Case Law Details
Issue involved in the present case is no more res integra and is covered by the decision of the Hon’ble Apex Court in the case of Topman Exports V/s CIT (supra) wherein it has been held that not the entire amount received by the assessee on sale of DEPB, but the sale value less the face value of the DEPB will represent profit on transfer of DEPB by the assessee. Respectfully following the above authoritative pronouncement of the Hon’ble Supreme Court, we direct the AO to recompute the deduction u/s 80HHC in accordance with the aforesaid judgment of the Hon’ble Apex Court and accordingly the orders passed by the ld.CIT(A) for the above assessment years do not call for any interference.
INCOME TAX APPELLATE TRIBUNAL, MUMBAI
ITA No. 1749 and 1750/Mum/2010- (Assessment Years: 2002- 03 and 2003- 04)
Assistant Commissioner of Income Tax
V/s
M/s Mayfair International
Date of Pronouncement: 22.2.2012
O R D E R
PER D.K.AGARWAL (JM)
These two appeals preferred by the Revenue are directed against the separate orders dated 3.12.2009 and 15.12.2009 passed by the ld. CIT(A) for the assessment years 2002- 03 and 2003- 04 against the direction to the AO to treat the sale of DEPB licenses as decided by the Special Bench of Tribunal in Top man Exports V/s ITO (2010) 318 ITR 87 (Mum)(SB)(AT) and calculate deduction u/s 80HHC. Since facts are identical and issues involve are common, both these appeals are disposed of by this common order for the sake of convenience.
2. In this case, the original notice of date of hearing was sent by RPAD fixing the case for 3.2.2011. However, the case was adjourned and the final notice of date of hearing was placed on notice board fixing the date of hearing on 14.2.2012. However, at the time of hearing, none was present on behalf of the assessee nor filed any application for adjournment of the case. Therefore, it was decided to dispose of the appeal ex-parte, qua the assessee, on merits after hearing the learned D.R.
3. Briefly stated facts of the case are that the assessee firm is engaged in the business of export. The scrutiny assessments u/s 143(3) were completed for the assessment years 2002-03 and 2003-04 on 31.1.2005 and 14.9.2005 determining the total income of the assessee at Rs.73,60,470/- and Rs.41,89,020/- as against the returned income of Rs. 22,28,580/- and Rs. 19,63,656/- respectively. On appeal , the ld. CIT(A), however, directed the AO to give opportunity to the assessee to prove that it had fulfilled conditions as provided under the 3rd proviso to section 80HHC(3) of the Income Tax Act, 1961 (the Act). Accordingly, fresh opportunity was provided to the assessee. The AO observed that the major addition to the returned income was on account of dis allowance of deduction u/s 80HHC of the Act on account of sale of DEPB license. According to the AO, the assessee has not fulfilled the conditions laid down under the third Proviso to section 80HHC(3) and the Board Circular No. 2/06 dated 17.1.2006 and, hence, the AO completed the assessments at the same income as assessed originally vide separate orders dated 4.3.2008. On appeal, the ld. CIT(A) following the decision of the Special Bench of the Tribunal in the case of Top man Exports Vs. ITO (supra) directed the AO to treat the sale of DEPB license as per the order of the Tribunal (supra) and recalculate the deduction u/s 80HHC of the Act.
4. Being aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before us challenging in all the grounds the direction of the ld. CIT(A) to recompute the deduction as per the order of the Special Bench of the Tribunal (supra).
5. At the time of hearing, the ld.DR fairly submits that that this issue stands covered in favor of the assessee by the recent decision of the Hon’ble Supreme Court in M/s Top man Exports V/s CIT and Ors. connected appeals in Civi l Appeal No. 1699 of 2012 arising out of SLP (C) No. 26558 of 2010, dated 8.2.2012, therefore, the issue may be decided accordingly.
6. We have carefully considered the submissions of the ld.DR and perused the material available on record. We are of the opinion that the issue involved in the present case is no more res integra and is covered by the decision of the Hon’ble Apex Court in the case of Top man Exports V/s CIT (supra) wherein it has been held that not the entire amount received by the assessee on sale of DEPB, but the sale value less the face value of the DEPB will represent profit on transfer of DEPB by the assessee. Respectfully following the above authoritative pronouncement of the Hon’ble Supreme Court, we direct the AO to recompute the deduction u/s 80HHC in accordance with the aforesaid judgment of the Hon’ble Apex Court and accordingly the orders passed by the ld.CIT(A) for the above assessment years do not call for any interference. The grounds taken by the Revenue are, therefore, rejected.
7. In the result, the Revenue’s appeals stand dismissed.
Order pronounced in the open court on 22nd Feb.,2012.
