Mobile View
Main Search Advanced Search Disclaimer
Cites 7 docs - [View All]
Pandian Chemicals Ltd. vs Cit on 24 April, 2003
Shambhu Investment (P) Ltd. vs Cit on 21 January, 2003
C E Or & Vice Chairman, Gujarat ... vs Shri Haji Daud Haji Harun Abuand ... on 20 November, 1996
Dy. Cit vs Smt. Geeta Gupta on 30 June, 2003
Jammu And Kashmir Industries Ltd. vs Income-Tax Officer on 27 April, 1988

User Queries
View the actual judgment from court
Income Tax Appellate Tribunal - Amritsar
Sun Pharmaceuticals Industries , ... vs Department Of Income Tax on 21 May, 2012
                                                      MA No.16(Asr)/2011 &
                                                       MA No.08(Asr)/2011

            IN THE INCOME TAX APPELLATE TRIBUNAL
                  AMRITSAR BENCH; AMRITSAR.


            BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER
            AND SH. B.P.JAIN, ACCOUNTANT MEMBER

                        M.A. No.16(Asr)/2011
                  (Arising out of I.T.A. No.184(Asr)/2009)
                        Assessment year:2005-06

Income Tax Officer,            Vs.   M/s. Sun Pharmaceutical Industries,
Ward 1(3), Jammu.                    Jammu.
 (Appellant)                         (Respondent)

                        M.A. No.08(Asr)/2011)
                  (Arising out of I.T.A. No.184(Asr)/2009)
                        Assessment year:2005-06

M/s. Sun Pharmaceutical Industries, vs.    Income Tax Officer,
Jammu.                                     Ward 1(3), Jammu.
(Appellant)                                (Respondent)

                        Assessee By:Sh. Subhash Jalan, CA
                        Department By:Sh.Tarsem Lal, DR


                        Date of hearing :21/05/2012
                        Date of pronouncement:23/05/2012


                               ORDER

PER BENCH:

These Miscellaneous Applications of the Revenue as well as the assessee arise from the order of the ITAT, Amritsar Bench, in ITA No.184(Asr)/2009 for the assessment year 2005-06, dated 11th June, 2010. 2 MA No.16(ASR)/2011 &

MA No.08(Asr)/2011

2. First of all, we take up M.A.No.16(Asr)/2011 filed by the Revenue. The Ld. DR, Sh. Tarsem Lal, at the outset summarized the miscellaneous application filed by the Revenue and pointed out the mistakes in the said order of the Tribunal dated 11.06.2010 as under:

2.1. Firstly, pointing out at page 62 of ITAT's order at para 27, the ITAT has referred in its order as under:

"The various judgments of the Hon'ble High Court and the Benches of the Tribunal have already been referred to above. Respectfully, following said judgments, we hold that the appellant would be entitled to benefit u/s 80IB for the same period to which SPIL would have been entitled to had there been any transfer of undertaking from SPIL to the appellant."

2.2. It was argued that there is no such judgments referred to by ITAT in its order where predecessor had been allowed the deduction u/s 80-IB then the successor will be so allowed the said deduction. This is a grave error by the ITAT in its order at para 27 which constitutes a mistake apparent from record under section 254(2) of the Act and accordingly prayed the Bench to recall the order.

2.3. Secondly, the Ld. DR, Sh. Tarsem Lal pointed out at page 37 of ITAT's order in para 10.1 of the said order, which for the sake of clarify is reproduced as under:

3 MA No.16(ASR)/2011 &

MA No.08(Asr)/2011 "10.1 The learned DR has further submitted that the alternate claim of the appellant that the deduction is to an undertaking and the benefit should be allowed for the balance of the period, reliance on the Board's Circular is misplaced and the appellant is not eligible at the threshold stage itself and the predecessor unit having not claimed and allowed the deduction, the successor unit cannot be entitled to the said deduction. The learned DR has relied on the decision in the case of AGS Timber & Chemical Ind. (Pvt.) Ltd., 92 Taxman 268 (Mad.)"

In this regard, the Ld. DR, Sh. Tarsem Lal argued and pointed out the mistakes which has three parts namely, decision referred to by the Ld. DR in the said para 10.1 of ITAT's order in the case of AGS Tiber and Chemicals Ind (Pvt.) Ltd.(1997) 92 Taxman 268 (Mad.) has not been dealt with by the Tribunal in its order dated 11.06.2010. As regards the arguments by Ld. DR in said para 10.1 of the ITAT's order with reference to the Board's Circular, it was argued that the appellant is not eligible at the threshold stage itself as per circular and thirdly when predecessor i.e. Sun Pharmaceuticals Industries ( In short 'SPI') has not claimed and has not been allowed deduction under section 80IB, the successor cannot be allowed such deduction because the predecessor SPI has to satisfy certain conditions u/s 80-IB of the Act. Therefore, having not dealt with such issue, there is a mistake apparent from record which clearly falls within the ambit of section 254(2) of the Act.

4 MA No.16(ASR)/2011 &

MA No.08(Asr)/2011 2.4. Thirdly, the Ld. DR, Sh. Tarsem Lal pointed out again at page 62 of ITAT's order in the 2nd & 3rd line which for the sake of clarity are reproduced as under:

"According to us, if the appellant is successor to SPIL, it must have the same consequence as SPIL would have had."

And also in para 27 which is reproduced for the sake of clarity as under:

"27. On proposition of law, we agree with the learned DR that the appellant cannot enjoy benefit greater than SPIL. However, in our vie, SPIL would have been entitled to this benefit more so when in his remand report for the assessment year 2004-05, the A.O. himself has accepted this fact. If that be so, there is no reason not to go by the Circular issued by the CBDT, which is found to be valid even in relation to section 80IB.The various judgments of the Hon'ble High Court and the Benches of the Tribunal have already been referred to above. Respectfully, following said judgments, we hold that the appellant would be entitled to benefit u/s 80IB for the same period to which SPIL would have been entitled to had there been any transfer of undertaking from SPIL to the appellant."

In this regard, the Ld. DR, Sh. Tarsem Lal, argued that the ITAT cannot decide any issue on speculation, guess, conjectures and sumrmises. Such decision is a mistake apparent from record, which falls under section 254(2) of the Act.

2.5. Fourthly and lastly, the Ld. DR, Sh. Tarsem Lal invited our attention to page of ITAT's order being ground No.2(a) which for the sake of clarity is reproduced as under:

5 MA No.16(ASR)/2011 &

MA No.08(Asr)/2011 "2(a) On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) [hereinafter referred to as learned CIT(A)] erred in concurring with the findings of the AO that the industrial undertaking of the appellant firm at Dadra was formed by transfer of machinery or plant used by M/s. Sun Pharmaceutical Industries Limited for any purpose."

In this regard, Mr. Tarsem Lal, the Ld. DR argued that the ITAT in its order from page 1 to 79 has not decided this ground. Non-consideration and not deciding the ground of the Revenue is a mistake apparent from record under section 254(2) of the Act. Finally, the Ld. DR prayed the Bench to recall the order on all the four points which constitute a mistake apparent from record u/s 254(2) of the Act.

3. On the other hand, the Ld. AR, Sh. Subhash Jalan, CA, argued at the outset that the ITAT's order dated 11.06.2011 in ITA No.184(Asr)/2009 for the assessment year 2005-06 has been challenged by the assessee as well as by the Revenue before the Hon'ble High Court of Jammu & Kashmir. The said appeal of the assessee is available at assessee's paper book at PB 15 to 30 and that of the Revenue appeal is available at PB 31 to 65. The Hon'ble High Court of Jammu & Kashmir has admitted the substantial question of law of the assessee and that of the Revenue available at PB 67 to 70. The Ld. AR appearing for the assessee read the substantial question of law which has been admitted and available at PB 66 to 70. Therefore, the issue is already seized with the Hon'ble High Court of Jammu & Kashmir and is sub-judice 6 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 and is a debatable issue. Therefore, none of the mistake pointed out by the Revenue is a mistake which could fall within the purview of section 254(2) of the Act. The Ld. AR appearing for the assessee, therefore, prayed the Bench to dismiss the Miscellaneous Application of the Revenue on the said facts and admission of substantial question of law by the Hon'ble High Court of Jammu & Kashmir, as mentioned hereinabove. 3.1. The Ld. AR, Mr. Subhash Jalan, CA argued that ITAT's order is running into 78 pages and up to page 54 complete history of setting up of industrial undertaking has exhaustively been dealt by the ITAT both factually and legally which includes disposal of ground 2(a) raised before the ITAT in its order dated 11.06.2010. Thereafter, the ITAT at page 54 itself proceeded to decide the issue with regard to ground 2(b) from para 18 and then ground 2(c) and so on. In para 5.4 of ITAT's order from page 11 to 20 of ITAT's order the chronology of the dates and events have been reproduced. At page 16 of ITAT's order in para xxxiii, it is clearly mentioned that the assessee partnership firm was formed w.e.f. 1.3.2003. Therefore, it was argued that from page 5 to 54 of the ITAT's order is the disposal of ground 2(a). It was further argued that it is a matter of record that in order of the ITAT that the capital work in progress of SPIL without starting of the commercial production was transferred to assessee's firm and this 7 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 fact is available at ITAT's order at page 20 & 21 when there is no question of commercial production by SPIL, then there cannot be any claim or deduction u/s 80IB by the SPIL the seller company. It is also a matter of record that at page 21 of the ITAT's order that first batch of manufacturing was produced on 14.4.2003 by the assessee and this fact was submitted before the A.O. It was argued by the Ld. AR by pointed out at page 44 of ITAT's order in para 11.1 by specifically referring to the remand report of the A.O. which was submitted to the ld. CIT(A) during the course of hearing for the assessment year 2004-05. The AO has accepted in the first line of page 17 of the remand report that the Dadra plant had started commercial production in April, 2003 is not disputed. The A.O. has accepted the eligibility of SPI to the claim u/s 80IB on page 15 and 19. In these pages, the AO has stated that the industrial undertaking set up by SPIL was qualified but it wanted to avoid payment of tax under MAT. On page 15 of the said remand report, the AO has observed in para 2 to point (xiii) that 'the question arises as to why a running unit established in the financial year 2001-02 by SPIL was transferred to SPI on 1.4.2003, when deduction u/s 80IB would have been available to SPIL also. Referring to page 78 of ITAT's order in para 43.3 that the ITAT in this para is of the opinion that the undertaking formed by SPI at Dadra was qualified for deduction u/s 8 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 80IB and the first year was taken as assessment year 2002-03 and the assessment year under consideration had become the fourth year of the undertaking and accordingly the benefit of deduction u/s 80-IB needs to be allowed as per the provisions of the section and Circular of CBDT, referred to hereinabove. Though the assessee is in appeal before the Hon'ble High Court of Jammu & Kashmir for this finding, therefore, the ITAT has very well discussed ground 2(a) raised before it in its order dated 11.06.2010, which has been decided by the Tribunal and does not constitute any mistake which can fall within the ambit of section 254(2) of the Act. He further argued that Ld. DR, Sh. Tarsem Lal's arguments with regard to non- adjudication of ground 2(a) is without any basis and considering his arguments will tantamount to review of ITAT's own order, which is not within the purview of section 254(2) of the Act.

3.2. As regards Board's Circular and other mistakes pointed out by the Ld. DR with respect of the ITAT's order at page 37 para 10.1, it was argued by the ld. AR appearing for the assessee apart from other decisions referred to in ITAT's order, at page 6 of assessee's paper book are the judgments and decisions, which were submitted before the ITAT during the course of hearing. Following decisions were referred to by the Ld. AR for its consideration:

9 MA No.16(ASR)/2011 &

MA No.08(Asr)/2011
i) Tech Books Electronic Services (P) Ltd vs. Addl. CIT, Range 16, 100 ITD 125 (Del).

ii) Chetak Enterprises (P) Ltd. vs. ACIT, Cir.1, 95 ITD 1(Jodh)

iii) C.I.T. vs. Haji Modh. Alio Modh Ishaq vs. 295 ITR 109 (All)

iv) Madras Machine Tools Manufacturers Ltd. vs. CIT 98 ITR 119 (Mad) 3.3 In the said decisions of the Tribunal in the case of Tech Books Electronic Services (P) Ltd vs. Addl. CIT, Range 16, 100 ITD 125 (Del) (supra), which dealt with exemption u/s 10B is according to the circular. Similarly, in the case of Chetak Enterprises (P) Ltd. vs. ACIT, Cir.1, 95 ITD 1 (supra) which is on section 80IA has dealt with the circular. The case of C.I.T. vs. Haji Modh. Alio Modh Ishaq vs. 295 ITR 109 (All)(supra) is with regard to section 80J and the case of Madras Machine Tools Manufacturers Ltd. vs. CIT 98 ITR 119 (Mad) is with regard to section 84 & 80J . All the said decisions of the Tribunal in various High Courts referred to hereinabove are applicable based on the circular itself. The ITAT has considered all the decisions and accordingly decided the issue , though no specifically referred in its order. In the said decisions, predecessor had been allowed deduction under various deductions and accordingly successor was also allowed deduction.

3.4. As regards the decision in the case of AGS Tiber & Chemicals Ind. (P) Ltd. (supra), the said decision though no referred to by the ITAT in its order is with regard to lesser and lessee relationship and it was never the 10 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 case of the department that the assessee is a lessee and SPI is a lesser and this decision is irrelevant and argument made by the Ld. DR that this decision has not been considered is irrelevant and cannot constitute a mistake u/s 254(2) of the Act. As regards the departmental Miscellaneous Application, the Ld. DR has referred to the decision of the Hon'ble Supreme Court in the case of Honda Siel Power Products Ltd. vs. CIT (2007) 295 ITR 466 (SC), which is also irrelevant since in that decision of Hon'ble Supreme Court, the ratio laid down by the Hon'ble Supreme Court is that of co-ordinate Bench decision was not considered on similar issue and had become a mistake apparent from record. In the present case, there is no such issue in hand before the Bench and, therefore, this argument of the ld. DR is without any basis and cannot help the revenue to consider its application. 3.5. As regards the arguments of the ld. DR with regard to ITAT's decision at page 62 where the word 'would have been' used and the decision of the ITAT being on speculation, guess, conjectures and surmises as argued by the Ld. DR is as a matter of fact is without any basis and at the outset cannot be a mistake apparent from record. But the Ld. DR is trying to get the order of the ITAT reviewed.

3.6. As regards the arguments at page 62 as mentioned hereinabove and para 27 at the said page, the ITAT had considered the arguments and the 11 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 remand report referred to in para 11.1 at page 44 of ITAT's order. It is with respect to the remand report by the AO where he has stated that industrial undertaking i.e. SPI was qualified for the eligibility of the claim u/s 80IB and had it been claimed if the commercial production had started in SPI that it would have been allowed and accordingly it would have been allowed in the successor firm. The ITAT had given its decision after extensively discussing the issue and argument by the Ld. DR that the decision has been made on speculation, guess, conjectures and surmises is nothing but an attempt to get the order reviewed which, in fact, does not form mistake apparent from record to come within the purview of section 254(2) of the Act. The Ld. AR argued that even if the Tribunal had considered the facts on record and the arguments of the assessee in substance but has not considered the arguments advanced by either parties for arriving at a conclusion cannot be an error apparent from record, although it may be an error of judgment. The Tribunal cannot, in its exercise of power of rectification, look into the circumstances which could support or not support this conclusion. These views have been held by the Hon'ble Mumbai High Court, in the case of CIT vs. Ramesh Electric and Trading Co. (1993) 203 ITR 497 (Bom). He argued that Ld. DR Mr. Tarsem Lal under the garb of various arguments made by him that the same have not been considered by the Tribunal is 12 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 trying to get the order of the ITAT reviewed which is not within the purview of section 254(2) of the Act. All the judgments have been considered by the Tribunal in its order running into 78 pages, having considered all the arguments of the revenue and that of the assessee and having decided all the issues on facts on record, there is no mistake apparent from record as pointed out by the Revenue. Therefore, the Ld. AR prayed the Bench to dismiss the Miscellaneous Application filed by the Revenue.

4. We have heard the rival contentions and perused the fact of the case. As regards mistake No.1 pointed out by the Ld. DR in Revenue's Miscellaneous Application is that at page 62 of ITAT's order, in para 27 has referred to various judgments of Hon'ble High Court and the Benches of the Tribunal which have already been referred to in the order. Following such judgments, the appellant was entitled to benefit under section 80IB for the same period to which SPIL would have been entitled to had there been any transfer of undertaking from SPIL to the appellant. 4.1 In this regard, it was observed that the first set of judgment is referred to and relied upon is available at page 26 of ITAT's order at para 5.13. These are seven decisions of various High Courts and the Tribunal. The said decisions are with respect to the allowability of deduction u/s 80IB vis-à-vis commercial production and not on trial production. The second set of 13 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 decisions relied upon by the AO/Revenue is at page 28 para 5.5 which have been referred to and has been distinguished by the following five decisions listed at page 30 of ITAT's order under para 6. Therefore, in view of reliance of various decisions of the Hon'ble High Court and the Benches of the Tribunal which have been referred to as mentioned hereinabove, the ITAT has respectfully followed the said decisions referred to at

i) Page 26 para 5.13.

    ii)     Page 28 para 5.15
and iii)    Page 30 para 6

of ITAT;s order dated 11.06.2010. Therefore, the arguments of the Ld. DR, Mr. Tarsem Lal are without any basis that there are no judgments referred to in ITAT's order before conclusion at para 27 page 62 of ITAT's order dated 11.06.2010 and we find no mistake apparent from record u/s 254(2) of the Act. Therefore, the application of revenue with reference to first mistake pointed out by the Ld. DR appearing for the Revenue is rejected.

5. As regards the second mistake pointed out by the Ld. DR is at page 37 para 10.1 of ITAT's order dated 11.06.2010. The Ld. DR pointed out three limbs of mistake in the said second mistake. As regards 2nd & 3rd limb mentioned hereinabove, the reliance of CBDT circular dated 13.12.1963 is misplaced as argued by the Ld. DR because in this case, the predecessor SPIL has not claimed any deduction u/s 80IB, therefore, the successor SPI, 14 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 the assessee is not eligible for deduction at threshold stage, as the circular contemplates where predecessor has claimed and had been allowed deduction then only successor will be entitled for the unexpired period. In this regard, we observe that ITAT during the course of original hearing had duly considered four decisions as stated in the paper book (Case Laws (2)) referred to at pages J262 to J-311. These four decisions are in the context of above referred to circular dated 13.12.1963 and the Hon'ble Courts and the Tribunal have allowed the benefit of the circular to the successor/transferee in the context of section 10B, 80-IA, 80J and Section 84/80-J of the Act respectively. Though the above decisions were considered by the Tribunal in addition to various decisions in the legal paper book pages J-1 to J-148, though the decisions are not mentioned in the order of the ITAT but the same have been duly considered at page 61 para 26 which is reproduced for the sake of clarity:

"26. Now we deal with ground No.2(d). We have already held in the foregoing paragraph that the assessee is not entitled for deduction under section 80IB of the Act for the assessment years 2002-03 and 2003-04, only undertaking is entitled for the same and the assessee is only entitled for this deduction for the assessment years 2004-05 and 2005-06. As regards to issue involved in ground No.2(b), the ld. counsel for the assessee has relied upon Board's Circular referred to above ( in para 144 of the CIT(A)'s order) as also various judgments of various High Courts and various Benches of the Tribunal for the proposition that even if the appellant assessee acquired running undertaking from SPIL, it would be entitled to the benefit u/s 80IB for the remainder period because benefit under section 80IB is attached 15 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 to the undertaking and not to the owner and the mere fact that ownership has undergone change would not deprive new owner to take benefit for the remainder period. The only argument that the learned DR canvassed on this issue so was that SPIL would not have got benefit, question of giving benefit to the appellant assessee did not arise. According to us, if the appellant is successor to SPIL, it must have the same consequence as SPIL would have had."

5.1. After considering the same, ITAT gave its order at page 62 para 27 as have already been mentioned hereinabove. Therefore, we find no mistake apparent from record u/s 254(2) of the Act with regard to 2nd & 3rd limb of the second mistake pointed out by the Ld. DR. The application of the revenue accordingly for 2nd & 3rd limb of second mistake is rejected. 5.2. As regards first limb of second mistake that the decision in the case of A.G.S. Tiber And Chemicals Industries (P) Ltd. vs. CIT (1997) 92 Taxman 268 (Mad) (supra) has not been considered by the ITAT. We are of the view that the said decision in the case of A.G.S. Tiber And Chemicals Industries (P) Ltd. vs. CIT (supra) is with respect to lessor and lessee relationship for deduction u/s 80-J of the Act. It is in this context that the Hon'ble Madras High Court held that lessee would not be entitled to relief u/s 80J but the benefit of the circular applies to the successor. We find that the assessee here is a successor of SPIL Dadra undertaking as has been discussed at length in ITAT's order . Therefore, the ratio of this judgment of Hon'ble Madras High Court supports the case of the assesee because there was no 16 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 relationship of lessee and lessor between SPIL and SPI the assessee. The non elaboration of such judgment of Hon'ble Madras High Court does not constitute a mistake apparent from record under section 254(2) of the Act and the application of the revenue, accordingly with reference to first limb of second mistake is rejected.

6. As regards the third mistake pointed out by the Ld. DR about the decision of the ITAT has been made on speculation, guess, conjectures and surmises by pointing out the order of ITAT at page 62 (tope lines) and in para 27 at page 62 itself, where the ITAT has used the word "must have, 'would have had' would have been entitled, we are of the view that ITAT in its order dated 11.06.2010 has extensively dealt with the entire factual in relation to setting up of Dadra undertaking. These are laid down at pages 11 to 21 in paras 5.4 & 5.5 of ITAT's order. Moreover, in various succeeding paragraphs upto page 26 para 5.14 of ITAT's order, the reason for no claim of deduction of 80IB by SPIL has been dealt with in respect of said undertaking. The arguments of the Ld. DR were also extensively considered at pages 33 to 42 paras 10 to 10.10 of ITAT's order. Thereafter, having reconsidered the rejoinder of the assessee in paras 11 to 11.2 at pages 42 to 47 of the ITAT's order, finally gave its findings on pages 51 & 52 in para 17 MA No.16(ASR)/2011 & MA No.08(Asr)/2011

16. The relevant portion of the said para 16 for the sake of convenience is reproduced as under:

"16. The main controversy between the parties is as to whether the plant at Dadra commenced commercial production before 31st March, 2002 or in the month of April, 2003. For that purpose, they have relied on various evidences, which include applications to the various authorities for obtaining licenses and permission for manufacturing drugs, permanent electric connections, obtained cash credit limits, consent by workers to work, hiring of generators inclusion of the Dadra unit in the unit-wise profit and loss account of SPIL and transfer of raw material, plant and machinery, applying for cash credit limit, productivity bonus payable are not preparatory activity but would be termed as setting up of business leading to commencement of commercial production. It is not correct to say that production commenced only on 14.4.2003 due to the fact that auditors papers show with remarks "No commercial production done". Small quantity of stock Olenz Rapitab, Excise Return for the month of February,2002 reflecting products and Tariff Item Numbers, Payment of Bonus to Employees, utilization of Modvat credit, payment of sales tax by SPIL, statement of Dr. Shinde that the plant is ready to commerce, new reports (28.03.2002), press release (26.4.2002), intimation in the annual report (01-02) of SPIL and minutes of the meetings confirming commencement of production. No production during F.Y. 2002-03 does not disprove the fact about production before 31.3.2002. Keeping in view the facts narrated above with the support of evidence, we are of the considered opinion that the production commenced before 31.3.2002 The assessee sold the products, hence the stage of trial production had been crossed."

6.1. Considering the above, the ITAT while giving order as mentioned at page 62 of the order, it has adequately used the words "must have" "would have" "would have been entitled", which were correctly used to indicate the correct factual position, as mentioned hereinabove. Hence, we find no 18 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 mistake under section 254(2) of the Act, as pointed out by the Ld. DR and the application of the revenue with reference to the third mistake is rejected.

7. As regards the fourth and the last mistake about non-disposal of ground 2(a) by ITAT in its order dated 11.06.2010, we find that the ITAT has dealt the entire factual position, inter-alia the use of the machinery or plant till page 54 of the ITAT's order i.e. immediately before para-18, which deals with ground 2(b) and thereafter ground 2(c), 2(d) & 2(e). The finding of the ITAT is reiterated at page 78 of the order in para 43.3, which includes disposal of ground 2(a) alongwith other grounds i.e. 2(b), 2(c), 2(d) & 2(e). For the sake of clarity, the said finding of ITAT in para 43.3 at page 78 is reproduced as under:

"43.3 Keeping in view the facts and the circumstances discussed above, we are of the considered opinion that undertaking formed by SPIL at Dadra was qualified for deduction u/s 80IB and the first year is taken as assessment year 2002-03 and the year under consideration become the fourth year of the undertaking and accordingly the benefit of deduction u/s 80IB needs to be allowed as per the provisions of section and Circular of CBDT, referred to hereinabove."

8. Therefore, having dealt with ground 2(a) as mentioned hereinabove, we find no mistake apparent from record as pointed out by the Ld. DR. Therefore, the application of revenue with reference to fourth and last 19 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 mistake is rejected. Thus, M.A. No.16(Asr)/2011 (arising out of ITA No.184(Asr)/2009) dated 11.06.2010) of the Revenue is rejected.

9. Now, we will deal with the Miscellaneous Application filed by the assessee in MA. No.08(Asr)/2011(arising out of ITA No.184(Asr)/2009) dated 11.06.2010 for the assessment year 2005-06.

10. The Ld. AR, Sh. Subhash Jalan, CA, appearing on behalf of the assessee pointed out the mistake in the order of the ITAT, dated 11.06.2010 in the light of the decision of the Hon'ble High Court of Jammu & Kashmir in the case of Shree Balaji Alloys &Others , Kathua vs. CIT reported in 333 ITR 335 holding that Central Excise Duty refund is a capital receipt and hence not includible in the income at all. The decision with respect to Central Excise Duty is referred at pages 76 & 77 in paras 42 to 42.3 of ITAT's order dated 11.06.2010. It was argued by the Ld. AR that subsequent decision of jurisdictional High Court and Supreme Court becomes a mistake apparent from record u/s 254(2) of the Act The Ld. AR had relied upon the decisions of various Courts of law as under in support of his arguments:

i) ACIT vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC) 20 MA No.16(ASR)/2011 & MA No.08(Asr)/2011
ii) Kil Kotagiri Tea & Coffee Estates Co. Ltd. vs. ITAT &Ors (1988) 174 ITR 579 (Kerala)
iii) M.K. Kuppuraj vs. ITO & Anr. (1995) 853 (Mad)
iv) CIT vs. Smt. Aruna Luthra (2001) 252 ITR 75 (P&H) (FB)
v) CIT vs. Subodhchandra S. Patel (2004) 265 ITR 445 (Guj.)
vi) Kailashnath Malhotra vs. JCTI (2009) 34 SOT 541 (Mum.)(TM)
vii) Padam Prakash (HUF) vs. ITO (2011) 136 TTJ 257 (Delhi) (SB) 10.1 In all the above said decisions, proposition has been laid down by the Courts that the judgment subsequently rendered by the Jurisdictional High Court/Supreme Court would constitute an error apparent from record which is rectifiable under section 154 & 254(2) of the Act. Since the decision of the Hon'ble High Court of Jammu & Kashmir in the case of Shree Balaji Alloys &Others , Kathua vs. CIT (supra) was not available at the time of the decision of the ITAT, dated 11.06.2010, the ITAT decided these issues against the assessee vide para 42 to 42.3 at pages 76 & 77 of its order.

11. The Ld. DR, Mr. Tarsem Lal, argued that subsequent decision of he Court does not render the mistake rectifiable under section 254(2) of the Act. The said decision of the Hon'ble High Court of J & K in the case of Shree Balaji Alloys &Others , Kathua vs. CIT (supra) was not available at the time of ITAT's order dated 11.06.2010.

21 MA No.16(ASR)/2011 &

MA No.08(Asr)/2011

12. We have heard the rival contentions and perused the facts of the case. We are of the view that law is very clear on the issue that if the issue is covered by the decision of High Court is reversed prior or even subsequent to the rectification of the order, it can be said to be a mistake apparent from record u/s 254(2) of the Act and could be corrected by the Tribunal. These views are expressed by the Hon'ble Supreme Court, in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC) and other decisions relied upon by the Ld. AR, hereinabove. In the present case, the issue is the treatment of Central Excise Duty Refund. The ITAT had decided the issue against the assessee, which view has been reversed by the Hon'ble J & K High Court in the case of Shree Balaji Alloys & Others, Kathua vs. CIT (supra) after the decision of the ITAT in its order dated 11.06.2010. Following the judgment of Hon'ble Supreme Court in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd.(supra) and other decisions relied upon by the ld. counsel hereinabove, we find that the issue is squarely covered by the decision of the Hon'ble J & K High Court in the case of Shree Balaji Alloys & Others, Kathua vs. CIT (supra), therefore it constitutes a mistake apparent from record u/s 254(2) of the Act. Hence, the said decision of the ITAT dated 11.06.2010 in paras 42 to 42.3 (Pages 76 &

77) is recalled for fresh adjudication. The Registry is directed to fix up the 22 MA No.16(ASR)/2011 & MA No.08(Asr)/2011 matter for hearing on 07/06/2012. Thus, the Miscellaneous Application filed by the assessee in MA No.08(Asr)/2011 is allowed.

13. In the result, MA No.16(Asr)/2011 of the Revenue is dismissed and MA No.08(Asr)/2011 of the assessee is allowed.

Order pronounced in the open court on 23rd May, 2012.

                 Sd/-                                Sd/-
              (H.S. SIDHU)                    (B.P. JAIN)
            JUDICIAL MEMBER               ACCOUNTANT MEMBER

Dated:      23rd May, 2012
/SKR/
Copy of the order is forwarded to :

1. The Assessee:M/s. Sund Pharmaceuticals Industries, Jammu.

2. The ITO Ward 1(3), Jammu.

3. The CIT(A), Jammu.

4. The CIT, Jammu.

5. The SR DR, ITAT, Amritsar True copy By Order (Assistant Registrar) Income Tax Appellate Tribunal Amritsar Bench : Amritsar.