DCIT - 8(1), MUMBAI V. M/s. BARBER SHIP MANAGEMENT (I) P. LTD., MUMBAI

ITA 936/MUM/2008

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79342 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 15-05-2014
• Assessment Year: 1998-1999
• Appeal Filed On: 08-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S E DASTUR
• Keywords: Business income; Depreciation; Reassessment proceedings
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO.4460/M/2007 (AY: 1999 - 2000) JCIT (OSD), CIRCLE 8(1), R.NO.210, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020. / VS. M/S. BARBER S HIP MANAGEMENT (I) PVT LTD, R.NO.210, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 20. ( / APPELLANT) .. ( / RESPONDENT ) ./ ITA NO.936/M/2008 (AY: 1998 - 1999) DCIT, CIRCLE 8(1), R.NO.210, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020. / VS. M/S. BARBER S HIP MANAGEMENT (I) PVT LTD, 31/32, APPLE HERITAGE, PLOT NO.54C, SIR MATHURADAS VASANJI ROAD, ANDHERI (W), MUMBAI - 93. ( / APPELLANT) .. ( / RESPONDENT ) ./ ITA NO.291/M/2006 (AY 1998 - 1999) M/S. BARBER SHIP MANAGEMENT (I) PVT LTD, 31/32, APPLE HERITAGE, PLOT NO.54C, SIR MATHURADAS VASANJI ROAD, ANDHERI (W), MUMBAI - 93. / VS. DCIT, CIRCLE 8(1), R.NO.210, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020. ./ PAN : AAACI 1614 H ( / APPELLANT) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI S.E. DASTUR & NISHANT THAKKAR / RE VENUE BY : SHRI MAURYA PRATAP, DR / DATE OF HEARING : 02.7.2014 / DATE OF PRONOUNCEMENT : 16 .7.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE THREE APPEALS UNDER CONSIDERATION INVOLVING AYS 1998 - 1999 AND 1999 - 2000. OUT OF THREE APPEALS, T HERE ARE CROSS APPEALS FOR THE AY 1998 - 99 AND THE ITA NO.4460/M/2007 IS FILED BY THE REVENUE FOR THE AY 1999 - 2000. SINCE, 2 THE ISSUES RAISED IN ALL THE THREE APPEALS ARE CONNECTED, THEREFORE, FOR THE SAKE OF CONVENIENCE, THESE APPEALS ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE AND GROUND WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAPHS OF THIS ORDER. 2. FIRSTLY, WE SHALL TAKE UP THE APPEAL ITA NO.4460/M/2007 FILED BY THE REVENUE FOR THE AY 1999 - 2000 . IN T HIS APPEAL FILED BY THE REVENUE ON 11.6.2007 IS AGAINST THE ORDER OF THE CIT (A) - VIII, MUMBAI DATED 21.3.2007 FOR THE ASSESSMENT YEAR 1999 - 2000. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE CIT (A) ERRED IN HOLDING THAT THE ASSESSEE IS ENTITLED TO BRING FORWARD THEIR UNABSORBED BUSINESS LOSS OF EARLIER YEARS AND ARE ENTITLED TO SET IT OFF AGAINST THE BUSINESS INCOME OF AY 1999 - 2000. 2. WITHOUT PREJUDICE TO GROUND NO.1, THE LD CIT (A) ERRED IN NOT APPRECIATING THE AOS FINDING THAT THE SHAREHOLDING PATTERNS HAS UNDER GONE A CHANGE IN THE PREVIOUS YEAR RELEVANT TO AY 1998 - 99 AND NOT THE AY UNDER REFERENCE AS HAS BEEN TAKEN BY THE ASSESSEE AND THEREFORE, AS PER THE PROVISIO NS OF SECTION 79, LOSSES PERTAINING TO THE AYS PRIOR TO AY 1998 - 99 ARE NOT ALLOWED TO BE CARRIED FORWARD FOR SET OFF. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DIRECTING THE AO TO GIVE EFFECT TO THE DIRECTION S OF THE CIT (A) - VIII , MUMBAI CONTAINED IN PARAGRAPH 23 OF THE ORDER DATED 19.11.2004 BY GIVING NECESSARY DEDUCTION WITHOUT APPRECIATING THAT THE AMOUNT OF RS. 2,74,52,224/ - DIRECTED BY CIT (A) - VIII, MUMBAI IN THE ABOVE MENTIONED ORDER TO BE BROUGHT TO TAX IN AY 1998 - 99 WAS NOT SO BROUGHT TO TAX IN AY 1998 - 99 AND THEREFORE, THE QUESTION OF ANY DEDUCTION OF ANY AMOUNT OF RS. 48,53,220/ - AY 1998 - 99 AS CLAIMED BY THE ASSESSEE DID NOT ARISE. 3. DURING THE PROCEEDINGS BEFORE US, A T THE OUTSET, BOTH THE PARTIES OF THE LITIGATION MENTIONED THAT THE APPLICABILITY OF THE PROVISIONS OF SECTION 79 OF THE ACT AND CONSEQUENT EFFECT ON THE CLAIMS RELATING TO CARRIED FORWARD AND SET OFF OF THE BUSINESS LOSSES . IN THIS REGARD, LD COUNSEL BRO UGHT OUR ATTENTION TO THE ORDER OF THE AO WHEREIN THE ASSESSING OFFICER ANALYZED THE APPLICABILITY OF THE PROVISIONS OF SECTION 79 OF THE ACT RELATING TO THE CARRIED FORWARD AND SET OFF OF THE BUSINESS LOSSES IN THE CASE OF CERTAIN COMPANIES AND MENTIONED THAT , IN THE EVENT OF CHANGE IN SHAREHOLDING AS PER THE PROVISIONS OF SECTION 79 OF THE ACT, THE ASSESSEE BECOMES DISENTITLED TO THE CONCESSION OF CARRIED FORWARD OF LOSSES UNDER SECTION 72 OF THE ACT. FURTHER, IN THIS REGARD, LD COUNSEL BROUGHT OUR ATTENT ION TO THE SCHEDULE A OF THE BALANCE SHEET DRAWN ON 31.3.1999 AND DEMONSTRATED THAT THE AUTHORIZED CAPITAL IS RS. 5 LAKHS AND SUBSCRIBED CAPITAL IS ALSO THE SAME IN THE YEAR UNDER CONSIDERATION AND THE CHANGES IN THE SHARE CAPITAL HOLDINGS TOOK PLACE IN TH E SUBSEQUENT 3 ASSESSMENT YEARS. TO SUBSTANTIATE THE SAME, ASSESSEE READ OUT THE FOLLOWING N OTE - 2 GIVEN IN SCHEDULE A WHICH READS AS UNDER: NOTE : 1). 2) SUBSEQUENT TO THE YEAR - END, THE COMPANY HAS RECEIVED THE NECESSARY APPROVAL FROM THE RESERVE BANK OF INDIA FOR THE TRANSFER OF 1,200 EQUITY SHARES OF RS. 10 EACH IN THE COMPANY, HELD BY A DIRECTOR, TO BARBER INTERNATIONAL LIMITED, THE HOLDING COMPANY AND ITS NOMINEE. THESE EQUITY SHARES HAVE BEEN TRANSFERRED ON 28 TH JULY, 1999. 4. BRINGING OUR ATTENTIO N TO THE ORDER OF THE CIT (A), LD COUNSEL FOR THE ASSESSEE MENTIONED THAT CIT (A) APPRECIATED THE FACTS OF THE CASE AND GRANTED RELIEF. IN THIS REGARD, HE READ OUT THE DECISION OF THE CIT (A) GIVEN AT PAGE 3 OF THE IMPUGNED ORDER. 5. ON THE OTHER HAND, LD DR RELIED ON THE ORDER OF THE AO. 6. WE HAVE HEARD BOTH THE PARTIES ON THE LIMITED ISSUE RELATING TO IF THERE IS ANY CHANGE IN SHAREHOLDINGS PATTERN OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATION ALONG WITH THE APPLICABILITY OF THE PROVISIONS OF SECTION 79 OF THE ACT. WE HAVE ALSO PERUSED THE RELEVANT PARA FROM PAGE 3 OF THE IMPUGNED ORDER WHICH READS AS UNDER: THE ISSUE HAS BEEN EXAMINED. ON PERUSAL OF THE RECORDS, THE NOTICE ISSUED BY THE AO AND THE RESPONSE AS WELL AS THE SHARE CAPITAL ACCOUNT OF THE APPELLANT, I FIND THAT THERE IS MERIT IN THE SUBMISSION OF THE LD COUNSEL. CONSEQUENTLY, I HOLD THAT THERE IS NO SITUATION WARRANTING THE APPLICATION OF SECTION 79 OF THE ACT IN THIS YEAR. THEREFORE, THE APPELLANT IS ENTITLED TO BRING FORWARD THEIR U NABSORBED BUSINESS LOSS AND DEPRECIATION OF THE EARLIER YEARS AND ARE ENTITLED TO SET IT OFF AGAINST THE BUSINESS INCOME OF THE AY 1999 - 2000. THE BALANCE BUSINESS PROFITS, IF ANY, SHALL BE CONSIDERED AS THE INCOME OF THIS AY 1999 - 2000 AND SHALL BE SUBJECT TO TAX ACCORDINGLY. IN VIEW OF THE ABOVE, GROUND NO.1 TO 5 ARE TREATED AS ALLOWED IN FAVOUR OF THE ASSESSEE AND THE AO IS DIRECTED TO ALLOW SET OFF. 7. FROM THE ABOVE, IT IS EVIDENT THAT THE CIT (A) HAS GIVEN A CATEGORICAL FINDING THAT THERE IS NO CHANGE IN THE SHAREHOLDINGS PATTERN IN THE YEAR UNDER CONSIDERATION TILL 31.3.1999. REVENUE HAS NOT BROUGHT ANYTHING ON RECORD TO DEMONSTRATE THAT THE FACTS ARE DIFFERENT. T HEREFORE, THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY I NTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 4 CROSS APPEALS FOR THE AY 1998 - 1999 ITA NO.291/M/2006 (AY 1998 - 1999) (BY THE ASSESSEE) 8. THIS APPEAL FILED BY THE ASSESSEE ON 12.1.2006 IS AGAINST THE ORDER OF THE CIT (A) - VIII, MUMBAI DATED 21.11.2005 FOR THE ASSESSMENT YEAR 1998 - 1999. 9. BRIEFLY STATED ASSESSEE FILED THE RETURN OF INCOME DECLARING THE LOSS OF RS. 81,65,682/ - . ASSESSMENT WAS COMPLETED DETERMINING THE ASSESSED INCOME OF RS. 2,19,58,312/ - . IN THE ASSESSMENT AO MA DE VARI OUS ADDITIONS. AS A RESULT OF APPELLATE PROCEEDINGS BEFORE THE CIT (A), THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED. AGGRIEVED WITH THE SAME, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. IN THIS APPEAL, ASSESSEE RAISED VARIOUS GROUNDS (18 GROUNDS ) WHICH WERE SUBSEQUENTLY CONCISED AND THE CONCISE GROUNDS READ AS UNDER: 1. GROUND NOS. 1 TO 5 AND 16 & 17: THE CIT (A) HAS ERRED IN LAW AND ON FACTS AND ON FACTS IN HOLDING THAT THE AMOUNT OF RS. 2,74,52,224/ - IS CHARGEABLE TO TAX IN THE ASSESSMENT YEAR UNDER CONSIDERATION. 2. GROUND NOS. 6 TO 15: THE CIT (A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE VALIDITY OF THE NOTICE U/S 147 R.W.S 148 AND THE CONSEQUENTIAL REASSESSMENT PROCEEDINGS WHICH ARE, IN FACT, BAD IN LAW AND DESERVES TO BE QUASHED. 3. GROUND NO.18: IN THE ALTERNATIVE, ASSUMING, WITHOUT ADMITTING THAT THE AMOUNT OF ADVANCE IS CHARGEABLE TO TAX IN THE YEAR UNDER CONSIDERATION, THE CIT (A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE BRINGING TO TAX THE ENTIRE AMOUNT OF RS. 2,74,52,224/ - IN THIS YEAR WITHOUT REDUCING THE AMOUNT OF EXPENDITURE INCURRED DURING THE YEARS 1999 - 2000 AND 2000 - 2001 (AS STATED BY THE CIT (A) IN HIS ORDER FOR THE YEAR 2001 - 2002). 10. AT THE OUTSET, R EFERRING TO CONCISE GROUND NO.2 ABOVE, LD COUNSEL MENTIONED THA T THE REOPENING OF THE ASSESSMENT WAS DONE CONSEQUENT TO THE DIRECTION OF THE CIT (A) FOR THE ASSESSMENT YEAR 2001 - 2002. RELEVANT FINDING OF THE CIT (A)S DIRECTION IS GIVEN IN PARA 2 OF HIS ORDER DATED 21.11.2005 AND THE RELEVANT LINES FROM PARA 2 READ AS UNDER: 2..IT WAS RE - OPENED U/S 147 OF THE ACT BY ISSUE OF NOTICE U/S 148 OF THE ACT. THE RE - OPENING WAS ON THE BASIS OF DIRECTION OF CIT (A) GIVEN IN ASSESSMENT YEAR 2001 - 2002 VIDE APPELLATE ORDERDATED 19.11.2004. 5 11. REFERRING TO THE ABOVE, LD COUNSEL DEMONSTRATED THAT THE SAID DIRECTION OF THE CIT (A) CAME UP FOR SCRUTINY EVENTUALLY BY THE TRIBUNAL FOR THE ASSESSMENT YEAR 2001 - 2002 AND THE TRIBUNAL VIDE ITS APPEAL ITA NO. 9264/MUM/2005, DATED 1.9.2008 READ WITH RELATED MISCELLANEOUS APPLICATION (MA) NO.675/M/2008 (ARISING FROM ITA NO.9264/M/2004), DATED 6.8.2009, THE TRIBUNAL HELD, WITH REFERENCE TO GROUND NO.10 OF THAT APPEAL, THAT THE SAID DIRECTION IS UNSUSTAINABLE AND ALLOWED THE MA IN THIS REGARD. PARA 3 OF THE SAID MA IS RELEVANT HERE AND THE SAME READS AS UNDER: 3. WE HAVE HEARD BOTH THE PARTIES AND HAVE GONE THROUGH ALL THE ARGUMENTS PUT FORWARD BY THEM. WE HAVE ALSO PERUSED THE APEX COURTS JUDGMENTS CITED BEFORE US. ALTHOUGH, IT IS EVIDENT FROM THE OPENING PARA OF THE ORDER THAT THERE IS OBLIQUE REFERENCE TO PAR T OF THE GROUND 10, PER SE, THE SAID GROUND NO.10 IS NOT ADJUDICATED IN THE IMPUGNED ORDER, WHICH IS A MISTAKE APPARENT FROM RECORD. HOWEVER, CONSIDERING THE FACT THAT THE COUNSELS ARGUMENTS RESOLVE AROUND THE SETTING ASIDE DIRECTION CONTAINED IN PARAG RAPH 6 OF THE IMPUGNED ORDER TO CONSIDER THE ASSESSABILITY OF A SIMILAR AMOUNT IN THE AY 1998 - 99, WE HAVE PERUSED THE SAID ARGUMENTS IN THE LIGHT OF THE APEX COUNTS JUDGMENTS IN THE CASE OF T V SUNDARAM IYENGAR AND SONS LTD (SUPRA). ACCORDINGLY, WE FIND THAT RATIO DECIDENDI IN THE CASE OF T V S SUNDARAM IYENGAR AND SONS LTD (SUPRA) HAS NO APPLICATION FOR MAKING ADDITION ON ACCOUNT OF INCREMENTAL AMOUNTS, EITHER IN THE YEAR UNDER CONSIDERATION OR FOR THE AY 1998 - 99, AS THE NATURE OF THE AMOUNTS INVOLVED AR E ONE AND THE SAME. THUS, THE ABOVE REFERR3D DIRECTION CONTAINED IN PARA 6 OF THE ORDER INVOLVING THE ASSESSMENT YEAR 1998 - 99 IS A MISTAKE APPARENT FROM RECORDS AND THE SAME IS RECALLED. THEREFORE, OUR DIRECTION OF SETTING ASIDE TO THE FILE OF AO IS RECA LLED AND ALLOWED AS A MISTAKE APPARENT FROM RECORD AS THE APEX COURT JUDGMENT IS INCOMPLETELY APPLIED TO THE FACTS OF THE CASE. CONSEQUENTLY, THE PRAYER AS PER THE SL NO.1 ABOVE IS ALLOWED. 12. THUS, THE REASSESSMENT DATED 25.2.2005 MADE BY THE AO , BEING THE PRODUCT OF THE SAID UNSUSTAINABLE DIRECTION OF THE CIT (A) , HAS TO BE HELD UNSUSTAINABLE IN LAW. THE IMPUGNED ORDER OF THE CIT (A) IS REQUIRED T O BE ANALYZED IN THE BACKGROUND OF THE ABOVE UNSUSTAINABLE DIRECTION OF THE CIT (A). WHILE HOLDING THE DI RECTIO N AS UNSUSTAINABLE ONE, THE TRIBUNAL RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF ITO VS. MURLIDHAR BHAGAWAN DAS (52 ITR 335) (SC) . ACCORDINGLY, THE LEGAL ISSUE RAISED BY THE ASSESSEE IN CONCISE GROUND NO.2 (GROUND NOS. 6 - 15 OF THE REGULAR GROUNDS) IS ALLOWED IN FAVOUR OF THE ASSESSEE. 13. REFERRING TO THE GROUND NO.1 OF THE CONCISE GROUNDS RELATING TO MERITS OF ADDITION , IT IS THE SUBMISSION OF THE LD COUNSEL THAT DESPITE THE FINDINGS OF THE TRIBUNAL ON ABOVE GROUND NO.2 RELATING TO LEGAL ISSUE , THE GROUND NO.1 MAY ALSO BE ADJUDICATED CONSIDERING THE FINDING OF FACT BY THE TRIBUNAL FOR THE ASSESSMENT YE AR 2001 - 2002 . IN THIS REGARD, LD COUNSEL BROUGHT OUR ATTENTION TO PARA 6 OF THE ORDER OF THE TRIBUNAL DATED 1.9.2008 READ WITH PARAS 3 TO 5 OF THE MA ORDER DATED 6.8.2009, LD COUNSEL DEMONSTRATED THAT IN VIEW OF THE JUDGMENT OF THE HONBLE 6 SUPREME COURT IN THE CASE OF T V SUNDARAM IYENGAR AND SONS LTD (SUPRA), EVEN THE INCREMENTAL AMOUNTS, IF ANY, CANNOT BE ADDED EITHER IN T HIS YEAR UNDER CONSIDERATION OR FOR THE AY 1998 - 99. HE ALSO MENTIONED THAT THE TRIBUNAL ALREADY GRANTED RELIEF IN RESPECT OF THE ISSUE RAISED IN GROUND NO.1 TO 3 BY ITS DECISION GIVEN IN PARA 3 TO 5 OF THE MA ORDER ABOVE AND READ OUT THE SAME. 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE CITED ORDERS OF THE TRIBUNAL. ON PERUSAL OF THE TRIBUNALS ORDERS, WE FIND PARA 3 TO 5 OF THE MA ORDER DATED 6.8.2009 ARE RELEVANT FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAID PARAS ARE REPRODUCED HERE UNDER : 3. WE HAVE HEARD BOTH THE PARTIES AND HAVE GONE THROUGH ALL THE ARGUMENTS PUT FORWARD BY THEM. WE HAVE ALSO PERUSED THE APEX COURTS JUDGMENTS CITED BEFORE US. ALTHOUGH, IT IS EVIDENT FROM THE OPENING PARA OF THE ORDER THAT THERE IS OBLIQUE REFERENCE TO PART OF THE GROUND 10, PER SE, THE SAID GROUND 10 IS NOT ADJUDICATED IN THE IMPUGNED ORDER, WHICH IS A MISTAKE APPARENT FROM RECORD. HOWEVER, CONSIDERING THE FACT THAT THE COUNSELS ARGUMENTS REVOLVE AROUND THE SETTING ASIDE DIRECTION CONTAINED IN PAR AGRAPH 6 OF THE IMPUGNED ORDER TO CONSIDER THE ASSESSABILITY OF A SIMILAR AMOUNT IN THE AY 1998 - 99, WE HAVE PERUSED THE SAID ARGUMENTS IN THE LIGHT OF THE APEX COURTS JUDGMENTS IN THE CASE T V SUNDARAM IYENGAR AND SONS LTD (SUPRA). ACCORDINGLY, WE FIND TH AT RATIO DECIDENDI IN THE CASE OF T V S SUNDARAM IYENGAR AND SONS LTD (SUPRA) HAS NO APPLICATION FOR MAKING ADDITION ON ACCOUNT OF INCREMENTAL AMOUNTS, EITHER IN THE YEAR UNDER CONSIDERATION OR FOR THE AY 1998 - 99, AS THE NATURE OF THE AMOUNTS INVOLVED ARE ONE AND THE SAME. THUS, THE ABOVE REFERRED DIRECTION CONTAINED IN PARA 6 OF THE ORDER INVOLVING THE ASSESSMENT YEAR 1998 - 99 IS A MISTAKE APPARENT FROM RECORDS AND THE SAME IS RECALLED. THEREFORE, OUR DIRECTION OF SETTING ASIDE TOT HE FILE OF AO IS RECALLED AND ALLOWED AS A MISTAKE APPARENT FROM RECORDS AS THE APEX COURT JUDGMENT IS INCOMPLETELY APPLIED TO THE FACTS OF THE CASE. CONSEQUENTLY, THE PRAYER AS PER THE SL NO 1 ABOVE IS ALLOWED . 4. REGARDING THE MISTAKE RELATING TO FAILURE TO ADJUDICATE GROUND 1 0, SINCE THE EXCESS ADVANCE, IF ANY FOR THE AY 1998 - 99 ALSO IS NOT OF ANY INCOME NATURE IN VIEW OF THE INAPPLICABILITY OF THE JUDGMENT IN THE CASE OF T V SUNDARAM IYENGAR AND SONS LTD (SUPRA), ADJUDICATING THE GROUND 10 OF THE APPEAL IS AN ACADEMIC EXERCIS E. IN ANY CASE, IT IS A SETTLED ISSUE AT THE LEVEL OF THE SUPREME COURT VIDE THE JUDGMENTS IN THE CASES OF (I) MURLIDHAR BHAGWAN DAS (SUPRA); AND (II) RAGENDER NATH (SUPRA), THAT THE ASSESSEE SHOULD SUCCEED IN GROUND 10. UNDISPUTEDLY, THE FAILURE TO APPLY THE SUCH JUDGMENTS IS A RECTIFIABLE MISTAKE. ACCORDINGLY, PRAYER AT SL NO 1 ABOVE IS ALLOWED . 5. THE SECOND MISTAKE DETAILED AT SL NO 2 OF THE PRAYER ABOVE RELATES TO APPEARANCE OF FIGURE OF RS 2,27,224/ - IN PARA 6 OF THE ORDER. IT IS NOTICED THAT THE FIG URE OF RS 2,27,224/ - APPEARING IN THE ORDER IS A TYPOGRAPHICAL MISTAKE WHICH HAS TO BE RECALLED AS THE MISTAKE IS APPARENT FROM RECORDS AND THE CORRECT FIGURE IS OF RS 2,74,52,224/ - . ACCORDINGLY, THE MISTAKE IS RECTIFIED U/S 254(2) OF THE ACT. 15. CON SIDERING THE ABOVE DECISION ON MERITS IN VIEW OF THE BINDING JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF T V SUNDARAM IYENGAR AND SONS LTD (222 ITR 364) (SC), WE ARE OF THE OPINION THAT THE ASSESSEE IS ENTITLED TO RELIEF ON MERITS IN 7 RESPECT OF THE C ONCISE GROUND NO.1 OF THE APPEAL. ACCORDINGLY, CONCISE GROUND NO.1 IS ALLOWED . 16. CONSIDERING THE RELIEF GRANTED TO THE ASSESSEE WHILE ADJUDICATING THE CONCISE GROUND NO.1 OF THE INSTANT APPEAL, THE ADJUDICATION OF THE CONCISE GROUND NO.3 BECOMES ACADEMI C. ACCORDINGLY, CONCISE GROUND NO.3 IS DISMISSED AS ACADEMIC . 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.936/M/2008 (1998 - 1999) (BY REVENUE) 18. THIS APPEAL FILED BY THE REVENUE ON 8.2.2008 IS AGAINST THE ORDER OF THE CIT (A) VIII, MUMBAI DATED 28.11.2007 FOR THE ASSESSMENT YEAR 1998 - 1999. 19. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING SOLITARY GROUNDS WHICH READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED I CANCELLING THE PE NALTY ORDER U/S 271(1)(C) OF THE ACT IMPOSING PENALTY OF RS. 96,08,278/ - WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE AO. 20. THE ISSUE RAISED BY THE REVENUE IN THIS APPEAL RELATES TO PENALTY U/S 271(1)(C) OF THE ACT. SINCE, WHILE ADJUDICATING THE ASSESSEES APPEAL FOR THE AY 1998 - 1999 VIDE ITA NO.291/M/2006, IN THE ABOVE PARAGRAPHS OF THIS ORDER, WE HAVE GRANTED RELIEF WITH REGARD TO THE QUANTUM OF ADDITION OF RS. 2,74,52,224/ - , T HE REFORE, WE ARE OF THE OPINION THE PENALTY LEVIED U/S 271(1)(C) IS NOT SUSTAINABLE. CONSIDERING THE SAME, THE GROUND RAISED BY THE REVENUE IS DISMISSED . 21. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUN CED IN THE OPEN COURT ON 1 6 T H JULY, 2014. S D / - S D / - (SANJAY GARG) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 1 6 /07/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 8 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI