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2015 (12) TMI 135 - ITAT HYDERABAD

2015 (12) TMI 135 - ITAT HYDERABAD - TMI - Rectification of mistake - deduction on the profit earned out of job work charges u/s 80IB not allowable - Held that:- On going through the facts on record, it is an admitted fact that the claim of assessee u/s 80IB was allowed by the revenue authorities from AY 1998-99, which was the first AY in which assessee made its claim u/s 80IB. The benefit, of deduction available for a specified number of years on satisfaction of the conditions laid down as per .....

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rocess of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record. In view of the settled position of law, we do not find any infirmity in the orders of CIT(A) in the AYs under consideration and accordingly the same are hereby upheld dismissing the grounds raised by revenue in all the appeals under consideration. - Decided in favour of assessee. - ITA Nos. 883, 884 & 885/Hyd/2015 - Dated:- 9-10-2015 - S .....

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convenient to dispose of these appeals by way of this common and consolidated order. 2. The grounds raised by revenue in these appeals are common, which are as under: 1. The ld. CIT(A) erred both in law and on facts 2. The ld. CIT(A) ought to have appreciated the fact that the AO after examining all the aspects has considered the proceedings u/s 154, as the mistake is within the purview of section 154. 3. As facts and grounds of appeal are identical, to dispose of these appeals, we refer to the .....

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of ₹ 1,19,06,207/- pertains to Job Work Charges and the balance pertains to Sales. Against the total turnover of. Rs.l,55,93,071/-, the assessee's income under the head income from Business works out to Rs.l,28,74,708/-. Out of this income, the assessee had claimed a deduction of ₹ 32,18,677/- (i.e. 25% of Rs.l,28,74,708/-) u/s.80IB of the Income-tax Act, 1961 (Act). The above mentioned deduction was claimed on the profit earned out of job work charges also. AO was of the view th .....

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11. In response to notice u/s.154, the assessee filed its reply. The assessee's submission was considered as not tenable. The AO, therefore, disallowed the claim u/s 80IB to the extent of ₹ 23,58,646 which is proportionate to job work income in the order passed u/s 154 dated 04/03/2014. 5. Aggrieved by the order of AO, assessee preferred appeal before ld. CIT(A). 6. In the course of the appellate proceedings, the AR submitted that the claim u/s 80IB was first made in the AY 1998-99 and .....

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/s 80IB on job work charges could not be brought under the purview of sec. 154. The AR contended that the Assessing Officer was not justified to re-appreciate and reinterpret the provisions of law and that the nature of the disallowance did not fall within the concept of mistake apparent from the record as defined by the Hon ble Supreme Court in the case of ITO vs Volkart Brothers [1971] 82 ITR SO(Se) in the following words: "A mistake apparent on the record must be an obvious and patent mi .....

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rom record since it is a debatable point of law. The ld. CIT(A) held that the recourse to sec.154 for making the disallowance is, therefore, not justified and not in accordance with the provisions of this section. The ld. CIT(A) set aside the disallowance made by the Assessing Officer, allowing the appeal of assessee. In AY 2004-05 and 2005-06 also ld. CIT(A) allowed the appeals of assessee. 8. Aggrieved by the order of ld. CIT(A), revenue is in appeal before us. 9. Ld. DR relied upon the order .....

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s of sect ion 80lA of I.T. Act , 1961. ii) The f irst assessment year of the appellants claim U/s.80-IA was for the assessment year 1998-99. The claim was examined. A categorical finding in the assessment order was given as to how and why the appellant was eligible for the claim and the claim has been allowed. The under taking satisf ied the condit ions laid down under the respective provisions of the I.T. Act, 1961 as has been held while allowing the claim. iii) The claim that stood considered .....

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hat was considered and allowed on the sale of by product, spent sulphur ic acid. The orders U/s.263 of I .T. Act of the Commissioner of Income Tax were contested before the ITAT. v) The ITAT cancelled the order of CIT, in terms of its order dated 23rd October 2009. The consequence being that the claim of deduct ion has been held to be valid. Again for the assessment year 2005-2006 while completing the assessment on 31/12/2007 the claim was denied. This is because the revision proceedings u/s.263 .....

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essment from the assessment year 2003-2004 has fallen under the purview of the provisions of section 153A of I.T. Act 1961. ii) I t is borne out of the assessment records that the assessment years 2003-2004; 2004-2005 and 2005-2006 are par t of the block assessments completed U/s.143(3) read with sect ion 153A of the I.T. Act , 1961. The subject mat ter at issue was once again examined by the assessing off icer in the assessment proceedings and the claim has been allowed. The back drop of the fa .....

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ied upon by audit were not applicable to the appellant's facts and they are distinguishable. A copy of the explanat ion is enclosed to be read as par t and parcel of this statement of facts. iv) The assessing of ficer with a simple and bald observation reading as "the assessee's submission is considered but not found tenable" passed the present rect if icat ion order U/s.154 treat ing the same as a mistake apparent from record modifying the assessed income with an addit ion of .....

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tion available for a specified number of years on satisfaction of the conditions laid down as per the respective provisions of the Act once considered and allowed cannot be withdrawn subsequently and that too by recourse to the proceedings U/s.154 of the I.T. Act, 1961 when there was no change either in facts and/or in law. iv) The settled judicial proposition of law enunciated by the Apex Court was categorical to the effect that "A mistake apparent on the record must be an obvious and pate .....

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