MAKER TOWER 'E' PREMISES CO.OP.SOC. LTD., MUMBAI V. INCOME TAX OFFICER, WARD 17(2)(3), MUMBAI

ITA 5383/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3150 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 18-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D G
• Assessee Lawyers: K K VED
• Section: 143(1); 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI AMARJIT SINGH , JM ITA NO. 5383 /MUM/ 2017 (ASSESSMENT YEAR: 2012 - 13 ) MAKER TOWER E PREMISES CO - OPERATIVE SOCIETY LTD. 61, MAKER ARCADE, CUFFE PARADE, MUMBAI - 400 005 VS. ITO, WARD 17(2)(3) AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 PAN/GIR NO. AAAM 0168 J ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI K. K. VED RESPONDENT BY : SHRI D. G. PANSARI DATE OF HEARING : 04.02.2019 DATE OF PRONOUNCEMENT : 28.02 .2019 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 28, MUMBAI (LD.CIT(A) FOR SHORT) DATED 02.05.2017 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y.) 2012 - 13. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1 : 0 RE.: DISMISSING THE APPEAL BY HOLDING THAT THE APPELLANT HAD SOUGHT AN ALTERNATIVE REMEDY IN THE FORM OF A RECTIFICATION APPLICATION : 1 : 1 THE COMMISSIONER OF I NCOME - TAX (APPEALS) HAS ERRED IN HOLDING THAT THE APPELLANT HAD SOUGHT AN ALTERNATIVE REMEDY IN THE FORM OF A RECTIFICATION APPLICATION AND IN DISMISSING THE APPEAL BY FURTHER HOLDING THAT THE APPROPRIATE DIRECTIONS HAVE BEEN GIVEN TO THE ASSESSING OFFICER IN THE IMPUGNED ORDER T O DISPOSE OFF THE RECTIFICATION APPLICATION FILED BY THE APPELLANT. 1 : 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW ON THE SUBJECT THE COMMISSIONER OF INCOME - TAX (APPEALS) OUGHT TO HAVE ADJUDICATED ON THE G ROUNDS RAISED BY IT. 1 : 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED TO DELETE THE ADJUSTMENT MADE BY HIM TO THE TOTAL INCOME AS RETURNED AND TO RE - COMPUTE/RE - PROCESS THE APPELLANT'S TOTAL INCOME ACCORDINGLY. 2 : 0 RE.: VALIDITY OF T HE ADJUSTMENT OF RS. 68,51,517 / - TO THE RETURNED INCOME: 2. 1 THE COMMISSIONER OF! ICOME - TAX (APPEALS) HAS ERRED IN NOT ADJUDICATING THE GROUND RAISED BY THE APPELLAN 1 : VIS - A - VIS VALIDITY OF THE ADJUSTMENT TO THE RETURNED 2 ITA NO.5383/MUM/2017 INCOME MADE BY THE ASSESSING OFFIC ER WHILE PROCESSING THE APPELLANT'S RETURN OF INCOME IN TERMS OF SECTION 143(1) OF THE INCOME - TAX ACT, 1961. 2. 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SI BJECT NO ADJUSTMENT WAS WARRAN TED IN THE CASE OF THE APPELLANT AND THE ADJUSTMENT MADE BY THE ASSESSING OFFICER IS IN AXCESS OF THE JURISDICTION U/S. 143(1) OF THE INCOME - TAX ACT, 1961, UNJUSTIFIED, ILLEGAL, INCORRECT AND UNWARRANTED. 2. 3 THE APPELLANT SUBMITS '.HAT THE ASSESSING OFFI CER BE DIRECTED TO DELETE THE ADJUSTMENT MADE BY HIM TO THE TOTAL INCOME AS RETURNED AND TO RE - COMPUTE/RE - PROCESS THE APPELLANT'S TOTAL INCOME ACCORDINGLY. WITHOUT PREJUDICE TO THE FO R EGOING, 3 : 0 RE.: NON - GRANTING OF DEDUCTION OF RS. 50.000 / - UNDER SECTION 80P(2UCUIIL OF THE INCOME - TAX ACT, 1961: 3 : 1 THE COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN NOT ADJUDICATING THE GROUND RAISED BY THE APPELLANT VIS - A - VIS NON - GRANTING OF DEDUCTION U/S. 80P(2)(C}(II) OF THE INCOME - TAX ACT, 1961 WHILE COMPU TING ITS TOTAL INCOME FOR THE YEAR UNDER CONSIDERATION. 3 : 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT, THE APPELLANT IS ENTITLED TO A DEDUCTION U/S. 80P(2)(C)(II) OF THE INCOME - T AX ACT, 1961 WHILE COMPUTING ITS TO':AL INCOME FOR THE YEAR UNDER CONSIDERATION. 3 : 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED TO GRANT DEDUCTION U/S. 80P(2)(C)(II) OF THE INCOME - TAX ACT, 1961 AND TO RE - COMPUTE ITS TOTAL INCOME ACCORD INGLY. 4 : 0 RE.: NON - GRANTING OF DEDUCTION OF RS. 68 , 01,517/ - UNDER SECTION 80P ( 2 )( D ) OF THE INCOME - TAX ACT, 1961: 4 : 1 THE COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN NOT ADJUDICATING THE GROUND RAISED BY THE APPELLANT VIS - A - VIS NON - GRANTING OF ( DEDUCTION U/S. 80P(2)(D) OF THE INCOME - TAX ACT, 1961 WHILE COMPUTING ITS TOTAL INCOME FRR THE YEAR UNDER CONSIDERATION. 4 : 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT, THE APP ELLANT IS ENTITLED TO A DEDUCTION U/S. 80P(2)(D) OF THE INCOME - TAX ACT, 1961 WHILE COMPUTING ITS TOTAL INCOME FOR THE YEAR UNDER CONSIDERATION. 4 : 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED TO GRANT DEDUCTION U/S. 80P(2)(D) OF THE INCO ME - TAX ACT, 1961 AND TO RE - COMPUTE ITS TOTAL INCOME ACCORDINGLY. 5:0 RE.: LEW OF INTEREST U/S. 234A OF THE INCOME - TAX ACT. 1961 OF RS. 19,669 / - : 5 : 1 THE COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN NOT ADJUDICATING THE GROUND RAISED BY THE APPEL LANT VIS - A - VIS LEVY OF INTEREST U/S. 234A OF THE INCOME - TAX ACT, 1961. 5 : 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILING ON THE SUBJECT, INTEREST U/S. 234A OF THE INCOME - TAX ACT, 1961 OUGHT NOT TO BE LEVIED AND THE LE VY IN RESPECT THEREOF IS ERRONEOUS, UNJUSTIFIED, INCORRECT AND ILLEGAL. 5 : 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED TO DELETE THE INTEREST U/S. 234A OF THE INCOME - TAX ACT, 1961 AND TO RE - COMPUTE ITS TAX LIABILITY ACCORDINGLY. 3. THE ISSUE PRESSED IN THE CASE RELATE S TO DENIAL OF DEDUCTION OF RS .68.51 LACS U/S. 80P IN AN INTIMATION U/S. 14 3 (1) OF THE ACT. AT THE OUTSET, THE LD. COUNSEL OF THE 3 ITA NO.5383/MUM/2017 ASSESSEE STATED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASS ESSEE BY THE ITAT IN ASSESSEES OWN CASE IN ITA NO. 4093/MUM/2017 FOR A.Y. 2015 - 16 VIDE ORDER DATED 04.07.2018. THE SIMILAR ISSUE WAS DECIDED BY THE ITAT WHICH READS AS UNDER: 9. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED ALL THE ARGUMENT S MADE BEFORE GIT(A) AND ALSO FILED ALL THE DETAILS IN ITS PAPER BOOKS CONSISTING THE PAGES 1 TO 80. THE LEARNED COUNSEL FOR THE ASSESSEE FIRST OF ALL RAISED THE ISSUE OF VALIDITY OF MAKING ADJUSTMENT UNDER SECTION 143(1) OF THE ACT, HE ARGUED THAT THE DIS ALLOWANCE OF DEDUCTION UNDER SECTION 80P2(D) CLAIMED BY THE ASSESSEE ON INTEREST EARNED ON DEPOSITS GIVEN TO CO - OPERATIVE BANKS AMOUNTING TO RS. 76, I 1,781/ - IS CLEARLY AIIOWABIE DEDUCTION. AS PER THE PROVISIONS THERE IS NO SCOPE FOR ANY DISALLOWANCE. MOR EOVER, IN ANY CASE, IT IS TO BE HELD TO BE DEBATABLE ISSUE UNDER DEBATABLE ISSUE CANNOT BE DISALLOWED WHILE PROCESSING THE RETURN UNDER SECTION 143(1) OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE PROVISIONS OF SECTION 143(1) AND THE RELEVANT PROVISIONS READS AS UNDER: - '143. (1) WHERE A RETURN HAS BEEN MADE UNDER SECTION 139, OR IN RESPONSE TO A NOTICE UNDER SUB - SECTION (1) OF SECTION 142, SUCH RETURN SHALL BE PROCESSED IN THE FOLLOWING MANNER, NAMELY: (A) THE TOTAL INCOME OR LOSS SHALL BE COMPUTED AFTER MAKING THE FOLLOWING ADJUSTMENTS, NAMELY: (I) ANY ARITHMETICAL ERROR IN THE RETURN; 92[***J (II) AN INCORRECT CLAIM, IF SUCH INCORRECT CLAIM IS APPARENT FROM ANY INFORMATION IN THE RETURN; 93 [( II I) DISALLOWANCE OF LOSS CLAIMED, IF RETURN OF THE PREVIOUS YEAR FOR WHICH SET OFF OF TOSS IS CLAIMED WAS FURNISHED BEYOND THE DUE DATE SPECIFIED UNDER SUB - SECTION (1) OF SECTION 139; (IV) DISALLOWANCE OF EXPENDITURE INDICATED IN THE AUDIT REPORT BUT NOT TAKEN INTO ACCOUNT IN COMPUTING THE T OTAL INCOME IN THE RETURN; (V) DISALLOWANCE OF DEDUCTION CLAIMED UNDER SECTIONS 10AA, 80 - IA, 80 - 1AB, 80 - IB, 80 - IC, 80 - ID OR SECTION 80 - IE, IF THE RETURN IS FURNISHED BEYOND THE DUE DATE SPECIFIED UNDER SUB - SECTION (1) OF SECTION 139; OR (VI) ADDITION OF IN COME APPEARING IN FORM 26AS OR FORM 16A OR FORM 16 WHICH HAS NOT BEEN INCLUDED IN COMPUTING THE TOTAL INCOME IN THE RETURN: 10. FROM THE ABOVE PROVISION OF SECTION 143(1), AS OPERATIVE FROM 01.04.2008, WHICH WAS INTRODUCED WITH AN OBJECT TO REDUCE REVENUE LOSS, THE PROVISIONS OF SECTION 143(1 ) OF THE ACT HAS BEEN AMENDED TO PROVIDE THAT THE TOTAL INCOME OF THE ASSESSEE SHALL BE COMPUTED AS THIS PROVISION IS FOR MAKING ADJUSTMENT TO THE TOTAL INCOME IN THE RETURN INCOME OF THE ASSESSEE I.E. (A) ANY ARITHMET IC ERROR IN THE RETURN OR (B) IN INCORRECT CLAIM, IF SUCH INCORRECT CLAIM IS APPARENT FROM ANY INFORMATION IN THE RETURN OF INCOME. HERE IN THE VERY SECTION, THE MEANING OF TERM 'INCORRECT CLAIM APPARENT FROM ANY INFORMATION IN THE RETURN' HAS BEEN DEFINED BY INSERTING AN EXPLANATION IN THE SAID SECTION. THE TERM SHALL MEAN SUCH CLAIM ON THE BASIS OF AN ENTRY, IN THE RETURN FOR FILING (A) AN ITEM, WHICH IS INCONSISTENT WITH ANOTHER ENTRY OF THE SAME OR SOME OTHER ITEM IN SUCH RETURN; (B) IN RESPECT OF WHICH , INFORMATION REQUIRED TO BE FURNISHED UNDER THIS ACT TO SUBSTANTIATE SUCH ENTRY HAS NOT BEEN SO FURNISHED; OR (C) IN RESPECT OF A DEDUCTION, WHERE SUCH DEDUCTION 4 ITA NO.5383/MUM/2017 EXCEEDS SPECIFIED STATUTORY LIMIT WHICH MAY HAVE BEEN EXPRESSED AS MONETARY AMOUNT OR PERCENT AGE OR RATIO OR FRACTION. 11. WE HAVE GONE THROUGH THE TACTS IN THE PRESENT CASE AND NOTICED THAT THE COMPLETE DETAILS OF THE DEDUCTION CLAIM UNDER SECTION 80P2(D) ON THE INTEREST INCOME DERIVED FROM CO - OPERATIVE BANKS WERE FILED IN THE RETURN OF INCOME WITH THE CPC. WE FIND NO SPECIFIC REASON FOR NOT GRANTING OF DEDUCTION UNDER SECTION 80P2(D) OF THE ACT AND HOW IT IS INCORRECT IN ANY MANNER. ACCORDINGLY, THE RETURN PROCNR.R.OD BY CPC BANGALORE UNDER SECTION 143(1) OF THE ACT DISALLOWING THE CLAIM OF DED UCTION UNDER SECTION 80P2(D) OF THE ACT, IS WITHOUT ANY BASIS AND BEING A HIGHLY DEBATABLE ISSUE, IT CANNOT BE CONSIDERED WHILE ACTING UNDER SECTION 143(1) OF THE ACT. ACCORDINGLY, WE DELETE THE DISALLOWANCE OF DEDUCTION AND ALLOW THIS ISSUE OF ASSESSEE'S APPEAL ON VALIDITY OF PROCESSING BY CPC UNDER SECTION 143(1) OF THE ACT. 12. SINCE, WE HAVE ADJUDICATED THE ISSUE ON VALIDITY OF PROCESSING OF RETURN UNDER SECTION 143(1) OF THE ACT AND ALLOWED THE CLAIM OF THE ASSESSEE ON THE VERY JURISDICTION. HENCE, WE NEED NOT TO ADJUDICATE THE ISSUE ON MERITS. THE APPEAL OF ASSESSEE IS ALLOWED. 13. IN THE RESULT, THE APPEAL ASSESSEE IS ALLOWED. 4. WE FIND THAT IN ASSESSEES OWN CASE, THE ITAT HAD HELD THAT IN THE RETURN PROCESSED BY C PC U/S. 143( 1 ), DISALLOWANCE OF CLAIM U/S.80P(2)(D) IS WITHOUT ANY BASIS AND BEING HIGHLY DEBATABLE ISSUE AND IT CANNOT BE CONSIDERED WHILE ACTING U/S. 143(1) OF THE ACT. 5. NO CONTRARY DECISION HAS BEEN PRO D U C ED BEFORE US. RESPECTFULLY FOLLOWING THE ABOVE DECISION, WE SET ASIDE THE ABOVE S. 143(1 ) INTIMATION AND H O LD THAT DENIAL OF DEDUCTION U/S. 80P OF RS. 68,51,517/ - WAS NOT JUSTIFIED. THE LD. COUNSEL OF THE ASSESSEE STATED THAT THE ABOVE ADJUDICATION W ILL TAK E CARE OF ALL THE GROUNDS RAISED BY THE ASSESSEE AND HE SHALL NOT BE CAN VASSING THE OTHER GROUNDS SEPARATELY. ACCORDINGLY, THIS APPEAL BY THE ASSESSEE IS PARTLY ALLOWED AS ABOVE. 6. IN THE RESULT, THIS APPEAL BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 8 . 0 2 . 2 0 1 9 S D / - S D / - ( AMARJIT SINGH ) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 2 8 . 0 2 . 2 0 1 9 ROSHANI , SR. PS 5 ITA NO.5383/MUM/2017 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI