DCIT, Solan V. M/s Himalayan Vegefruit Ltd., Parwanoo

MA 271/CHANDI/2005

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8942 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 year(s) 11 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2000-2001
• Appeal Filed On: 22-08-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: ATUL GANDHI
• Keywords: Business income; Depreciation
• Section: 143(3); 80IB; 145; 263; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI T.R. SOOD, ACCOUNTANT MEMBER MA NO. 271/CHD/2005 (IN ITA NO. 18/CHANDI/2004) ASSESSMENT YEAR: 2000-01 THE DCIT, VS M/S HIMALAYAN VEGEFRUIT LTD., CIRCLE, PARWANOO, DISTT. SOLAN SOLAN (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.JAISHREE SHARMA RESPONDENT BY : SHRI ATUL GANDHI DATE OF HEARING : 03.08.2012 DATE OF PRONOUNCEMENT : 03.08.2012 ORDER PER H.L.KARWA, VP THIS MISC. APPLICATION BY THE REVENUE ARISES OUT OF THE ORDER OF THE TRIBUNAL DATED 28.3.2005 PASSED IN ITA NO. 18/CHAND I/2004 RELATING TO ASSESSMENT YEAR 2000-01. 2. THE REVENUE VIDE ITS APPLICATION DATED 16.8.2005 HAS SATED AS UNDER:- TO THE ASSTT. REGISTRAR, ITAT, KENDRIYA SADAN, SECTOR 9, CHANDIGARH 2 SIR, SUB: ITA NO.18/CHANDI/2004 DATED 28.3.2005 M/S H IMALAYAN VEGEFRUIT LTD., PARWANOO V CIT AY 2000-01 MISC. PETITION - REGARDING 1. ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3 ) ON 28.1.2003 AT AN INCOME OF RS. 2,49,22,379/-., AGGRIEVED BY THE ORDE R, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE C!T(A). MEANWHILE THE CIT NOT ICED THAT THOUGH THE ASSESSMENT HAD BEEN MADE AT AN ENHANCED FIGURE, BUT THE FACTS ON RECORD HAD NOT BEEN PROPERLY EXAMINED WHILE FINALIZING THE ASSESSM ENT PROCEEDINGS. THEREFORE, HE CONSIDERED THE ORDER MADE BY THE A.O. AS ERRONEO US AND PREJUDICIAL TO THE INTEREST OF REVENUE AND PASSED AN ORDER U/S 263 ON 22.12.2003 SETTING ASIDE THE ASSESSMENT. THE ASSESSEE PREFERRED AN APP EAL BEFORE THE ITAT AGAINST THE ORDER U/S 263 AND THE ITAT HAS ALLOWED THE APPE AL. 1. THE CIT IN HIS O RDER U/S 263 HAD HELD THE O RDER PASSED BY THE ASSESSING OFFICER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE FOLLOWING GROUNDS : A). INTEREST SUBSIDY : DURING THE YEAR, THE ASSESSEE COMPANY HAD RECEIVED INTEREST SUBSIDY OF RS. 74.92 LACS FROM THE INDUSTRY DEPARTMENT. WHILE PASS ING ORDER U/S 263, THE CIT NOTICED THAT DEDUCTION U/S 80-I HAD BEEN ALLOWED WR ONGLY TO THE ASSESSEE IN RESPECT OF THIS AMOUNT, IN VIEW OF THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. VISHWNATHAN & CO, (200 3) 261 !TR 737 WHEREIN IT HAS BEEN CLEARLY STATED THAT ANY INTEREST SUBSIDY E TC. RECEIVED BY AN ASSESSEE CANNOT BE TERMED AS PROFITS DERIVED FROM THE BUSINE SS OF INDUSTRIAL UNDERTAKING. B) SET OFF INTEREST EXPENDITURE ON OTHER LOAN S AGAINST INTEREST INCOME FROM FDRS : DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE H AD RECEIVED INTEREST OF RS. 10,43,776/- ON FIXED DEPOSITS WHICH HAS BEEN SET OF F AGAINST INTEREST EXPENDITURE ON 'OTHER LOANS'. THE CIT WHILE PASSING ORDER U/S 263 NOTICED THAT THIS INCOME COULD NOT BE TREATED AS PART OF BUSINESS INCOME AND SET OFF AGAINST THE INTEREST EXPENDITURE. FURTHER, HE OBSERVED THAT EVEN IF THIS INCOME WAS TREATED AS BUSINESS INCOME, YET IT COULD NOT BE CONSIDERED AS INCOME DERIVED FROM THE BUSINESS OF INDUSTRIAL UNDERTAKING AND DEDUCTION U/ S 80IB COULD NOT BE ALLOWED 3 TO THE EXTENT OF INTEREST RECEIVED IN VIEW OF DECIS ION OF HON'BLE APEX COURT IN THE CASE OF PANDIAN CHEMICALS LTD. VS. CIT 262 ITR 278 WHEREIN IT HAS BEEN CLEARLY HELD THAT INTEREST EVEN ON MANDATORY DEPOSI TS MADE WITH THE ELECTRICITY BOARD FOR SUPPLY OF ELECTRICITY COULD NOT BE HELD A S INCOME DERIVED FROM THE BUSINESS OF INDUSTRIAL UNDERTAKING. C) THE ASSESSEE HAD ENCLOSED A TDS CERTIFICATE WIT H THE RETURN OF INCOME WHEREIN THE TAX DEDUCTOR HAD CREDITED THE ASSESSEE' S ACCOUNT BY AN AMOUNT OF RS. 749590/- AS INTEREST ON WHICH AN AMOUNT OF RS. 1,6 4,910/- WAS DEDUCTED AS TAX DEDUCTED AS SOURCE. THE FACT WHETHER THIS INTEREST INCOME WAS INCLUDED IN THE AMOUNT OF RS. 10,43,776/- RECEIVED AS INTEREST ON F IXED DEPOSITS OR IT WAS IN ADDITION TO THE SAID AMOUNT, WAS ALSO REQUIRED TO B E EXAMINED, WHICH THE A.O. HAD NOT DONE. D) DECLARATION OF ABNORMAL HIGH PROFITS IN TH E FIRST 5 YEARS TO CLAIM DEPRECIATION: THE ASSESSEE HAD DECLARED ABNORMALLY HIGH PROFITS I N THE FIRST 5 YEARS WHEN THE ASSESSEE WAS ENTITLED TO 100% DEDUCTION U/S 80IA. IN THE VERY 6 TH YEAR, WHEN THE DEDUCTION WAS REDUCED FROM 100% TO 25%, THERE W AS A STEEP FALL IN PROFITS SO MUCH SO THAT THE ASSESSEE HAD DECLARED LOSS OF RS. 12,45,460/-WHEREAS IN THE EARLIER YEARS THE ASSESSEE'S BUSINESS WAS IN A GOOD POSITION AND IN THE IMMEDIATE PRECEDING YEAR, THE ASSESSEE HAD DECLARED PROFIT OF RS. 2,46,57,266/-. THE C!T FURTHER OBSERVED THAT MOST OF THE NEW UNITS INCUR L OSSES IN THE INITIAL YEARS BECAUSE OF NEWNESS, INEXPERIENCE, LACK OF MANUFACTU RING SKILLS AND IT IS ONLY AFTER 4-5 YEARS THAT A NEW UNIT MATURES AND START M AKING HANDSOME PROFITS. BUT IN THE ASSESSEE'S CASE, THE POSITION WAS EXACTLY RE VERSE. IN DECLARING VERY HIGH PROFITS DURING THE FIRST 5 YEARS AND CLAIMING 100% DEDUCTION U/S 80IA, SOMETIMES SOME OF THE VERY ESSENTIAL EXPENSES AND A LLOWANCES WITHOUT WHICH THE BUSINESS COULD NOT BE RUN SMOOTHLY HAD AL SO NOT BEEN SHOWN AND DEBITED TO THE P&L ACCOUNT. FOR EXAMPLE, FOR THE FI RST 5 A.Y.S DEPRECIATION ALLOWANCE WAS CLAIMED AS PER THE COMPANY'S ACT AND THIS WAS NOT EVEN 1/3 RD OF THE ALLOWABLE AMOUNT UNDER THE IT. ACT, THUS RESULT ING IN ARTIFICIAL INFLATION OF PROFITS WHICH HAD BEEN CLAIMED AS FULLY EXEMPT U/S 80IA. IN FACT, THE BASE FOR DEPRECIATION I.E. THE WDV WAS MUCH HIGHER FOR THE 6 TH AND SUBSEQUENT YEARS WHEN 75% OF INCOME IS TAXABLE. IT WAS FURTHER NOTI CED BY THE CIT THAT FROM THE 4 6 TH ASST. YEAR, THE ASSESSEE HAD STARTED CLAIMING DEPR ECIATION AT THE RATES AS PER THE I.T.ACT. E) DECLARATION OF HIGH PROFITS FROM UN IT-I ENJOYING DEDUCTION U/S 80IA/IB AND LOW PROFIT FROM UNIT-II WHERE DEDUCTION U/S 80IA/IB IS NOT AVAILABLE: DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE WAS GIVEN OPPORTUNITY TO JUSTIFY HIGH SALES PRICE AND HIGH NET PROFIT FRO M UNIT-1 AND ABNORMALLY LOW PROFITS OF UNIT-LL BY INTRODUCING NECESSARY DOC UMENTARY EVIDENCE. ORDINARILY, THE CASH SALES ARE GENERALLY AT LOWER R ATES THAN THE CREDIT SALES. WHEN THE ASSESSEE WAS REQUIRED TO JUSTIFY THE CREDIT SALES OF JUICE CONCENTRATE AT A LOWER RATE OF RS. 40 PER KG, WHEREAS THE CASH SALES OF SUBSTANTIAL QUANTITIES AND AMOUNT WERE MADE AT A MUCH HIGHER PRICE, THE AS SESSEE COULD NOT FURNISH ANY SATISFACTORY REPLY AND DID NOT PRODUCE THE RELEVANT SALES BILLS/VOUCHERS AND BOOKS OF ACCOUNTS INSPITE OF NUM BER OF OPPORTUNITIES GIVEN TO IT. WHITE COMPLETING PROCEEDINGS U/S 263, THE CI T OBSERVED THAT EVEN IF THE CONTENTION OF THE ASSESSEE THAT THE HIGHER CASH PRICE WAS REALIZED BECAUSE OF THE USE OF ITS OWN BRAND NAME IS ACCEPTED, THE HUGE AMOUNT OF EXCESS PROFIT ACCRUING ON ACCOUNT OF HIGHER SALE PRICE WHICH WAS ATTRIBUTED TO THE BRAND NAME COULD BY NO MEANS BE SAID TO BE THE INCOME DER IVED FROM THE INDUSTRIAL UNDERTAKING. LEAVING GENUINE BUSINESS PROFIT ASIDE, EXCESS PROFIT ATTRIBUTABLE TO THE USE OF BRAND NAME DID NOT QUALIFY FOR DEDUCTION U/S 80IA/IB. F). IT WAS FURTHER OBSERVED BY THE CI T THAT THE ASSESSEE HAD TRIED TO PROJECT THAT HE HAD ALWAYS COOPERATED, FURNISHED ALL REQUIR ED RELEVANT INFORMATION/ DOCUMENTS AND BOOKS OF ACCOUNTS, BUT, INFACT, THE A SSESSEE HAD NEITHER ATTENDED NOR PRODUCED THE REQUISITE BOOKS OF ACCOUNTS INSPIT E OF SEVERAL OPPORTUNITIES AFFORDED TO HIM BEFORE THE A.O. AS WELL AS BEFORE T HE CIT. ITS NON-COOPERATION COULD BE GAUGED FROM THE FACT THAT THE BOOKS WERE N OT PRODUCED EVEN AT THE TIME OF 263 PROCEEDINGS ON THE GROUND THAT THE BOOK S WERE ALREADY WITH THE DEPARTMENT. BUT THIS WAS ONLY PARTIALLY TRUE AND MO ST OF THE BOOKS OF ACCOUNTS WERE IN THE POSSESSION OF THE ASSESSEE. THUS, THE C IT FURTHER OBSERVED THAT THE BOOK VERSION OF THE ASSESSEE HAD RIGHTLY BEEN R EJECTED BY INVOKING THE PROVISIONS OF SECTION 145 BY THE A.O. THE A.O. HAD FAILED TO ADEQUATELY HIGHLIGHT THE ABOVE ASPECTS AND NON-COOPERATIVE ATT ITUDE OF THE ASSESSEE ON THE ABOVE POINTS IN HIS ASSESSMENT ORDER DATED 28.1.200 3. THEREFORE, THE 5 ASSESSMENT ORDER DATED 28.1.2003 WAS HELD ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE ABOVE POINTS ALSO. 3. THE HON'BLE ITAT HAS UPHELD THE ACTION OF TH E CIT UPON THE JURISDICTION OF ORDER U/S 263 BY DECIDING THAT THE JURISDICTION OF THE CIT WILL REMAIN UNAFFECTED BY ANY APPELLATE ORDER IF SUBJECT MATTER OF THE APPEAL WAS NOT THE SUBJECT MATTER OF REVISION OR IN CASE THE SUBJE CT MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY WAS DIFFERENT THAN THE SU BJECT MATTER UNDER REVISION BEFORE THE CIT U/S 263 WITHIN THE PROVISIONS OF LAW AND THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE AND IN FAVOUR OF THE R EVENUE. HENCE, NO COMMENTS ON THIS ISSUE ARE CALLED FOR. HOWEVER, THE ORDER OF THE HON'BLE ITAT IS NOT ACCEPTABLE AS IT SUFFERS FROM SEVERAL 'MISTAKES APPARENT FROM THE RECORD' AND OTHER INFIRMITIES AS DISCUSSED HEREINAFTER :- 4. OF ALL THE ABOVE-MENTIONED ISSUES, THE ITAT HA S DEALT WITH ONE ISSUE ONLY I.E. ABOUT DEDUCTION U/S 801A/IB ON THE AMOUNT OF INTEREST SUBSIDY RECEIVED BY THE ASSESSEE. IT HAS NOT COMMENTED ON THE OTHER ISSUES RAISED AS PER SUB- PARAS B), C ), D), E) AND F) OF PARA 2 ABOVE BY THE CIT AT THE TIME OF 263 PROCEEDINGS. THE ISSUES NOT DISCUSSED BY THE ITAT A ND ON WHICH NO DECISION IS GIVEN ARE AS UNDER: I). THAT THE A.O. HAD FAILED TO ENQUIRE AS TO WHY INTEREST RECEIVED OF RS.1043756/- HAD BEEN ADJUSTED AGAINST THE INTEREST EXPENDITURE AND NOT SHOWN SEPARATELY AS INCOME UNDER THE HEAD 'OTHER SO URCES' . II). THAT THE A.O. HAD FAILED TO INV ESTIGATE IF INTEREST OF RS.7,49,5907- RECEIVABLE FROM HDFC BANK HAD BEEN SH OWN SEPARATELY OR HAD BEEN ADJUSTED AGAINST THE INTEREST EXPENDITURE DEBITED TO THE P&L A/C. IN OTHER WORDS, THE A.O. HAD ALSO FAILED TO EXAMINE THE TAXABILITY OF THE ABOVE TWO AMOUNTS OF INTEREST. III). THAT THE A.O, HAD FAILED TO EXAMINE THE GE NUINENESS OF THE EXTRA - ORDINARY HIGH PROFITS DECLARED BY THE ASSES SEE, PARTICULARLY FROM THE ANGLE OF EXPENSES AS MANY OF ESSENTIAL EXPENSES WITHOUT WHICH THE BUSINESS COULD NOT BE RUN SMOOTHLY HAD NOT BEEN SHO WN INCURRED AT ALL OR SHOWN AT VERY SMALL AMOUNTS, PARTICULARLY IN VIEW O F THE PROVISIONS OF SUB-SECTION 8 AND 10 OF SECTION 80IA. IV) THAT THE A.O. HAD FAILED TO ALLOW DEPRECIATI ON ALLOWANCE TO THE ASSESSES FOR THE 1 ST FIVE A.YS INCLUDING THE A.Y. UNDER APPEAL AS PER T HE IT. RULES. IN A.Y. 2000-01, THE ASSESSEE HAD CLAIMED DE PRECIATION AS PER COMPANY ACT RATES WHICH IS NOT EVEN 1/3 RD OF THE ADMISSIBLE RATES AS PER IT. 6 ACT AND THE A.O. DID NOT COMPUTE AND ALLOW DEDUCTIO N AS PER THE IT. ACT. SO MUCH SO, THE DEPRECIATION CLAIMED BY THE ASSESSE E IN THE P&L A/C AS PER THE COMPANY ACT WAS ADDED BACK, BUT NO AMOUNT A S PER INCOME TAX ACT WAS WORKED OUT AND ALLOWED. THIS RESULTED IN MO RE DEDUCTION U/S 80IA BEING ALLOWED TO THE ASSESSEE. V) THAT THE A.O. HAD FAILED TO MARSHAL FULL FACTS AND EVIDENCE AGAINST THE ASSESSEE IN THE ASSESSMENT ORDER. VI) NOT DISALLOWING DEDUCTION U/S 80IA IN RESPECT OF EXCESS PROFITS ACCRUING ON ACCOUNT OF ADMITTED HIGHER SALE PRICE W HICH HAS BEEN ATTRIBUTED BY THE ASSESSEE ITSELF TO ITS BRAND NAME . THESE ARE MISTAKES APPARENT FROM RECORD WHICH NEED TO BE ADDRESSED TO AND RECTIFIED. 5.1 THOUGH THE ISSUE OF NOT EXAMI NING AND DISALLOWING DEDUCTION IN RESPECT OF INTEREST SUBSIDY RECEIVED BY THE ASSESSE E COMPANY HAS BEEN DISCUSSED BY THE HON'BLE ITAT, BUT THE DECISION ARR IVED AT IN THIS RESPECT ALSO IS NOT BASED ON TRUE FACTS AND CORRECT INTERPRETATI ON OF LAW. THE HON'BLE ITAT HAS HELD THAT THE PROVISIONS OF SECTION 80HH AND 80 IA ARE DIFFERENT AND THEREFORE, THE JUDGMENT OF VISHWANATHAN & CO. VS. C ST 261 ITR 737 (MAD) GIVEN U/S 80HH IS NOT APPLICABLE TO THE ASSESSEE'S CASE, IN DOING SO, IT HAS COMPLETELY IGNORED THE DETAILED ARGUMENTS GIVEN BY THE CIT IN PARA 3 OF HIS ORDER U/S 263. THE OPERATING PART OF THE DECISION O F THE HON'BLE ITAT AS CONTAINED IN PARA 12 OF THEIR ORDER DATED 28.3.2005 IS REPRODUCE D BELOW FOR BETTER PERCEPTION :- 'SINCE THERE IS NO DIRECT DECISION EITHER OF THE AP EX COURT OR OF THE JURISDICTIONAL HIGH COURT EXISTING AT THE TIME OF THE PASSING OF THE ASSESSMENT ORDER BY THE ASSESSING OFFICER WHEREIN THE INTEREST SUBSIDY INCOME EARNED BY THE ASSESSES IN SIMILAR CIRCUMSTAN CES IS HELD TO BE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA, SO, THE VIEW ADOPTED BY THE ASSESSING OFFICER IN CONCLUDING THAT THE ASSESSEE I S ENTITLED TO DEDUCTION ON THE INTEREST EARNED ON SUBSIDY UNDER SECTION 80IA I S A POSSIBLE VIEW AND CANNOT BE CALLED A ILLEGAL VIEW ADOPTED BY THE ASSE SSING OFFICER. HENCE, WE ARE OF THE OPINION THAT ON ACCOUNT OF ASSESSING OFFICER HAVING ADOPTED ONE OF THE LEGALLY POSSIBLE VIEWS THE ASSESSMENT OR DER, PASSED BY THE ASSESSING OFFICER WITH REGARD TO THE INCOME EARNED BY THE ASSESSEE FROM INTEREST SUBSIDY AMOUNTING TO RS.74.92 LAKHS ELIGIB LE FOR DEDUCTION UNDER SECTION 801 A, CANNOT BE CALLED ERRONEOUS, EVEN IF THE REVENUE HAS SUFFERED LOSS IN REVENUE, AND FOR THIS VIEW IT DOES NOT CONF ER JURISDICTION ON THE CIT TO INVOKE HIS REVISIONAL JURISDICTION UNDER SECTION 26 3.' 7 5.2 THE HON'BLE ITAT HAS INVOKED THE RATIO OF JUDGM ENT IN THE CASE OF M/S MALABAR INDUSTRIES LTD. 243 ITR 83 (SC) BELIEV ING ALL ALONG THAT THE MATTER HAD BEEN ENQUIRED INTO BY THE A.O. AND HE HA D TAKEN A CONSCIOUS DECISION AFTER DUE APPLICATION OF MIND WHILE ALLOWI NG THE SAME. THIS IS TOTALLY WRONG. THIS ISSUE HAS NOT BEEN DISCUSSED B Y THE A.O. ANYWHERE IN THE WHOLE OF THE ASSESSMENT ORDER U/S 143(3) DATED 29.1.2003. NEITHER THE ASSESSEE HAD MADE ANY SUBMISSIONS DURING THE ASSESS MENT PROCEEDINGS ON THIS ISSUE NOR IT HAS EVER CLAIMED EVEN DURING THE 263 PROCEEDINGS THAT THE ISSUE HAD BEEN EXAMINED BY THE A.O. AFTER DUE APPLI CATION OF MIND. THUS THERE WAS NO QUESTION OR OCCASION FOR THE A.O TO FO RMULATE AND EXPRESS A VIEW IN THE ASSESSMENT ORDER, AND THEREFORE THE QUE STION OF APPLYING MALABAR INDUSTRIES CASE DOES NOT ARISE. IT IS A MISTAKE OF FACT APPARENT FROM THE RECORD WHICH NEEDS TO BE RECTIFIED. 5.3 THE ITAT ORDER IS BASED ON A MISCONCEPTION OF LAW T HAT THE LAW AT THE TIME OF PASSING OF THE ASSESSMENT ORDER IS RELE VANT. BY NOW IT IS A WELL ESTABLISHED LAW THAT FOR THE PURPOSES OF SECTION 26 3, THE RECORD AND THUS THE LEGAL POSITION RELEVANT FOR ANY CASE IS THE ONE EXI STING AT THE TIME OF EXAMINATION BY THE COMMISSIONER AND NOT AT THE TIME OF PASSING OF ASSESSMENT ORDER BY THE A.O. AT THE TIME OF EXAMINATION BY THE COMMISSIONER, THE FOLLOWING CASES DID EXIST :- I) VISHWANATHAN & CO. VS. CIT 261 ITR 737 ( MAD) II) CAMBAY ELECTRIC SUPPLY INDL. CO. LTD, VS . CIT 113 ITR 84 (SC) THE 2 ND CASE OF CAMBAY ELECTRIC SUPPLY INDL. CO. LTD. VS. CIT WAS THERE EVEN AT THE TIME OF PASSING OF ASSESSMENT ORDER WHICH THE A .O. FAILED TO TAKE COGNIZANCE OF. 5.4 IT IS THUS APPARENT THAT THE A.O. HAVING NOT CONSIDERED THIS ASPECT HAD NOT EXPRESSED ANY VIEW. EVEN IF SOME VIEW IS ATTRIBUTE D TO HIM, THE SAME CANNOT BE SAID TO BE LEGALLY SUSTAINABLE IN VIEW OF THE ABOVE MENT IONED CASE LAWS. AND FURTHER IT IS NOT ESSENTIAL THAT THERE HAS TO BE DIRECT DECISI ON EITHER FROM THE APEX COURT OR JURISDICTIONAL HIGH COURT. IN THE ABSENCE OF A CONT RARY VIEW, THE DECISION OF ANY HIGH COURT HAS ALSO TO BE RESPECTED AS THAT OF THE JURISDICTIONAL HIGH COURT . HERE IN 8 THIS CASE, THERE WAS A DECISION NOT ONLY OF THE MAD RAS HIGH COURT, BUT THAT OF THE APEX COURT ALSO AT THE RELEVANT TIME. THUS THERE AR E MISTAKES BOTH OF LAW AND FACTS APPARENT FROM RECORD ON THIS ISSUE ALSO WHICH NEED TO BE RECTIFIED. 6.1 FURTHER, AS PER THE HON'BLE ITATS ORDER, THE ASSESSEE HAD CHALLENGED THE ORDER U/S 263 ON THE FOLLOWING TWO EFFECTIVE GR OUNDS:- I) 'THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN H OLDING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, EVEN WHEN ALL THE ISSUES, POINTS ETC. RAISED BY THE CIT ARE ALREADY, AS ON THE DATE, UNDER CONSIDERATION OF THE CIT(A), SHIMLA FOR THE RELEVANT PERIOD, WHO IS EXAMINING THE SAME IN THE APPELLATE PROCEEDI NGS IN PROGRESS THERE. THUS, THE SAID ORDER UNDER SECTION 263 OF THE CIT I S BEYOND THE AUTHORITY OF LAW AND SHOULD BE CANCELLED AS IT IS IN VIOLATION T O THE PROVISIONS UNDER SECTION 263(1) READ WITH EXPLANATION (C). II) THE LEARNED CIT ERRED IN LAW AND ON FACTS ISSUI NG DIRECTIONS TO THE ASSESSING AUTHORITY TO LOOK INTO THE PRECEDING AND SUCCEEDING ASSESSMENT YEARS OF THE APPELLANT FROM THE ANGLES INDICATED IN THE ORDER AND TAKE APPROPRIATE REMEDIAL ACTION. THE SAID DIRECTIONS SH OW THE VINDICTIVE MIND OF THE DEPARTMENT AGAINST THE APPELLANT AND AR E ILLEGAL. THEREFORE THE SAME SHOULD BE REVERSED.' 6.2 ON THE 1 ST GROUND, THE HON'BLE ITAT HAS GIVEN A DECISION IN F AVOUR OF THE DEPARTMENT AND HAS OUTRIGHTLY REJECTED THE ASSESSEE 'S CONTENTION THAT AN ORDER U/S 263 CANNOT BE PASSED BY THE CIT DURING TH E PENDENCY OF APPEAL BEFORE THE CIT(A). THE 2 ND GROUND HAS NOT BEEN DEALT WITH AT ALL BY THE ITAT AND NO FINDING HAS BEEN GIVEN ON THIS. 6.3 UNDER SUCH CIRCUMSTANCES, IF THERE WAS REALLY NO OTHER GROUND OF APPEAL, THE ITAT SHOULD HAVE CONFIRMED THE ORDER OF THE CIT AND THERE WAS NO REASON FOR THE ITAT TO DISCUSS ISSUES LIKE ALLOWABI LITY OF DEDUCTION U/S 80IA IN RESPECT OF INTEREST SUBSIDY AND THEN QUASH THE O RDER PASSED BY THE CIT. 7. SO THE ISSUES HAVE BEEN DECIDED PARTLY AND UNLE SS AND UNTIL THE DECISION OF THE ITAT COMES ON THESE ISSUES, THE APP EAL OF THE ASSESSEE CANNOT BE TERMED AS ALLOWED. IN OTHER WORDS, THE HO N'BLE ITAT HAS NOT GIVEN ANY ADVERSE FINDING ON SEVERAL ISSUES. IF AN ORDER IS ERRONEOUS AND PREJUDICIAL TO 9 THE INTEREST OF REVENUE EVEN ON ONE COUNT, THE ORDE R U/S 263 OF THE CIT COULD NOT BE SET ASIDE. THEREFORE, THE HON'BLE TRIBUNAL IS REQUESTED TO SET ASIDE ITS ORDER DATED 28.3.2005, RECTIFY THE MISTAKES POINTED OUT ABOVE AND RESTORE THE ORDER OF THE CIT U/S 263 OF THE INCOME-TAX ACT, 196 1. 3. WE HAVE HEARD SMT. JAISHREE SHARMA, LD. DR AND S HRI ATUL GANDHI, LD. COUNSEL FOR THE ASSESSEE AT LENGTH AND HAVE ALS O CAREFULLY GONE THROUGH THE CONTENTS OF THE ABOVE APPLICATION. WE HAVE ALS O REPRODUCED THE CONTENTS OF THE MISC. APPLICATION IN ITS ENTIRETY TO DEMONST RATE THAT IN THE GARB OF ABOVE APPLICATION, THE REVENUE INTENDS TO REOPEN AN D REARGUE THE WHOLE MATTER, WHICH IS BEYOND THE SCOPE OF SECTION 254(2) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). IN OUR VIEW, WHAT IS RE CTIFIABLE U/S 254(2) OF THE ACT IS A MISTAKE WHICH IS APPARENT. IT MUST BE ONE FOR THE DISCOVERY OF WHICH NO ELABORATE REASONING OR INQUIRY IS NECESSARY. IT MUST BE VISIBLE AND PATENT. 4. THE MAIN ARGUMENT MADE BY SMT. JAISHREE SHARAMA, THE LD. DR IS THAT THE TRIBUNAL HAS COMMITTED AN ERROR OF JUDGMENT AND , THEREFORE, THE ORDER DATED 28.3.2005 PASSED IN ITA NO. 18/CHANDI/2004 MA Y BE SET ASIDE. IN FACT, IN A MISC. APPLICATION, IT IS NOT POSSIBLE TO SEEK REVIEW OF ORDER OF THE TRIBUNAL. IN OUR CONSIDERED VIEW, SCOPE OF SECTION 254(2) OF THE ACT IS CONFINED TO PATENT AND GLARING ERRORS APPARENT ON R ECORD AND ANYTHING BEYOND THESE ERRORS WOULD CLEARLY BE OUTSIDE AMBIT OF INHE RENTLY LIMITED SCOPE OF SECTION 254(2) OF THE ACT. POWER TO RECTIFY MISTAK E U/S 254(2) OF THE ACT CANNOT BE USED FOR RECALLING THE ENTIRE ORDER. SMT . JAISHREE SHARMA, LD. DR SUBMITTED THAT THOUGH THE ISSUE OF NOT EXAMINING AN D DISALLOWING DEDUCTION IN RESPECT OF INTEREST SUBSIDY BY THE ASSESSEE COMP ANY HAS BEEN DISCUSSED BY 10 THE TRIBUNAL IN ITS ORDER DATED 28.3.2005, BUT THE DECISION ARRIVED AT IN THIS RESPECT ALSO IS NOT BASED ON TRUE FACTS AND CORRECT INTERPRETATION OF LAW. 5. IN OUR VIEW, THERE IS NO MERIT IN THE ABOVE CONT ENTION OF SMT. JAISHREE SHARMA LD. DR, BECAUSE EVEN IF, ON THE BASIS OF A W RONG CONCLUSION, THE TRIBUNAL HAS NOT DECIDED THE ISSUE IN FAVOUR OF THE REVENUE, IT WILL NOT BE A GROUND FOR MOVING AN APPLICATION U/S 254(2) OF THE ACT. ON A PERUSAL OF FINDINGS OF THE TRIBUNAL GIVEN IN PARA 12 OF ITS OR DER DATED 28.3.2005, THE TRIBUNAL OBSERVED THAT IT IS CLEAR THAT IN THIS CA SE, THE VIEW ADOPTED BY THE ASSESSING OFFICER IN CONCLUDING THAT THE ASSESSEE I S ENTITLED TO DEDUCTION ON THE INTEREST EARNED ON SUBSIDY U/S 80IA IS A POSSIB LE VIEW AND CANNOT BE CALLED A ILLEGAL VIEW ADOPTED BY THE ASSESSING OFFI CER. THEREFORE, THE TRIBUNAL ON THE BASIS OF THE JUDGMENT OF THE HON'BL E SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS CIT (2000) 243 ITR 83(SC) HELD THAT EVEN IF TWO VIEWS ARE POSSIBLE, AND THE ASSESSING O FFICER HAS ADOPTED ONE OF THE LEGALLY POSSIBLE VIEWS, HENCE, THE COMMISSIONER HAD NO JURISDICTION TO INTERFERE BY EXERCISING HIS POWERS U/S 263 OF THE A CT. THERE IS NO MATERIAL ON RECORD TO CONTROVERT THE ABOVE FINDINGS OF THE TRIB UNAL. 6. IN THE INSTANT CASE, THE TRIBUNAL HAS DISPOSED O FF THE APPEAL OF THE ASSESSEE FILED AGAINST THE ORDER OF CIT(A) PASSED U /S 263 OF THE ACT ON MERITS. THEREFORE, THE ORDER PASSED BY THE TRIBUNA L CANNOT BE REVIEWED. IN THE CASE OF INDRAKUMAR PATODIA VS ITO (2011) 238 CT R 437(BOM.), THE HON'BLE BOMBAY HIGH COURT HELD THAT ONCE THE TRIBUN AL HAD DISPOSED OF THE APPEAL ON MERITS, THE TRIBUNAL CANNOT REVIEW ITS OR DER. CIVIL COURTS HAVE BEEN EXPRESSLY GRANTED POWER OF REVIEW IN THE CPC. NO SUCH POWERS ARE CONFERRED UPON THE TRIBUNAL UNDER THE I.T. ACT. A T THIS STAGE, WE MAY ALSO 11 REFER TO A DECISION OF HON'BLE ORISSA HIGH COURT IN THE CASE OF K.K.RAVINDRAN VS ITAT (2011) 332 ITR 569 (ORISSA), WHEREIN THE H ON'BLE HIGH COURT HELD THAT EXERCISE OF POWERS U/S 254(2) BY TRIBUNAL IN R ECALLING ITS ENTIRE ORDER AMOUNTED TO PASSING A FRESH ORDER IN APPEAL WHICH I S NOT PERMISSIBLE. IN THE INSTANT CASE, WE HAVE ALREADY OBSERVED HEREIN ABOVE THAT THE REVENUE COULD NOT POINT OUT ANY APPARENT AND PATENT MISTAKE IN TH E ORDER OF THE TRIBUNAL. IN THE CASE OF CIT V VARDHMAN SPINNING (1997) 226 ITR 296(P&H), THE HON'BLE HIGH COURT HELD THAT WHAT CAN BE RECTIFIED U/S 254( 2) IS A MISTAKE WHICH IS APPARENT AND PATENT. THE MISTAKE HAS TO BE SUCH FO R WHICH NO ELABORATE REASONS OR INQUIRY IS NECESSARY. THE HON'BLE JURIS DICTIONAL HIGH COURT FURTHER HELD THAT WHERE TWO OPINIONS ARE POSSIBLE, THEN, IT CANNOT BE SAID TO BE AN ERROR APPARENT ON THE BASIS OF THE RECORD. W E MAY ALSO ADD HERE THAT IT IS NOT THE CASE OF THE REVENUE THAT THE ORDER OF TH E TRIBUNAL DATED 28.3.2005 IS EITHER BASED ON IRRELEVANT EVIDENCE OR RELEVANT EVIDENCE HAS BEEN IGNORED. IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE TRI BUNAL HAS NOT FOLLOWED THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT O R JUDGMENT OF THE HON'BLE SUPREME COURT ON THIS ISSUE. EVEN FOR THE SAKE OF ARGUMENT, IT IS STATED THAT THE ORDER OF THE TRIBUNAL IS PATENTLY WRONG OR AGAI NST THE LAW AND IN THAT EVENTUALITY, THE REMEDY AVAILABLE TO THE REVENUE WA S TO FILE AN APPEAL AGAINST THE ORDER OF THE TRIBUNAL BEFORE THE HON'BLE JURISD ICTIONAL HIGH COURT. 7. IN VIEW OF THE ABOVE, WE CONCLUDE THAT THE APPLI CATION FOR RECTIFICATION U/S 254(2) OF THE ACT IS NOT MAINTAINABLE BECAUSE T HE REVENUE COULD NOT POINT OUT ANY APPARENT AND PATENT MISTAKE IN THE ORDER OF THE TRIBUNAL. IN FACT, IN THE GRAB OF AN APPLICATION FOR RECTIFICATION, THE R EVENUE SEEKS TO REOPEN AND REARGUE THE WHOLE MATTER WHICH IS BEYOND THE SCOPE OF SECTION 254(2) OF THE ACT. IN THIS REGARD, WE MAY REFER TO THE LAST THRE E LINES OF PRAYER CLAUSE 12 WHICH SAYS THEREFORE, THE HON'BLE TRIBUNAL IS REQUESTED TO SET ASIDE ITS ORDER DATED 28.3.2005, RECTIFY THE MISTAKES POINTED OUT ABOVE AND RESTORE THE ORDER OF THE CIT U/S 263 OF THE INCOME-TAX ACT, 196 1 . FROM THE CONTENTS OF APPLICATION FILED U/S 254(2), THE INTENTION OF THE REVENUE IS CLEAR THAT REVENUE WANTS THAT THE TRIBUNAL SHOULD SET ASIDE IT S ORDER DATED 28.3.2005 IN TOTO AND REHEAR THE MATTER ON MERITS AFRESH AND ALS O DECIDE THE APPEAL IN THEIR FAVOUR. WE HAVE ALREADY HELD HEREIN ABOVE THAT ON CE, THE TRIBUNAL HAD DISPOSED OF THE APPEAL ON MERITS, THE TRIBUNAL CANN OT REVIEW ITS ORDER. CONSIDERING THE RELEVANT FACTS OF THE CASE AND SETT LED LEGAL POSITION, WE ARE OF THE VIEW, THAT THE MISC. APPLICATION PREFERRED BY T HE REVENUE IS DEVOID OF ANY MERIT AND DESERVES DISMISSAL. ACCORDINGLY, WE DISMISS THE MISC. APPLICATION. 8. IN THE RESULT, THE MISC. APPLICATION IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF AUGUST, 2012 SD/- SD/- (T.R.SOOD) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 3 RD AUGUST, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5 THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR