Income Tax Appellate Tribunal - Jodhpur
R.A.M. Earth Movers (P) Ltd. vs Assistant Commissioner Of Income Tax on 8 November, 2002
Equivalent citations: (2003)78TTJ(JODH)407
ORDER
B.L. Khatri, A.M.
1. This miscellaneous application has arisen out of the order of this Bench dt. 27th March, 2002, in ITA No. 1158(Jp) 1994 [reported as RAM. Earth Movers & Ltd. v. Asstt. CIT (2003) 78 TTJ (Jd) 398.--Ed.] for the asst. yr. 1990-91.
2. The learned authorised representative has drawn the attention of this Bench to page No. 6, para 13, of the aforementioned order which reads as under :
"In ground No. 2 the learned counsel submitted that it was wrong on the part of CIT to rely on the judgment of CIT v. Mysore Minerals Ltd (1994) 205 ITR 461 (Kar) simply because the SLP was admitted by the Hon'ble Supreme Court. We find that this case has now been decided by the Hon'ble Supreme Court in CIT v. Mysore Minerals Ltd. (2001) 247 ITR 301 (SC), It was held by the Hon'ble Supreme Court that the Tribunal was right in law in holding that investment allowance was allowance on machinery employed in the process of extraction of granite from quarry, cutting the same into various sizes and polishing them was a question of law and the decision of the Karnataka High Court was reversed. Therefore, this objection of the learned authorised representative fails."
The learned authorised representative submitted that the observation of the Bench that "we find that this case has now been decided by the Hon'ble Supreme Court in (2001) 247 ITR 301 (SC)" is patently wrong and perverse and in observing so it has committed a glaring and patent mistake of law and fact. The decision reported in CIT v. Mysore Minerals Ltd. (1994) 205 ITR 461 (Kar) has neither been considered nor was reversed in (2001) 247 ITR 301 (SC) by the Hon'ble Supreme Court, as has been observed by this Bench in the aforementioned extract of p. 6, para 13, of the order.
3. As a matter of fact, the decision reported in (2001) 247 ITR 301 (SC) (supra), is a case relating to some different year as is patent and obvious from the bare reading of the said judgment. The Hon'ble Supreme Court has delivered this judgment, in relation to a question where reference application against the Tribunal's order was whether rightly refused by the Hon'ble High Court. This was against the judgment and order dt. 28th May, 1998, of the Karnataka High Court in C.P. No. 630 of 1997, whereas in 205 ITR 461 (Kar) (supra) the case number was ITRC No. 92 of 1992, date of order was 28th Oct., 1992. The Supreme Court has in (2001) 247 ITR 301 (SC) directed the Hon'ble High Court to refer the question of law as was before it in C.P. No. 630 of 1997. Thus, the Hon'ble Bench has drawn a patent and obviously wrong Conclusion from the decision resulting in a patent and glaring mistake of law and fact. This has resulted in an adverse decision. Since the submission of the appellant was, as has been recorded at page No. 4, para v. of the order, that the only reason given in the order under Section 263 by the CIT directing to withdraw the investment allowance, was that because of the granting of SLP by the Supreme Court against the case reported in (1994) 205 ITR 461 (Kar) (supra), the appellant unit was not entitled for investment allowance as was claimed by it. The said para No. (v) of para 4 is reproduced hereunder:
"Since the learned CIT in his order under Section 263 only took the basis of the Hon'ble Karnataka High Court reported in CIT v. Mysore Ltd. (1994) 205 ITR 461 (Kar) against which SLP was granted by the Hon'ble Supreme Court and no further basis having been made by him or if would have been available to the learned CIT while making the order but he did not make the same as the part of the impugned order, therefore, his order cannot be supplemented or sustained on any other ground or reason whether or not it is available with the CIT. He relied upon the following judgments :
(a) CIT v. Chandrika Educational Trust (1994) 207 ITR 108 (Ker);
(b) CIT v. L.F.D. Silva (1991) 192 ITR 547 (Kar);
(c) CIT v. Jagadhari, Supply & Industrial Co. (1983) 140 ITR 490 (P&H)."
4. The learned authorised representative contended that the granting of SLP does not mean staying of the operation of a particular judgment. Therefore, the basis or reason directing to withdraw the investment allowance given by the learned CIT is unsustainable. In view of the above position, this Bench had committed a glaring error of fact and law to arrive at a wrong conclusion. The main plank of the argument was decided on wrong understanding of the decision of the Hon'ble Supreme Court and, therefore, a patent error of fact and law having been committed which now needs to be rectified under Section 254(2) of the Act reversing the conclusion arrived at in the order.
5. We have heard the rival parties. We have also considered their submissions. In this case the CIT found from the perusal of the record that the assessee derived income by way of receipt from job work of open cast gypsum mining for the Rajasthan State Metals and Minerals Corporation (for short RSMMC). The assessee claimed investment allowance of Rs. 4,88,238 @ 20 per cent of the cost of plant and machinery purchased/acquired during the year under consideration. The AO did not examine the allowability of the claim in accordance with the relevant provisions of law and his order is silent on this aspect which implied that the claim of investment allowance had been allowed. Since the enquiry which ought to have been conducted, had not been done, the order was considered as erroneous and prejudicial to the interest of Revenue. Further, being a job work, it was not the assessee's business to manufacture or produce any article or thing nor it is so in the case of open cast mining activity and under these circumstances the order passed by the AO was considered erroneous and prejudicial to the interest of the Revenue by the CIT. While passing the order on merit the CIT has also made a reference to the case of CIT v. Mysore Minerals Ltd. (1994) 205 ITR 461 (Kar) (supra) which was not accepted by the Department and SLP was filed before the Hon'ble Supreme Court. The learned authorised representative had contended that there was patent and glaring mistake of fact and law only on the basis of the observation of this Bench in para 13 on p. 6 of the order. We find that there is no mistake of law and facts in the order of the Tribunal. Besides considering the judgment of Hon'ble Supreme Court in the case of Mysore Minerals Ltd. (supra) this Bench of Tribunal had also considered the facts of the case in detail and had also discussed in detail the legal positions in view of various pronouncements of Hon'ble Supreme Court and High Courts. It was clearly held in para 19 at p. 8 of the order that the appellant is engaged in job work of mining, raising, loading and transporting of gypsum owned by RSMMC. In this process there is no transformation into a new commodity having its own character, use and name. Therefore, the facts of the case of the assessee are similar to the facts of the case of CIT v. Lucky Mineral (P) Ltd. (1997) 226 ITR 245 (Raj) which had been confirmed by the Hon'ble Supreme Court in Lucky Minmat (P) Ltd. v. CIT. Therefore, the appellant was not entitled to deduction for investment allowance as there was no manufacture or production of any article or thing.
6. The learned authorised representative submitted that the decision reported in (2001) 247 ITR 301 (SC) (supra) appears relating to some different year as is patent and obvious from the bare reading of the said judgment.
7. The mistake pointed out by the learned authorised representative with regard to citation of SLP is correct. The facts of both the cases are similar and the case seems to be pertaining to the same assessee, though may be of different year. Even in the judgment reported in (2001) 247 ITR 301 (SC), the Hon'ble Supreme Court has also referred to the judgment in CIT v. Mysore Ltd. (1994) 205 ITR 461 (Kar). In both the cases, the Hon'ble Supreme Court has granted SLP to the Department to appeal against the judgment and it was held that a question of law has arisen. This implies that the judgment of Karnataka High Court in the case of CIT v. Mysore Minerals Ltd. (supra) was reversed and final position of law would emerge out of the final verdict of the apex Court. It is evident from the perusal of the judgment of CIT v. Mysore Mineral Ltd. (1994) 205 ITR 461 (Kar) that the Hon'ble Supreme Court has granted SLP in this case also to the Department to appeal against this judgment [see (1993) 201 ITR (St) 59. Therefore, the citation (2001) 247 ITR 301 (SC) is substituted/replaced by the citation (1993) 201 ITR (St) 59. The mistake was only with regard to citation of the case before the Hon'ble Supreme Court through which SLP had been granted. This mistake has now been amended as mentioned above.
8. The miscellaneous application is allowed to the extent indicated above in this order.