Divis Laboratories Ltd., Hyderabad v. DCIT, Circle 1(2), Hyderabad

MA 12/HYD/2011 | misc
Pronouncement Date: 16-09-2011 | Result: Allowed

Appeal Details

RSA Number 1222524 RSA 2011
Bench Hyderabad
Appeal Number MA 12/HYD/2011
Duration Of Justice 7 month(s) 29 day(s)
Appellant Divis Laboratories Ltd., Hyderabad
Respondent DCIT, Circle 1(2), Hyderabad
Appeal Type Miscellaneous Application
Pronouncement Date 16-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 16-09-2011
Assessment Year misc
Appeal Filed On 18-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI AKBER BASHA ACCOUNTANT MEMBER MA NO. ARISING OUT OF APPLICANT RESPONDENT ASSTT. Y EAR 11/H/2011 MA 54/H/09 & ITA 395/03 M/S. DIVIS LABORATORIES LTD. HYD. DCIT CIR- 1(2) HYD. 1998-99 12/H/2011 MA 55/H/09 & ITA 396/H/03 -DO- -DO- -DO- 13/H/2011 MA56/H/09 & ITA 797/H/04 -DO- -DO- 2001-02 14/H/2011 MA 57/H/2009 & ITA 798/H/04) -DO- -DO- 2002-03 15/H/2011 MA 58/H/2009 & ITA 814/H/05 -DO- -DO- 2003 - 04 16/H/2011 MA 59/H/09 & ITA 815/H/05 -DO- -DO- 2004 - 05 APPLICANT BY : SHRI S. RAMA RAO RESPONDENT BY : SMT. NIVEDITA BISWAS O R D E R PER AKBER BASHA ACCOUNTANT MEMBER: BY THESE MISC. APPLICATIONS THE ASSESSEE IS SEE KING THE TRIBUNAL TO RECALL ITS COMMON ORDER PASSED IN ABOVE -MENTIONED ITA NUMBERS DATED 23 RD JULY 2009. SINCE THE FACTS ARE QUITE IDENTICAL AND SIMILAR IN ALL THESE MISC. APPLICATI ONS FOR THE SAKE OF BREVITY WE DEAL WITH THE FACTS/SUBMISSIONS AS MENT IONED IN MA NO.11/HYD/2011. M.A.NOS. 11 TO 16 OF 2011 DIVIS LABORATORIES LTD HYD. ============================ 2 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED IS WITH REGARD TO COMPUTATI ON OF PROFIT UNDER SECTION 115JA OF THE IT ACT. THE QUESTION IS WHETHER THE DEDUCTION UNDER SEC. 80HHC IS TO BE COMPUTED ON THE BOOK PROFIT ARRIVED AT IN ACCORDANCE WITH THE PROVISIONS OF SEC TION 115JA OR SUCH DEDUCTION IS TO BE COMPUTED IN ACCORDANCE WITH THE REGULAR PROVISIONS OF LAW. IT IS FURTHER SUBMITTED THAT THE ASSESSING OFFICER WAS OF THE OPINION THAT THE DEDUCTION UNDER SECTION 80HHC OF THE ACT IS TO BE WORKED OUT WITH REFERENCE TO THE INCOM E COMPUTED IN ACCORDANCE WITH THE REGULAR PROVISIONS OF THE ACT. THE CIT (A) BY FOLLOWING THE DECISION OF THE SPECIAL BENCH IN THE CASE OF DCIT VS. SYNCARE FORMULATION REPORTED IN 13 SOT 404 (MUM.) O BSERVED THAT THE DEDUCTION UNDER SECTION 80HHC IS TO BE WOR KED OUT WITH REFERENCE TO THE BOOK PROFIT COMPUTED UNDER SECTION 115JA OF THE ACT. THIS BENCH OF THE TRIBUNAL DISMISSED THE APPEA L OF THE REVENUE IN ITA NO.395/HYD/2003 DATED 31-10-2007. L ATER THE DEPARTMENT FILED AN APPLICATION UNDER SECTION 254(2 ) OF THE ACT MENTIONING THAT THE DECISION OF THE SPECIAL BENCH W AS OVER-RULED BY THE BOMBAY HIGH COURT IN THE CASE OF CIT VS. AJ ANTA PHARMA LIMITED REPORTED IN 223 ITR 441. THE BENCH OF THE T RIBUNAL ACCEPTED THE PETITION FILED BY THE DEPARTMENT ON TH E GROUND THAT THE BOMBAY HIGH COURT SPECIFICALLY OVER-RULED THE D ECISION OF THE SPECIAL BENCH. THE LEARNED COUNSEL FOR THE PETITIO NER FURTHER SUBMITTED THAT THE DECISION OF THE BOMBAY HIGH COUR T IS REVERSED BY THE APEX COURT IN AJANTA PHARMA LIMITED VS. CIT (223 CTR M.A.NOS. 11 TO 16 OF 2011 DIVIS LABORATORIES LTD HYD. ============================ 3 441). IT IS FURTHER SUBMITTED THAT AS THE APEX CO URT DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE COMPANY AND THE JUD GMENT OF THE BOMBAY HIGH COURT IS SPECIFICALLY OVER-RULED BY THE APEX COURT THE PETITIONER REQUESTS THE TRIBUNAL TO PASS APPROPRIAT E ORDERS UNDER SECTION 254(2) OF THE ACT BY REVERSING THE EARLIER ORDER PASSED IN MA NO.54/HYD/2009. 3. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT RAISE ANY SERIOUS OBJECTION ON THE CONTENTIONS OF THE COUNSEL FOR THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAV E IN THE INSTANT CASE ALLOWED THE PETITION FILED BY THE DEPARTMENT ON THE GROUND THAT THE DECISION OF THE BOMBAY SPECIAL BENCH OF TH E TRIBUNAL IN THE CASE OF SYNCARE FORMULATIONS [SUPRA] NO LONGER REMAINS AND THE JUDGMENT OF BOMBAY HIGH COURT IN THE CASE OF AJ ANTHA PHARMA [SUPRA] RULES THE FIELD. THEREFORE THE TRIBUNAL RECTIFIED THE ERROR THE ORDER PASSED IN THE MAIN APPEAL AND FOLLOWED TH E JUDGMENT OF THE BOMBAY HIGH COURT ON THE ISSUE OF ELIGIBLE PRO FIT FOR DEDUCTION UNDER SECTION 80HHC OF THE ACT. ACCORDINGLY THE TRI BUNAL SET ASIDE THE ORDER OF THE CIT (A) AND RESTORED THAT OF THE A SSESSING OFFICER. NOW WE FIND THAT THE DECISION OF THE BOMBAY HIGH C OURT IN THE CASE OF AJANTA PHARMA [SUPRA] WAS REVERSED BY THE APEX COURT [REPORTED IN 327 ITR 305]. THERE IS NO CONFLICT ON THE POINT THAT AS PER THE APEX COURTS JUDGMENT THE VIEW POINT OF TH E ASSESSING M.A.NOS. 11 TO 16 OF 2011 DIVIS LABORATORIES LTD HYD. ============================ 4 OFFICER ON THIS ISSUE IS NOT VALIDATED. IT IS WELL SETTLED LAW THAT AFTER THE JUDGMENT OF THE APEX COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LIMITED REPORTED IN 305 ITR 227 THE JUDICIAL DECISIONS OPERATE RETROSPECTIVELY. IF A POINT IS COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT OR APEX COURT RENDERED BEFORE OR AFTER THE ORDER THE CONTRARY VI EW TAKEN IN THE ORDER IS TO BE AMENABLE FOR RECTIFICATION. IT IS AL SO WELL SETTLED LAW THAT WHERE AN ORDER IS PASSED BY AN AUTHORITY ON TH E BASIS OF A PARTICULAR DECISION REVERSAL OF SUCH DECISION IN T HE FURTHER PROCEEDINGS WILL JUSTIFY A RECTIFICATION OF AN ORDE R PASSED ON EARLIER DECISION. THEREFORE IN OUR CONSIDERED VIEW THE JUDGMENT RENDERED BY THE APEX COURT OR THE JURISDICTIONAL HI GH COURT RENDERS THE EARLIER CONTRARY ORDER PASSED BY THE TR IBUNAL ERRONEOUS WHICH NEEDS TO BE RECTIFIED UNDER SECTI ON 254(2) OF THE ACT NOTWITHSTANDING THE FACT THAT SUCH JUDGMENT WA S RENDERED BEFORE OR AFTER THE ORDER PASSED BY THE TRIBUNAL. UNDER THESE CIRCUMSTANCES WE HOLD THAT THE IMPUGNED ORDER PASS ED BY THE TRIBUNAL IN THE MISCELLANEOUS APPLICATION SUFFERS FROM AN INFIRMITY INASMUCH AS IT IS IN THE CONTRADICTION TO WHAT HAS BEEN SUBSEQUENTLY LAID DOWN BY THE APEX COURT IN THE CAS E OF AJANTA PHARMA (SUPRA). THEREFORE THE ORDER OF THE TRIBUN AL DESERVES AND IS HEREBY RECTIFIED. ACCORDINGLY WE RESTORE THE P ARA-13 AT PAGES- 12-13 OF THE TRIBUNAL ORDER DATED 31-10-2007 (IN TH E MAIN APPEAL) AND DELETE PARA-5 APPEARING AT PAGE-4 OF THE ORDE R OF THE TRIBUNAL DATED 23-7-2009 PASSED ON THE MISCELLANE OUS APPLICATION FILED BY THE DEPARTMENT. M.A.NOS. 11 TO 16 OF 2011 DIVIS LABORATORIES LTD HYD. ============================ 5 5. IN THE RESULT ALL THE MISCELLANEOUS APPLICATI ONS FILED BY THE ASSESSEE STAND ALLOWED. ORDER WAS PRONOUNCED IN THE COURT ON 16-09- 2011. SD/- SD/- (G.C. GUPTA) (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER. DATED: 16 -9-2011. COPY FORWARDED TO: 1. DIVIS LABORATORIES LTD. 7-1-77/E/1/303 DHARAM KARAN ROAD AMEERPET HYDERABAD. 2. ADDL. CIT (ASSTS.) SPECIAL RANGE-1 HYDERABAD/D CIT CIR-1(2) HYDERABAD. 3 4. 5. CIT AP I HYDERABAD. CIT (A) IV HYDERABAD. THE DR ITAT HYDERABAD. JMR* M.A.NOS. 11 TO 16 OF 2011 DIVIS LABORATORIES LTD HYD. ============================ 6