ACIT 14(3)(2), MUMBAI V. SHIVSHAI PUNARVASAN PRAKALP LTD, MUMBAI

ITA 3626/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4179 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2005-2006
• Appeal Filed On: 25-05-2018
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO. 3626 / MUM . /201 8 ( ASSESSMENT YEAR : 2005 06 ) ITA NO. 3627 /MUM. /201 8 ( ASSESSMENT YEAR : 2006 07 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 14(3)(2) , MUMBAI . APPELLANT V/S SHIVSHAI PUNARVASAN PRAKALP LTD. GRIHA NIRMAN BHAVAN BANDRA (E), MUMBAI 400 051 PAN AACCS1590C . RESPONDENT REVENUE BY : SHRI CHAUDHARY ARUNKUMAR SINGH ASSESSEE BY : SHRI KIRIT S. SINGHVI DATE OF HEARING 08.08.2019 DATE OF ORDER 23.08.2019 O R D E R PER SAKTIJIT DEY. J.M. CAPTIONED APPEALS BY THE REVENUE ARISE OUT OF TWO SEPARATE ORDERS , BOTH DATED 16 TH FEBRUARY 2018, PASSED BY LEARNED COMMISSIONER (APPEALS) 22 , MUMBAI , FOR THE ASSESSMENT YEAR S 20 05 06 AND 2006 07. 2 . BRIEF FACTS ARE, FOR THE ASSESSMENT YEAR 2005 06, ORIGINALLY , THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX 2 SHIVSHAI PUNARVASAN PRAKALP LTD. ACT, 1961 (FOR SHORT 'THE ACT' ) VIDE ORDER DATED 14 TH DECEMBER 2007, DETERMINING THE TOTAL INCOME AT ` 5,04,99,620. SUBSEQUENTLY, AN ORDER UNDER SECTION 154 OF THE ACT WAS PASSED ON 15 TH SEPTEMBER 2008, REVISING THE INCOME DETERMINED TO ` NIL, AFTER SETTING OFF THE BROUGHT FORWARD BUSINESS LOSS OF ASSESSMENT YEAR 2002 03. AGAIN , THE ASSESSMENT WAS RE OPENED UNDER SECTION 147 OF THE ACT AND AN ASSESSMENT ORDER UNDER SECTION 143(3) R/W SECTION 147 OF THE ACT, WAS PASSED ON 16 TH NOVEMBER 2009, DETERMINING THE TOTAL INCOME AT NIL. HOWEVER, IN THE SAID ASSESSMENT ORDER, THE ASSESSING OFFICER TREATED INCOME OF ` 46,39,627, SHOWN UNDER THE HEAD BUSINESS INCOME AS INCOME FROM OTHER SOURCES. AFTER COMPLETION OF THE ASSESSMENT AS AFORESAID, LEARNED COMMISSIONER OF INCOME TAX CALLED FOR THE ASSESSMENT RECORD AND AFTER EXAMINING HE WAS OF THE VIEW THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE AS ASSESSEES CLAIM OF LOSS UNDER ONE TIME SETTLEMENT AMOUNTING TO ` 15,51,47,832, PENAL INTEREST OF ` 5,88,665, AND INTEREST ON DINDOSHI SITE OF ` 3,06,29,000, WERE ALLOWED AS EXPENDITURE INSTEAD OF CAPITALIZING THEM. ACCORDINGLY, HE SET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO THE ASSESSING OFFICER TO EXAMINE ASSESSEES CLAIM AFRESH. SIMILARLY, F OR THE ASSESSMENT YEAR 2006 07, THE ASSESSMENT WAS ORIGINALLY COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 16 TH DECEMBER 2008. HOWEVER, IN EXERCISE OF POWER UNDER SECTION 263 OF THE ACT, LEARNED COMMISSIONER OF INCOME 3 SHIVSHAI PUNARVASAN PRAKALP LTD. TAX REVISED THE SAID ASS ESSMENT ORDER ON IDENTICAL REASONING ON THE BASIS OF WHICH HE REVISED THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2005 06. BEING AGGRIEVED WITH THE ORDERS PASSED UNDER SECTION 263 OF THE ACT, THE ASSESSEE PREFERRED APPEAL S BEFORE THE TRIBUNAL. DURING THE PENDENCY OF ASSESSEES APPEAL S BEFORE THE TRIBUNAL, THE ASSESSING OFFICER PASSED FRESH ASSESSMENT ORDERS IMPLEMENTING THE DIRECTIONS OF THE LEARNED COMMISSIONER OF INCOME TAX IN THE ORDERS PASSED UNDER SECTION 263 OF THE ACT. AGAINST SUCH CONSEQUENTIAL ORD ERS PASSED BY THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL S BEFORE LEARNED COMMISSIONER (APPEALS). DURING THE PENDENCY OF ASSESSEES APPEALS BEFORE LEARNED COMMISSIONER (APPEALS), THE APPEALS FILED BY THE ASSESSEE CHALLENGING THE ORDERS PASS ED UNDE R SECTION 263 OF THE ACT WERE HEARD AND DISPOSED OFF BY THE TRIBUNAL VIDE ORDER DATED 16 TH JANUARY 2017, IN ITA NO.3317/MUM./2011 AND ITA NO.3314/ MUM./2011, QUASHING THE ORDERS PASSED UNDER SECTION 263 OF THE ACT . M EANING THEREBY , THE ASSESSMENT ORDERS SU BJECT ED TO REVISION UNDER SECTION 263 OF THE ACT WERE RESTORED. WHEN THE AFORESAID ACTUAL POSITION WAS BROUGHT TO THE NOTICE OF THE LEARNED CIT(A) IN THE C OURSE OF HEARING OF THE APPEAL PROCEEDINGS ARISING OUT OF ASSESSMENT ORDERS PASSED IN PURSUANCE TO DI RECTION GIVEN UNDER SECTION 263 OF THE ACT, THE LEARNED CIT(A) CANCELLED THE ASSESSMENT ORDERS PASSED IN PURSUANCE TO THE ORDERS PASSED U /S 263 OF THE ACT. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 4 SHIVSHAI PUNARVASAN PRAKALP LTD. 3 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. UNDISPUTEDLY, THE IMPUGNED ASSESSMENT ORDERS GIVING RISE TO THE PRESENT PROCEEDINGS WERE PASSED IN PURSUANCE TO THE DIRECTIONS OF LEARNED COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT. ADMITTEDLY, THE ORDERS PASSED UNDE R SECTION 263 OF THE ACT FOR THE AFORESAID ASSESSMENT YEARS WERE QUASHED BY THE TRIBUNAL WHILE DECIDING ASSESSEES APPEAL S IN ITA NO.33 17/MUM./2011 &ITA NO.3314/ MUM./ 2011, DATED 16 TH JANUARY 2017. THEREFORE, WHEN THE ORDERS PASSED UNDER SECTION 263 OF THE ACT HAVE BEEN QUASHED AND HAVE LOST THEIR VALIDITY, THE PROCEEDINGS INITIATED BY THE ASSESSING OFFICER IN PURSUANCE TO THE DIRECTIONS OF THE LEARNED COMMISSIONER UNDER SECTION 263 OF THE ACT CULMI NATING IN THE IMPUGNED ASSESSMENT ORDERS WOULD HAVE NO LOCUS STANDI. THEREFORE, LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN CANCELLING THE IMPUGNED ASSESSMENT ORDERS. IN VIEW OF THE AFORESAID, WE HAVE NO HESITATION IN UPHOLDING THE ORDERS OF LEARNED CO MMISSIONER (APPEALS) BY DISMISSING THE GROUNDS RAISED. 4 . I N THE RESULT, APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 23.08.2019 SD/ - N.K. PRADHAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 23.08.2019 5 SHIVSHAI PUNARVASAN PRAKALP LTD. COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI