Appeal Details
Counselvise Citation
[2019] 115 COUNSELVISE.COM (IT) 4510 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
15-03-2019
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
Not Allotted
Assessment Year
2011-2012
Appeal Filed On
11-03-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI BEFORE SHRI MAHAVIR SINGH, JM & SHRI M.BALAGANESH, AM ITA NO. 1343 / MUM/20 1 6 ( ASSESSMENT YEAR : 2011 - 12 ) M/S. GRANADA INVESTMENTS & FINANCE PVT. LTD.,), (FORMERLY KNOWN AS GRANADA ENERGY SYST EMS PVT. LTD., ) 3 RD FLOOR, INDUSTRY MANOR, NEAR CENTURY BAZAR, PRABHADEVI MUMBAI 400 026 VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 6(3) MUMBAI PAN/GIR NO. AACCM0066R ( APPELLANT ) .. ( RESPONDENT ) ITA NO. 2594 /MUM/201 6 ( ASSESSMENT YEAR : 2011 - 12 ) DCIT CIR 7(1) - 1 ROOM NO.23, GROUND FLOOR AAYAKAR BHAVAN, M.K.ROAD MUMBAI - 400 020 VS. M/S. GRANADA ENERGY SYSTEMS PVT. LTD.,(PRESENTLY M/S.GRANADA INVESTMENTS & FINANCE PVT. LTD.,), 3 RD FLOOR, INDUSTRY MANOR, NEAR CENTURY BAZAR, PRABHADEVI MUMBAI 400 026 P AN/GIR NO. AACCM0066R (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI HITESH SHAH / MS. MALLIKA DEVENDRA REVENUE BY SHRI CHAUDHARY ARUNKUMAR SINGH DATE OF HEARING 28 / 02 /201 9 DATE OF PRONOUNCEMENT 15 / 03 /201 9 ITA NOS.1343/MUM/2016 & 2594/MUM/2016 M/S. GRANADA INVESTMENTS & FINANCE PVT. LTD., 2 / O R D E R PER M. BALAGANESH (A.M) : THESE CROSS APPEALS FILED BY ASSESSEE AND REVENUE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 21, [HEREINAFTER REFERRED TO AS THE LD CITA] MUMBAI DATED 22/01/2016 FOR A.Y.2011 - 12 IN TH E MATTER OF ORDER PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961. 2. LET US TAKE UP THE REVENUE APPEAL IN ITA NO.2594/MUM/2016. WE FIND THAT THE TOTAL ADDITIONS MADE IN THE ASSESSMENT WERE ONLY TO THE TUNE OF 56.21 LAKHS. NO ENHANCEMENT OF INCOME WAS MADE BY THE LD. CIT(A). THE TAX EFFECT ON THESE TOTAL ADDITIONS MADE IS LESS THAN RS.20 LAKHS WHICH WILL BE WELL WITHIN THE MONETARY LIMITS PRESCRIBED BY THE CBDT IN ITS RECENT CIRCULAR NO. 3/2018 DATED 11/07/2018 WHEREIN REVENUE IS DIRECTED TO WITHDRAW ITS APP EAL FILED BEFORE THE TRIBUNAL IF THE TAX EFFECT ON THE DISPUTED ADDITIONS ARE WITHIN THE MONETARY LIMITS PRESCRIBED IN THE SAID CIRCULAR. ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED AS NOT MAINTAINABLE. 3. NOW LET US COME TO ASSESSEES APPEAL IN IT A NO.1343/MUM/2016. 4. THE FIRST ISSUE IS TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF FOREIGN TRAVEL EXPENSES OF RS.5,44,023/ - IN THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS.1343/MUM/2016 & 2594/MUM/2016 M/S. GRANADA INVESTMENTS & FINANCE PVT. LTD., 3 5. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY WORKING AS AN AGENT IN INDIA AND ABROAD AND DEALS IN NON - CONVENTIONAL ENERGY ENGINEERING EQUIPMENTS. IT ALSO DEALS WITH IMPORTS / EXPORTS / MATERIAL HANDLING EQUIPMENT ACTIVITIES IN CONSONANCE W ITH THE OBJECTIONS MENTIONED IN THE MEMORANDUM OF ASSOCIATION OF THE COMPANY. THE LD. AO OBSERVED THAT THE ASSESSEE COMPANY HAD DEBITED A SUM OF RS.5,44,023/ - TOWARDS FOREIGN TRAVEL EXPENSES IN ITS PROFIT AND LOSS ACCOUNT. ON GOING THROUGH THE DETAILS FOR TRAVELLING FILED BY THE ASSESSEE , IT WAS NOTICED THAT THE SAME PERTAIN TO FOREIGN TRAVEL OF DIRECTORS OF THE COMPANY. THE ASSESSEE REPLIED BEFORE THE LD. AO THAT MR. GOPAL VAZIRANI IS THE CHAIRMAN AND MANAGING DIRECTOR AND HIS WIFE MRS. PADMA VAZIRANI IS D IRECTOR OF THE ASSESSEE COMPANY AND THAT THEY HAD VISITED TO LONDON, GERMANY AND OTHER EUROPEAN COUNTRIES IN CONNECTION WITH THE BUSINESS OF THE ASSESSEE. THE ASSESSEE SUBMITTED THE INVOICE COPY OF SKY SPEED TOUR AND TRAVEL COMPANY TO THE TUNE OF RS.2,19,4 11/ - PERTAINING TO THE AIR TRAVEL. HOWEVER, THE OTHER BILLS RELATING TO FOREIGN TRAVEL WERE NOT SUBMITTED BEFORE THE LD. AO AS THE SAME WERE NOT TRACEABLE. THE LD. AO OBSERVED THAT THE ASSESSEE COMPANY WAS NOT BENEFITTED PURSUANT TO THE AFORESAID FOREIGN T RAVEL OF THE DIRECTORS AND THAT THE ASSESSEES COMPANY M AIN BUSINESS DURING THE YEAR IS ONLY WITH REGARD TO INVESTMENT IN SHARES AND MUTUAL FUNDS, PURCHASE AND SALE OF SHARES AND INVESTMENT OF SURPLUS MONEY IN BANK DEPOSITS , FOR WHICH PURPOSE , THE INCURREN CE OF FOREIGN ITA NOS.1343/MUM/2016 & 2594/MUM/2016 M/S. GRANADA INVESTMENTS & FINANCE PVT. LTD., 4 TRAVEL IS NOT WARRANTED. ACCORDINGLY, THE LD. AO DISALLOWED THE SAME ON THE GROUND THAT THE ASSESSEE WAS NOT ABLE TO PROVE THE BUSINESS NEXUS OF THE SAID EXPENDITURE . B EFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THAT PURSUANT TO THIS FOREIGN TRAVEL OF THE DIRECTORS, THE ASSESSEE COMPANY WAS ABLE TO EARN EXEMPT INCOME OF EURO 50,000/ - EQUIVALENT TO RS.32,42,226/ - IN F.Y.2012 - 13 RELEVANT TO A.Y.2013 - 14. THE LD. CIT(A) OBSERVED THAT THE BENEFIT , THE ASSESSEE HAD DERIVED PURSUANT TO INCURRENCE OF FOREIGN TRAVEL EXPENSES HAVE AROSE AFTER TWO YEARS . B ASED ON TH E FOREIGN TRAVEL EXPENDITURE INCURRED DURING THE YEAR UNDER CONSIDERATION , THE ASSESSEE DID NOT R EAP ANY BENEFIT AND HENCE, THE LD. AO HAD RIGHTLY DISALLOWED THE SAME AS NOT INCURRED WHOLLY AN D EXCLUSIVELY FOR THE PURPOSE OF ASSESSEES BUSINESS. 6. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE FACTS NARRATED HEREINABOVE REMAIN UNDISPUTED AND HENCE THE SAME ARE NOT REITERATED FOR THE SAKE OF BREVITY. W E FIND THAT THE ASSESSEE HAS NOT ESTABLISHED THE BUSINESS NEXUS AND THE BENEFITS DERIVED , IF ANY , DURING THE YEAR PURSUANT TO THE FOREIGN TRAVEL VISIT MADE BY ITS DIRECTORS. EXCEPT THE INVOICE COPY FOR THE AIR TRAVEL, THE ASSESSEE WAS NOT ABLE TO PROVIDE ANY OTHER DETAILS AS TO WHOM THE DIRECTORS HAD MET IN THOSE FOREIGN COUNTRIES , THE PURPOSE OF THOSE VISITS AND HOW ASSESSEE COMPANY WAS BENEFITED OUT OF SUCH VISIT TO JUSTIFY THE CLAIM THAT THE SAID VISIT WAS MEANT FOR PROMOTING THE ITA NOS.1343/MUM/2016 & 2594/MUM/2016 M/S. GRANADA INVESTMENTS & FINANCE PVT. LTD., 5 BUSINESS OF THE ASSESSE E COMPANY. NONE OF THE DETAILS WERE FILED IN THIS REGARD EVEN BEFORE US BY THE ASSESSEE. IN THESE CIRCUMSTANCES, WE HOLD THAT THE LD. CIT(A) HAD RIGHTLY UPHELD THE DISALLOWANCE MADE BY THE AO. ACCORDINGLY, GROUND NO.1 RAISED BY THE ASSESSEE IS DISMISSED. 8 . THE GROUND NO.2 & 3 RAISED BY THE ASSESSEE IS WITH REGARD TO NON - ADJUDICATION OF THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE BEFORE THE LD. CIT(A) IN RESPECT OF PRAYER SEEKING FOR REDUCTION OF LONG TERM CAPITAL GAIN EARNED ON ACCOUNT OF SALE OF SHARES OF M/S. WMI CRANES LTD. TO THE TUNE OF RS.1,42,44,725/ - . 9. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESSEE SOLD 75,000 SHARES TO M/S. WMI CRANES LTD., IN THE MONTH OF FEBRUARY 2011 FOR RS.24,09,23,250/ - AND DERIVED LONG TERM CAPITAL GAIN OF RS. 23,17,09,427/ - . BEFORE THE LD. CITA , ASSESSEE RAISED THE FOLLOWING ADDITIONAL GROUND S OF APPEAL: - L) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE SALE KATE AS PER SHARE OF THE SHARES OF M/S WMI CRANES LIMITED, ON SAL E WHICH LONG TERM CAPITAL GAINS WERE EARNED AND OFFERED TO TAX SHOULD HAVE BEEN CONSIDERED AT RS.3,022.38P PER SHARE AS COMPARED TO RS.32L2.31P PER SHARE. 2} IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE PROPORTIONATE SUM PERTAINING TO THE A PPELLATE THAT WAS PAID OUT OF THE ESCROW ACCOUNT OUGHT TO HAVE BEEN REDUCED FROM THE GROSS SALES .'PROCEEDS SHOWN BY THE APPELLANT AS HAVING BEEN RECEIVED ON THE SALE OF THE SHARES. 3) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE SUM PARKED IN ESCROW ACCOUNT AND SUBSEQUENTLY PAID, TO THE COMPANY WAS NOT TO BE CONSIDERED AS PART OF THE FULL VALUE OF CONSIDERATION RECEIVED, OR ACCRUING FOR THE PURPOSES OF COMPUTING THE LONG TERM CAPITAL GAINS IN TERMS OF SECTION 48 OF THE INCOME TAX ACT, 1961.' ITA NOS.1343/MUM/2016 & 2594/MUM/2016 M/S. GRANADA INVESTMENTS & FINANCE PVT. LTD., 6 10. IN THE SAID ADDITIONAL GROUND S OF APPEAL, THE ASSESSEE MADE A CLAIM THAT THE ACTUAL CONSIDERATION RECEIVED ON SALE OF SHARES OF M/S. WMI CRANES LTD., WAS LESS THAN THE CONSIDERATION TAKEN FOR COMPUTING CAPITAL GAINS, IN VIEW OF THE FACT THAT CERTAIN AMOUNT OF CONSIDERATION WAS KEPT IN ESCROW ACCOUNT. THE LD. CIT(A) CALLED FOR A REMAND REPORT IN THIS REGARD FROM THE LD. AO. THE LD. AO FURNISHED A REMAND REPORT DATED 19/08/2015 WHEREIN IT WAS SUBMITTED THAT THE VERY SAME GROUND WAS THE SUBJECT MATTER OF REVISION PETITION U/S.264 OF THE ACT BEFORE THE PR. CIT - 7 , MUMBAI BY THE ASSESSEE VIDE ORDER DATED 09/02/2015. THE SAID REVISION PETITION U/S.264 WAS DISPOSED OFF FOR THE A.Y.2011 - 12 REJECTING THE PLEA OF THE ASSESSEE. THE COPY OF THE ORDER PASSED U/S.264 WAS ALSO ENCLOSED THEREWITH. THE LD. CIT(A) OBSERVED THAT SINCE THE ISSUE RAISED IN THE ADDITIONAL GROUNDS OF APPEAL BEFORE HIM WAS ALREADY THE SUBJECT MATTER OF REVISION PETITION U/S.264 OF THE ACT, HENCE THE SAME CANNOT BE ADJUDICATED BY HIM UNDER APPEA L. ACCORDINGLY, HE DISMISSED THE ADDITIONAL GROUNDS OF APPEAL. 11. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 12. WE HAVE HEARD RIVAL SUBMISSIONS. IT IS THE CASE OF THE LD. CIT(A) THAT WITH RESPECT TO THE GROUND NO S .2 & 3 RAISED BEFORE US, THE SAME WERE THE SUBJECT MATTER OF ADJUDICATION BY THE LD. ADMINISTRATIVE COMMISSIONER IN THE PROCEEDINGS U/S.264 OF THE ACT. FOR THE SAKE OF ITA NOS.1343/MUM/2016 & 2594/MUM/2016 M/S. GRANADA INVESTMENTS & FINANCE PVT. LTD., 7 CONVENIENCE, THE ORDER PASSED U/S.264 OF THE ACT DATED 09/02/2015 IS REPRODUCED HEREUNDER: - THE RETURN OF INCOME WAS FILE D BY THE ASSESSEE FOR A.Y.2011 - 12 ADMITTING INCOME OF RS.22,12,30,101/ - WHICH INCLUDED LONG TERM CAPITAL GAINS OF RS.22,17,09,427/ - AND BUSINESS INCOME OF RS.22,44,209/ - . THE ASSESSMENT WAS COMPLETED BY THE AO ON 18.11 . 2013 IN WHICH THE ADDITION OF RS.50 L ACS WAS MADE DISALLOWING THE CLAIM OF DEDUCTION U/S.54EC OF THE ACT, DISALLOWANCE OF RS. 1 ,12,510/ - U/S.14A AND DISALLOWANCE OUT OF THE CLAIM FOR FOREIGN TRAVEL EXPENSES TO THE TUNE OF RS.5,44,023/ - . 2. HOWEVER, THE ASSESSEE HAS NOW FILED A REVISION PETIT ION U/S.264 OF THE ACT ON 11.11.2014, IT IS CLAIMED THAT PROMOTER GROUP EXILED THE COMPANY AND IN LIEU OF THIS TOTAL CONSIDERATION OF RS.1,55,00,00,000/ - WAS REQUIRED TO BE PAID BY THE BUYER FOR SALE OF SHARES OF M/S. WMI CRANES LTD. WHICH WAS RUN AND CONT ROLLED BY THE ASSESSEE COMPANY ALONG WITH PROMOTERS / DIRECTORS. IT WAS SUBMITTED THAT AN AMOUNT OF R S.30 CRORES WAS KEPT IN ESCROW ACCOUNT FOR MEETING THE CONTINGENT LIABILITY WHICH, MAY ARISE ON ACCOUNT OF COMPANY/ PROMOTERS SUBSEQUENT TO CHANGING OF HAN DS. LATER, PAYMENTS WERE MADE TO THE TUNE OF R S.9 ,17, 0 4,24 0 / - OUT OF THIS ESCROW ACCOUNT. PETITION U/S.264 OF THE ACT FOR REDUCING THE TOTAL INCOME BY RS.1,42,44,725/ - IN THE HANDS OF THE ASSESSES COMPANY (ON PROPORTIONATE BASIS), FROM ASSESSE D INCOME OF R S.21 ,26,06 ,8 05/ - TO RS.20,69,85,380/ - , HAS BEEN FILED. 3 THE ASSESSEE WAS ASKED TO APPEAR ON 16.01.2015 TO EXPLAIN AND DISCUSS T HE C ASE . IN RESPONSE TO THIS HEARING, THE AUTHORIZED REPRESENTATIVE FROM SHAH & TAPARIA APPEARED AND FILED SUBMISSION FROM TIM E TO TIME I.E. ON 16.01.2015 & 19.01.2015. ANOTHER OPPORTUNITY OF HEAR ING WAS GIVEN ON 30.01. 2015 AS DESIRED BY THE AUTHORIZED REPRESENTATIVE. THE ASSESSEE SOUGHT ADJOURNMENT WHICH WAS DULY GIVEN FOR 05.02.2015. HOWEVER, NO ONE APPEARED ON 05.02.2015 ON TH E APPOINTED TIME. I HAVE, THEREFORE, NO OPTION BUT TO DISPOSE OF THE APPLICATION ON MERIT BASED ON THE FACTS AVAILABLE ON RECORD. 4. I HAVE PERUSED THE AGREEMENT BETWEEN M/S. GRANADA INVESTMENT & FINANCE PVT. LTD, AND KONECRANES FINANCE CORPORATION, I HAV E PERUSED THE CORRESPONDENCE IN RESPECT OF AMOUNT WITHDRAWN FROM ESCROW ACCOUNT. IT IS APPARENT FROM THE PERUSAL OF SHARE SUBSCRIPTION AND PURCHASE AGREEMENT BETWEEN KONEC RANES FINANCE CORPORATION AND WM I CRANES LIMITED ALONG WITH PROMOTERS MENTIONED IN TH E LIST ATTACHED NAMELY, MR. GOPAL A. VAZIRANI, MRS. PADMA G, VAZIRANI, DINESH G. VAZIRANI, GRANADA ENERGY SYSTEMS PVT. LTD, ETC., DATED 11.10,2010 THAT ITA NOS.1343/MUM/2016 & 2594/MUM/2016 M/S. GRANADA INVESTMENTS & FINANCE PVT. LTD., 8 'PURCHASE PRICE' HAS BEEN DEFINED IN CLAUSE 1.1.42 OF THIS AGREEMENT. THIS READS AS: - 'PURCHASE PRIC E MEANS A PRICE OF RS.321 2. 31 PER SALE SHARE AGGREGATING TO RS.1,55,00,000/ - FOR ALL THE 'SALE SHARES . IN CLAUSE 1.1.44, 'SALE SHARES' HAS BEEN DEFINED AS: - 'SALE SHARES MEANS 482,519 EQUITY SHARES OWNED BY THE SELLING PROMOTERS, IN THE PROPORTION SET OUT IN PART B AF ANNEXURE 1 HERETO, TO BE SOLD TO THE PURCHASER AT CLOSING. THIS AGREEMENT ALSO TALKS ABOUT THE 'ESCROW ACCOUNT' AND 'ENCUMBRANCE HAS BEEN DEFINED IN CLAUSE 1.1.22, WHICH HAS BEEN DEFINED AS UNDER : - ' ENCUMBRANCE'' MEANS, AS THE CASE MAY BE, ANY ENCUMBRANCE FOE SECURITY INTEREST, CLAIM, MORTGAGE,. PLEDGE, CHARGE, HYPOTHECATION, ESCROW, CUSTODY ARRANGEMENT. LIEN. NEGATIVE LIEN, LEASE, TITLE RETENTION, DEPOSIT BY WAY OF SECURITY, BENEFICIAL OWNERSHIP, OR ANOTHER INTER EST HELD BY A THIRD PERSON, (II) SECURITY INTEREST OR OTHER ENCUMBRANCE OF ANY KIND SECURING, OR CONFERRING ANY PRIORITY OF PAYMENT IN RESPECT OF, ANY OBLIGATION OF ANY PERSON, (III) POWER OF ATTORNEY IN RELATION TO THE EQUITY SHARES, VOTING TRUST AGREEMEN T, 'INTEREST, OPTION OR RIGHT OF PREEMPTION, RIGHT OF FIRST OFFER, RIGHT OF FIRST REFUSAL, DRAG - ALONG RIGHT OR OTHER TRANSFER RESTRICTION IN FAVOUR OF ANY PERSON, AND/OR (IV) ANY ADVERSE CLAIM AS TO TITLE, POSSESSION OR USE, ' 5. FROM THE ABOVE, IT IS DE AR THAT THE ASSESSEE IS NOW CLAIMING REDUCTION U/S.264 OF THE ACT FROM THE CAPITAL GAINS' COMPUTED BY IT VOLUNTARILY AND SHOWN IN THE RETURN OF INCOME FILED. NEEDLESS TO SAY, CAPITAL GAIN HAS TO BE WORKED OUT AS PER THE 'PROVISIONS OF PART - E OF CHAPTER IV OF THE INCOME - TAX ACT. SECTION 48 OF THE ACT DEALS WITH MODE OF COMPUTATION OF CAPITAL GAINS. IT READS AS UNDER: '48. THE INCOME CHARGEABLE UNDER HEAD CAPITAL GAINS' SHALL BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF THE CONSIDERATION RECEIVE D OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET THE FOLLOWING AMOUNTS, NAMELY. (I) EXPENDI TURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WI TH SUCH TRANSFER; (II) THE COST OF ACQUISITION OF THE ASSET AND THE COST OF ANY IMPROVEMENT THE RETO. ITA NOS.1343/MUM/2016 & 2594/MUM/2016 M/S. GRANADA INVESTMENTS & FINANCE PVT. LTD., 9 6. IT IS CL EAR FROM THE ABOVE DISCUSSION THAT THE ASSESSEE RECEIVED THE CONSIDERATION WAS ENTITLED TO RECEIVE CONSIDE RATION @ RS.3213 . 31 PER SHARE. FROM THIS AMOUNT DEDUCTION IS AVAILABLE IN RESPECT OF (I) COST OF ACQUISITION OF THE ASSETS ALONGWIT H COST OF IMPROVEMENT AND (II) EXPE NDI T URE INCURRED WHOLLY AND EXCLU SIVELY IN CONNECTION WITH TRANSFER. THE ARRANGEMENT BETWEEN THE SELLER AND BUYER FOR MEETING CERTAIN CONTINGENT LIABILITIES WHICH MAY ARISE SUBSEQUENT TO THE TRANSFER ARE NOT TO BE CONSIDE RED FROM THE PRICE CONSIDERATION RECEIVED I.E. @RS 3213.31 PER SHARE AS PER SECTION 48 OF THE ACT . 7. I AM OF THE VIEW THAT IN ABSENCE OF SPECIFI C PROVISION BY WHICH THE: ASSES SE E CAN REDUCE THE RETURNED INCOME FILED BY IT VOLUNTARILY; THE SAME CANNOT BE PERMITTED INDIRECTLY BY RESORTING THE PROVISION OF SECTION 264 OF THE ACT. WHAT THE ASSESSEE IS ASKING FOR IS AGAINST THE PROVISIONS OF SECTION 139(1) AND 139(5) OF THE ACT. SO MUCH SO THE ACT MAKES IT CLEAR AS PER PROVISO TO SECTION 240 THAT IF ASSESSMEN T IS ANNULLED, THE REFUND SHALL BECOME DUE ONLY OF THE AMOUNT, IF ANY, OF THE TAX PAID IN EXCESS OF THE TAX CHANGEABLE ON THE TOTAL INCOME RETURNED BY THE ASSESSEE. THUS, THE INCOME RETURNED BY THE ASSESSEE IS SACROSANCT AND CANNOT BE DISTURBED. ON ACCOUNT OF ABSENCE OF SPECIFIC PROVISION, ENABLING THE UNDERSIGNED TO REDUCE THE RETURNED INCOME, IT CANNOT BE RESORTED TO INDIRECTLY THROUGH SECTION 264 OF THE ACT. 7.1. MOREOVER, AS STATED ABOVE, THE LONG TERM CAPITAL GAIN HAS BEEN COMPUTED BY THE VOLU NTARILY AND SHOWN IN THE RETURN OF INCOME FILED BY IT, IS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 48 OF THE ACT. THERE IS NO DEDUCTION AVAILABLE OTHER THAN THOSE MENTIONED IN SECTION 48 FROM THE 'CONSIDERATION RECEIVED/ RECEIVABLE'. IN THE PRESENT CAS E, CONTINGENT LIABILITY PAID OUT OF ESCROW ACCOUNT DOES NOT HAVE ANY EFFECT ON 'AMOUNT RECEIVABLE AS PER SHARE SUBSCRIPTION AND PURCHASE AGREEMENT BETWEEN KONECRANES CORPORATION AND W M I CRANES LIMITED, WHICH REMAINS AT RS.3213.31 PER SHARE. THEREFORE, THE CLAIM OF THE ASSESSEE FAILS ON THAT GROUND ALSO. 8. THE REQUEST MADE IN THE PETITION TO REDUCE THE RETURNED INCOME IN VIEW OF DISCUSSION ABOVE, CANNOT BE ACCEDED TO. THE PETITION OF THE ASSESSEE IS DISPOSED OF AS REJECTED. 13. FROM THE ABOVE, IT COULD BE SEEN THAT THE ASSESSEE WAS TRYING TO REDUCE A SUM OF RS.1,42,44,725/ - FROM THE SALE CONSIDERATION OF SHARES OF M/S. WMI CRANES LIMITED AND CORRESPONDINGLY REDUCE THE TAXABLE INCOME ITA NOS.1343/MUM/2016 & 2594/MUM/2016 M/S. GRANADA INVESTMENTS & FINANCE PVT. LTD., 10 THEREON TO THAT EXTENT. THE LD. CIT U/S.264 HAD OBSERVED THAT THIS WOULD LEAD TO THE ASSESSED INCOME GOING BELOW THE RETURN ED INCOME, IT WOULD BE AGAINST THE PROVISIONS OF SECTION 139(1) AND 139(5) OF THE ACT AND ERSTWHILE PROVISIONS OF SECTION 240 THE ACT. THE LD. CIT HAD ALSO OBSERVED THAT TH IS SUM WAS VOLUNTARILY SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME AND THE S AME CANNOT BE REDUCED INDIRECTLY IN THE REVISION PROCEEDINGS ROUTED U/S.264 OF THE ACT. WE FIND FROM PARA 7.1. OF THE ORDER U/S.264 PASSED BY THE LD. CIT, THAT THE LD. CIT ON DUE APPRECIATION OF THE F ACTS HAD ALSO PASSED THE ORDER ON MERITS BY HOLDING THAT THE ASSESSEES PRAYER TO SEEK REDUCTION O F SALE CONSIDERATION SHALL NOT FORM PART OF DEDUCTION AVAILABLE IN THE STATEMENT U/S.48 OF THE ACT. ACCORDINGLY, THE CLAIM OF THE ASSESSEE WAS REJECTED ON MER ITS ALSO. IN THIS SCENARIO, THE ACTION OF THE LD. CIT(A) , IN DISMISSING THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE BEFORE HIM ON THE GROUND THAT THE SAID ISSUE WAS THE SUBJECT MATTER OF REVISION PROCEEDINGS U/S.264 OF THE ACT , IS JUSTIFIABLE AND CANNOT BE FAULTED WITH. ACCORDINGLY, THE GROUND NOS. 2 & 3 RAISED BY THE ASSESSEE BEFORE US ARE DISMISSED. 14. GROUND NO.4 RAISED BY THE ASSESSEE IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. ITA NOS.1343/MUM/2016 & 2594/MUM/2016 M/S. GRANADA INVESTMENTS & FINANCE PVT. LTD., 11 15. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AS WELL AS THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 / 03 /201 9 SD/ - ( MAHAVIR SINGH ) SD/ - ( M.BALAGANESH ) JUDICIAL MEM BER ACCOUNTANT MEMBER MUMBAI; DATED 15 / 03 /201 9 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//
