A.M. TPDD COMPANY INDIA P. LTD ( FORMERLY INDOMINT AGRIPRODUCTS P. LTD, V. ITO 1(2)(1),

MA 110/MUM/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 5011 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-08-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 18-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VP & SHRI R.K. PANDA, AM M.A. NO. 110/MUM/2010 ARSING OUT OF I.T.A. NO. 5461/MUM/2005 (ASSESSMENT YEAR 2001-02) M/S. AM TODD CO. INDIA PVT. LTD. (FORMERLY INDOMINT AGRI- PRODUCTS PVT. LTD.) 20, RAJMAHAL, 84 VEER NARIMAN ROAD, CHURCHGATE, MUMBAI-20 PAN: AAACI4884P VS. INCOME TAX OFFICER 1(2)(1) MUMBAI APPELLANT RESPONDENT APPELLANT BY: MR. RAJAN R. VORA RESPONDENT BY: MR. S.M. KESHKAMAT O R D E R DATE OF HEARING: 18.06.2010 DATE OF ORDER: 20.08.2010 PER R.K. PANDA, AM: THE ASSESSEE THROUGH THIS MISCELLANEOUS APPLICATION (MA) REQUESTS THE TRIBUNAL TO RECALL/MODIFY GROUND NO. 2 OF THE ORDER OF THE TRIBUNAL SINCE THERE IS A MISTAKE APPARENT IN THE O RDER OF THE TRIBUNAL. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IN ITS RETURN OF INCOME FILED, HAS CLAIMED THE EXCH ANGE LOSS ON THE FOLLOWING ACCOUNTS: SL. NO. PARTICULARS AMOUNT (RS.) 1. EXCHANGE LOSS ON ADVANCE RECEIVED AGAINST SALES RECORDED IN A.Y. 2001-02 11,989,479 2. EXCHANGE LOSS ON ACCOUNT OF AMOUNT OUTSTANDING AGAINST IMPORTS MADE IN A.Y. 2001-02. 4,324,030 3. EXCHANGE LOSS ON AMOUNT RECEIVABLE FOR R&D SERVICES 16,434 4. EXCHANGE GAIN ON EXPENSES RECOVERABLE (1,167) TOTAL 16,328,776 M.A. NO. 110/MUM/2010 M/S. AM TODD CO. INDIA PVT. LTD. ==================== 2 3. HE SUBMITTED THAT THE TRIBUNAL DISMISSED THE GROUND RAISED BY THE ASSESSEE ON THE GROUND THAT SUCH EXCHANGE FLUCTUATI ON LOSS HAS NOT CRYSTALLISED DURING THE YEAR. FURTHER THE TRIBUNAL DISMISSED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE TRANSACTIONS IN RESPECT OF WHICH THE EXCHANGE FLUCTUATION LOSS HAS BEEN CLAIMED ARE BETW EEN THE ASSESSEE COMPANY AND THE HOLDING COMPANY AND THERE WAS NO OB LIGATION FOR THE HOLDING COMPANY TO PAY ADVANCE TO THE ASSESSEE COMP ANY. THE HOLDING COMPANY HAS PARKED SOME MONEY WITH THE ASSESSEE WHI CH HAS BEEN DESCRIBED AS ADVANCE BY THE ASSESSEE COMPANY. THER E IS NO LIABILITY OF THE ASSESSEE TO PAY TO THE HOLDING COMPANY ON ACCOUNT O F ANY TRANSACTION BY WAY OF SALE OR IMPORT OR BY WAY OF ANY LOAN IN RESP ECT OF WHICH THE ASSESSEE COMPANY HAS KEPT THE MONEY AS ADVANCE WITH ITS SUBSIDIARY. 3.1 REFERRING TO VARIOUS PAGES OF THE PAPER BOOK, H E SUBMITTED THAT ALL DETAILS WERE AVAILABLE AT PAGE 175 OF THE PAPER BOO K TO SUBSTANTIATE THAT ADVANCES ARE TRADE ADVANCES. REFERRING TO PAGES 17 5 TO 177 OF THE PAPER BOOK, HE SUBMITTED THAT THE DETAILS OF SALES/RECEIP TS FROM AM TODD (USA) WERE FURNISHED GIVING DETAILS OF THE TOTAL EXCHANGE LOSS OF RS.1,63,28,771. REFERRING TO PAGE 178 OF THE PAPER BOOK, HE SUBMITT ED THAT THE DETAILS OF LOSS ON EXCHANGE RATE DIFFERENCE AS ON 31 ST MARCH, 2001 WAS FILED GIVING THE BREAK UP OF EXCHANGE LOSS ON ADVANCE RECEIVED A GAINST EXPORTS AMOUNTING TO RS.1,19,89,479. SIMILARLY, EXCHANGE L OSS ON ACCOUNT OF IMPORTS AT RS.43,30,954 WAS ALSO GIVEN. REFERRING TO PAGES 130 AND 131 OF THE PAPER BOOK, HE SUBMITTED THAT THE CERTIFICAT ES OF FOREIGN INWARD REMITTANCES WERE FURNISHED IN THE PAPER BOOK. REFE RRING TO PAGES 145 TO 155 OF THE PAPER BOOK, HE SUBMITTED THAT THE PURCHA SE ORDERS SHOWING THE TERMS OF PAYMENTS AS IN ADVANCE WERE ALSO FIL ED BEFORE THE BENCH. HE SUBMITTED THAT THE EXCHANGE LOSS WAS ABSOLUTELY IN DIRECT CONNECTION WITH THE REGULAR ACTIVITY OF THE ASSESSEE. AS FAR AS THE EXCHANGE LOSS ON ACCOUNT OF R&D EXPENSES, THE LOSS IS VERY MINIMAL W HICH IS ONLY RS.16,434. M.A. NO. 110/MUM/2010 M/S. AM TODD CO. INDIA PVT. LTD. ==================== 3 3.2 REFERRING TO PARA 12 OF THE ITAT ORDER, HE SUBM ITTED THAT THE FINDING GIVEN BY THE TRIBUNAL IS TOTALLY INCORRECT AND BASED ON WRONG APPRECIATION OF FACTS. HE SUBMITTED THAT BECAUSE O F THE INCORRECT STATEMENT GIVEN BY THE ASSESSING OFFICER ALL FACTUA L ERRORS CREPT UP. THE TRIBUNAL WITHOUT GOING THROUGH THE VARIOUS PAPERS F ILED IN THE PAPER BOOK MERELY FOLLOWED THE ORDERS OF THE LOWER AUTHORITIES . 3.3 EVEN ON MERIT ALSO, HE SUBMITTED THAT THE DECIS ION OF HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF ONGC WHICH W AS RELIED ON BY THE LOWER AUTHORITIES AND THE TRIBUNAL HAS NOW BEEN REV ERSED BY THE HONBLE SUPREME COURT AS REPORTED IN 312 ITR 254. THEREFOR E, IN VIEW OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. THANE ELECTRICITY SUPPLY LTD., REPORTED IN 206 ITR 727, H E SUBMITTED THAT IF THE DECISION OF THE TRIBUNAL IS NOT IN CONFORMITY WITH THE SUBSEQUENT DECISION OF THE HONBLE SUPREME COURT THEN THERE IS A MISTAK E APPARENT IN THE ORDER OF THE TRIBUNAL WHICH NEEDS RECTIFICATION U/S . 254 OF THE ACT. 4. THE LEARNED DR, ON THE OTHER HAND, WHILE SUPPORTING THE ORDER OF THE TRIBUNAL SUBMITTED THAT THE TRIBUNAL HAS CONSID ERED EVERY ASPECT AND HAS PASSED A DETAILED ORDER WHICH DOES NOT SUFFER F ROM ANY INFIRMITY. THEREFORE, THERE BEING NO MISTAKE APPARENT FROM THE ORDER OF THE TRIBUNAL, THE MA FILED BY THE ASSESSEE SHOULD BE DI SMISSED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE IN HIS REJOIND ER SUBMITTED THAT THE TRIBUNAL HAS ONLY REPRODUCED THE ASSESSING OFFICERS ORDER. THE DISALLOWANCE COULD HAVE BEEN MADE ONLY FOR THE EXCH ANGE LOSS ON ACCOUNT OF R&D AGREEMENT BUT FOR OTHER EXCHANGE LOSS THE TR IBUNAL SHOULD NOT HAVE DECIDED AGAINST THE ASSESSEE IGNORING THE MATE RIAL PRODUCED IN THE PAPER BOOK. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BO TH THE SIDES. WE FIND THE VARIOUS DETAILS FURNISHED BY THE ASSESS EE IN THE PAPER BOOK HAVE NOT BEEN CONSIDERED BY THE TRIBUNAL. FURTHER THE DECISION OF THE HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF ONGC WHICH HAS BEEN M.A. NO. 110/MUM/2010 M/S. AM TODD CO. INDIA PVT. LTD. ==================== 4 RELIED ON BY THE TRIBUNAL WHILE REJECTING THE GROUN D OF THE ASSESSEE HAS SUBSEQUENTLY BEEN REVERSED BY THE HONBLE SUPREME C OURT AS REPORTED IN 312 ITR 254. WE, THEREFORE, FIND MERIT IN THE SUBM ISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT A MISTAKE HAS CREPT I N THE ORDER OF THE TRIBUNAL INSOFAR AS THE FACTUAL ASPECTS HAVE NOT BE EN PROPERLY APPRECIATED BY THE TRIBUNAL ON THE BASIS OF THE VARIOUS DOCUMEN TS FILED IN THE PAPER BOOK FOR WHICH IT REQUIRES MODIFICATION. WE, THERE FORE, DEEM IT PROPER TO RECALL GROUNDS OF APPEAL NO. 2 OF THE TRIBUNALS OR DER IN I.T.A. NO. 5461/MUM/2005 FOR FRESH ADJUDICATION. THE REGISTRY IS DIRECTED TO ISSUE NOTICE OF HEARING IN DUE COURSE. 7. IN THE RESULT, THE MA FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH AUGUST, 2010. SD/- (D. MANMOHAN) VICE PRESIDENT SD/- (R.K. PANDA) ACCOUNTANT MEMBER MUMBAI, DATED 20 TH AUGUST, 2010 COPY TO: (1) THE APPELLANT, (2) THE RESPONDENT, (3) THE CIT(A)-I, MUMBAI, (4) THE CIT-I, MUMBAI, (5) THE DR, B BENCH, ITAT, MUMBAI. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI TPRAO