CIT vs. MAWANA SUGAR LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . 22.02.2011 . Present: Mr. Sanjeev Sabharwal, Advocate for the appellant. Ms. Madhavi Swaroop, Advocate for the respondent. . + ITA No. 330/2011 . This appeal arises out of the order passed in an application preferred by the Assessing Officer under Section 154 of the Income Tax Act, 1961 seeking rectification of assessment order, which was also allowed by the Assessing Officer finding that there was an error apparent on the face of it. The facts, as appearing, from the orders of the authority below pointed out that the aforesaid error are as follows:- ?2. ?there was a scrutiny assessment u/s. 143(3) wherein addition was made on account of excise duty reimbursement of M/s. Tecumseh Products India Ltd., amounting to Rs.2.92 crores. Thereafter, assessee filed an application u/s. 154 alleging that addition of excise duty reimbursement was a mistake apparent from record. Contention of assessee was that the company had transferred its business of manufacturing compressors to Tecumseh Products India Ltd. (TPIL) as on 31.3.1997. The company had undertaken to reimburse any liability which may arise in respect of period upto 31.3.1997 as per agreement. During the year ended 31.3.2005, the company has reimbursed liability of Rs.392 lakhs being the demand raised by Excise Department against the TPIL in respect of the period from August 1990 to April 1992. The company had debited to its PandL Account for the year ended 31.3.2005 an amount of Rs.90 lakhs and balance amount of Rs.302 lakhs was included under the head ?loans and advances recoverable in cash or kind or for value to be received.? It was further contended while adding the excise duty the AO has wrongly assumed that amount of Rs.392 lakhs has been debited to PandL Account during the year and that he had understood the term ?previous year? used in Notes to Accounts for the year ended 31.3.2006 having the same meaning as given in Income Tax Act whereas reference was to the preceding year i.e. year ended 31.3.2005. Amount of excise duty reimbursed was neither debited in the profit and loss account nor claimed as deduction in the computation of income therefore adding this amount to the returned income amounts to mistake apparent from record. However, the AO declined assessee?s claim by observing that there was no mistake apparent in the order u/s 143(3). . . . 3. By the impugned order, CIT(A) held that the AO was not justified in adding the amount of Rs.3.92 crores on account of excise duty reimbursement since it was not claimed in profit and loss account. Accordingly, the same was treated as a mistake apparent in the order u/s. 143(3) of the Act, against which Revenue is in further appeal before us.? . In view of the above, no substantial question of law arises for consideration. Accordingly, the present appeal stands dismissed. . . A.K. SIKRI, J. . M.L. MEHTA, J. FEBRUARY 22, 2011 AK . . . 13 #