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Atul Limited Versus DCIT (OSD) , Range-1, Ahmedabad.

2016 (5) TMI 414 - ITAT AHMEDABAD

Deduction u/s.80HHC - exclusion of profit on sale of DEPB licence for computing the deduction u/s.80HHC - Held that:- en a court interprets a provision, it decides as to what is the meaning and effect of the words used by the Legislature. It is a declaration regarding the statute. In other words, the judgment declares as to what the Legislature had said at the time of the promulgation of the law. The declaration is - This was the law. This is the law. This is how the provision shall be construed .....

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he DEPB licence is to be excluded. Therefore, in view of subsequent decision of the Hon’ble Supreme Court, which has explained the position of law, when it was brought on the statute book, resulted an apparent error in the order of the Tribunal, which requires rectification. Therefore, we recall the finding of the Tribunal on ground no.3 also, and restore this ground for adjudication afresh. - Misc. Application No.157/Ahd/2012, ITA No.1547/Ahd/2007 - Dated:- 30-3-2016 - SHRI PRAMOD KUMAR, ACCOUN .....

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essee has pleaded as under: The Hon'ble ITAT noted at Page 7 Para 8 of the impugned order that both the parties agreed that the issue was squarely covered against the applicant by the decision dated 24/07/2009 of the ITAT Ahmedabad Bench 'D' in the assessee's own case for A.Y. 2003/04 in ITA No. 157/Ahd/2007 and further that Hon'ble ITAT in that order followed decision in ITA # 3528/Ahd/2004 dated 16/05/2008 in A.Y. 2001/02. The Hon'ble ITAT on the basis of above observat .....

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" 3. With the assistance of the ld. representatives, we have gone through the record carefully. We find that the Tribunal has recalled its finding on this issue in the Asstt.Year 2001-02 vide order dated 11.5.2012 passed in MA No.324/Ahd/2008 in ITA No.3528/Ahd/2004. The discussion made by the Tribunal reads as under: This Miscellaneous application is filed by the assessee pointing out certain mistakes in the tribunal order. The contention raised in the miscellaneous application are as unde .....

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ng by way of a new turbine which generates electricity. 4. The assessee had already one captive power plant of which the turbine and the boiler were principal items. The New Power Plant by way of turbine consumed the steam produced by the above boiler which was a part of old power plant. The A.O. rejected the claim of Sec. 80-IA in respect of new power plant by holding as follows :- "It is hereby held that the new power plant has been established by way of transfer of old and previously use .....

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l, Commissioner of Income-Tax (Appeals) agreed with the A.O. that the new industrial undertaking has come into existence by transfer of the old boiler. 5. On appeal, by the assessee, the assessee's counsel merely contended before the Tribunal that on the basis of the figures given by the A.O. in his assessment order even if the boiler is to be considered to be a part of new power plant even then the value of the old machinery and the boiler is not more than 20% of the total value of the mach .....

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he total value of the machinery and plant of ₹ 14,46,44,295/- equal to ₹ 2,92,24,180/-. Thus, by virtue of the provision of Explanation 2 to section 801A(3) the condition stated in section 80-IA (3)(ii) viz. it is not formed by the transfer to a new business of machinery or plant previously used for any purpose" is complied with. There was no further or other discussion about this point at the time of hearing of the appeal and the learned Departmental Representative merely relie .....

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point, it has been denied the right of hearing and the appeal on this point has been decided without hearing the assessee. Further, it is worth appreciating that the A.O. also agrees that a new industrial undertaking has come into existence but he denies 80-IA relief because according to him the condition in section 80-IA(3)(ii) viz. "it is not formed by the transfer to a new business of machinery or plant previously used for any purpose" is not fulfilled and the short submission of t .....

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ot; 2. In the course of hearing before us of the miscellaneous application, it was submitted by the Ld. A.R. that as per the judgment of Hon'ble Gujarat High Court rendered in the case of Gujarat Alkali and Chemicals Ltd. Vs CIT as reported in 249 TR (Guj.) 82, use by the assessee of the old undertaking for the purpose of production in its new undertaking is not a decisive test in construing Section 80-1. He further submitted that as per this decision, it was held by the Hon'ble Gujarat .....

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because a clear finding is given by the tribunal that there is merely an expansion of industrial undertaking and the new undertaking must be independent of existing unit and it should be able to carry out activities independently and, therefore, there is no apparent mistake in the Tribunal order. 4. We have considered the rival submissions. We find that in the case of Gujarat Alkali & Chemicals (supra) also, the substantial expansion was carried out by the assessee and deduction was claimed .....

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on the nature of the technology and the mechanism of production. In view of this decision of Hon'ble Gujarat High Court which is dated 12.03.2012, it appears to us that the impugned tribunal order is not in line with this subsequent judgment of Hon'ble Gujarat High Court rendered in the case of Gujarat Alkali & Chemicals (supra). As per the judgment of Hon'ble Apex Court rendered in the case of ACIT Vs Saurashtsra Kutch Stock Exchange Ltd., as reported in 305 ITR 227, if the tri .....

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als Ltd. (supra). In our considered opinion, the tribunal order on this aspect should be recalled and the matter should be decided afresh after hearing both the sides. We order accordingly and direct the registry to fix this appeal for hearing in respect of ground No.3 of the assessee's appeal i.e. I.T.A.No. 3528/Ahd/2004. The registry should fix this appeal in due course and should issue notice to both the sides. 5. In the result, the miscellaneous application of the assessee stands allowed .....

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ing on this issue. The basis for adjudicating this ground has been extinguished. Therefore, we recall the order of the Tribunal to this extent as far as the first apparent error pointed out by the assessee is concerned. The finding recorded on ground no.2 of the appeal is recalled and this ground is restored for re-adjudication. 5. With regard to second apparent error, the assessee has made following pleadings. 7. Vide Ground no. 4 to 8 the applicant challenged reduction of profits of the busine .....

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eeded to dismiss the above grounds 4 to 8 as per Para 17.5 on page 21 of the order. 8. It is respectfully submitted that the judgment of the Hon'ble Bombay High Court in Kalpataru Colours & Chemicals (supra) has now been reversed by the Hon'ble Apex Court in Topman Exports v CIT @ 342 ITR 49 (SQ taking a view that not the entire sale proceeds of DEPB license is to be excluded from the profits of the business for computing deduction u/s 80HHC of the Act but only the profit arising out .....

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in the impugned order, as held by the apex court in CIT v Saurashtra Kutch Stock Exchange Ltd.(305 ITR 227) that Non - Consideration of a judgment of the Apex Court would always constitute a mistake apparent from the record, regardless of the judgment being rendered prior to or subsequent to the order pronounced to be rectified, therefore the order of the Hon'ble ITAT requires to be modified so as the claim of the applicant be appreciated with correct facts. 6. With the assistance of the ld. .....

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