SMT. SHASHI GUPTA, MUMBAI v. INCOME TAX OFFICER WARD 12(2)(2), MUMBAI

ITA 2824/MUM/2009 | 2001-2002
Pronouncement Date: 14-05-2010 | Result: Allowed

Appeal Details

RSA Number 282419914 RSA 2009
Assessee PAN ACBPG2138A
Bench Mumbai
Appeal Number ITA 2824/MUM/2009
Duration Of Justice 1 year(s) 10 day(s)
Appellant SMT. SHASHI GUPTA, MUMBAI
Respondent INCOME TAX OFFICER WARD 12(2)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 14-05-2010
Date Of Final Hearing 14-05-2010
Next Hearing Date 14-05-2010
Assessment Year 2001-2002
Appeal Filed On 04-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI BEFORE SHRI. R.S. SYAL (A.M.) AND SHRI. VIJAY PAL R AO (J.M) ITA NO.2824/MUM/2009 ASSESSMENT YEAR: 2001-2002 SHASHI GUPTA 2 ND FLR. ARSIWALS BLDG. 61 WODEHOUSE RD. COLABA MUMBAI 400 005. PAN : ACBPG2138A VS. INCOME TAX OFFICER WARD 12(2)(2) AAYAKAR BHAVAN M.K. RD. MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI I. P. RATHI RESPONDENT BY : DR. ANIL KUMAR SINGH O R D E R PER VIJAY PAL RAO J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 09.02.2009 OF LEARNED CIT(A)-XXII MUMBAI ARISING F ROM ORDER PASSED U/S.154 OF THE I.T. ACT FOR THE ASSESSMENT YEAR 200 1-2002. 2. THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN THIS APPEAL HOWEVER THE FOLLOWING ISSUES ARISE FROM THE GROUNDS OF THE APPE AL. 1. WHETHER THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) IS JUSTIFIED IN HOLDING THAT THERE WAS A MISTAKE APPAR ENT ON RECORD TO RECTIFY U/S.154 OF THE I.T. ACT WITH RESPECT TO COM PUTATION OF VALUE OF THE DEPB FOR THE PURPOSE OF SEC.80HHC. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION U /S.80.HHC ON THE ENTIRE DEPB BENEFIT OF RS.63 98 044/-. 3. AT THE TIME OF ORIGINAL ASSESSMENT ORDER PASSED ON 28.11.2006 THE ASSESSING OFFICER DETERMINED THE TOTAL INCOME AT RS .26 62 960/- AFTER ALLOWING DEDUCTION OF RS.95 700 062/- U/S.80HHC. SUBSEQUENTLY THE ASSESSING OFFICER PROPOSE TO RECTIFY THE ASSESSMENT ORDER U/S.154 OF THE ACT ITA NO.2824/MUM/2009 A.Y.: 2001-2002 2 WITH RESPECT TO DEDUCTION U/S.80HHC ALLOWED AT RS.9 5 70 062/- AND TO RECOMPUTE AT RS.51 79 600/- AS PER THE AMENDED PROV ISIONS. THE ASSESSEE OBJECTED TO THE PROPOSED RECTIFICATION AND REDUCTIO N OF DEDUCTION. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE AND RECTIFY THE ASSESSMENT VIDE ORDER DATED 28.12.2006 WHEREBY THE DEDUCTION U/S.80HHC WAS COMPUTED AT RS.51 79 600/- AS AGAINST THE ORIGINAL DEDUCTION ALLOWED AT RS.95 70 062/-. THE ASSESS EE CHALLENGED THE ACTION OF THE ASSESSING OFFICER BEFORE THE CIT(A) ON THE G ROUND OF JURISDICTION AS WELL AS ON MERITS. THE LEARNED CIT(A) HAS REJECTE D THE CLAIM OF THE ASSESSEE AND CONFIRMED THE ACTION OF THE ASSESSEE. 4. BEFORE US LEARNED AR OF THE ASSESSEE HAS SUBMIT TED THAT THE ASSESSEE CREDITED RS.63 98 044/- AS DEPB BENEFIT TO THE PROF IT & LOSS A/C. THIS AMOUNT INCLUSIVE OF SALE PROCEEDS SALES TAX COLLEC TED THEREON AND PROVISION MADE FOR DEPB LICENSE RECEIVABLE AT RS.22 79 018/- WHICH IS TOTAL DEPB ENTITLEMENT RECEIVABLE AS ON THE YEAR END. HE FU RTHER CONTENDED THAT THE ENTIRE DEPB BENEFIT OF RS.63 98 044/- CANNOT BE CON SIDERED AS PROFIT ON TRANSFER OF DEPB AS DEFINED U/S.28(IIID) AND FOR RE COGNITION OF THE PROFIT ON TRANSFER OF DEPB THE ORIGINAL ENTITLEMENT VALUE OF DEPB AND SALES TAX COLLECTED THEREON HAS TO BE REDUCED FROM THE SALES PROCEEDS OF THE DEPB. HE HAS POINTED OUT THAT THE TOTAL PROFIT EARNED ON TRANSFER OF SUCH DEPB LICENSE U/S.28(IIID) WAS RS.3 00 180/- ONLY BEING R EALISED IN THIS YEAR AS PER THE DETAILS IN RECORD WAS SUBMITTED TO THE ASSESSIN G OFFICER HENCE IN THE ORIGINAL ASSESSMENT ONLY RS.3 00 180/- WAS TAXED U/ S.28(IIID). THUS THE LEARNED AR SUBMITTED THAT THE ISSUE OF PROFIT EARNE D ON TRANSFER OF DEPB LICENSE U/S.28(IIID) WAS DEBATABLE ISSUE AND ONCE T HE ASSESSING OFFICER HAS ACCEPTED THE CLAIM OF THE ASSESSEE THE SAME CANNOT BE REVISED U/S.154. SINCE THE ASSESSING OFFICER HAS NO JURISDICTION U/S .154 TO REVISED THE ISSUE WHICH IS A DEBATABLE ONE AND NOT APPARENT ERROR ON THE FACE OF IT. HE HAS RELIED UPON DECISION OF THE HONBLE SUPREME COURT I N THE CASE OF MEPCO INDUSTRIES LTD. VS. CIT (319 ITR 208). ITA NO.2824/MUM/2009 A.Y.: 2001-2002 3 5. ON THE OTHER HAND LEARNED DR HAS SUBMITTED THAT AS PER THE AMENDED PROVISION OF SECTION 80HHC BOTH THE AMOUNTS OF THE DEPB VALUE AND PROFIT ON TRANSFER HAS TO BE EXCLUDED FROM THE BUSINESS PROFIT FOR THE PURPOSE OF DEDUCTION U/S.80HHC. SINCE THE ASSESSI NG OFFICER IN THE ORIGINAL ASSESSMENT ALLOWED THE EXCESS DEDUCTION U/ S.80HHC WITHOUT CONSIDERING THE AMENDED PROVISION IT CONSTITUTES A N APPARENT ERROR ON FACE OF THE ORDER WHICH CAN BE RECTIFIED U/S.154 OF THE ACT. HE HAS RELIED UPON ORDER OF THE LOWER AUTHORITIES. 6. WE HAVE CONSIDERED THE RIVAL CONTENTION AND RELE VANT MATERIAL ON RECORD. WE NOTE THAT THE ISSUE OF PROFIT ON TRAN SFER OF DEPB LICENCE FOR THE PURPOSE OF SECTION 80HHC IS A DEBATABLE ISSUE. IN THE ASSESSMENT U/S.143(3) R.W.S. 254 THE ASSESSING OFFICER ALLOW THE DEDUCTION U/S.80HHC ON THE ENTIRE BENEFIT OF DEPB EXCEPT RS.3 00 180/- WHICH WERE CONSIDERED U/S.28(IIID) OF THE ACT. SUBSEQUENTLY THE ASSES SING OFFICER PASSED THE RECTIFICATION ORDER AND CONSIDERED THE ENTIRE RECEI PT OF DEPB AND PROFIT ON TRANSFER OF SUCH DEPB IS BEING COVERED U/S.28(IIID) . THIS ISSUE WHETHER THE ENTIRE DEPB CREDIT OR ONLY THE PROFIT EARNED ON THE TRANSFER OF DEPB AFTER REDUCING THE FACE VALUE OF DEPB FROM THE SALES PROC EEDS SHOULD BE CONSIDERED AS PROFIT U/S.28(IIID) OF THE I.T. ACT I S A ISSUE ON WHICH TWO VIEWS WERE POSSIBLE AND ACCORDINGLY WAS A DEBATABLE ONE. AS FAR AS REDUCTION OF DEDUCTION U/S.80HHC ON THE GROUND OF AMENDED PROVIS ION OF ACT IS CONCERNED IF EXCESS DEDUCTION WAS ALLOWED MERELY BY OVERLOOKING MANDATORY PROVISIONS OF LAW WHICH GIVES NO DISCRETION TO THE TAXING AUTHORITY THEN IT IS A MISTAKE FROM THE RECORD BUT IF A DECISION ON A DE BATABLE POINT OF LAW WHERE LAW CONFERS ON THE TAXING AUTHORITY A DISCRETION TH EN SUCH DISCRETION CAN NOT BE CORRECTED U/S.154 OF THE ACT. THE SCOPE OF PR OVISIONS FOR SECTION 154 IS LIMITED TO THE MISTAKE WHICH IS OBVIOUS AND PATENT AND APPARENT ON THE RECORD AND NOT SOMETHING WHICH CAN BE ESTABLISHED B Y LONG DRAWN PROCESS OF REASONING ON THE POINT AND THERE MAY BE A POSSIB ILITY OF TWO OPINIONS. THUS IT IS SETTLED POSITION OF LAW THAT AN ISSUE CA NNOT BE DECIDED U/S.154 OF THE ACT WHEN THERE IS DEBATABLE POINT OF LAW. T HE NATURE OF THE ISSUE INVOLVED IN THE PRESENT CASE IS NOT SIMPLE ONE AND THEREFORE IT IS NOT A CASE ITA NO.2824/MUM/2009 A.Y.: 2001-2002 4 OF OVERLOOKING OF A PARTICULAR PROVISION OF LAW WHE RE THERE CANNOT BE TWO OPINIONS. THE ISSUE HAS BEEN FINALLY SETTLED BY THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF TOPMAN EXPORT VS. ACIT [318 ITR (AT) 87]. 7. THEREFORE IN VIEW OF THE ABOVE FACTS AND CIRCUM STANCES WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE INVOLVED IN THIS CASE IS CLEARLY DEBATABLE POINT OF LAW AND CAN NOT BE DECIDED UNDER THE PROVI SIONS OF SECTION 154 OF THE I.T. ACT. ACCORDINGLY THE ASSESSING OFFICER HAD EXCEEDED THE JURISDICTION IN DECIDING THE ISSUE BY INVOKING THE PROVISION OF SECTION 154 WHICH RENDERS IMPUGNED ORDER PASSED U/S.154 AS NULL AND VOID BEING BASED ON CHANGE OF OPINION. ACCORDINGLY THE ORDER PASS ED U/S.154 DATED 28.12.2006 IS LIABLE TO BE SET ASIDE. SINCE THE ISSUE OF LEGALITY OF ORDER U/S.154 HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND THE RECTIFICATION ORDER PASSED U/S.154 HAS BEEN SET ASIDE THEREFORE WE DO NOT PROPOSE TO DECIDE THE ISSUE ON MERIT. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON THIS 21 ST DAY OF MAY 2010. SD/- (R.S. SYAL) (ACCOUNTANT MEMBER) SD/- (VIJAY PAL RAO) (JUDICIAL MEMBER) MUMBAI DATED 21 ST MAY 2010. JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- MUM BAI 4. COMMISSIONER OF INCOME TAX CITY- MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH E MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI