Akshar Chem(India) Ltd, Ahmedabad V. Pr.Commissioner of Income Tax-1, Ahmedabad

ITA 809/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1353 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-04-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 08-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH
• Keywords: Opportunity of being heard
• Section: 143(3); 142(1); 14A; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NO. 809/AHD/2015 / ASSESSMENT YEAR: 2010-11 AKSHARCHEM (INDIA) LTD., C/O. SKYJET AVIATION PVT. LTD., 36, VAKIL CHAMBERS, MIRZAPUR, AHMEDABAD-380 025 PAN : AABCA 2805 M VS PRINCIPAL COMMISSIONER OF INCOME-TAX-1, AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE(S) BY : SHRI SUNIL TALATI, CA REVENUE BY : SHRI JAGDISH, CIT-DR / DATE OF HEARING : 25/04/2016 /DATE OF PRONOUNCEMENT: 03/06/2016 / O R D E R PER ANIL CHATURVEDI, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME-TAX-1, AHMEDABAD DATED 02.0 3.2015 PASSED U/S.263 OF THE ACT FOR ASSESSMENT YEAR 2010-11. 2. FACTS OF THE CASE FOR AY AS CULLED OUT FROM THE RELEV ANT MATERIAL ARE AS UNDER:- 2.1. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BU SINESS OF MANUFACTURING OF DYES AND PIGMENTS AND FILED ITS RETUR N OF INCOME FOR AY 2010-11 ON 28/09/2010 DECLARING TOTAL INCOME AT RS.NIL. THE CAS E WAS SELECTED FOR SCRUTINY ASSESSMENT AND THEREAFTER THE AO FRAMED ASSESSMENT ORDER U/S.143(3) VIDE ORDER DATED 01/03/2013 AND THE TOTAL TAXAB LE INCOME ITA NO. 809/AHD/2015 AKSHAR CHEMICALS (I) LTD VS. PRI. CIT FOR AY 2010-11 - 2 - WAS DETERMINED AT RS.NIL. SUBSEQUENTLY, ON EXAMINING TH E RECORDS OF ASSESSMENT, THE LD.CIT NOTICED THAT THE ASSESSEE HAD UNU TILIZED BALANCE OF CENVAT CREDITS IN THE BALANCE-SHEET UNDER THE LOANS AND ADVANCES WHICH ACCORDING TO HIM SHOULD HAVE BEEN INCLUDED IN THE CL OSING STOCK U/S.145A OF THE I.T.ACT, 1961. HE ALSO NOTED THAT ASSESSEE HAD INC URRED EXPENDITURE BY WAY OF INTEREST WHICH WAS NOT DISALLOWED AS PER SE CTION 14A OF THE ACT R.W.RULE 8D OF THE IT RULES, 1962. HE WAS, THEREFORE, OF THE VIEW THAT THE ASSESSMENT ORDER PASSED BY AO U/S.143(3) OF THE ACT WAS ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. HE, ACCORDI NGLY, ISSUED A NOTICE DATED 09/02/2015 AND CALLED UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY APPROPRIATE ORDER U/S.263 OF THE ACT NOT BE PASSED. IN RESP ONSE TO THE AFORESAID NOTE, ASSESSEE INTER-ALIA OBJECTED TO THE INITI ATION OF THE PROCEEDINGS U/S.263 OF THE ACT AND ON MERITS SUBMITTED THAT NO ERROR WAS COMMITTED BY THE AO WHILE COMPUTING THE ASSESSMENT. THE SUBMISSIONS OF THE ASSESSEE WERE NOT FOUND ACCEPTABLE TO THE LD.CIT. H E WAS OF THE VIEW THAT IN TERMS OF PROVISIONS OF SECTION 145A OF THE ACT , THE CLOSING BALANCE AS RS.8,58,547/- IN THE CENVAT CREDIT WAS REQUIRED TO BE INCLUDE D AS PART OF CLOSING STOCK AND NON-INCLUSION OF IT, WHILE VALUING CLOSING STOCK HAS RESULTED INTO SHOWING GROSS PROFIT LESS TO THAT EXTE NT. WITH RESPECT TO DISALLOWANCE U/S.14A OF THE ACT R.W. RULE 8D, HE WAS OF THE VIEW THAT WHILE WORKING OUT THE DISALLOWANCE, THE ASSESSEE HAS CONSIDERE D INTEREST- EXPENDITURE AT RS.1,17,42,953/- AS AGAINST RS.1,20,43,086/-. HE WAS OF THE VIEW THAT THE AO HAS SIMPLY ACCEPTED THE SUBMISSIONS OF THE ASSESSEE AND FAILED TO MAKE ANY ENQUIRY WHICH WAS REQUIRED TO BE MADE BY HIM. HE WAS, THEREFORE, OF THE VIEW THAT THE ORDER PASSED BY THE AO WAS WITHOUT ANY PROPER ENQUIRY AND INVESTIGATION AND WAS THEREFORE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCOR DINGLY CANCELLED THE ASSESSMENT ORDER PASSED U/S.143(3) DATED 01/02/2013 AND DIRECTED THE AO ITA NO. 809/AHD/2015 AKSHAR CHEMICALS (I) LTD VS. PRI. CIT FOR AY 2010-11 - 3 - TO MAKE AFRESH ASSESSMENT. AGGRIEVED BY THE AFORESAID ORDER OF THE LD.CIT, ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING G ROUNDS:- 1. THE LEARNED PR. C.I.T. HAS ERRED IN PASSING ORDER U/S 263 WI THOUT JURISDICTION AND APPROPRIATE POWERS AVAILABLE UNDER THE A CT. IT IS SUBMITTED THAT THE ORDER PASSED U/S 263 IS BAD IN LAW, VOID AB INITIO A ND THE SAME BE DELETED. 2. WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THAT THE ORDER PASSED U/S 263 OF THE I.T. ACT IS NOT CORRECT ON FACTS AND IN LAW INASMUCH AS THE ORIGINAL ORDER PASSED U/S 143(3) WAS NEITHER PREJUDICED TO THE INTEREST OF REVENUE NOR IT WAS ERRONEOUS. IT IS SUBMITTED THAT THE F INDING GIVEN BY THE LEARNED C.I.T. IS NOT CORRECT ON THE FACTS AND FAR FROM TRUTH. IT BE SO HELD NOW. 3. THE LEARNED PR. C.I.T. HAS ERRED IN HOLDING THAT ASSESSEE CO MPANY HAS FOLLOWING THE EXCLUSIVE METHOD OF ACCOUNTING AND HAD NOT TAKEN INTO A CCOUNT UNUTILIZED BALANCE OF CENVAT CREDIT IN TERMS OF SECTI ON 145A OF THE ACT AND THUS UNDERSTATING THE PROFIT BY NOT INCLUDING IT IN CLOSING STOCK. THE LD. PR. C.I.T. HAS NOT CONSIDERED THE EXPLANATIONS/SUBMISSIO NS FURNISHED BY YOUR APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDI NGS AS WELL AS PROCEEDINGS BEFORE HIM IN TRUE PERSPECTIVE. IT IS SUB MITTED THAT THE VIEW SO TAKEN OF HOLDING THE ASSESSMENT ORDER PASSED BY A.O. AS ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE IS INCORRECT AN D ILLEGAL AND ACCORDINGLY THE DIRECTION TO SET ASIDE THE ORIGINAL ASSESSMENT ORDE R AND PASSING THE FRESH ASSESSMENT ORDER BE CANCELLED. IT BE SO HELD NOW. 4. THE LEARNED PR. C.I.T. HAS ERRED IN HOLDING THAT ASSESSEE COMPANY HAS NOT WORKED OUT THE CORRECT DISALLOWANCE AS PER SECTION 14A OF THE ACT R.W.R. 8D OF THE IT RULES. IT IS SUBMITTED THAT THE VIEW SO TAKEN O F HOLDING THE ASSESSMENT ORDER PASSED BY A.O. AS ERRONEOUS AND PREJUDICI AL TO THE INTEREST OF REVENUE IS INCORRECT AND ILLEGAL AND ACCORDINGLY THE DIRECTION TO SET ASIDE THE ORIGINAL ASSESSMENT ORDER AND PASSING THE FRESH ASSE SSMENT ORDER BE CANCELLED. IT BE SO HELD NOW. 5. THE ORDER PASSED BY THE LEARNED PR. C.I.T. IS BAD IN LAW AND C ONTRARY TO THE PROVISIONS OF LAW AND FACTS. IT IS SUBMITTED THAT THE SAME BE HELD SO NOW. 6. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER AND/OR TO AMEND ALL OR ANY OF THE GROUNDS BEFORE THE FINAL HEARING. ITA NO. 809/AHD/2015 AKSHAR CHEMICALS (I) LTD VS. PRI. CIT FOR AY 2010-11 - 4 - 3. BEFORE US, LD.AR AT THE OUTSET SUBMITTED THAT THE ISS UE IN THE PRESENT APPEAL IS INVOKING OF REVISIONARY PROCEEDINGS U/S.263 OF THE ACT AS THE REQUIRED CONDITIONS ARE NOT FULFILLED. BEFORE US, LD.AR REITERATED THE SUBMISSIONS MADE BEFORE THE LD.CIT AND SUBMITTED THAT I N THE PRESENT CASE THE PRE-REQUISITE CONDITIONS SPECIFIED U/S.263 OF THE A CT WERE NOT FULFILLED AND, THEREFORE, THE PROCEEDINGS U/S.263 OF THE ACT LACKS J URISDICTION AND ARE BAD IN LAW. WITH RESPECT TO THE NON-INCLUSION OF UNUTI LIZED BALANCE OF CENVAT CREDIT U/S.145A OF THE ACT, HE SUBMITTED THAT THE AS SESSEE WAS FOLLOWING EXCLUSIVE METHOD OF ACCOUNTING UNDER WHICH THE EXCISE DUTY PAID ON THE PURCHASE ON RAW-MATERIALS AND COMPONENTS W AS HELD AS ADVANCE, I.E. AS MODVAT CREDIT. THE EXCISE DUTY RECEIVABLE WAS ADJUSTED AGAINST EXCISE DUTY PAYABLE AT THE TIME OF CLEARANCE OF FI NISHED GOODS MANUFACTURED BY ASSESSEE AND THIS MODVAT CREDIT DID NOT FORM PART OF COST OF PURCHASE. HE FURTHER SUBMITTED THAT SINCE TH E VALUATION OF THE STOCK WAS AT COST, THE EFFECT OF MODVAT CREDIT WHICH IS NOT A PART OF COST WAS NOT INCLUDED IN THE SAID STOCK. HE FURTHER PLACED RELIANCE ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. INDO NIPPON CHEMICALS CO.LTD. REPORTED AT (2003) 261 ITR 275 (SC) AND SUBMITTED THAT MODVAT CREDIT CANNOT BE CONSIDERED AS INCOME OF THE ASSESSEE. WITH R ESPECT TO THE DISALLOWANCE U/S.14A OF THE ACT, HE SUBMITTED THAT THE ASSESSEE HAD CONSIDERED THE NET INTEREST FOR THE PURPOSE OF DISA LLOWANCE. HE FURTHER SUBMITTED THAT THE AO WHILE FRAMING THE ASSESSMENT OR DER HAD RAISED SPECIFIC QUERIES AND AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE AND APPLICATION OF MIND, THE ISSUE WAS DECIDED BY AO. HE ALSO POINTED OUT COPY OF THE NOTICES ISSUED U/S.143(2) AND 142(1) OF THE ACT WHICH WERE PLACED AT PAGE NO.14 OF THE PAPER-BOOK OF THE ASSESSEE. HE SUBMITTED THAT SINCE THE ISSUE HAS BEEN EXAMINED BY THE AO, CIT CANNO T RESORT TO REVISIONARY PROCEEDINGS U/S.263 OF THE ACT. HE FURTHER SUBMITTED THAT THE ITA NO. 809/AHD/2015 AKSHAR CHEMICALS (I) LTD VS. PRI. CIT FOR AY 2010-11 - 5 - ERROR ENVISAGED BY SECTION 263 OF THE ACT SHOULD BE AN ACTUAL ERROR EITHER OF FACTS OR OF A LAW AND WHEN TWO VIEWS ARE POSSIBLE AND AO HAS TAKEN ONE VIEW WITH WHICH CIT DOES NOT AGREE, THE ORDER OF THE AO CANNOT BE TREATED AS ERRONEOUS AND TO THE PREJUDICIAL TO THE INTERESTS OF REVENUE UNLESS THE VIEW TAKEN BY THE AO IS UNSUSTAINABLE IN LAW AND FOR TH IS PROPOSITION HE RELIED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO.LTD. VS. CIT REPORTED AT (2000) 243 ITR 83 (SC). HE ALSO PLACED RELIANCE ON THE DECISION OF THE COORDINATE BENC H IN THE CASE OF CADILA HEALTHCARE LTD. AND PLACED ON RECORD THE COPY OF T HE AFORESAID DECISION. HE THEREFORE SUBMITTED THAT ORDER PASSED BY CIT U/S.263 OF THE ACT BE QUASHED. ON THE OTHER HAND, LD.CIT-DR SUPPORTE D THE ORDER OF THE AO AND SUBMITTED THAT WHEN THE AO HAS ALLOWED THE CLAIM OF THE ASSESSEE WITHOUT ANY DISCUSSION, THE ORDER PASSED BY THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. HE TH US SUPPORTED THE ORDER OF CIT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS ABOVE THE INVOKING O F PROVISIONS OF SECTION 263 BY CIT. 5. S. 263(1) OF THE ACT, THE POWERS UNDER WHICH CIT HAS ASSUMED POW ER FOR REVISION READS AS UNDER: THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF A NY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREI N BY THE ITO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF T HE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREO N AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MO DIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. ITA NO. 809/AHD/2015 AKSHAR CHEMICALS (I) LTD VS. PRI. CIT FOR AY 2010-11 - 6 - 6. THE READING OF THE ABOVE PROVISIONS MAKES IT VERY C LEAR THAT THE POWER OF SUO MOTU REVISION U/S 263(1) IS IN THE NATURE OF SUPE RVISORY JURISDICTION AND THE SAME CAN BE EXERCISED ONLY IF THE CIRCUMSTANCE S SPECIFIED THEREIN EXIST. TWO CIRCUMSTANCES MUST EXIST TO ENABLE THE COM MISSIONER TO EXERCISE POWER OF REVISION U/S 263, NAMELY (I) THE ORDER IS ERRO NEOUS (II) BY VIRTUE OF BEING ERRONEOUS PREJUDICE HAS BEEN CAUSED TO THE INTERESTS O F THE REVENUE. 7. HBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO LTD VS CIT (2000) 243 ITR 83 (SC) HAS HELD THAT CIT HAS TO BE SATISFIED O F TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE AO SOUGHT T O BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENTIF THE ORDER OF THE ITO IS ERRONEOUS B UT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUD ICIAL TO THE REVENUE RECOURSE CANNOT BE HAD TO S. 263(1). IT WAS FURTHER HELD THA T THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MI STAKE OR ERROR COMMITTED BY THE AO; WHEN AN ITO ADOPTED ONE OF THE CO URSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE; OR WHER E TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDI CIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINA BLE IN LAW. 8. IN THE PRESENT CASE, IT IS SEEN THAT SECTION 263 OF THE ACT HAS BEEN INVOKED ON TWO GROUNDS; NAMELY, (I) NON-INCLUSION OF MODVAT CREDIT TO THE CLOSING STOCK AND (II) THE DISALLOWANCE U/S.14A R.W .RULE 8-D OF I.T. RULES, 1962. ON THESE ISSUES, WE FIND THAT THE AO HAD RAISED SPECIFIC QUERY IN THE NOTICE ISSUED U/S.142(1) OF THE ACT. THE QUERIES RAISED BY THE AO WERE REPLIED BY THE ASSESSEE AND THESE DETAILS ALSO FO RMED PART OF THE TAX AUDIT REPORT THAT WERE FILED BY THE ASSESSEE BEFORE AO. THUS, IT CAN BE ITA NO. 809/AHD/2015 AKSHAR CHEMICALS (I) LTD VS. PRI. CIT FOR AY 2010-11 - 7 - SEEN THAT AFTER MAKING THE NECESSARY QUERIES WITH RESPE CT TO THE ISSUES UNDER CONSIDERATION AND ON RECEIVING REPLIES FROM THE ASSESSEE, THE AO WAS SATISFIED WITH THE SUBMISSION OF ASSESSEE AND, THEREFO RE NO ADDITIONS WERE MADE BY THE AO. WE FIND THAT THE HONBLE APEX COURT IN THE CASE OF CIT VS. MAX INDIA LTD. REPORTED AT (2007) 295 ITR 282(SC) HAS HELD TH AT WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW W ITH WHICH CIT DOES NOT AGREE, THE ORDER OF THE AO CANNOT BE TREATED AS ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE ITO IS SUSTAINABLE IN LAW. WE ALSO LIKE TO REFER TO THE DE CISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GABRIAL INDIA LTD. REPORTED AT (1993) 203 ITR 108 (BOM), WHEREIN THE HIGH COURT HAS HELD AS UNDER:- AN ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WI TH LAW. IF AN ITO ACTING IN ACCORDANCE WITH LAW MAKES CERTAIN ASSESSMENT, T HE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE ACCORDING TO HIM THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY. THI S SECTION DOES NOT VISUALISE A CASE OF SUBSTITUTION OF JUDGMENT OF TH E COMMISSIONER FOR THAT OF THE ITO, WHO PASSED THE ORDER, UNLESS THE D ECISION IS HELD TO BE ERRONEOUS. CASES MAY BE VISUALISED WHERE ITO WHILE M AKING AN ASSESSMENT EXAMINES THE ACCOUNTS, MAKES ENQUIRIES, APPLIES HIS MIND T O THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME EIT HER BY ACCEPTING THE ACCOUNTS OR BY MAKING SOME ESTIMATES HIMSELF. THE COMMISSIONER, ON PERUSAL OF THE RECORDS, MAY BE OF THE OPINION THAT THE ESTIMATE MADE BY THE OFFICER CONCERNED WAS ON THE LOWER SIDE AND, LEFT TO THE COMMISSIONER, HE WOULD HAVE ESTIMATED THE INCOME AT A HIGHER FIGURE THAN THE ONE DETERMINED BY THE ITO. THAT WOULD NOT VEST THE COMMISSIONER WITH POWER TO RE-EXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIMSELF AT A HIGHER FIGURE. IT IS BECAUSE THE ITO HAS EXERCISED THE QUASI-JUDICIAL POWER VESTED IN HIM IN ACCORDANCE WITH LAW AND ARRIVED AT A CONCLUSION AND SUCH A CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER DOES NOT FEEL SATISFIED WITH THE CONCLUSION. IT MAY BE S AID IN SUCH A CASE THAT IN THE OPINION OF THE COMMISSIONER THE ORDER IN QUESTION I S PREJUDICIAL TO THE INTEREST OF THE REVENUE. BUT THAT BY ITSELF WILL NOT BE ENOUGH TO VEST THE COMMISSIONER WITH THE POWER OF SUO MOTU REVISION BECAUSE THE FIRST REQUIREMENT, NAMELY, THE ORDER IS ERRONEOUS, IS ABS ENT. SIMILARLY IF AN ORDER IS ERRONEOUS BUT NOT PREJUDICIAL TO THE INTERES T OF THE REVENUE, THEN ALSO THE POWER OF SUO MOTU REVISION CANNOT BE EXERCISED. ANY ITA NO. 809/AHD/2015 AKSHAR CHEMICALS (I) LTD VS. PRI. CIT FOR AY 2010-11 - 8 - AND EVERY ERRONEOUS ORDER CANNOT BE SUBJECT-MATTER OF REVISION BECAUSE THE SECOND REQUIREMENT ALSO MUST BE FULFILLED. 9. FURTHER ON THE ISSUE OF CONSIDERING MODVAT CREDIT AS INCOME, WE FIND THAT THE HONBLE APEX COURT IN THE CASE OF CIT VS. INDO NIPPON CHEMICALS CO.LTD.(SUPRA) HAS HELD THAT UNAVAILED MODVAT CR EDIT CANNOT BE CONSTRUED AS INCOME AND THERE IS NO LIABILITY TO PAY TAX ON SUCH MODVAT CREDIT. 10. BEFORE US, REVENUE HAS NOT BROUGHT ANY MATERIAL RECO RD TO DEMONSTRATE THAT THE VIEW TAKEN BY THE AO WAS AN IMPERM ISSIBLE VIEW AND WAS CONTRARY TO LAW OR WAS UPON ERRONEOUS APPLICATIONS OF LEGAL PRINCIPLES NECESSITATING THE EXERCISING OF REVISIONARY POWER U/S .263 OF THE ACT. IN VIEW OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT IN T HE PRESENT CASE LD.CIT WAS NOT JUSTIFIED IN RESORTING TO REVISIONARY P OWERS U/S.263 OF THE ACT. WE THEREFORE SET ASIDE THE ORDER OF CIT CANCELLIN G THE ORDER OF THE AO DATED 01/03/2013 PASSED U/S.143(3)OF THE ACT. THUS, THIS GROUND ASSESSEES APPEAL IS ALLOWED. 11 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 03 RD JUNE, 2016 AT AHMEDABAD. SD/- SD/- (S.S. GODARA) JUDICIAL MEMBER (ANIL CHATURVEDI) ACCOUNTANT MEMBER AHMEDABAD; DATED 03 / 06 /2016 .. ,. ../ T.C. NAIR, SR. PS ITA NO. 809/AHD/2015 AKSHAR CHEMICALS (I) LTD VS. PRI. CIT FOR AY 2010-11 - 9 - !'#'$ / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $% & / CONCERNED CIT 4. & ( ) / THE CIT-I, AHMEDABAD 5. )*+' % , % , $ / DR, ITAT, AHMEDABAD 6. +/0 / GUARD FILE. / BY ORDER, #)' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION ..25.5.16 (DICTATION-PAD 18+ PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 12.5.16/17.5.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S .. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.6.6.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 6.6.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER