KALPATARU COMPUTER SERVICES P.LTD, MUMBAI V. DCIT 9(2), MUMBAI

ITA 3696/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75750 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Keywords: Business income; Revised return
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A , MUMBAI BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 3696/M/2011 ASSESSMENT YEAR: 2007 - 08 M/S. KALPATARU COMPUTER SERVICES PVT. LTD. 10/93 SIDDHARTH NAGAR V, OPP. PRABODHAN KRIDA BHAVAN, GOREGAON (W) MUMBAI 400 104 PAN: AABCK8642C VS. DCIT 9(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SATISH R. MODY, A.R. REVENUE BY : SHRI M.L. PERUMAL, D.R. DATE OF HEARING : 23.01 .201 4 DATE OF PRONOUNCEMENT : 28.02.2014 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONE R OF INCOME TAX (APPEALS) [(HEREINAFTER REFERRED TO AS CIT(A)] DATED 24.03.11. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN ASSESSING THE INCOME OF THE APPELLANT AT RS.3,62,16,725/ - INSTEAD OF THE ACTUAL INCOME OF RS.1,98,85,921/ - WITHOUT APPRECIATING THE FACT THAT THE APPELLANT HAD INADVERTENTLY ENTERED THE WRONG FIGURES IN WRONG COLUMNS WHILE FILING THE E - RETURN FOR THE FIRST TIME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN RELYING ON IRRELEVANT ISSUES AND CASE LAWS WHICH ARE NOT APPLICABLE TO THE APPELLANT WHILE DECIDING THE APPEAL. ITA NO .3696/M/2011 M/S . KALPATARU COMPUTER SERVICES P. LTD. 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) FAILED TO APPRECIATE THE ERRORS IN MA K ING THE ENTRY IN THE COMPUTATION OF TOTAL INCOME IN THE E - RETURN MORE SPECIFICALLY THE ENTRY OF RS.3,62,16,725/ - MADE UNDER THE HEAD INCOME FROM OTHER SOURCES BEING THE INTEREST RECEIVED, INSTEAD OF THE AMOUNT OF RS.3,62,167.25 BEING THE ACTUAL AMOUNT AND AS EVIDENT FROM THE PROFIT AND LOSS ACCOUNT FILED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN NOT ACCEPTING THE REMAND REPORT SENT BY THE ASSESSING OFFICER IN THE COURSE OF APPELLATE PROCEEDINGS WHEREIN THE ASSESSING OFFICER AFTER GOING THROUGH THE DETAILS HAD ACCEPTED THE CLAIM OF OCCURRENCE OF ERROR AS MADE BY THE APPELLANT. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) OUGHT TO HAVE APPRECIATED THAT WHEN THE TOTAL SALES OF THE APPELLANT DURING THE YEAR WAS RS.2,87,97,735/ - THE TOTAL INCOME OF THE APPELLANT COULD NOT BE HIGHER AND FURTHER THE ERROR IN MAKING THE ENTRIES IN THE COMPUTATION OF TOTAL INCOME WHILE FILING THE E - RETURN WAS EVIDENT FROM THE OTHER ENTRIES MADE UNDER THE HEAD REGARDING PROFIT AND LOSS IN THE SAME ORIGINAL RETURN OF INCOME ITSELF AND OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO RECOMPUTED THE INCOME OF THE APPELLANT AS PE R THE REVISED RETURN FILED. 3. A PERUSAL OF THE GROUNDS OF APPEAL REVEALS THAT THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT THE LOWER AUTHORITIES HAVE TREATED THE TOTAL INCOME OF THE ASSESSEE AT RS. 3,62,16,725/ - DUE TO CLERICAL ERROR COMMITTED BY THE ASSES SEE AT THE TIME OF E - FILING OF THE RETURN. THE CLAIM OF THE ASSESSEE IS THAT UNDER THE HEAD INCOME FROM OTHER SOURCES BEING THE INTEREST RECEIVED WAS RS.3,62,167.25 BUT THE TOTAL INCOME WAS WRONGLY SHOWN AS RS.3,62,16,725/ - WITHOUT DECIMAL SEPARATOR. I T WAS JUST A CLERICAL MISTAKE THAT THE DECIMAL COULD NOT BE WRITTEN SEPARATING THE RUPEES AND PAISA IN THE SAID FIGURE. THE MISTAKE WAS POINTED OUT TO THE A SSESSING O FFICER (HEREINAFTER REFERRED TO AS AO) BUT HE REFUSED TO RECTIFY THE SAME. THE ASSESSEE ALSO HAS FILED A REVISED RETURN WHICH WAS ALSO REJECTED BY THE AO. IN APPEAL, THE LD. CIT(A) CALLED FOR A REMAND REPORT FROM THE AO . T HE AO AFTER PERUSAL OF THE BALANCE SHEET POINTED OUT THAT ITA NO .3696/M/2011 M/S . KALPATARU COMPUTER SERVICES P. LTD. 3 THE CLAIM OF THE ASSESSEE WAS CORRECT THAT DUE TO UNINTENTIONA L ERROR THE FIGURE OF THE TOTAL INCOME WAS SHOWN AS RS.3,62,16,725/ - WITHOUT THE DECIMAL SEPARATOR VIRTUALLY SHOULD HAVE BEEN WRITTEN AS RS.3,62,167.25. HOWEVER, THE LD. CIT(A) DESPITE THE REMAND REPORT OBTAINED FROM THE AO REJECTED THE CLAIM OF THE ASSES SEE POINTING OUT CERTAIN DEFECTS AND NON MATCHING OF THE FIGURES OF THE REVISED RETURN WITH THAT OF THE ORIGINAL RETURN OF THE ASSESSEE. THE ASSESSEE IS THUS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES AND ALSO HAV E GONE THROUGH THE RECORDS. 5. A PERUSAL OF THE IMPUGNED ORDER ITSELF REVEALS THAT DUE TO SOME CLERICAL ERROR THE DECIMAL SEPARATOR WAS NOT PUT IN THE TOTAL INCOME DECLARED BY THE ASSESSEE AND AS SUCH THE TOTAL INCOME WAS TREATED AT RS.3,62,16,725/ - INST EAD OF RS.3,62,167.25. THOUGH IN THE REVISED RETURN THE ASSESSEE CLAIMED THAT ITS TOTAL INCOME BE RECOMPUTED AT RS.1,98,85,921/ - BUT THE REVISED RETURN WAS REJECTED BY THE AO AS IT WAS FILED AFTER THE COMPLETION OF THE ASSESSMENT PROCEEDINGS. 6. THOUGH THE REVISED RETURN WAS REJECTED DUE TO CERTAIN DEFECTS AND ALSO DUE TO ITS FILING AFTER THE COMPLETION OF ASSESSMENT PROCEEDINGS , H OWEVER, WHEN A CLERICAL MISTAKE HAD COME INTO THE NOTICE OF THE LOWER AUTHORITIES THAT THE TOTAL INCOME HAS BEEN WRONGLY WRI TTEN WITHOUT DECIMAL SEPARATOR SEPARATING THE AMOUNT INTO RUPEES AND PAISA , STILL THE LOWER AUTHORITIES FAILED TO RECTIFY THE SAME. THE LD. CIT(A) HAD CALLED THE REMAND REPORT FROM THE AO , T HE RELEVANT EXTRACT OF WHICH FINDS MENTION IN PARA 4 OF THE IMPUG NED ORDER WHICH FOR THE SAKE OF CONVENIENCE IS REPRODUCED AS UNDER: 4. THE ABOVE LETTER WAS REFERRED TO THE A . O . VIDE THIS OFFICE LETTER DT.29 - 9 - 2010 CALLING FOR HIS REPORT ON THE CLAIMS/CONTENTIONS OF THE APPELLANT. THE RELEVANT TEXT OF THE A.O.S REPO RT DT.14 - 2 - 2011 IS EXTRACTED BELOW: ITA NO .3696/M/2011 M/S . KALPATARU COMPUTER SERVICES P. LTD. 4 ON PERUSAL OF THE RECORDS, IT IS OBSERVED THAT ASSESSMENT WAS COMPLETED AFTER ACCEPTING THE RETURNED INCOME. THE ASSESSEE FILED REVISED RETURN AFTER THE COMPLETION OF THE ASSESSMENT HENCE IT IS NOT TAKEN INTO CONSIDER ATION. THE ASSESSEE HAS CLAIMED THAT DUE TO AN UNINTENTIONAL ERROR THE TOTAL INCOME OF THE ASSESSEE WAS STATED AS RS.3,62,16,725/ - WHICH IS THE FIGURE OF OTHER INCOME WITHOUT DECIMAL SEPARATOR. THE ASSESSEE HAS FILED COPY OF ITS BALANCE SHEET AND ON PERU SAL OF THE SAME, IT IS SEEN THAT THE CONTENTION OF THE ASSESSEE IS CORRECT. 7. A PERUSAL OF THE ABOVE , REVEALS THAT IT IS AN ADMITTED CASE OF THE AO THAT THERE WAS A CLERICAL ERROR IN WRITING THE TOTAL INCOME OF THE ASSESSEE . U NDER SUCH CIRCUMSTANCES I T WAS THE DUTY OF THE AO TO CORRECT THE SAID FIGURE EXERCISING HIS POWERS UNDER SECTION 154 OF THE INCOME TAX ACT. ON THE FAILURE OF THE AO TO CORRECT THE FIGURE , IT WAS THE DUTY OF THE LD. CIT(A) TO RECTIFY THE SAID DEFECT. WE MAY OBSERVE THAT THE POWER S OF THE LD. CIT(A) ARE COEXTENSIVE WITH THAT OF AO. NO LAW OF THE LAND CAN JUSTIFY THE ACTION OF THE LOWER AUTHORITIES IN TAXING THE ASSESSEE FOR THE INCOME WHICH IN FACT HAS NOT BEEN RECEIVED BY THE ASSESSEE BUT DUE TO SOME ERROR IN WRITING THE FIGURE T O WHICH THE REVENUE AUTHORITIES HAVE ALSO NOT DISPUTED. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THE AO IS DIRECTED TO ASSESS THE INCOME OF THE ASSESSEE TREATING THE TOTAL INCOME AT RS.3,62,167.25. 8. IN THE RESULT, APPEAL OF THE A SSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.02. 201 4 . SD/ - SD/ - ( D. KARUNAKARA RAO ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 28 .02. 201 4 . * KISHORE COPY TO: THE APPELLANT THE RESPONDENT ITA NO .3696/M/2011 M/S . KALPATARU COMPUTER SERVICES P. LTD. 5 THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.