DEWAN HOUSING FINANCE CORPN.LTD., MUMBAI V. THE ASSTT.C.I.T.,CENTRAL 37, MUMBAI

ITA 6177/MUM/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2602 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 03-12-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 15-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD USMAN SR
• Assessee Lawyers: AJAY R SINGH
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI A.L.GEHLOT, AM & SMT. P.MADHAVI DEVI, JM I.T.A.NOS.6176 & 6177/MUM/2008 A.YRS. 2004-05 & 2005-06 DEWAN HOUSING FINANCE CORPN. LTD. 6 TH FLOOR, DHEERAJ ARMA, ANANT KANEKAR MARG, ST. ROAD, BANDRA [E] MUMBAI 400 051 PAN NO.AAACD-1977-A VS. ASST. COMMISSIONER OF I.T. CENTRAL CIRCLE 37 MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI K.SHIVRAM & AJAY R. SINGH. REVENUE BY : SHRI MOHD. USMAN, SR.AR O R D E R PER P.MADHAVI DEVI, JM: THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAINST C IT[A] S SEPARATE ORDERS DATED 19/9/2008 FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 RESPECTIVELY. 2. IN BOTH THESE APPEALS THE GRIEVANCE OF THE ASSES SEE IS AGAINST THE ORDER OF THE CIT[A] IN CONFIRMING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S.36[1][VII] OF THE IN COME TAX ACT WITHOUT APPRECIATING THE REASONS AND CIRCUMSTANCES UNDER WH ICH THERE WAS EXCESS DEDUCTION. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A PUBLIC LIMITED HOUSING FINANCE COMPANY ENGAGED IN THE BUSINESS OF EXTENDING HOUSING LOANS. THE ASSESSEE COMPANY FILED ITS RETUR N OF INCOME ON 1-11-2004 DECLARING TOTAL INCOME OF RS.11,00,76,483 /- AFTER CLAIMING 2 DEDUCTION OF RS.8,90,36,500/- BEING SPECIAL RESERVE AS PROVIDED U/S.36[1][VIII] OF THE INCOME TAX ACT. THE ASSESSME NT U/S.143[3] WAS COMPLETED ALLOWING THE SAID DEDUCTION U/S.36[1][VII I] AMOUNTING TO RS.8,50,27,316/-. THE ASSESSEE FILED AN APPEAL AGAI NST THE ABOVE ORDER BEFORE THE CIT[A] AND THE CIT[A] DISPOSED OF THE A PPEAL BY REVISING THE INCOME OF THE ASSESSEE TO RS.15,07,19,347/-. SU BSEQUENT THERETO, AO NOTICED THAT DEDUCTION U/S.36[1][VIII] HAS BEEN ALLOWED IN EXCESS TO THE EXTENT OF RS.40,27,316/- IN THE A.Y 2004-05 AND AN AMOUNT OF RS.32,86,824/- FOR A.Y 2005-06. OBSERVING THAT THER E IS A MISTAKE APPARENT FROM RECORD, HE ISSUED A NOTICE U/S.154 OF THE ACT DATED 18-1-2008 FOR BOTH THE ASSESSMENT YEARS. IN REPLY T O THE SAME, ASSESSEE VIDE LETTER DATED 8-2-2008 OBJECTED TO THE PROPOSED RECTIFICATION ON THE GROUND THAT THERE WAS NO EXCES S DEDUCTION ALLOWED AND THAT THERE IS UNUTILIZED SPECIAL RESERVE AMOUNT ING TO RS.460.30 LAKHS AS ON 31-3-2003 AND SHORT CREATION OF RESERVE OF RS.40,27,315/- FOR A.Y 04-05 AND RS.32,86,824/- FOR THE A.Y 05-06 WHICH CAN BE DRAWN FROM THIS UNUTILIZED RESERVE. IT WAS ALSO SUB MITTED THAT THE AMOUNT CREATED FOR SUCH RESERVE CAN BE VERIFIED FRO M THE BALANCE- SHEET OF THE COMPANY WHILE ALLOWANCES BY THE DEPART MENT CAN BE VERIFIED FROM AOS OWN RECORDS. AFTER CONSIDERING T HE SAME, AO HOWEVER, HELD THAT EXCESS DEDUCTION HAS BEEN ALLOWE D U/S.36[1][VIII] OF THE ACT AND THAT THERE IS A MISTAKE APPARENT FRO M RECORD WHICH NEEDS TO BE RECTIFIED U/S.154 OF THE ACT. HE, THERE FORE, ADDED THE EXCESS RELIEF ALLOWED TO THE ASSESSEE U/S.36[1][VII I] OF THE ACT TO THE 3 TOTAL INCOME OF THE ASSESSEE AND REVISED THE TOTAL INCOME ACCORDINGLY. AGGRIEVED BY THE SAME, ASSESSEE FILED AN APPEAL BEF ORE THE CIT[A] WHO CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 4. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE HAS FILED BEFORE US A LETTER DATED 2-12-2009 SEEKING PERMISSI ON OF THE BENCH TO RAISE THE ADDITIONAL GROUNDS OF APPEAL WHICH ARE AS FOLLOWS- 1. WITHOUT PREJUDICE TO THE GROUND OF APPEAL THE ASSESSEE SUBMITS THAT THE CLAIM OF DEDUCTION U/S.36[1][VII] BY CREATION OF SPECIAL RESERVE IS A DEBATABLE ISSUE, THEREFORE COU LD NOT HAVE BEEN A SUBJECT MATTER OF RECTIFICATION U/S.154 OF T HE ACT AS THERE WAS NO MISTAKE APPARENT FROM RECORD. 2. WITHOUT PREJUDICE TO THE ABOVE ORIGINAL ASSESSME NT ORDER WAS SUBJECT MATTER OF APPEAL BEFORE CIT[A] WHEREIN ONE OF THE ISSUE WAS DEDUCTION U/S.36[1][VIII], HENCE THE ORIG INAL ORDER WAS MERGED WITH THE CIT[A] ORDER, THEREFORE THE SAID ORDER CANNOT BE RECTIFIED U/S.154 OF THE ACT. 3. WITHOUT PREJUDICE TO ABOVE IF THERE WAS AS SHORT FALL IN CREATION OF RESERVE THE ASSESSEE MAY BE GIVEN AN OPPORTUNITY TO MAKE GOOD THE SHORTFALL. 5. IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSE SSEE THAT THESE GROUNDS ARE LEGAL GROUNDS WHICH CAN BE RAISED AT AN Y STAGE OF THE PROCEEDINGS IN VIEW OF THE RATIO LAID DOWN BY THE F OLLOWING JUDGMENTS: 1. AHMEDABAD ELECTRICITY CO. LTD. VS. CIT 199 ITR 3 51 [BOM] 2. JUTE CORPORATION OF INDIA LTD. VS. CIT 187 ITR 6 88 [S.C] 3. NATIONAL THERMAL POWER CO. LTD. VS. CIT 229 ITR 383 [S.C] 6. THE LD. DR, HOWEVER, SUBMITTED THAT THE ASSESSEE HAS NOT RAISED THE GROUND OF JURISDICTION EITHER BEFORE THE CIT[A] OR BEFORE THE CIT[A] AND, THEREFORE, IT CANNOT BE RAISED AT THIS STAGE. 7. HAVING HEARD BOTH THE PARTIES ON THE ADMISSION OF ADDITIONAL GROUNDS OF APPEAL, WE FIND THAT THE ADDITIONAL GROU NDS RAISED BY THE 4 ASSESSEE ARE LEGAL GROUNDS AND AS HELD BY THE HON'B LE THE SUPREME COURT JUDGMENT IN THE CASE OF NATIONAL THERMAL POWE R CO. LTD. [CITED SUPRA], THEY CAN BE ADMITTED PROVIDED THERE IS NO N EED OF FRESH INVESTIGATION INTO FACTS. IN THE CASE BEFORE US, TH ERE IS NO NECESSITY OF INVESTIGATION INTO FACTS AT THIS STAGE AS ALL THE M ATERIAL FACTS ARE ALREADY ON RECORD. HENCE, WE ADMIT THE ADDITIONAL GROUNDS O F APPEAL RAISED BY THE ASSESSEE. HOWEVER, SINCE THESE GROUNDS WERE NOT RAISED BEFORE THE CIT[A] AND THERE IS NO ADJUDICATION ON THESE GROUN DS BY HIM, WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE F ILE OF THE CIT[A] TO ADJUDICATE UPON THE ADDITIONAL GROUNDS OF APPEAL RA ISED BY THE ASSESSEE. WE, THEREFORE, DO NOT THINK IT NECESSARY TO GO INTO THE MERITS OF THE DISALLOWANCES/ADDITIONS MADE BY THE AO U/S.1 54 OF THE INCOME TAX ACT. 8. IN THE RESULT, ASSESSEES APPEALS ARE ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 10 TH DAY OF DECEMBER, 2009. SD/- SD/- (A.L.GEHLOT) (P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI:10 TH DECEMBER, 2009. P/-* 5 COPY TO- 1) APPELLANT 2) RESPONDENT 3) CITA MUMBAI. 4) CIT CITY MUMBAI 5) DR BENCH MUMBAI TRUE COPY BY ORDER DY /ASST.REGISTRAR,ITAT MUMBAI. SR.NO. PARTICULARS DATE INITIALS 1 DRAFT DICTATED ON 4-12-09 P 2 DRAFT PLACED BEFORE AUTHOR 7-12-09 P 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO SR.PS/PS 6 ORDER KEPT FOR PRONOUNCEMENT 7 FILE SENT TO BENCH CLERK 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER