TMI Blog2009 (9) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case are that the CIT on perusal of assessment order and other details available on record seen that the assessee had claimed deduction under section 80 HHC of the Act to the extent of Rs. 8,18,638 against export of manufactured plastic processing machines . The assessee had shown total export turnover of Rs. 1,31,87,610 and against this the assessee had debited Rs. 61,31,529 on account of purchases. On examination of details of purchases, the CIT found that the assessee made total purchases of Rs. 67,06,250 and was in receipt of S.T. refund of Rs. 5,74,720. The CIT noticed that the assessee was in receipt of sales tax refund of Rs. 5,74,720, which was included in the profit should have been excluded from the profit component for wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned AR submitted that the assessee is an exporter and sales tax payable on purchases which is utilized for manufacturing goods exported is refundable/not payable as per the policy of the State Government. Therefore, the assessee is not liable for sales tax on the purchases and accounted the purchases net of sales tax liabilities. The assessee has also issued the requisite forms and the suppliers who have not charged the sales tax in some of the cases. But in the purchases from traders, sales tax is built in the cost of material which has been claimed as refund and reduced from the cost of purchases at the end of the year. The learned AR further submitted that sales tax set off/refund receivable by the assessee from the State Government d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 500,911 Deduction u/s 80HHC = 30% of 2728792 818638 5. The learned DR has relied upon the order of CIT. 6. We have heard the learned representatives of the parties and perused the record. The issue under consideration is pertaining to section 263 of IT Act. The said section reads as under:- "263. (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation. In computing the period of limitation for the purposes of subjection (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has, therefore, to be considered firstly as to when an order can be said to be erroneous. We find that the expressions "erroneous", "erroneous assessment" and "erroneous judgment" have been defined in Black s Law Dictionary. According to the definition, "erroneous" means "involving error; deviating from the law". "Erroneous assessment" refers to an assessment that deviates from the law and is, therefore, invalid, and is defect that is jurisdictional in its nature, similarly, "erroneous judgment" means "one rendered according to course and practice of court, but contrary to law, upon mistaken view of law, or upon erroneous application of legal principles. 6.2 An order cannot be termed as erroneous unless it is not in accordance with law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, viz., that the order is erroneous, is absent. 6.3 In the light of above discussion, if we consider the facts of the case under consideration, we find that the assessee is an exporter and eligible for refund of sales tax on purchases charged by the supplier which was used for manufacturing of exported goods. The assessee recorded gross purchases including sales tax, which was refundable to the assessee. The assessee followed regular system of accounting to reduce purchases when the sales tax was refunded. It is a settled principle of law as has been held by the Apex Court in the case of CIT v. Laxmi Machine Works [2007] 290 ITR 667 ftn1Chandrakant L. Nandwana v. Asstt. CIT.htm that sales tax is not a part of total turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
