ZAFONIC FINLEASE & INVESTMENT P. LTD, MUMBAI V. ITOA RG 8(3)-4, MUMBAI

ITA 5507/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7281 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 12-03-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 01-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIPUL JOSHI SHRI SAMEER DALAL
• Keywords: Question of law
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI. BEFORE SHRI J. SUDHAKAR REDDY, A.M. & SMT.P.MADHA VI DEVI, J.M. I.T.A. NO. 5 507/MUM/2008. ASSESSMENT YEA R : 2005-06. ZAFONIC FINLEASE & INVESTMENT THE INCOME TAX OFFICER, PVT. LTD., VS. RANGE-8(3)-4, 124, ANDHERI UNIVERSAL INDL. MUMBAI. PREMISES, J.P. ROAD, ANDHERI (W), MUMBAI 400 020. PAN :AAGZO330K APPELLANT RESPONDENT APPELLANT BY : SHRI VIPUL JOSHI. SHRI SAMEER DALAL. RESPONDENT BY : SHRI MOHD. USMAN. O R D E R PER J. SUDHAKAR REDDY, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE CIT(APPEALS)-XXIX, MUMBAI DATED 09-07- 2008 FOR THE ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUND : THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TAXING FACTORING INCOME OF RS.1,72,07,402/- ON PROPORTIONATE BASIS WITHOUT APP RECIATING THE FACT THAT THE APPELLANT HAD INCURRED A LOSS FRO M THE BUSINESS BECAUSE OF NON-RECOVERABILITY OF REMAINING OF DEBTS. 2. WHEN THE MATTER WAS POSTED FOR HEARING THE LEARNED COUNSEL FILED A DECLARATION IN FORM NO. 8 UNDER SECTION 158 A(1) OF THE I.T. ACT 2 THAT IDENTICAL QUESTION OF LAW IS PENDING BEFORE TH E HON'BLE BOMBAY HIGH COURT. THE DECLARATION FORM 8 IS AS UNDER: - I, MR. M.K. VERGHESE , SON OF LATE C.G. KOCHITTY . MR. M.K. VERGHESE , BEING THE DIRECTOR OF ZAFONIC FINLEAE & INVESTMENT P. LTD ., DO HEREBY DECLARE: 1. THAT THE FOLLOWING QUESTIONS OF LAW ARE PENDING IN THE CASE OF ZAFONIC FINLEASE & INVESTMENT P. LTD . BEFORE THE HIGH COURT ON AN APPEAL UNDER SECTION 260A IN RESPECT OF THE A SSESSMENT YEAR 2003-04 . A COPY OF THE QUESTIONS OF LAW REFERRED TO THE HIG H COURT IS ENCLOSED. 2. THAT THE SAID QUESTIONS OF LAW ARE IDENTICAL WIT H THE QUESTIONS OF LAW ARISING IN THE CASE OF ZAFONIC FINLEASE & INVESTMENT P. LTD . IN RESPECT OF THE ASSESSMENT YEAR 2005-2006 WHICH IS PENDING BEFORE THE INCOME TAX APPELLATE TRIBUNAL G BEING I.T.A. NO. 5507/M/08 3. THAT IS THE ASSISTANT COMMISSIONER OF INCOME-TAX 8 (3) AGREES TO APPLY TO THE CASE REFERRED TO IN PARAGRAP H 2 ABOVE THE FINAL DECISION ON THE QUESTION OF LAW IN THE CA SE REFERRED TO IN PARAGRAPH 1 ABOVE, **I / THE ASSESSEE MENTIONED IN PARAGRAPH 1 AND 2 ABOVE, SHALL NOT RAISE THE SAID Q UESTIONS OF LAW IN THE CASE REFERRED TO IN PARAGRAPH 2 ABOVE IN APPEAL BEFORE ANY APPELLATE AUTHORITY OR FOR A REFERENCE B EFORE THE HIGH COURT UNDER SECTION 256 OR THE SUPREME COURT U NDER SECTION 257 OR IN APPEAL BEFORE THE SUPREME COURT U NDER SECTION 261. 3. THE QUESTION OF LAW ADMITTED BY THE HON'BLE BOMBAY HIGH COURT AS PER ANNEXURE IS AS UNDER: - 1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN CONFIRMING TH E ACTION OF THE RESPONDENT IN TAXING RS.3,15,776/-, AS INCOME F ROM FACTORING CONTRACT, ON PROPORTIONATE / NOTIONAL BAS IS, ESPECIALLY WHEN THE APPELLANT HAD, IN FACT, INCURRE D LOSS? 2. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, AND IN LAW, THE ORDER OF THE TRIBUNAL IS PERVERSE INASM UCH AS IT IS BASED ON SURMISES, CONJECTURE AND SUSPICION BY TAKI NG INTO 3 ACCOUNT EXTRANEOUS AND IRRELEVANT CONSIDERATIONS, W HILE IGNORING THE RELEVANT CONSIDERATIONS? 4. THE LEARNED D.R. HAS NO OBJECTION IF THE DECLARATIO N IS ADMITTED UNDER THE PROVISIONS OF THE ACT. CONSIDERING THE FA CT THAT SIMILAR ISSUE WAS INVOLVED IN A.Y. 2003-04 AND THE HON'BLE BOMBAY HIGH COURT HAS ADMITTED THE QUESTION OF LAW, IN VIEW OF THE DECLAR ATION UNDER SECTION 158A(1) OF THE ACT WE DIRECT THE A.O. TO APPLY THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE ASSESSEES CASE AC CORDINGLY AND MODIFY THE ORDER AS PROVIDED IN THE SAID PROVISIONS . 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 29 TH DAY OF MARCH, 2010. SD/- SD/- (P. MADHAVI DEVI) (J. SUDHAKAR REDDY) JUDICIAL MEMBER. ACCOUNTANT MEMBER. MUMBAI, DATED : 29 TH MARCH, 2010. WAKODE COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, G-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI. 4 DATE INITIAL 1. DRAFT DICTATED ON 25-03-2010 2. DRAFT PLACED BEFORE AUTHOR 29-03-2010 4. DRAFT DISCUSSED / APPROVED BY THE SECOND MEMBER ___________ 5. APPROVED DRAFT CAME TO PS ___________ 6. KEPT FOR PRONOUNCEMENT ON ___________ 7. FILE SENT TO THE BENCH CLERK ___________ 8. FILE SENT TO THE HEAD CLERK ___________ 9. DATE OF DESPATCH OF ORDER ___________