DCIT-8(2)(1), Mumbai V. M/S SHAILY ENG. PLASTIC LTD. , VADODARA

ITA 2123/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6860 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 05-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA
• Keywords: Rectification of order; Set aside
• Section: 10B; 154

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 2123/MUM/2019 (ASSESSMENT YEAR 2010-11) DCIT-8(2)(1) AAYAKAR BHAVAN ROOM NO. 624 M.K. ROAD MUMBAI-400 020. VS. M/S. SHAILY ENG. PLASTIC LTD. 364-366 AT AND POST RANIA TAL SAVLI ROAD WORLI, VADODARA-391780. PAN : AACCA6600R ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NONE DEPARTMENT BY SHRI T.S. KHALSA DATE OF HEARING 17.02.2021 DATE OF PRONOUNCEMENT 06.04.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS IS IN APPEAL BY THE REVENUE IS DIRECTED AGAI NST ORDER OF LEARNED CIT APPEAL DATED 20.11.2018 AND PERTAINS TO A.Y. 2010-1 1. 2. THE GROUNDS OF APPEAL READ AS UNDER :- 1. THE CIT(A) HAS ERRED ON FACTS AND IN LAW BY AL LOWING THE DEDUCTION U/S 10B OF THE IT ACT, 1961 AFTER ADJUSTMENT OF LOSSES OF O THER UNITS OWNED BY THE ASSESSEE? 2. IT IS SUBMITTED THAT SINCE THE RE-COMPUTATION OF DED UCTION U/S 10B WAS AS PER CBDT CIRCULAR NO. 7/2013 DATED 16.07.2013, T HE ACTION OF THE ASSESSING OFFICER FALLS WITHIN THE PREVIEW OFSEC.154 OF THE ACT. ' 2. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AN Y GROUND OR ADD A NEW GROUND THAT MAY BE NECESSARY. 3. THE LD. CIT(A)'S ORDER IS CONTRARY IN LAW AND ON FACTS AND DESERVES TO BE SET ASIDE. 3. IN THIS CASE ASSESSING OFFICER PASSED AN ORDER U NDER SECTION 154 OF THE INCOME TAX ACT. IN THIS ORDER HE HELD THAT THE ASSE SSEE HAS BEEN ALLOWED DEDUCTION UNDER SECTION 10B OF THE ACT IN THE ASSES SMENT ORDER WITHOUT ADJUSTMENT OF LOSSES FROM OTHER UNIT. HENCE HE MADE THE ADJUSTMENT OF LOSSES M/S. SHAILY ENG. PLASTIC LTD. 2 FROM OTHER UNIT AND THEREAFTER COMPUTED THE DEDUCTI ON UNDER SECTION 10B OF THE ACT ACCORDINGLY. 4. AGAINST THIS ORDER ASSESSEE APPEALED BEFORE THE LEARNED CIT(A). 5. LEARNED CIT(A) FOUND THAT THE DECISIONS REFERRED BY THE ASSESSEE IN THE CASE OF CIT VS. M/S. YOKOGAWA INDIA LTD. (CIVIL APP EAL NO. 8498 OF 2013)(SUPREME COURT) WAS ALSO IN FAVOUR OF THE ASSE SSEE ON MERITS. MOREOVER HE FOUND THAT THE ISSUE IS IN ANY CASE DEBATABLE AN D AN ORDER UNDER SECTION 154 OF THE ACT CANNOT BE PASSED ON THE SUBJECT. WE MAY GAINFULLY REFERRED TO THE ORDER OF LEARNED CIT(A) IN THIS REGARD AS UNDER :- I HAVE CONSIDERED THE SUBMISSION MADE BY THE ASSESS EE. IT IS OBSERVED THAT THE AO HAS PASSED RECTIFICATION ORDER U/S. 154 OF THE A CT AND HAS ALLOWED DEDUCTION U/S 10B OF THE IT ACT TO THE APPELLANT AFTER AD JUSTMENT OF LOSSES OF OTHER UNITS OWNED BY THE APPELLANT. THE ACTION OF THE AO IS NOT IN CONFORMITY WITH THE DECISIONS QUOTED BY THE APPELLANT. THEREFORE, EVEN IF THE AO HAS A CASE, THE ISSUE THE DECISION QUOTED BY THE APPELLANT. THEREFORE, EVEN IF THE ASSESSING OFFICER HAS A CASE, THE ISSUE WHETHER THE DECISION UNDER SECTION 10B OF THE IT ACT SHOULD BE ALLOWED IN RESPECT OF A UN IT BY CONSIDERING THE UNIT ON A STAND-ALONE BASIS OR IT SHOULD BE ALLOWED AF TER ADJUSTMENT OF LOSS FROM OTHER UNITS IS AT BEST A DEBATABLE ISSUE. THEREFOR E, THE RECTIFICATION MADE BY THE AO IN THE ORDER UNDER 154 OF THE IT ACT D ATED 23/03/2015 IS BEYOND THE SCOPE OF THE PROVISIONS OF SECTION 154 OF THE IT ACT. ACCORDINGLY, THE ORDER PASSED BY THE AO UNDER SECTION 154 OF THE IT ACT IS HEREBY QUASHED AND SET ASIDE AND THE ONLY GROUND OF APPEAL RAISED BY THE APPELLANT IS ALLOWED. 6. AGAINST THIS ORDER REVENUE IS IN APPEAL BEFORE U S. 7. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE. NONE APPEARED ON BEHALF OF THE ASSESSEE. LEARNED DEPARTMENTAL REP RESENTATIVE COULD NOT CONTROVERT THAT THE ISSUE ON MERIT ITSELF IS COVERE D IN FAVOUR OF THE ASSESSEE BY THE SUPREME COURT DECISION AS ABOVE. MOREOVER AS RI GHTLY POINTED OUT BY THE LEARNED CIT(A) THIS ISSUE CANNOT BE SUBJECT MATTER OF ORDER UNDER SECTION 154. AS AN ORDER UNDER SECTION 154 CAN BE PASSED ONLY ON A MISTAKE APPARENT FROM RECORD. BY NO STRETCH OF IMAGINATION THIS ISSUE CAN BE SAID TO BE A MISTAKE APPARENT FROM RECORD. M/S. SHAILY ENG. PLASTIC LTD. 3 8. HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). ACCORDINGLY WE UPHOLD THE SAME. 9. IN THE RESULT THIS APPEAL BY THE REVENUE STANDS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 6.4.2021. SD/- SD/- (AMARJIT SINGH) (SHAMIM Y AHYA) JUDICIAL MEMBER ACCOUNTAN T MEMBER MUMBAI; DATED : 6/4/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI