ITO-RANGE(3)(1)(3), MUMBAI V. CLOVER SOLAR PVT LTD., MUMBAI

MA 217/MUM/2022

AI Insights

The case revolves around a Miscellaneous Application filed by the Revenue against the Tribunal's earlier decision that allowed M/s. Clover Solar Pvt. Ltd. to claim a deduction under section 80IA of the Income Tax Act for interest income earned from bank deposits. The Revenue contended that the Tribunal had overlooked a Supreme Court decision in CIT Vs. Eltek SGS Pvt. Ltd., which allegedly reversed the principles followed by the Bombay High Court in the Tribunal's earlier decision. However, the Tribunal found that the Supreme Court's decision pertained to a different context (duty drawback under Customs Act) and did not affect the eligibility of the assessee to claim deductions on interest income as previously decided.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136456 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-01-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 26-01-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 17-08-2022
• Other Referred Cases: CIT Vs. Eltek SGS Pvt. Ltd., Telma Exchangers manufacturers Pvt. Ltd. Vs. ACIT, Liberty India (2009) 183 Taxman 349
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80IB; 80IA; 80HH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI ‘SMC’ BENCH, MUMBAI. Before Shri B.R. Baskaran (AM) M.A. No. 217/Mum/2022 in I.T.A. No. 4175/Mum/2019 (A.Y. 2015-16) ITO, Ward 3(1)(3) Room No. 666A 6 th Floor Aayakar Bhavan M.K. Road Mumbai-400 020. V s . M/s. Clover Solar Pvt. Ltd. 85, A-Wing, Mittal Tower Nariman Point Mumbai-400 021. PAN : AADCC2739E (Appellant) (Respondent) Assessee by Shri K.K. Ved Department by Ms. Samruddhi Hande Da te of He ar ing 27.01.2023 Da te of P r onou nce me nt 27.01.2023 O R D E R Per B.R.Baskaran (AM) :- The Revenue has filed this Miscellaneous Application submitting that the Tribunal has committed a mistake apparent from record in the order passed in the above said appeal by not considering the decision rendered by Hon'ble Supreme Court in the case of CIT Vs. Eltek SGS Pvt. Ltd. (Civil Appeal No. 2817 of 2010). 2. I heard the parties and perused the record. I noticed that the issue adjudicated by the Tribunal was related to eligibility of the assessee to claim deduction under section 80IA of the I.T. Act in respect of interest income of Rs. 7,03,702/- earned by the assessee from the Bank deposits. The Tribunal has followed the decision rendered by Hon'ble Bombay High Court in the case of Telma Exchangers manufacturers Pvt. Ltd. Vs. ACIT (ITA No. 415 of 2004 dated 18.7.2018) and held that the assessee is eligible for deduction under section 80IA of the Act on the interest income earned by the assessee M/s. Clover Solar Pvt. Ltd. 2 from the deposits kept by the assessee with the banks. It is the submission of the Revenue that Hon'ble Bombay High Court has rendered its decision by following the decision rendered by Hon'ble Delhi High Court in the case of CIT Vs. Eltek SGS Pvt. Ltd. (300 ITR 06) and the above said decision of Hon'ble Delhi High Court has since been reversed by Hon'ble Supreme Court in the very same case in Civil Appeal No. 851/2009 dated 26.3.2010. Supporting the petition filed by the Revenue, the Ld D.R submitted that the decision rendered by Hon’ble Bombay High Court should also be considered as reversed by Hon’ble Supreme Court. Accordingly, the Ld D.R submitted that the impugned decision rendered by the Tribunal needs to be reversed in view of the decision of Hon’ble Supreme Court, referred above. 3. The Learned AR, on the contrary, submitted that the issue considered by Hon'ble Delhi High Court in the case of Eltek SGS Pvt. Ltd. (supra) is related to the eligibility of duty drawback granted under Customs Act for deduction under section 80IB of the Act. The Hon'ble Delhi High Court held that the duty drawback on custom duty is eligible for deduction under section 80IB of the Act. When the revenue challenged the said decision rendered by Hon’ble Delhi High Court, the Hon'ble Supreme Court noticed that it has held in the case of Liberty India (2009) 183 Taxman 349 that the duty drawbacks are not eligible for deduction under section 80IB of the Act. Accordingly, following the decision rendered by Hon'ble Supreme Court in the case of Liberty India (supra), the Hon'ble Apex Court reversed the decision rendered by Hon'ble Delhi High Court in the case of Eltek SGS Pvt. Ltd. (supra). 4. The Learned AR submitted that the issue decided by the Tribunal is not related to the “duty drawback”. The issue adjudicated by the Tribunal related to the interest income earned by the assessee on the deposits kept with banks during the course of carrying on of its business under business compulsions. The Hon'ble Bombay High Court, in the case of Tema M/s. Clover Solar Pvt. Ltd. 3 Exchangers manufacturers Pvt. Ltd. (supra), has also considered the eligibility of the assessee to claim deduction under section 80IA of the Act in respect of interest income only. Hence, there was parity of facts between the present case and the case decided by Hon’ble Bombay High Court. Hence, the Tribunal has followed the binding decision rendered by Hon'ble Bombay High Court and hence it cannot be considered as mistake apparent from record. 5. I have heard the rival contentions and perused the record. I noticed that there is parity of facts between the present case and the decision rendered by Hon'ble Bombay High Court in the case of Tema Exchangers Manufacturers Pvt. Limited (supra). The decision in the case of Eltek SGS Pvt. Ltd. (supra) has been rendered by Hon'ble Delhi High Court in the context of duty drawback received by the assessee which is not the case here. Though the Hon’ble Bombay High Court has referred to the decision rendered by Hon’ble Delhi High Court only to the extent that the language employed in sec. 80IB and 80HH is different. 6. Since the Tribunal has followed the binding decision rendered by Hon'ble Bombay High Court, we are of the view that there is no mistake apparent from record as contended by the revenue. Accordingly, we do not find any merit in the petition filed by the Revenue. 7. In the result Miscellaneous Application filed by Revenue stands dismissed. Pronounced in the open court on 27.1.2023 Sd/- (B.R. BASAKARAN) Accountant Member Mumbai; Dated : 27/01/2023 M/s. Clover Solar Pvt. Ltd. 4 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