Assistant Commissioner of Income-tax, Ratnagiri Circle, Ratnagiri V. Sagar Sawali Beach Resorts, Ratnagiri

MA 108/PUN/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4225 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-05-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-03-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Tax effect
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER M.A. No.108/PUN/2021 (Arising out of ITA No.1246/PUN/2019 िनधाᭅरण वषᭅ / Assessment Year: 2009-10 ACIT, Ratnagiri Circle, Ratnagiri. Vs. Sagar Sawali Beach Resorts, A/p. Karde, Tal. Dapoli, Dist. Ratnagiri. PAN : ABNFS9923N Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This present Miscellaneous Application is filed by the Department seeking recall of the order passed by this Tribunal in ITA No.1246/PUN/2019 for the assessment year 2009-10 dated 24.06.2020. 2. The Revenue is seeking recall of the order of the Tribunal (supra) on the following grounds : (i) The issue in appeal is covered by one of the exceptions enumerated in the CBDT Circular No.17 of 2019 dated 08.08.2019 and, therefore, the appeal cannot be dismissed on low tax effect. Revenue by : Shri Piyush Kumar Singh Yadav Assessee by : Shri Pramod Shingte Date of hearing : 20.05.2022 Date of pronouncement : 23.05.2022 MA No.108/PUN/2021 2 (ii) The Tribunal had wrongly allowed the claim for deduction on account of interest paid to the partners though the Partnership Deed did not authorize any payment of interest to the partners. 3. On the other hand, ld. AR submitted that the present Miscellaneous Application filed by the Revenue is misconceived, as the appeal was not dismissed on low tax effect but dismissed on merits. It is further submitted that the disallowance of interest paid to the partners was not subject-matter of revision order passed by the Commissioner of Income Tax u/s 263 of the Income Tax Act, 1961 (‘the Act’) and, therefore, while passing the consequential order to 263 order, the Assessing Officer cannot travel beyond the scope of the order of revision and cannot make addition on new items. Thus, ld. AR submitted that the ld. CIT(A) as well as the Tribunal had rightly granted relief to the assessee, the order of Tribunal is amenable to rectification. 4. We heard the rival submissions and perused the material on record. The contention of the Revenue that the appeal was dismissed on low tax effect though appeal is covered one of the exceptions of the CBDT Circular (supra), is patently wrong as the appeal was dismissed on merits. 5. As regards to other contention that the Tribunal ought not to have granted relief in respect of addition of interest paid to the MA No.108/PUN/2021 3 partners in the absence of authorization of the Partnership Deed, we noticed that the impugned assessment order was passed consequent to the order of revision passed u/s 263 of the Act. We also gone through the order of revision passed u/s 263 placed at page no.25 to 33 of the Paper Book as well as show-cause notice issued u/s 263 placed at page no.17 to 18 of the Paper Book, which clearly indicates that the disallowance of interest paid to the partners is not a subject-matter of revision. Therefore, it would clearly demonstrate that the Assessing Officer travelled beyond the scope of order passed by the Commissioner of Income Tax u/s 263 while passing consequential order, which is not permissible in law. On appeal before the ld. CIT(A), the ld. CIT(A) had deleted the addition on account of payment of interest to the partners by holding that while passing the assessment order pursuant to the order of revision u/s 263, the Assessing Officer is not entitled to examine the items which is not part of the revision proceedings u/s 263 of the Act. The ld. CIT(A) also placed reliance on the decision of the Hon’ble Gujarat High Court in the case of CIT vs. D.N. Dosani, 280 ITR 275 (Guj.-HC). 6. On further appeal by the Revenue before the Tribunal, the Tribunal affirming the reasoning of the ld. CIT(A) dismissed the appeal filed by the Revenue. Thus, it is clear that there was no occasion to the Tribunal to go into the merits of addition on account MA No.108/PUN/2021 4 of payment of interest to the partners. Thus, it is clear from the above that the present Miscellaneous Application filed by the Department is premised on wrong assumption of facts. Therefore, the Miscellaneous Application filed by the Revenue stands dismissed. 7. In the result, the Miscellaneous Application filed by the Revenue stands dismissed. Order pronounced on this 23 rd day of May, 2022. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 23 rd May, 2022. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A)-2, Kolhapur. 4. The Pr. CIT-2, Kolhapur. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “SMC” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.