EMCEE PHARMACEUTICALS PVT. LTD., Kolkata V. ACIT, Circle - 11, Kolkata, Kolkata

ITA 253/KOL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4661 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2000-2001
• Appeal Filed On: 19-02-2016
• Court: TRIBUNAL
• Department Lawyers: MD GHAYAS UDDIN
• Keywords: Capital receipt
• Section: 143(3); 154

Judgement Text

I.T.A. NO. 253/KOL./2016 ASSESSMENT YEAR: 2000-2001 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 253 /KOL/ 2016 ASSESSMENT YEAR: 2000-2001 EMCEE PHARMACEUTICALS PVT. LIMITED,................ ....................APPELLANT DA-201, GROUND FLOOR, SECTOR-1, SALT LAKE CITY, KOLKATA-700 064 [PAN : AAACE 5456 F] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,.............. ...................RESPONDENT CIRCLE-11, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI SANJAY BHATTACHARYA, FCA, FOR THE ASSESSEE MD. GHAYAS UDDIN, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MAY 09, 2016 DATE OF PRONOUNCING THE ORDER : JUNE 17, 2016 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-9, KOLKATA DAT ED 18.12.2015 FOR THE ASSESSMENT YEAR 2000-01 AND THE GROUNDS RAISED THEREIN READ AS UNDER:- 1. THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) WA S WRONG IN DISMISSING THE APPELLANT'S APPEAL FILED AGAINST THE ASSESSING OFFICER'S ACTION IN REJECTING THE APPELLA NT'S PETITION U/S 154. 2. THAT WITHOUT PREJUDICE TO THE CONTENTION RAISED IN GROUND NO. 1 ABOVE, THE COMMISSIONER OF INCOME-TAX (APPEAL S) FAILED TO APPRECIATE THAT FOLLOWING THE HON'BLE INCOME-TAX APPELLATE TRIBUNAL'S ORDER FOR THE APPELLANT'S OWN CASE FOR T HE ASSESSMENT YEAR 2008-09, THE SUM OF RS.15,24,925/- BEING THE ASSISTANCE RECEIVED BY THE APPELLANT FROM THE GOVER NMENT OF WEST BENGAL UNDER THE WEST BENGAL INDUSTRIAL PROMOT ION (ASSISTANCE TO INDUSTRIAL UNIT) SCHEME, 1994, SHOUL D HAVE I.T.A. NO. 253/KOL./2016 ASSESSMENT YEAR: 2000-2001 PAGE 2 OF 7 BEEN REDUCED FROM THE APPELLANT'S ASSESSED INCOME F OR THE ASSESSMENT YEAR 2000-01. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PHARMACEUTICAL PRO DUCTS. IT RECEIVED FINANCIAL ASSISTANCE UNDER THE WEST BENGAL GOVERNME NT INDUSTRIAL PROMOTION (ASSISTANCE TO INDUSTRIAL UNIT) SCHEME, 1 994 SINCE ASSESSMENT YEAR 1995-96. IN THE RETURNS OF INCOME FILED FOR A. YS. 1995-96 TO 1997-98, THE AMOUNT OF SUCH FINANCIAL ASSISTANCE WAS NOT OFF ERED TO TAX BY THE ASSESSEE AND THE SAID RETURNS WERE ACCEPTED BY THE ASSESSING OFFICER UNDER SECTION 143(1). THE RETURN OF INCOME FILED BY THE ASSESSEE FOR A.Y. 1998-99, HOWEVER, WAS SELECTED FOR SCRUTINY AND IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) FOR THE SAID YEAR, T HE ASSESSEES CLAIM FOR EXEMPTION OF THE FINANCIAL ASSISTANCE RECEIVED UNDE R THE SCHEME BEING A CAPITAL RECEIPT WAS DISALLOWED BY THE ASSESSING OFF ICER. KEEPING IN VIEW THE SAID STAND TAKEN BY THE ASSESSING OFFICER IN A. Y. 1998-99, THE ASSESSEE-COMPANY OFFERED TO TAX THE FINANCIAL ASSIS TANCE RECEIVED UNDER THE SCHEME IN THE RETURN OF INCOME FILED FOR THE YE AR UNDER CONSIDERATION, I.E. A.Y. 2000-01. THEREAFTER, THE APPEAL FILED BY THE ASSESSEE DISPUTING THE ADDITION MADE BY THE ASSESSING OFFICER AND CONF IRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF FINANCIAL ASSISTANCE REC EIVED UNDER THE SCHEME IN A.Y. 1998-99 CAME TO BE DISPOSED OF BY TH E TRIBUNAL VIDE ITS ORDER DATED 21.02.2015 PASSED IN ITA NO. 1941/KOL/2 004 ACCEPTING THE CLAIM OF THE ASSESSEE THAT THE AMOUNT OF FINANCIAL ASSISTANCE RECEIVED UNDER THE RELEVANT SCHEME WAS EXEMPT FROM TAX BEING A CAPITAL RECEIPT. ON RECEIPT OF THE SAID ORDER, A PETITION UNDER SECT ION 154 WAS FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER CONTENDING TH AT THERE WAS A MISTAKE IN THE ASSESSMENT MADE FOR THE YEAR UNDER CONSIDERA TION IN BRINGING TO TAX THE AMOUNT OF FINANCIAL ASSISTANCE, WHICH WAS A CAPITAL RECEIPT AND THE SAME BEING APPARENT FROM RECORD SHOULD BE RECTIFIED . THE ASSESSEE ALSO MOVED AN APPLICATION UNDER SECTION 264 TO THE CONCE RNED LD. CIT SEEKING THE SAME RELIEF. THE LD. CIT DID NOT ALLOW THE RELI EF AS SOUGHT BY THE ASSESSEE BUT DIRECTED THE ASSESSING OFFICER TO DISP OSE OF THE APPLICATION I.T.A. NO. 253/KOL./2016 ASSESSMENT YEAR: 2000-2001 PAGE 3 OF 7 FILED BY THE ASSESSEE FOR RECTIFICATION UNDER SECTI ON 154, WHICH WAS STILL PENDING AT THE RELEVANT TIME. ACCORDINGLY, THE ASSE SSING OFFICER DISPOSED OF THE APPLICATION FILED BY THE ASSESSEE UNDER SECT ION 154 AND DISMISSED THE SAME BY HOLDING THAT SINCE THE ISSUE UNDER CONS IDERATION AS TO WHETHER THE AMOUNT OF FINANCIAL ASSISTANCE IN QUEST ION IS A REVENUE OR CAPITAL RECEIPT WAS DEBATABLE AND THE DEPARTMENT HA D FILED AN APPEAL BEFORE THE HONBLE HIGH COURT AGAINST THE ORDER PAS SED BY THE TRIBUNAL FOR A.Y. 1998-99, THE RELIEF SOUGHT BY THE ASSESSEE BY WAY OF PETITION FOR RECTIFICATION WAS BEYOND THE SCOPE OF SECTION 154. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 154, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE A SSESSEE AND PERUSING THE RELEVANT MATERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEALS) DISMISSED THE SAID APPEAL AND UPHELD THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 154 FOR THE FOLLOWING REASONS GIVEN I N PARAGRAPH NO. 4 OF HIS IMPUGNED ORDER:- 4. IT IS SEEN THAT THE APPELLANT IS IN RECEIPT OF FINANCIAL ASSISTANCE UNDER WEST BENGAL GOVERNMENT INDUSTRIAL PROMOTION (ASSISTANCE TO INDUSTRIAL UNIT) SCHEME 1994 SINCE A Y 1995-96. FOR AY 1995-96 TO 1997- 98, THIS RECEIPT WAS NOT OF FERED FOR TAX. FOR AY 98-99, THE AO ADDED THIS RECEIPT AS REV ENUE RECEIPT WHICH WAS CONFIRMED BY CIT(A). THE HON'BLE ITAT VID E ORDER DATED 21/02/2005, ALLOWED THE APPEAL OF THE APPELLA NT. IN THE INTERMITTENT TIME, THE APPELLANT FILED RETURNS UNDE R ADVICE TO PAY TAXES ON DISPUTED ITEMS AS A MEASURE OF ABUNDAN T FINANCIAL PRUDENCE. THE APPELLANT MADE AN APPLICATION ULS 264 TO CIT WHO DIRECTED THE AO TO PASS APPROPRIATE ORDER WITHI N TWO WEEKS. THE AO IN THE ORDER U/S 154 DATED 19/09/2006 FOR AY 2000-01 HAS HELD THAT 'SINCE THE ISSUE UNDER CONSID ERATION IS DEBATABLE AS TO WHETHER IT IS A REVENUE ON CAPITAL RECEIPT, THE DEPARTMENT HAS FILED APPEAL BEFORE THE HON'BLE HIGH COURT'. THE AO HAS HELD THAT 'SINCE YOUR PETITION AS BEYOND THE SCOPE OF SECTION 154, NO RECTIFICATION U/S 154 IS POSSIBL E. YOUR RECTIFICATION PETITION IS DISPOSED OFF ACCORDINGLY. ' THIS APPEAL IS AGAINST THE ORDER U/S 154 DATED 19/09/2006 FOR A Y 2000-01. HOWEVER, IN THE GROUNDS OF APPEAL AND STATEMENT OF FACTS, THE AYS MENTIONED ARE 2000-01 AND 2001-02. THERE IS NO MISTAKE IN THE ORDER U/S 154 DATED 19/09/2006 FOR AY 2000-01 A S A DEBATABLE ISSUE CANNOT BE DECIDED U/S 154. THE APPE AL IS DISMISSED. I.T.A. NO. 253/KOL./2016 ASSESSMENT YEAR: 2000-2001 PAGE 4 OF 7 AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT A SIMILAR ISSUE RELATING TO THE EXEMPTION OF THE AMOU NT OF FINANCIAL ASSISTANCE RECEIVED UNDER THE SCHEME FROM TAX BEING A CAPITAL RECEIPT HAS SINCE BEEN DECIDED BY THE HONBLE CALCUTTA HIGH COU RT IN THE CASE OF CIT VS.- RASOI LIMITED (ITA NO. 258 OF 2001 DATED 19 TH MAY, 2011). HE CONTENDED THAT THE ASSESSMENT MADE BY THE ASSESSING OFFICER BRINGING TO TAX THE AMOUNT OF FINANCIAL ASSISTANCE RECEIVED UND ER THE SCHEME IN THE HANDS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERAT ION, I.E. A.Y. 2000-01 THUS IS CONTRARY TO THE DECISION OF THE HONBLE JUR ISDICTIONAL HIGH COURT RENDERED SUBSEQUENTLY AND THERE IS A MISTAKE IN THE ASSESSMENT MADE BY THE ASSESSING OFFICER, WHICH IS RECTIFIABLE UNDER S ECTION 154. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE DECISION OF THE H ONBLE GUJARAT HIGH COURT IN THE CASE OF SUHRID GEIGY LIMITED VS.- CIT REPORTED IN 237 ITR 834 AND THE HONBLE SUPREME COURT IN THE CASE OF AC IT VS.- SAURASHTRA KUTCH STOCK EXCHANGE LIMITED REPORTED IN 305 ITR 22 7, WHEREIN IT WAS HELD THAT IF THE POINT IS COVERED BY A DECISION OF THE JURISDICTIONAL HIGH COURT RENDERED PRIOR OR EVEN SUBSEQUENT TO THE RELE VANT ORDER, IT COULD BE SAID TO BE A MISTAKE APPARENT FROM THE RECORD. W HEN IT WAS BROUGHT TO HIS NOTICE THAT THE CLAIM FOR EXEMPTION ON ACCOUNT OF THE AMOUNT OF FINANCIAL ASSISTANCE IN QUESTION WAS NOT EVEN MADE BY THE ASSESSEE IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERA TION, THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF JUTE CORPORATION OF INDIA LIMITED VS.- CIT REPORTED IN 187 ITR 688 AND NATIONAL THERMAL POWER CO. LIMITED VS. - CIT REPORTED IN 229 ITR 383, WHEREIN IT WAS HELD THAT THE NEW CLAIM MADE BY THE ASSESSEE BY WAY OF ADDITIONAL GROUND, WHICH WAS NOT MADE BEF ORE THE ASSESSING OFFICER COULD BE ENTERTAINED BY THE APPELLATE AUTHO RITY. 5. THE LD. D.R., ON THE OTHER HAND, STRONGLY SUPPOR TED THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) UPHOLDING THE ORDER P ASSED BY THE ASSESSING I.T.A. NO. 253/KOL./2016 ASSESSMENT YEAR: 2000-2001 PAGE 5 OF 7 OFFICER UNDER SECTION 154 REJECTING THE CLAIM OF TH E ASSESSEE FOR RECTIFICATION ON THE ISSUE UNDER CONSIDERATION. HE CONTENDED THAT FACTS INVOLVED IN THE CASE OF RASOI COMPANY LIMITED (SUPR A) DECIDED BY THE HONBLE CALCUTTA HIGH COURT ARE DIFFERENT FROM THE FACTS OF THE ASSESSEES CASE AND IT, THEREFORE, CANNOT BE SAID THAT THE ISS UE UNDER CONSIDERATION RELATING TO THE ASSESSEES CLAIM FOR EXEMPTION ON A CCOUNT OF THE FINANCIAL ASSISTANCE RECEIVED UNDER THE SCHEME IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION RENDERED BY THE HONBLE JURISDICTIO NAL HIGH COURT IN THE SAID CASE. HE CONTENDED THAT THE SAID ISSUE IS STIL L DEBATABLE AND THE SAME, THEREFORE, IS BEYOND THE SCOPE OF RECTIFICATI ON PERMISSIBLE UNDER SECTION 154. HE ALSO CONTENDED THAT THE CLAIM FOR T HE SAID EXEMPTION WAS NOT MADE BY THE ASSESSEE-COMPANY ITSELF IN THE RETU RN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION AND IN THE ABSENCE OF SUCH CLAIM, IT CANNOT BE SAID THAT THERE WAS A MISTAKE ON THE PART OF THE ASSESSING OFFICER IN NOT ALLOWING SUCH CLAIM AND THE QUESTION OF RECTIFI CATION UNDER SECTION 154 DOES NOT ARISE. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION, THE AMOUNT OF FINANCIAL ASSISTANCE IN QUESTION RECEIVED UNDER THE SCHEME WA S OFFERED TO TAX BY THE ASSESESE AND THERE WAS NO CLAIM MADE BY THE ASS ESSEE FOR EXEMPTION OF THE SAID AMOUNT BEING CAPITAL RECEIPT EITHER IN THE RETURN OF INCOME OR EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS. T HE CLAIM FOR SUCH EXEMPTION WAS MADE BY THE ASSESSEE FOR THE FIRST TI ME ONLY BY WAY OF APPLICATION FILED FOR RECTIFICATION UNDER SECTION 1 54. NO DOUBT, THE ASSESSEE CAN MAKE SUCH NEW CLAIM DURING THE COURSE OF APPELLATE PROCEEDINGS, WHICH ARE EXTENSION OF THE ASSESSMENT PROCEEDINGS AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF JUTE CO RPORATION OF INDIA LIMITED (SUPRA) AND NATIONAL THERMAL POWER CO. LIMI TED (SUPRA). BUT THIS PROPOSITION CANNOT BE EXTENDED AND APPLIED TO THE R ECTIFICATION PROCEEDINGS UNDER SECTION 154, THE SCOPE OF WHICH I S LIMITED TO RECTIFY THE MISTAKES, WHICH ARE APPARENT FROM THE RECORD. I N THE PRESENT CASE, I.T.A. NO. 253/KOL./2016 ASSESSMENT YEAR: 2000-2001 PAGE 6 OF 7 WHEN THE CLAIM FOR EXEMPTION OF THE AMOUNT OF FINAN CIAL ASSISTANCE IN QUESTION WAS NOT MADE AT ALL BY THE ASSESSEE EITHER IN THE RETURN OF INCOME OR EVEN DURING THE COURSE OF ASSESSMENT PROC EEDINGS, IT CANNOT BE SAID THAT THERE WAS ANY MISTAKE ON THE PART OF THE ASSESSING OFFICER IN NOT ALLOWING SUCH EXEMPTION, WHICH IS APPARENT FROM REC ORD THAT CAN BE RECTIFIED UNDER SECTION 154. THE RATIO OF THE DECIS ION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF SUHRID GEIGY LIMI TED (SUPRA) AND THAT OF THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS.- SAURASHTRA KUTCH STOCK EXCHANGE LIMITED(SUPRA) ALSO CANNOT BE ANY HE LP TO THE ASSESSEE AS IN THE ABSENCE OF ANY CLAIM MADE BY THE ASSESSEE FO R EXEMPTION BEFORE THE ASSESSING OFFICER, THERE WAS NO OCCASION FOR TH E ASSESSING OFFICER TO EXPRESS ANY VIEW ON SUCH CLAIM AND THE QUESTION THA T SUCH VIEW BEING CONTRARY TO THE DECISION OF THE HONBLE JURISDICTIO NAL HIGH COURT RENDERED SUBSEQUENTLY GIVING RISE TO THE MISTAKE APPARENT FR OM THE RECORD WOULD NOT ARISE. AS SUCH CONSIDERING ALL THE FACTS OF THE CASES, I AM OF THE VIEW THAT THE APPLICATION FILED BY THE ASSESSEE UNDER SE CTION 154 SEEKING RECTIFICATION ON THE ISSUE UNDER CONSIDERATION HAD NO MERIT AND THE LD. CIT(APPEALS) WAS FULLY JUSTIFIED IN UPHOLDING THE O RDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 154 REJECTING THE S AID APPLICATION. THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) IS, THEREFOR E, UPHELD AND THIS APPEAL FILED BY THE ASSESSEE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 17, 2016 . SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 17 TH DAY OF JUNE, 2016 COPIES TO : (1) M/S. EMCEE PHARMACEUTICALS PVT. LIMITED, DA-201, GROUND FLOOR, SECTOR-1, SALT LAKE CITY, KOLKATA-700 064 I.T.A. NO. 253/KOL./2016 ASSESSMENT YEAR: 2000-2001 PAGE 7 OF 7 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-11, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-9, KOLKAT A (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.