This appeal by the Revenue is directed against the order of Ld. CIT (Appeals), Jaipur dated 12.07.2016 pertaining to A.Y. 2012-13. The revenue has raised the following grounds of appeal:-
1. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in allowing the deduction of Rs. 56,82,033/- u/s 10AA of the Income Tax Act, 1961 whereas the conditions laid down for claiming the deduction u/s 10AA of the IT Act, 1961 are not fulfilled. The appeal craves the indulgence to modify, alter, and add any other ground of appeal.ITA No. 842/JP/2016. M/s Goenka Jewellers , Jaipur.
2. Briefly stated the facts are that the case of the assessee was picked up for scrutiny assessment and the assessment under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the) was framed vide order dated 30 th January, 2015. While framing the assessment, the Assessing Officer rejected the claim of deduction u/s 10AA of the. Thereby he made addition of Rs. 56,82,083/-. Aggrieved by this, the assessee preferred an appeal before Ld. CIT(A), who after considering the submissions allowed the appeal.
3. Now, the Revenue is in appeal against the order of the Ld. CIT(A).
4. Only effective ground is against allowing the claim of deduction u/s 10AA of the.
4.1 Ld. D/R relied on the assessment order and submitted that Ld. CIT(A) was not justified in allowing the claim of deduction.
4.2 Per contra Ld. Counsel for the assessee submitted that issue is squarely covered in favour of the assessee by the decision of the Co-ordinate Bench. He reiterated the submissions as made in the written submissions. He further drew our attention to the decision of the co-ordinate Bench in ITA No. 728/JP/2014 pertaining to the A.Y. 2011-12 and also the decision of the co-ordinate Bench in ITA No. 357/JP/2012 and 384/JP/2013 pertaining to the Assessment Years 2007-08 & 2008-
09. He submitted, under these facts, the Ld. CIT(A) was justified in allowing the deduction.
4.3 Ld. A/R further placed reliance on the Judgment of the Honble Supreme Court in the case of Commissioner of Income Tax vs. Bommidala Enterprises Pvt. Ltd. (2016) 389 ITR 1 (SC) . ITA No. 842/JP/2016. M/s Goenka Jewellers , Jaipur.
4.4 We have heard the rival contentions, perused the material available on record and gone through the order of the authorities below. The Ld. CIT(A) has decided the issue by observing as under:- (III) I have duly considered the submissions of the appellant, assessment order and the material placed on record. It is noted that the Honble ITAT, Jaipur, vide its above referred order has allowed the deduction u/s 10AA of the to the appellant wherein it was held as under:
2.8 We have heard the rival contentions and perused the material available on record. The Coordinate Bench in case of M/s Goenka Diamonds and Jewels Ltd. vide its order dated 31/1/2012 has decided the identical issue with the same fact pattern as the case before us. The relevant finding of the Co-ordinate Benches are at para 2.19 and
2.20 of its order which reads as under:
Though vide instruction No. 1/2006 dated 24.03.2006 it was clarified that trading nits can be set up in the SEZ. However, the modification was made on 2.05.2006 in which it was made clear that the deduction u/s 10AA will be available in reset of the trading in the nature of re- export of imported good. Thus the assessee were promised that they will be eligible for deduction u/s 10AA of the in respect of the profit earning on trading of re-export of imported goods. The Revenue has not been able to show us that such instruction was not withdrawn or the Board has issued instruction that instruction dated 24.05.2006 from the Ministry of Commerce will not be applicable for the purpose of allowing exemption u/s 10AA of the. Hence the view of doctrine of promissory estopped, we hold that the assessee is entitled to deduction.
We have also reproduced section 51 of the SEZ Act. As per this section it is mentioned that notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in ITA No. 842/JP/2016. M/s Goenka Jewellers , Jaipur. any instrument having effect by virtue of any law other than this Act. The provision of SEZ Act will prevail. The Honble Apex Court in the case of Tax Recovery Officer vs. Custodian Appointed under the Special Court, 293 ITR 369 had an occasion to consider the meaning of language employed in section 13 of the Special Court Act. In section 13 of the Section Court Act, it was state that provision of the shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. The Honble Apex Court held that there can be no manner of doubt that the provision of Special Court Act wherever they are applicable shall prevail over the provision of the income tax Act. The Honble Delhi High Court in the case of CIT vs. Vasisth Chay Vaapar Ltd. 330 ITR 440 held that when there is a provision in another enactment which contains a non obstente clause than that would override the provisions of the Income Ta Act. Thus one will have to consider the implication of section 51 of the SEZ Act. It means that anything inconsistent to the provision of the EZ Act will not be considered. Thus the word service as mentioned in section 10AA cannot be construed in-consistency with the definition of services given in the SEZ Act. Under the SEZ Act, the trading is included in the services provided the trading is export of imported goods. We therefore, feel that the assessee is entitled to deduction u/s 10AA of the and therefore, the Ld. CIT(A) was justified in allowing the exemption.
2.9 It is also noted that the said decision of the Coordinate Bench has subsequently been followed by the Coordinate Benches in case of Geetanjali Export Corporation Ltd. ITA No. 6947-48 Mumbai/20 dated
08.05.2013 and Midas DFS (p) Ltd. ITA No. 30/Kol/2012 dated
03.11.2013. It is not in dispute that the facts and circumstances of the case are identical with the facts and circumstances of the case in case of M/s Goenka Diamonds & Jewels Ltd. Further the Ld. DR has not ITA No. 842/JP/2016. M/s Goenka Jewellers , Jaipur. brought to our notice any contrary ruling of the Co-ordinate Bench or the Honble High Court and Supreme Court. Given the consistent decisions of the Coordinate Bench where the deduction has been allowed to the assessee u/s 10AA of the in respect of profit earned on trading of re-export of imported goods, respectfully following the said decisions, the assessee in the instant case shall be eligible for deduction u/s 10AA of the. Hence, the ground of the Revenue is dismissed. Since, the facts and circumstances of the case remains the same in the year under consideration also respectfully following the above referred decision of Honble ITAT, Jaipur in the case of the appellant itself, it is held that the AO was not justified in disallowing deduction of Rs. 56,82,083/- claimed by the appellant u/s 10AA of the in respect of Re-export of imported goods. (iv) It was further submitted by the appellant that the AO was not correct in stating that the appellant was not carrying out any manufacturing activities at Surat as it was also doing cutting and polishing diamonds at its SEZ unit at Surat and the entire deduction 10AA of the is on account of both manufacturing and re-export of imported goods. As the AO has not brought on record any material which may justify the disallowance of deduction in respect of manufacturing activities at SEZ unit at Surat, therefore, no adv ere inference can be drawn in respect of manufacturing activities at SEZ, Surat and the AO is accordingly directed to allow deduction u/s 10AA of the on account of profits from the manufacturing activities of the appellant at its SEZ unit at Surat.
4.5 We are in agreement with the finding of the Ld. CIT(A) as this is not the first year, the assessee has been allowed deduction in the earlier years, facts are identical there is no change into facts and circumstances. Therefore, taking a ITA No. 842/JP/2016. M/s Goenka Jewellers , Jaipur. consistent view, we do not see any reason to interfere into the order of the Ld. CIT(A), same is hereby affirmed. This ground of Revenues appeal is dismissed.
5. In the result, appeal of the Revenue in ITA No. 842/JP/2016 is dismissed. Order is pronounced in the open court on Friday, the 8th day of September 2017. Sd/- sd/- ( HkkxpUn ( dqy Hkkjr) ( BHAGCHAND) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 08/09/2017. Pooja/ vknsk dh izfrfyfi vxzsf"kr@Copy of the order forwarded to:
1. The Appellant- Dy. Commissioner of Income-tax, Circle-2, Jaipur.
2. The Respondent M/s.Goenka Jewellers, Jaipur.
3. The CIT(A).
4. The CIT,
5. The DR, ITAT, Jaipur
6. Guard File (ITA No. 842/JP/2016) vknskkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar ITA No. 842/JP/2016. M/s Goenka Jewellers , Jaipur.
