MADHUCON PROJECTS LIMITED ,HYDERABAD V. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(1), HYDERABAD

MA 131/HYD/2022

AI Insights

The case involves two Miscellaneous Applications filed by the Revenue and the Assessee, Madhucon Projects Ltd., against the common order of the Income Tax Appellate Tribunal dated 11.01.2022. The applications sought to rectify alleged mistakes in the Tribunal's earlier decision regarding the eligibility of the Assessee to claim deductions under section 80IA of the Income Tax Act, 1961, specifically related to income from the sale of scrap metal and other income, and the treatment of MAT credit. The Tribunal dismissed both applications, stating that the issues raised did not amount to a mistake apparent on record and that the applications were essentially seeking a review of the Tribunal's earlier decision, which is not allowed under the Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773192 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-09-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2013-2014
• Appeal Filed On: 19-09-2022
• Other Referred Cases: Liberty India vs. CIT [2009] 183 Taxman 349 (S.C.), ACIT vs. Sourashtra Kutch Stock Exchange Ltd., [2008] 305 ITR 227 (SC), CIT vs. Reliance Telecom Ltd., [2021] 133 taxmann.com 41 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MADAN MOHAN MEENA
• Assessee Lawyers: P MURALI MOHAN RAO

Judgement Text

"INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER M.A.No.117/Hyd./2022 Arising out of ITA.No.636/Hyd./2020 - Assessment Year 2013-2014 The DCIT/ACIT, Central Circle-2(1), Hyderabad. vs. Madhucon Projects Ltd., Hyderabad. PAN AABCM4757A (Applicant) (Respondent) M.A.No.131/Hyd./2022 Arising out of ITA.No.609/Hyd./2020 - Assessment Year 2013-2014 Madhucon Projects Ltd., Hyderabad. PAN AABCM4757A vs. The DCIT/ACIT, Central Circle-2(1), Hyderabad. (Applicant) (Respondent) For Assessee : CA, P Murali Mohan Rao For Revenue : Sri Madan Mohan Meena, Sr. AR Date of Hearing : 12.09.2025 Date of Pronouncement : 22.09.2025 ORDER PER MANJUNATHA G, A.M. : The above two Miscellaneous Applications M.A. Nos.117 & 131/Hyd./2022 has been filed by the Revenue and Assessee viz., Madhucon Projects Ltd., requesting to Printed from counselvise.com 2 MA.Nos.117 & 131/Hyd./2022 rectify the mistakes crept in the common order of the Tribunal dated 11.01.2022 passed in ITA.Nos.636 & 609/ Hyd./2020 for the assessment year 2013-2014, respectively, by exercising it’s jurisdiction u/sec.254(2) of the Income Tax Act, 1961. Since common issues are involved in both these Miscellaneous Applications, these were heard together and are being disposed of by this single consolidated order for the sake of convenience and brevity. 2. The grounds raised by the Revenue in it’s M.A.No.117/Hyd./2022 in ITA.No.636/Hyd./2020 for the assessment year 2013-2014 are as under : 1. “The Hon'ble TAT has erred in its common order in ITA Nos. 635 836/Hyd/2020, as the grounds of appeal for the Asst. Year 2012-13 and 2013-14 are not one and the same. The ground of appeal for the Asst. Year 2012- 13 related to the eligibility of the assessee for deduction u/s. 80IA, since the assessee failed to produce supporting details to substantiate its claim Whereas the ground of appeal for the Asst Year 2013-14 relates to whether or not the assessee is entitled to claim deduction u/s 80IA towards income from sale of scrap metal and other income 2. The appellant prays that the Hon'ble ITAT may kindly consider the rectification of its common order in ITA No. 636/Hyd/2020, as the Hon'ble ITAT has dismissed the ground raised by the revenue without adjudicating the issue Printed from counselvise.com 3 MA.Nos.117 & 131/Hyd./2022 3. The Appellant craves leave to add, amend alter vary and/or withdraw any or all the above grounds of Appeal.” 3. The grounds raised by the Assessee in it’s M.A.No.131/Hyd./2022 in ITA.No.609/Hyd./2020 for the assessment year 2013-2014 are as under : 1. \"1. The Ld. CIT(A) erred in partly allowing the appeal. 2. (a) The Ld. CIT(A) erred in confirming the disallowance of deduction claimed u/s 80-IA of the Act to the extent of Rs.2.48.96.334/-- (b) The Ld. CIT(A) ought to have allowed the MAT credit for Rs.2.48,96,334/- which has been included in the deduct claimed u/s 80IA of the Act. (c) Without prejudice, CIT(A) ought to have appreciated the fact that MAT credit of Rs.2,48,96,334/- cannot be added to the total income of the assessee. 3. The appellant may, add or alter or amend or modify or substitute or delete and/or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal\". 4. CA, P. Murali Mohan Rao, Learned Counsel for the Assessee submitted that, the Hon'ble ITAT has dismissed all the grounds raised by the appellant in its appeal in ITA No.609/Hyd/2020 for the assessment year 2013-14, vide para no.18 of it’s order by relying on the Printed from counselvise.com 4 MA.Nos.117 & 131/Hyd./2022 decision of Hon'ble Supreme Court in the case of Liberty India vs. CIT [2009] 183 Taxman 349 (S.C.) where in it has been held that Duty Drawback receipts/DEPB benefits are on account of statutory provisions in Customs Act/ Scheme(s) framed by Government and that Profits so derived do not form part of net profits of eligible industrial undertaking for the purpose of sections 80-IB, 80-1 and 80- IA of the Income Tax Act, 1961. The Learned Counsel for the Assessee submitted that, as can be seen from the above, the Hon'ble ITAT has not adjudicated on ground no.2(c). The adjudication was on ground nos.2(a) and 2(b) only dealing with the allowability or otherwise of deduction u/sec.80IA on MAT credit. Therefore, he submitted that non- adjudication of ground no.2(c) is a mistake apparent from the order of the Hon'ble Tribunal, and therefore, pleaded that the order of the Tribunal 11.01.2022 in ITA.No.609/Hyd./2020 be recalled in the interest of justice and to decide the issue. Printed from counselvise.com 5 MA.Nos.117 & 131/Hyd./2022 4.1. The Learned Counsel for the Assessee submitted that, decision of the Hon’ble Supreme Court cited by he Tribunal in it’s order dated 11.01.2022 in ITA.No.609/ Hyd./2020 is not applicable to the appellant's case for the assessment year under consideration for the following reasons: i. The issue before the Supreme Court in that case was whether profits earned by virtue of Duty Draw back receipts/DEPB farm part of net profits of eligible industrial undertaking for the purpose of section 80- 1B, 80-1 and 80-IA of the Act. But, in the appellant's case, the issue is accounting of MAT credit available u/s 115.JAA for Rs.2,48,96,334/- by the appellant. At the outset, it is humbly submitted that MAT credit is not a profit which can neither be credited to P & L account nor be claimed as deduction u/s 80-IA of the Act. In the appellant's case, the MAT credit of Rs.2,48,96,334/- that has arisen from the assessment year 2012-13:It is an asset to the appellant which is not to be carried to the P & L Printed from counselvise.com 6 MA.Nos.117 & 131/Hyd./2022 account prepared for the financial year 2012-13 according to the approved Indian Accounting Standards. However, by inadvertence, the same amount has been shown in the P & L account first and has been considered for the purpose of computing deduction u/s 80-1A of the Act later. Had the amount not been shown in the P & L account, there would not have been a need of considering the same in the computation of deduction u/s 80-IA for the year under consideration. (ii) (a) DEPB/Duty Drawback remissions are incentives where as MAT credit u/s 115JAA of the Income Tax Act, 1961 is not an incentive and therefore, there cannot be any comparison between DEPB/Duty Draw back remissions and MAT credit u/s 115. JAA of the Act. (b) Unlike MAT credit u/s 115JAA, DEPB/Duty Draw back remissions are incentives which flow from the schemes framed by the Central Government. Printed from counselvise.com 7 MA.Nos.117 & 131/Hyd./2022 (iii) The MAT credit of Rs.2,48,96,334/- do not form part of the net profits irrespective of the issue whether it is eligible or not for any deduction under Chapter VIA of the Act, leave alone, the deduction u/s 80-IA of the Act. Since the amount has been inadvertently included in net profits for the year under consideration, it necessitated to claim the same as deduction u/s 80-1A of the Act. (iv) Unlike Duty Draw back which is a trading receipt of the undertaking having direct nexus with the activity of the concern, MAT credit has nothing to do with the nature of trade; It is the credit to be availed by the appellant in the year in which its tax liability as per normal provisions exceeds the tax liability as per MAT provisions. (v) The credit under DEPB can be utilized by the exporter- assessee itself or can even be transferred to any other party. But, the MAT credit u/s 115JAA cannot be transferred to any other party. Printed from counselvise.com 8 MA.Nos.117 & 131/Hyd./2022 (vi) DEPB/Duty Draw back belong to the category of ancillary profits of the undertakings where as MAT credit u/sec.115JB cannot be considered as \"Profit\" so as to be carried to P & L account of the year, as the same represents an asset as per the approved Indian Accounting Standards. 4.2. The Learned Counsel for the Assessee, therefore, submitted that, there is a apparent mistake in the order of the Tribunal dated 11.01.2022 and prayed to recall the order passed in appeal in ITA.No.609/Hyd/2020 dated 11.01.2022 for the assessment year 2013-14. 5. Sri Madan Mohan Meena, learned Sr. AR for the Revenue, on the other hand, submitted that, although, the Revenue has taken separate grounds for the assessment years 2012-2013 and 2013-2014, but, the Tribunal in paras 22 to 23 of the Order has held that the grounds for both the assessment years are similar and further, dismissed the appeals of the Revenue by holding that, Learned DR has not brought any contrary decision in this regard. But, the fact remains that, the grievance of the Revenue in their appeal Printed from counselvise.com 9 MA.Nos.117 & 131/Hyd./2022 for the assessment year 2012-2013 is on non-submission of relevant evidences in support of the claim of the assessee, whereas for the assessment year 2013-2014, it relates to whether or not, the assessee is entitled to claim deduction u/sec.80IA towards income from sale of scrap metal and other income. The said findings of the Tribunal constitute a mistake apparent on record, which needs to be rectified u/sec.254(2) of the Income Tax Act, 1961. Therefore, he submitted that, the Order of the Tribunal dated 11.01.2022 should be recalled. 6. We have heard both the parties and considered relevant contents of the Miscellaneous Application filed by the assessee against the Order of the Tribunal dated 11.01.2022 in ITA.No.609/Hyd./2020 for assessment year 2013-2014 and we find that, the Tribunal after considering the relevant grounds of appeal of the assessee and arguments advanced by both the parties held that, MAT credit is held not to be eligible for deduction u/sec.80IA of the Act as it is not directly linked to the eligible business, but, only comes into operation due to statutory provision. In Printed from counselvise.com 10 MA.Nos.117 & 131/Hyd./2022 our considered view, the findings recorded by the Tribunal in the given facts and circumstances of the case, cannot be considered as mistake apparent on record, which could be considered u/sec.254(2) of the Income Tax Act, 1961. Further, the assessee sought through this Miscellaneous Application to review the Order of the Tribunal dated 11.01.2022 under the garb of rectification, which is not permissible, in light of of decisions of Hon’ble Supreme Court in the case of ACIT vs., Sourashtra Kutch Stock Exchange Ltd., [2008] 305 ITR 227 (SC) and CIT vs., Reliance Telecom Ltd,., [2021] 133 taxmann.com 41 (SC). Thus, we dismiss the M.A.No.131/Hyd./2022 filed by the assessee. 7. In the result, M.A.No.131/Hyd./2022 of the Assessee is dismissed. M.A.No.117/Hyd./2022 – A.Y. 2013-2014 – [Revenue M.A.] 8. Coming back to the Miscellaneous Application No.117/Hyd./2022 filed by the Revenue for the assessment year 2013-2014, we find that, the Revenue’s main Printed from counselvise.com 11 MA.Nos.117 & 131/Hyd./2022 contention is, the grounds raised for both the assessment years are on different issues, although, it pertains to deduction claimed u/sec.80IA of the Act. We find that, the Tribunal has given a categorical finding in paras 20 to 22 of the Order dated 11.01.2022 that, the Revenue has raised grounds on identical issues of deduction claimed by the assessee for non-furnishing of relevant evidences in support of it’s claim and after considering the relevant facts, the Tribunal has held that, the learned CIT(A) allowed the deduction claimed by the assessee by following the decision of his predecessor in assessee’s own case for earlier assessment years. Before us, the Learned Sr. AR could not brought any contrary material in this regard. In our considered view, the above findings of the Tribunal, cannot be considered as mistake apparent on record, which could be rectified u/sec.254(2) of the Income Tax Act, 1961. Further, what is canvassed through the present Miscellaneous Application by the Revenue is that, to review the Order of the Tribunal dated 11.01.2022 under the garb of rectification, which is not permissible, in light of of Printed from counselvise.com 12 MA.Nos.117 & 131/Hyd./2022 decisions of Hon’ble Supreme Court in the case of ACIT vs., Sourashtra Kutch Stock Exchange Ltd., [2008] 305 ITR 227 (SC) and CIT vs., Reliance Telecom Ltd,., [2021] 133 taxmann.com 41 (SC). Thus, we dismiss the M.A.No.117/ Hyd./2022 filed by the Revenue. 9. In the result, M.A.No.117/Hyd./2022 of the Revenue is dismissed. 10. To sum-up, M.A.No.131/Hyd./2022 in ITA.No. 609/Hyd./2020 for the assessment year 2013-2014 of the Assessee is dismissed and M.A.No.117/Hyd./2022 in ITA.No.636/Hyd./2020 for the assessment year 2013-2014 of the Revenue is dismissed. A copy of this common order be placed in the respective case files. Order pronounced in the open Court on 22.09.2025. Sd/- Sd/- [RAVISH SOOD] [MANJUNATHA G] JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 22nd September, 2025 VBP Printed from counselvise.com 13 MA.Nos.117 & 131/Hyd./2022 Copy to 1. The DCIT/ACIT, Central Circle-2(1), Room No.612, 6th Floor, Aayakar Bhavan, Basheerbagh, Hyderabad. 2. M/s. Madhucon Projects Ltd., Hyderabad. C/o. P. Murali & Co. Chartered Accountants, 6-3-655/1/3, Somajiguda, Hyderabad - 500 082. 3. CIT(A)-12, Hyderabad. 4. The Pr. CIT-(Central), Hyderabad. 5. The DR ITAT “A” Bench, Hyderabad 6. Guard File //By Order// //True Copy// Printed from counselvise.com "