Commissioner Of Income Tax Jaipur-Ii,Jaipur v. M/S Agarwal Marble Industries Ltd. F-282

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 839 / 2008 Commissioner Of Income Tax Jaipur-II,Jaipur. ----Appellant Versus M/S Agarwal Marble Industries LTD. F-282-283, Road No. 9, VkiArea, Jaipur ----Respondent _____________________________________________________ For Appellant(s) : Mr. K. D. Mathur on behalf ofMr. R. B. Mathur For Respondent(s) : _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYASJudgment 20/09/2017 1. By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal of the department. 2.This court while admitting the appeal on 18.02.2009 framed the following question of law:- “Whether in the facts and circumstances of thecase, the assessee is entitled for benefit ofdeductions u/s. 801/1A when admittedly assesseeis not involved in any manufacturing activity and isonly engaged in cutting and polishing of the marbleand granite?” 3. The facts of the case are that the Assessing Officer issued notice u/s. 154 for rectification on the ground that the MATCredit u/s. 115 JA cannot be allowed before charging interest u/s. 234 B and 234 C of he Act. The assessee did notsubmitted reply and after considering the matter the assessingofficer passed the order u/s. 154 of the Act and did not allowedthe MAT credit u/s. 115 JA of the Act before charging interestu/s. 234 and 234C of the Act. 4. While considering the matter as pointed out by the counselfor the respondent, the Tribunal Para in 10,11 observed asunder:- “The ld. Counsel for the assessee,on the other hand,while replying on the order of the CIT(A), firstlybrought to our notice that as against the original orderpassed by the AO under Section 143(3), the Revenuehas raised a ground of appeal regarding the veryaction of the AO in allowing deduction under Section801A. Accordingly to him, in the light of the aforesaidstand of the Revenue, which is pending fordetermination before this Tribunal in ITA No.157/JP/2002, the rectification order passed by the AOwas not sustainable. Consequently, he brought to ournotice the provisions of Section 154(1A) of the Act andsubmitted that where a matter has been consideredand decided by way of an apapeal against the order ofthe AO, then the AO cannot exercise power ofrectification in respect of such matter. He pointed outthat the quantum of deduction allowed under Section801A in the original assesssment proceedings hasbeen subject-matter of dispute before the CIT(A) andthe CIT(A) has already decided the matter. In suchcircumstances, it was submitted by him that theexercise of jurisidction under Section 154 by the AOwas not valid. Besides the above, he also brought toour notice a recent decision of the Hon’ble SupremeCourt in the case of CIT vs. Sesa Goa ltd., 271 ITR 331(SC), wherein the Hon’ble Supreme Court has heldthat extraction and proceedings of iron ore need notbe a commercially new project. This decision wasrendered in the context of Section 801 of the Act. Itwas pointed out by him that this decision of theHon’ble Supreme Court does not throw a debate as theeligibility of the assessee to claim deduction underSection 801(A) of the Act. Even on this ground, it waspleaded by him that the order of the CIT(A) should besustained. 11. We have considered the rival submissions. It isobserved that when the original assessment wascompleted under Section 143(3), the AO did not gointo the question as to whether the activity of theassessee amounts to manufacture in respect of whichit would be entitled to deduction under Section 801A ofthe Act. The only issue was as to whether from thegross total income on which deduction under Section801 HHC has to be deducted. We have alreadyextracted the ground of Appeal of the Revenue in ITANo. 157/JP/2002, which arises out of the original orderpassed by the AO under Section 143 (3). We fail tounderstand as to how the Revenue has raised thedispute with regard to the question whether theactivities of the assessee would amount tomanufacture or not and as to whether the assesseewould be entitled to exemption under Section 801A ofthe Act. Be that as it may. The argument of the ld.Counsel for the assessee that in vew of the provisionsof Section 154(1A), the AO cannot exercise powersunder Section 154 cannot be would amount tomanufacture or not enabling it to claim deductionunder Section 801A was never decided by the AOwhen he passed the original order of assessmentunder Section 143(3).” 5. We are in complete agreement with the view taken by theTribunal. Hence no case is made out for interference. 6. The issue is answered in favour of the assessee against thedepartment. 7.The appeal stands dismissed. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. B.M.G./Gourav-44