ACIT CIR 25(3), MUMBAI V. MOHANDAS G MAJETHIA, MUMBAI

ITA 7351/MUM/2012

• Counselvise Citation: 735119914 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 11-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R PATIL
• Assessee Lawyers: ASHOK R MAJETHIA
• Keywords: Revised return
• Section: 263; 139; 139(5)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - B BENCH. . . , , BEFORE S/SH.I.P.BANSAL, JUDICIAL MEMBE R & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 7351/MUM/2012, ! ! ! ! / ASSESSMENT YEAR-2006-07 DCIT 25(3), 308, C-11, BANDRA-KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 VS MOHANDAS G. MAJETHIA, GOVARDHAN NAGAR, E-WING-120, 1ST FLOOR, BORSAPADA, KANDIVALI(W), MUMBAI-67 PAN: AFWPM9324A ( '# / APPELLANT) ( $%'# / RESPONDENT) & ' / REVENUE BY : SHRI V.R. PATIL () () () () ' ' ' ' / ASSESSEE BY : SHRI ASHOK R. MAJETHIA & && & )* )* )* )* / DATE OF HEARING : 11-08-2014 +,! & )* / DATE OF PRONOUNCEMENT : 11-08-2014 , 1961 & && & 254 )1( )-) )-) )-) )-) . . . . ORDER U/S..254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM : CHALLENGING THE ORDER DATED.28.09.2012 OF THE CIT(A )-35,MUMBAI, ASSESSING OFFICER(AO)HAS RAISED FOLLOWING GROUNDS APPEAL: (1)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ACCEPT THE ASSESSEES CLAI M REGARDING DEBITING OF RS.76,87,676/- IN P & L A/C AND CLAIM LOSS IN REVISED RETURN (2)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD,CIT(A) ERRED IN ACCEPTING THE CLAIM OF LOSS OF THE ASSESSEE WITHOUT APPRECIAT ING THE FACTS THAT THE REVISED RETURN OF INCOME WAS BEYOND THE STIPULATED TIME AND IN VIEW OF THE P ROVISIONS OF SECTION 139(1) AND 80, THE SAID LOSS COULD NOT HAVE BEEN ALLOWED. (3)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN RELYING ON THE JUDGMENTS OF THE HONBLE HIGH COURT OF ALLAHABA D IN THE CASE OF DHAMPUR SUGAR MILLS VS CIT (90 ITR 236) AND THE HONBLE HIGH COURT OF BOMBAY I N THE CASE OF M/S. SANCHIT SOFTWARE AND SOLUTION (P) LIMITED VS CIT (25 TAXMAN.COM,123 ) WI THOUT APPRECIATING THE FACTS THAT THE ASSESSEES CASE IS CLEARLY DISTINGUISHABLE FROM THE CITED CASES. (4)THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CI T(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED. (5)THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AN Y GROUND OR ADD A NEW GROUND. 2. ASSESSEE,AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF BUILDERS AND CONSTRUCTION,FILED HIS RETURN OF INCOME ON 30.10.2006 DECLARING TOTAL INCOME AT RS.4 6.47 LAKHS.AFTER CONSIDERING THE DISALLOW - ANCE MADE U/S.40(A)(IA) OF THE ACT IN THE ASSESSMEN T ORDER DTD. 30.11.2007 FOR THE AY-2005-06, HE FILED A REVISED RETURN ON 26.03.2008 DECLARING L OSS OF RS.30.20 LAKHS, THE ORIGINAL ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED ON 26.12.2008 A SSESSING THE LOSS AT RS. 20.34 LAKHS. CIT-25 INITIATED PROCEEDINGS U/S. 263 OF THE ACT ON 20.09. 2010 BY THE BY ISSUING A SHOW CAUSE NOTICE.IN THE REVISIONAL PROCEEDINGS,IT WAS HELD THAT THE REV ISED RETURN CLAIMING LOSS WAS FILED BEYOND THE TIME LIMIT PRESCRIBED U/S.139(1) OF THE ACT,THAT TH E LOSS WAS NOT ALLOWABLE AS PER THE PROVISIONS OF SECTION 139(3)R.W.S.80 OF THE ACT.THE CIT DIRECTED THE AO TO REFRAME THE ASSESSMENT IN LIGHT OF THE DIRECTION GIVEN IN THE ORDER PASSED U/S.263 OF THE ACT THE ASSESSEE DID NOT PREFER AN APPEAL AGAINST THE 263 ORDER.THE AO ISSUED NOTICE U/S. 142 (1) OF THE ACT TO THE ASSESSEE ON 29.07.2011. THE ASSESSEE FILED ITS REPLY,VIDE HIS LETTER DATED 11.08.2011.HE STATED THAT AFTER FILING THE ORIGINAL 2 ITA NO. 7351/MUM/2012 MOHANDAS G. MAJETHIA RETURN U/S. 139(1) OF THE ACT FOR THE AY 2006-07,ON 30.10.2006,THE AO HAD DISALLOWED AN AMOUNT OF RS.76,87,676/- U/S.40(I)(IA) OF THE ACT FOR THE AY 2005-06,THAT THE AO HAD ASKED HIM TO FILE A REVISED RETURN FOR THE SUBSEQUENT AY I.E. AY 2006-0 7,THAT ACCORDINGLY, REVISED RETURN WAS FILED BY HIM, THAT THE ORIGINAL RETURN WAS FILED AS PER T HE PROVISIONS OF SECTION 139(3) OF THE ACT,THAT AT THE TIME OF FILING THE ORIGINAL RETURN HE DID NOT C LAIM LOSS AMOUNTING TO RS.76.87 LAKHS AS SAME WAS CLAIMED IN THE AY 2005-06,THAT SECTION 139(3) O F THE ACT HAD TO BE READ WITH SECTION 139(5)OF THE ACT,THAT SECTION 139(5) GAVE A RIGHT T O THE ASSESSEE TO CLAIM A DEDUCTION WHICH WAS ALLOWABLE TO HIM AS PER THE PROVISIONS OF THE ACT,T HAT THE LOSS CLAIMED IN THE REVISED RETURN HAD BEEN CORRECTLY QUANTIFIED AND WAS ALSO ALLOWED TO B E CARRY FORWARDED.AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE ORDER PASSED BY THE CIT-25 MUMBAI U/S. 263,THE AO HELD THAT ASSESSEE HAD NOT COMPLIED WITH THE PROVISIONS OF SE CTION 139 (3) OF THE ACT, THAT THERE WAS NO QUESTION OF SATISFYING THE PROVISIONS OF SECTION 80 OF THE ACT,THAT THE REVISED RETURN FILED BY HIM ON 26.03.2008 WAS A INVALID RETURN, THAT THE LOSS C LAIMED BY HIM WAS NOT ACCEPTABLE,THAT AN AMOUNT OF RS.76.87 LAKHS CLAIMED AS LOSS/EXPENDITUR E IN THE REVISED RETURN OF INCOME THAT WAS ALLOWED EARLIER HAD TO BE WITHDRAWN. FINALLY,HE ADD ED THE SAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA). BEFORE HIM, IT WAS STATED THAT THE AO HAD OBSERVED AT PARAGRAPH NO.2 OF PAGE 3 IN THE ASSESSMENT ORDER FOR THE AY 2005-06, DATED 3 0.11.2007 AS UNDER: 'THE ABOVE CONTRACTUAL AND PROFESSIONAL EXPENSES OF RS. 76,87,626/- ARE BEING DISALLOWED AND ADDED TO THE TOTAL INCOME.HOWEVER, AS THE ASSESSEE HAS MADE THE PAYMENT IN THE SUBSEQUENT YEAR THESE EXPENSES WILL BE ALLOWED IN AY. 2006-07' IT WAS FURTHER STATED THAT ASSESSEE HAD FILED REVIS ED RETURN FOR AY 2006-07 ON 26.03.2008 WHEREIN HE DEBITED RS.76.87 LAKHS AND RESULTANTLY HE REVISE D HIS RETURN DECLARING A LOSS OF RS.30.20 LAKHS [+46.47 LAKHS 76.87 LAKHS = (-)RS.30,20,951/-]. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE,TH E FAA HELD THAT THE AO HAD TREATED REVISED RETURN INDEPENDENTLY AND HAD DISALLOWED THE ASSESSE E'S CLAIM OF LOSS OF RS.76.87 LAKHS, THAT THE VIEW TAKEN BY THE AO WAS INCORRECT, THAT THERE WAS A DISTINCTION BETWEEN THE REVISED RETURN AND A CORRECTION OF RETURN,THAT IF THE ASSESSEE WOULD FIL E AN APPLICATION FOR CORRECTING THE RETURN ALREADY FILED OR MAKE AMENDMENTS THEREIN IT WOULD NOT MEAN THAT HE HAD FILED REVISED RETURN, THAT IT WAS TAKE THE CHARACTER OF ORIGINAL RETURN.HE REFERRED T O THE ORDER OF THE DHAMPUR SUGAR MILLS LTD. (90 ITR 236)AND SANCHIT SOFTWARE AND SOLUTIONS P.LTD.(2 5TAXMAN.COM.123) DELIVERED BY THE HON'BLE HIGH COURT OF MUMBAI AND THE CBDT CIRCULAR NO. 14(X L-35) DATED 11.04.1955. HE FURTHER HELD THAT DISALLOWANCE OF RS.76.87 LAKHS WAS MADE BY THE AO WHILE COMPLETING THE ASSESSMENT FOR THE EARLIER YEAR ON THE GROUND OF TDS WAS DEPOSITED LATE/THAT HE HAD MADE THE PAYMENT IN SUBSEQUENT YEAR AND SAME HAD TO BE ALLOWED IN THAT ORDER, THAT AO HAD DISALLOWED THE EXPENDITURE TWICE,THAT IT WAS AGAINST THE DOCTRINE OF DOUBLE JE OPARDY.FINALLY,HE ALLOWED THE APPEAL FILED BY THE ASSESSEE. 4. BEFORE US,DEPARTMENTAL REPRESENTATIVE(DR)SUPPORTED THE ORDER OF THE AO, AUTHORISED REPRESE -NTATIVE(AR) STATED THAT THE ASSESSEE HAD REVISED T HE RETURN AS PER THE ADVICE OF THE AO, THAT AO HAD DISALLOWED THE CLAIM AFTER A NOTICE U/S. 263 WA S ISSUED BY THE CIT,THAT TDS WAS PAID IN THE SUBSEQUENT YEAR,THAT WHILE PASSING THE ORDER FOR TH E AY 2005-06, AO HAD TAKEN COGNISANCE OF THE ACT OF THE PAYMENT OF TDS IN THE AY 2006-07, THAT I N THE AY 2006-07 THE TAX WAS PAID BEFORE THE DUE DATE OF FILING OF RETURN U/S. 139(1) OF THE ACT . 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT WHILE PASSING THE ORDER FOR THE AY 2005-06 THE AO,AT PAGE S NO.2 & 3 OF THE ORDER,HAD SPECIFICALLY MENTIONED THAT TDS WAS PAID BEFORE 31ST MAY 2005 BY THE ASSESSEE,THAT THE ASSESSEE MADE THE PAYMENT BEYOND THE STIPULATED DATES,THAT IN ACCORDA NCE WITH PROVISIONS OF SECTION 40(1)(IA) OF THE 3 ITA NO. 7351/MUM/2012 MOHANDAS G. MAJETHIA ACT THE EXPENSES CLAIMED BY HIM WERE BEING DISALLOW ED,THAT THE CONTRACTUAL AND PROFESSIONAL EXPENSES OF RS.76.87 LAKHS WERE BEING ADDED TO THE ASSESSEE'S INCOME. HE FINALLY MENTIONED THAT THE ASSESSEE HAD MADE THE PAYMENTS IN SUBSEQUENT YE AR,THAT THOSE EXPENSES WOULD BE ALLOWED IN AY 2006-07.IF THE AO HAD HIMSELF HELD THAT EXPENSES WAS TO BE ALLOWED IN THE SUCCEEDING YEAR THEN THERE WAS NO REASON TO DISALLOW THE CLAIM MADE BY THE ASSESSEE IN THE LATER YEAR.WE FIND THAT AFTER ALLOWING THE CLAIM MADE BY THE ASSESSEE,THE A O WITHDREW IT ONCE HE RECEIVED THE ORDER OF THE CIT-25,PASSED U/S. 263 OF THE ACT.IT IS AN UNDI SPUTED FACT THAT TDS WAS PAID BY 31ST MAY OF THE SUCCEEDING YEAR AND IT WAS PAID WELL WITHIN THE TIME-LIMIT PRESCRIBED FOR FILING OF RETURN U/S. 139(1) OF THE ACT.IN THESE CIRCUMSTANCES WE ARE OF THE OPINION THAT ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL OR FACTUAL INFIRMITY.THEREFOR E,UPHOLDING HIS ORDER,WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT ,APPEAL FILED BY THE AO STANDS DISMISSED. 0)1 () * & 2 & ) 34 . ORDER PRONOUNC ED IN THE OPEN COURT ON 11TH AUGUST 2014 . . & +,! 5 6 11,08, 201 4 , & - 7 SD/- SD/- ( . . / I.P. BANSAL) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 6 /DATE: 11.08 . 2014. SK . . . . & && & $)8 $)8 $)8 $)8 98!) 98!) 98!) 98!) / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / '# 2. RESPONDENT / $%'# 3. THE CONCERNED CIT(A)/ : ; , 4. THE CONCERNED CIT / : ; 5. DR B BENCH, ITAT, MUMBAI / 8<- $) CH , . . . 6. GUARD FILE/ - 0 %8) %8) %8) %8) $) $)$) $) //TRUE COPY// . / BY ORDER, = / 3 DY./ASST. REGISTRAR , /ITAT, MUMBAI