Transpek-Silox Industry Limited, Baroda V. The Dy.CIT., Circle-4, Baroda

ITA 12/AHD/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6461 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 05-05-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 01-01-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G D BALVA
• Keywords: Rectification of order
• Section: 143(3); 80HHC; 234B; 115JB; 80IB; 154; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH (BEFORE S/SHRI T.K. SHARMA, JUDICIAL MEMBER AND A.N. PAHUJA, ACCOUNTANT MEMBER) ITA NO.12/AHD/2009 [ASSTT. YEAR : 2002-2003] TRANSPEK SILOX INDUSTRY LTD. KALALI, ATLADRA VADODARA. PAN NO. AAACT 3739 J VS. DCIT, CIR.4 VADODARA. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SUNIL TALATI REVENUE BY : SHRI G.D.BALVA O R D E R PER T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)-III, BA RODA DATED 10.11.2008 FOR A.Y.2002-2003. 2. THE BRIEF FACTS ARE THAT THE ASSESSEE IS A COMPA NY. FOR THE ASSESSEE YEAR IN APPEAL, THE ASSESSEE HAD FILED RETURN OF IN COME ON 25-10-2002 DECLARING NET TAXABLE INCOME AT RS.1,59,69,696/- UN DER NORMAL PROVISIONS OF THE IT ACT AND RS.8,06,64,581/- UNDER SECTION 11 5JB OF THE IT ACT, 1961. THE AO FRAMED ASSESSMENT UNDER SECTION 143(3 ) ON 21-3-2005 WHEREIN HE WORKED OUT THE TOTAL INCOME AT RS.3,63,0 9,330/- (UNDER NORMAL PROVISIONS OF THE IT ACT) AND THE BOOK PROFI T UNDER SECTION 115JB AT RS.9,27,87,962/-. SINCE THE TAX PAYABLE COMPUTE D UNDER NORMAL PROVISIONS OF THE INCOME-TAX ACT IS MORE THAN THE T AX PAYABLE ON BOOK PROFIT CALCULATED UNDER SECTION 115JB OF THE ACT, T HE TAX IS CALCULATED ON THE TOTAL INCOME OF RS.3,18,22,940/-. THE AO CHARG ED INTEREST UNDER SECTIONS 234A, 234B, 234C AND 234D OF THE ACT. ITA NO.12/AHD/2009 -2- 3. AGAINST THE AFORESAID ORDER, AN APPEAL WAS FILED BEFORE THE CIT(A) AND THE CIT(A) VIDE ITS ORDER DATED 14-03-2007 DIRE CTED THE AO - (I) TO RE-COMPUTE THE BOOK PROFIT UNDER SECTION 115JB BY R EDUCING THE DEDUCTION UNDER SECTION 80HHC THEREFROM AND (II) TO RE-COMPUTE THE DEDUCTION UNDER SECTION 80IB BY ADOPTING THE MARKET VALUE. THE AO VIDE ORDER DATED 28-5-2007 GAVE APPELLATE EFFECT OF THE ORDER OF THE LEARNED CIT(A) DATED 14-3-2007. IN THIS ORDER, THE AO COMPUTED THE ASSESSEES INCOME AT NIL UNDER NORMAL PROVISIONS OF IT ACT AND BOOK PROFITS UNDER SECTION 115JB AT RS.806,64,581/-. WH ILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JB, THE AO ALLOWED THE DEDUCTION UNDER SECTION 80HHC AMOUNTING TO RS.1,21,23,381/- AS CLAI MED IN THE RETURN OF INCOME WHICH WAS NOT ALLOWED IN THE ORIGINAL ASSESS MENT ORDER DATED 21- 3-2005 IN VIEW OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF IPCA LABORATORIES LTD., 266 ITR 521 (SC). SUBSEQUE NTLY, THE AO VIDE ORDER UNDER SECTION 154 DATED 10-7-2007 REWORKED OU T THE BOOK PROFIT UNDER SECTION 115JB DISALLOWING THE DEDUCTION UNDER SECTION 80HHC WHICH WAS EARLIER ALLOWED IN ORDER DATED 28-5-2007 GIVING APPELLATE EFFECT TO THE ORDER OF THE LEARNED CIT(A). IN THIS ORDER, HE ALSO CHARGED INTEREST UNDER SECTION 234B AND 234C OF THE ACT. A GAINST THE AFORESAID ORDER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE C IT(A) CHALLENGING THAT THERE WAS NO MISTAKE APPARENT FROM RECORD IN ORDER DTD. 28-5-2007 GIVING EFFECT TO THE ORDER DATED 14-3-2007 OF THE LEARNED CIT(A). IN THE IMPUGNED ORDER, THE LEARNED CIT(A) DISMISSED THE AP PEAL OF THE ASSESSEE HOLDING THAT THE DEDUCTION UNDER SECTION 80HHC IS R IGHTLY RECOMPUTED IN ORDER UNDER SECTION 154. THE REASON GIVEN BY THE L EARNED CIT(A) AS CONTAINED IN PARA 3.3 READS AS UNDER: 3.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE COUNS EL AND FACTS OF THE CASE. WHILE DECIDING THE APPEAL IN THE CASE OF THE APPELLANT IN ITA NO.12/AHD/2009 -3- PARA-5, MY ID. PREDECESSOR HAS REFERRED BOTH THE DE CISIONS RELIED UPON BY THE APPELLANT AND HELD THAT EXPORT PROFIT U /S 80HHC ARE TO BE REDUCED FROM THE NET PROFIT. HOWEVER WHILE COMPU TING THE DEDUCTION U/S 80HHC, THE ASSESSING OFFICER DID NOT DO SO AS PER THE PROVISIONS OF SUB-SECTION 3 OF SECTION 80HHC. I N RECTIFICATION ORDER THE ASSESSING OFFICER COMPUTED THE DEDUCTION U/S 80HHC AS PER THE PROVISIONS OF SECTION 80HHC(3) BY REDUCING 90% OF EXPORT INCENTIVES AND DEDUCTION U/S 8018 ALLOWED TO THE APPELLANT. WHAT IS TO BE CONSIDERED AS DEDUCTIBLE IS MENTIONED IN CLAUSE 4 OF SUB-SECTION 2 TO SECTION 11538 AND AS PER THAT ACCO UNT OF PROFIT ELIGIBLE FOR DEDUCTION U/S 80HHC COMPUTED UNDER CLA USE (I) TO CLAUSE (III) OF SUB-SECTION 3 IN THE CASE MAY BE AN D SUBJECT TO THE CONDITIONS SPECIFIED IN THAT SECTION. THIS MEANS TH E ELIGIBLE PROFIT U/S 80HHC IS TO BE CONSIDERED AS PER PROVISIONS OF SECTION 80HHC AND NOT ON THE BASIS OF SOME ISOLATED CALCULATION. SPECIAL BENCH MUMBAI IN THE CASE OF DCIT VS. SYNCONE FORMULATION INDIA LTD REPORTED IN 106 ITD 193 HELD THAT DEDUCTION U/S 80H HC NEEDS TO BE WORKED OUT ON THE BASIS OF ADJUSTED BOOK PROFIT. THEREAFTER, COMPUTATION OF ELIGIBLE PROFIT IS TO BE MADE UNDER THE PROVISIONS OF SECTION 80HHC. THE DECISION IN SMRUTHI ORGANICS LTD IS ON DIFFERENT FACTS WHERE DUE TO LOSES BROUGHT FORWARD, GROSS TOTAL INCOME WAS NEGATIVE AND NO DEDUCTION UNDER THE NORM AL PROVISIONS WAS ELIGIBLE. THE TRIBUNAL DECIDED THAT PROVISIONS OF SECTION 80B WILL NOT BE CONSIDERED SINCE WHAT IS RE FERRED IN SECTION 115JA IS ELIGIBLE PROFIT AS COMPUTED U/S 80HHC. HOW EVER THE COMPUTATION OF ELIGIBLE DEDUCTION HAS TO BE MADE WI THIN THE PROVISIONS OF SECTION 80HHC ALTHOUGH IN RESPECT OF ADJUSTED PROFIT OF BUSINESS. PROVISIONS OF SECTION 80HHC CANNOT BE IGNORED WHILE COMPUTING BOOK PROFIT. WHAT ASSESSING OFFICER HAS D ONE IS CALCULATION OF ELIGIBLE PROFIT AS PER THE PROVISION S OF SECTION 80HHC WHICH IS NOT CONTRADICTED IN THE DECISIONS RE LIED UPON BY THE APPELLANT. THE HON. MUMBAI HIGH COURT IN THE CA SE OF ROHAN DYES REPORTED IN 270 ITR 350 HELD THAT PROFIT FOR T HE PURPOSES OF SECTION 80HHC MEANS POSITIVE PROFIT AND THE MEANING OF PROFIT IN PROVISO TO SECTION 8OHHC(3) IS NOT DIFFERENT. IT IS HELD HERE THAT IF THE ASSESSEE IS NOT ENTITLED TO THE BENEFIT OF DEDU CTION U/S 80HHC, THE SAME CANNOT BE ALLOWABLE U/S 115JA ALSO. CONSID ERING THIS, I FIND NO INFIRMITY IN THE RECTIFICATION ORDER PASSED BY THE ASSESSING OFFICER WHERE HE COMPUTED THE CORRECT PROFIT ELIGIB LE UNDER SECTION 80HHC. SINCE WAS NEGATIVE, THE SAME CANNOT BE REDU CED FROM BOOK PROFIT. THIS GROUND IS ALSO THEREFORE REJECTE D. ITA NO.12/AHD/2009 -4- APART FROM THE ABOVE, IN THE IMPUGNED ORDER, THE LE ARNED CIT(A) ALSO UPHELD THE ACTION OF THE AO REGARDING LEVY OF INTER EST UNDER SECTION 234B AND 234C ON THE GROUND THAT THEY WERE ALREADY CHARG ED IN THE ORIGINAL ASSESSMENT ORDER BUT WHILE GIVING APPEAL EFFECT, TH ROUGH INADVERTENCE THEY WERE NOT CHARGED. THIS WAS A MISTAKE APPARENT FROM RECORD. FINALLY, WITH REGARD TO LEVY OF INTEREST UNDER SECT ION 234D IN THE IMPUGNED ORDER, THE LEARNED CIT(A) HELD THAT THIS S ECTION WAS INTRODUCED W.E.F. 12-6-2003 AND IS APPLICABLE FOR ANY REFUND G RANTED AFTER THIS DATE IRRESPECTIVE OF THE ASSESSMENT YEAR. HE ACCORDINGL Y UPHELD THE ACTION OF THE AO CONFIRMING THE LEVY OF INTEREST UNDER SECTIO N 234D OF THE IT ACT, 1961. 4. AGGRIEVED WITH THE ORDER OF THE CIT(A), ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: YOUR APPELLANT BEING DISSATISFIED WITH THE ORDER P ASSED U/S 154 OF THE ACT BY THE LEARNED HON'BLE COMMISSIONER OF INCO ME TAX (A)-III, BARODA, DATED 10/11/2008 PRESENTS THIS APPEAL AGAIN ST THE SAID ORDER ON THE FOLLOWING AMONGST OTHER GROUNDS:- 1(A) THE ORDER PASSED BY THE HONOURABLE COMMISSION ER OF INCOME TAX (A)-III IS BAD IN LAW, CONTRARY TO LEGAL PRONOU NCEMENTS AND SAME BE QUASHED. (B) THE HONOURABLE COMMISSIONER OF INCOME TAX (A)-I II HAS ERRED IN CONFIRMING THE ORDER PASSED BY THE ASSESSING OFF ICER AS THE MISTAKES RECTIFIED ARE NOT APPARENT FROM THE RECORD S AND SO PROVISIONS OF SEC. 154 ARE NOT APPLICABLE. 2.(A) THE HONOURABLE COMMISSIONER OF INCOME TAX (A) -III HAS ERRED IN NOT ENTERTAINING YOUR APPELLANT'S CLAIM OF DEDUCTION U/S 801-HC BY REWORKING THE SAME AS PER PROVISIONS OF S ECTION 801- IHC(3).THE HONOURABLE COMMISSIONER OF INCOME TAX (A )-III HAS IGNORED THE PROVISIONS OF EXPLANATION TO SUBSECTION (2) (G)(IV) OF SECTION 115JB OF THE ACT WHILE CALCULATING DEDUCTIO N U/S 80HHC. THE AO BE DIRECTED TO RE-COMPUTE THE DEDUCTION U/S 80 HHC OF THE ITA NO.12/AHD/2009 -5- ACT ON THE BOOK PROFIT AS PER THE PROVISIONS OF THE ACT. (B) THE LEARNED AO BE DIRECTED TO CALCULATE THE CLA IM OF DEDUCTION U/S 80HHC AS CLAIMED BY THE APPELLANT IN ITS RETURN OF INCOME I.E. RS.1,21,23,381 ON THE NET PROFIT AS PER THE PROFIT AND LOSS ACCOUNT PREPARED FOR THE YEAR IN ACCORDANCE WI TH SCHEDULE VI OF THE COMPANIES ACT AND WITHOUT REDUCING THEREFROM THE DEDUCTION AVAILABLE U/S 801B OF THE ACT. (C) THE LEARNED AO BE ALSO DIRECTED TO EXCLUDE SALE S TAX AND EXCISE DUTY FROM THE TOTAL TURNOVER OF THE BUSINESS . 3. (A) THE HONOURABLE COMMISSIONER OF INCOME TAX (A )-III HAS ERRED IN CONFIRMING CHARGING OF INTEREST U/S 234D O F THE ACT. YOUR APPELLANT SUBMITS THAT PROVISIONS OF SECTION 234D H AVE BEEN INSERTED IN THE ACT W.E.F. 01.06.2003 WHICH ARE NOT RETROSPECTIVE. THE YEAR UNDER CONSIDERATION BEING ASSESSMENT YEAR 2002-2003, THE LEVY OF INTEREST U/S 234D BY THE ASSESSING OFFI CER IS INCORRECT. IT BE HELD SO NOW AND SAME BE DELETED. B) THE HONOURABLE COMMISSIONER OF INCOME TAX (A)-II I HAS ERRED IN CHARGING INTEREST U/S 234B/C OF THE ACT. IT IS S UBMITTED THAT IN CASE INCOME IS FINALLY DETERMINED UNDER MAT, INTERE ST U/S 234B AND 234C IS NOT CHARGEABLE AS PER PROVISIONS OF THE ACT . THUS THE LEVY OF INTEREST U/S 234B/C IS INCORRECT. IT BE HELD SO NOW AND SAME BE DELETED. 5. AT THE TIME OF HEARING BEFORE US, WITH REGARD TO GROUND NO.1 AND 2 LEARNED COUNSEL FOR THE ASSESSEE AFTER NARRATING TH E EVENTS CHRONOLOGICALLY LEADING TO PASSING OF THE ORDER UNDER SECTION 154 D ATED 1-7-2007 POINTED OUT THAT SO FAR AS REWORKING OF THE BOOK PROFIT UND ER SECTION 11JB IS CONCERNED, THERE WAS NO MISTAKE APPARENT FROM THE R ECORD WITHIN THE MEANING OF SECTION 154 OF THE IT ACT, 1961. ELABOR ATING HIS ARGUMENTS, THE LEARNED COUNSEL OF THE ASSESSEE POINTED OUT THA T IN THIS CASE, THE LEARNED CIT(A) AGAINST THE AOS ORDER UNDER SECTION 143(3) DATED 21-3- 2005, DECIDED THE APPEAL ON 15-3-2007. THE AO ALLO WED THE APPEAL EFFECT TO THE SAID ORDER ON 28-5-2007. IN THE SAID ORDER, THERE WAS NO ITA NO.12/AHD/2009 -6- MISTAKE APPARENT FROM RECORD IN COMPUTING THE BOOK PROFIT. THEREFORE, IT MAY BE HELD THAT THE ORDER UNDER SECTION 154 TO THI S EXTENT IS BAD IN LAW AND LIABLE TO SET ASIDE. IN SUPPORT OF HIS CONTENTI ON, THE LEARNED COUNSEL RELIED UPON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF AJANTA PHARMA LTD. VS. CIT, 327 ITR 305 (SC) FOR THE PROPO SITION THAT 100% EXPORT PROFIT EARNED BY THE ASSESSEE AS COMPUTED UN DER SECTION 80HHC(3) IS ELIGIBLE FOR DEDUCTION UNDER CLAUSE (IV ) OF THE ACT OF EXPLANATION TO SECTION 115JB. APART FROM THIS, THE LEARNED COU NSEL POINTED OUT THAT THE MISTAKE APPARENT FROM RECORD M UST BE OBVIOUSLY AND PATENT AND NOT SOMETHING WHICH CAN BE ESTABLISHED B Y A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY C ONCEIVABLY BE TWO OPINIONS. A DECISION ON A DEBATABLE POINT OF LAW I S NOT A MISTAKE APPARENT FROM THE RECORD AS HELD BY HONBLE SUPREME COURT IN THE CASE OF T.S. BALARAM, ITO VS. VOLKART BROTHERS, 82 ITR 50 ( SC). 6. WITH REGARD TO LEVY OF INTEREST UNDER SECTION 23 4D, THE LEARNED COUNSEL OF THE ASSESSEE RELIED UPON THE DECISION OF THE SPECIAL BENCH IN THE CASE OF INCOME-TAX OFFICER, WARD-11 (1), NEW DE LHI V. EKTA PROMOTERS (P.) LTD., 113 ITD 219. ON THE STRENGTH OF THIS DECISION OF THE SPECIAL BENCH, HE POINTED OUT THAT IN THIS CASE, TH E ASSESSMENT YEAR INVOLVED IS 2002-2003, THEREFORE, THE INTEREST UNDE R SECTION 234D IS NOT LEVIABLE. AS AGAINST THIS, THE LEARNED DR APPEARED BY THE REVENUE AND POINTED OUT THAT THE INTEREST UNDER SECTION 234D WA S LEVIED IN THE ORIGINAL ASSESSMENT FRAMED UNDER SECTION 143(3) ON 21-3-2005 . IT APPEARS THAT IN THE ORIGINAL ASSESSMENT, THE ASSESSEE ACCEPTED THE LEVY OF INTEREST UNDER SECTION 234D THEREFORE, NOW THE ASSESSEE HAS NO RIG HT TO AGITATE LEVY OF INTEREST UNDER SECTION 234D OF THE IT ACT. ITA NO.12/AHD/2009 -7- 7. IN REPLY, THE LEARNED COUNSEL OF THE ASSESSEE SU BMITTED THAT AGAINST THE ORIGINAL ASSESSMENT, THE ASSESSEE HAS FILED APP EAL AND THE ASSESSEE RAISED GROUND AGAINST THE LEVY OF INTEREST UNDER SE CTION 234D. THE LEARNED CIT(A) DECIDED THE APPEAL ON 17-3-2007 AND HAS NOT ADJUDICATED THE GROUND CHALLENGING THE LEVY OF INTEREST UNDER S ECTION 234D. THEREFORE, HE SUBMITTED THAT NOW THE TRIBUNAL MAY A DJUDICATE THIS GROUND AS PER THE JUDGMENT OF THE SPECIAL BENCH IN THE CAS E OF EKTA PROMOTERS PVT. LTD. (SUPRA). 8. FINALLY WITH REGARD TO THE LEVY OF INTEREST UNDE R SECTIONS 234B AND 234C, THE LEARNED COUNSEL OF THE ASSESSEE FAIRLY AD MITTED THAT IN THE ORDER GIVING APPEAL EFFECT TO THE ORDER UNDER SECTION 250 , THE AO THROUGH INADVERTENCE DID NOT CHARGE THE INTEREST UNDER BOTH THIS SECTION. THEREFORE, THIS WAS A MISTAKE APPARENT FROM RECORD WITHIN THE MEANING OF SECTION 154. THEREFORE, HE HAS NO OBJECTION AND FO R THIS REASONS, HE HAS NOT PRESSED THIS GROUND OF APPEAL. 9. AS AGAINST THIS, THE LEARNED DR VEHEMENTLY SUPPO RTED THE ORDER OF THE LEARNED CIT(A). 10. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GONE THOUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECI SION OF HONBLE SUPREME COURT IN THE CASE OF AJANTA PHARMA (SUPRA) RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE. IT IS PERTINENT T O NOTE THAT THE AO ALLOWED THE APPEAL EFFECT TO THE ORDER OF THE LEARN ED CIT(A) DATED 28-5- 2007. IN THIS ORDER, HE HAS ALLOWED DEDUCTION UNDE R SECTION 80HHC AS CLAIMED BY THE ASSESSEE AND RECOMPUTED THE BOOK PRO FIT UNDER SECTION 115JB. IN OUR CONSIDERED OPINION, THERE WAS NO MIS TAKE APPARENT FROM ITA NO.12/AHD/2009 -8- RECORD WITHIN THE MEANING OF SECTION 154 BECAUSE AT THE RELEVANT TIME THIS ISSUE IS HIGHLY DEBATABLE. FURTHER, IT IS EVIDENT FROM THE DEBATE AND DISCUSSION CONTAINED IN THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF CIT VS. AJANTA PHARMA (SUPRA) REPORTED IN 3 18 ITR 352. THIS DECISION WAS REVERSED BY THE HONBLE SUPREME COURT AS REPORTED IN 327 ITR 305 (SC) RELIED UPON BEFORE US BY THE LEARNED C OUNSEL OF THE ASSESSEE. WE THEREFORE OF THE VIEW THAT THE AO CLE ARLY ERRED IN RE- COMPUTING/WITHDRAWING THE DEDUCTION CLAIMED UNDER S ECTION 80HHC BY ORDER UNDER SECTION 154 DATED 10-7-2007. WE ACCORD INGLY HOLD THAT IN ORDER UNDER SECTION 250 DATED 28-5-2007, THE BOOK P ROFIT WAS RIGHTLY COMPUTED AT RS.8,06,64,581/-. THE GROUND NO.1 AND 2 IS ACCORDINGLY ALLOWED. 11. WITH REGARD TO THE LEVY OF INTEREST UNDER SECTI ON 234D, WE FIND CONSIDERABLE FORCE IN THE CONTENTION OF THE LEARNED DR. IT IS PERTINENT TO NOTE THAT FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ORIGINAL ASSESSMENT WAS FRAMED UNDER SECTION 143(3) ON 21-2-2005. IN T HIS ASSESSMENT ORDER, THE AO CHARGED INTEREST UNDER SECTION 234D OF THE I T ACT, WHICH IS EVIDENT FROM THE DIRECTION OF THE AO CONTAINED IN P AGE NO.1 OF THE ASSESSMENT ORDER. THE COUNSEL OF THE ASSESSEE FAIR LY ADMITTED THAT AGAINST IN THE ORIGINAL ASSESSMENT ORDER UNDER SECTION 143( 3), THE APPEAL WAS FILED WHEREIN HE HAS SPECIFICALLY CHALLENGED THE LE VY OF INTEREST UNDER SECTION 234D ALSO.THE LEARNED CIT(A) DECIDED THE AP PEAL OF THE ASSESSEE VIDE ORDER DATED 14-3-2007 IN APPEAL NO.CAB/IIII/18 -05-2006 WHEREIN HE HAS NOT ADJUDICATED THE GROUND CHALLENGING THE L EVY OF INTEREST UNDER SECTION 234D. THE AO ALLOWED THE APPEAL EFFECT TO THE AFORESAID ORDER OF THE LEARNED CIT(A) VIDE ORDER DATED 28-5-2007 UNDER SECTION 250. ALONG WITH THIS ORDER, THE AO ALSO ISSUED ITNS-150 WHEREIN THE INTEREST UNDER SECTION 234D AMOUNTING TO RS.1,04,574/- WAS C HALLENGED. ITA NO.12/AHD/2009 -9- SUBSEQUENTLY, THE AO VIDE ORDER DATED 10-7-2007 UND ER SECTION 154 PASSED THE IMPUGNED ORDER WHEREIN HE RECTIFIED UNDE R SECTION 154 WITHDRAWING (I) DEDUCTION UNDER SECTION 80HHC BECAU SE THE PROFIT OF THE BUSINESS IS NEGATIVE FIGURE AND (II) LEVIED INTERES T UNDER SECTION 234B AND 234C. FROM THE ABOVE, IT IS CLEAR THAT THE INTERES T UNDER SECTION 234D WAS CHARGED BY THE AO (I) IN THE ORIGINAL ASSESSMEN T ORDER UNDER SECTION 143(3), (II) IN ORDER GIVING THE APPEAL EFFECT TO T HE ORDER OF THE LEARNED CIT(A) IN ORDER UNDER SECTION 250 DATED 28-5-2007 A ND ALSO (III) IN ORDER UNDER SECTION 154 DATED 10-7-2005. FROM THE AFORE SAID CHRONOLOGICAL EVENT, IT IS CLEAR THAT LEVY OF INTEREST UNDER SECT ION 234D ATTAINED FINALITY IN THE ORIGINAL ASSESSMENT ORDER FRAMED UNDER SECTI ON 143(3) ON 21-3- 2005 BECAUSE THE ASSESSEE HAS ACCEPTED THE ORDER OF THE LEARNED CIT(A) IN APPEAL NO.CAB/IIII/18-05-2006 DATED 14-3-2007 WHERE IN THE LEARNED CIT(A) HAS NOT ADJUDICATED THE GROUND CHALLENGING T HE LEVY OF INTEREST UNDER SECTION 234D. ON THIS GROUND, WE HOLD THAT I N THE PRESENT APPEAL, ASSESSEE CANNOT AGITATE THAT THE INTEREST UNDER SE CTION 234D OF THE I.T.ACT IS NOT LEVIABLE AS PER RATIO OF DECISION OF SPECIAL BENCH IN THE CASE OF EKTA PROMOTERS PVT. LTD. (SUPRA). HOWEVER, THE ASSESSEE IS ENTITLED TO CONSEQUENTIAL RELIEF AS PROVIDED IN SUB-SECTION (2) OF SECTION 234D OF I.T.ACT,1961. THE AO IS ACCORDINGLY DIRECTED TO AL LOW CONSEQUENTIAL RELIEF IN CHARGING INTEREST UNDER SECTION 234D, WHI LE GIVING APPEAL EFFECT TO THIS ORDER IN TERMS OF SUB-SECTION (2) OF SECTIO N 234D OF THE I.T.ACT, 1961. 12. GROUND NO.3(B) WAS NOT PRESSED AT THE TIME OF H EARING THEREFORE THIS GROUND IS DISMISSED, AS BEING NOT PRESSED. ITA NO.12/AHD/2009 -10- 13. IN RESULT, THE ASSESSEES APPEAL IS TREATED TO BE PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 31 ST MAY, 2011 SD/- SD/- (A.N. PAHUJA) ACCOUNTANT MEMBER (T.K. SHARMA) JUDICIAL MEMBER PLACE : AHMEDABAD DATE : 31-05-2011 C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD 1. DATE OF DICTATION : 05-05-2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER. : 09-05-2011 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S : 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT. : 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER : 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. : 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK. : 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. : 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER. : 10. DATE OF DESPATCH OF THE ORDER :