ITO 1(1)-3, MUMBAI V. EVEREST MEDIA P. LTD, MUMBAI

ITA 1571/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7771 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2000-2001
• Appeal Filed On: 06-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMOL KAMAT
• Keywords: Rectification of order; Difference of opinion; Change of opinion
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI T.R. SOOD, AM AND SMT. P. MADHAVI DEVI , JM I.T.A. NO. 1571/MUM/2009 ASSESSMENT YEAR: 2000-01 THE INCOME-TAX OFFICER-1(1)-3, R.NO.531-A, AAYAKAR BHAVAN, M.K. ROAD, MUMBI 400 020. VS. M/S. EVEREST MEDIA P. LTD., 1-B/A, PAREKH MARG, 1 ST FLOOR, VEER NARIMAN ROAD, CHURCHGATE, MUMBAI 400 020 PAN: AAACE 1603 Q (APPELLANT) (RESPONDENT) APPELLANT BY :: SHRI AMOL KAMAT RESPONDENT BY :: SHRI RAKESH JOSHI O R D E R PER T.R. SOOD (AM): IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWIN G GROUND: WHETHER ON FACTS AND CIRCUMSTANCES AND IN LAW THE CIT(A) ERRED IN QUASHING THE ORDER U/S. 154 OF THE INCOME-TAX ACT. 2. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE ORDER U/S.154 WAS PASSED BY THE ASSESSING OFFICER BECAUSE, ACCORDING TO HIM, IN THE ORIGINAL ASSESSMENT DONE UNDER SECTION 143(3) OF THE ACT, THE ADMINISTRATIVE EXPENSES WERE NOT ALLOCATED TO SHARE BUSINESS AND OTHER BUSINESS. THE LEARNED CIT( A) QUASHED THIS ORDER MAINLY BY PARA 14, WHICH READS AS UNDER: EVEN ON MERITS THE A.OS ACTION IS UNWARRANTED. TH E MISTAKE TO BE RECTIFIED U/S.154 HAS TO BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED IN A LONG DRAWN PROCESS OF REASO NING ON POINTS ON WHICH THERE CAN BE CONCEIVABLY TWO OPINIONS. THIS HAS BEE N HELD IN THE CASE OF T.S.BALARAMAN (SUPRA). FURTHER, THE MISTAKE SOUGHT TO BE RECTIFIED IS NOT IN THE APPLICATION OF ANY LAW OR OMISSION OF ANY FACT AVAILABLE ON RECORD. THE A.O. HAS EXAMINED THE ISISUE RELATING TO THE DETERM INATION OF SPECULATIVE INCOME. HE WAS SATISFIED ABOUT THE EXPENDITURE CLAI MED IN RESPECT OF SPECULATIVE INCOME AND ADVERTISEMENT RECEIPT AND HA S NOT CONSIDERED IT NECESSARY TO APPORTION ANY ADMINISTRATIVE EXPENSES IN RESPECT OF SPECULATIVE INCOME IS NOT REQUIRED BY ANY LEGAL PRINCIPLES WHIC H THE A.O. MISSED TO IMPLEMENT. HE HAS CONSIDERED THE FACTS RELATING TO THE CLAIM ON VARIOUS TYPES OF EXPENDITURE AND HAS NOT APPORTIONED ANY AD MINISTRATIVE EXPENDITURE TOWARDS THE SPECULATIVE INCOME. THIS WAS THE CONSI DERED OPINION ON THE FACTS OF THE CASE WHICH CANNOT BE RECTIFIED AS A MI STAKE. THIS WILL TANTAMOUNT TO A CHANGE OF OPINION WHICH CANNOT BE A LLOWED AS A BASIS FOR RECTIFICATION ORDER U/S.154. THE DECISION OF THE DE LHI HIGH COURT IN THE CASE OF ITA NO.1571/M/09 M/S. EVEREST MEDIA PVT. LTD. 2 H.R. LTD., AND THE DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. U.P. STATE AGRO INDL. CORPN. ARE RELEVANT IN THIS R EGARD. 3. BEFORE US THE LEARNED DEPARTMENTAL REPRESENTATIV E STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 4. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ISSUE IS CLEARLY DEBATABLE AND THE SAME CANNOT BE RECTIFIED AND IN THIS REGARD HE RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F MEPCO INDUSTRIES LTD. VS. CIT (319 ITR 208). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. AS POINTED BY THE LEARNED CIT(A) THE ALLOCATION OF EXPENSES CANNOT BE TERMED AS MISTAKE APPARENT FROM RECORD. IT IS MAINLY A CHANGE OF OPINION. THE HONBLE SUPREME COU RT IN THE CASE OF MEPCO INDUSTRIES LTD. VS. CIT (SUPRA) HAS HELD AS UNDER: HELD, REVERSING THE DECISION OF THE HIGH COURT, THA T THE RIGHT TO RECTIFY MISTAKES UNDER SECTION 154 COULD NOT BE INVOKED IN A CASE OF MERE CHANGE OF OPINION. A RECTIFIABLE MISTAKE WAS A MISTAKE WHICH WAS OBVIOUS AND NOT SOMETHING WHICH HAD TO BE ESTABLISHED BY A LONG DRA WN PROCESS OF REASONING OR WHERE TWO OPINIONS WERE POSSIBLE. A DECISION ON A DEBATABLE POINT OF LAW COULD NOT BE TREATED AS A MISTAKE APPARENT FROM TH E RECORD. RESPECTFULLY FOLLOWING THE ABOVE ORDER, WE DECIDE THE ISSUE AGAINST THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED ON THIS 2ND DAY OF FEBRUARY, 2010 SD. SD. (P. MADHAVI DEVI) (T.R. SOOD ) JUDICIAL MEMBER ACCOUNTANT MEMBR MUMBAI, DATED THE 2 ND FEBRUARY, 2010. KN COPY TO: 1. THE ASSESSEE. 2. THE ITO-1(1)-3, MUIMBAI 3. THE CIT-1, MUMBAI 4. THE CIT(A)-I, MUMBAI 5. THE DR, E BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, I.T.A.T.MUMBAI ITA NO.1571/M/09 M/S. EVEREST MEDIA PVT. LTD. 3 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 29.01.2010 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 29.01.2010 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 29.01.2010 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER