2022 (5) TMI 1004 - AT - Income Tax

Tribunal corrects errors, allows provision for deduction under section 80HHC, favors assessee

The ACIT, Vapi Circle, Vapi. Versus Bayer Vapi Pvt. Ltd., (Formerly Known as M/s. Bilag Industries Pvt. Ltd.)

The ACIT, Vapi Circle, Vapi. Versus Bayer Vapi Pvt. Ltd., (Formerly Known as M/s. Bilag Industries Pvt. Ltd.) - TMI Issues involved:1. Recalling of the Tribunal's order due to factual errors and typographical mistakes.2. Adjudication on the provision written back for deduction under section 80HHC of the Income Tax Act.Issue 1: Recalling of the Tribunal's order:The appeal by the Revenue for the assessment year 2004-05 was directed against the order passed by the Learned Commissioner of Income Tax (Appeals), Valsad. The Tribunal recalled its previous order due to factual errors and typographical mistakes, specifically related to incorrect correlation of sales made and commission paid, and a typographical error in quoting the amount. The Tribunal decided not to interfere in the order concerning the merits of the issue but directed the correcting of the typographical error in the figure mentioned.Issue 2: Provision written back for deduction under section 80HHC:The second issue involved the provision written back for deduction under section 80HHC of the Act. The assessee argued that the provision written back had a direct nexus with the manufacturing business and should be eligible for deduction. The Assessing Officer, however, held that the amount had no nexus with the business and excluded it from the profit for the purpose of granting deduction under section 80HHC. The Learned CIT(A) directed the assessing officer to exclude all items except rent from Bajaj Alliance for the deduction under section 80HHC. The Tribunal referred to various judicial decisions and held that the provision written back should be considered as part of manufacturing profit eligible for deduction under section 80HHC. The Tribunal relied on the judgment of the Coordinate Bench of ITAT, Delhi, and the Hon'ble Jurisdictional Gujarat High Court in a similar case to support its decision. Consequently, the Tribunal allowed the second issue in favor of the assessee, dismissing a part of the Revenue's ground related to the provision written back.In conclusion, the judgment addressed the issues of recalling the Tribunal's order due to errors and the eligibility of the provision written back for deduction under section 80HHC of the Income Tax Act. The detailed analysis provided a comprehensive understanding of the Tribunal's decision and the legal principles applied in reaching the judgment.