Kanan Latex Industries P Ltd, Kottayam v. ACIT, Kottayam

ITA 902/COCH/2008 | 2002-2003
Pronouncement Date: 31-05-2010

Appeal Details

RSA Number 90221914 RSA 2008
Assessee PAN AABCK0056E
Bench Cochin
Appeal Number ITA 902/COCH/2008
Duration Of Justice 1 year(s) 7 month(s) 3 day(s)
Appellant Kanan Latex Industries P Ltd, Kottayam
Respondent ACIT, Kottayam
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 31-05-2010
Date Of Final Hearing 19-04-2010
Next Hearing Date 19-04-2010
Assessment Year 2002-2003
Appeal Filed On 28-10-2008
Judgment Text
IN THE INCOME TAX APPELLATE T RIBUNAL COCHIN BENCH COC HIN BEFORE SHRI N.VIJAYAKUMARAN AND SHRI SANJAY AROR A I.T.A. NO. 902/COCH./2008 ASSESSMENT YEAR : 2002-03 KANAM LATEX INDUSTRIES (P.) LTD. OOPPOOTTIL BUILDING KOTTAYAM. [PAN: AABCK 0056E] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1 KOTTAYAM. (ASSESSEE -APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI K.I. JOHN CA REVENUE BY DR. BABU JOSEPH DR O R D E R PER SANJAY ARORA AM: THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER BY THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV KOCHI (CIT(A) FOR SHORT) DATED 30.10.2008 AND THE ASSESSMENT YEAR (A.Y.) UNDER REFERENCE IS 2002-03. 2. THE PRINCIPAL ISSUE RAISED IN THE PRESENT APPEAL RELATES TO THE DEDUCTION UNDER S. 80HHC OF THE INCOME-TAX ACT 1961 (THE ACT' HEREIN AFTER) WHICH STOOD CLAIMED FOR THE RELEVANT YEAR IN THE SUM OF RS. 2 16 85 930/- THO UGH ALLOWED PER THE ASSESSMENT FRAMED UNDER S. 143(3) R.W.S. 147 OF THE ACT DATED 26.12.2 007 AT RS. 69 04 704/- ONLY I.E. DISALLOWING THE BALANCE RS. 1 47 81 226/- WHICH AC TION STANDS CONFIRMED IN FIRST APPEAL. 3.1 THE FACTS OF THE CASE IN-SO-FAR AS THE MATERIAL FOR THE PURPOSE AT HAND ARE THAT THE ASSESSEES IMPUGNED CLAIM STOOD RESTRICTED BY THE ASSESSING OFFICER (AO) ON THE GROUND THAT HE HAD ALLOWED DEDUCTION U/S. 80IB OF THE ACT AT RS. 1 47 81 226/- AS SIMULTANEOUS DEDUCTIONS COULD NOT BE ALLOWED ON THE SAME PROFIT AND FOR WHICH HE RELIED ON THE PROVISION OF S. 80IB(13) OF THE ACT REPRODUCING T HE RELEVANT PART THEREOF IN HIS ORDER. AS SUCH THE CLAIM ALLOWED UNDER S. 80IB WOULD NEED TO BE DEDUCTED FROM THE ELIGIBLE CLAIM I.E. INDEPENDENT OF S. 80IB OR FROM RS. 21 685930/-. ACCORDINGLY ONLY THE BALANCE AMOUNT OF RS. 69 04 704/- (21685930 14781 226) STOOD ALLOWED BY HIM. ITA. NO.902COCH./2008 2 3.2 IN APPEAL THE LD. CIT(A) CONFIRMED THE DEDU CTION UNDER SETION 80HHC AS ALLOWED PLACING RELIANCE ON THE DECISION IN THE CASE OF ACIT VS. ROGINI GARMENTS AND OTHERS 294 ITR (AT) 15 (CHENNAI) (SB) AFTER DULY DISCUSSING A ND DISTINGUISHING THE DECISIONS RELIED UPON BY THE ASSESSEE BEFORE HER. 4. THE ASSESSEE BEFORE US HAS PLACED RELIANCE ON THE DECISIONS IN CIT V. BABY MARINE EXPORTS 290 ITR 323; CIT V. LAKSHMI MACHINE WORKS 290 ITR 667 (SC); CIT V. AIR CRAFT RADIO CORPORATION 292 ITR 64 (SC); AND STEEL AUTHORITY OF INDIA LTD . IN (2008) 16 VST 181 (SC) WHICH AS STATED IN THE GRO UNDS OF APPEAL WERE ALSO RELIED UPON BEFORE THE LD. CIT(A) VIDE THE ASSESSEES ARGUMENT NOTE BEFORE HER. THE SAME HOWEVER WERE NOT DEALT WITH BY HER IN ADJUDICATING THE ASSE SSEES APPEAL. A PAPER-BOOK RUNNING INTO 76 PAGES CONTAINING IN THE MAIN CASE LAW S TANDS ALSO PLACED ON RECORD BY THE LD. AR. THE LD. DR ON THE OTHER HAND RELIED UPON THE DECISION IN THE CASE OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF OLAM EXPORTS (INDIA) LTD. VS. CIT (2010) 229 CTR (KER.) 206 PLACING A COPY OF THE SAME ON RECOR D. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD. 5.1 THE ONLY REASON STATED BY THE ASSESSING OFFI CER (AO) FOR RESTRICTING THE ASSESSEES CLAIM IS THE SIMULTANEOUS CLAIM BY THE ASSESSEE FOR DEDUCTION U/S. 80IB WHICH STANDS ALLOWED AT RS. 147.81 LACS SO THAT THE DEDUCTION U /S. 80HHC AS CLAIMED I.E. RS. 216.86 LACS STOOD REDUCED BY HIM BY THAT AMOUNT ALLOWING THE BALANCE RS. 69.05 LACS. IN FIRST APPEAL THE LD. FIRST APPELLATE AUTHORITY AFTER EX AMINING A HOST OF CASE LAW HELD THAT THE AO WAS JUSTIFIED IN COMPUTING THE DEDUCTION U/S. 80 HHC ON ELIGIBLE PROFITS AFTER REDUCING THERE-FROM THE DEDUCTION U/S. 80IB. THE AS SESSEES CONTENTION OF THE TWO SECTIONS BEING SEPARATE AND DISTINCT SO THAT EACH SHALL HAVE TO BE GIVE EFFECT TO INDEPENDENT OF EACH OTHER STOOD REJECTED IN VIEW O F THE CLEAR PROVISION OF S. 80(IB)(13) R/W S. 80IA(9) POSTULATING NO FURTHER DEDUCTION ON THE PROFITS WHICH HAVE BEEN SUBJECT TO DEDUCTION U/SS. 80 (IA) OR 80(IB) AS THE CASE MAY BE. THE MATTER STANDS EXAMINED AT LENGTH BY THE VARIOUS BENCHES OF THE TRIBUNAL INCL UDING BY THE COCHIN BENCH HOLDING LIKE-WISE WHICH STANDS UPHELD IN THE CASE OF OLAM EXPORTS (INDIA) LTD. (SUPRA) AND ITA. NO.902COCH./2008 3 WHICH ALSO CONFIRMS THE VIEW BY THE SPECIAL BENCH O F THE TRIBUNAL IN THE CASE OF ROGINI GARMENTS AND OTHERS (SUPRA) RELIED UPON BY THE LD. CIT(A). IN FACT IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2000-01 2003-04 AND 2004 -05 WHEREIN THIS ISSUE STOOD CARRIED THERETO AT THE INSTANCE OF THE REVENUE WAS DECIDED LIKE-WISE BY THE TRIBUNAL AND FOR THE SAME REASONS VIDE ITS ORDER DATED MAY 13 2010 ( IN I.T.A. NO. 11 12/COCH/2007 & 588/COCH/2008). WE ARE THEREFORE UNABLE TO APPREC IATE THE BASIS OF THE ASSESSEE CLAIM EVEN AS CONVEYED AT THE TIME OF HEARING. HOWEVER W E ARE NOT IN AGREEMENT WITH THE LD. CIT(A) WHEN SHE STATES OF THE AO AS HAVING COMPUTED THE DEDUCTION U/S. 80HHC IN THE MANNER STATED BY HER; HE ONLY REDUCING THE DEDUCTIO N OTHERWISE EXIGIBLE U/S. 80HHC BY THE DEDUCTION ALLOWED U/S. 80IB AND WHICH IN OUR V IEW IS CLEARLY NOT THE MANDATE OF LAW EVEN AS CLARIFIED BY US VIDE THE ORDER IN THE ASSES SEES CASE CITED SUPRA. THE ASSESSEES CLAIM THEREFORE THOUGH STANDS DISALLOWED IN PRINC IPLE WOULD STAND ENTITLED TO ADDITIONAL RELIEF IN COMPUTING THE DEDUCTION U/S. 80 HHC AS S TATED I.E. BY REDUCING THE DEDUCTION U/S. 80IB FROM THE `PROFITS OF THE BUSINESS AS COM PUTED U/S. 80HHC(3). 5.2 AS REGARDS THE CASE LAW CITED BY THE ASSESSEE WE HAVE PERUSED THE SAME FINDING EACH AS DISTINGUISHABLE NONE OF THEM BEING ON THE ISSUE AT LARGE IN THE INSTANT CASE I.E. THE SCOPE OF THE PROVISION OF S. 80IB(13) R.W.S. 80 IA(9) WHILE THE DECISIONS RELIED UPON BY THE REVENUE ARE SQUARELY ON THE POINT. FURTHER M ORE THE ISSUE HAVING BEEN THE SUBJECT MATTER OF A DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT DIRECTLY ON THE POINT WHICH IS BINDING WE ARE CONSTRAINED NOT TO CONSIDER THE SAME SO THAT THE PROPER COURSE FOR THE ASSESSEE IN CASE OF ANY PERCEIVED INJUSTICE IS TO CARRY THE MATTER TO THE HONBLE HIGH COURT. WE ARE THEREFORE NOT INCLINED TO DWELL ON TH E RELATIVE MERITS OF EACH OF THEM INDIVIDUALLY I.E. WITH REFERENCE TO THE ASSESSEE S CASE. REFERENCE IN THIS CONTEXT IS DRAWN TO THE DECISION IN THE CASE OF CIT (ASSTT.) V. SAURASHTRA KUTCH STOCK EXCHANGE LTD . 305 ITR 227 (SC) HOLDING THAT A VIEW ADOPTED BY THE TR IBUNAL EVEN WITHOUT NOTICING THE DECISION BY THE JURISDICTIONAL HIGH COURT WOULD REN DER IT LIABLE TO RECTIFICATION U/S. 254(2) OF THE ACT. 6. THE ONLY OTHER ISSUE AGITATED BY THE ASSESSE E PER ITS GROUNDS OF APPEAL IS IN RELATION TO CONFIRMATION OF THE LEVY OF INTEREST U/S. 234B O F THE ACT BY THE LD. CIT(A). NO SPECIFIC ITA. NO.902COCH./2008 4 ARGUMENTS IN RELATION TO THE SAID GROUND STOOD RAIS ED BEFORE US. IT IS WELL SETTLED THAT THE INTEREST U/S. 234B IS COMPENSATORY AND MANDATORY IN NATURE SO THAT NEITHER THE AO NOR ANY APPELLATE AUTHORITY HAS ANY POWER TO NOT TO LEV Y THE SAME. THE HONBLE APEX COURT AS FAR BACK AS IN THE CASE OF CENTRAL PROVINCES MANGANESE ORE CO. LTD. VS. CIT (1986) 160 ITR 961 (SC) HAS HELD THAT THE LEVY OF INTERES T BEING A PART OF THE PROCESS OF ASSESSMENT COULD BE DISPUTED BY THE ASSESSEE IN AP PEAL PROVIDED HE LIMITS HIMSELF TO THE GROUND THAT HE IS NOT LIABLE TO THE LEVY AT ALL. T HE SAME THUS CONFIRMS THE LEVY OF INTEREST AS MANDATORY AND COMPENSATORY EXCEPT WHERE THE ASS ESSEE SHOWS CAUSE FOR NOT BEING LIABLE THERETO I.E. IN TERMS OF THE RELEVANT PROV ISIONS. NO SUCH CLAIM STANDS MADE EVEN BEFORE THE FIRST APPELLATE AUTHORITY. RESULTANTLY THE ASSESSEES CLAIM ON THIS GROUND FAILS. WE DECIDE ACCORDINGLY. 7. IN THE RESULT THE ASSESSEES APPEAL IS PARTLY A LLOWED. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 31ST MAY 2010 GJ COPY TO: 1. KANAM LATEX INDUSTRIES (P.) LTD. OOPPOOTTIL BUI LDING KOTTAYAM. 2. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1 KOTTAYAM 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV KOC HI. 4. THE COMMISSIONER OF INCOME-TAX KOTTAYAM. 5. D.R./I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE. B Y ORDER (ASSISTA NT REGISTRAR) ITA. NO.902COCH./2008 5