DCIT, Tuticorin v. M/s. Universal Foods, Kanyakumari

ITA 764/CHNY/2011 | 2001-2002
Pronouncement Date: 14-07-2011 | Result: Dismissed

Appeal Details

RSA Number 76421714 RSA 2011
Assessee PAN AAAFU7869B
Bench Chennai
Appeal Number ITA 764/CHNY/2011
Duration Of Justice 2 month(s) 16 day(s)
Appellant DCIT, Tuticorin
Respondent M/s. Universal Foods, Kanyakumari
Appeal Type Income Tax Appeal
Pronouncement Date 14-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 22-07-2011
Date Of Final Hearing 14-07-2011
Next Hearing Date 14-07-2011
Assessment Year 2001-2002
Appeal Filed On 28-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI BEFORE SHRI N.S.SAINI ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER .. ITA NO.764/MDS./11 ASSESSMENT YEAR:2001-02 DEPUTY COMMISSIONER OF INCOME TAX. CIRCLE-I TUTICORIN. VS. M/S.UNIVERSAL FOODS ERAVIPUTHUR KADAI KATTATHURAI PO KANYAKUMARI DISTRICT. PAN AAAFU 7869 B (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI SHAJI P JACOB ASSESSEE BY : NONE O R D E R PER N.S.SAINI ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF CIT(A)-I MADURAI DT.10.01.2011. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX(A) HAS ERRED IN DELETING THE DISALLOWANCE MADE U/S.80HHC OF THE ACT. THE COMMI SSIONER OF INCOME TAX(A) OUGHT TO HAVE SEEN THAT INSURANCE AND FREIGHT CHARGES ARE DERIVED FROM BUSINESS AND WHICH ARE ASS ESSED UNDER THE HEAD OTHER SOURCES. THEREFORE THE ACTION O F THE ASSESSING PAGE 2 OF 7 ITA. 764/MDS/11 M/S.UNIVERSAL FOODS OFFICER THAT DEDUCTION OF INSURANCE AND FREIGHT CHA RGES FROM THE PROFIT COMPUTED FOR THE PURPOSE OF DEDUCTION U/S.80 HHC IS A MISTAKE APPARENT FROM RECORDS AND NOT A DEBATABLE I SSUE AS STATED BY THE COMMISSIONER OF INCOME TAX(A). 3. THE COMMISSIONER OF INCOME TAX(A) HAS DECIDED T HE ISSUE AS UNDER:- 3.1. REVISION ORDER DT.14.06.2008 WAS PASSED TO W ITHDRAW EXCESS CLAIM OF DEDUCTION U/S.80HHC AS IT WAS NOTIC ED THAT INSURANCE OF RS.10 63 737/- AND FREIGHT (SHIPPING A ND FORWARDING) OF RS.23 28 131/- WERE OMITTED TO BE DE DUCTED FROM THE PROFIT OF THE BUSINESS TO CLAIM DEDUCTION U/S.80HHC. 4. AGGRIEVED BY THIS DISALLOWANCE ASSESSEE FILED THIS APPEAL. 5. THOUGH THESE ARE SEVERAL GROUNDS OF APPEAL ALL ARE DIRECTED AGAINST THE ACTION OF ASSESSING OFFICER I N RESTRICTING THE CLAIM OF DEDUCTION U/S.80HHC TO RS.46 44 455/- IN THE REVISION ORDER AS AGAINST THE ORIGINAL DEDUCTION OF RS.70 53 942/- CLAIMED BY THE APPELLAN T IN THE RETURN FILED BY IT AND ALLOWED BY THE ASSESSING OFF ICER IN THE SCRUTINY ASSESSMENT. 6. NOTICE WAS ISSUED SHRI V.GANAPTHY FCA APPEARE D AND SUBMITTED RELEVANT DETAILS. CASE WAS HEARD. PAGE 3 OF 7 ITA. 764/MDS/11 M/S.UNIVERSAL FOODS 7. ON PERUSAL OF DETAILS SUBMITTED IT COULD NOT NO TICED THAT ASSESSEE IN ITS RETURN OF INCOME FILED ON 06.11.200 1 FOR THE RELEVANT ASSESSMENT YEAR CLAIMED DEDUCTION OF RS.70 53 942/- U/S.80HHC OF THE ACT. THIS RETURN W AS ACCOMPANIED BY THE REPORT IN FORM NO.10CCAC WHEREIN IT WAS CERTIFIED THAT THE TOTAL DEDUCTION T O BE CLAIMED BY THE ASSESSEE U/S.80HHC WAS RS.70 53 942/-. IN COLUMN NO.26 OF FORM 3CD OF 44 A B REPORT A SUM OF RS.70 53 942/- WAS CLAIMED AS DEDUCTION U/S.80HHC OF THE ACT. THE SAME WAS ALLOWE D IN THE SCRUTINY ASSESSMENT U/S.143(3) OF THE ACT. 7.1 IN SUCH CIRCUMSTANCES WITHDRAWAL OF EXCESS CL AIM OF DEDUCTION U/S.80HHC IN THE REVISION ORDER DT.14.06. 2005 UNDER THE PRETEXT THAT INSURANCE OF RS.10 63 337/- AND FREIGHT OF RS.23 28 131/- WERE OMITTED TO BE DEDUCT ED FROM THE PROFIT OF THE BUSINESS TO CLAIM THE DEDUCTION U /S.80HHC IN MY VIEW IS NOT IN ORDER FOR THE FOLLOWING REASO NS:- I) FOR RECTIFICATION U/S.154 OF THE ACT THE MIST AKE MUST BE OBVIOUS AND PATENT. II) RECTIFICATION IS NOT POSSIBLE WHEN THE QUESTION IS DEBATABLE [COMMISSIONER OF INCOME TAX VS. HERO CYCLES (P) LTD. (1997) 228 ITR 473 (SC) ] III) MISTAKE SHOULD NOT INVOLVE STATUTORY INTERPRET ATION [COMMISSIONER OF INCOME TAX VS. SATYANARAYAN BHALOTIA (1994) 74 TAXMAN 34 (CAL.)] PAGE 4 OF 7 ITA. 764/MDS/11 M/S.UNIVERSAL FOODS IV) RECTIFICATION IS BARRED IF THERE ARE DIVERGENT VIEWS BY DIFFERENT HIGH COURTS [COMMISSIONER OF INCOME TAX VS. ORIENT PAPER INDUSTRIES (1994)208 ITR 158(CAL.) ] V) THE MISTAKE SHOULD NOT BE SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. VI) A DECISION ON DEBATABLE POINT BY LAW IS NOT MIS TAKE APPARENT FROM RECORD. T.S.BALARAM ITO VS. VOLKART BROS. (1971) 82 ITR (SC). 7.2. SCRUTINY ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED ON 19.02.04 IN THIS CASE WHEREIN THE ASSESSEES CLAIM OF DEDUCTION U/S.80HHC OF THE ACT WAS ALLOWED. HOWEVER THE DISALLOWANCE IS MADE IN THE RECTIFICATION ORDER. HENCE THE DISALLOWANCE OF EXCESS DEDUCTION U/S.80H HC MADE IN THE REVISION ORDER U/S.154 OF THE ACT IS DI RECTED TO BE DELETED. 4. NONE APPEARED ON BEHALF OF THE RESPONDENT ASSES SEE WHEN THE CASE WAS CALLED UP FOR HEARING. NOTICE WA S SERVED TO THE RESPONDENT ASSESSEE ON 07.05.11 AS EVIDENCED BY ACKNOWLEDGMENT CARD OF POST OFFICE PLACED ON RECORD . PAGE 5 OF 7 ITA. 764/MDS/11 M/S.UNIVERSAL FOODS 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE MERELY RELIED ON THE GROUNDS OF APPEAL. 6. WE HAVE HEARD THE LD. LEARNED DR AND PERUSED T HE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE IN A PROCEEDING INITIATED U/S.154 OF THE ACT THE LEARNED ASSESSING OFFICER HELD THAT NON DEDUCTION OF INSURANCE OF RS.10 63 737/- A ND FREIGHT OF RS.23 28 131/- WHILE COMPUTING BUSINESS INCOME FOR CALCULATING DEDUCTION ALLOWABLE U/S.80HCC PRESENTS A CASE OF MI STAKE APPARENT FROM THE RECORD AND ACCORDINGLY THE LEARNE D ASSESSING OFFICER REDUCED FREIGHT AND INSURANCE FROM THE BUSI NESS PROFITS TO COMPUTE DEDUCTION U/S.80HHC. 7. ON APPEAL LEARNED COMMISSIONER OF INCOME TAX|(A ) CANCELLED THE AFORESAID PROCEEDINGS U/S.154 ON THE GROUND THAT WITHDRAWAL OF EXCESS CLAIM OF DEDUCTION U/S.80HHC IN THE REVISION ORDER DATED 14.06.2005 UNDER THE PRETEXT T HAT INSURANCE OF RS.10 63 337/- AND FREIGHT OF RS.23 28 131/- WER E OMITTED TO BE DEDUCTED FROM THE PROFITS OF THE BUSINESS TO CLAIM DEDUCTION/S.80HHC WAS NOT IN ORDER AS RECTIFICATION U/S.154 OF THE ACT CAN BE MADE OF THE MISTAKE WHICH IS OBVIOUS AND PATENT AND NOT OF A DEBATABLE ISSUE OR INVOLVING STATUTORY INT ERPRETATION OR WHERE THERE ARE DIVERGENT VIEWS OR WHERE SOMETHING HAS TO BE ESTABLISHED BY LONG DRAWN PROCESS OF REASONING ON P OINTS ON WHICH THERE ARE CONCEIVABLY TWO OPINIONS. WE FIND THAT THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT GIVE ANY REASON BEFORE US AS TO WHY FREIGHT AND INSURANCE CHARGES S HOULD BE REDUCED WHILE COMPUTING BUSINESS PROFITS. ON THE O THER HAND LD. LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY CONCEDED THAT THERE PAGE 6 OF 7 ITA. 764/MDS/11 M/S.UNIVERSAL FOODS WAS NO ERROR IN THE ORDER OF THE LEARNED COMMISSION ER OF INCOME TAX(A). WE THEREFORE CONFIRM THE ORDER OF THE LEAR NED COMMISSIONER OF INCOME TAX(A) AND DISMISS THE APPEA L OF THE REVENUE. 8. IN RESULT THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING IN THE PRESENCE OF THE PARTIES ON 22 ND JULY 2011. SD/- SD/- ( GEORGE MATHAN ) ( N.SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 22 ND JULY 2011. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE PAGE 7 OF 7 ITA. 764/MDS/11 M/S.UNIVERSAL FOODS DATE INITIALS 1. DRAFT DICTATED ON 2. DRAFT PLACED BEFORE AUTHORITY 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S. 6. KEEP FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE 9. DATE OF DISPATCH OF ORDER