The ACIT, Central Circle-1(1), Ahmedabad V. Sadbhav Engineering Ltd., Ahmedabad

MA 140/AHD/2014

AI Insights

The case involves multiple Miscellaneous Applications (MAs) filed by the Revenue against Sadbhav Engineering Ltd. concerning the eligibility for deductions under sections 80IA and 80IB of the Income Tax Act for the assessment years 2005-06, 2006-07, and 2007-08. The Revenue contended that the ITAT's earlier decision, which allowed these deductions without setting off losses from other eligible units, was erroneous based on a judgment by the Hon'ble Gujarat High Court. However, the Tribunal noted that the issue was already pending before the High Court and had been admitted, which precluded the Tribunal from revisiting the matter under the provisions of section 254(2).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135668 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 year(s) 8 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-05-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-03-2023
• Assessment Year: 2006-2007
• Appeal Filed On: 03-09-2014
• Other Referred Cases: M/s Shriram Properties Pvt Ltd. vs. ACIT, Sintex Industries Ltd vs. ACIT, CIT Vs. Muni Seva Ashram
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Question of law; Unabsorbed depreciation
• Section: 80IB; 80IA; 254(2)

Judgement Text

आयकर आयकरआयकर आयकर अपी अपीअपी अपीलीय लीयलीय लीय अिधकरण अिधकरणअिधकरण अिधकरण, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद 瀈यायपीठ 瀈यायपीठ瀈यायपीठ 瀈यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A’’ BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND Ms. MADHUMITA ROY, JUDICIAL MEMBER Sr.No. M.A No/ITA(s). Asstt. Year Name of Appellant Name of Respondent 1. M.A No.139/Ahd/2014 in ITA No.610/Ahd/2008 2005-06 A.C.I.T, Central Circle-1(1), Ahmedabad Sadbhav Engineering Ltd., Sadbhav House, Opp. Law garden Police Chowki, Ellis Bridge, Ahmedabad. PAN : AADCS0852Q 2. M.A No.140/Ahd/2014 in ITA No.1834/Ahd/2009 2006-07 A.C.I.T, Central Circle-1(1), Ahmedabad Sadbhav Engineering Ltd., Ahmedabad. PAN : AADCS0852Q 3. M.A No.141/Ahd/2014 in ITA No.2054/Ahd/2009 2006-07 A.C.I.T, Central Circle-1(1), Ahmedabad Sadbhav Engineering Ltd., Ahmedabad. PAN : AADCS0852Q 4. M.A No.142/Ahd/2014 in ITA No.1835/Ahd/2009 2007-08 A.C.I.T, Central Circle-1(1), Ahmedabad Sadbhav Engineering Ltd., Ahmedabad. PAN : AADCS0852Q 5. M.A No.143/Ahd/2014 in ITA No.2055/Ahd/2009 2007-08 A.C.I.T, Central Circle-1(1), Ahmedabad Sadbhav Engineering Ltd., Ahmedabad. PAN : AADCS0852Q (Applicant) (Responent) Revenue by : Shri Atul Pandey, Sr. DR Assessee by : Shri Dhinal Shah, A.R सुनवाई क琉 तारीख/D a t e o f H e a r i n g : 1 7 / 0 3 / 2 0 2 3 घोषणा क琉 तारीख /D a t e o f P r o n o u n c e m e n t : 1 2 / 0 5 / 2 0 2 3 आदेश आदेशआदेश आदेश/O R D E R M.A No.139/Ahd/2014 in ITA No.610/Ahd/2008 and 4 others A.Y. 2005-06 2 PER WASEEM AHMED ACCOUNTANT MEMBER: This bunch of 5 MA’s is directed at the instance of Revenue against the common order of ITAT dated 19-12-2013 in 5 appeals in case of M/s Sadbhav Engineering Ltd. on the reasoning that there are mistakes apparent from record. At the outset, we note that the grounds raised in different MA’s by the Revenue are involving identical issues raised therein. Therefore, for the sake of brevity and convenience, we have decided to adjudicate MA No. 139/AHD/2014 in ITA No. 610/AHD/2008 taking it as a lead case. However, the finding given in such MA will apply to all other MAs filed by the Revenue in different assessment years. 2. The Revenue in these miscellaneous applications have pointed out certain errors in the order of the ITAT which as per the revenue are apparent from record. It was pointed out that the ITAT in its order held that the assessee is eligible for deduction under section 80IB of the Act on the profit of an eligible unit without setting of loss from another eligible unit. In holding so, the ITAT has relied on the judgement of Chennai Bench of Tribunal in case of M/s Shriram Properties Pvt Ltd. vs. ACIT reported in 36 taxmann.com 398. However, the finding given by the Chennai Tribunal found to be erroneous in view of judgment of Hon’ble Gujarat High Court in case Sintex Industries Ltd vs. ACIT reported in [2013] 37 taxmann.com 217 (Gujarat). In this case, the Hon’ble Gujarat High Court held that while considering the gross total income of the assessee, the deduction under section 80IA and 80IB of the Act, are required to be allowed after adjusting loss of other units. In view of the above, the learned DR before us contended that the order of the ITAT suffers from apparent mistakes and therefore, the same needs to be recalled within the provisions of section 254(2) of the Act. 3. On the other hand, the learned AR for the assessee before us, inter-alia, contended that the issue raised by the Revenue is pending for adjudication before the Hon’ble Gujarat High Court in the own case of the assessee in the earlier year. M.A No.139/Ahd/2014 in ITA No.610/Ahd/2008 and 4 others A.Y. 2005-06 3 According to the ld. AR, once, the issue has been admitted by the Hon’ble Gujarat High Court, the same cannot be agitated in MA. 4. We have duly considered the rival contentions and gone through the records carefully. It is settled position of law that power for rectification under section 254(2) of the Act can be exercised only when mistake, which is sought to be rectified, is an obvious and patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions. 4.1 Before we adjudicate the issue raised by the revenue, we find that the Revenue on the same issue has challenged the order of the ITAT passed in the own case of the assessee before the Hon’ble Gujarat High Court in tax appeal No. 876 of 2014 which has also been admitted vide order dated 25 th August 2014. The relevant order of the Hon’ble Gujarat High Court admitting the appeal filed by the revenue is available on record and the relevant question is extracted below: “Whether on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal is right in holding that in a case having multiple eligible undertakings as well as non-eligible undertakings, a particular eligible industrial undertaking is qualified for deduction under section 80IA of the Income Tax Act,1961 without regard to the provisions of section 80AB?” 4.2 Thus, once the same question, raised by the Revenue in MA has been admitted by the Hon’ble Gujarat High Court, the ITAT has no power to entertain the same. We find that the Hon’ble Gujarat High Court in the case of CIT Vs. Muni Seva Ashram reported in (2013) 38 Taxmann.Com 110 (Guj) has held that when appeal has been filed before the Hon’ble High Court and the appeal is admitted and substantial question of law has been framed in the said appeal, then the Tribunal cannot recall the order. The relevant portion of the order reads as under: M.A No.139/Ahd/2014 in ITA No.610/Ahd/2008 and 4 others A.Y. 2005-06 4 6. In view of the above stand taken by the learned counsel appearing on behalf of the respondent - assessee recorded hereinabove, more particularly when against the impugned judgement and order dtd. 11/7/2008 passed in ITA No.633/Ahd/2008, which has been recalled subsequently by the ITAT, Tax Appeal No.1231 of 2008, was already admitted on the substantial questions of law framed in the said appeal, impugned orders cannot be sustained. 7. In view of the above stand taken by the learned counsel appearing on behalf of the respondent - assessee, recorded hereinabove, we are not passing any further reasoned order. 4.3 Considering the totality of the facts involved in the present case and in view of the decision cited hereinabove, we are of the view that in the present case since the appeal against the order of the Tribunal has already been admitted and a substantial question of law has been framed by the Hon'ble High Court, the Tribunal cannot proceed with the Miscellaneous Application u/s 254(2) of the Act. 4.4 Before parting, it is also important to note that the ld. DR was given time till 5 th April 2023 for submitting the report, if any, vide order sheet entry dated 17- 03-2023. The relevant extract of the order sheet entry is reproduced below: “Upon the conclusion of the arguments in length advanced by the Ld. Counsel for the assessee, the Ld. DR sought time to get the report from the AO whether the issue raised in the Miscellaneous Application is pending before the Hon’ble Gujarat High Court i.e. setting off the losses of the non- eligible units against the income of the units eligible for deduction under chapter VIA of the Act. Admittedly, these Miscellaneous Applications were instituted by the Department way back in the year 2014 and substantial time has already been lapsed from the filing of these Miscellaneous Applications. Thus, considering the time already lapsed, we are not inclined to adjourn the matter further. However, in the Interest of Justice and fair play, the Ld. DR is directed to file the written submission by 05/04/2023, and the MA shall be disposed off after considering such submission to be filed by the Ld. DR otherwise the M.As filed by the Revenue shall be disposed off on the basis of materials available on record. With this observation, the hearing of all the Miscellaneous Applications are concluded.” 4.4 However, the report was filed dated 17-4-2023 vide letter dated 12-04- 2023 by the ld. DR which is available on record. The relevant extract of the report is reproduced as under: M.A No.139/Ahd/2014 in ITA No.610/Ahd/2008 and 4 others A.Y. 2005-06 5 “2. With regard to the above cited subject and the above referred letter, undersigned is as under: 2.1 Vide order dated 19.12.2013 passed in ITA No. 610/Ahd/2008 in the case of above assessee for AY 2005-06, relief was granted to the assessee on the issue of allowability of deduction u/s 80IA of the Act. While deciding the said issue, the Hon’ble ITAT relied upon the decision of Chennai Bench of the Tribunal in the case of M/s. Shriram Properties Pvt. Ltd. Vs. ACIT wherein it was held that the profit derived from a particular eligible industrial undertaking is qualified for deduction u/s 80IB/80IA without reduction of loss suffered by any other eligible undertaking. However, in the decision of the Hon’ble High Court of Gujarat in the case of Sintex Industries Ltd vs ACIT, it was held that while considering the gross total income, deduction u/s 80IA and 80IB of the Act are required to allowed after adjusting loss incurred in other units. The Hon’ble High Court also held that deduction under chapter VI A would be available only if computation of gross total income after setting-off of carried forward unabsorbed depreciation of earlier years is not NIL. 2.2 In view of the above, it was seen that the order of the Hon’ble ITAT was erroneous and hence, the Miscellaneous Application was filed by this office after taking authorization from the CIT, Central-1, Ahmedabad. Therefore, it is humbly requested that the M.A may be decided on merits. 4.5 However, on perusal of the report, it was noticed that there was no response to the query raised by the Bench as reproduced in the earlier paragraph. Thus, it appears that the Revenue has nothing to say to controvert the argument advanced by the ld. AR of the assessee. In view of the aforesaid facts and following the decision cited above, the Miscellaneous Application u/s 254(2) of the Act seeking rectification in the order of Tribunal is hereby dismissed, being not maintainable. 4.6 In the result, the MA filed by the Revenue is hereby dismissed. 5. Now coming to the other four Miscellaneous Application filed by the revenue against their respective Assessment years. M.A No.139/Ahd/2014 in ITA No.610/Ahd/2008 and 4 others A.Y. 2005-06 6 Sr.No. M.A No(s) A.Y 1. M.A No.140/Ahd/2014 in ITA No.1834/Ahd/2009 2006-07 2. M.A No.141/Ahd/2014 in ITA No.2054/Ahd/2009 2006-07 4. M.A No.142/Ahd/2014 in ITA No.1835/Ahd/2009 2007-08 5. M.A No.143/Ahd/2014 in ITA No.2055/Ahd/2009 2007-08 6. At the outset, we note that the issues raised by the revenue in the above- mentioned Miscellaneous Applications in their respective Assessment Years bearing MA Nos. 140 to 143/Ahd/2014 are identical to the issues raised by the Revenue in the Miscellaneous Application No. 139/Ahd/2014 in (ITA No. 610/Ahd/2014) for AY 2005-06. Therefore, the findings given in MA No. 139/Ahd/2014 shall also be applicable to the above-mentioned MA Nos. 141 to 143/Ahd/2014. The Miscellaneous Application of the revenue in M.A No. 139/Ahd/2014 has been decided by us vide paragraph No.4 of this order in favour of the assessee and against the revenue. The learned AR and the DR also agreed that whatever will be the findings for the M.A No. 139/Ahd/2014 for A.Y. 2005-06 shall also be applied for the other MA Nos. 140 to 143/Ahd/2014 also. Hence, the Miscellaneous Applications filed by the revenue are hereby dismissed. 6.1 In the result, the four MA’s filed by the Revenue are hereby dismissed. 7. In the combined result, all the Miscellaneous Application filed by the Revenue are hereby dismissed. Order pronounced in the Court on 12/05/2023 at Ahmedabad. Sd/- Sd/- (MADHUMITA ROY) JUDICIAL MEMBER (WASEEM AHMED) ACCOUNTANT MEMBER Ahmedabad; Dated 12/05/2023 Manish M.A No.139/Ahd/2014 in ITA No.610/Ahd/2008 and 4 others A.Y. 2005-06 7 आदेश आदेशआदेश आदेश क琉 क琉क琉 क琉 灹ितिलिप 灹ितिलिप灹ितिलिप 灹ितिलिप अ灡ेिषत अ灡ेिषतअ灡ेिषत अ灡ेिषत/Copy of the Order forwarded to : 1. अपीलाथ牸 / The Appellant 2. 灹瀄यथ牸 / The Respondent. 3. संबंिधत आयकर आयु猴 / Concerned CIT 4. आयकर आयु猴(अपील) / The CIT(A) 5. िवभागीय 灹ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड榁 फाईल / Guard file. आदेशानुसार आदेशानुसारआदेशानुसार आदेशानुसार/ BY ORDER, उप उपउप उप/सहायक सहायकसहायक सहायक पंजीकार पंजीकारपंजीकार पंजीकार (Dy./Asstt.Registrar) आयकर आयकरआयकर आयकर अपीलीय अपीलीयअपीलीय अपीलीय अिधकरण अिधकरणअिधकरण अिधकरण, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation : 10/04/2023 (Dictated on dragon software by Hon’ble Member) 2. Date on which the typed draft is placed before the Dictating Member 21/04/2023 3. Date on which the approved draft comes to the Sr.P.S./P.S. - 11.05.2023 4. Date on which the fair order is placed before the Dictating Member for Pronouncement 12.05.2023 5. Date on which the file goes to the Bench Clerk .. 12.05.2023 6. Date on which the file goes to the Head Clerk.................................. 7. The date on which the file goes to the Assistant Registrar for signature.