A.P. State Agro Industries Development ... vs Assessee
- CitationITA.No.1684/Hyd/2013
Ratio decidendi
The rule this decision rests on
The Assessing Officer cannot, under section 154, rectify an assessment order by taking a different interpretation of a provision on a disallowance that was already considered and decided in the order sought to be rectified and that was subject-matter of an appeal; a debatable issue or one capable of more than one interpretation is not an apparent mistake within the scope of section 154, and such a matter is not open to correction in rectification proceedings.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
The DCIT, Circle 1(1) M/s. A.P. State Agro Hyderabad. vs. Industries Development Corpn. Ltd., Hyderabad. PAN AABCA7378R (Appellant) (Respondent)
Cross Objection No.19/Hyd/2014 Arising out of ITA.No.1684/Hyd/2013 - Assessment Year 2004-2005
M/s. A.P. State Agro Industries Development vs. The DCIT, Circle 1(1) Corpn. Ltd., Hyderabad. Hyderabad. PAN AABCA7378R (Cross Objector) (Respondent)
For Revenue : Mr. D. Sudhakar Rao For Assessee : Mr. S. Rama Rao
Date of Hearing : 11.12.2014 Date of Pronouncement : 02.01.2015
ORDER
PER B. RAMAKOTAIAH, A.M.
The appeal by Revenue is against the Order of Ld. CIT(A)-II, Hyderabad dated 24.09.2013. Assessee raised cross objections mainly in support of the order of Ld. CIT(A) while also contending that Ld. CIT(A) ought to have held that the amounts disallowed are allowable as deduction.
2 ITA.No.1684/Hyd/2013 M/s. AP State Agro Industries Development Corp. Ltd., Hyderabad.
2. Brief facts of the case are that assessee is a public sector undertaking owned by Government of Andhra Pradesh. It has filed return of income which was scrutinized under section 143(3) dated 31.08.2006. A.O. examined the claim of deduction under section 35DDA not only in this year but also of earlier years and made disallowance of an amount of Rs.3,83,768. This issue was subject matter of appeal before the Ld. CIT(A)-II, Hyderabad who confirmed disallowance made by A.O. vide his order dated 02.01.2008. However, A.O. vide order under section 154 dated 08.04.2009 disallowed ex-gratia payment of Rs.1,09,96,117 and Rs.42,075 on the ground that these payments relate to A.Ys. 1998-99 and 1999-2000 respectively and the provision of section 35DDA are applicable only w.e.f. 01.04.2001 i.e., for A.Y. 2001-2002. Aggrieved, of such order, assessee preferred appeal before the Ld. CIT(A). Ld. CIT(A) considered submissions and also the fact that issues were considered in the order under section 143(3) held that A.O. cannot rectify order under section 154. Ld. CIT(A) order in para 6 is as under :
"6. The crux of the issue is, according to the A.O. if the payment relate to A.Y. 2004-05, then only it is allowable u/s.35DDA. According to the appellant, even if the expenditure pertain to earlier years, it can still be claimed. It is legally well settled that the debatable issues and issues which are prone to multiple interpretations cannot be rectified u/s.154. Even otherwise, identical issue was already considered by the CIT(A), wherein 1/5th of claim of leave encashment and gratuity were held allowable. It is legally well settled principle that any issue which is subject matter of appeals cannot be considered u/s.154. Further, 1/5th of ex-gratia was already allowed in earlier assessment years in A.Y. 2002-03. Keeping all these facts in view, I consider the issue is not in the domain of section 154 of I.T. Act. Therefore, disallowance of ex-gratia is not upheld."
3 ITA.No.1684/Hyd/2013 M/s. AP State Agro Industries Development Corp. Ltd., Hyderabad.
3. After considering the rival contentions, we do not see any merit in Revenue appeal. As can be seen from the assessment order passed in this regard, A.O. vide paras 2 and 3 discussed provisions of section 35DDA, claims made by assessee and disallowed an amount of Rs.3,83,768 which was confirmed by Ld. CIT(A). In view of this, present A.O. is not competent to modify order under section 154 on a different interpretation. Therefore, we support the order of Ld. CIT(A) and dismiss Revenue grounds. Since, cross-objection is in support of Ld. CIT(A) order, cross objection becomes academic in nature. Hence, the same is dismissed.
4. In the result, both appeal of the Revenue and cross objection of the assessee are dismissed.
Order pronounced in the open Court on 02.01.2015.
Sd/- Sd/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated 02nd January, 2015
VBP/-
Copy to
1. The DCIT, Circle 1(1), 4th Floor, Aayakar Bhavan, Basheerbagh, Hyderabad.
2. M/s. A.P. State Agro Industries Development Corpn. Ltd., 504, Hermitage Office Complex, Hill Fort Road, Hyderabad.
3. CIT(A)-II, Hyderabad.
4. CIT-I, Hyderabad
5. D.R. ITAT "B" Bench, Hyderabad.
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