Choice Laboratories Pvt. Ltd., (Erstwhile Hiten Impex Pvt. Ltd.), Unjha V. The Dy. CIT., Patan Circle, Patan

ITA 2646/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0997 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 09-06-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 16-09-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N P PATEL
• Assessee Lawyers: S N DIVATIA
• Section: 143(3); 80HHC; 80IB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 2646/AHD/2015 / ASSESSMENT YEAR : 2001-02 CHOICE LABORATORIES P. LTD., (ERSTWHILE HITEN IMPEX PVT LTD) STATE HIGHWAY, UNJHA (NG) PAN: AAACH 4652 A VS DCIT, PATAN CIRCLE, PATAN / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S. N. DIVATIA, AR REVENUE BY : SHRI N. P. PATEL, SR DR / DATE OF HEARING : 09/06/2016 / DATE OF PRONOUNCEMENT: 15/07/2016 / O R D E R THIS IS AN APPEAL AGAINST THE ORDER OF THE ASSESSIN G OFFICER PASSED U/S 154 CLAIMING IT TO BE FOR RECTIFICATION OF MIST AKE. 2. FACTS IN THIS REGARD ARE THE ASSESSEE IS INTO MANUFACTURING, TRADING AND EXPORT OF TOOTH PASTE AND TOOTH POWDER ETC. FO R IMPUGNED ASSESSMENT YEAR 2001-02, THE ASSESSEE FILED THE RETURN OF INCO ME ON 29.10.2001, DECLARING TOTAL INCOME OF RS.7,673/- AFTER CLAIMING DEDUCTION U/S 80HHC OF RS.6,37,538/-. THE ASSESSING OFFICER COMPLETED REG ULAR ASSESSMENT U/S 143(3) OF THE ACT DETERMINING TOTAL INCOME AT RS.15 ,34,247/- AFTER ALLOWING DEDUCTION U/S 80HHC OF RS.1,32,967 AND U/S 80IB OF RS.3,288/-. 3 AGGRIEVED, THE ASSESSEE PREFERRED THE APPEAL AND ITAT VIDE ITS ORDER DATED 22.08.2008 SET ASIDE THE MATTER BACK TO THE F ILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE ABOUT DEDUCTION U/S 80HHC DE NOVO . IN SUBSEQUENT ORDER, THE ASSESSING OFFICER FOUND THE CLAIM MADE B Y THE ASSESSEE TO BE CORRECT AND ALLOWED THE SAME U/S 80HHC. 4. THEREAFTER, REVENUE AUDIT PARTY RAISED SOME AUDI T OBJECTIONS AND ON THE BASIS THEREOF, 154 PROCEEDINGS WERE UNDERTAKEN CLAIMING THAT A MISTAKE SMC-ITA NO. 2646/AHD/2015 CHOICE LABORATORIES PVT LTD VS. DCIT AY : 2001-02 2 APPARENT FROM RECORD WAS FOUND WHICH NEEDED TO BE R ECTIFIED. THE ASSESSEE OBJECTED TO THE PROPOSED 154 ACTION ON THE GROUND T HAT THE ISSUE WAS DEBATABLE IN NATURE AND CANNOT BE RECTIFIED U/S 154 . THE LD. ASSESSING OFFICER, HOWEVER, REJECTED THE APPLICATION AND REDU CED THE CLAIM U/S 80HHC. 5. AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL W HERE THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY FO LLOWING OBSERVATIONS:- . ON CAREFUL CONSIDERATION OF ENTIRE FACTS ALONG WTIH FORM NO.10CCAC SUBMITTED BY APPELLANT ALONG WITH RETURN OF INCOME, IT IS OBSERVED THAT EXPORT TURNOVER IN RESPECT OF TRADED GOODS IS SHOWN AT RS.NIL AS WELL AS PROFIT FROM EXPORT OF TRADING GOODS IS SHOWN AT RS. NIL. APPELLANT HAS ARGUED THAT EXPORT PROFIT FROM TRADING GOODS IS RS. 5,91,461/-, BUT THIS CLAIM IS NOT SUPPORTED BY FORM 10CCAC SIGNED BY CHARTERED ACCOUNTANT NOR APPELLANT HAS SUBMITTED REVISED CERTIFICATE OR ANY EVIDENCES THAT THERE WERE EXPORT OF TRADING GOODS, HENCE, ARGUMENT ON APPELLA NT THAT THERE IS EXPORT PROFIT OF TRADING GOODS IS REJECTED. 6. LD. CIT(A) FURTHER OBSERVED THAT THE ASSESSEE HA D NEGATIVE PROFIT OF EXPORT BUSINESS AT RS.(-)2,47,062/-. LD. CIT(A) FU RTHER OBSERVED AS UNDER:- .. HOWEVER, APPELLANT IN ITS SUBMISSION HAS COMPU TED SUCH DEDUCTION AT RS.8,85,470/- . IT IS PERTINENT TO NOTE THAT AS PE R PROVISO TO SECTION 80HHC(3), APPELLANT IS ENTITLED THE ABOVE DEDUCTION AT 90% OF EXPORT INCENTIVE, WHEREAS, APPELLANT IN REVISED COMPUTATIO N AS SUBMITTED IN APPELLATE PROCEEDINGS HAS CONSIDERED 100% EXPORT IN CENTIVE FOR CLAIMING ABOVE DEDUCTION WHICH IS PATENTLY INCORRECT, HENCE, DEDUCTION U/S 80HHC ON EXPORT INCENTIVE IS CONSIDERED AT RS.7,96,923/- AS CERTIFIED BY CHARTERED ACCOUNTANT IN FORM NO.10CCAC. THUS, APPELLANT HAS NEGATIVE PROFIT MANUFACTURI NG BUSINESS AT RS.6,47,062/- WHICH IS REQUIRED TO BE ADJUSTED AGAI NST EXPORT INCENTIVE WORKED OUT TO RS.7,96,923/- AS PER 5 TH PROVISO TO SECTION 80HHC AND REVISED PROFIT FOR THE PURPOSE OF DEDUCTION U/S 80HHC IS CO MPUTED AT RS.1,49,860/- (RS.7,96,923) (-) RS.6,47,062/-. AS IN THE YEAR UNDER CONSIDERATION, APPELLANT IS ENTITLED TO DEDUCTION U/S 80HHC AT THE RATE OF 80%, HENCE, SUCH DEDUCTION IS RE-COMPUTED AT RS.1,19,888/-. THUS, A PPELLANT GETS RELIEF OF RS.1,19,883/- AND BALANCE ADDITION MADE BY AO IS HER EBY CONFIRMED. SMC-ITA NO. 2646/AHD/2015 CHOICE LABORATORIES PVT LTD VS. DCIT AY : 2001-02 3 7. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 8. LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE C ORRECTION CARRIED OUT BY THE LD. ASSESSING OFFICER IS DEBATABLE IN NATURE AND CANNOT BE TERMED AS HUMAN MISTAKE APPARENT FROM RECORD. THE ORDERS OF THE AUTHORITIES BELOW AMOUNT TO REVIEW OF OWN ORDER WHICH IS NOT PERMISSI BLE U/S 154 OF THE ACT. THE ISSUE IN QUESTION WAS SETTLED BY HONBLE SUPREM E COURT IN THE CASE OF IPCA LABORATORIES VS. DCIT, 266 ITR 521; THEREAFTER LAW AS AMENDED BY INSERTING FIFTH PROVISO BY TAXATION LAWS AMENDMENT ACT, 2005 W.E.F. 1.4.1992. 9. LD. DR, ON THE OTHER HAND, VEHEMENTLY CONTENDS THAT THE ASSESSING OFFICER WHILE WORKING OUT THE ELIGIBLE CLAIM OF DED UCTION U/S 80HHC, MADE SOME CALCULATION MISTAKE WHILE FRAMING THE ASSESSME NT IN THIS BEHALF DE NOVO . THE CALCULATION MISTAKE WAS DULY INFORMED TO THE ASSESSEE AND THE REPLY RECEIVED THEREOF WAS NOT FOUND TO BE SATISFAC TORY. SINCE THE MISTAKE AS MENTIONED ABOVE WAS OF CALCULATION WHICH BECOMES A MATHEMATICAL PROPOSITION, LD. ASSESSING OFFICER HAS RIGHTLY CARR IED OUT THE RECTIFICATION. FURTHER, LD. CIT(A) HAS FOUND THE CALCULATION TO BE FURTHER RECTIFIABLE AND HAS GIVEN THE SUITABLE RELIEF TO THE ASSESSEE. IN FINE, IT IS CONTENDED THAT THE ACTION UNDERTAKEN RIGHTLY FALLS WITHIN THE PURVIEW OF SECTION 154 BEING FOR CORRECTION OF MISTAKE APPARENT FROM THE RECORD; DUE NOTICE OF HEARING WAS GIVEN TO THE ASSESSEE; THEREFORE, THERE IS NO INFIR MITY IN THE ORDERS OF THE AUTHORITIES BELOW. 10. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE LOWER AUT HORITIES. I FIND MERIT IN THE CONTENTIONS OF THE LD. DR. ADMITTEDLY, THERE A RE NO EXPORT ACTIVITIES IN THE MANUFACTURING AND TRADING OF THE ASSESSEE, WHIC H HAS BEEN RIGHTLY OBSERVED BY THE AUTHORITIES BELOW, COUPLED WITH THE FACT THAT THE CHARTERED SMC-ITA NO. 2646/AHD/2015 CHOICE LABORATORIES PVT LTD VS. DCIT AY : 2001-02 4 ACCOUNTANT HAS NOT CERTIFIED SUCH EXPORTS IN FORM 1 0CCAC. BESIDES, THERE IS APPARENT MISTAKE IN WORKING OF NEGATIVE PROFITS AND CONSEQUENT EFFECT ON THE CLAIM U/S 80HHC OF THE ACT. IN VIEW THEREOF, TH E ACTION UNDERTAKEN BY THE AUTHORITIES BELOW AMOUNTS TO RECTIFICATION OF M ISTAKE APPARENT FROM THE RECORD AND THERE IS NO INFIRMITY IN THE ORDER OF TH E LD. CIT(A) WHICH IS UPHELD. ASSESSEES APPEAL IS DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 15 TH JULY, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 15/07/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD