TMI Blog2011 (5) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... epresented By: Dr. Shri Rakesh Gupta and Ashwani Taneja for the Appellant. Shri H.L. Dihana and Ms. Y. Kakkar for the Respondent. Shri R.P. Tolani, This appeal has been filed by the assessee against the order dt. 17th March, 2006 (wrongly mentioned as 17th March, 2004 in the order) passed by CIT, Delhi-IX, New Delhi, under section 263. 2. Following grounds of appeal are raised : "1. On the facts and in the circumstances of the case and in law, the learned CIT, grossly erred on erroneous and insufficient grounds, in reopening the assessment of the assessee under section 263 of the Act terming it as erroneous and prejudicial to the interest of the Revenue on the grounds that the turnover and profit of separate and distinct business carried on by the assessee are liable to be clubbed to form the total turnover and profits of the business respectively for calculating the deduction under section 80HHC of the Act and thus restricting the claim under section 80HHC of the Act to a sum of Rs. 1,22,83,280. 2. On the facts and in the circumstances of the case in law, the learned CIT, while reopening the assessment, erred in not appreciating the fact and the law that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nit. Assessee maintains completely separate books of account for this export trading which are separately audited including its P L A/c. 3.2. Assessee filed auditor's certificate calculating deduction under section 80 HHC qua this export trading at a sum of Rs. 2,17,76,592 which was based on the amount of total turnover of the export business as per separate books. AO however reduced the claim under section 80HHG by a proper working, which is mentioned therein. 3.3. Aggrieved against the order of AO, assessee preferred first appeal including the issue of reduction of deduction under section 80HHC, CIT(A) vide order dt. 6th Dec., 2004 confirmed the order of AO on this issue. 3.4. CIT, thereafter issued notice under section 263 claiming that AO's order was erroneous and prejudicial to the interest of Revenue inasmuch as the total turnover of all units was not aggregated., Assessee objected to the same by way of written submissions dt. 10th Jan., 2006. CIT however passed the impugned order under section 263 holding that the turnover of all the business entities of the appellant were to be aggregated as "total turnover" for computation of deduction under section 80HHC irrespectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stries Ltd. [2002] 257 ITR 41 which is another legal view of the same issue, contrary to view adopted by AO. (iii) At the most CIT's view gives rise to a debate being possible on the issue about "total turnover" i.e. the aggregate turnover of all the business units or "total turnover" of the export business only when undisputedly separate books of account for such export business have been maintained and it is not carried on by any other entities. The issue being debatable, it was not amenable to be revised under section 263 as per Hon'ble Supreme Court decision in the case of CIT v. Max India Ltd. [2007] 295 ITR 282. (iv) That the assessment order had merged into the order of CIT(A) as in first appeal the ground about deduction under section 80HHC was adjudicated against assessee by CIT(A) and therefore, on account of merger of this order in the order of CIT(A), revision could not be done by CIT under section 263 due to express bar contained in Explanation (c) to section 263(1) and in view of catena of judgments on this aspect. 4.1. Learned counsel contends that Hon'ble Madras High Court in the cases of the Madras Motors Ltd. (supra) and Shiva Distilleries Ltd. (supra) have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 80HHC was before him and dealt with by him. Paper book 121-137 written submissions during section 263 proceedings. 4.3. It is contended that all the necessary disclosures and submissions were made before AO who duly verified them. Besides, it is a settled legal proposition that power of CIT(A) are co-terminous with that of AO and CIT(A) can do what AO could not do. When the issue in question has been duly considered in assessment order and further adjudicated in appeal by learned CIT(A) in view of the following decisions, revision under section 263 cannot be made by CIT : (i) Sonal Garments v. Jt CIT [2005] 95 ITD 363 (Mum.) (ii) Saw Pipes Ltd. v. Addl. CIT [2005] 3 SOT 237 (Delhi) (iii) Sahara India Savings Investment Corprn. Ltd. v. Asstt. CIT [2004) 90 TTJ (Luck.) 878. (iv) Sahara India Mutual Benefit Co. Ltd. v. Asstt. CIT (IT Appeal No. 509 (All.) of 1999, dated 23-5-2000. (v) Hooghly Mills Co. Ltd. v. Asstt. CIT [1999] 71 ITD 264 (Cal.). (vi) Sadhu Ram Sons v. CIT (IT Appeal No. 223 (Asr.) of 2003 and C.O. No. 1 (Asr) of 2006] dated 19-1-2007. (vii) Marico Industries Ltd. v. Asstt. CIT [2009] 27 SOT 73 (Mum.) URO. 4.4. When there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under section 80HHC in the present case was considered during assessment proceedings and which view was in consonance with Madras High Court decision in the case Madras Motors Ltd. (supra) and the same being a plausible view, revisionary power invoked by CIT under section 263 cannot be sustained. 6.2. CIT in impugned order is aware about Madras High Court judgment but was of the opinion that Kerala High Court in the case of Indian Spices Co. v. CIT [2004] 267 ITR 445 has considered the above Madras High Court decision. CIT chose to follow Kerala High Court decision whereas AO's views find support in Madras High Court. It is thus evident that the CIT also recognized that the issue involved a judicial debate. This being so Hon'ble Supreme Court in the case of Max India Ltd. (supra) and Delhi High Court in case CIT v. DLF Power Ltd. [2010] 329 ITR 289 (Delhi) and Punjab Haryana High Court in case CIT v. Saluja Exim Ltd. [2010] 329 ITR 603 have held that such issue is riot amenable to be revised under section 263. Therefore in our view CIT erred in assuming jurisdiction under section 263 on an issue which he accepts being debatable. 6.3. The issue of deduction under section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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