LUPIN LTD, v. ASST CIT 10(1),

MA 310/MUM/2012 | 1997-1998
Pronouncement Date: 05-07-2013 | Result: Allowed

Appeal Details

RSA Number 31019924 RSA 2012
Assessee PAN AAACL1069K
Bench Mumbai
Appeal Number MA 310/MUM/2012
Duration Of Justice 1 year(s) 1 month(s) 13 day(s)
Appellant LUPIN LTD,
Respondent ASST CIT 10(1),
Appeal Type Miscellaneous Application
Pronouncement Date 05-07-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 05-07-2013
Assessment Year 1997-1998
Appeal Filed On 22-05-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH MUMBAI !' !' !' !' # $% # $% # $% # $% & & & & ' ' ' ' BEFORE SHRI RAJENDRA SINGH ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA JUDICIAL MEMBER ('(' ') . / M.A. NO.310/MUM./2012 ( . / ITA NO. 2059/MUM./2005 + # - ( &) . '/. / ASSESSMENT YEAR : 199798 ) LUPIN LIMITED (FORMERLY KNOWN AS LUPIN LABORATORIES LIMITED) 159 CST ROAD KALINA SANTACRUZ (E) MUMBAI 400 098 .. ' / APPLICANT ) V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE10(1) AAYAKAR BHAVAN 101 M.K. ROAD MUMBAI 400020 .... 0123 / RESPONDENT 2 ./ PERMANENT ACCOUNT NUMBER AAACL1069K &) .5# 6 7 / ASSESSEE BY : MS. VANASPATI PATEL ' 6 7 / REVENUE BY : MR. MOHIT JAIN )' 6 # / DATE OF HEARING 28.06.2013 $ 89/ 6 # / DATE OF ORDER 05.07.2013 $ $ $ $ / ORDER # $% # $% # $% # $% & & & & : : : : / PER AMIT SHUKLA J.M. BY WAY OF THIS MISCELLANEOUS APPLICATION THE ASSES SEE SEEKS RECTIFICATION OF THE IMPUGNED ORDER DATED 3 RD SEPTEMBER 2012 PASSED BY THE TRIBUNAL MUMBAI BENCH IN ITA NO.2446/MUM./2005 F OR ASSESSMENT YEAR 199798. LUPIN LIMITED 2 2. IN THE AFORESAID APPLICATION THE ASSESSEE HAS POIN TED OUT THAT THE TRIBUNAL WHILE ADJUDICATING THE ISSUES RAISED IN G ROUND NO.5 AND 8 OF THE APPEAL FILED BY THE REVENUE HAS MAINLY FOLLOWED TH E JUDGMENTS OF HON'BLE JURISDICTIONAL HIGH COURT WHICH HAS NOW BEEN REVERS ED BY THE HON'BLE SUPREME COURT AND THEREFORE IT CONSTITUTES MISTAK E APPARENT FROM RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE ACT. 3. IN GROUND NO.5 THE REVENUE HAS CHALLENGED THE DIRE CTION OF THE LEARNED COMMISSIONER (APPEALS) THAT ONLY 90% OF THE NET INTEREST RECOVERIES AND INTEREST FROM BANK DEPOSIT SHOULD BE REDUCED WH ILE CALCULATING DEDUCTION UNDER SECTION 80HHC. WHILE ADJUDICATING T HIS ISSUE THE TRIBUNAL HAS DECIDED THE ISSUE OF NETTING OF INTEREST AGAINS T THE ASSESSEE VIDE PARA 63 FOLLOWING THE DECISION OF HON'BLE JURISDICTIONA L HIGH COURT IN CIT V/S ASIAN STAR CO. LTD. [2010] 326 ITR 56 (BOM.). RELE VANT FINDINGS OF THE TRIBUNAL ARE REPRODUCED HEREIN BELOW: 63 . WE HAVE CAREFULLY HEARD THE SUBMISSIONS OF THE RIV AL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. RECENTLY THE HONBLE JURISDICTIONAL HIGH COURT IN M/S. ASIAN STAR CO LTD. SUPRA HAS HELD THAT THE TR IBUNAL WAS NOT JUSTIFIED IN COMING TO THE CONCLUSION THAT THE NET INTEREST ON F IXED DEPOSITS IN THE BANK RECEIVED BY THE .ASSESSEE SHOULD BE CONSIDERED FOR THE PURPOSES OF WORKING OUT THE DEDUCTION UNDER SECTION 80HHC AND NOT THE GROSS INTEREST. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE ID. COUNSEL FOR THE ASSESSEE WE RESPECTFULLY FOLLOWING THE JUDGMENT OF HONBLE J URISDICTIONAL HIGH COURT SUPRA HOLD THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN COMIN G TO THE CONCLUSION THAT ONLY 90% OF THE NET INTEREST RECOVERIES AND INTEREST FRO M BANK DEPOSIT SHOULD BE SET OFF AGAINST THE INTEREST AND FINANCE CHARGES PAID I .E. CREDITS AND DEBITS OF THE SAME NATURE ARE TO BE ADJUSTED AGAINST EACH OTHER B EFORE REDUCTION UNDER CLAUSE (BAA) OF EXPLANATION TO SEC. 80HHC AND ACCORDINGLY TO THIS EXTENT THE ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) IS REV ERSED AND THAT OF THE ASSESSING OFFICER IS RESTORED. THE FIRST PART OF GR OUND NO.5 IS THEREFORE ALLOWED. 4. THE LEARNED COUNSEL ON BEHALF OF THE ASSESSEE SUB MITTED BEFORE US THAT THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH CO URT HAS NOW BEEN SPECIFICALLY REVERSED BY THE HON'BLE SUPREME COURT IN ACG ASSOCIATED CAPSULES PVT. LTD. V/S CIT [2012] 340 ITR 345 (SC) WHEREIN IT HAS BEEN HELD THAT 90% OF THE NET AMOUNT OF ANY RECEIPT OF T HE NATURE MENTIONED IN CLAUSE (I) WHICH IS ACTUALLY INCLUDED IN THE PROFIT S OF THE ASSESSEE HAS TO BE DEDUCTED FROM THE PROFITS OF THE ASSESSEE FOR DETER MINING OF THE PROFITS OF THE ASSESSEE UNDER EXPLANATION (BAA) TO SECTION 80H HC. THUS ONLY THE NET LUPIN LIMITED 3 AMOUNT OF INTEREST HAS TO BE TAKEN INTO CONSIDERATI ON AND NOT THE GROSS AMOUNT. THEREFORE THE DECISION OF THE TRIBUNAL HAS TO BE IN LINE WITH THE LAW LAID DOWN BY THE APEX COURT. 5. THE SECOND ISSUE WHICH HAS BEEN RAISED IN GROUND N O.8 BY THE REVENUE WAS AGAINST THE DIRECTION OF THE LEARNED CO MMISSIONER (APPEALS) TO CONSIDER THE PROFITS AS PER THE BOOKS AND NOT THE P ROFITS COMPUTED FOR THE PURPOSE OF STATUTORY DEDUCTION UNDER SECTION 80HHC FOR THE DEDUCTION OF EXPORT PROFIT. THE TRIBUNAL WHILE ADJUDICATING THI S ISSUE HAS FOLLOWED THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN AL KABEER EXPORTS LTD. 193 TAXMAN 56 (BOM.). THE RELEVANT FINDINGS OF THE TRIB UNAL ARE AS UNDER: 82. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THAT IN TH E RECENT JUDGMENT IN AL KABEER EXPORT LTD. SUPRA THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD VIDE PARA-31 OF ITS JUDGMENT AS UNDER :- 31. IN THE CIRCUMSTANCES WHILE ALLOWING THE APPEA L WE ANSWER THE QUESTION OF LAW BY HOLDING THAT THE TRIBUNAL WAS NO T JUSTIFIED IN COMING TO THE CONCLUSION THAT THE AMOUNT TO BE REDU CED UNDER CLAUSE (IV) OF EXPLANATION 1 TO SECTION 11538 IN RESPECT O F THE PROFITS ELIGIBLE FOR DEDUCTION UNDER SECTION 8OHHC HAS TO BE COMPUTE D WITH REFERENCE TO THE NET PROFITS IN THE PROFIT AND LOSS ACCOUNT AND NOT ACCORDING TO THE PROFITS OF THE BUSINESS COMPUTED U NDER THE HEAD OF PROFITS AND GAINS OF BUSINESS OR PROFESSION. THE QU ESTION OF LAW IS ACCORDINGLY ANSWERED IN FAVOUR OF THE REVENUE AND A GAINST THE ASSESSEE IN THE AFORESAID TERMS. THE APPEAL IS DISP OSED OF. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGH T ON RECORD BY THE ID. COUNSEL FOR THE ASSESSEE FOR THE ASSESSEE WE RESPECTFULLY F OLLOWING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN AL KABEER EXPORT LTD. SUPRA HOLD THAT THE ID. CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICE R THAT FOR DEDUCTION OF EXPORT PROFIT HE SHOULD TAKE INTO CONSIDERATION PROFITS AS PER BOOKS AND NOT THE PROFITS COMPUTED FOR THE PURPOSES OF STATUTORY DEDUCTION UN DER SECTION 80HHC AND ACCORDINGLY THE ORDER PASSED BY THE LD. CIT(A) ON T HIS ACCOUNT IS REVERSED AND THAT OF ASSESSING OFFICER IS RESTORED. THE GROUND T AKEN BY THE REVENUE IS THEREFORE ALLOWED . 6. HERE ALSO THE LEARNED COUNSEL SUBMITTED THAT THE S AID JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT HAS BEEN REVE RSED BY THE HON'BLE SUPREME COURT IN THE SAME CASE OF AL KABEER EXPORTS LTD. V/S CIT VIDE JUDGMENT AND ORDER DATED 3 RD FEBRUARY 2012. THUS THE FINDINGS OF THE TRIBUNAL HAVE TO BE BROUGHT IN CONSONANCE WITH THE DECISION AND THE LAW LAID DOWN BY THE HON'BLE SUPREME COURT. LUPIN LIMITED 4 7. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESE NTATIVE SUBMITTED THAT ONCE THE TRIBUNAL RELIED UPON THE JU DGMENT OF HON'BLE JURISDICTIONAL HIGH COURT AND HAS RENDERED ITS JUDG MENT BASED ON BINDING PRECEDENCE OF THE HON'BLE JURISDICTIONAL HIGH COURT THEN THERE IS NO MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TR IBUNAL. HE THUS STRONGLY OBJECTED TO ANY KIND OF RECTIFICATION. 8. WE HAVE HEARD THE EITHER PARTY PERUSED THE RELEVAN T FINDINGS OF THE TRIBUNAL AND THE CONTENTIONS RAISED IN THE APPLICAT ION. THE TRIBUNAL HAS DECIDED GROUND NO.5 AND 8 BASED ON THE JUDGMENTS OF HON'BLE JURISDICTIONAL HIGH COURT AS WAS AVAILABLE AT THE TIME OF THE PASS ING OF THE ORDER. THEREAFTER BOTH THE JUDGMENTS OF HIGH COURT HAVE B EEN REVERSED BY THE HON'BLE SUPREME COURT WHICH IS NOW THE LAW OF THE L AND AND HAS A BINDING PROCEDURE UNDER ARTICLE 141 OF THE CONSTITUTION. IT IS A TRITE LAW THAT A JUDICIAL DECISION ACTS RETROSPECTIVELY BECAUSE THE DUTY OF THE COURT IS TO INTERPRET THE LAW AND NOT TO PROPOUND ANY NEW LAW. IT HAS TO FIND CORRECT INTERPRETATION OF LAW BECAUSE THE LAW IS ALWAYS THE SAME AS PROVIDED IN THE STATUTE. IF THE SUBSEQUENT DECISION ALTERS THE EARL IER ONE THE LATER DECISION DOES NOT MAKE ANY NEW LAW BUT ONLY DISCOVERS THE CO RRECT PRINCIPLE OF LAW WHICH HAS TO BE APPLIED RETROSPECTIVELY. ONCE THE H ON'BLE SUPREME COURT SETTLES THE DISPUTE AND DECIDES THE ISSUE ON THE IN TERPRETATION OF THE LAW THEN IT HAS TO BE TAKEN AS THE LAW WAS ALWAYS LIKE THAT AND SUCH INTERPRETATION OF LAW BY THE APEX COURT IS BINDING ON ALL THE COURTS. NOW WHETHER THE LAW LAID DOWN BY THE HON'BLE SUPREME CO URT SUBSEQUENT TO THE PASSING OF THE ORDER CAN BE SAID TO BE MISTAKE APPA RENT FROM THE RECORD UNDER SECTION 254(2) AND COULD BE RECTIFIED BY THE TRIBUNAL. THIS QUESTION HAS BEEN ANSWERED BY THE HON'BLE SUPREME COURT IN A CIT V/S SAURASHTRA KUTCH STOCK EXCHANGE LTD. [2008] 305 ITR 227 (SC) WHEREIN THE HON'BLE SUPREME COURT HAS HELD THAT SUBSEQUENT DECISION OF THE JURISDICTIONAL HIGH COURT OR HON'BLE SUPREME COURT CONSTITUTES MISTAKE APPARENT FROM RECORD. ACCORDINGLY WE HOLD THAT THE DECISION OF THE TRIBU NAL HAS TO BE IN CONSONANCE WITH THE LAW LAID DOWN BY THE HON'BLE SU PREME COURT EVEN THOUGH THE JUDGMENT OF HON'BLE SUPREME COURT HAS BE EN RENDERED LUPIN LIMITED 5 SUBSEQUENTLY. THEREFORE IT CONSTITUTED MISTAKE APP ARENT FROM RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE ACT. 9. WE THUS MODIFY THE FINDINGS GIVEN BY THE TRIBUNAL WITH REGARD TO GROUND NO.5 AND 8 IN THE REVENUES APPEAL AND DIREC T THE ASSESSING OFFICER TO DEAL AND DECIDE THE ISSUE IN LINE WITH THE PRINC IPLES AND LAW LAID DOWN BY THE HON'BLE SUPREME COURT IN ASIAN STAR CO. LTD. (S UPRA) AND AL KABEER EXPORTS LTD. (SUPRA). THUS WITHOUT RECALLING THE I MPUGNED ORDER DATED 3 RD SEPTEMBER 2010 THE SAID ORDER IS MODIFIED TO THIS EXTENT ONLY. 10. 5 #; &) .5# 6 ('(' ') '# < ) # = > 10. IN THE RESULT ASSESSEES M.A. IS TREATED AS AL LOWED. $ 6 89/ ? @); 5 TH JULY 2013 9 6 A > ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH JULY 2013 SD/- RAJENDRA SINGH ACCOUNTANT MEMBER SD/- # # # # $% $% $% $% & & & & AMIT SHUKLA JUDICIAL MEMBER MUMBAI @) @) @) @) DATED: 5 TH JULY 2013 $ 6 0&#( B(/# / COPY OF THE ORDER FORWARDED TO : (1) &) .5# / THE ASSESSEE; (2) ' / THE REVENUE; (3) C () / THE CIT(A); (4) C / THE CIT MUMBAI CITY CONCERNED; (5) ('FA 0&#&) / THE DR ITAT MUMBAI; (6) AG. H / GUARD FILE. 1(# 0&# / TRUE COPY $) / BY ORDER 0 . IJ / PRADEEP J. CHOWDHURY '5K &) I' / SR. PRIVATE SECRETARY + / / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI