2018 (8) TMI 1862 - AT - Income Tax

Mistake apparent from record within the meaning of section 254(2) - deduction u/s 80IC (2) (b) (iii) denied - Through this M.A., it was brought to our notice that in the case of M/s. Sewajpur Tea Co. Pvt. Ltd. 2013 (11) TMI 1327 - ITAT KOLKATA M/s. Sewajpur Tea Co. Pvt. Ltd. was not engaged in carrying on business of cultivation of tea, which was an essential ingredient to be qualified for claiming deduction under section 80-IC the claim of that assessee was rejected - HELD THAT - As brought to our notice that assessee company owned a Tea Estate situated in Silchar District of Assam. It was submitted before us that the assessee company, in order to utilize installed manufacturing capacity, purchased green leaves from the market also. Thus it was brought to our notice that the judgment of the Coordinate Bench of this Tribunal in the case of M/s. Sewajpur Tea Co. Pvt. Ltd. (Supra) is not applicable to the assessee company under consideration, as facts of the assessee company is different as discussed above. Since we have relied on the decision of the Coordinate Bench of the Tribunal in M/s. Sewajpur Tea Co. Pvt. Ltd. to decide the issue in assessee s case, and it has been shown before us that case law is not applicable to the facts of the assessee s case, therefore, we are of the view that the order of the Tribunal contains an apparent mistake and should be recalled. Therefore, we direct the Registry to fix the appeal in due course.

Summary

Issues:
Claim for deduction under section 80IC (2) (b) (iii) of the Income Tax Act, 1961 based on the ownership of tea gardens and manufacturing activities.

Analysis:
The assessee filed a Miscellaneous Application pointing out a mistake apparent from the record in the Tribunal's order dated 31.01.2018. The issue revolved around the Tribunal's reliance on a judgment in the case of M/s. Sewajpur Tea Co. Pvt. Ltd. to dismiss the assessee's claim under section 80IC of the Act. The assessee argued that the facts of M/s. Sewajpur Tea Co. Pvt. Ltd., being a standalone tea manufacturer without tea gardens, differed from the assessee's case, where the company owned tea gardens and engaged in manufacturing. The Tribunal noted the distinction and agreed that the judgment in M/s. Sewajpur Tea Co. Pvt. Ltd. was not applicable to the assessee's situation. Consequently, the Tribunal found an apparent mistake in its order and directed the appeal to be fixed for due course.

The dispute centered on the eligibility of the assessee for deduction under section 80IC of the Act based on the ownership of tea gardens and engagement in manufacturing activities. The Tribunal initially relied on a judgment involving a tea manufacturing company without tea gardens, leading to the dismissal of the assessee's claim. However, upon review through the Miscellaneous Application, it became evident that the facts of the assessee's case, where tea gardens were owned and green leaves were purchased for manufacturing, differed significantly from the case relied upon. This crucial distinction led to the Tribunal recognizing the mistake in its earlier order and allowing the Miscellaneous Application filed by the assessee.

This judgment highlights the importance of factual distinctions in tax matters and the need for precise application of legal principles to specific cases. The Tribunal's reconsideration based on the varying circumstances of the parties involved demonstrates the significance of accurate interpretation and application of law to ensure fair and just outcomes in tax disputes. The decision underscores the principle that legal judgments should align closely with the facts and circumstances of each case to uphold the integrity and effectiveness of the legal system.