M/s Vardhman Industries, Solan V. Income Tac Officer, Baddi

MA 62/CHANDI/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6458 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 19-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ASHISH GOYALCA

Judgement Text

,, IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH , !'# $ % &' , '( BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER M.A. NO.61 & 62/CHD/2019 (ARISING OUT OF ITA NO.317 & 318/CHD/2016- DECIDED VIDE ORDER 13.11.2018) / ASSESSMENT YEAR :2010-11 & 2011-12 M/S VARDHMAN INDUSTRIES, 55, HPSIDC INDUSTRIAL AREA, BADDI, DISTT.SOLAN (H.P.) THE ITO., BADDI (H.P) ./ PAN NO:AAEFV7858F / APPELLANT / RESPONDENT / ASSESSEE BY : ASHISH GOYAL,C.A ! / REVENUE BY : SMT. ZEENIA HANDA SR.DR ' #$ / DATE OF HEARING : 05.04.2019 %&'($ / DATE OF PRONOUNCEMENT : 05.04.2019 '/ ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: THE PRESENT MISC. APPLICATIONS RELATE TO THE SAME A SSESSEE, ARISING OUT OF ITA NO.317 & 318/CHD/2018 AND HAS BEEN MOVED BY THE ASSESSEE PLEADING THEREIN FOR RECALLING THE CONSOLIDATED ORDER DATED 13.11.2018 OF THE TRIBUNAL. 2. THE ASSESSEE HAS PRAYED FOR RECALLING THE ORDER OF THE TRIBUNAL DATED 13.11.2018, SUBMITTING THAT THE APPEAL OF THE ASSESSEE WAS DISMISSED RELYING UPON THE JUDGEMENT OF THE AP EX COURT IN THE CASE OF CLASSIC BINDING INDUSTRIESIN CIVIL APPE AL NO(S) 7208 OF M.A. NO 61 & 62 -C-2019 INITA 317&318-C-18 M/S VARDHMAN INDUSTRIES, BADDI 2 2018 DATED 20.08.2018, WHICH HAS SINCE BEEN RECONS IDERED AND DULY REVERSED BY THE HONBLE APEX COURT IN THE CASE OF PCIT, SHIMLA VS. AARHAM SOFTRONICS & ORS. IN CIVIL APPEA L NO.1784 OF 2019, DATED 20.02.2019,HOLDING THAT THE RATIO LAID DOWN IN THAT JUDGEMENT WAS NOT GOOD AT LAW. 3. IT WAS POINTED OUT THAT THE ISSUE INVOLVED IN TH E APPEALS WAS RELATING TO THE ALLOWANCE OF DEDUCTION U/S 80IC OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS 'ACT') @ 100% OF THE ELIGIBLE PROFITS, ON SUBSTANTIAL EXPANSION UNDERTAKEN BY THE ASSESSEE EVEN THOUGH THE ASSESSEE HAD ALREADY AVAILED THE DEDUCTI ON @ 100% FOR 5 YEARS U/S 80IC OF THE ACT ON ESTABLISHMENT OF THE UNIT. THAT EARLIER THE ITAT HAD DISMISSED THE APPEAL OF THE AS SESSEE FOLLOWING THE DECISION DATED 20.8.2018 OF THE HON'BLE SUPREME COURT DECIDED IN FAVOUR OF THE REVENUE IN THE GROUP OF CASES WITH THE LEAD CASE AS CIT VS. M/S CLASSIC BINDING INDUSTRIES, IN CIVIL APPEAL NO(2) 7208 OF 2018. IT WAS FURTHER SUBMITTED BY THE LD. COU NSEL FOR THE ASSESSEE THAT THE ISSUE NOW STANDS COVERED WITH TH E RECENT JUDGMENT OF HON'BLE SUPREME COURT PASSED IN CASE OF PR CIT VS. AARHAM SOFTRONICS (SUPRA), WHEREBY, THE ORDER IN T HE CASE OF CIT(A) VS. CLASSIC BINDING INDUSTRIES IN CIVIL AP PEAL NO(S) 7208 OF 2018 DATED 20.08.2018 HAS BEEN REVERSED. IT WAS, THEREFORE, PLEADED THAT THE ORDER DATED 13.11.2018 BE RECALLED . 4. THE LD. DR DID NOT CONTROVERT THE SAME. 5. WE HAVE GONE THROUGH THE ENTIRE FACTS OF THE CAS E. WE FIND THAT GROUND NO.2 & 4(II) OF ITA NO. 317/CHD/16 RELA TING TO A.Y 2010-11 AND GROUND NO.2 IN ITA NO. 318/CHD/16 RELAT ING TO A.Y M.A. NO 61 & 62 -C-2019 INITA 317&318-C-18 M/S VARDHMAN INDUSTRIES, BADDI 3 2011-12, HAD BEEN DECIDED FOLLOWING THE DECISION O F THE HONBLE APEX COURT IN CLASSIC BINDING(SUPRA). 6. GROUND NO.2 IN BOTH THE APPEALS WAS AGAINST THE RESTRICTION OF DEDUCTION U/S 80IC OF THE ACT, BEYOND FIVE YEARS FR OM COMMENCEMENT OF MANUFACTURING ACTIVITY, TO 25% OF T HE ELIGIBLE PROFITS DESPITE THE ASSESSEE HAVING UNDERTAKEN SUB STANTIAL EXPANSION AND READ IDENTICALLY IN BOTH THE APPEALS AS UNDER: ITA NO. 317/CHD/2016 2.(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW BY UPHOLD ING THE ORDER OF THE AO RESTRICTING THE DEDUCTION CLAIMED . BY THE ASSESSEE U/S 80IC OF THE ACT TO RS.31,39,394/-, I.E . 25% DEDUCTION, AS AGAINST RS. 1,25,57,577/-, I.E. 100% DEDUCTION CLAIMED BY THE ASSESSEE. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW IN CONFI RMING THE SAID ADDITION BY MISINTERPRETING THE PROVISIONS OF SECTION 80IC OF THE ACT REGARDING 'SUBSTANTIAL EXPANSION'. ITA NO.318/CHD/2016 2.(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW BY UPHOLDING ORDER OF THE AO RESTRICTING THE DEDUCTION CLAIMED BY THE ASSESSEE U /S 80IC OF THE ACT TO RS.44,00,333/-, I.E. 25% DEDUCTION, AS AGAINS T RS.1,76,01,333/-, I.E. 100% DEDUCTION CLAIMED BY TH E ASSESSEE. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW IN CONFIRMING THE S AID ADDITION BY MISINTERPRETING THE PROVISIONS OF SECTION 8 0IC OF THE ACT REGARDING 'SUBSTANTIAL EXPANSION'. 7. GROUND NO.4(II) IN ITA NO. 317/CHD/2016 RELATING TO A.Y 2010-11, WAS AGAINST DENIAL OF CLAIM OF DEDUCTION U /S 80IC OF THE ACT, ON MISCELLANEOUS INCOME OF RS.1,27,000/-, WHIC H WAS ALLOWED BY THE ITAT, BUT THE DEDUCTION U/S 80IC OF THE ACT WAS RESTRICTED TO 25% OF THE ELIGIBLE PROFITS IN VIEW OF THE DECISION OF THE APEX COURT IN CLASSIC BINDING(SUPRA).THE SAID GROUND NO.4(II) READS AS UNDER: M.A. NO 61 & 62 -C-2019 INITA 317&318-C-18 M/S VARDHMAN INDUSTRIES, BADDI 4 4.(II) THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS A ND IN LAW IN RESTRICTING THE DISALLOWANCE MADE BY THE AO TO 25% OF THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80 IC OF THE ACT ON ACCOUNT OF MISCELLANEOUS RECEIPTS OF RS.1,27,000/-, DESPITE THE FACT THAT THE ASSESSEE IS ELIGIBLE FOR 100% DEDUCTION U/S 80IC. 8. IT IS AN ADMITTED FACT THAT THE ISSUE IN THE AB OVE GROUNDS IS COVERED BY THE DECISION OF THE HON'BLE APEX COURT I N THE CASE OF PR.CIT, SHIMLA VS. M/S AARHAM SOFTRONICS IN CIVIL APPEAL NO.1784 OF 2019, DATED 20.02.2019, WHEREIN, IT HAS BEEN H ELD THAT EVEN A NEW UNDERTAKING WHICH HAS CLAIMED DEDUCTION OF ITS ELIGIBLE PROFITS @ 100% THEREOF FOR THE FIRST FIVE YEARS IS ENTITLED TO CLAIM DEDUCTION @ 100% OF ITS PROFITS THEREAFTER ON ACCOUNT OF SUBS TANTIAL EXPANSION UNDERTAKEN BY IT. SINCE THE DECISION OF THE APEX C OURT IN CLASSIC BINDING(SUPRA) STANDS OVERRULED, THIS IN ITSELF CON STITUTES A MISTAKE APPARENT FROM RECORD. 9. A BINDING DECISION IS ALWAYS RETROSPECTIVE AND T HE DECISION OVERRULED WAS NEVER THE LAW OF THE LAND. WHEN A COU RT DECIDES A MATTER IT ONLY INTERPRETS LAW AND APPLIES IT TO THE FACTS OF THE CASE. IF THE INTERPRETATION OF LAW IS FOUND TO BE CONTRAR Y IN THE LIGHT OF JUDICIAL PRONOUNCEMENT RENDERED SUBSEQUENTLY, IT DI SCLOSES A MISTAKE APPARENT FROM RECORD. HENCE, A MISTAKE APPARENT ON RECORD HAS OCCURRED IN THE ORDER DATED 13.11.2018 OF THIS TRIBUNAL. HENCE, THIS IS A FIT CASE FOR RECALLING THE SAID ORDER FOR THE LIMITED PURPOSE OF ADJUDICATING GROUND NO.2 & 4(II) IN ITA NO.317/CHD/2016 AND GROU ND NO.2 IN ITA NO. 317/CHD/2016, WHICH WE HEREBY DO. M.A. NO 61 & 62 -C-2019 INITA 317&318-C-18 M/S VARDHMAN INDUSTRIES, BADDI 5 10. THE ORDER DATED 13.11.2018 IS ACCORDINGLY RECAL LED, THE APPEAL IS RESTORED AND POSTED FOR HEARING AFRESH FOR TODAY I.E. 05.04.2019. 11. IN THE RESULT, BOTH THE MISCELLANEOUS APPLICAT IONS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.04.2019. SD/- SD/- # $ % &' (SANJAY GARG) (ANNAPURNA GUPTA) + /JUDICIAL MEMBER '( /ACCOUNTANT MEMBER ,# /DATED: 05.04.2019 * ' * )&* +, -, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ) ) ' . / CIT 4. ) ) ' . ( )/ THE CIT(A) 5. ,/0 1 , ) $ )1 , 23405 / DR, ITAT, CHANDIGARH 6. 04 6# / GUARD FILE )&* ' / BY ORDER, ! / ASSISTANT REGISTRAR