Monarch Dyestuff Industries & Exports ... vs Department Of Income Tax

The ACIT-Circle-4, V/S Monarch Dyestuff Industries Ahmedabad 301, Shagun Complex, 93 Swastik Society, B/H St. Xavier's Ladies Hostel, Navrangpura, Ahmedabad

(Appellant) (Respondent)

PAN: AABCM8936F

Appellant by : Shri B.L. Yadav, Sr. D.R. Respondent by : Shri Tushar Hemani, Advocate

(आदे श)/ORDER

Date of hearing : 19-06-2015 Date of Pronouncement : 19 -06-2015

PER SHRI ANIL CHATURVEDI,A.M.

1. The present M.A. is filed by the Revenue against the order of Tribunal dated 30.05.2014 in respect of appeal in ITA No. 672/Ahd/2010 for A.Y. 1995-96.

2. In the Miscellaneous Application, the Revenue has interalia submitted that while deciding the appeal, the Hon'ble Tribunal has noted that the Assessee had discontinued its manufacturing and operation after 31.03.1995 and had surrendered the license to the appropriate authorities and had not obtained 2 M.A No. 182/A/14 (in ITA No. 672/A/2010) . A.Y. 1995-96 subsequently any benefit out of the advance licenses and hence no income from it arose to the Assessee. It is submitted by the Revenue that on perusing the records for A.Y. 96-97, it is noticed that Assessee continued manufacturing activities and had imported raw materials worth Rs. 15,03,480/- and Assessee had already debited its manufacturing expenses of Rs. 81,34,106/- to the Profit and Loss account and in view of the aforesaid facts, the Tribunal was not correct in allowing Assessee's appeal and it is therefore prayed that there is apparent mistake in the order of Tribunal which needs to be rectified.

3. Before us, ld. D.R. reiterated the submissions made in the miscellaneous application and urged that the order be recalled or rectified. Ld. A.R. on the other hand submitted that there is no mistake in the order of Tribunal. He further submitted that the Hon'ble Tribunal had decided the issue in the light of decision of Hon'ble Apex Court in the case of CIT vs. Excel Industries Ltd. reported in (2013) 86 CCH 86. He therefore submitted that in the absence of any apparent mistake, the M.A. of the Revenue be dismissed.

4. We have heard the rival submissions and perused the material on record. It is Revenue's contention that the appeal has been decided after taking into consideration the fact that Assessee had discontinued its manufacturing operation after 31.03.1995 and had not obtained any benefit out of the advance licenses which is contrary to the facts. We find that the Tribunal while deciding the appeal of the Assessee apart from considering the fact about the discontinuing of operations after 31.03.1995 and not obtaining any benefit out of the advance licenses had also relied on the decision of Hon'ble 3 M.A No. 182/A/14 (in ITA No. 672/A/2010) . A.Y. 1995-96 Supreme Court in the case of CIT vs. Excel Industries (supra). The relevant observation of the Tribunal is reproduced hereunder for ready reference.

8. Considering the fact that the Assessee has discontinued its manufacturing operations after 31.03.1995, surrendered the licenses to the appropriate authorities and has not obtained subsequently any benefit out of the advance licenses and on these facts applying the ratio of the aforesaid decision of Hon'ble Apex Court, we are of the view that no income arose to the Assessee and therefore no addition can be made on account of income on advance license. In view of the aforesaid facts, we direct the deletion made on account of income on advance licenses. Thus this ground of Assessee is allowed.

5. We thus find that the apart from the fact of discontinued business, the Tribunal had also relied on the decision of Apex Court. Before us, Revenue has not brought any contrary binding decision in its support nor has pointed as to how the ratio of the aforesaid decision would not be applicable to the facts of the case. Further, it is a settled law that the power of rectification under section 254(2) of the Income-tax Act can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions. Further, the Tribunal cannot, in exercise of its power of rectification, look into some other circumstances which would support or not support its conclusion so arrived at. The mistake which the Tribunal is entitled to correct is not an error of judgment but a mistake which is apparent from the record itself. In the present case, no such mistake was apparent from the record. In view of the aforesaid facts, we are of the view that since the Revenue has failed to point out any mistake apparent from record in the order, we are not inclined to recall the order of the Co-ordinate Bench in ITA. No. 672/A/2010 order 4 M.A No. 182/A/14 (in ITA No. 672/A/2010) . A.Y. 1995-96 dated 30.05.2014, thus the Miscellaneous Application bearing no. 182/A/2014 is hereby dismissed.

6. In the result, the Miscellaneous Application is dismissed.

Order pronounced in Open Court on 19 - 06 - 2015.

Sd/- Sd/- (RAJPAL YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad. TRUE COPY Rajesh

Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) - 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER

Deputy/Asstt.Registrar ITAT,Ahmedabad