The ACIT, Circle-1, Eluru v. M/s Ananda Foods, Bhimavaram

ITA 208/VIZ/2007 | 1999-2000
Pronouncement Date: 26-02-2010 | Result: Allowed

Appeal Details

RSA Number 20825314 RSA 2007
Assessee PAN AADFA6981H
Bench Visakhapatnam
Appeal Number ITA 208/VIZ/2007
Duration Of Justice 2 year(s) 9 month(s) 8 day(s)
Appellant The ACIT, Circle-1, Eluru
Respondent M/s Ananda Foods, Bhimavaram
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 26-02-2010
Assessment Year 1999-2000
Appeal Filed On 18-05-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO.208/VIZAG/2007 ASSESSMENT YEAR : 1999-2000 ITA NOS.194&195/VIZAG/2008 ASSESSMENT YEARS : 2000-01 & 2001-02 RESPECTIVELY ACIT CIRCLE-1 ELURU ANANDA FOODS BHIMAVARAM (APPELLANT) VS. (RESPONDENT) PAN AADFA 6981H APPELLANT BY: SHRI SUBRATA SARKAR DR RESPONDENT BY: SHRI G.V.N. HARI CA ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER:- THESE APPEALS ARE PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) PERTAINING TO THE ASSESSMENT YEARS 1999-2000 2000-01 & 2001-02. ALL THESE APPEALS ARE WITH REGARD TO THE PROFIT ON TRANSFER OF DEBP LICENSES IN ORDER TO COMPUTE DEDUCTION U/S 80HHC OF THE ACT. NOW THE CONTROVERSY WITH REGARD TO THE PROFIT ON TRANSFER OF DEPB LICENSES H AS BEEN SET AT REST BY THE ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL DATED 11 .8.2009 IN THE CASE OF M/S. TOPMAN EXPORTS & OTHERS (ITA NO.5769/MUM/2006) (318 ITR {AT} 87) IN WHICH THE MATTER HAS BEEN RESTORED TO THE A.O. TO R E-ADJUDICATE THE ISSUE IN TERMS INDICATED IN THE ORDER. THE FINDING OF THE S PECIAL BENCH IN THAT ORDER ARE REPRODUCED HEREUNDER FOR THE SAKE OF REFERENCE: THE QUESTION RAISED BEFORE THE SPECIAL BENCH HAS T WO PARTS. IN SO FAR AS THE FIRST PART: WHETHER THE ENTIRE AMOUNT R ECEIVED ON SALE OF DEPB ENTITLEMENTS REPRESENTS PROFIT CHARGEABLE UNDE R SECTION 28(IIID) OF THE INCOME TAX ACT IS CONCERNED WE A NSWER IT IN NEGATIVE AND THE SECOND PART OF THE QUESTION: OR TH E PROFIT REFERRED TO THEREIN REQUIRES ANY ARTIFICIAL COST TO BE INTER POLATED? IS REPLIED IN AFFIRMATIVE TO THE EXTENT THAT THE FACE VALUE OF DEPB SHALL BE DEDUCTED FROM THE SALE PROCEEDS. AS REGARDS THE GR OUNDS RAISED IN THESE APPEALS AGAINST THE DENIAL OF DEDUCTION U/S 8 0HHC IN FULL OR PART WE FIND THAT THE COMPUTATION OF PROFITS DERIV ED FROM EXPORTS AND THE RESULTANT AMOUNT OF DEDUCTION UNDER THIS SE CTION CAN BE MADE ONLY WHEN THE DECISION IS TAKEN ON THE AMOUNT AND THE 2 TIMING OF TAXABILITY OF THE FACE VALUE OF DEPB AND THE PROFIT ON ITS SALE. ON THIS ISSUE WE HOLD THAT THE FACE VALUE OF DEPB IS CHARGEABLE TO TAX U/S 28(IIIB) AT THE TIME OF ACCRU AL OF INCOME THAT IS WHEN THE APPLICATION FOR DEPB IS FILED WITH THE COMPETENT AUTHORITY PURSUANT TO EXPORTS AND PROFIT ON SALE OF DEPB REPRESENTING THE EXCESS OF SALE PROCEEDS OF DEPB OV ER ITS FACE VALUE IS LIABLE TO BE CONSIDERED U/S 28(IIID) AT TH E TIME OF ITS SALE. WHATEVER IS SAID ABOUT DEPB SHALL ALSO HOLD GOOD F OR DFRC ON BOTH ITS COMPONENTS VIZ THE FACE VALUE OF DRC AND PROFIT ON ITS TRANSFER EXCEPT FOR THE FACT THAT THE PROFIT ON SA LE OF DFRC SHALL BE CHARGED TO TAX U/S 28(IIIE). THERE IS NO DISPUTE A BOUT THE DUTY DRAWBACK WHICH SHALL BE CHARGEABLE TO TAX AT THE T IME OF ACCRUAL OF INCOME U/S 28(IIIC) WHEN APPLICATION IS FILED WITH THE COMPETENT AUTHORITY AFTER MAKING EXPORTS. SINCE THE NECESSAR Y FACTS FOR THE DETERMINATION OF THE QUANTUM OF DEDUCTION U/S 80HHC AS DISCUSSED ABOVE ARE NOT AVAILABLE ON RECORD WE T HEREFORE SET ASIDE THE IMPUGNED ORDERS AND DIRECT THE AO TO COMP UTE THE AMOUNT OF RELIEF IN ACCORDANCE WITH THE VIEW EXPRES SED BY US HERE IN ABOVE. 3. WE THEREFORE FOLLOWING THE ORDER OF THE SPECIAL BENCH SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE F ILE OF THE A.O. TO RE- ADJUDICATE THE IMPUGNED ISSUE IN THE LIGHT OF THE R ATIO LAID DOWN BY THE TRIBUNAL. 4. IN THE RESULT THE REVENUES APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26.2.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 26 TH FEBRUARY 2010 COPY TO 1 THE ACIT CIRCLE-1 ELURU 2 ANANDA FOODS 27-8-21 SIVARAOPET BHIMAVARAM 3 THE CIT RAJAHMUNDRY 4 THE CIT(A) RAJAHMUNDRY 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM