PREMCHAND ROYCHAND & SONS P.LTD, MUMBAI V. ASST CIT RG 12(1), MUMBAI

ITA 7245/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2440 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 05-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SUKESH KOTHARI
• Keywords: Business income; Rectification of order
• Section: 143(3); 234B; 154

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SANJAY ARORA , A M ./ I.T.A. NO. 7245/MUM/2014 ( / ASSESSME NT YEAR: 1998 - 99 ) PREMCHAND ROYCHAND & SONS PRIVATE LIMITED (FORMERLY PREMCHAND ROYCHAND & SONS) 63, BOMBAY SAMACHAR MARG, FORT, MUMBAI - 400 001 / VS. ASST. CIT, RANGE 12(1), AAYKAR BHAVAN, MUMBAI - 400 020 ./ ./ PAN/GIR NO. AAAFP 4126 G ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI KIRIT KAMDAR & SHRI SUKESH KOTHARI / RESPONDENT BY : S MT. BHARATI SINGH / DATE OF HEARING : 02.11.2015 / DATE OF PRONOUNCEMENT : 18 .11.2015 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN A PPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 23 , MUMBAI (CIT(A) FOR SHORT) DATED 19.09.2014 , DISM ISSING THE A SSESSEES APPEAL CONTESTING THE ORDER DATED 16.12.2013 GIVING THE APPEAL EFFECT PASSED U/S. 143(3) R/W S. 254 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 1998 - 99 . 2 ITA NO. 7245/MUM/2014 (A.Y. 1998 - 99) PREMCHAND ROYCHAND & SONS PRIVATE LIMITED VS. ASST. CIT 2. THE ONLY IS SUE IN THIS APPEAL , PROJECTED PER G ROUNDS 1 TO 4, IS WHETHER THE ORDER GIVING APPEAL EFFECT DETERMINES THE INCOME CORRECTLY , I.E., ON THE BASIS OF THE DIFFERENT ORDERS ON RECORD. THIS IS AS THE ASSESSEE CLAIMS THAT A SUM OF RS.19,61,375/ - (COMPRISING TWO A MOUNTS, I.E., RS.15,18,153/ - & RS.4,43,222/ - ) HA S BEEN WRONGLY INCLUDED WHILE ASSESSING I TS INCOME FOR THE YEAR VIDE ASSESSMENT U/S. 143(3) DATED 30.03.2001 (PB PGS. 17 - 26). THE SUM OF RS.15,18,153/ - (BEING MUNICIPAL TAX AND OFFICE MAINTENANCE EXPENSES R S.42,149/ - AND MADHU KUNJ PROPERTY EXPENSES - RS.14,76,004/ - ) , DEBITED TO THE PROFIT AND LOSS ACCOUNT , HAD BEEN DISALLOWED SUO MOTU BY THE ASSESSEE WHILE RETURNING ITS BUSINESS INCOME (AT A LOSS OF RS.8,85,435/ - ) (REFER COMPUTATION OF INCOME AT PB PG. 13) , WHICH FIGURE HAD BEEN ADOPTED IN THE ASSESSMENT ORDER ( AT PAGE 6 ) . THERE WAS THUS A DOUBLE DISALLOWANCE OF THE SAID SUM (RS.15,18,153/ - ). FURTHER , A NOTHER SUM OF RS.4,43,222/ - HA D BEEN DISALLOWED IN ASSESSMENT TOWARD AN ASSUMED EXCESS RENT RECEIVED ON MA DHUKUNJ PROPERTY. ACCORDINGLY, RECTIFICATION APPLICATION WAS MOVED BY THE ASSESSEE ON 04.05.2001 (PB PGS. 27 - 28), WHICH WA S ALLOWED BY THE A SSESSING OFFICER (A .O. ) VIDE ORDER U/S. 154 DATED 27.12.2001. THOUGH THE ASSESSEE HAD IN FACT ALSO APPEALED AGAINST THE SAID DISALLOWANCE TO THE FIRST APPELLATE AUTHORITY, RAISING A SPECIFIC GROUND IN ITS RESPECT (GD. # 8) , THE SAME WAS NOT PRESSED INASMUCH AS THE ISSUE HAD BEEN SETTLED VIDE THE SAID RECTIFICATION ORDER. HOWEVER, WHILE GIVING APPEAL EFFECT THE MATTER IN APPEAL TRAVELLING UP TO THE TRIBUNAL, VIDE ORDER DATED 16.12.2013, THE A.O. PROCEEDED BY TAKING THE INCOME AS HAD BEEN DETERMINED VIDE ASSESSMENT ORDER DATED 30.03.2001, I.E., DISREGARDING THE RECTIFICATION AFORE - SAID. THE MATTER WAS APPEALED AGAINST, B UT THE LD. CIT(A) DECLINED INTERFERENCE , STATING THAT THE ASSESSEE HAD FAILED TO PRODUCE THE RECTIFICATION ORDER DATED 27.12.200 1 . THOUGH THE ASSESSEE HAS APPLIED FOR THE SAME TO THE A.O., IT HAS NOT BEEN RECEIVED EVEN TO DATE, AND IS AWAITED. THE REVENUE S CASE, AS PLEADED BY THE LD. DR, ON THE OTHER HAND, IS THAT THERE IS NO INFIRMITY IN THE IMPUGNED ORDER IN - AS - MUCH AS THE ASSESSEE HAD FAILED TO PRODUCE 3 ITA NO. 7245/MUM/2014 (A.Y. 1998 - 99) PREMCHAND ROYCHAND & SONS PRIVATE LIMITED VS. ASST. CIT THE RECTIFICATION ORDER U/S. 154 ON THE BASIS OF WHICH IT CLAIMS RELIEF. APPROPRIATE INSTRUCTIONS IN THIS REGARD COULD BE ISSUED. 3. THE PARTIES HAVE BEEN HEARD , AND THE MATERIAL ON RECORD PERUSED. THE ISSUE IN APPEAL IS NOT WITH REGARD TO THE VALIDITY OR OTHERWISE OF THE DISALLOWANCE OF RS.19.61 LACS, I.E., ON MERITS , BUT WHETHER THE APPEAL EFFECT GIV ING ORDER DATED 16.12.2013 COMPUTES THE ASSESSEES INCOME CORRECTLY, I.E., IN TERMS OF THE DIFFERENT ORDERS HAVING A BEARING ON THE QUANTIFICATION OF ITS INCOME FOR THE RELEVANT YEAR . FURTHER, I RRESPECTIVE OF WHETHER THE ASSESSEE HAS BEEN ABLE TO PRODUCE T HE RECTIFICATION ORDER DATED 27.12.2001 - WHICH IT ADMITTEDLY HAS NOT, OR NOT, IT IS ONLY THE ASSESSING AUTHORITY WHO WOULD GIVE EFFECT TO THE RELEVANT ORDERS - APPELLATE AS WELL AS RECTIFICATION , AS ON THIS RECORD, AND ONLY IN TERMS THEREOF. AS SUCH, HOW IS THE NON - PRODUCTION BY THE ASSESSEE - WHO CLAIMS TO HAVE NOT RECEIVED THE SAID RECTIFICATION ORDER, THEREOF , RELEVANT ? ALL THAT THE LD. CIT(A) WAS REQUIRED TO DO WAS TO DIRECT THE A.O. TO COMPUTE THE ASSESSEES INCOME FOR THE RELEVANT YEAR BY PRO CEEDING FROM THE INCOME AS DETERMINED PRIOR TO THE APPELLATE ORDER / S WHICH IS SOUGHT TO GIVE N EFFECT TO VIDE HIS ORDER DATED 16.12.2013. THOUGH THE ASSESSEE HAS BEFORE THE TRIBUNAL ALSO RAISE D ANOTHER ISSUE (VIDE GROUND NO. 3) BY STATING THAT THE ADDITION FOR R S.4.43 LACS (FORMING PART OF RS.19.61 LACS) COULD NOT SUSTAINED SUBSEQUENT TO THE ORDER (DATED 18.07.2012) BY THE TRIBUNAL, NO ARGUMENT IN ITS RESPECT WAS MADE BEFORE THE B ENCH NOR, CONSEQUENTLY , RESPONDED TO BY THE LD. DR. THE SAID ISSUE WAS NOT EVEN RAIS ED BEFORE THE LD. CIT(A) . THE SAME WOULD IN FACT NOT SURVIVE WHERE THE DISALLOWANCE OF RS.19,61,375/ - ITSELF HAS BEEN DELETED, I.E., AS CLAIMED, VIDE ORDER U/S. 154 DATED 27.12.2001. IN VIEW OF THE FOREGOING, THE A.O. IS DIRECTED TO COMPUTE THE ASSESSEES INCOME FOR THE RELEVANT YEAR BY GIVING DUE EFFECT TO THE ORDER U/S. 154 DATED 27.12.2001, ALSO FURNISHING ONE COPY OF THE SAME, WHERE NOT ALREADY SO, ALONG WITH THE ORDER GIVING APPEAL EFFECT TO THIS ORDER , TO THE ASSESSEE. 4 ITA NO. 7245/MUM/2014 (A.Y. 1998 - 99) PREMCHAND ROYCHAND & SONS PRIVATE LIMITED VS. ASST. CIT GROUND NO. 5 WAS ALSO NOT URGED BEFORE THE BENCH, EVEN AS THE SAME, BEING IN RELATION TO LEVY OF INTEREST U/SS. 234B, 220(2) AND 234B OF THE ACT, IS CONSEQUENTIAL IN NATURE. I DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 18 , 2015 SD/ - (S ANJAY ARORA) / A CCOUNTANT MEMBER MUMBAI ; DATED : 18 . 11 .201 5 . . ./ ROSHANI , SR. PS / 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 F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI