Income Tax Appellate Tribunal - Jodhpur
R.A.M. Earth Movers (P) Ltd. vs Assistant Commissioner Of Income Tax on 27 March, 2002
Equivalent citations: (2003)78TTJ(JODH)398
ORDER
Assessing officer allowed investment allowance without conducting relevant enquiry Catch Note:
Assessing officer's order allowing assessee's claim under section 32A without conducting relevant enquiries was erroneous and prejudicial to interest of revenue--Commissioner therefore, rightly invoked section 263 though without referring section 32A(5).
Ratio:
Assessing officer's order allowing assessee's claim under section 32A without conducting relevant enquiries was erroneous and prejudicial to interest of revenue--Commissioner therefore, rightly invoked section 263 though without referring section 32A(5).
Held:
The order of the assessing officer is silent on allowability of investment allowance. The assessing officer had not examined this issue and had also not sought any explanation regarding thereto. Therefore, the Commissioner has acted within the legal parameters for revision of order under section 263. The Commissioner had clearly held that this is a mistake of law on the part of the assessing officer. He had completed the proceedings without conducting any enquiry. Therefore, the order of the assessing officer was erroneous and prejudicial to the interest of revenue.
Submission that it was wrong on the part of Commissioner to rely on the judgment of CIT v. Mysore Minerals Ltd. (1994) 205 ITR 461 (Karn) simply because the SLP was admitted by the Hon'ble Supreme Court is not acceptable becausee this case has now been decided by the Hon'ble Supreme Court in CIT v. Mysore Minerals Ltd. (2000) 17 DTC 610 (SC) : (2001) 247 ITR 301 (SC).
He was legally competent to review the order under section 263 without referring to the provision of section 32A(5) of the Act.
Application:
Principle ennunciated in this case is aqpplicable to current assessment year also.
Decision:
In favour of revenue.
Income Tax Act 1961 s.263 Rectification under s. 154--VALIDITYNo direction under section 263 by Commissioner to withdrawal brought forward investsment allowance--Assessing officer withdrew same while following direction of Commissioner for withdraw of investment allowance for 1990-91 Catch Note:
Assessee's claim under section 32A was allowed by assessing officer for assessment year 1990-91--Commissioner invoking section 263 directed assessing officer to withdraw the same--Assessing officer while following direction under section 263 also rectified assessment order withdrawing brought forward investment allowance from assessment year 1989-90--Same not justified--Investment allowance allowed in assessment year 1989-90 which has been brought forward to assessment year 1990-91 could not be withdrawn under section 154 as Commissioner had not revised order for assessment year 1989-90.
Ratio:
Investment allowance allowed in assessment year 1989-90 which had been brought forward to assessment year 1990-91 could not be withdrawn under section 154 as Commissioner had not revised order for assessment year 1989-90.
Held:
The Commissioner while passing the order under section 263 has not given any direction for withdrawing the benefit of brought forward investment allowance from assessment year 1989-90. Had the Commissioner such intention he should have issued a separate show-cause notice and should have passed a separate order under section 263 of the Act for assessment year 1989-90.
Investment allowance allowed in assessment year 1989-90 which has been brought forward to assessment year 1990-91 cannot be withdrawn under section 154 as the Commissioner has not revised the order for assessment year 1989-90.
Therefore, assessing officer is directed to allow the benefit of carry forward of unabsorbed investment allowance under section 32A for assessment year 1990-91 as the Commissioner has not issued any direction to revise the order for assessment year 1989-90.
Case Law Analysis:
CIT v. Century Flour Mills Ltd. : (1999) 239 ITR 23 (Mad) relied on.
Application:
Not to current assessment year.
Decision:
In favour of assessee.
Income Tax Act 1961 s.154 Income Tax Act 1961 s.263 Investment allowance-- OR PRODUCTIONAssessee engaged in mining, raising loading and transportation of gypsum from mines owned by RSMMC Catch Note:
Assessee was not entitled to deduction for investment allowance as there was no manufacture or production of any article or things by mining, raising loading, etc., of gypsum from mines owned by RSMMC.
Ratio:
Assessee was not entitled to deduction for investment allowance as there was no manufacture or production of any article or things by mining, raising loading, etc., of gypsum from mines owned by RSMMC.
Held:
The appellant is engaged in mining, raising, loading and transporting of gypsum from mines owned by RSMMC. In this process there is no transformation into a new commodity having its own character, use and name.
Therefore, the appellant was not entitled to deduction for investment allowance as there was no manufacture or production of any article or thing by the appellant.
Case Law Analysis:
CIT v. Lucky Minerals (P) Ltd. (1997) 226 ITR 245 (Raj) and Lucky Minmat (P) Ltd. v. CIT (2000) 17 DTC 531 (SC) (2000) 245 ITR 830 (SC) applied; CIT v. Trinity Hospital : (1997) 225 ITR 178 (Raj) distinguished.
Application:
Not to current assessment year.
Decision:
In favour of revenue.2 Assessment Year:
1990-91 Cases Referred:
Bajaj Tempo Ltd. v. CIT (1992) 196 ITR 188 (SC), CIT v. Best Chem & Limestone Industries (P) Ltd. (1994) 210 ITR 883 (Raj), CIT v. Chandrika Educational Trust (1994) 207 ITR 108 (Ker), CIT v. Gwalior Rayon and Silk Manufacturing Co. Ltd.(1992) 196 ITR 149 (SC), CIT v. Jagadhari Supply & Industrial Co. (1983) 140 ITR 490 (P&H), CIT v. L.F.D. Silva (1991) 192 ITR 547 (Karn), CIT v. Mysore Minerals Ltd. (1994) 205 ITR 461 (Karn), CIT v. Mysore Minerals Ltd. (2000) 17 DTC 610 (SC) : (2001) 247 ITR 301 (SC), CIT v. N.C. Budharaja & Co. (1993) 204 ITR 412 (SC), CIT v. Orissa. State Financial Corporation (1993) 203 ITR 747 (Ori), CST v. Kedernal Sahatta Dawakhana (1984) TLR 2918, Deputy CST v. Pio Food Packers (1980) 46 STC 63 : (1980) Suppl. SCC 174, Forbes Ewart Figgis (P) Ltd. v. ITO (1993) 47 TTJ (Coch-Trib) 76, ITO v. Venkataraman (1989) 34 TTJ (Mad-Trib) 237, Malabar Industrial Co. v. CIT (2000) 14 DTC 146 (SC) : (2000) 243 ITR 83 (SC), Mittal Ice and Cold Storage v. CIT (1986) 159 ITR 80 (MP) and Thiagraraja Industries v. ITO (1986) 15 ITD 26 (Hyd-Trib).
Income Tax Act 1961 s.32A ORDER B.L. Khatri, A.M.
1. ITA No. 1158(Jp)/94 is an appeal by the assessee against the order of CIT passed under Section 263 for asst. yr. 1990-91, ITA No. 1304(Jp)/96 is an appeal by the assessee against the order of CIT(A), Jodhpur, for asst. yr. 1990-91. There are common grounds of appeal. Therefore, these appeals are being decided through a consolidated order.
2. In ITA No. 1158(Jp)/94 the appellant has agitated against the revision of order of AO dt. 27th Sept., 1991 under Section 263 of the IT Act, by the CIT. The AO while passing the order for asst. yr. 1990-91, dt. 27th Sept., 1991, had allowed investment allowance under Section 32A of the IT Act amounting to Rs. 4,88,238 without making any enquiry. The CIT found from perusal of record that the assessee-company derived income by way of receipts 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 the law and his order is silent on this aspect, which implies 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 the Revenue. Further, being a job worker, 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 CIT. Therefore, the order was revised under the provision of Section 263 of the IT Act and while doing so he had also referred to the case of CIT v. Mysore Minerals Ltd. (1994) 205 ITR 461 (Kar), which was not accepted by the Department and SLP was filed before the Hon'ble Supreme Court. Therefore, the CIT has directed the AO to withdraw the claim of investment allowance under Section 32A.
3. As regards first ground of appeal the learned authorised representative submitted that the CIT erred in revising the order under Section 263 of the IT Act because the AO while framing the order had gone through all the details and then arrived at the conclusion. Therefore, it was wrong to say that the AO had not examined the claim lawfully and accordingly he has mistakenly allowed the claim of the appellant. While arriving at the conclusion that the CIT only held that the AO committed a mistake of law. He had not concluded that the order was erroneous. Therefore, the conditions of Section 263 were not satisfied.
4. The impugned order was also not prejudicial to the interest of the Revenue in any manner. Nor the learned CIT has stated the reasons as to how the same was prejudicial to the interest of the Revenue. He has relied on the case of Malabar Industrial Co. v. CIT (2000) 243 ITR 83, 88 (SC).
5. As regards ground No. 2, it was submitted that the learned CIT was wrong on the reasons and fact that simply because the SLP was admitted by the Hon'ble Supreme Court against the decision of the Hon'ble Karnataka High Court he could not have exercised power under Section 263 of the IT Act.
6. As regards ground No. 3, it was submitted that the action of the CIT was further erroneous because of the fact and reason of specific provision of Section 32A(5) of the IT Act. The investment allowance can be withdrawn only on the three situations envisaged by the provisions of Section 32A(5) of the Act.
7. Ground No. 4 apprehending the situation that the AO may proceed to withdraw the earlier years' investment allowance as well also, though which was not the subject-matter of the revision before the CIT, because such action has become final and there being no action taken as to withdraw such allowance under any enabling provision for doing so. The learned CIT(A)'s action in not stating the quantum of disallowance specifically in the directional part of his order has given rise to this abundant precautionary ground because the learned CIT(A) stated that he was not satisfied that AO committed a mistake of law under Section 32A. Therefore, the appellant prays that the quantum of withdrawal of investment allowance may be directed to the actual, Rs. 4,82,265. The appellant has accordingly prayed that the appeal of the appellant may be allowed by reversing the order of the CIT in withdrawing the investment allowance of Rs. 4,88,238 because :
(i) The AO had framed assessment order after due and diligent enquiry and allowed the claim under Section 32A to be carried forward as per the view on the fact-situation. Accordingly, his action was neither erroneous nor prejudicial to the interest of the Revenue.
(ii) The appellant was though engaged in performing job work of mining of gypsum, yet it was engaged in the manufacturing of goods which were commercially different from the earlier one which was part and parcel of the earth and mines and resulted in a different saleable item only after the appellant's activities of excavating, raising, loading and transporting the same.
(iii) The learned authorised representative placed reliance on the case of CIT v. Trinity Hospital (1997) 225 ITR 178 (Raj) wherein it was held that the photographs of various parts of the body obtained by these machines are the resultant product of work or activity. Photographs or the graphs are obtained from these machines, which are the results of efforts or activity, can be said to be thing under Section 32A of the Act.
(iv) The decision of the Hon'ble Karnataka High Court even if not accepted by the Department and even if SLP thereagainst was admitted, it did not authorize the CIT to proceed on the basis of the decision that mining was not a manufacturing activity. He relied upon the case of CIT v. Orissa State Financial Corporation (1993) 203 ITR 747 (On).
(v) Since the learned CIT in his order under Section 263 only took the basis of the Hon'ble Karnataka High Court reported in (1994) 205 ITR 461 (Kar) (supra) 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); and
(c) CIT v. Jagadhari Supply & Industrial Co. (1983) 140 ITR 490 (P&H).
(vi) That the learned CIT's order is not a speaking order so far as all the objections of the appellant are concerned, they were not met properly. The learned CIT has not given any reasoning as to why that reliance placed on the various decisions was not supporting its case.
(vii) The learned CIT's order is also unsustainable on account of the fact that the ground that investment allowance was aimed towards granting incentive or promoting industrial growth and development. Therefore, such decision should be construed liberally and it should be construed in the manner so that the object of the provisions is not being frustrated. He relied upon the case of Bajaj Tempo Ltd. v. CIT (1992) 196 ITR 188 (SC) and CIT v. Gwalior Rayon and Silk Manufacturing Co. Ltd. (1992) 196 ITR 149 (SC).
(viii) Before the CIT, he has contended that the appellant was entitled for claim though it was engaged in job work for mining of others. Reliance was placed on the following decisions of ITAT :
(a) ITO v. Venkatamman (1989) 34 TTJ (Mad) 237:
(b) Thiagparaja Industries v. ITO (1986) 15 ITD 26 (Hyd);
(c) Forbes Ewart Figgis (P). Ltd. v. ITO (1993) 47 TTJ (Coch) 76; and
(d) CST v. Kedemal Sahatta Dawakhana (1984) TLR 2918.
8. The learned Departmental Representative relied upon the order of CIT and he contended that as far as the words used in Section 32A of the IT Act are similar to the provisions contained in Section 80HH. The learned authorised representative relied upon the case of CIT v. Lucky Minerals (P) Ltd. (1997) 226 ITR 245 (Raj), which had been affirmed by Hon'ble Supreme Court in Lucky Minmat (P) Ltd. v. CIT. It was only a case of excavation and there is no production or manufacture of any item. Therefore, the assessee was not entitled to investment allowance under Section 32A of the Act.
9. We have considered the rival submissions. In this case the appellant is engaged in mining, raising, loading and transporting gypsum from mines owned by RSMMC. For this business the appellant had acquired plant and machinery which is being used for aforesaid business activity. The assessee had claimed investment allowance of Rs. 4,88,238 on the machinery purchased/acquired for the above business.
10. The CIT revised the order passed under Section 263 of the IT Act with the direction to withdraw the investment allowance allowed under Section 32A of the IT Act on the ground that the assessee-company derives income by way of receipts from job work of open cast gypsum for mining for RSMMC and the AO had not examined the allowability of the claim in accordance with the relevant provisions of law and his order is silent on this aspect which implies that the claim of investment allowance had been allowed without conducting any enquiry. Therefore, the order was erroneous and prejudicial to the interest of the Revenue.
11. Before deciding this issue, it is pertinent to mention the provisions of Section 32A(2)(b)(ii) which provides for investment allowance for small scale industrial undertaking for the purpose of business of manufacture or production of any article or thing.
12. Through first ground of appeal, the appellant had submitted that the AO had gone through all the details before allowing the claim of investment allowance under Section 32A of the Act. From the perusal of the record, we find that the order of the AO is silent on this aspect. The AO had not examined this issue and had also not sought any explanation regarding thereto. Therefore, the CIT has acted within the legal parameters for revision of order under Section 263. We find that the CIT had clearly held that this is a mistake of law on the part of the AO. He had completed the proceedings without conducting any enquiry. Therefore, the order of the AO was erroneous and prejudicial to the interest of Revenue.
13. 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. (supra) 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 allowable on the 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 also fails.
14. In ground No. 3 the learned counsel submitted that the conditions/circumstances mentioned in Section 32A(5) of the Act exist. Therefore, the CIT(A) was not permitted by law to withdraw the investment allowance. We find that the CIT has not resorted to the provisions of Section 32A(5). He was legally competent to review the order under Section 263 without referring to the provision of Section 32A(5) of the Act.
15. In ground No. 4, the learned authorised representative inter alia submitted that the appellant was though engaged in performing job work of mining of gypsum yet it was engaged in the manufacturing of goods which were commercially different from the earlier one which was part and parcel of the earth and the mines. He had relied heavily on the case of CIT v. Trinity Hospital (supra). Secondly, he has contended that the Tribunal has no option but to accept the appeal and set aside the order of the CIT in the cases where the ground for decision taken by CIT is found to be wrong and not tenable in law.
16. Before coming to the Conclusion we shall refer to various judgments where the word 'manufacture' or 'production' has been defined. The learned authorised representative has relied upon the case of CIT v. Trinity Hospital (supra). The facts of this case are that the assessee was running a hospital and it had installed various machines in its hospital, like x-ray machine, ultra sound scanner/ultra sonographic machines, foetal monitor and air-conditioner, etc. In this case, the Hon'ble Rajasthan High Court held that the photographs or graphs obtained from these machines which are the result of efforts or activity, therefore, can be held to be 'things'. While deciding the case of CIT v. Trinity Hospital (supra) the Hon'ble Rajasthan High Court has referred to the judgment of Mittal Ice and Cold Storage v. CIT (1986) 159 ITR 80 (MP). In this judgment, the meaning of the word 'manufacture' and 'production' occurring in Clause (b)(ii) of Sub-section (2) of Section 32A was considered. One of the conditions is that the plant and machinery should have been used by the assessee in a small scale industrial undertaking for the purposes of business or 'manufacture' or 'production' of any article or thing. The context in which the words 'manufacture' and 'production' occur shows that what is manufactured or produced in the industrial undertaking is marketable, capable of being passed on from hand to hand as a new and distinct commercial commodity. We are of the opinion that the facts of the case of CIT v. Trinity Hospital (supra) are distinguishable from the facts of the case of the appellant. The learned Departmental Representative relied upon the judgment of Hon'ble Rajasthan High Court in the case of CIT v. Lucky Mineral (P) Ltd. (supra) which has been affirmed by the Hon'ble Supreme Court in. In this case the assessee had business of mining of limestones and marble blocks and thereafter cutting and sizing the same before being sold in the market. The Hon'ble Rajasthan High Court distinguished its earlier judgment in the case of CIT v. Best Chem & Limestone Industries (P) Ltd. because the assessee was engaged in the business of extracting limestone and its sale either as such or after converting it into lime and lime dust or concrete by stone crushers. Therefore, the facts of the case were not the similar in the case before the Hon'ble High Court in the case of Lucky Minerals (P) Ltd. (supra) the activities of the assessee-company consisted of excavating limestone and marble boulders and after cutting boulders into slabs, selling them. Cutting the boulders into slabs might have been with the aid of machinery but the original commodity retained a continuing substantial identity through the processing state carried out by the assessee-company. Therefore, it was held that the assessee was not entitled to the deduction under Section 80HH of the Act. We find that the facts of the case of Lucky Mineral (P) Ltd. (supra) are similar to the facts of the case of the appellant.
17. In the case of Dy. CST v. Pio Food Packers (1980) 46 STC 63, 65 : (1980) Suppl. SCC 174, the Hon'ble Supreme Court considered the meaning of the word "manufacture" with reference to several decisions and stated the test in the following words :
"There are several criteria for determining whether a commodity is consumed in the manufacture of another. The generally prevalent test is whether the article produced is regarded in the trade, by those who deal in it, as distinct in identity from the commodity involved in its manufacture. Commonly, manufacture is the end result of one or more processes though which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognized as a new and distinct article that a manufacture can be said to take place. Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it must be regarded as still retaining its original identity."
18. The moment there is a transformation into a new commodity having its own character, use and name whether as a result of one process or several processes, "manufacture" takes places. The meaning of the word "manufacture" and "produce" had also been considered by the Hon'ble Supreme Court in the case of CIT v. N.C. Budharaja & Co. (1993) 204 ITR 412, 423-24 (SC) takes place as under:
"The word 'production' or 'produce' when used in juxtaposition with the word 'manufacture' takes in bringing into existence new goods by a process which may or may not amount to manufacture. It also takes in all the byproducts, intermediate products and residual products which emerge in the course of manufacture of goods."
19. The appellant is engaged in mining, raising, loading and transporting of gypsum from mines 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 Lucky Mineral (P) Ltd. (supra) which had already been affirmed by the Hon'ble Supreme Court. Therefore, the appellant was not entitled to deduction for investment allowance as there was no manufacture or production of any article or thing by the appellant. The learned CIT had correctly revised the order under Section 263 of the IT Act.
20. In ITA No. 1304/Jp/1996, the appellant has agitated that the AO erred in withdrawing the claim for brought forward investment allowance under Section 154 of the Act and the learned CIT(A) also erred in deciding the appeal of the appellant on the ground that he cannot hear the appeal against the order of CIT(A), Jodhpur, who is equally authority including the consequential order.
21. The brief facts of the case are that the appellant-company had claimed investment allowances of Rs. 4,82,265 for asst. yr. 1989-90. The said return was processed under Section 143(1) and the claim of investment allowances was allowed to be carried forward.
22. In the asst. yr. 1990-91 the appellant had also made a claim of unabsorbed investment allowances. For that year i.e., current year's investment allowances which was of Rs. 4,88,238 that the assessee had claimed current year's investment allowances of Rs. 4,88,238 and also along with that separately claimed unabsorbed investment allowances brought forward from preceding asst. yr. 1989-90 (Rs. 4,82,265). The AO had also allowed this claim while framing the order under Section 143(3) vide his order dt. 27th Sept., 1991. This order was revised by CIT under Section 263 of the Act on 18th March, 1994, directing the AO to withdraw the claim of investment allowance under Section 32A. The CIT directed to withdraw the investment allowance of Rs. 4,88,238 relating to the current assessment year i.e., 1990-91 and he has not given any direction to withdraw the investment allowance claimed by the appellant and allowed to be carried forward to the appellant from asst. yr. 1989-90 under Section 143(1).
23. The AO while giving effect to the direction of the CIT contained in the order under Section 263 he had also not allowed the benefit of carry forward of unabsorbed investment allowance for asst. yr. 1989-90 and he has withdrawn the same through his order under Section 154, dt. 23rd Nov, 1994. Aggneved by this order of the AO the learned authorised representative had made the following submissions:
23.1. The CIT(A), Jodhpur, has erred in dismissing the appeal against order of AO on the ground that he was not competent to decide on directions issued by the CIT who has got equal authority.
23.2. The appellant's case is squarely covered by the judgment of Hon'ble Madras High Court in the case of CIT v. Century Flour Mills Ltd. (1999) 239 ITR 23 (Mad). The action of the AO was bad in law and erroneous in withdrawing the investment allowance relating to asst. yr. 1989-90 which was aEowed as brought forward from that assessment year to succeeding assessment year for which there was no direction from CIT which is patent from the show-cause notice issued by him (PB7) and the order framed by him.
24. The learned Departmental Representative relied upon the order of the AO.
25. We have considered the rival submissions. We find that the CIT while passing the order under Section 263 has not given any direction for withdrawing the benefit of brought forward investment allowance from asst. yr. 1989-90. Had the CIT such intention he should have issued a separate show-cause notice find should have passed a separate order under Section 263 of the Act for asst. yr. 1989-90. The learned authorised representative had rightly placed reliance on the case of CIT v. Century Flour Mills Ltd (supra). The Hon'ble Madras High Court held as under at p. 28:
"This Court in the case of Seshasayee Paper and Boards Ltd. v. IAC (1986) 157 ITR 342 (Mad) held that even a wrong order passed by the ITO is binding on the Department unless it is set aside by the process known to or authorised by the law. Similarly, in the case of CIT v. A. Samarapuri Chetty (1992) 195 ITR 371 (Mad), this Court has taken a view that even a void order has legal consequences, unless the order is set aside by the Department in the manner contemplated by the law. Those two decisions make it clear that so long as the order stands, that order should be given effect to; that the statutory benefit should be given effect from that order and if the Department wants to deny those statutory benefits, it is for the Department to cancel the order and till then, it is impermissible for the Department to deny the benefits in the assessment proceedings for subsequent assessment years. Though we uphold the order of the Tribunal we uphold the same not for the reasons stated by the Tribunal but for other reasons stated above,"
In this case the CIT has revised the order under Section 263 for asst. yr. 1990-91 for withdrawal of investment allowance under Section 32A of the IT Act. But the investment allowance of Rs. 4,82,265 was allowed in asst. yr. 1989-90 and was brought forward in the asst. yr. 1990-91 from asst. yr. 1989-90. The investment allowance allowed in asst. yr. 1989-90 which has been brought forward to asst. yr. 1990-91 cannot be withdrawn under Section 154 of the IT Act as the CIT has not revised the order for asst. yr. 1989-90. Therefore, the AO is directed to allow the benefit of carry forward of unabsorbed investment allowance under s 32A of the IT Act for the asst. yr. 1990-91 as the CIT has not issued any direction to revise the order for asst. yr. 1989-90.
26. In the result, ITA No. 1158(Jp)/94 is dismissed and ITA No. 1304/Jp/96 is allowed.