ACIT 21(1), MUMBAI V. INTERNATIONAL METRO CIVIL CONTRACTORS, MUMBAI

ITA 3934/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1389 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 12-01-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 09-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL K JHA
• Keywords: Rectification of order; Reassessment proceedings
• Section: 143(3); 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.3934/M/2016 ASSESSMENT YEAR: 2002-03 ACIT 21(1), ROOM NO.116, 1 ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400012 VS. M/S. INTERNATIONAL METRO CIVIL CONTRACTORS, 16 TH FLOOR, TOWER II, INDIABULL FINANCE CENTRE, S.B. MARG, ELPHINSTONE (W), MUMBAI 400 013 PAN: AAAAI0325D (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI SUNIL K. JHA, A.R. REVENUE BY : MS. DINKLE HARIYA, D.R. DATE OF HEARING : 27.02.2017 DATE OF PRONOUNCEMENT : 07.04.2017 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 14.03.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2002-03. 2. THE REVENUE IS AGGRIEVED BY THE ACTION OF THE LD . CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) IN HIS RECTIFICATION ORDER PASSED UNDER SECTION 154 OF THE INCOME TAX ACT. IN THIS CASE THE ASSESSEE HAD FILED ITS ORIGINAL RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 31.10.02 DECLARING NIL INCOME WHIC H WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, AN ORDER UNDER SECTION 154 WAS PASSED ON 06.04.04 DENYING THE CLAIM OF TDS TO THE ASSESSEE. THE ASSESSEE WENT IN APPEAL AGAINST THE RECTIFICATION ORDER AND GOT PART RELIEF. ITA NO.3934/M/2016 M/S. INTERNATIONAL METRO CIVIL CONTRACTORS 2 3. THEREAFTER, THE ASSESSEES CASE WAS REOPENED UND ER SECTION 147 OF THE ACT AND A NOTICE DATED 12.04.04 UNDER SECTION 147 O F THE ACT WAS ISSUED. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FILED A R ETURN OF INCOME ON 30.04.04 DECLARING LOSS OF RS.41,94,85,340/-. THE SAID CLAI M OF LOSS WAS REJECTED BY THE AO VIDE HIS ORDER DATED 30.03.06 PASSED UNDER SECTI ON 143(3) READ WITH SECTION 147 OF THE ACT. THE AO VIDE SAID ORDER HAD ALSO MADE CERTAIN OTHER DISALLOWANCES. 4. AGGRIEVED BY THE SAID ORDER, THE ASSESSEE PREFER RED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) ALLOWED SUBSTANTIAL RELIEF TO THE ASSESSEE. WHILE GIVING EFFECT TO THE LD. CIT(A)S ORDER, THE AO REW ORKED THE LOSS ALLOWABLE TO THE ASSESSEE AT RS.41,81,36,921/- VIDE HIS ORDER DA TED 21.07.06. THE DEPARTMENT PREFERRED APPEAL AGAINST THE SAID ORDER BEFORE THE TRIBUNAL. THIS TRIBUNAL VIDE ORDER DATED 25.08.09 UPHELD THE DECIS ION OF THE LD. CIT(A). HOWEVER, ON THE LIMITED ISSUE OF ALLOWABILITY OF SO FTWARE AND HARDWARE EXPENSES, THE TRIBUNAL DIRECTED THE AO TO REEXAMINE THE ASSESSEES CLAIM WHILE GIVING EFFECT TO THE ITATS ORDER. THE AO VI DE ORDER DATED 30.12.11 REWORKED THE LOSS TO RS.41,71,10,403/-. NOW VIDE I MPUGNED ORDER PASSED UNDER SECTION 154 OF THE ACT, THE AO HAS ASSERTED T HAT THE CLAIM OF LOSS OF RS.41,94,85,340/- WAS INCORRECTLY WORKED OUT WHILE GIVING EFFECT TO LD. CIT(A)S ORDER DATED 21.07.06. ON THIS PLEA THE AO HAS RECTIFIED THE ORDER GIVING EFFECT TO TRIBUNALS ORDER DATED 30.12.11 AN D HAS WITHDRAWN THE BENEFIT OF CARRIED FORWARD LOSSES TO THE ASSESSEE. THE AO HAS CONCLUDED THAT THE RETURN OF INCOME FILED BY THE ASSESSEE, IN RESPONSE TO THE NOTICE UNDER SECTION 148 OF THE ACT, WAS INVALID AND HENCE LOSSES SHOULD NOT BE ALLOWED. THE LD. CIT(A) HAS ALLOWED THE APPEAL AGAINST THE SAID ORDER OF TH E AO HOLDING THAT THERE WAS NO JUSTIFICATION IN THE RECTIFICATION ORDER PASSED BY THE AO UNDER SECTION 154 OF THE ACT AS IT CANNOT BE SAID THAT THERE WAS ANY MIS TAKE APPARENT ON RECORD IN THE SAID ORDER. HE ACCORDINGLY DIRECTED THE AO TO DELETE THE DISALLOWANCE SO MADE BY THE AO IN PROCEEDINGS UNDER SECTION 154 OF THE ACT. ITA NO.3934/M/2016 M/S. INTERNATIONAL METRO CIVIL CONTRACTORS 3 BEING AGGRIEVED BY THE ABOVE ORDER OF THE LD. CIT(A ), THE REVENUE HAS COME IN APPEAL BEFORE US. 5. ADMITTEDLY, THE ISSUE HAS BEEN SETTLED UP TO THE LEVEL OF THE TRIBUNAL. THERE IS NO MISTAKE IN THE ORDER GIVING EFFECT TO T HE ORDER OF THE TRIBUNAL. HENCE, THERE IS NO JUSTIFICATION OF RECTIFYING THE SAID ORDER. THE AO HAS TRIED TO DO REASSESSMENT PROCEEDINGS IN THE GARB OF PROCE EDINGS UNDER SECTION 154 OF THE ACT. MOREOVER, THE ORDER GIVING EFFECT TO THE LD. CIT(A)S ORDER WHICH THE AO HAS SOUGHT TO RECTIFY IS DATED 30.03.06 AND THE PRESENT ORDER PASSED UNDER SECTION 154 OF THE ACT IS DATED 12.09.13 WHICH IS O THERWISE BARRED BY LIMITATION. WE, THEREFORE, DO NOT FIND ANY MERIT I N THE APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON .04.2017 . SD/- SD/- (JASON P. BOAZ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 07.04.2017. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.