INFINITI MODULES P.LTD, V. ITO WD 8(2)(1),

MA 225/MUM/2012

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0601 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-06-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2001-2002
• Appeal Filed On: 04-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income
• Section: 154

Judgement Text

MA NO. 225/M/2012 MS. INFINITE MODULES PVT. LTD. - 1 - IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI .. ! , #$ #$ #$ #$ % &', ( , ) BEFORE SHRI R.K. GUPTA, JM AND SHRI RAJENDRA SINGH, AM *$*$ $+ / MA NO. 225/MUM/2012 ARISING OT OF ITA 4350/MUM/2006 ( + , $-, + , $-, + , $-, + , $-, / / / / ASSESSMENT YEAR : (2001-2002 ) M/S INFINITE MODULES P. LTD, 51-A, PILERNE ESTATE, BARDEZ, GOA-403511. + + + + / VS. INCOME TAX OFFICER WARD 8(2)(1), MUMBAI / ( ./ PAN : PAN:- AAACI 4696P ( /0 / // / APPELLANT ) .. ( 12/0 / RESPONDENT ) /0 3 4 / APPELLANT BY : SHRI BIREN GABHAWALA 12/0 3 4 / RESPONDENT BY : MS. NEERAJA PRADHAN. +$ 3 5( / // / DATE OF HEARING : 21-6-2013 67- 3 5( / DATE OF PRONOUNCEMENT : 28-6-2013 8 / O R D E R PER RAJENDRA SINGH THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY TH E ASSESSEE REQUESTING FOR RECTIFICATION/RECALL OF ORDER DATED 21-9-2011 OF THE TRIBUNAL IN ITA NO. 4350/MUM/2006. THE ASSESSE IN THE MISCELLAN EIOUS APPLICATION HAS POINTED OUT SOME APPARENT MISTAKES IN THE ORDER OF TRIBUNAL. 2. BEFORE WE PROCEED TO DEAL WITH THE MISTAKES POIN TED OUT IT WILL BE APPROPRIATE TO GIVE A BRIEF BACKGROUND OF THE CASE. THE ASSESSEE WHO WAS MA NO. 225/M/2012 MS. INFINITE MODULES PVT. LTD. - 2 - ENGAGED IN THE BUSINESS OF MANUFACTURING AND ASSEMB LING OF MODULAR FUNITURE HAD DECLARED TOTAL TURNOVER OF RS. 3,01,68 ,607/- IN THE RELEVANT YEAR WHICH INCLUDED SALES OF RS. 2,99,44,516/- AND OTHER INCOME OF RS. 2,24,091/- . THE AO NOTED THAT ASSEMBLING OF COMPONENTS MANUFA CTURED BY THE ASSESSEE WAS DONE AT THE SITE OF THE CUSTOMERS, WHERE THE GO ODS WERE SUPPLIED BY THE SUPPLIERS DIRECTLY. THEREFORE, THOUGH THE MANUFACTU RING OF COMPONENTS WAS DONE IN THE SPECIFIED AREA AS MENTIONED IN THE EIGH TH SHEDULE TO WHICH SECTION 80-IB APPLY THE ASSEMBLING OF THESE COMPONE NTS ALONG WITH OTHER PARTS, WHICH WERE PROCURED DIRECTLY FROM THE MARKET , WERE DONE AT THE PLACES LIKE MUMBAI, AHMEDABAD, BANGALORE AND PUNE ETC. THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80-IB(4) ONLY IN RESPECT OF GOODS OR ARTICLES MANUFACTURED OR PRODUCED IN THE INDUSTRIAL UNDERTAKING SITUATED IN THE INDUSTRIALLY BACKWARD AREA AS SPECIFIED IN EIGHTH SCHEDULE. THE AO, THEREFORE ASKED THE ASSESSEE TO GIVE BREAK UP OF THE TOTAL TURN OVER WI TH REGARD TO THE GOODS MANUFACTURED IN THE SPECIFIED AREA AND GOODS PROCU RED FROM VARIOUS PARTIES SITUATED OUTSIDE THE SPECIFIED AREA. THE ASSESSEE C OULD NOT GIVE SUCH DETAILS. THE AO, THEREFORE, AFTER EXAMINATION OF RECORDS, NO TED THAT THE GOODS WORTH RS. 2,03,20,279/- HAD BEEN MANUFACTURED AT THE FACT ORY LOCATED AT GOA, WHICH WAS A NOTIFIED ARE U/S 80-IB. THE AO FURTHER NOTED THAT SAID SALES ALSO INCLUDED THE SALE OF GOODS AMOUNTING TO RS. 77,10,5 68/- AND RS. 8,01,313/- AGGREGATING TO RS. 85,11,881/- WHICH HAD NOT BEEN M ANUFACTURED AS NO EXCISE DUTY HAD BEEN PAID. THE AO, THEREFORE, EXCLU DED THE SAID TURNOVER FROM THE TURNOVER OF RS. 2,03,20,279/- OF GOODS MAN UFACTURED IN THE SPECIFIED AREA AND CONSIDERED ONLY THE TURNOVER OF RS. 1,18,0 8,398/- FOR THE COMPUTATION OF DEDUCTION U/S 800IB(4) AND ALLOWED T HE DEDUCTION OF RS. 33,54,446/- ONLY AND THE BALANCE CLAIM OF RS. 53,76 ,072/- WAS REJECTED. THE ASSESSEE DISPUTED THE DECISION OF AO IN DISALLOWING A PART OF THE CLAIM OF DEDUCTION U/S 80-IB. MA NO. 225/M/2012 MS. INFINITE MODULES PVT. LTD. - 3 - 3. CIT (A) IN THE ORDER DATED 20.10.2004 HELD THAT DECISION OF AO TO TREAT THE SALES OF RS. 77,28,982/- AND RS. 8,01,313/- AGGREGATING TO RS. 85,11,881/- AS TRADING SALES WAS NOT CORRECT. CIT ( A) HELD THAT THESE WERE ALSO MANUFACTURING SALES ON WHICH EXCISE DUTY WAS N OT LEVIABLE. CIT (A), THEREFORE, HELD THAT THE ASSESSEE WAS ENTITLED FOR DEDUCTION U/S 80-IB IN RESPECT OF THESE SALES ALSO. CIT (A) ALSO CONSIDERE D THE ADMISSIBILITY OF DEDUCTION U/S 80-IB IN RESPECT OF OTHER INCOME OF R S. 2,24,091/- AND HELD THAT THE ASSESSEE WAS NOT ENTITLED FOR DEDUCTION IN RESPECT OF SUCH RECEIPTS. THE AO WHILE GIVING EFFECT TO THE SAID ORDER OF CIT (A) DATED 20-10-2004 INCLUDED THE TURNOVER OF RS. 85,11,881/- TO THE TUR NOVER CONSIDERED BY AO AT RS. 1,18,08,398/- IN THE ORIGINAL ASSESSMENT AND AL LOWED DEDUCTION U/S 80- IB(4) ON TURNOVER OF RS. 2,03,20,279/-. THE ASSESS EE, THEREAFTER FILED RECTIFICATION APPLICATION U/S 154 ON 24.6.2005 AND REQUESTED THE AO TO AMEND THE APEAL EFFECT ORDER BY CONSIDERING THE TUR NOVER OF RS. 2,99,44,516/- FOR THE PURPOSE OF DEDUCTION U/S 80-IB IN PLACE OF ONLY RS. 2,03,20,279/- TAKEN BY AO. THE AO REJECTED THE APPLICATION HOLDIN G THAT THE DEDUCTION HAD BEEN COMPUTED FOLLOWING THE DIRECTION OF CIT (A), A ND, THERFORE, THERE WAS NO APPARENT MISTAKE. CIT (A) HOWEVER IN THE ORDER DATE D 3.5.2006 HELD THAT THE AO WHILE GIVING APPEAL EFFECT SHOULD HAVE REDUCED R S. 85,11,881/- FROM THE TURNOVER OF RS. 2,99,44,516/- AND NOT FROM RS. 2,03 ,20,279/-. AGGRIEVED BY THE SAID DECISION THE REVENUE FILED APPEAL BEFORE T RIBUNAL. 4. THE TRIBUNAL VIDE ORDER DATED 21.9.2011 IN ITA 4 350/M/2006 SET ASIDE THE ORDER OF CIT(A) ON THE GROUND THAT THERE WAS NO APPARENT MISTAKE IN THE ORDER OF AO GIVING EFFECT TO THE ORDER OF CIT (A) D ATED 20.10.2004. THE TRIBUNAL IN PARA (4) OBSERVED THAT THE AO IN THE AS SESSMENT ORDER HAD CONSIDERED THE TOTAL SALES OF RS. 2,99,44,516/- AND AFTER EXAMINATION CONCLUDED THAT THE SALES WERE ONLY TO THE TUNE OF R S. 2,03,20,279/- OF GOODS MANUFACTURED AT THE FACTORY PREMISES LOCATED IN THE BACKWARD AREA WHICH WAS ENTITLED FOR DEDUCTION U/S 80-IB(4). THE BALANC E SALES WERE OBVIOUSLY MA NO. 225/M/2012 MS. INFINITE MODULES PVT. LTD. - 4 - TREATED BY AO AS NOT SALES IN RESPECT OF GOODS MANU FACTURED IN THE BACKWARD AREA. THE TRIBUNAL, THEREFORE, DID NOT UPHOLD THE O RDER OF CIT (A) EXCLUDING THE TURNOVER OF RS. 85,11,881/- FROM THE TOTAL SALE S OF RS. 2,99,44,516/- AND HELD THAT THERE WAS NO APPARENT MISTAKE IN THE ORDE R OF THE AO GIVING EFFECT TO THE ORDER OF CIT (A). 5. WE HAVE HEARD BOTH THE PARTIES AND CONSIDRED TH E POINTS MADE IN THE MISCELLANEOUS APPLICATION AND THE MATERIAL ON RECOR D. WE FIND FROM THE PERUSAL OF THE ORDER DATED 20.10.2004 OF CIT (A) TH AT CIT(A) IN THE SAID ORDER HAS NOT HELD THAT THE DECISION OF AO TREATING THE B ALANCE SALES OF RS. 96,24,237/- (RS. 2,99,44,516 - 2,03,20,279) AS NOT RELATING TO THE GOODS MANUFACTURED AT BACKWARD AREA WAS NOT CORRECT. IN F ACT, WE DO NOT FIND ANY DECISION OF CIT (A) ON THIS ISSUE. CIT (A) HAS ONLY DIRECTED TO CONSIDER THE SALES OF RS. 85,11,881/- AS MANUFACTURING SALES. TH EREFORE, IN CASE THE ASSESSEE WAS NOT SATISFIED WITH THE ORDER OF CIT (A ) IT COULD HAVE FILED FURTHER APPEAL BEFORE THE TRIBUNAL TO ADJUDICATE THE ISSUE OF CERTAIN SALES NOT TREATED BY AO AS MANUFACTURED SALES IN THE BACKWARD AREA. T HE ORDER OF CIT(A), CLEARLY SHOWS THAT THE ONLY ISSUE ARGUED BEFORE CIT (A) WAS EXCLUSION OF SALE OF RS. 85,11,881/- AND ALLOWABILITY OF DEDUCTION IN RE LATION TO OTHER INCOME. THE TRIBUNAL, THEREFORE IN THE IMPUGNED ORDER MENTIONED THAT DISPUTE RAISED BY THE ASSESSEE BEFORE CIT (A), WAS ONLY IN RELATION T O EXCLUSION OF SALES OF RS. 85,11,881. HOWEVER, EVEN IF WE ACCEPT THE CONTENTIO N OF THE ASSESSEE THAT ENTIRE DISALLOWANCE WAS IN DISPUTE BEFORE CIT (A), THERE BEING NO ORDER OF CIT (A) REGARDING THE SALES EXCLUDED BY AO AS BEING NOT SALES IN RESPECT OF GOODS MANUFACTED IN THE BACKWARD AREA THE AO COULD NOT CO NSIDER THIS ASPECT IN THE APPEAL EFFECT ORDER. THE AO HAD PASSED THE APPE AL EFFECT ORDER CORRECTLY BY EXCLUDING THE SALES OF RS. 85,11,881/- TO THE SALES TAKEN BY THE AO FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S 800IB(4) A S CIT(A) HAD NOT REVERSED THE DECISION OF THE AO TREATING THE SALES OF RS. 96 ,24,237/- BEING NOT IN RESPECT OF GOODS MANUFACTURED IN THE SPECIFIED AREA . MA NO. 225/M/2012 MS. INFINITE MODULES PVT. LTD. - 5 - 6. IN VIEW OF THE FOREGOING DISCUSSION AND FOR THE REASONS GIVEN EARLIER, WE DO NOT SEE ANY APPARENT MISTAKE IN THE ORDER OF TRI BUNAL. THE TRIBUNAL COULD RECTIFY ONLY THE PATENT AND OBVIOUS MISTAKES AND HA S NO POWER TO REVIEW ITS OWN DECISION. WE, THERFORE, DO NOT FIND ANY MERIT I N THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE AND THE SAME IS, THERFORE, REJECTED. 7. IN THE RESULT MISCELLANEOUS APPLIACTION OF THE ASSE SSEE STANDS REJECTED. ORDER PRONOUNCED IN THE OPERN COURT TODAY I.E 28 -6-2013 SD/- SD/- ( R.K. GUPTA) (RAJENDRA SINGH) / JUDICIAL MEMBER ( / ACCOUNTANT MEMBER S.K. SR. P.S. DATED 28-6-2013 8 3 15&* I*-5 8 3 15&* I*-5 8 3 15&* I*-5 8 3 15&* I*-5/ COPY OF THE ORDER FORWARDED TO : 1. /0 / THE APPELLANT 2. 12/0 / THE RESPONDENT. 3. J () / THE CIT(A)- 4. J / CIT 5. *$M 15+ , , / DR, ITAT, MUMBAI 6. N, O / GUARD FILE. 8+ 8+ 8+ 8+ / BY ORDER, 2*5 15 //TRUE COPY// P P P P/ // /' ' ' ' ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI