ITO 11(3)(3), MUMBAI V. VIJAY SYNTHETIC PRINTS PVT. LTD., MUMBAI

MA 107/MUM/2016

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 5466 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-09-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 11-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PAWAN KU MAR BEERLA
• Keywords: Rectification of order; Tax effect
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH F, MU MBAI BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER M.A. NO. 107/MUM/2016 (ARISING OUT OF ITA NO.8373/M UM/2011) ASSESSMENT YEAR: 2006-07 ITO 11(3)(3), ROOM NO. 429, 4 TH FLOOR, AAYAKAR BHAWAN, M.K. ROAD, MUMBAI-400020 VS. M/S VIJAY SYNTHETIC PRINTS PVT. LTD. 109, 1 ST FLOOR, MEHRA INDUSTRIAL COMPOUND, SAKI NAKA, ANDHERI KURLA ROAD, ANDHERI (EAST) MUMBAI-400072. PAN: AAACV0178K (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHEKHAR GUPTA (DR) ASSESSEE BY : SHRI PAWAN KUMAR BEERLA (AR) DATE OF HEARING : 26.08.2016 DATE OF PRONOUNCEMENT : 20.09.2016 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT MISCELLANEOUS APPLICATIONS (MA) IS FILE D BY THE REVENUE FOR RECTIFICATION OF ORDER DATED 01.12.2015. 2. IN THE APPLICATION, THE APPLICANT/REVENUE IN NUTSHE LL PLEADED THAT THE ORDER WAS PASSED BY THE BENCH HOLDING THAT TAX EFFECT INVOLVED IN THE A PPEAL IS BELOW RS. 4,00,000/-, RELYING UPON THE CIRCULAR / INSTRUCTION NO. 05/14 OF CBDT D ATED 10.07.2014. IN THE APPLICATION, THE APPLICANT/REVENUE FURTHER PLEADED THAT THE TAX EFFECT IN THE PRESENT APPEAL IS IN FACT RS. 27,05,113/. THE TOTAL DISALLOWANCE IN THE PRESE NT APPEAL WERE CONSISTING OF RS. 81,18,626/- ON ACCOUNT OF BAD DEBT, RS. 3,52,200/- ON ACCOUNT OF OTHER BAD DEBT AND RS. 2,83,284/- ON ACCOUNT OF BROKERAGE, THE TOTAL OF RS . 87,54,410/-. IT IS PRAYED IN THE APPLICATION THAT ORDER DATED 01.12.2015 MAY BE RECA LLED/SET-ASIDE AND THE APPEAL OF REVENUE BE RESTORED. 3. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE ( DR) FOR REVENUE AND LD AUTHORISED REPRESENTATIVE (AR) FOR ASSESSEE AND PERUSED THE CO NTENTS OF THE ORDER AND THE ORDER OF AUTHORITIES BELOW. THE ATTENTION OF LD. DR FOR REV ENUE WAS INVITED TO PARAGRAPH NO.3 OF THE ORDER OF THIS TRIBUNAL, WHEREIN IT IS SPECIFICA LLY REFERRED THAT DR HAS ADMITTED THE TAX EFFECT INVOLVED IN THE APPEAL WAS LESS THAN RS. 4,0 0,000/-. LD. DR FOR REVENUE FAIRLY CONCEDED THAT DUE OVERSIGHT AND INADVERTENT MISTAK E, THE TAX EFFECT WAS ADMITTED LESS THAN 2 MA NO. 107/M/2016 M/S VIJAY SYNTHETIC PRINTS PVT. LTD. RS. 4,00,000/-. LD DR FOR REVENUE ARGUED THAT THE A PPEAL FILED BEFORE THE TRIBUNAL IS WITH REGARD TO THE DISALLOWANCES CONSISTING OF RS. 81,18 ,626/- ON ACCOUNT OF BAD DEBT, RS. 3,52,200/- ON ACCOUNT OF OTHER BAD DEBT AND RS. 2,8 3,284/- ON ACCOUNT OF BROKERAGE, THE TOTAL OF RS. 87,54,410/- . LD DR FURTHER ARGUED THA T THE TOTAL NOTIONAL TAX LIABILITY IS MORE THAN THE RS. 25 LACS. AR OF ASSESSEE SUPPORTED T HE ORDER OF THE TRIBUNAL AND ARGUED THAT THE ORDER PASSED BY THE TRIBUNAL DOES NOT SUFFER AN Y INFIRMITY AND NOT REQUIRED ANY FURTHER INTERFERENCE. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND FURTHER PERUSED THE ASSESSMENT ORDER. IN FACT IN THE ASSESSMENT ORDER, THE AO MADE THE DISALLOWANCE OF WRITE OFF OF BAD DEBT OF RS. 81,18,626/- OF M/S DHARAMPAL BROTHERS P . LTD. AND RS. 3,52,200/- OF K.S. INTERNATIONAL AND FURTHER DISALLOWED A BROKERAGE OF RS. 2,83,284/- PAID TO M/S CHIRAG INVESTMENT AND RS. 1,25,000/- TO SHRI AJIT MEHTA. T HE FAA WHILE HEARING THE APPEAL OF THE ASSESSEE HOLD THAT THE DISALLOWANCE OF BAD DEBT WRITTEN OF AMOUNTING TO RS. 81,18,626/- WERE ADVANCE GIVEN TO THE SISTER CONCE RN M/S DHARAMPAL BROTHERS P.LTD AND DIRECTED THE AO TO ALLOW BUSINESS LOSS U/S 28 R.W.S 37. AND IN RESPECT OF RS. 3,52,000/- RELATING TO M/S K.S. INTERNATIONAL IT WAS HELD THA T ASSESSEE SOLD FABRIC TO THEM AND THEREFORE THE CONDITION U/S 36(1)(VII) ARE SATISFIE D AND DIRECTED THE AO TO ALLOW WRITE OFF THE BED DEBT. LD. CIT(A) FURTHER DELETED THE DISAL LOWANCE OF COMMISSION OF RS. 2,83,224/- PAID TO SHRI CHIRAJ INVESTMENT. ALL THRE E DELETION OF DISALLOWANCE WAS THE SUBJECT MATTER OF APPEAL BEFORE THE TRIBUNAL. THE T OTAL DISALLOWANCE UNDER CONSIDERATION WAS RS. 87,54,410/-. THE TAX EFFECT HAS BEEN DEFI NED IN THE BOARD CIRCULAR NO. 5/20014(SUPRA) TO INCLUDE THE REDUCTION IN THE RETU RNED LOSS IN ASSESSMENT, WHICH IS IN THE PRESENT CASE IS AT RS.81.18 LACS. THE SAME (REDUCTI ON) BEING DISPUTED, THE TAX EFFECT EFFECT ON THE DISPUTED DISALLOWANCE IS MORE THAN RS. 25.00 LACS. CONSIDERING THE FACT AND THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL, THE ORDER DA TED 01.12.2015 IS RECALLED. THE PRESENT M.A. IS DISPOSED OF BY RECALLING THE ORDER DATED 01 .12.2015. SINCE THE ORDER IS RECALLED. 5. IN THE RESULT, M.A FILED BY THE REVENUE IS ALLOWED. THE REGISTRY IS DIRECTED TO FIX THE MATTER FOR REGULAR HEARING IN ITS DUE COURSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH SEPTEMBER, 2016. SD/- SD/- ( SANJAY ARORA ) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 20/09/2016 S.K.PS 3 MA NO. 107/M/2016 M/S VIJAY SYNTHETIC PRINTS PVT. LTD. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. $ //TRUE COPY/