The ACIT,(OSD)-Range-4,, Ahmedabad v. M/s. Mamta Machinery Pvt. Ltd.,, Ahmedabad

ITA 2692/AHD/2010 | 1996-1997
Pronouncement Date: 31-10-2013 | Result: Dismissed

Appeal Details

RSA Number 269220514 RSA 2010
Assessee PAN AABCM8241P
Bench Ahmedabad
Appeal Number ITA 2692/AHD/2010
Duration Of Justice 3 year(s) 1 month(s) 15 day(s)
Appellant The ACIT,(OSD)-Range-4,, Ahmedabad
Respondent M/s. Mamta Machinery Pvt. Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 31-10-2013
Date Of Final Hearing 23-10-2013
Next Hearing Date 23-10-2013
Assessment Year 1996-1997
Appeal Filed On 15-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BENCH AHMEDABAD .. ! ! ! ! ' #$ BEFORE SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI KUL BHARAT JUDICIAL MEMBER 1. !./ I.T.A.NO.2692/AHD/2010- A.Y.1996-97 2. !./ I.T.A.NO.2693/AHD/2010- A.Y.2006-07 THE ACIT (OSD)-I RANGE-4 AHMEADBAD / VS. MAMTA MACHINERY PVT.LTD. 5/1/1-A PHASE-I GIDC VATVA AHMEDABAD PAN: AABCM 8241 P ( &' / // / APPELLANT ) .. ( ()&' / RESPONDENT ) REVENUE BY : SHRI S.C.TIWARI SR.D.R. ASSESSEE BY : SHRI M.J. SHAH AR ' * + $ / / / / DATE OF HEARING : 23/10/2013 -./ + $ / DATE OF PRONOUNCEMENT : 31/10/2013 0 / O R D E R PER SHRI KUL BHARAT JUDICIAL MEMBER : BOTH THESE APPEALS BY THE REVENUE ARE DIRECTED AG AINST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TA X(APPEALS)-XX AHMEDABAD(CIT(A) FOR SHORT) BOTH IDENTICALLY DATE D 07/07/2010 PERTAINING TO ASSESSMENT YEARS (AYS) 1996-97 & 2006 -07. SINCE THE APPEALS PERTAIN TO THE SAME ASSESSEE BOTH THESE AP PEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORD ER FOR THE SAKE OF CONVENIENCE. ITA NOS.2692 & 2693/AHD/ 2010 ACIT VS. MAMTA MACHINERY P.LTD. AYS 1996-97 & 2006-07 RESPECTIVELY - 2 - 2. FIRST WE TAKE UP THE ITA NO.2692/AHD/2010 FOR A Y 1996-97. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO EXCLUDE ERECTION AND INSTALLATION CHARGES FOR TH E PURPOSE OF COMPUTATION OF DEDUCTION U/S.80HHC. 1.2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLD ING THAT THE ERECTION AND INSTALLATION CHARGES WOULD FORM PART O F THE INCOME FOR THE PURPOSE OF SECTION 80HHC. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FAC TS IN HOLDING THAT ONLY NET INTEREST SHOULD BE REDUCED FROM THE INCOME OF T HE ASSESSEE WHILE COMPUTING DEDUCTION U/S.80HHC. 3. IN DOING SO THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE RATIO OF THE DECISION OF THE HONB LE BOMBAY HIGH COURT IN THE CASE OF ASIAN STAR 231 CTR . 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 5. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD.C IT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE REST ORED TO THE ABOVE EXTENT. 2.1. BRIEFLY STATED FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED. AGGRIEVED BY THE ASSESSMENT ORDER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A) WHO ALSO CONFIRMED THE ACTION OF THE AO. THE ASSESSEE FURTHER FILED AN APPEAL BEFORE THE HONBLE ITAT AND THE HONBLE ITAT VIDE ITS ORDER DATED 25/01/2007 IN ITA NO.1315/AHD/ 2002 DIRECTED THE AO TO DECIDE THE ISSUE AFRESH. IN PURSUANCE TO T HE DIRECTION OF THE HONBLE ITAT THE AO AGAIN FRAMED THE ASSESSMENT U/ S.143(3) OF THE ACT. THE ASSESSEE FEELING AGGRIEVED BY THE ORDER PREFERRED AN APPEAL ITA NOS.2692 & 2693/AHD/ 2010 ACIT VS. MAMTA MACHINERY P.LTD. AYS 1996-97 & 2006-07 RESPECTIVELY - 3 - BEFORE THE LD.CIT(A) WHO AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE PARTLY ALLOWED THE APPEAL. NOW THE REVE NUE IS IN APPEAL BEFORE THE HONBLE ITAT. 3. GROUND NOS.1 & 1.2 ARE INTER-CONNECTED. LD.COUN SEL FOR THE ASSESSEE POINTED OUT THAT THIS ISSUE IS SQUARELY CO VERED BY THE DECISION OF HONBLE COORDINATE BENCH (ITAT A BENCH AHMEDABAD) RENDERED IN ASSESSEES OWN CASE FOR A.Y. 2002-03 IN ITA NO.2056 /AHD/2005 DATED 30/01/2006. HE DREW OUR ATTENTION TOWARDS PAGE-5 O F THE SAID ORDER OF THE TRIBUNAL PASSED IN ITA NO.2056/AHD/2005. ON TH E CONTRARY LD.SR.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BE LOW. 4. WE HAVE HEARD THE PARTIES PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. WE FIND THAT THE HONBLE COORDINATE BENCH HAS HELD VIDE PARA-5 OF IT S ORDER DATED 31/01/2006 PASSED IN ITA NO.2056/AHD/2005 FOR AY 2 002-03 IN ASSESSEES OWN CASE AS UNDER:- 5. THE NEXT DISPUTE IS WITH REGARD TO THE EXCLUSIO N OF PACKING INCOME OF RS.8 12 732/- SERVICE CHARGES RS.51 42 9 06/- AND ERECTION AND INSTALLATION CHARGES RS.3 03 482/- WHI LE COMPUTING THE DEDUCTION U/S.80HHC. HERE THE CLAIM OF THE AS SESSEE IS THAT THEY ARE PART OF THE BUSINESS INCOME AND EVEN THROU GH THEY ARE NOT THE INCOME DERIVED FROM EXPORT THEY ARE TO BETAKEN INTO CONSIDERATION WHILE COMPUTING THE DEDUCTION BY VIRT UE OF THE PROVISIONS CONTAINED IN SECTION 80HHC(3) OF THE ACT THE ASSESSEE BEING MANUFACTURER AND SELLER ITS CASE WILL BE COVE RED BY SECTION 80HHC(3)(A) WHICH READS AS UNDER: (3) FOR THE PURPOSES OF SUB-SECTION (1) -- (A) WHERE THE EXPORT OUT OF INDIA IS OF GOODS OR MERCHANDISE MANUFACTURED OR PROCESSED BY THE ITA NOS.2692 & 2693/AHD/ 2010 ACIT VS. MAMTA MACHINERY P.LTD. AYS 1996-97 & 2006-07 RESPECTIVELY - 4 - ASSESSEE THE PROFITS DERIVED FROM SUCH EXPORT SHAL L BE THE AMOUNT WHICH BEARS TO THE PROFITS OF THE BUSINE SS THE SAME PROPORTION AS THE EXPORT TURNOVER IN RESPE CT OF SUCH GOODS BEARS TO THE TOTAL TURNOVER OF THE BUSIN ESS CARRIED ON BY THE ASSESSEE; (B) WHERE THE EXPORT OUT OF INDIA IS OF TRADING GOO DS THE PROFITS DERIVED FROM SUCH EXPORT SHALL BE THE EXPOR T TURNOVER IN RESPECT OF SUCH TRADING GOODS AS REDUCE D BY THE DIRECT COSTS AND INDIRECT COSTS ATTRIBUTABLE TO SUCH EXPORT; (C) WHERE THE EXPORT OUT OF INDIA IS OF GOODS OR MERCHA NDISE MANUFACTU5RED OR PROCESSED BY THE ASSESSEE AND OF TRADING GOODS THE PROFITS DERIVED FROM SUCH EXPORT SHALL -- (I) IN RESPECT OF THE GOODS OR MERCHANDISE MANUFACTURED OR PROCESSED BY THE ASSESSEE BE THE AMOUNT WHICH BEARS TO THE ADJUSTED PROFITS OF THE BUSINESS THE SAME PROPORTION AS THE ADJUSTED EXPORT TURNOVER IN RESPECT OF SUCH GOODS BEARS TO THE ADJUSTED TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE; AND (II) IN RESPECT OF TRADING GOODS BE THE EXPORT TURNOVER IN RESPECT OF SUCH TRADING GOODS AS REDUCED BY THE DIRECT AND INDIRECT COSTS ATTRIBUTABLE TO EXPORT OF SUCH TRADING GOODS: PROVIDED THAT THE PROFITS COMPUTED UNDER CLAUSE(A) OR CLAUSE (B) OR CLAUSE(C) OF THIS SUB-SECTION SHALL B E FURTHER INCREASED BY THE AMOUNT WHICH BEARS TO NINETY PER C ENT OF ANY SUM REFERRED TO IN CLAUSE (IIIA) (NOT BEING PRO FITS ON SALE OF A LICENCE ACQUIRED FROM ANY OTHER PERSON) AND C LAUSES (IIIB) AND (IIIC) OF SECTION 28 THE SAME PROPORTIO N AS THE EXPORT TURNOVER BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE. CONSEQUENTLY THESE AMOUNTS ARE TO BE TREATED AS PA RT OF THE BUSINESS PROFITS FOR THE PURPOSE OF COMPUTING THE I NCOME DERIVED FROM EXPORT BY VIRTUE OF THE PROVISIONS OF SECTION 80HHC(3) OF THE ACT. WE DIRECT ACCORDINGLY. ITA NOS.2692 & 2693/AHD/ 2010 ACIT VS. MAMTA MACHINERY P.LTD. AYS 1996-97 & 2006-07 RESPECTIVELY - 5 - 4.1. THE REVENUE HAS NOT PLACED ANYTHING ON RECORD FOR SUGGESTING ANY CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE HONBLE CO- ORDINATE BENCH WE DO NOT FIND ANY MERIT IN THIS GROUND OF THE REVENUE S APPEAL THE SAME IS THEREFORE REJECTED. 5. GROUND NO.2 IS AGAINST THE FINDING OF THE LD.CIT (A) IN HOLDING THAT ONLY NET INTEREST SHOULD BE REDUCED FROM THE INCOME OF THE ASSESSEE WHILE COMPUTING DEDUCTION U/S.80HHC. 5.1. LD.COUNSEL FOR THE ASSESSEE POINTED OUT THAT T HIS ISSUE IS ALSO COVERED BY THE DECISION OF THE HONBLE COORDINATE B ENCH RENDERED IN ASSESSEES OWN CASE IN ITA NO.2056/AHD/2005 FOR AY 2002-03 DATED31/01/2006. ON THE CONTRARY LD.SR.DR HAS SUP PORTED THE ORDER OF THE AO. 6. WE HAVE HEARD THE RIVAL CONTENTIONS. WE FIND TH AT THE COORDINATE BENCH IN ASSESSEES OWN CASE(SUPRA) HAS DECIDED THI S ISSUE VIDE PARAGRAPH NOS.3 & 4 BY OBSERVING AS UNDER:- 3. THE NEXT DISPUTE IS WITH REGARD TO THE EXCLUSI ON OF INTERST INCOME OF RS.3 09 683/- FROM BUSINESS INCOME FOR THE PURPOSE OF DEDUCTION U/S.80HHC. INTEREST INCOME IS NOT AN INCOME DERIVE D FROM EXPORT IN VIEW OF THE DECISION OF THE SUPREME COURT IN THE CA SE OF PANDIAN CHEMICALS LTD. 262 ITR 278 (SC) AND ALSO THE DECISI ON OF THE TRIBUNAL IN THE CASE OF MIRE INDUSTRIES 87 ITD 475 (AHD) WHE REIN IT IS HELD AS UNDER:- THIS INTEREST IS EARNED ON THE SURPLUS MONEY WHICH WAS EARNED BY THE INDUSTRIAL UNDERTAKING AND TO AUGMENT THE IN COME OF THE UNDERTAKING. ASSESSEE SOLICITS THE DISTINCTION BET WEEN INITIAL FUND AND SURPLUS/IDLE FUNDS AND THE ARGUMENT IS THA T INITIAL FUNDS ARE DEPOSITED WHEN THE UNDERTAKING HAD NOT YET SET ON AND THAT PROFIT ALONE COULD BE SAID TO HAVE NOT BEEN DERIVED FROM; IN SO ITA NOS.2692 & 2693/AHD/ 2010 ACIT VS. MAMTA MACHINERY P.LTD. AYS 1996-97 & 2006-07 RESPECTIVELY - 6 - FAR AS FUNDS GENERATED FROM WITHIN THE EARNINGS OF UNDERTAKING AFTER IT HAD STARTED THE INTEREST INCOME WOULD BE P ART AND PARCEL OF THE UNDERTAKING. THE FACT HOWEVER REMAINS THAT INCOME IS EARNED FROM DEPOSITS MADE AND NOT FROM INDUSTRIAL U NDERTAKING MANUFACTURING OR PRODUCING ARTICLES OR THINGS. THI S DISTINCTION MAY BE VALID FOR DETERMINING THE INCOME WHETHER FRO M BUSINESS WHERE ONLY INCIDENTAL CONNECTION IS REQUIRED TO BE ESTABLISHED AND DETERMINING WHETHER INCOME IS DERIVED FROM WHER E THE EFFECTIVE AND DIRECT SOURCE OF FIRST DEGREE ALONE I S TO BE ESTABLISHED. HENCE THE ASSESSEE WOULD NOT BE ENTIT LED TO DEDUCTION ON SUCH INTEREST RECEIPTS. 4. THE SPECIAL BENCH DECISION IN THE CASE OF NIRMA INDUSTRIES LTD. 95 ITD 199 (AHD.)(SB) ALSO HELD AS UNDER: THE ASSESSEE SOLD DETERGENT POWDER/CAKE TO VARIOUS CUSTOMERS. THE SALE PROCEEDS HAD A DIRECT/IMMEDIATE NEXUS WITH THE INDUSTRIAL UNDERTAKING. IF THE AMOUNT OF SALE PROC EEDS WAS NOT PAID WITHIN THE CREDIT PERIOD ALLOWED THE BUYER HA D TO PAY INTEREST ON SUCH DELAYED PAYMENT. THE INTEREST WAS NOT ARISING BECAUSE OF MANUFACTURING OF DETERGENT POWDER/CAKE B Y THE INDUSTRIAL UNDERTAKING BUT BECAUE THE SALE PROCEEDS REMAINED UNPAID FOR A STIPULATED PERIOD. THE INTEREST COULD NOT BE SAID TO FLOW DIRECTLY FROM THE INDUSTRIAL UNDERTAKING. THE ASSESSEE HAD SOLD THE PRODUCT OF THE INDUSTRIAL UNDERTAKING AND SINCE THE SALE PROCEEDS WERE NOT PAID WITHIN TIME ON THE ARREARS OF SALE PROCEEDS INTEREST WAS RECEIVED. THE IMMEDIATE AND EFFECTIVE SOURCE OF INTEREST WAS THE SALE PROCEEDINGS WHICH R EMAINED UNPAID FOR A STIPULATED CREDIT PERIOD. THE INDUSTR IAL UNDERTAKING COMES IN THE SECOND DEGREE. THE WORDS DERIVED FRO M ARE TO BE GIVEN A NARROW MEANING. DERIVED FROM MEANS SOMET HING WHICH HAS A DIRECT OR IMMEDIATE NEXUS WITH THE INDU STRIAL UNDERTAKING. THE SALE PROCEED HAS A DIRECT NEXUS W ITH THE INDUSTRIAL UNDERTAKING BUT NOT THE INTEREST ON THE ARREARS OF SALE PROCEEDS. THE INTEREST WAS PAID BY THE BUYER ONLY BECAUSE HE DID NOT MAKE THE PAYMENT OF SALE PROCEEDS WITHIN TI ME. INTEREST FROM DEBTORS DOES NOT HAVE EITHER DIRECT O R IMMEDIATE NEXUS WITH INDUSTRIAL UNDERTAKING. THEREFORE THE INTEREST ON THE DELAYED PAYMENT OF SALE PROCEEDS COULD NOT BE SAID TO BE THE INCOME DERIVED FROM THE INDUSTRIAL UNDERTAKING. TH EREFORE THE ITA NOS.2692 & 2693/AHD/ 2010 ACIT VS. MAMTA MACHINERY P.LTD. AYS 1996-97 & 2006-07 RESPECTIVELY - 7 - ORDER OF THE COMMISSIONER (APPEALS) WAS REVERSED ON THAT POINT AND THAT OF THE ASSESSING OFFICER WAS TO BE RESTORE D. THE INTEREST INCOME THEREFORE IS TO BE EXCLUDED F ROM THE INCOME WHILE COMPUTING DEDUCTION U/S.80HHC. THE EXCLUSION HOWE VER IS TO BE OF THE NET AMOUNT I.E. THE NET INCOME AFTER ALLOWING T HE EXPENDITURE INCURRED BY THE ASSESSEE IN EARNING THE SAME IN VIE W OF THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF LA ISONS ENTERPRISES 89 ITD 25 WHEREIN IT IS HELD AS UNDER:- FOR THE PURPOSE OF APPLYING EXPLANATION (BAA) BELO W SUB- SECTION 4B) OF SECTION 80HHC AND WHILE REDUCING 90 PER CENT OF THE RECEIPT BY WAY OF INTEREST FROM THE PROFITS OF THE BUSINESS IT IS ONLY THE 90 PER CENT OF THE NET INTEREST REMAINING AFTER ALLOWING A SET-OFF OF INTEREST PAID WHICH HAS A NEXUS WITH TH E INTEREST RECEIVED THAT CAN BE REDUCED AND NOT 90 PER CENT O F THE GROSS INTEREST. (UNDERLINING BY US). WE ORDER ACCORDINGLY. 6.1. SINCE THE LD.SR.DR HAS NOT PLACED ANYTHING ON RECORD FOR SUGGESTING THAT HOW THIS FINDING OF HONBLE COORDIN ATE BENCH DOES NOT APPLY ON THE FACTS AND CIRCUMSTANCES THEREFORE RES PECTFULLY FOLLOWING THE DECISION OF THE HONBLE COORDINATE BENCH WE REJECT THIS GROUND OF THE REVENUE. 7. THE NEXT GROUND IS WITH REGARD TO NOT APPRECIATI NG THE RATIO OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF ASIAN STAR REPORTED AT 231 CTR 01. 7.1. AT THE OUTSET LD.COUNSEL FOR THE ASSESSEE SUB MITTED THAT THIS DECISION OF THE HONBLE BOMBAY HIGH COURT WAS IMPLI EDLY OVERRULED BY THE HONBLE APEX COURT IN THE CASE OF ACG ASSOCIATE D CAPSULES P.LTD. VS. CIT REPORTED AT (2012)343 ITR 89(SC). THIS FAC T IS NOT CONTROVERTED BY THE LD.SR.DR THEREFORE THIS GROUND IS HEREBY RE JECTED. ITA NOS.2692 & 2693/AHD/ 2010 ACIT VS. MAMTA MACHINERY P.LTD. AYS 1996-97 & 2006-07 RESPECTIVELY - 8 - 8. GROUND NOS.4 & 5 ARE GENERAL IN NATURE WHICH REQ UIRE NO INDEPENDENT ADJUDICATION. 9. IN THE RESULT REVENUES APPEAL I.E. ITA NO.269 2/AHD/2010 FOR AY 1996-97 IS DISMISSED. 10. NOW WE TAKE UP THE APPEAL IN ITA NO.2693/AHD/2 010 FOR AY 2006-97. 10.1. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO ALLOW THE EXCESS EXPENDITURE OF RS.10 13 759/- CLAIMED BY THE ASSESSEE DURING THE COURSE OF ASSESS MENT PROCEEDINGS ON ACCOUNT OF EXPENDITURE ON SEMINARS. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN N OT APPRECIATING THE FACT THAT THE ASSESSEES BOOKS HAV E BEEN AUDITED AND BALANCE-SHEET HAS BEEN PREPARED WITH OR IGINAL EXPENDITURE I.E. RS.2 22 26 481/- AS AGAINST RS.2 3 2 40 240/- CLAIMED DURING THE ASSESSMENT PROCEEDINGS AND SWAPP ING THE NEW PROFIT IN BALANCE-SHEET WOULD RESULT IN UNA CCOUNTED ASSETS TO THIS EXTENT IN THE BALANCE-SHEET. I3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS I N NOT APPRECIATING THE FACT THAT THE ASSESSEE HAD NOT SUB MITTED ANY REVISED BALANCE-SHEET NOR FILED ANY LETTER FROM THE AUDITOR SPECIFYING THE ERROR. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. ITA NOS.2692 & 2693/AHD/ 2010 ACIT VS. MAMTA MACHINERY P.LTD. AYS 1996-97 & 2006-07 RESPECTIVELY - 9 - 5.1. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD.CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. 11. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE L D.CIT(A) ALLOWED THE EXPENDITURE OF RS.10 13 759/- WHICH WAS NOT CLA IMED BY THE ASSESSEE IN HIS RETURN OF INCOME AND SUCH CLAIM WAS MADE SUB SEQUENT TO FILING OF THE RETURN OF INCOME DURING THE COURSE OF ASSESSMEN T PROCEEDINGS. SUBSEQUENTLY THE ASSESSEE HAS MOVED AN APPLICATION FOR RECTIFICATION OF MISTAKE AND AN ORDER U/S.154 OF THE ACT WAS PASSED BY THE AO REJECTING THE APPLICATION OF THE ASSESSEE AND THE ASSESSEE FE ELING AGGRIEVED PREFERRED AN APPEAL BEFORE THE LD.CIT(A) WHO DIRECT ED THE AO TO ALLOW THE CLAIM OF THE ASSESSEE. 12. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT INADVERTENTLY THE EXPENDITURE INCURRED WAS NOT RECORDED AND WHEN IT C AME TO THE NOTICE THE SAME WAS CLAIMED DURING THE COURSE OF ASSESSMEN T PROCEEDINGS. HE SUBMITTED THAT IT IS NOT THE CASE OF REVENUE THAT T HE EXPENDITURE IS BOGUS OR SHAM ANY EXPENDITURE INCURRED FOR BUSINESS PUR POSES IS REQUIRED TO BE ALLOWED U/S.37 OF THE ACT. HE STRONGLY RELIED ON T HE ORDER OF THE LD.CIT(A) AND ALSO THE DECISION RELIED UPON BY THE LD.CIT(A) IN HIS ORDER. 12.1.ON THE CONTRARY LD.SR.DR SUPPORTED THE ORDER OF THE AO. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LD.CIT(A) HA S GRANTED THE RELIEF FOLLOWING THE DECISION OF HONBLE MADHYA PRADESH HI GH COURT RENDERED IN THE CASE OF CIT VS. K.N.OIL INDUSTRIES (142 ITR 13)(MP) AND DECISION ITA NOS.2692 & 2693/AHD/ 2010 ACIT VS. MAMTA MACHINERY P.LTD. AYS 1996-97 & 2006-07 RESPECTIVELY - 10 - OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CONTAINER CORP. OF INDIA LTD. VS. DY.CIT (92 ITD 333)(DELHI.). THE HO NBLE MP HIGH COURT IN THE CASE OF CIT VS. K.N.OIL INDUSTRIES HAS HELD THAT IF IT IS APPARENT FROM THE RECORD THAT THE ASSESSEE WAS ENTI TLED TO RELIEF ADMISSIBLE UNDER SECTION 35B THAT RELIEF CAN BE GR ANTED TO HIM BY AN ORDER UNDER SECTION 154 BY RECTIFYING THE ASSESSMEN T EVEN THOUGH RELIEF UNDER THAT SECTION HAD NOT BEEN CLAIMED BY THE ASSE SSEE IN THE ORIGINAL ASSESSMENT PROCEEDINGS. IN THE PRESENT CASE THE ASSESSEE HAD NOT CLAIMED EXPENDITURE OF RS.10 13 759/- DUE TO OVERSI GHT IN ITS P&L ACCOUNT BUT SUBSEQUENTLY MADE THE CLAIM BEFORE THE AO AND ALSO FILED AN APPLICATION FOR RECTIFICATION OF MISTAKE AFTER ORI GINAL ASSESSMENT PROCEEDINGS WERE CONCLUDED. IT IS NOT THE CASE OF THE REVENUE THAT THE EXPENSES CLAIMED BY THE ASSESSEE ARE SHAM OR BOGUS NO SUCH MATERIAL HAS BEEN PLACED ON RECORD ON BEHALF OF THE REVENUE. THE LD.SR.DR OF THE REVENUE HAS NOT POINTED OUT THAT HOW THESE JUDGEMEN TS ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. THERE FORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) THE SAME I S HEREBY UPHELD. THIS GROUND OF THE REVENUE IS REJECTED. 13. IN THE COMBINED RESULT BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31/10 /2013 3 .. .../ T.C. NAIR SR. PS ITA NOS.2692 & 2693/AHD/ 2010 ACIT VS. MAMTA MACHINERY P.LTD. AYS 1996-97 & 2006-07 RESPECTIVELY - 11 - 0 + ($4 54/$ 0 + ($4 54/$ 0 + ($4 54/$ 0 + ($4 54/$/ COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. ()&' / THE RESPONDENT. 3. !! $ '6 / CONCERNED CIT 4. '6() / THE CIT(A)-XX AHMEDABAD 5. 4 #7 ($ / DR ITAT AHMEDABAD 6. 789 :* / GUARD FILE. 0' 0' 0' 0' / BY ORDER )4$ ($ //TRUE COPY// ; ;; ;/ // / !< !< !< !< ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD 1. DATE OF DICTATION .. 24.10.13 (DICTATION-PAD 14- P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.10.13 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.31.10.13 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.10.13 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER