Deputy Commissioner of Income-tax, Circle - 1(1), Pune V. BMC Software India Pvt.Ltd,(as Successor Of KineticGlue Online Communities Pvt.Ltd), Pune

MA 113/PUN/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3266 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-08-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-07-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 23-02-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Rectification of order; Question of law
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER M.A. No. 113/PUN/2021 (Arising out of ITA No. 1722/PUN/2017) Assessment Year : 2014-15 The Dy. C.I.T. Cir. 1(1) Pune. Applicant V/s. M/s. BMC Software India Pvt. Ltd. (as a successor of BMC Software India Pvt. Ltd. Tower B, 9 th floor, Business Bay Wing Airport Road, Yerawada, Pune-411 006 PAN; AABCB 6110oE Respondent Applicant by : Shri Piyush Kumar Singh Yadav Respondent by : Shri Farrokh V. Irani Date of Hearing : 15-07-2022 Date of Pronouncement : 08-08-2022 ORDER PER PARTHA SARATHI CHAUDHURY, JM: This Miscellaneous Application has been preferred by the Revenue u/s. 254(2) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟) with a prayer to recall the order of Tribunal in ITA No. 1722/PUN/2017 for the assessment year 2014-15 dated 12-3-2020 2. Primarily, the Revenue is contending that there is an error in the judgment of the Tribunal since it had placed reliance on the judgment of the Hon‟ble Supreme Court in the case of C.I.T. Vs. V.S. Dempo Co. Ltd. (2016) 74 taxmannn.com 15 (SC) as per para 2.3 of Misc. application. In this regard, we find that para 8 and 9 of the Tribunal‟s order is relevant which are extracted as follows: “8. That leaves ground 1 for adjudication before the Tribunal. In this regard, ld. Counsel submitted that the said ground relates to the applicable rate of taxation to Long Term Capital Asset which is business asset, where depreciation is claimed. Ld. Counsel submitted that so long as the asset involved is held by the assessee for more than 3 years, that is Long Term Capital Asset and in that case, the applicable rate of taxation is 20% and not 30% as applied by the AO. In this regard, ld. Counsel brought our attention to the decision of Tribunal in the case of M/s. Velvet Holdings Pvt. Ltd. Vs. ACIT in ITA No.6810/Mum/2008, for A.Y. 2004- 2 MA No.113 of 2021 BMC Software India Ltd. A.Y. 2014-15 05, order dated 26.06.2014 (Page 9 of the Paper Book), which is relevant in this regard. The fact that the said decision was taken by the Tribunal in the light of another decision in the case of M/s. Smita Conductors Ltd. Vs. DCIT in ITA No.4004/Mum/2011, for A.Y. 2006-07, order dated 17.09.2013 and para 4 of the said decision is relevant (page 10 of Paper Book). The relevant lines were read out in the Court. Mentioning that the said decision is approved by the Hon‟ble jurisdictional High Court, ld. Counsel brought our attention to page 12 of Paper Book and demonstrated that the way the Revenue‟s appeal was dismissed by the Hon‟ble High Court in Income Tax Appeal No.165 of 2015 in the case of M/s. Velvet Holdings Pvt. Ltd. vide order dated 10.07.2017. The relevant para 1 of the said judgment of Hon‟ble High Court is extracted as under:- “1. Heard the learned counsel for the appellant and the learned counsel for the respondent. It is fairly conceded that the Tribunal has relied upon the judgment of this court in case of CIT vs. ACE Builders Pvt. Ltd. reported in [2006] 281 ITR 210. The said judgment has been approved by the Apex Court in the case of CIT, Panji vs. V.S. Dempo Company Ltd. reported in [2016] 74 Taxmann.com 15 (SC). As the issue raised in the present appeal is already covered by the above referred judgment, no substantial question of law arises.” 9. After hearing both the sides on this legal issue, we find that the issue raised in the present ground has already been settled by the Hon‟ble Supreme Court (supra) in favour of assessee. In view of the settled position of the law, this ground stands allowed. Thus, ground no.1 raised by assessee is allowed”. 3. We find that in the aforesaid decision of the Tribunal, reliance was placed on the decision of the Co-ordinate Bench, Mumbai in the case of M/s. Velvet Holdings Pvt. Ltd. Vs. ACIT in ITA No. 6810/Mum/2008 for A.Y. 2004-05, order dated 26-06-2014 which was taken by the Tribunal in the light of another decision in the case of M/s. Smita Conductors Ltd. Vs. DCIT in ITA No. 4004/MUM/2011, for A.Y. 2006-07, order dated 17-09-2013. This decision was also approved by the Jurisdictional High court in Income-tax Appeal No. 165 of 2015 in the case of M/s. Velvet Holdings Pvt. Ltd. vide order dated 10-07-2017. Thereafter, Hon‟ble High court, the relevant para of which was extracted by the Tribunal and the Hon‟ble High Court has in fact referred to the said judgment of Supreme Court in the case of V.S. Dempo Co. Ltd. (supra). Now what the revenue through this Misc. application is contending that the reliance placed by the Tribunal on the decision of the Hon‟ble Jurisdictional High Court is mis- placed and in turn, reliance placed by the Hon‟ble jurisdictional High Court in the case of Hon‟ble Supreme Court in the case of V.S. Dempo Co. (supra) is also accordingly misplaced and therefore, has filed this Misc. application before 3 MA No.113 of 2021 BMC Software India Ltd. A.Y. 2014-15 this Tribunal. In our considered view, such kind of Misc. application has to be dismissed outright. However, for the sake of judicial discipline, we hold that as per the examination of the aforesaid facts and circumstances that there is no mistake apparent from record in the order of the Tribunal. It had relied on the decision of the Hon‟ble Jurisdictional High court and in the said decision of the Hon‟ble Jurisdictional High Court, Their Lordships in their wisdom has referred the decision of the Hon‟ble Supreme Court in the case of Dempo Company Ltd (supra). 4. There are series of decisions by the Hon'ble Supreme Court as well as Hon'ble High Court expounding scope of exercising powers under section 254(2) of the Act. We do not deem it necessary to recite and recapitulate all of them, but suffice to say that core of all these authoritative pronouncements is that power for rectification under section 254(2) of the Act can be exercised only when mistake, which is sought to be rectified, is an obvious and patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions. For fortifying this view, we make reference to the decision of the Hon'ble jurisdictional High Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ld., 262 ITR 146 which has been upheld by the Hon'ble Supreme Court reported in 305 ITR 227. 5. The Hon'ble Jurisdictional High Court in the case of CIT Vs. Ramesh Electric & Trading Company reported as 203 ITR 497 has held that the scope of section 254(2) is limited to rectification of mistake apparent from record itself and not rectification in error of judgment. The relevant observations of the Hon'ble High Court are as under: “The Tribunal cannot, in exercise of its power of rectification, look into some other circumstances which would support or not support its conclusion so arrived at. 4 MA No.113 of 2021 BMC Software India Ltd. A.Y. 2014-15 The mistake which the Tribunal is entitled to correct is not an error of judgment but a mistake which is apparent from the record itself.” 6. In view of the above and as per the Miscellaneous Application filed before us, we do not find any mistake, much less any apparent mistake that warrants rectification in the order of Tribunal dated 12-03-2020. Accordingly, Miscellaneous Application filed by Revenue is dismissed being devoid of any merit. 7. In the result, the Miscellaneous Application filed by Revenue is dismissed. Order pronounced on 08 th August 2022 Sd/- sd/- INTURI RAMA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER Pune; Dated : 08 th day of August 2022 Ankam Copy of the Order forwarded to 1. The Appellant. 2. The Respondent. 3. The CIT(Appeals)-1, Pune. 4. The Pr. CIT-1, Pune. 5. DR, ITAT, “A” Bench, Pune. 6. Guard File. BY ORDER, /// TRUE COPY /// Senior Private Secretary ITAT, Pune. 5 MA No.113 of 2021 BMC Software India Ltd. A.Y. 2014-15 Date 1 Draft dictated on 15-07-2022 Sr.PS/PS 2 Draft placed before author 22-07-2022 Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on 08-08-2022 Sr.PS/PS 7 Date of uploading of order 08-08-2022 Sr.PS/PS 8 File sent to Bench Clerk 10-08-2022 Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order