M/s. Maniar & Co., Ahmedabad V. The Jt. CIT, Range-11, Ahmedabad

MA 104/AHD/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4848 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 28-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Onus to prove

Judgement Text

MA NO. 103 - 104/AHD/2015 ARISING OUT OF I.T.A. NOS.3383/AHD/2010 AND 539/AHD/201 1 ASSESSMENT YEAR : 2007 - 08 AND 2008 - 09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND RAJPAL YADAV JM ] MA NO. 103 - 104 /AHD/2015 ARISING OUT OF I.T.A. NO S . 3383 / AHD/2010 AND 539/AHD/201 1 ASSESSMENT YEAR: 2007 - 08 AND 2008 - 09 MANIAR & CO .... ......... ... .. APPLICANT NEAR AJIT MILLS, GUJARAT BOTTLING ROAD RAKHIAL, AHMEDABAD 380021 [PAN: AABFM4919K] VS. JOINT COMMISSIONER OF INCOME TAX RANGE 11, AHMEDABAD . . RESPONDENT APPEARANCES BY: P F JAIN FOR THE APPLICANT PRASOON KABR A FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JULY 15 , 2016 DATE OF PRONOUNC ING THE ORDER : OCTOBER 13 , 2016 O R D E R PER PRAMOD KUMAR , AM : [1] BY WAY OF THESE APPLICATION S , THE ASSESSEE APPLICANT SEEKS RECTIFICATION OF A MISTAKE, APPARE NT ON RECORD, ALLEGED TO HAVE CREPT IN THE ORDER DATED 22 ND JULY 2012 PASSED BY THE TRIBUNAL. [2] THE MISTAKE IS SAID TO BE THIS. WHILE THE TRIBUNAL HAS CONFIRMED THE DISALLOWANCE OF COMMISSION FOR BOTH THE ASSESSMENT YEARS BEFORE US , ON THE GROUND THA T THERE WAS NO EVIDENCE OF SERVICES RENDERED - AS EVIDENT FROM THE OBSERVATIONS TO THE EFFECT THE LEARNED AO HAD ALLOWED THE COMMISSION TO VARIOUS PERSONS WHICH HAD BEEN FOUND GENUINE PAYMENT. LD CIT(A) ALSO UPHELD THE ADDITION ON THE GROUND THAT THE APPEL LANT HAD NOT GIVEN ANY EVIDENCE, OF SERVICES BEING RENDERED BY THEM. THE BURDEN OF PROOF LAY UPON THE ASSESSEE. THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A) . HOWEVER, ACCORDING TO THE APPLICANT, THE ISSUE MA NO. 103 - 104/AHD/2015 ARISING OUT OF I.T.A. NOS.3383/AHD/2010 AND 539/AHD/201 1 ASSESSMENT YEAR : 2007 - 08 AND 2008 - 09 PAGE 2 OF 3 BEFORE THE ITAT WAS DISALLOWANCE OF 20% COMMISSIO N UNDER SECTION 40A(2)(B) AND THERE WAS NO DISPUTE REGARDING RENDITION OF SERVICE AND RESPECTIVE GROUNDS HAVE NOT BEEN TAKEN ADJUDICATED RESULTING INTO APPARENT MISTAKE AS ENVISAGED UNDER SECTION 254(2) OF THE ACT . [3] WE HAVE HEARD THE RIVAL CONTENTIO NS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. [4] UNDOUBTEDLY, SO FAR AS THE ASSESSMENT PROCEEDINGS ARE CONCERNED, THE DISALLOWANCE WAS MADE UNDER SECTION 40A(2)(B) AND THE ISSUE R EGARDING RENDITION OF SERVICES DID NOT COME UP FOR CONSIDERATION AT THAT STAGE. HOWEVER, WHEN THE MATTER TRAVELLED TO THE CIT(A), FOR BOTH THESE ASSESSMENT YEARS, DISALLOWANCE WAS CONFIRMED ON THE GROUND THAT THERE WAS NO EVIDENCE FOR RENDITION OF SERVICES . THE QUESTION, THEREFORE, ARISES WHETHER, THE DISALLOWANCE HAVING BEEN CONFIRMED BY THE CIT(A) ON THE GROUND OF LACK OF EVIDENCE OF SERVICES HAVING BEEN RENDERED - EVEN THOUGH THE DISALLOWANCE WAS ORIGINALLY MADE UNDER SECTION 40A(2)(B), THE TRIBUNAL COMMI TTED AN ERROR APPARENT ON RECORD IN CONFIRMING THE DISALLOWANCE ON THE GROUND THAT THERE WAS NO EVIDENCE FOR RENDITION OF SERVICES. WE ARE UNABLE TO SEE ANY MERITS IN THE PLEA OF THE ASSESSEE. THE ORDER OF THE CIT(A) AND THE AO ARE REQUIRED TO BE SEEN IN C ONJUNCTION, IN VIEW OF THE MERGER THEORY, AND THE TRIBUNAL WAS INDEED REQUIRED TO VIEW THE ISSUE IN APPEAL AS SUCH. THE ADMISSIBILITY OF DEDUCTION UNDER SECTION 37(1), AS HAS BEEN ADJUDICATED BY THE CIT(A) AND THE ITAT, IS A BASIC ISSUE, AND UNLESS SOMETHI NG IS HELD TO ADMISSIBLE FOR DEDUCTION UNDER SECTION 37(1), THE DISABLING PROVISIONS UNDER SECTION 40A DONOT COME INTO PLAY AT ALL. A VIEW IS THUS INDEED POSSIBLE THAT THE DISABLING PROVISIONS OF SECTION 40A, ON THE GIVEN FACTS, WERE PURELY ACADEMIC IN APP LICAT I ON. VIEWED THUS, THERE IS NO MISTAKE APPARENT ON RECORD, AN EXPRESSION MUST REMAIN CONFINED TO COVER ONLY SUCH CASES ON WHICH NO TWO VIEWS ARE POSSIBLE - AS IS THE LAW SETTLED IN THE CASE OF ITO VS VOLKART BROS [(1971) 82 ITR 50 (SC)] , IN THE APPROACH OF THE TRIBUNAL. THAT APART, EVEN IN A SITUATION IN WHICH AN ASPECT OF THE DEDUCTIBILITY HAS BEEN TAKEN UP BY THE TRIBUNAL ITSELF - EVEN WHEN THE SAID ASPECT HAS NOT BEEN TAKEN UP AT THE ASSESSMENT STAGE, A SPECIAL BENCH OF THE TRIBUNAL, IN THE CASE OF TA TA COMMUNICATIONS LTD VS JCIT [(2009) 121 ITD SB 384 (MUM)], HAS DECLINED TO HOLD THAT THERE IS ANY MISTAKE APPARENT ON RECORD IN THE APPROACH SO ADOPTED BY THE TRIBUNAL. IT WAS HELD BY THE TRIBUNAL THAT, ASSESSEE S CONTENTION THAT IT WAS NOT REQUIRED TO SATISFY THE CONDITION REGARDING RENDERING 'ELIGIBLE TELECOMMUNICATION SERVICES' BECAUSE NO SUCH OBJECTION WAS RAISED BY THE DEPARTMENTAL REPRESENTATIVE, AND AS IT WAS NOT RAISED BY THE AO IN THE ASSESSMENT ORDER, IS DEVOID OF ANY MERIT. ONCE A LEGAL CLAIM WAS BEFORE THE TRIBUNAL, IT WAS DUTY BOUND TO CONSIDER AND EXAMINE THAT ALL THE CONDITIONS ARE SATISFIED BEFORE RELIEF IS ALLOWED. THIS IS PRECISELY WHAT THE TRIBUNAL HAS DONE AND ASSESSEE IS NOT JUSTIFIED IN CONTENDING THAT QUESTION OF BASIC OR CELLULAR SERVICES COULD NOT HAVE BEEN EXAMINED BY THE TRIBUNAL. WHEN SUCH ARE THE VIEWS OF THE SPECIAL BENCH, WHICH BIND THIS DIVISION BENCH, WE ARE UNABLE TO SEE ANY LEGALLY SUSTAINABLE MERITS IN THE PLEA OF THE ASSESSEE. IF THE ASSESSEE IS AGGRIEVED OF THE ORDE R OF THE TRIBUNAL, AS HE IS, THE REMEDY LIES ELSEWHERE. WE MUST, HOWEVER, DISMISS THESE RECTIFICATION PETITIONS AS DEVOID OF ANY MERITS SUSTAINABLE IN LAW. MA NO. 103 - 104/AHD/2015 ARISING OUT OF I.T.A. NOS.3383/AHD/2010 AND 539/AHD/201 1 ASSESSMENT YEAR : 2007 - 08 AND 2008 - 09 PAGE 3 OF 3 [5] THE RECTIFICATION APPLICATIONS ARE DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON 13 TH DA Y OF OCTOBER, 2016 S D/ - S D/ - RAJPAL YADAV PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 13 TH DAY OF OCTOBER , 2016. COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT( A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD