Atul Limited, Ahmedabad V. The Income tax Officer, Ahmedabad Ward-1(1), Ahmedabad

MA 324/AHD/2008

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7891 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 24-02-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 15-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: J P SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI D. K. TYAGI, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER M.A. NO.324/AHD/2008 IN I.T.A. NO. 3528/ AHD/2004 (ASSESSMENT YEAR 2001-02) ATUL LIMITED, ASHOKA CHAMBERS, RASALA MARG, ELLIS BRIDGE, AHMEDABAD VS. ITO, WARD 1(1), AHMEDABAD PAN/GIR NO. : AABCA2390M (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI J P SHAH, AR RESPONDENT BY: SHRI B L YADAV, SR. DR DATE OF HEARING: 27.04.2012 DATE OF PRONOUNCEMENT: 05.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASS ESSEE POINTING OUT CERTAIN MISTAKES IN THE TRIBUNAL ORDER. THE CONTEN TION RAISED IN THE MISCELLANEOUS APPLICATION ARE AS UNDER: 1. THE APPLICANT BEING AGGRIEVED BY THE ORDER PASS ED BY THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, BENCH 'D' DA TED 16.05.2008 RECEIVED ON 19.05.2008 (ANNEXURE-A) BEGS TO SUBMIT THIS MISCELLANEOUS APPLICATION UNDER SEC.254(2) OF THE I.T. ACT FOR THE KIND CONSI DERATION OF THE HON'BLE MEMBERS OF BENCH 'D'. 3. ONE OF THE POINTS FOR ADJUDICATION BEFORE THE TRIBUNAL WAS IN RESPECT OF 80-IA RELIEF CLAIMED FOR THE FIRST TIME FOR THE INCOME GENERATED FROM A NEW INDUSTRIAL UNDERTAKING BY WAY OF A NEW TURBINE WHICH GENERATES ELECTRICITY. M.A.NO.324 /AHD/2008 2 4. THE ASSESSEE HAD ALREADY ONE CAPTIVE POWER PLANT OF WHICH THE TURBINE AND THE BOILER WERE PRINCIPAL ITEMS. THE NE W POWER PLANT BY WAY OF TURBINE CONSUMED THE STEAM PRODUCED BY TH E ABOVE BOILER WHICH WAS A PART OF OLD POWER PLANT. THE A.O . REJECTED THE CLAIM OF SEC. 80-IA IN RESPECT OF NEW POWER PLANT B Y HOLDING AS FOLLOWS :- 'IT IS HEREBY HELD THAT THE NEW POWER PLANT HAS BEE N ESTABLISHED BY WAY OF TRANSFER OF OLD AND PREVIOUSL Y USED MACHINERY WHICH DISQUALIFIES THE NEW POWER PLANT FR OM BEING ELIGIBLE FOR DEDUCTION U/S.80-IA. ANY PROFITS DERIVED THEREFROM SHALL HAVE TO BE EXCLUDED FROM THE PROFIT S OF THE NEW INDUSTRIAL UNDERTAKINGS ELIGIBLE FOR DEDUCTION U/S. 80- IA.' IN OTHER WORDS, A.O. WAS OF THE VIEW THAT AS THE NE W POWER PLANT WAS GETTING THE STEAM FROM ALREADY EXISTING BOILER, IT IS ESTABLISHED BY THE TRANSFER OF OLD AND PREVIOUSLY USED MACHINER Y AND THEREFORE, DISQUALIFIES THE ASSESSEE FOR 80-IA RELIEF. ON APPE AL, COMMISSIONER OF INCOME-TAX (APPEALS) AGREED WITH THE A.O. THAT T HE NEW INDUSTRIAL UNDERTAKING HAS COME INTO EXISTENCE BY T RANSFER OF THE OLD BOILER. 5. ON APPEAL, BY THE ASSESSEE, THE ASSESSEE'S COUNS EL MERELY CONTENDED BEFORE THE TRIBUNAL THAT ON THE BASIS OF THE FIGURES GIVEN BY THE A.O. IN HIS ASSESSMENT ORDER EVEN IF THE BOI LER IS TO BE CONSIDERED TO BE A PART OF NEW POWER PLANT EVEN THE N THE VALUE OF THE OLD MACHINERY AND THE BOILER IS NOT MORE THAN 2 0% OF THE TOTAL VALUE OF THE MACHINERY AND PLANT USED IN THE BUSINE SS. THE ASSESSEE'S COUNSEL RELIED ON THE FIGURES GIVEN BY T HE A.O. HIMSELF AT PAGE 48 & 49 OF HIS ASSESSMENT ORDER, ACCORDING TO WHICH RS.14,47,600/- WAS THE ORIGINAL PURCHASE PRICE OF T HE BOILER; WHEREAS TOTAL VALUE OF THE MACHINERY INCLUDING THE ABOVE IS STATED TO BE RS.14,46,44,295/- AND 20% THEREOF IS RS.2,92, 24,180/- AND THEREFORE, THE VALUE OF THE MACHINERY AND PLANT PRE VIOUSLY USED IS RS. 14,47,600/- AND DOES NOT EXCEED 20% OF THE TOTA L VALUE OF THE MACHINERY AND PLANT OF RS.14,46,44,295/- EQUAL TO RS.2,92,24,180/-. THUS, BY VIRTUE OF THE PROVISION OF EXPLANATION 2 TO SECTION 801A(3) THE CONDITION STATED IN SECTION 80-IA (3)(II) VIZ. IT IS NOT FORMED BY THE TRANSFER TO A NEW BUSINESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE' IS COMPLIED WITH. THERE WAS NO FURTHER OR OTHER DISCUSSION ABOUT THIS POINT AT THE TIME OF HEARING OF THE APPEAL AND THE LEARNED DEPARTMENTAL REPRESENTATIVE MERELY RELIED ON THE ORDER OF THE A.O. WHICH HELD T HAT THE 'NEW POWER PLANT HAS BEEN ESTABLISHED BY WAY OF TRANSFER OF OLD AND M.A.NO.324 /AHD/2008 3 PREVIOUSLY USED MACHINERY WHICH DISQUALIFIES THE NE W POWER PLANT FROM BEING ELIGIBLE FOR DEDUCTION U/S. 80-1 A.' THE TRIBUNAL WITHOUT ANY DISCUSSION IN THE OPEN COURT ABOUT THE POINT OF EXPANSION HELD THAT THIS WAS A CASE OF EXPANSION OF THE EXISTING UNDERTAKING. THE ASSESSEE MOST HUMBLY SUBMITS THAT IN ABSENCE OF ANY ARGUMENTS HAVING BEEN INVITED FROM THE ASSESSEE ON THIS POINT, IT HAS BEEN DENIED THE RIGHT OF HEARING AND THE APP EAL ON THIS POINT HAS BEEN DECIDED WITHOUT HEARING THE ASSESSEE. FURT HER, IT IS WORTH APPRECIATING THAT THE A.O. ALSO AGREES THAT A NEW I NDUSTRIAL UNDERTAKING HAS COME INTO EXISTENCE BUT HE DENIES 8 0-IA RELIEF BECAUSE ACCORDING TO HIM THE CONDITION IN SECTION 8 0-IA(3)(II) VIZ. 'IT IS NOT FORMED BY THE TRANSFER TO A NEW BUSINESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE' IS NOT FULFI LLED AND THE SHORT SUBMISSION OF THE ASSESSEE WAS THAT EXPLANATION 2 O F SECTION 34(3) SAVES THE ASSESSEE BECAUSE VALUE OF OLD MACHINERY I NCLUDING BOILER IS LESS THAN 20%. 6. THE ASSESSEE MOST HUMBLY SUBMITS THAT THE ORDER OF THE TRIBUNAL THUS SUFFERS FROM AN APPARENT ERROR WHICH HAS RESUL TED INTO INJUSTICE TO THE ASSESSEE. THE ASSESSEE FURTHER, MO ST HUMBLY PRAYS THAT THE ABOVE APPARENT ERROR BE KINDLY RECTIFIED A ND JUSTICE BE DONE TO THE ASSESSEE, FOR WHICH ACT OF KINDNESS THE ASSESSEE SHALL FOR EVER PRAY AND REMAIN GRATEFUL. 2. IN THE COURSE OF HEARING BEFORE US OF THE MISCEL LANEOUS APPLICATION, IT WAS SUBMITTED BY THE LD. A.R. THAT AS PER THE JU DGMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF GUJARAT ALKALI AND CHEMICALS LTD. VS CIT AS REPORTED IN 249 TR (GUJ.) 82, USE BY THE ASSESSEE OF THE OLD UNDERTAKING FOR THE PURPOSE OF PRODUCTION IN IT S NEW UNDERTAKING IS NOT A DECISIVE TEST IN CONSTRUING SECTION 80-I. HE FURTHER SUBMITTED THAT AS PER THIS DECISION, IT WAS HELD BY THE HONBLE GU JARAT HIGH COURT THAT NEW UNDERTAKING MUST NOT BE SUBSTANTIALLY THE SAME OLD BUSINESS AND THERE SHOULD BE SUBSTANTIAL INVESTMENT OF NEW CAPIT AL IS IMPERATIVE. HE FURTHER SUBMITTED THAT THIS JUDGMENT OF HONBLE GUJ ARAT HIGH COURT IS SQUARELY APPLICABLE IN THE PRESENT CASE AND HENCE, THE ISSUE IN DISPUTE SHOULD BE DECIDED IN THE LIGHT OF THIS JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT. M.A.NO.324 /AHD/2008 4 3. AS AGAINST THIS, IT WAS SUBMITTED BY THE LD. D.R . THAT THERE IS NO APPARENT MISTAKE IN THE TRIBUNAL ORDER BECAUSE A CL EAR FINDING IS GIVEN BY THE TRIBUNAL THAT THERE IS MERELY AN EXPANSION OF I NDUSTRIAL UNDERTAKING AND THE NEW UNDERTAKING MUST BE INDEPENDENT OF EXIS TING UNIT AND IT SHOULD BE ABLE TO CARRY OUT ACTIVITIES INDEPENDENTL Y AND, THEREFORE, THERE IS NO APPARENT MISTAKE IN THE TRIBUNAL ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT IN THE CASE OF GUJARAT ALKALI & CHEMICALS (SUPRA) ALSO, THE SUB STANTIAL EXPANSION WAS CARRIED OUT BY THE ASSESSEE AND DEDUCTION WAS CLAIM ED U/S 80-I AND THE SAME WAS REJECTED BY THE A.O. ON THIS BASIS THAT IT WAS A CASE OF EXPANSION AND, THEREFORE, BENEFIT IS NOT AVAILABLE. THIS ORDER WAS CONFIRMED BY THE LD. CIT(A) AND BY THE TRIBUNAL BUT WHEN THE MATTER WAS CARRIED BEFORE HONBLE GUJARAT HIGH COURT, IT WAS H ELD BY THE HONBLE GUJARAT HIGH COURT THAT ONLY BECAUSE TO A CERTAIN E XTENT, THE NEW UNDERTAKING IS DEPENDENT ON THE EXISTING UNIT, IT W ILL NOT DEPRIVE THE NEW UNDERTAKING THE STATUS OF A SEPARATE AND DISTINCT I DENTITY. IT ALL DEPENDS ON THE NATURE OF THE TECHNOLOGY AND THE MECHANISM OF P RODUCTION. IN VIEW OF THIS DECISION OF HONBLE GUJARAT HIGH COURT WHIC H IS DATED 12.03.2012, IT APPEARS TO US THAT THE IMPUGNED TRIB UNAL ORDER IS NOT IN LINE WITH THIS SUBSEQUENT JUDGMENT OF HONBLE GUJARAT HI GH COURT RENDERED IN THE CASE OF GUJARAT ALKALI & CHEMICALS (SUPRA). AS PER THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF ACIT VS SAURASHTSRA KUTCH STOCK EXCHANGE LTD., AS REPORTED IN 305 ITR 227, IF THE TRIBUNAL DECISION IS NOT IN LINE WITH THE SUBSEQUENT JUDGMENT OF HON BLE JURISDICTIONAL HIGH COURT OR OF HONBLE APEX COURT, IT AMOUNTS TO AN APPARENT MISTAKE IN THE TRIBUNAL ORDER. HENCE, IN OUR CONSIDERED OP INION, THERE IS AN APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER BEC AUSE THE SAME APPEARS TO BE NOT IN LINE WITH THE SUBSEQUENT JUDGM ENT OF HONBLE GUJARAT M.A.NO.324 /AHD/2008 5 HIGH COURT WHICH IS THE JURISDICTIONAL HIGH COURT I N THE PRESENT CASE, RENDERED IN THE CASE OF GUJARAT ALKALIES & CHEMICAL S LTD. (SUPRA). IN OUR CONSIDERED OPINION, THE TRIBUNAL ORDER ON THIS ASPE CT SHOULD BE RECALLED AND THE MATTER SHOULD BE DECIDED AFRESH AFTER HEARI NG BOTH THE SIDES. WE ORDER ACCORDINGLY AND DIRECT THE REGISTRY TO FIX TH IS APPEAL FOR HEARING IN RESPECT OF GROUND NO.3 OF THE ASSESSEES APPEAL I.E . I.T.A.NO. 3528/AHD/2004. THE REGISTRY SHOULD FIX THIS APPEAL IN DUE COURSE AND SHOULD ISSUE NOTICE TO BOTH THE SIDES. 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE STANDS ALLOWED IN TERMS INDICATED ABOVE. 6. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (D. K. TYAGI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 2/5 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3/5.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 11/5/12 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.11/5 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 1 1/05/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .