Tribunal rules in favor of appellant on time limitation and custom duty treatment issues.

The Tribunal ruled in favor of the appellant on both issues. Regarding the time limitation for filing an application under section 154 of the Income Tax Act, the Tribunal held that the application was not time-barred, as the limitation period should be calculated from the end of the financial year in which the order sought to be amended was passed. On the treatment of reversed provisions for custom duty in the calculation of income under MAT, the Tribunal directed the AO to exclude the reversed provisions from the income under MAT, as no deduction was allowed earlier. The appeal was allowed, and the order of the CIT(A) was set aside.

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Issues involved:
1. Time limitation for filing application u/s 154 of the Income Tax Act.
2. Treatment of reversed provisions for custom duty in the calculation of income under MAT.

Analysis:

Issue 1: Time limitation for filing application u/s 154 of the Income Tax Act

The appeal was filed against the order of the Ld. CIT(A) regarding the time limitation for filing an application u/s 154 of the Income Tax Act. The appellant argued that the period of limitation should be reckoned from the date of the last order passed in the assessment year, not the assessment order date. The provisions for custom duty were created in AY 1988-89 and reversed in AY 1989-90. The AO did not exclude the reversed provisions of &8377; 3.50 Cr while computing income under MAT, leading to the rectification application filed by the assessee in 2009. The Tribunal held that the application was not time-barred under section 154(7) of the Act, as the limitation period should be calculated from the end of the financial year in which the order sought to be amended was passed. Citing the Peninsula Land Ltd case, the Tribunal concluded that the application was valid and not barred by limitation.

Issue 2: Treatment of reversed provisions for custom duty in the calculation of income under MAT

The second issue revolved around the treatment of reversed provisions for custom duty in the calculation of income under MAT. The provisions were disallowed by the AO and upheld by the tribunal in previous years. The AO did not allow the reduction of the reversed provisions of &8377; 3.50 Cr from the income under MAT in the order giving appeal effect. The Tribunal disagreed with the CIT(A) and directed the AO to reduce the provisions for custom duty reversed amount from the income under MAT. The Tribunal held that since no deduction was allowed earlier, the reversed provisions should be excluded from the income under MAT. Consequently, the appeal of the assessee was allowed, and the order of the CIT(A) was set aside.

In conclusion, the Tribunal ruled in favor of the appellant on both issues, allowing the appeal and directing the AO to exclude the reversed provisions for custom duty from the income under MAT.

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