BHOIR DREDGING COMPANY P. LTD, MUMBAI V. DCIT 3(1), MUMBAI

ITA 3701/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1412 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2006-2007
• Appeal Filed On: 16-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHENDR
• Assessee Lawyers: Y P TRIVEDI
• Keywords: Depreciation; Rectification of order

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -HBENCH MUMBAI BEFORE S/SHRI RAJENDRA,ACCOUNTANT MEMBER AND RAM LAL NEGI,JUDICIAL MEMBER ./ITA/3701-02/MUM/2015, /ASSESSMENT YEAR: 2006-07 M/S. BHOIR DREDGING COMPANY PVT.LTD. 318, MAKER CHAMBER V, NARIMAN POINT MUMBAI-400 021. PAN:AAACB 0473 D VS. DCIT, CIRCLE 3(1),MUMBAI. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI M.C. OMI NINGSHEN-DR ASSESSEE BY: SHRI Y.P. TRIVEDI AND MS. USHA DALAL / DATE OF HEARING: 21.02.2017 / DATE OF PRONOUNCEMENT: 05.04.2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDERS DATED 26/03/2015 OF THE CIT (A)-8,MUMBAI THE ASSESSEE COMPANY HAS FILED THE PRESENT APPEALS.ASSESSEE-COMPANY IS ENGAG ED IN THE BUSINESS OF MANUFACTURING AND PRODUCING OF SAND,HIRING OF EQUIPMENTS AND SHIPS.IT FILED ITS RETURN OF INCOME ON 14/11/2006, DECLARING TOTAL INCOME AT RS.78.93 LAKHS.THE RETURN WAS PROCESSED U/S.143 (1) OF THE ACT AND A DEMAND OF RS. 25.96 LAKHS WAS RAISED. ITA/3701/MUM/2015: 2. AFTER RECEIVING THE ORDER,THE ASSESSEE FILED A RECT IFICATION APPLICATION, U/S.154 OF THE ACT,ON 22/ 10/2008.ON 09/01/2012,THE ASSESSEE FILED SECOND REC TIFICATION APPLICATION. IN BOTH APPLICATIONS IT CONTENDED THAT IN THE COMPETITION OF INCOME THE ASS ESSEE HAD DISCLOSED GROSS TOTAL INCOME AT RS. 78.93 LAKHS AND THE NET TAXABLE INCOME OF RUPEES NE T AFTER SETTING OFF BROUGHT FORWARD BUSINESS LOSS AND APPRECIATION, THAT IN THE RETURN BY MISTAK E IT HAD SHOWN INCOME OF RS.78, 93, 351/-, THAT IT WAS A TECHNICAL ERROR WHICH COULD HAVE BEEN RECT IFIED BY THE AO U/S.154 OF THE ACT, THAT IT WAS A MISTAKE APPARENT FROM RECORD,THAT IT HAD FILED AL L THE RELEVANT PARTICULARS IN ITS RETURN OF INCOME. IT RELIED UPON THE CIRCULAR OF THE CBDT, DATED 11/0 4/1955 THAT WAS FOLLOWED BY THE HONBLE GUJARAT COURT IN THE CASE OF THE AHMEDABAD KEISER E HIND MILLS CO.LTD. (128 ITR 486). THE AO DISPOSED OFF THE SECOND RECTIFICATION OF VACATION O N 18/11/2013 AND REJECTED THE CLAIM MADE BY THE ASSESSEE. 3701-02/M/15(06-07) BHOIR DREDGING CO.PVT.LTD. 2 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BEFORE HIM,THE ASSESSEE RAISED THE S AME ARGUMENTS THAT ARE MENTIONED IN THE EARLIER PARAGRAPH.AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, THE FAA REFERRED TO THE PROVISIONS OF SECTION 143 (1) OF THE ACT AND HELD T HAT BEFORE 01/04/2008,THERE WAS NO PROVISION FOR CORRECTING ARITHMETIC MISTAKE OF INTERNAL INCON SISTENCIES, THAT SECTION WAS AMENDED BY THE FINANCE ACT 2008,WITH EFFECT FROM 01/04/2008,THAT T HE CASE OF ASSESSEE WAS DISTINGUISHABLE FROM THE DECISION OF PRITHVI BROKERS AND SHAREHOLDERS PR IVATE LTD (349 ITR 336) AND AHMEDABAD KEISER E HIND MILLS CO.LTD.(SUPRA),THAT THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/S.143 (1)TAKING INTO ACCOUNT THE TOTAL INCOME DECLARED BY THE ASSESSEE, THAT THERE WAS NO MERIT IN THE APPEAL FILED BY IT. 4. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORIS ED REPRESENTATIVE (AR) CONTENDED THAT THERE WAS ONLY A TECHNICAL MISTAKE IN THE RETURN,TH AT IN THE COMPUTATION OF INCOME THE ASSESSEE HAS DISCLOSED ITS INCOME AT RS.NIL. HE RELIED UPON THE CASES OF PRITHVI BROKERS AND SHAREHOLDERS PRIVATE LTD. AHMEDABAD KEISER E HIND MILLS CO.LTD.( SUPRA). THE DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE FAA. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE ASSESSEE HAD FILED A RETURN OF INCOME DECLARING TOT AL INCOME OF RS.78.93 LAKHS, THAT IN THE STATEMENT OF INCOME IT HAD CLAIMED THAT INCOME FOR THE YEAR UNDER APPEAL WAS NIL, THAT BROUGHT FORWARD LOSSES AND DEPRECIATION RESULTED IN SHOWING NIL INCOME IN THE COMPUTATION, THAT THE RETURN WAS PROCESSED U/S.143 (1) OF THE ACT, THAT T HE ASSESSEE FILED TO RECTIFICATION APPLICATIONS BEFORE THE AO, THAT THE AO REJECTED THE CLAIM MADE BY THE ASSESSEE, THAT THE FAA CONFIRMED THE ORDER OF THE AO HOLDING THAT THERE WAS NO SCOPE FOR ANY RECTIFICATION A CASE WAS PROCESSED U/S.143(1) OF THE ACT.WE ARE OF THE OPINION,THAT TH E F AA WAS NOT JUSTIFIED IN REJECTING THE CLAIM MADE BY THE ASSESSEE. HE HAS ALSO ACCEPTED THAT IN THE COMPETITION OF INCOME THE ASSESSEE HAS SHOWN INCOME AT RS NIL.AS PER THE SETTLED PRINCIPLE S OF TAXATION JURISPRUDENCE THE DEPARTMENT IS ENTITLED TO COLLECT DUE TAXES ONLY AND THAT DUE TAX ES ARISE FROM TAXABLE INCOME. IN THE CASE UNDER CONSIDERATION THE ASSESSEE HAD INADVERTENTLY, IN TH E RETURN OF INCOME, DISCLOSED SOME INCOME THAT HAD NOT ACCRUED/ARISEN TO IT. IN THE CIRCUMSTANCES, AFTER-THE-FACT WAS BROUGHT TO THE NOTICE OF THE REVENUE AUTHORITIES,THERE WAS NO JUSTIFICATION TO L EVY ANY TAXES. IN THE CASE OF AHMEDABAD KEISER E HIND MILLS CO.LTD.(SUPRA) THE HONBLE GUJARAT HIG H COURT HAD FOLLOWED CIRCULAR ISSUED BY THE 3701-02/M/15(06-07) BHOIR DREDGING CO.PVT.LTD. 3 CBDT IN THE YEAR 1955 (SUPRA). IN THAT CIRCULAR, TH E BOARD HAD ADVISED THE OFFICERS OF THE DEPARTMENT NOT TO TAKE ADVANTAGE OF MISTAKES COMMIT TED BY THE ASSESSEE. IN THE CASE OF PRITHVI BROKERS AND SHAREHOLDERS PRIVATE LTD (SUPRA), THE H ONBLE BOMBAY HIGH COURT HAS CLEARLY HELD THAT APPELLATE AUTHORITIES ARE NOT BARRED FROM ADMI TTING FRESH CLAIMS MADE BEFORE THEM FOR THE FIRST TIME. CONSIDERING THE PECULIAR FACTS AND CIRC UMSTANCES OF THE CASE,WE ARE OF THE OPINION THAT CLAIM MADE BY THE ASSESSEE BEFORE THE FAA SHOULD HA VE BEEN ALLOWED AFTER VERIFICATION. THEREFORE,IN THE INTEREST OF JUSTICE,WE ARE RESTORI NG THAT THE ISSUE TO THE FILE OF THE FAA, WHO WOULD VERIFY THE VERACITY OF THE CLAIM MADE BY THE ASSESSEE. IF IT IS FOUND THAT CLAIM MADE BY THE ASSESSEE ABOUT BROUGHT FORWARD LOSSES AND THE DEPRE CIATION WAS IN ORDER CONSIDERING THE EARLIER YEARS RETURNS OF INCOME, THE APPEAL FILED BY THE AS SESSEE SHOULD BE ALLOWED. THE ASSESSEE IS DIRECTED TO EXTEND FULL COOPERATION TO THE FAA. EFF ECTIVE GROUND OF APPEAL IS ALLOWED IN FAVOUR OF THE ASSESSEE, IN PART. ITA/3702/MUM/2015: 6. THE SUBJECT MATTER OF THE ABOVE APPEAL IS DISMISSIN G THE APPEAL FILED BY THE ASSESSEE WITH REGARD TO RECTIFICATION APPLICATIONS.WHILE ADJUDICA TING THE EARLIER APPEAL,WE HAVE DISCUSSED THE FACTS OF THE CASE IN DETAIL.THE FAA ,BESIDES DISMIS SING THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED U/S.143(1)OF THE ACT,ALSO DISMISSE D THE APPEAL FILED BY THE ASSESSEE CHALLENGING THE RECTIFICATION ORDER.THE AO AS WELL AS THE FAA H ELD THAT APPLICATION FILED U/S. 154(1) OF THE ACT WAS LIABLE TO BE REJECTED .WE HAVE ALREADY HELD THAT THE FAA SHOULD RE-ADJUDICATE THE MATTER WITH REGARD TO 143(1) ORDER.WE FURTHER DIRECT HIM T O DECIDE THE ORDER PASSED BY HIM ABOUT RECTIFI -CATION ORDER, AFTER HEARING THE ASSESSEE.EFFECTIVE GROUND IS DECIDED IN FAVOUR OF THE ASSESSEE,IN PART. AS A RESULT BOTH THE APPEALS FILED BY ASSESSEE STAN D PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH APRIL, 2017. 05 , 2017 SD/- SD/- ( / RAM LAL NEGI ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 05.0 .2017. JV.SR.PS. 3701-02/M/15(06-07) BHOIR DREDGING CO.PVT.LTD. 4 / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.