Atul Limited, Ahmedabad V. The Income tax Officer, Ahmedabad Ward-1(1), Ahmedabad

ITA 3528/AHD/2004

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0497 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 12-08-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 07-12-2004
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: J P SHAH
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV, JM, & SHRI MANISH BORA D, AM. ITA NO.3528/AHD/2004 ASST. YEAR:2001-02 ATUL LIMITED, ASHOKA CHAMBERS, RASALA MARG, ELLISHBRIDGE, AHMEDABAD. VS. ITO, WARD-1(1), AHMEDABAD.. APPELLANT RESPONDENT PAN AABCA 2390M APPELLANT BY SHRI J. P. SHAH, AR RESPONDENT BY SHRI SANJAY AGRAWAL, CIT, DR DATE OF HEARING: 12.8.2016 DATE OF PRONOUNCEMENT: 20/9/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THE ORDER OF LD. CIT(A) DATED 25 TH OCTOBER, 2004 PASSED FOR ASST. YEAR 2001-02 WAS CHALLENGED BY THE ASSESSEE A S WELL AS REVENUE IN ITA NO.3528/AHD/2004 AND ITA NO.3769/AHD /2004 RESPECTIVELY. THESE APPEALS WERE DECIDED BY THE TRI BUNALS VIDE ORDER DATED 16.5.2008. IN GROUND NO.3 ASSESSEE HAS PLEADED THAT LD. CIT(A) HAS ERRED IN NOT RECOGNIZING THE NEW POWER P LANT AS NEW INDUSTRIAL UNDERTAKING FOR THE PURPOSE OF GRANTING DEDUCTION U/S 80IA OF THE ACT. THIS GROUND OF THE ASSESSEE WAS REJECTE D BY THE TRIBUNAL ITA NO. 3528/AHD/2004 ASST. YEAR 2001-02 2 VIDE ITS ORDER DATED 16.5.2008 AND THE TRIBUNAL HAS RECORDED FOLLOWING FINDING :- 7. GROUND NOS.3 AND 4 RELATE TO THE CLAIM OF THE AS SESSEE FOR DEDUCTION U/S 80-IA IN RESPECT OF NEW POWER PLANT. THE ASSESSEE CLAIMED TH AT DURING THE YEAR HE HAS ESTABLISHED THE NEW POWER PLANT AND ACCORDINGLY CLA IMED THE DEDUCTION ON THAT POWER PLANT U/S 80-IA OF THE ACT. WHEN QUESTIONED B Y THE AO, THE ASSESSEE VIDE LETTER DATED 9/3/2004 POINTED OUT THAT FOR GENERATI ON OF THE POWER WHAT IS REQUIRED IS TURBINE. FOR COMPOSITE PLANT FOR GENERATION OF POWE R WHAT IS REQUIRED IS BOILER AND TURBINE. BOILER MANUFACTURES THE STEAM WHICH IS THE RAW MATERIAL FOR TURBINE. TURBINE IS INDEPENDENTLY KEPT FOR GENERATING POWER. THE ASS ESSEE INSTALLED NEW TURBINE WHICH ITSELF IS A NEW INDUSTRIAL UNDERTAKING CAPABL E OF GENERATING ELECTRICITY. THIS TURBINE CAN BE OPERATED BY PURCHASING STEAM FROM OU TSIDE SOURCE BUT THE ASSESSEE SINCE HAD THE SPARE CAPACITY OF STEAM USED THE SAM E FOR GENERATING ELECTRICITY IN TURBINE. IT WAS POINTED OUT THAT THE ASSESSEE HAS' CHARGED FOR CONSUMPTION OF STEAM AT THE RATE OF RS.660 PER MT. RELYING ON THE DECISI ON 107 ITR 195 (SO), IT WAS POINTED OUT THAT THE ASSESSEE MAY ESTABLISH A NEW U NIT FOR USING THE PRODUCT OF THE OLD BUSINESS AS ITS RAW MATERIAL. THE BUSINESS MAY ESTABLISH NEW UNIT FOR SUPPLYING RAW MATERIAL FOR ITS OLD UNIT. THE ASSESSEE MAY EST ABLISH A DIVISION OF ITS OWN PRODUCT AS A NEW UNIT AND THE ASSESSEE MAY ESTABLISH ONE OR MORE UNITS. IT WAS ALSO POINTED OUT THAT THE AO HAS PRESUMED THAT THE EXISTING BOIL ER IS AN INTEGRAL PART OF THE NEW PLANT. THERE IS NO TRANSFER OF PREVIOUSLY USED PLAN T AND MACHINERY AND THEREFORE THE QUESTION OF VALUE OF PREVIOUSLY USED PLANT BEING LE SS THAN 20% OF THE TOTAL VALUE OF THE NEW PLANT AND: MACHINERY DOES NOT SURVIVE. IT W AS ALSO POINTED OUT THAT THE TOTAL VALUE OF THE PLANT AND MACHINERY USED FOR BUSINESS OF GENERATING POWER WORKS OUT TO RS.14,56,44,295/- (1827180 ON PLANT AND MACHINERY A ND 126427115 TURBINE, A NEW INDUSTRIAL UNIT). THE VALUE OF THE -BOILER (PRE-EXI STING-AND PRE-USED IS RS.1476600/- (PURCHASED SECOND-HAND ON 9-11-98). IT WAS ALSO CON TENDED THAT THE BOILER IS NOT A' PART AND PARCEL OF NEW PLANT AND MACHINERY. THE AO DID NOT AGREE WITH THE CONTENTIONS OF THE ASSESSEE THAT THE TURBINE HAS TO BE TREATED AS AN INDEPENDENT POWER GENERATING UNIT AND ULTIMATELY HE HELD THAT N EW POWER PLANT HAS BEEN ESTABLISHED BY WAY OF TRANSFER OF OLD PREVIOUSLY US ED MACHINERY AND ACCORDINGLY DID NOT ALLOW THE DEDUCTION U/S 80-IA IN RESPECT OF THI S POWER PLANT. THE \ ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) ALSO CONFIR MED THE FINDING OF THE AO BY HOLDING AS UNDER: *4.1 I HAVE CONSIDERED THE FINDINGS OF THE AO, S UBMISSIONS AND ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE APPELLANT DURIN G THE COURSE OF ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS AND CAS E LAWS RELIED UPON ON THE ISSUE. I FIND THAT NO INDUSTRIAL UNDERTAKING CA ME INTO EXISTENCE WITHIN THE PROVISIONS OF SECTION 80IA BY TRANSFERRING THE BOIL ER OR BY INSTALLING NEW MACHINERY FOR THE PURPOSE OF GENERATION OF POWER FA R FACTORY CONSUMPTION. I FIND THAT THIS IS NOTHING BUT AN EXERCISE TO CLAIM DEDUCTION TO REDUCE TAXABLE PROFITS. I ALSO FIND THAT THE POWER PLANT IS NOT CA PABLE TO RUN INDEPENDENTLY AND IS DEPENDENT ON THE TRANSFER OF STEAM ETC. FROM THE EXISTING PLANT. I THEREFORE HOLD THAT THE APPELLANT IS NOT ENTITLED TO CLAIM DE DUCTION U/S 80IA ON NEW ITA NO. 3528/AHD/2004 ASST. YEAR 2001-02 3 POWER PLANT AMOUNTING TO RS. 15,68,40,556/-.THIS GR OUND OF APPEAL IS THEREFORE REJECTED.' 8 BEFORE US, THE LEARNED AR VEHEMENTLY CONTENDED TH AT THE INSTALLATION OF A NEW TURBINE IS A NEW INDUSTRIAL UNDERTAKING CAPABLE OF GENERATING ELECTRICITY. THIS UNDERTAKING IS BEING RUN INDEPENDENTLY. MERELY THAT THE ASSESSEE WAS USING THE STEAM AS RAW MATERIAL FROM THE EXISTING BOILER DOES NOT MEAN THAT A NEW INDUSTRIAL UNDERTAKING HAS NOT COME INTO EXISTENCE. THE ASSESS EE COULD, HAVE BOUGHT THE STEAM FROM OUTSIDE ALSO. THE POWER AND PLANT IS A S EPARATE UNIT FROM THE BOILER. THEREFORE, THE ASSESSEE SHOULD HAVE TREATED NEW TUR BINE TO BE AN INDUSTRIAL UNDERTAKING. EVEN OTHERWISE ALSO IT WAS CONTENDED T HAT THE VALUE OF THE BOILER IN ANY CASE WAS LESS THAN 20% OF THE TOTAL PLANT AND MACHI NERY INSTALLED BY .THE ASSESSEE. BOTH THE LEARNED AO AND THE LEARNED CIT(A) COULD NO T BE ABLE TO UNDERSTAND THAT THE POWER CAN BE GENERATED INDEPENDENTLY. THUS, IT WAS CONTENDED THAT THE ASSESSEE WAS ENTITLED FOR THE DEDUCTION U/S 80IA. THE LEARNE D DR, ON THE OTHER HAND; RELIED ON THE ORDER OF THE AO. 9 WE HAVE/CAREFULLY CONSIDERED THE RIVAL SUBMISSION S AND PERUSED( THE MATERIAL ON RECORD ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW. THE DEDUCTION U/S 80IA IS AVAILABLE TO AN ASSESSEE WHERE THE GROSS TOTAL INCO ME OF THE ASSESSEE INCLUDES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR ENTE RPRISE FROM ANY ELIGIBLE BUSINESS AS REFERRED TO IN SUB-SECTION (4). THE DEDUCTION SH ALL BE ALLOWED AN AMOUNT EQUAL TO 100% OF THE PROFITS AND GAINS DERIVED FROM SUCH BUS INESS FOR TEN CONSECUTIVE YEARS. AS PER THIS SECTION APPLIES TO ANY UNDERTAKING WHICH IS SET UP PART OF INDIA FOR THE GENERATION OR GENERATION AND DISTRIBUTION OF POWER IF IT BEGINS TO GENERATE POWER AT ANY TIME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 1993 AND ENDING ON THE 31ST DAY OF MARCH, 2010. SUB-SECTION (3) OF SECTION 80IA REQUIRES THAT SUCH UNDERTAKING MUST FULFILL THE CONDITIONS LAID DOWN T HEREIN. THE FIRST CONDITION THEREIN IS THAT THE UNDERTAKING SHOULD NOT BE FORMED BY SPLITT ING UP, OR THE RECONSTRUCTION, OF A BUSINESS ALREADY IN EXISTENCE. THE SECOND CONDITION STATES THAT THE UNDERTAKING IS NOT FORMED BY THE TRANSFER TO A NEW BUSINESS OF MAC HINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. EXPLANATION 2 TO THIS SUB-SECTION STATES THAT WHERE IN THE CASE OF AN UNDERTAKING, ANY MACHINERY OR PLANT OR ANY PART THE REOF PREVIOUSLY USED FOR ANY PURPOSE IS TRANSFERRED TO A NEW BUSINESS AND THE TO TAL VALUE OF THE MACHINERY OR PLANT OR PART SO TRANSFERRED DOES NOT EXCEED TWENTY PER CENT OF THE TOTAL VALUE OF THE MACHINERY OR PLANT USED IN THE BUSINESS, THEN FOR T HE PURPOSES OF CLAUSE (II) OF THIS SUB-SECTION, THE CONDITION SPECIFIED THEREIN SHALL BE DEEMED TO HAVE BEEN COMPLIED WITH. THIS IS AN UNDISPUTED FACT THAT IN THIS CASE THE ASSESSEE HAS NOT TRANSFERRED THE EXISTING BOILER TO THE NEW UNDERTAKING FOR GENERATI NG THE POWER BUT THE CONTENTION OF THE ASSESSEE IS THAT THE SAME VERY BOILER IS BEING USED FOR SUPPLYING THE STEAM TO BOTH THE TURBINE WHICH WAS ALREADY IN EXISTENCE AND THE NEW ONE ESTABLISHED BY THE ASSESSEE. THE CLAIM OF THE ASSESSEE IS THAT THE NEW TURBINE ESTABLISHED BY HIM ITSELF IS A NEW UNDERTAKING ENGAGED IN THE BUSINESS OF GEN ERATING THE POWER. NEW TURBINE ITSELF CANNOT GENERATE POWER UNTIL AND UNLESS THE S TEAM IS PROVIDED TO IT THROUGH BOILER. AN UNDERTAKING WHICH IS ELIGIBLE FOR DEDUCT ION U/S 80IA, IN OUR OPINION, MUST ITSELF BE AN INDEPENDENT UNDERTAKING AND SHOULD BE ABLE TO CARRY OUT THE ACTIVITIES FOR WHICH IT HAS BEEN ESTABLISHED. THE NEW TURBINE ESTA BLISHED BY THE ASSESSEE CANNOT ITSELF GENERATE THE POWER. THE UNDERTAKING SO THAT IT MAY GENERATE THE POWER WILL BE COMPLETE ONLY WHEN BOTH NEW TURBINE AND THE BOILER ARE INSTALLED. THE ASSESSEE HAS ITA NO. 3528/AHD/2004 ASST. YEAR 2001-02 4 NOT INSTALLED BOILER BUT IT IS PART OF EXISTING UND ERTAKING GENERATING THE .POWER. THIS, IN OUR OPINION, IS MERELY AN EXPANSION OF THE EXISTING UNDERTAKING. IF THE EXIST ING BOILER IS CARVED OUT FROM THE NEW TURBINE INSTALLED BY THE ASSESSEE, THE NEW TURBINE CLAIMED TO BE ELIGIBLE UNDERTAKING ITSELF CANNOT GE NERATE THE POWER. NO MATERIAL OR EVIDENCE WAS BROUGHT TO OUR KNOWLEDGE WHICH MAY PRO VE THAT THE NEW TURBINE INSTALLED BY THE ASSESSEE CAN INDEPENDENTLY GENERAT E THE POWER. THE ASSESSEE IS ALREADY HAVING THE UNDERTAKING ENGAGED IN THE BUSIN ESS OF GENERATING THE POWER. THE ASSESSEE IN THIS CASE HAS MERELY ADDED A NEW TU RBINE TO THE EXISTING UNDERTAKING BY WHICH HIS CAPACITY TO GENERATE THE P OWER HAS INCREASED. THIS, IN OUR OPINION, IS MERELY AN EXPANSION OF THE EXISTING UND ERTAKING. THE NEW UNDERTAKING AS IS ELIGIBLE U/S 80IA, IN OUT OPINION, MUST BE INDEP ENDENT AND INTEGRATED UNIT WHICH SHOULD BE ABLE TO CARRY ON THE ACTIVITIES OR TO CAR RY ON THE BUSINESS AS HAS BEEN STIPULATED U/S 80IA INDEPENDENTLY. IT IS NOT THE CA SE OF THE ASSESSEE THAT THE NEW UNIT ESTABLISHED BY THE ASSESSEE. HAS TAKEN THE BOILER F ROM THE EXISTING UNIT FOR ITS EXCLUSIVE USE AND GENERATION OF POWER. IT IS ONLY I N THE EXISTING UNIT THE ASSESSEE HAS ADDED NEW TURBINE WHICH, IN OUR OPINION, CANNOT BE REGARDED TO BE ESTABLISHING THE NEW UNDERTAKING QUALIFYING FOR REDUCTION U/S 80 IA. WE, THEREFORE, DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE CIT(A) IN DENYING DEDUCTION TO THE ASSESSEE U(S 801A. THUS, GROUND NOS.3 AND 4 STAND DISMISSED. 2. THE ASSESSEE HAD MOVED A MISCELLANEOUS APPLICATI ON BEARING NO.324/AHD/2008. THIS MISCELLANEOUS APPLICATION WAS ALLOWED BY THE TRIBUNAL VIDE ITS ORDER DATED 11.5.2012. THE TRIBUN AL HAS RESTORED GROUND NO.3 FOR RE-ADJUDICATION. DISSATISFIED WITH THE ORDER OF TRIBUNAL PASSED IN M.A. NO.324/AHD/2008 REVENUE WENT IN APPE AL BEFORE THE HONBLE HIGH COURT OF GUJARAT VIDE TAX APPEAL NO.63 5 OF 2012. THE HONBLE HIGH COURT HAS REVERSED THE ORDER OF THE TR IBUNAL DATED 11.5.2012 PASSED IN THE M.A. NO.324/AHD/2008. THE F INDING RECORDED BY THE HONBLE HIGH COURT IS AS UNDER :- 9. ON THE OTHER HAND, LEARNED COUNSEL SHRI SOPARKAR FOR THE ASSESSEE OPPOSED THE APPEAL CONTENDING THAT THE JUDGMENT OF THE TRIB UNAL DATED 16.05.2008 WAS NOT IN CONSONANCE WITH THE VIEW OF THE CASE OF THE DECISION OF THE HIGH COURT GIVEN IN CASE OF GUJARAT ALKALIES AND CHEMICALS LTD. (SUPRA). MERELY BECAUSE NEW INDUSTRY DEPENDED ON THE EXISTING INDUSTRY, WOU LD NOT BE A GROUND TO DENY DEDUCTION UNDER SECTION 80IA OF THE ACT. SINCE THE TRIBUNAL HAD PROCEEDED ONLY ON THIS BASIS, IT HAD RECALLED ITS JUDGMENT AND POS TED THE APPEAL FOR FURTHER HEARING. COUNSEL RELIED ON THE DECISION OF THE SUPR EME COURT IN CASE OF HONDA SIEL POWER PRODUCTS LTD. V. COMMISSIONER OF INCOMET AX REPORTED IN [2007] ITA NO. 3528/AHD/2004 ASST. YEAR 2001-02 5 295 ITR 466 (SC) IN WHICH, IN THE CONTEXT OF SCOPE OF POWER OF RECTI FICATION, IT WAS OBSERVED AS UNDER: 12. AS STATED ABOVE, IN THIS CASE WE ARE CONCERNED WITH THE APPLICATION UNDER SECTION 254(2) OF THE 1961 ACT. AS STATED ABO VE, THE EXPRESSION 'RECTIFICATION OF MISTAKE FROM THE RECORD' OCCURS I N SECTION 154. IT ALSO FINDS PLACE IN SECTION 254(2). THE PURPOSE BEHIND ENACTME NT OF SECTION 254(2) IS BASED ON THE FUNDAMENTAL PRINCIPLE THAT NO PARTY APPEARING BEFORE THE TRIBUNAL, BE IT AN ASSESSEE OR THE DEPARTMENT, SHOU LD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED BY THE TRIBUNAL. THIS FUNDAME NTAL PRINCIPLE HAS NOTHING TO DO WITH THE INHERENT POWERS OF THE TRIBU NAL. IN THE PRESENT CASE, THE TRIBUNAL IN ITS ORDER DATED 10.9.2003 ALLOWING THE RECTIFICATION APPLICATION HAS GIVEN A FINDING THAT SAMTEL COLOR L TD. (SUPRA) WAS CITED BEFORE IT BY THE ASSESSEE BUT THROUGH OVERSIGHT IT HAD MISSED OUT THE SAID JUDGMENT WHILE DISMISSING THE APPEAL FILED BY THE A SSESSEE ON THE QUESTION OF ADMISSIBILITY/ALLOWABILITY OF THE CLAIM OF THE ASSESSEE FOR ENHANCED DEPRECIATION UNDER SECTION 43A. ONE OF THE IMPORTANT REASONS FOR GIVING THE POWER OF RECTIFICATION TO THE TRIBUN AL IS TO SEE THAT NO PREJUDICE IS CAUSED TO EITHER OF THE PARTIES APPEAR ING BEFORE IT BY ITS DECISION BASED ON A MISTAKE APPARENT FROM THE RECOR D. 10. FROM THE FACTS ON RECORD, IT EMERGES THAT THE T RIBUNAL IN ITS ORIGINAL JUDGMENT DATED 16.05.2008 HAD HELD THAT THE ASSESSEE HAD NOT ESTABLISHED A NEW POWER PLANT SO AS TO QUALIFY FOR DEDUCTION UNDER SECTION 80IA OF THE ACT. THE TRIBUNAL RECALLED THIS ORDER IN EXERCISE OF POWERS OF RECTIF ICATION ON THE GROUND THAT THIS VIEW IS NOT IN CONSONANCE WITH IN CASE OF GUJARAT A LKALIES AND CHEMICALS LTD. (SUPRA) . IT IS UNDISPUTED THAT UNDER SECTION 254(2) OF THE A CT, THE TRIBUNAL ENJOYS THE POWER TO RECTIFY ANY MISTAKE APPARENT ON THE FA CE OF THE RECORD AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE ORDER. IN VI EW OF THE JUDGMENT OF THIS COURT IN CASE OF ASSISTANT COMMISSIONER OF INCOMETAX V. S AURASHTRA KUTCH STOCK EXCHANGE LIMITED, REPORTED IN 262 ITR 146, THE DECI SION OF THE JURISDICTIONAL HIGH COURT EVEN IF RENDERED SUBSEQUENTLY, WOULD CONSTITU TE A MISTAKE APPARENT ON RECORD, INVESTING THE TRIBUNAL WITH JURISDICTION TO RECTIFY THE MISTAKE. IT WAS THEREFORE NOT EVEN THE ARGUMENT OF THE REVENUE THAT MERELY BECAUSE THE JUDGMENT OF THE GUJARAT HIGH COURT IN CASE OF GUJAR AT ALKALIES AND CHEMICALS LTD. (SUPRA) WAS DELIVERED SUBSEQUENT TO THE JUDGMENT OF THE TRIBUNAL, THE SAME WOULD NOT FORM A GROUND TO HOLD THAT THE TRIBUNAL'S JUDGMENT SUFFERED FROM AN APPARENT MISTAKE. HOWEVER, THE REVENUE ARGUED THAT THE SAID JUDGMENT DID NOT CLINCH THE ISSUE AND AT ANY RATE, IT WAS DEBATABLE WHETHER BY VIRTUE OF THE JUDGMENT OF GUJARAT HIGH COURT, THE TRIBUNAL'S VIEW WOULD BE RENDERED INCORRECT AND IN THAT VIEW OF THE MATTER, POWER OF RECTIFICAT ION COULD HAVE BEEN EXERCISED. 11. AS NOTED, THE SUPREME COURT IN CASE OF T.S. BAL RAM (SUPRA) HELD THAT A MISTAKE APPARENT ON RECORD MUST BE OBVIOUS AND PATE NT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED ON A LONG DRAWN PROCESS OF REASONING WHERE TWO OPINIONS ARE POSSIBLE. ITA NO. 3528/AHD/2004 ASST. YEAR 2001-02 6 12. IN CASE OF HONDA SIEL POWER PRODUCTS LTD. (SUPRA), THE SUPREME COURT HIGHLIGHTED THAT THE PURPOSE BEHIND ENACTMENT OF SE CTION 254(2) IS BASED ON THE FUNDAMENTAL PRINCIPLE AND NO PARTY APPEARING BEFORE THE TRIBUNAL SHOULD SUFFERED ON ACCOUNT OF THE MISTAKE COMMITTED BY THE TRIBUNAL AND THAT POWER OF RECTIFICATION OF THE TRIBUNAL IS GRANTED TO SEE THA T NO PREJUDICE IS CAUSED TO EITHER OF THE PARTIES BY THE DECISION OF THE TRIBUNAL BASE D ON THE MISTAKE APPARENT FROM THE RECORD. SECTION 254 (2) ITSELF REFERS TO A MIST AKE APPARENT ON RECORD, WHICH CAN BE RECTIFIED. THE CONCEPT OF MISTAKE APPARENT O N RECORD WAS NOT DILUTED BY THE SUPREME COURT IN CASE OF HONDA SIEL POWER PRODU CTS LTD. (SUPRA) ALSO. 13. IN CASE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA) ALSO, THE SUPREME COURT OBSERVED THAT A PATENT MANIFEST AND SELF EVID ENT ERROR WHICH DOES NOT REQUIRE ELABORATE DISCUSSION OF EVIDENCE OR ARGUMEN TS TO ESTABLISH IT CAN BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD. IN THE SAID JUDGMENT, THE SUPREME COURT APPROVED THE DECISION OF GUJARAT HIGH COURT IN CASE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD . (SUPRA). 14. IN VIEW OF SUCH SETTLED LEGAL POSITION, WE MAY EXAMINE THE FACTS ON HAND. AS NOTED, THE ASSESSEE HAD INSTALLED A TURBINE FOR POW ER GENERATION, WHICH RELIED ON THE EXCESS STEAM PRODUCTION CAPACITY OF THE PLANT. THE ASSESSEE CLAIMED THAT IT HAD THUS, SET UP A NEW POWER PLANT WHICH QUALIFY FO R DEDUCTION UNDER SECTION 80IA OF THE ACT. THE TRIBUNAL BY ITS ORIGINAL JUDGM ENT, UPHELD THE VIEW OF THE REVENUE AUTHORITIES HOLDING THAT TURBINE ITSELF WOU LD NOT BE SUFFICIENT TO GENERATE POWER AND THE PLANT THEREFORE WOULD NOT QUALIFY AS A NEW INDUSTRY. ON THE BASIS OF JUDGMENT OF SUPREME COURT IN CASE OF GUJARAT ALK ALIES AND CHEMICALS LTD. (SUPRA), HOWEVER, THE TRIBUNAL WAS PERSUADED TO REC ALL THIS JUDGMENT AND POST THE APPEAL FOR FURTHER HEARING. IN GUJARAT ALKALIES ' CASE, THE FACTS WERE THAT THE ASSESSEE WAS IN THE BUSINESS OF MANUFACTURING CAUST IC SODA AND OTHER CHEMICALS, FOR WHICH, IT HAD INSTALLED A PRODUCTION PLANT. THE ASSESSEE ACQUIRED A NEW INDUSTRIAL LICENSE AND A NEW LETTER OF INTENT F OR SUBSTANTIAL EXPANSION OF THE PRODUCTION CAPACITY OF THE CAUSTIC SODA, BY WHICH, ITS EXISTING CAPACITY WAS NEARLY DOUBLED. THE ASSESSEE HAD MADE SIZABLE INVESTMENT I N ACQUIRING NEW MACHINERY AND PLANT. THE ASSESSEE THEREFORE CLAIMED THAT THIS WAS A NEW INDUSTRIAL UNDERTAKING AND THE PROFIT IN RESPECT OF WHICH WOUL D QUALIFY FOR DEDUCTION UNDER SECTION 80IA OF THE ACT. THE CLAIM WAS REJECTED BY THE REVENUE AUTHORITIES AND THE TRIBUNAL ON THE GROUND THAT THIS IS A CASE OF S UBSTANTIAL EXPANSION AND NOT OF INSTALLMENT OF NEW INDUSTRY. ONE OF THE GROUNDS PRE SSED IN SERVICE WAS THAT, THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE TO PROVE THAT THE NEW UNIT COULD INDEPENDENTLY PRODUCE THE GOODS WITHOUT TAKING ASSI STANCE OF THE EXISTING PLANT AND MACHINERY OF THE OLD UNIT. WHEN THE ASSESSEE AP PROACHED THE HIGH COURT, IN THIS CONTEXT, THE HIGH COURT OBSERVED THAT THERE WA S NO LOGIC FOR THE ARGUMENT THAT THE TRUE TEST WOULD BE WHETHER A NEW INDUSTRIA L UNDERTAKING CAN FUNCTION INDEPENDENTLY OF THE EXISTING INDUSTRIAL UNDERTAKIN G. ON THE QUESTION OF SATISFYING THE TEST OF A SEPARATE AND DISTINCT IDENTITY OF THE INDUSTRIAL UNIT SET UP, THE COURT WAS OF THE OPINION THAT ONLY BECAUSE TO A CERTAIN E XTENT, THE NEW UNDERTAKING IS ITA NO. 3528/AHD/2004 ASST. YEAR 2001-02 7 DEPENDENT ON THE EXISTING UNIT, WILL NOT DEPRIVE TH E NEW UNDERTAKING STATUS OF A SEPARATE AND DISTINCT IDENTITY. IT ALL DEPENDS ON T HE NATURE OF TECHNICALITY AND THE MECHANISM OF PRODUCTION. 15. THUS WHILE DISCARDING THE THEORY OF THE TEST OF SEPARATE AND DISTINCT IDENTITY FAILING MERELY BECAUSE THE NEW UNDERTAKING WAS DEPE NDENT ON THE EXISTING ONE, THE COURT OPINED THAT IT ALL DEPENDS ON THE NATURE OF TECHNICALITY AND THE MECHANISM OF PRODUCTION. IN THE LATER PORTION OF TH E JUDGMENT, THE COURT OBSERVED THAT THE TRUE TEST IS NOT WHETHER THE NEW INDUSTRIAL UND ERTAKING CONNOTES EXPANSION OF THE EXISTING BUSINESS OF THE ASSESSEE BUT WHETHER IT IS A NEW IDENTIFIABLE ENDEVOUR WHERE SUBSTANTIAL INVESTM ENT OF FRESH CAPITAL IS MADE TO ENABLE EARNING OF PROFIT ATTRIBUTABLE TO THAT NE W CAPITAL. 16. IT CAN THUS, BE SEEN THAT THE HIGH COURT IN CAS E OF GUJARAT ALKALIES AND CHEMICALS LTD. (SUPRA) WHILE LAYING DOWN CERTAIN BROAD PROPOSITION S FOR ASCERTAINING WHETHER A NEW INDUSTRIAL UNDERTAKING I N THE GIVEN SET OF FACTS WAS ESTABLISHED, DID NOT LAY DOWN RATIO WHICH CAN BE ST RAIGHTWAY APPLIED TO THE FACTS OF THE PRESENT CASE. IN THE PRESENT CASE, THE VIEW ADOPTED BY THE REVENUE AUTHORITIES WHICH WAS UPHELD BY THE TRIBUNAL WAS TH AT BY MERE INSTALLATION OF TURBINES, THE ASSESSEE DID NOT INSTALL A NEW INDUST RY, SINCE TURBINES THEMSELVES WOULD NOT BE SUFFICIENT FOR POWER GENERATION, WITHO UT GENERATION OF STEAM. WHEN THE HIGH COURT IN CASE OF GUJARAT ALKALIES AND CHEM ICALS LTD. (SUPRA) REFERRED TO THE ISSUE DEPENDING ON THE NATURE OF TECHNOLOGY AND MECHANISM OF PRODUCTION, IT LEFT THIS QUESTION OPEN TO BE JUDGED CASE SPECIFIC. THIS WAS THEREFORE NOT A CASE WHERE BY VIRTUE OF THE JUDGMENT OF THE CASE OF HIGH COURT IN CASE OF GUJARAT ALKALIES AND CHEMICALS LTD. (SUPRA), IT CAN BE STATED THAT THE TRIBUNAL HAD COMMITTED AN ERROR APPARENT ON RECORD WHICH NEEDED RECTIFICATION. AT BEST, THE HIGH COURT PROPOUNDED THAT MERE DEPENDENCE OF A NEW INDUSTRY ON AN EXISTING INDUSTRY, WOULD NOT DISQUALIFY ITSELF FROM CLAIMING DEDUCTION. 17. IN THE RESULT, RESPECTIVE ORDERS OF THE TRIBUNA L DATED 11.05.2012 AND 22.03.2013 ARE SET ASIDE. QUESTION ANSWERED IN FAVO UR OF THE REVENUE. TAX APPEALS DISPOSED OF ACCORDINGLY. 3. SINCE THE FINDING WHICH HAS RESTORED GROUND NO.3 FOR RE- ADJUDICATION HAS ALREADY BEEN SET ASIDE, THEREFORE, THERE IS NOTHING FOR THIS BENCH TO DECIDE. THIS APPEAL ON RESTITUTIO N VIDE M.A. NO.324/AHD/2008 FOR GROUND NO.3 HAS BECOME REDUNDAN T BECAUSE HONBLE HIGH COURT HAS VACATED THE ALLEGED RESTITUT ION ORDER. THEREFORE, WE NEED NOT TO RECORD ANY FINDING AND TH E ORDER DATED 16.5.2008 PASSED BY THE TRIBUNAL STANDS RESTORED. ITA NO. 3528/AHD/2004 ASST. YEAR 2001-02 8 4. IN VIEW OF THE ABOVE, THIS FILE IS RETURNED TO T HE REGISTRY FOR CONSIGNING TO THE RECORD ROOM. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH SEPTEMBER, 2016 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 20/9/2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 206/09/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 20/09/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 21/9/2016 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: