DCIT 9(1), v. AJANTHA PHARMA LTD,

MA 776/MUM/2009 | 2004-2005
Pronouncement Date: 09-04-2010 | Result: Allowed

Appeal Details

RSA Number 77619924 RSA 2009
Assessee PAN AAACA5579P
Bench Mumbai
Appeal Number MA 776/MUM/2009
Duration Of Justice 4 month(s) 15 day(s)
Appellant DCIT 9(1),
Respondent AJANTHA PHARMA LTD,
Appeal Type Miscellaneous Application
Pronouncement Date 09-04-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 09-04-2010
Assessment Year 2004-2005
Appeal Filed On 24-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH MUMBAI BEFORE SHRI S.V. MEHROTRA ACCOUNTANT MEMBER AND SHRI V. DURGA RAO JUDICIAL MEMBER MA NO. 776/MUM/2009 (ARISING OUT OF ITA NO. 912/MUM/2008) (ASSESSMENT YEAR: 2004-05) DCIT - 9(1) M/S. AJANTA PHARMA LTD. AAYAKAR BHAVAN M.K. ROAD 21 SATYAM 318 LINKING ROAD MUMBAI 400020 VS. KHAR (W) MUMBAI 400042 PAN - AAACA 5579 P APPLICANT RESPONDENT APPLICANT BY: SHRI MOHD. USMAN RESPONDENT BY: SHRI J.D. MISTRI O R D E R PER S.V. MEHROTRA A.M. THE DEPARTMENT HAS FILED THIS MISCELLANEOUS APPLICA TION FOR RECTIFICATION OF CERTAIN MISTAKES ALLEGEDLY HAVING BEEN CREPT IN THE ORDER OF THE TRIBUNAL DATED 14 TH JULY 2009. 2. THE BRIEF FACTS ARE THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR A.Y. 2004-05 DECLARING A LOSS OF RS.4 77 17 335/- A ND BOOK PROFIT OF RS.65 94 712/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) DETERMINING THE LOSS AT RS.3 13 62 620/- AND BOOK P ROFIT AT RS.1 01 47 584/-. THE A.O. HAD MADE ADDITION OF RS. 35 47 872/- IN RESPECT OF INVESTMENTS WRITTEN OFF WHILE COMPUTING THE MINI MUM ALTERNATE TAX. THE LEARNED CIT(A) AS WELL AS THE ITAT RELYING ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF APOLLO TYRES LTD. 255 ITR 273 ALLOWED ASSESSEES APPEAL. 3. IN THE MISCELLANEOUS APPLICATION IT IS STATED THAT IN VIEW OF THE AMENDMENT OF SECTION 115JB INSERTING CLAUSE (I) TO EXPLANATION 1 TO SECTION 115JB WITH RETROSPECTIVE EFFECT FROM 01.04.2001 BO OK PROFIT IS TO BE INCREASED BY THE AMOUNT SET ASIDE AS PROVISIONS FOR DIMINUTION IN THE VALUE OF ANY ASSET. HOWEVER SINCE TRIBUNAL HAS TAKEN A C ONTRARY VIEW A MISTAKE MA NO. 776/MUM/2009 M/S. AJANTA PHARMA LTD. 2 HAS CREPT IN THE ORDER OF THE TRIBUNAL WHICH NEEDS TO BE RECTIFIED AS NOW THE BOOK PROFITS ARE REQUIRED TO BE INCREASED BY THE IN VESTMENT WRITTEN OFF AS THE SAME AMOUNTS TO DIMINUTION IN THE ASSETS OF THE ASS ESSEE. THE DEPARTMENT HAS ALSO FILED A COPY OF THE TRIBUNAL B BENCH ORD ER DATED 30 TH JULY 2009 IN THE CASE OF ITO 9(2)(3) VS. M/S. MAHARAJA BUILDERS P. LTD. IN ITA NO. 4682/MUM/2008 WHEREIN THE REVENUES APPEAL STANDS A LLOWED ON THIS ISSUE. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO MISTAKE APPARENT FROM RECORD IN THE TRIBUNAL ORDER BECAUSE ON THE DATE WHEN THE TRIBUNAL PASSED THE ORDER I.E. 14 TH JULY 200 THE LAW WAS AS PER THE DECISION OF THE HON'BLE SUPREME COURT IN THE CA SE OF APOLLO TYRES (SUPRA) WHICH HAD BEEN CORRECTLY APPLIED BY THE TRI BUNAL. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE AMENDMENT IN THE STATUTE HAS BEEN BROUGHT ON RECORD BY FINANCE (NO.1) ACT 2004 WITH R ETROSPECTIVE EFFECT FROM 01.04.2009. HE SUBMITTED THAT ON 14 TH JULY 2009 EVEN PRESIDENTS ASCENT HAD NOT BEEN RECEIVED WHICH WAS GRANTED ON 30 TH JULY 2009. 5. THE LEARNED D.R. SUBMITTED THAT THE TRIBUNAL ORDER IS TO BE BROUGHT IN CONFORMITY WITH THE AMENDED PROVISIONS. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PERUSED THE RECORD. THERE IS NO GAINSAYING THAT HON'BLE SUPREME COURT D OES NOT LAY DOWN THE LAW BUT IT ONLY DECLARES THE LAW. IF LEGISLATURE CO NSIDERS IT PROPER THAT IT IS NECESSARY TO AMEND THE LAW TO OVERCOME THE INTERPRE TATION GIVEN BY THE HON'BLE SUPREME COURT THEN IT AMENDS THE LAW WITH RETROSPECTIVE EFFECT. THEN THE LAW AS AMENDED WILL PREVAIL AND NOT THE INTERPRETATION AS GIVEN BY THE HON'BLE SUPREME COURT. HON'BLE SUPREME COURT IN THE CASE OF CIT VS. M. C. JACOB 203 ITR 972 (KER) HELD THAT THE TRI BUNAL IS DUTY BOUND TO GIVE EFFECT TO THE LAW AS AMENDED AND BY FAILING TO DO SO IT ABDICATES ITS DUTY. IT WAS HELD THAT MERELY BECAUSE THE AMENDMENT WAS SUBJECT OF CHALLENGE IN A PROCEEDING BEFORE THE HON'BLE SUPREM E COURT WAS OF NO CAUSE FOR REMITTING THE MATTER BACK TO THE APPELLAT E ASSISTANT COMMISSIONER. IT IS TRUE THAT IN THIS CASE WHEN THE MATTER CAME UP BEFORE THE TRIBUNAL THE IMPUGNED AMENDMENT IN SECTION 115J WA S ALREADY THERE BUT MA NO. 776/MUM/2009 M/S. AJANTA PHARMA LTD. 3 THE RATIO OF JUDGEMENT IS THAT LAW AS APPLICABLE AT THE RELEVANT TIME HAS TO BE APPLIED. MERELY BECAUSE THE AMENDMENT HAS BEEN BROU GHT SUBSEQUENTLY IS OF NO CONSEQUENCE IF IT HAS BEEN BROUGHT WITH RETROSPE CTIVE EFFECT AND COVERS THE RELEVANT ASSESSMENT YEAR. IN THE CASE OF CIT VS. MA HALAXMI SUGAR MILLS COMPANY LIMITED 160 ITR 920 HON'BLE SUPREME COURT O BSERVED THAT IT IS THE DUTY OF THE A.O. TO APPLY THE RELEVANT PROVISIONS O F INCOME TAX ACT FOR THE PURPOSE OF DETERMINING THE TRUE FIGURE OF THE ASSES SEES TAXABLE INCOME AND THE CONSEQUENT TAX LIABILITY. MERELY BECAUSE THE AS SESSEE FAILS TO CLAIM THE BENEFIT CANNOT RELIEVE THE ITO OF HIS DUTY TO APPL Y THE APPROPRIATE LAW. THUS THE ORDER BY ANY AUTHORITY HAS TO BE IN CONFORMITY WITH THE PROVISIONS OF LAW. IF THE DECISION OF AN AUTHORITY IS NOT IN CONFORMIT Y WITH THE RELEVANT PROVISIONS OF LAW AS AMENDED FROM TIME TO TIME THEN THERE IS A MISTAKE APPARENT ON FACE OF ORDER. HON'BLE M.P. HIGH COURT IN THE CASE OF CIT VS. M.P. ELECTRICITY BOARD 210 ITR 425 HELD THAT THE TRIBUNAL WAS JUSTIF IED IN RECTIFYING ITS ORDER FOR APPLYING THE AMENDED PROVISIONS OF SECTION 34A( 4). IN THIS CASE IT WAS HELD THAT WHEN THE LAW IS AMENDED WITH RETROSPECTIVE EFF ECT THE FICTION THAT ALL MUST PROCEED ON THE BASIS THAT THE LAW AT THE RELEV ANT TIME WAS THE LAW AS AMENDED SUBSEQUENTLY. THAT BEEN SO THE LEGAL FICTI ON IS APPARENTLY CAPABLE OF BEING CARRIED FORWARD TO HOLD THAT WHEN THE EARL IER ORDER WAS PASSED IT WAS PASSED IN CONTRAVENTION OF THE AMENDED LAW WHICH BY FICTION HAS DEEMED TO BE IN FORCE AT THAT TIME. THIS CLEARLY IS AN ERROR APPARENT ON THE FACT OF THE RECORD. 7. IN VIEW OF THE ABOVE DISCUSSION IT IS EVIDENT THAT THE TRIBUNALS ORDER HAS TO BE IN CONFORMITY WITH THE PROVISIONS OF LAW AS AMENDED AND THEREFORE WE MODIFY PARA 15 AS UNDER: - HAVING HEARD BOTH THE PARTIES WE SET ASIDE THE ORD ER OF THE LEARNED CIT(A) BECAUSE THE AMOUNT OF INVESTMENT WRITTEN OFF FALLS WITHIN EXPLANATION (I) TO SECTION 115JB OF THE ACT AND TH EREFORE THE A.O. WAS JUSTIFIED IN INCREASING THE BOOK PROFIT BY RS.35 47 872/-. THIS GROUND IS ACCORDINGLY ALLOWED. 8. THE ORDER OF RECTIFICATION UNDER SECTION 254(2) MER GES WITH THE ORIGINAL ORDER. MA NO. 776/MUM/2009 M/S. AJANTA PHARMA LTD. 4 9. PARA 18 IS MODIFIED AS UNDER: - IN THE RESULT APPEAL FILED BY THE REVENUE IS PART LY ALLOWED. 10. IN THE RESULT MISCELLANEOUS APPLICATION IS ALLOWED . ORDER PRONOUNCED ON 9 TH APRIL 2010. SD/- SD/- (V. DURGA RAO) (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 9 TH APRIL 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) IX MUMBAI 4. THE CIT IX MUMBAI CITY 5. THE DR A BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P. MA NO. 776/MUM/2009 M/S. AJANTA PHARMA LTD. 5 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 30.03.10 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 31.03.10 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR. PS/PS 7 FILE SENT TO THE BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER