ahmedabad v. The Dy.CIT., Circle-4,, Ahmedabad

ITA 1337/AHD/2007 | 2003-2004
Pronouncement Date: 28-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 133720514 RSA 2007
Assessee PAN AACCM6133D
Bench Ahmedabad
Appeal Number ITA 1337/AHD/2007
Duration Of Justice 2 year(s) 9 month(s) 24 day(s)
Appellant Missionpharma Logistics (India) Pvt.Ltd.,, Ahmedabad
Respondent The Dy.CIT., Circle-4,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 28-01-2010
Date Of Final Hearing 01-08-2007
Next Hearing Date 01-08-2007
Assessment Year 2003-2004
Appeal Filed On 03-04-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD DBENCH BEFORE DR. O.K. NARAYANAN VICE-PRESIDENT (AZ) AND SHRI MAHAVIR SINGH JUDICIAL MEMBER ITA NO.1337/AHD/2007 [ASSTT.YEAR:2003-04] DATE OF DRAFTED:21.1.10 MISSIONPHARMA LOGISTICS (INDIA) VS. DEPUTY COMMISSIONER OF PVT. LTD. COMMERCE HOUSE INCO ME-TAX CIRCLE-4 1 ST FLOOR OPP: RAJVANSH FLATS NAVJIV AN TRUST BUILDING JUDGES BUNGALOW ROAD OFF ; ASHRAM ROAD BODAKDEV AHMEDABAD 380054 AHMEDABA D-380014 PAN NO.AACCM6133D (APPELLANT) (RESPONDENT) REVENUE BY: SHRI ANIL KUMA R CIT DR ASSESSEE BY: SHRI SAURABH N SOPARKAR AR DATE OF ORDER RESERVED: 07/01/10 O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-VII AHMEDABAD IN APPEAL N O. CIT(A) VII/CIR.4/144/2006-07 DATED 26-12-2006. THE ASSESSM ENT WAS FRAMED BY THE DCIT CIRCLE-4 AHMEDABAD U/S. 143(3) OF THE INCOME -TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 20-03-2006 FOR THE ASSESSMENT YEAR 2003-04. 2. THE FIRST ISSUE IN THIS APPEAL OF THE ASSESSEE I S AGAINST THE ORDER OF CIT(A) IN DISALLOWING THE CLAIM OF EXEMPTION U/S.10 A OF THE ACT. FOR THIS THE ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.2 :- ITA NO.1337/AHD/2007 A.Y. 2003-04 MISSIONPHARMA LOGISTICS (I) PVT. LTD. V. DCIT CI R-4. ABD PAG E 2 2. THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF CLAIM OF EXEMPTION OF IN COME U/S.10A. BASED ON THE FACTS OF THE CASE CIRCUMSTANCES OF TH E CASE PROVISIONS OF LAW AND RATIO OF VARIOUS DECISIONS LAID DOWN BY THE HONBLE SUPREME COURT OTHER HIGH COURTS AS WELL AS INCOME TAX APPE LLATE TRIBUNALS IT IS PRAYED THAT THE COMPANY IS ELIGIBLE FOR EXEMPTION O F INCOME U/S.10A OF THE INCOME TA ACT. IT IS PRAYED THAT IT BE HELD SO NOW. 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT THE ASSESSEE- COMPANY IS A 100% SUBSIDIARY OF MISSION PHARMA A/S DENMARK (EARLIER KNOWN AS MISSION PHARMA INTERNATIONAL PROJECT SERVI CES A/S) AND INCORPORATED ON 04-10-2001. THE BUSINESS ACTIVITY OF THE ASSESSEE-COMPANY CONSTITUTED AS RE-PACKING RE-LABELING AND KIT-PACK ING OF MEDICINES PHARMACEUTICALS AND MEDICAL DISPOSABLES. THE PARENT COMPANY MISSION PHARMA A/S IS A WORLD LEADER IN SUPPLYING MEDICAL K ITS THROUGH OUT WORLD AND ITS BUSINESS UNIT IS SET UP IN A SPECIAL ECONOMIC Z ONE (SEZ IN SHORT) APPROVED BY DEVELOPMENTAL COMMISSIONER KANDLA. THE ASSESSEE -COMPANY IN ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR C LAIMED DEDUCTION U/S.10A OF THE ACT ON THE GROUND THAT IT IS A MANUFACTURER AND ITS BUSINESS IS SET UP IN SEZ. DURING THE COURSE OF ASSESSMENT PROCEEDINGS T HE ASSESSING OFFICER AFTER EXAMINING THE DETAILS AND EXPLANATIONS FILED BY THE ASSESSEE DISALLOWED THE CLAIM OF DEDUCTION U/S10A OF THE ACT ON THE GRO UND THAT THE ASSESSEE IS NOT A MANUFACTURER. AGGRIEVED THE ASSESSEE PREFE RRED APPEAL BEFORE CIT(A). 4. THE CIT(A) NOTED THE FACT THAT THE ASSESSEE IS D OING THE BUSINESS OF RE- PACKING RE-LABELING AND KIT-PACKING OF MEDICINES PHARMACEUTICALS AND MEDICAL DISPOSABLES AND ON THE BASIS OF THE SAME CL AIMED THE SAME AS MANUFACTURING ACTIVITY AND ACCORDINGLY CLAIMED DEDU CTION U/S.10A OF THE ACT. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISSED THE CLAIM OF THE ASSESSEE BY NOTING THE FOLLOWING ACTIV ITIES OF THE ASSESSEE- COMPANY:- (I) PURCHASE AND RECEIPT OF THE GOODS I.E. MEDICIN ES AND MEDICAL DISPOSABLES; (II) ENTRY OF DATE OF GRN INTO SYSTEM; (III) RANDOM SAMPLING; ITA NO.1337/AHD/2007 A.Y. 2003-04 MISSIONPHARMA LOGISTICS (I) PVT. LTD. V. DCIT CI R-4. ABD PAG E 3 (IV) QUALITY CHECK VISUAL INSPECTION; (V) PREPARATION OF KITS ARRANGING VARIOUS ITEMS O F DIFFERENT QUANTITY IN DIFFERENT SIZE BOXES LABELING PUTTING SHIPPING MA RKS STAPLING ETC. (VI) WAREHOUSING; (VI) LOGISTICS; HE NOTED THAT MEDICINES AND DISPOSABLES ARE NOT MAN UFACTURED BY THE ASSESSEE AND THERE ARE PURCHASED BY ASSESSEE FROM D IFFERENT MANUFACTURERS. THE ASSESSEE DOES NOT OPEN THE SEAL OR ALUMINUM AND PLASTIC FOILS IN WHICH EACH UNIT OF MEDICINE SAY A PARACEFAMOL 100 MG. T ABLET IS PACKED. NO CHANGE IS MADE IN THESE PRODUCTS EITHER IN QUALITY OR IN QUANTITY. THE END USER USE THE MEDICINE AS WAS PACKED BY THE MANUFACTURER. THE ASSESSEE- COMPANY RE-PACKS MEDICINE IN DIFFERENT QUANTITIES W ITHOUT ANY CHANGE IN NATURE OR QUALITY OF PRODUCT PURCHASED FROM MANUFAC TURERS. WHERE THERE IS NO DIFFERENCE IN IDENTITY BETWEEN ORIGINAL COMMODITY A ND THE MANUFACTURED ARTICLE IT IS NOT POSSIBLE TO SAY THAT ONE COMMODI TY HAS BEEN CONSUMED IN MANUFACTURE OF ANOTHER. THE CIT(A) DISMISSED THE C LAIM BY HOLDING IN PARA- 5.9 TO 5.15 AS UNDER:- 5.9 I HAVE CONSIDERED THE ABOVE SUBMISSIONS. IT IS SEEN THAT THE APPELLANT HAS APPLIED FOR PERMISSION FOR SETTING UP A MANUFACTURING UNIT AT THE KANDLA SEZ TO THE DEVELOPMENT COMMISSIONER SEZ WHO HAS GRANTED PERMISSION TO THE APPELLANT TO SET UP A MAN UFACTURING UNIT. BUT A CLOSE LOOK AT THE APPLICATION FILED BEFORE THE DE VELOPMENT COMMISSIONER SHOWS THAT THE ASSESSEE HAS APPLIED PE RMISSION FOR THE MANUFACTURING OF MEDICINES AND DISPOSABLES IN LOTS AND KITS STATED AS UNDER:- PLEASE REFER TO YOUR APPLICATION DATED 19.10 .2001 ON THE ABOVE SUBJECT. THIS IS TO CONVEY THE APPROVAL IN T ERMS OF THE PROVISIONS CONTAINED IN EXPORT AND IMPORT POLICY AN D HANDBOOK OF PROCEDURE VOL-I (1997-002) FOR SETTING UP A UNI T AT KANDLA SPECIAL ECONOMIC ZONE FOR CARRYING OUT THE UNDER ME NTIONED ACTIVITIES: ACTIVITY/ITEM OF MANUFACTURE ANNUAL CAPACITY ANNUAL TURNOVER (IN LACS) ANNUAL TURNOVER (IN US$) THOUSAND PHARMACEUTICAL PRODUCT NAMELY MEDICINES & LOTS/KITS 7000 & 5000 7000 & 5000 I 2300 II 2300 5000 5000 ITA NO.1337/AHD/2007 A.Y. 2003-04 MISSIONPHARMA LOGISTICS (I) PVT. LTD. V. DCIT CI R-4. ABD PAG E 4 DISPOSABLES 7000 & 5000 8750 & 6250 10000 & 7000 III 2300 IV 2760 V 3220 5000 6000 7000 IT IS NOTED THAT YOU HAVE PROJECTED EXPORT TURNOVER OF US$ 28000 (IN THOUSAND) AND NET FOREIGN EXCHANGE EARNING (NFE ) OF US$ 2379 (IN THOUSAND) IN FIVE YEARS. THE APPROVED IS B ASED ON THE DETAILS FURNISHED BY YOU IN YOUR PROJECT APPLICATIO N FROM THE ABOVE IT IS CLEAR THAT THOUGH THE PERMISS ION IS GRANTED FOR MANUFACTURE OF MEDICINES AND DISPOSABLES WITH USE O F CERTAIN RAW MATERIALS THE APPELLANT COMPANY HAS NOT MANUFACTUR ED ANY OF THE MEDICINES OR MEDICAL DISPOSABLES. THE FACT THAT THE DEVELOPMENT COMMISSIONER HAS GRANTED PERMISSION TO SET UP MANUF ACTURING UNIT CANNOT IN ANY WAY CHANGE THE BASIC CHARACTER OF BUS INESS ACTIVITIES OF THE APPELLANT COMPANY FROM ONE OF TRADER OF GOODS T O A MANUFACTURER. THE FACT THAT DEVELOPMENT COMMISSIONER HAS ALLOWED THE COMPANY TO SET UP A MANUFACTURING UNIT FOR MANUFACTURING MEDIC INES AND DISPOSABLES AND KITS CANNOT BE A GROUND TO TREAT TH E COMPANY ASS A MANUFACTURER FOR ALLOWING DEDUCTION U/S.10A. FOR TH IS PURPOSE THE ACTIVITIES OF THE COMPANY ARE TO BE EXAMINED AND NO T THE INTENTION WHICH IT HAS EXPRESSED BEFORE THE DEVELOPMENT COMMI SSIONER. THEREFORE THIS ARGUMENT OF THE ASSESSEE COMPANY IS NOT ACCEPTABLE HENCE THE SAME IS REJECTED. 5.10 THE NEXT POINT OF ARGUMENT IS THAT JUDICIAL PR ONOUNCEMENTS IN SUPPORT APPELLANTS CLAIM. THE APPELLANT HAS RELIED ON THE FOLLOWING CASE LAWS IN SUPPORT OF ITS CLAIM THAT ITS ACTIVITIES AR E MANUFACTURING ACTIVITIES: (I) ITO V. EKTARA EXPORTS P. LTD. 1523 ITR 18 (II) ISBC CONSULTANCY SERVICES LTD. VS. DCIT 83 TTJ 597 (III) ASPINWALL & CO. VS. CIT 251 ITR 323 (SC) (IV) CIT V. AJAY PRINTERY PVT. LTD. 58 ITR 811 (V) CIT VS. CASINO PVT. LTD. 91 ITR 289 5.11 I HAVE CONSIDERED THE ABOVE DECISIONS. THE FAC TS OF THE CASE ARE ENTIRELY DIFFERENT. WHILE IN APPELLANTS CASE IT IS SIMPLE CASE OF PACKING OR RE-PACKING WITHOUT MAKING CHANGE IN THE NATURE A ND QUALITY OF MATERIALS USED IN THE CASES CITED ABOVE THERE IS A CHANGE IN THE QUALITY AND CONTENT OF THE MATERIALS USED IN THE CASES CITE D ABOVE. HENCE THE CASE LAWS RELIED UPON BY THE APPELLANT ARE NOT APPL ICABLE RATHER THE FOLLOWING CASE LAWS RELIED UPON BY THE AO ARE SQUAR ELY APPLICABLE OF THE FACTS OF THE APPELLANTS CASE. 5.12 IN A RECENT CASE THE HONBLE MADHYA PRADESH HI GH COURT IN THE CASE OF VINDHYACHAL DISTILLERIES (P) LTD. VS. STATE OF MADHYA PRADESH 5 ITA NO.1337/AHD/2007 A.Y. 2003-04 MISSIONPHARMA LOGISTICS (I) PVT. LTD. V. DCIT CI R-4. ABD PAG E 5 STT (2006) M.P. HAVE HELD THAT PACKING CANNOT BE SA ID TO BE MANUFACTURING. THIS DECISION IS SQUARELY APPLICABLE TO THE FACTS OF THE APPELLANT. FURTHER THE DECISIONS IN THE FOLLOWING CASES ARE SQUARELY APPLICABLE TO THE FACTS OF THE CASE OF THE APPELLAN T COMPANY: (I) SETH CHEMICAL WORKS (P) LTD. VS. U(OI (1993) 6 6 ELT 76 (CAL): THE ACTIVITY OF PACKING OF ULTRAMARINE BLUE MANU FACTURED IN BULK (II) BANNER & CO. VS. USI (1994) 70 ELT 181 (CAL); PUTTING BRAND NAME ON SPECIFIED GOODS DOES NOT CH ANGE THE GOODS AND CANNOT THEREFORE AMOUNT TO MANUFACTURE (III) UOI VS. J.G. GLASS INDS. LTD.(1998) 96 TAXMA N 29 38 (SC); PRINTING ON BOTTLES DOES NOT INVOLVE A PROCESS OF MANUFACTURING. (IV) CIT VS. WESTERN INDIA PHARMACEUTICAL SERV. P. LTD. (1993) 230 ITR 96 (BOM.) 5.13 IT IS ALSO ARGUED THAT THE PROVISIONS OF SECTI ON10A PROVIDES FOR AN EXEMPTION AND WHEN A PROVISION IS MADE IN THE CONTE XT OF A LAW WHICH PROVIDES FOR CONCESSIONAL RATE OF TAX FOR THE PURPO SE OF ENCOURAGING AN INDUSTRIAL ACTIVITY A LIBERAL CONSTRUCTION SHOULD BE PUT UPON THE LANGUAGE OF THE STATUTE. RELIANCE IS PLACE ON THE DECISION O F CIT VS. STRAWBOARD MFG. CO. LTD. 17 ITR 431 5.14 THE ABOVE DECISION IS NOT APPLICABLE TO THE AP PELLANTS CASE. THE APPELLANT DOESNT AT ALL SATISFY THE CONDITIONS TO BE TREATED AS A MANUFACTURER. THEREFORE THE QUESTION OF TAKING A LIBERAL VIEW BY TREATING THE NON-MANUFACTURING ACTIVITY AS A MANUFA CTURING ONE DOESNT ARISE. IN THE CASE OF CIT VS. N.C. BUDHIRAJA & CO. 204 ITR 417 THE HONBLE S.C HAS HELD AS UNDER THE PRINCIPLE OF ADOPTING A LIBERAL INTERPRETATION WHICH ADVANCES THE PURPOSE AND OBJECT OF BENEFICENT PROVISIONS CAN NOT BE CARRIED TO THE EXTENT OF DOING VIOLENCE TO THE PLAIN AND SI MPLE LANGUAGE USED IN THE ENACTMENT. IT WOULD NOT BE REASONABLE O R PERMISSIBLE FOR THE COURT TO REWRITE THE SECTION OR SUBSTITUTE WORDS OF ITS OWN FOR THE ACTUAL WORDS EMPLOYED BY THE LEGISLATURE IN THE NAME OF GIVING EFFECT TO THE SUPPOSED UNDERLYING OBJECT. AF TER ALL THE UNDERLYING OBJECT OF ANY PROVISION HAS TO BE GATHER ED ON A REASONABLE INTERPRETATION OF THE LANGUAGE EMPLOYED BY THE LEGISLATURE 5.15 THEREFORE THE APPELLANT IS NOT ENTITLED FOR ST ATUS OF A MANUFACTURER. ON CONSIDERATION OF THE FACTS OF THE CASE AND THE C ASE LAWS CITED ABOVE I HOLD THAT AO IS JUSTIFIED IN REJECTING THE APPELL ANTS CLAIM OF ITA NO.1337/AHD/2007 A.Y. 2003-04 MISSIONPHARMA LOGISTICS (I) PVT. LTD. V. DCIT CI R-4. ABD PAG E 6 MANUFACTURING AND DISALLOWING THE DEDUCTION U/S.10A . THE DISALLOWANCE U/S.10A IS THEREFORE UPHELD. AGGRIEVED THE ASSESSEE CAME IN SECOND APPEAL BEFOR E US. 5. BEFORE US ALSO LD. COUNSEL FOR THE ASSESSEE REIT ERATED THE SAME SUBMISSIONS AS MADE BEFORE THE CIT(A) AS WELL AS AS SESSING OFFICER. ON THE OTHER HAND LD. CIT DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. HE STATED THAT THE PACKING OF MEDICINES CANNOT BE TERMS AS A MANUFACTURING AS THERE IS NO CHANGE IN THE IDENTITY BETWEEN ORIGINAL COMMODIT Y AND THE MANUFACTURED ARTICLE. ACCORDINGLY IT IS NOT POSSIBLE THAT ONE C OMMODITY HAS ASSUMED THE CHARACTER OF MANUFACTURE OF ANOTHER AND ACCORDINGLY THIS IS ONLY RE-PACKING OR RE-LABELING OF MEDICAL KITS AND THIS IS NOT A MANUF ACTURING ACTIVITY SO AS TO ALLOW THE CLAIM U/S.10A OF THE ACT. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSE E HAS EXPLAINED THE STAGE-I PROCUREMENT OF RAW MATERIALS STAGE-II INSP ECTION AND APPROVAL I.E. INSPECTION AND APPROVAL STAGE-III STORAGE AND IDEN TIFICATION STAGE-IV PRODUCTION AND STAGE-V INSPECTION AND DISPATCH. BE FORE US LD. COUNSEL FOR THE ASSESSEE MADE ARGUMENT OF PRODUCTION I.E STAGE -IV AND STATED THAT NORMAL KIT PACKING CAN CONSIST OF A SMALL AS SIX IT EMS AND SOMETIMES MAY GO UPTO ABOUT 50 ITEMS. ON RECEIPT OF THE KIT-PACK ORD ERS THE LIST OF ORDERS TO BE CONSOLIDATED UNDER ONE KIT PACK ARE SPECIFIED BASED ON THE TYPE OF REQUIREMENT BY THE END USER WHICH COULD BE ANY DISA STER SUCH AS WAR EARTHQUAKE CYCLONE EPIDEMIC FIRMING OR SOMETIMES EVEN HELP PROGRAMMES ORGANIZED BY VARIOUS MINISTRY OF HEALTH IN DIFFEREN T COUNTRIES. EACH PRODUCT IS INDIVIDUALLY PUT INTO DUST PROOF PLASTIC COVERS AND MARKED CLEARLY IN THE LANGUAGE MOST PREVALENT IN THE IMPORTING COUNTRY WH ICH COULD BE FRENCH ARABIC SPANISH KOREAN TEXT ON ALL THE PACKS. STI CKER LABELS ARE DEVELOPED IN DIFFERENT LANGUAGES AS PER REQUIREMENT AND STUCK DI FFERENT PRODUCTS SIMILARLY PACKED AND QUANTITY SPECIFIED ARE THEREBY PUT INTO AN OUTER CARTON WHICH IS ITA NO.1337/AHD/2007 A.Y. 2003-04 MISSIONPHARMA LOGISTICS (I) PVT. LTD. V. DCIT CI R-4. ABD PAG E 7 MARKED SPECIALLY FOR THE PROJECT HOSPITAL FUNDING AGENCY. STICKERS LABELS FOR SHIPPING MARKS AND CONSIGNEE LABELS ARE PRODUCED AL ONG WITH COLOUR CODE STICKERS USED FOR IDENTIFYING KIT FOR DIFFERENT REG IONAL OR DESTINATION HOSPITALS. EACH INDIVIDUAL KIT IS THEN BLUED AND SEALED FURTHE R SHRINK STRAPPED AND IN SOME CASES CARRYING HANDLES ARE PROVIDED WHERE CRAN ES OR FORTH LIFT ARE NOT EXISTENCE. FROM THE ABOVE FACTS NOTED IN THE ORDER S OF LOWER AUTHORITIES AND THE ARGUMENT MADE BEFORE US. WE FIND THAT FOLLOWING TESTS SPECIFIED ARE MET WITH ONLY THEN ONE CAN SAY THAT THERE IS MANUFACTU RE OR PRODUCTION:- (I) THERE IS A CHANGE OF TRANSFORMATION OF ONE COM MODITY INTO ANOTHER. (II) THE TWO COMMODITIES ARE COMMERCIALLY DIFFEREN T AND DISTINCT. (III) THE RESULTANT COMMODITY EMERGING OUT OF THE P ROCESS SHOULD HAVE A DISTINCT NAME CHARACTER OR USE (IV) ALL THE CHANGES AND MERE CHANGE OF SIZE DOES N OT TANTAMOUNT TO MANUFACTURE AND THE CHANGE SHOULD BE SUCH AS TO BRI NG INTO EXISTENCE A NEW COMMODITY HAVING A DIFFERENT IDENTITY. WE FIND THAT THE ASSESSEE IS IN THE BUSINESS OF RE- PACKING OF MEDICINES AND DISPOSABLE INTO OF THE CONTAINERS WHICH ARE USED A S END PRODUCT BY THE USER AND AS THERE IS NO CHANGE IN QUALITY CHARACTER OR COMPOSITE OF UNITS THE ASSESSEE CANNOT CLAIM THE SAME AS MANUFACTURER. WE FURTHER FIND FROM THE FACT THAT THE ASSESSEE DOES NOT TAMPER THE SEALS OF MEDICINES. THE MEDICINES AND THE DESCRIPTION LIKE CONTENTS COMPOSITION LOT NO LICENCE NO. EXPIRY AND MANUFACTURING DATE REMAINS INTACT IN THE CASE OF TH E ASSESSEE AND THERE IS NO NEW COMMODITY WHICH IS DIFFERENT IN QUALITY & QUANT ITY THAT IS USED BY THE END USERS. WE FIND THAT THE ASSESSEES CASE IS JUST OF RE-PACKING AFTER PURCHASE AND NOTHING ELSE. ACCORDINGLY THE ASSESSEE IS NOT ENTITLED TO CLAIM OF DEDUCTION U/S. 10A OF THE ACT. ACCORDINGLY WE UPHO LD THE ORDERS OF LOWER AUTHORITIES AND THE GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 7. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN NOT ALLOWING THE EXEMPT U/S.80HHC OF THE ACT. FOR THIS THE ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.3 :- ITA NO.1337/AHD/2007 A.Y. 2003-04 MISSIONPHARMA LOGISTICS (I) PVT. LTD. V. DCIT CI R-4. ABD PAG E 8 3. WITHOUT PREJUDICE TO THE GROUND NO.2 ABOVE THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE COMPANY IS NOT ELIGIBLE FOR EXEMPTION OF INCOME AVAILABLE U/S. 80HHC OF THE INCOME TAX ACT. ON THE FACTS & CIRCUMSTANCES OF THE CASE A ND PROVISIONS OF LAW IT IS SUBMITTED THAT THE COMPANY IS ELIGIBLE F OR EXEMPTION/DEDUCTION U/S.80HHC IN RESPECT OF THE EXPORTS MADE BY IT AS I T HAS FULFILLED ALL THE CONDITIONS TO BE ELIGIBLE FOR ENTITLED OF DEDUCTION . IT IS PRAYED THAT IT BE HELD SO NOW. 8. FROM THE ABOVE IT IS SEEN THAT ALTERNATIVE CLAI M OF THE ASSESSEE IS AS REGARDS TO DEDUCTION U/S.80HHC OF THE ACT. WE FIND FROM THE ORDER OF THE LOWER AUTHORITIES THAT THE CLAIM OF THE ASSESSEES DEDUCTION U/S.80HHC OF THE ACT WAS DISALLOWED ON THE GROUND THAT THE CHARTERED ACCOUNTANTS REPORT WAS NOT FILED ALONG WITH THE RETURN OF INCOME AND SOME SUPPLIERS HAVE ALSO CLAIMED THE DEDUCTION U/S.80HHC OF THE ACT BY TREATING THE SALE OF THE ASSESSEE- COMPANY AS EXPORT. AS THE FACTS ARE NOT CLEAR FROM THE ORDER OF THE LOWER AUTHORITIES AND WE ARE OF THE VIEW THAT THIS ISSUE NEEDS RE-EXAMINATION AS REGARDS TO ENTITLEMENT TO DEDUCTION U/S.80HHC OF TH E ACT OF THE ASSESSEE PRINCIPALLY THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80HHC OF THE ACT. ACCORDINGLY THIS ISSUE NEEDS RE-VERIFICATION ON EN TERITY AT THE LEVEL OF THE ASSESSING OFFICER AND AO WILL DECIDE THE CLAIM OF D EDUCTION AFTER ALLOWING REASONABLE OPPORTUNITIES OF BEING HEARD TO THE ASSE SSEE. 9. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN NOT ALLOWING UN-ABSORBED DEPRECIATION AND CARRY FORWARD BUSINESS LOSS FOR ASSESSMENT YEAR 2002-03. FOR THIS THE ASS ESSEE HAS RAISED THE FOLLOWING GROUND NO.4 :- 4. THE LEARNED CIT (APPEALS)-VII HAS ERRED IN NOT DEALING WITH THE GROUND OF APPEAL RELATING TO NON-GRANTING FOR UNABS ORBED DEPRECIATION AND CARRIED-FORWARD BUSINESS LOSS FOR A.Y 2002-03. BASED ON THE FACTS AND LEGAL PROVISIONS IT IS SUBMITTED THAT THE CLAI M OF THE COMPANY FOR SET-OFF OF UNABSORBED DEPRECIATION AND CARRIED-FORW ARD BUSINESS LOSS FOR A.Y 2002-03 AGAINST THE INCOME FOR A.Y. 2003-04 BE ALLOWED. IT IS PRAYED THAT IT BE HELD SO NOW. 10. AFTER HEARING THE RIVAL CONTENTIONS WE FIND TH AT THE ISSUE REGARDING UNABSORBED DEPRECIATION AND CARRY FORWARD BUSINESS LOSS OF ASSESSMENT YEAR ITA NO.1337/AHD/2007 A.Y. 2003-04 MISSIONPHARMA LOGISTICS (I) PVT. LTD. V. DCIT CI R-4. ABD PAG E 9 2002-03 BEFORE THE LOWER AUTHORITIES PARTICULARLY THE CIT(A) THIS ISSUE WAS NOT AGITATED IN THE HOPE OF GETTING DEDUCTION U/S.1 0A OF THE ACT. NOW THE ASSESSEE IS INTERESTED IN CONTESTING THIS ISSUE REG ARDING UNABSORBED DEPRECIATION AND CARRY FORWARD BUSINESS LOSS RELATI NG TO ASSESSMENT YEAR 2002-03. AS THE MAIN ISSUE REGARDING U/S.80HHC OF T HE ACT HAS BEEN SET ASIDE TO THE FILE OF ASSESSING OFFICER WE FEEL THA T THIS ISSUE ALSO NEEDS RE- EXAMINATION AT THE LEVEL OF THE ASSESSING OFFICER A S THE FACTS ARE NOT AVAILABLE ON RECORDS. ACCORDINGLY THIS ISSUE OF THE ASSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS DAY OF 28 TH JANUARY 2010 SD/- SD/- (DR.O.K.NARAYANAN) (MAHAVIR SINGH) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD DATED : 28/01/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-VII AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD