Ambica Knitting Mills,, Ahmedabad vs Assessee

सुनवाई क तार ख/ Date of Hea ring : 20/03/2015 घोषणा क तार ख /Date of P ronouncement: 25/03/2015

आदेश /O R D E R

PER: MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER

This Misc. Application has been filed by the Assessee on 28th of August, 2014 and the grievance narrated therein is as under:

"As regards the second mistake, it is submitted that the controversy involved in assessee's case as to applicability of third and fourth proviso inserted to S.80HHC(3) vide Taxation Laws (Amendment) Act, 2005 has been put to rest by the Hon'ble Gujarat High Court in the case of "Avani Exports and others vs. CIT and others - 348 ITR 391 (Guj)" wherein it has been held that such amendment is prospective in nature and not retrospective. As per the said decision, the said amendment shall not be applicable in assessee's case since assessee's case pertains to Assessment Year 2003-04. However, the Hon'ble Tribunal, while deciding assessee's appeal, has not considered the said decision at all. Non-consideration of decision of the jurisdictional High Court is always a mistake apparent from record.

ITA No.129/Ahd/2014 M/s. Ambica Knitting Mills For A.Y.2003-04 -2- As regards the third mistake, the Hon'ble Tribunal has modified the order of CIT(A) slightly. CIT(A) held that deduction u/s 80HHC in respect of DEPB was to be recomputed in light of the decisions in the cases of "Topman Exports (supra)" and "ACG Associated Capsules (supra)". However, the Hon'ble Tribunal directed AO to compute the deduction u/s 80HHC also in light of the decision of the Hon'ble Supreme Court in the case of "IPCA Laboratories - 266 ITR 521 (SC)". Thus, Hon'ble Tribunal has directed AO to recompute deduction u/s 80HHC in light of three decisions of the Hon'ble Supreme Court viz. Topman Exports, ACG Associated Capsules and IPCA Laboratories. Your Honors may kindly appreciate that reference to IPCA Laboratories while directing AO to recompute deduction u/s 80HHC is wrong and has no bearing at all since Revenue's ground of appeal before the Hon'ble Tribunal was as to DEPB and its impact while calculating deduction u/s 80HHC. Thus, reference to an irrelevant decision has been made by the Hon'ble Tribunal while directing AO to recompute deduction u/s 80HHC which is a mistake apparent from record. Moreover, the second ground of revenue is with reference to contention that the export turn over does not exist 10 crore which is also based on incorrect facts because the export turnover is Rs.14,88,76,875/-. This aspect has not been properly appreciated by the Hon'ble Tribunal. Hence mistake apparent from record."

2. From the side of the Applicant, learned AR, Mr. Tushar Hemani appeared and stated that a latest order of the Jurisdictional High Court in the case of Avani Exports & Others has been pronounced and the issue involved is now required to be decided accordingly. Although, in the Misc. Application, it is mentioned that an adjournment application was moved still it was decided ex-parte but learned A.R. has not contested this aspect. Learned A.R.'s main plank of argument was that the decision of Hon'ble Gujarat High Court although pronounced on 2nd July, 2012 but admittedly not placed before the Hon'ble Bench, therefore, the ratio laid down therein was not considered hence an apparent mistake has committed. Side by side, it has also been mentioned that the Respected Tribunal has considered the written submission of the Assessee wherein Avani Exports, 74 DTR 97 (Gujarat) was referred hence noted in the Tribunal order as well; but the Tribunal has not taken the cognizance of the law laid down therein. Therefore, this was the main grievance of ITA No.129/Ahd/2014 M/s. Ambica Knitting Mills For A.Y.2003-04 -3-

learned A.R. that in a situation when the Hon'ble High Court has held that the amendment in Section 80HHC(3) was to be considered prospectively and not retrospectively, therefore, the view taken by the Tribunal was a mistake apparent from record.

3. From the side of the Revenue-Department, learned Sr.D.R., Mr. M.K. Singh appeared and supported the order of the Tribunal. He has argued that on one hand the Assessee has not co-operated with the proceedings before the Tribunal. On the other hand, the Tribunal has restored the issue for de novo consideration; hence, the Applicant has chance to argue the law laid down in Avani Exports (supra) before the AO; therefore no prejudice should have been caused to the Assessee.

4. Heard both the sides. It is worth to mention that although no one had appeared before us but from the side of the Assessee a written submission was already on record along with few decisions of Hon'ble Courts. Therefore, it was decided to proceed and decide the issue involved in the light of the written submissions filed by the Assessee. Otherwise also in a situation when the Assessee has preferred not to argue but to file written submission then generally an appeal is decided on the basis of the written note furnished which convey the arguments of the Assessee. Hence, one of the alleged mistake as highlighted in paragraph 4 of the Misc. Application, has no substance, therefore dismissed.

4.1 We are in agreement with the argument of learned Sr.D.R., Mr. M.K. Singh that in a situation when the question of calculation of deduction u/s.80HHC has been restored back to the file of the AO to be ITA No.129/Ahd/2014 M/s. Ambica Knitting Mills For A.Y.2003-04 -4-

decided after examining the facts of the case then at this stage the Assessee should not have any grievance because no prejudice is caused especially when the Assessee shall get a chance to explain his point of view to the AO.

4.2 We have examined the decision of Avani Exports at that time cited as 74 DTR 97 (although wrongly spelled Bhavani) and now cited as 348 ITR 391 (Guj.). We have duly considered the legal proposition laid down therein hence in paragraph 6.1 we have directed the AO to examine the latest provisions and if the assessee fulfills the conditions as laid down in Seciton 80HHC(3) to allow as per law. We hereby also add that vide paragraph 5 of the Tribunal we have noted the decision of Ipca laboratories, 266 ITR 251 and hence again reiterate that a particular decision of Hon'ble Court should not be applied in isolation because the deduction as prescribed u/s.80HHC is a code in itself which requires a consolidated application of several other decisions before granting a deduction u/s.80HHC of IT Act. Therefore, we find no force in this Misc. Application that Avani Exports (supra) was not considered by the Tribunal. This is a wrong allegation; hence this part of the Application is also hereby dismissed.

5. In the result, the Misc. Application is dismissed.

Sd/- Sd/- (ANIL CHATURVEDI) (MUKUL Kr. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 25/03/2015 Prabhat Kr. Kesarwani, Sr. P.S.s आदेश क त ल प अ े षत/Copy of the Order forwarded to : ITA No.129/Ahd/2014 M/s. Ambica Knitting Mills For A.Y.2003-04 -5-

1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आयु त / Concerned CIT

4. आयकर आयु त(अपील) / The CIT(A)-III, Ahmedabad

5. वभागीय त न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड फाईल / Guard file.

आदेशानुस ार / BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad