AGILITY LOGISTICS P.LTD, MUMBAI V. ACIT RANGE-9(1)(1), MUMBAI

MA 117/MUM/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8311 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-08-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: K
• Assessment Year: 2014-2015
• Appeal Filed On: 11-05-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 143(3); 54

Judgement Text

M.A. 117/MUM/2021 A.Y. 2014 - 15 (ARISING OUT OF ITA NO.6679/MUM/2018) AGILITY LOGISTICS PVT. LTD. VS. THE ACIT, RANGE 9(1)(1) 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH K MUMBAI BEFORE SHRI S.RIFAUR RAHMAN (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) M.A NO.117/MUM/2021 (ARISING OUT OF ITA NO. 6679/MUM/2018) (ASSESSMENT YEAR: 2014 - 15) AGILITY LOGISTICS PVT. LTD. POLARIS, A - 501/502, 5 TH FLOOR, OFF MAROL MAROSHI ROAD, MAROL, ANDHERI (EAST), MUMBAI 400 067 VS. THE ACIT, RANGE 9(1)(1) ROOM NO. 203, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400020 PAN NO. AAACL3717A ( ASSESSEE ) ( REVNEUE ) ASSESSEE BY : SHRI KETAN VED , A.R REVENUE BY : SHRI SUSHIL KUMAR MISHRA , D.R DATE OF HEARING : 30 /07 /2021 DATE OF PRONOUNCEMENT : 09 /0 8 /2021 ORDER PER RAVISH SOOD, J.M: THE PRESENT MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE ARISES FROM THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF ITS APPEAL, VIZ. AGILITY LOGISTICS PVT. LTD. VS. ACIT, RANGE 9(1), DATED 11.02.2021. AS IS DISCERNIBLE FROM THE APPLICATION, IT IS THE CLAIM OF THE ASSESSEE APPLICANT THAT AS THE ORDER PASSED BY THE TRIBUNAL SUFFERS FROM A MISTAKE WHICH IS APPARENT FROM RECORD, THEREFORE, THE SAME THEREIN RENDERS IT AMENABLE FOR RECTIFICATION UNDER SUB - SECTION (2) OF SEC. 254 OF THE ACT. M.A. 117/MUM/2021 A.Y. 2014 - 15 (ARISING OUT OF ITA NO.6679/MUM/2018) AGILITY LOGISTICS PVT. LTD. VS. THE ACIT, RANGE 9(1)(1) 2 2. ADVERTING TO THE IMPUGNED MISTAKE IN THE ORDER , IT IS STATED BY THE ASSESSEE APPLICANT THAT IT HAD VIDE G ROUND OF APPEAL NO. 3 ASSAILED BEFORE THE TRIBUNAL DISALLOWANCE OF ITS CLAIM FOR DEDUCTION U/S 3 6(1)(III) OF THE ACT THAT WAS SUSTAINED BY THE CIT(A) . REFERRING TO THE FACTS LEADING TO THE CONTROVERSY IN HAND, IT IS STATED BY THE ASSESSEE THAT THE A.O HOLDING A CONVICTION THAT THE ASSESSEE HA D DIVERTED/UTILIZED P ART OF ITS INTEREST BEARING FUNDS FOR GIVING ADVANCES FOR ACQUIRING CERTAIN IMMOVABLE PROPE RTIES , THEREFORE, VIDE HIS ORDER PASSED U/S 143(3) R.W.S 144C(13), DATED 28.09.2018 HAD DISALLOWED PART OF ITS CLAIM FOR DEDUCTION OF INTEREST EXPENDITURE OF RS.3,49,61,254/ - (OUT OF THE TOTAL CLAIM OF INTEREST EXPENSES OF RS.11,32,14,306/ - ). IT IS STATED BY THE ASSESSEE APPLICANT, THAT THE TRIBUNAL HAD PAGE 40 - PARA 34 OF ITS ORDER OBSERVED , THAT PRIMA FACIE , THE ASSESSEE MORE OR LESS HA D BEEN A BLE TO DRIVE HOME ITS CLAIM THAT THE CAPITAL ADVANCES/INVESTMENTS WERE MADE PRIOR TO RAISING OF THE INTEREST BEA RING LOANS/BORROWINGS IN QUESTION, AS A RESULT WHEREOF , NO PART OF THE INTEREST EXPENDITURE WAS LIABLE TO BE DISALLOWED U/S 36(1)(III) OF THE ACT. BACKED BY THE AFORESAID FACTS, IT IS STATED BY THE ASSESSEE , THAT THE TRIBUNAL DESPITE OBSERVING AS HEREINABOVE , HAD HOWEVER, SET - ASIDE THE ISSUE TO THE FILE OF THE A.O WITH A DIRECTION TO THE ASESSEE TO ESTABLISH THAT IT HAD AT THE RELEVANT POINT OF TIME SUFFICIENT FUNDS AVAILABLE WITH IT TO JUSTIFY THE CAPITAL A DVANCES /INVESTMENTS MADE QUA THE PROPERTIES IN QUESTION. IT IS FURTHER STATED THAT THE TRIBUNAL WHILE SETTING - ASIDE THE MATTER TO THE FILE OF THE A.O HAD FAILED TO TAKE COGNIZANCE OF THE FACT THAT THE ASSESSEE IN THE COURSE OF THE PROCEEDINGS BEFORE THE L OWER AUTHORITIES HAD FURNISHED THE DETAILS OF ITS OWN FUNDS VIS - - VIS BORROWED FUNDS FOR EACH OF THE YEAR IN WHICH THE CAPITAL ADVANCE S/INVESTMENTS WERE MADE, AND THE SAID FACT WAS DULY RECORDED BY THE DISPUTE RESOLUTION PANEL (DRP) AT P AGE NO. 41 & 42 OF ITS ORDER PASSED UNDER SEC. 144C(5), DATED 18.07.2018. ACCORDINGLY, IN THE BACKDROP OF THE AFORESAID FACTS, IT IS THE CLAIM OF THE ASSESSEE THAT THE TRIBUNAL HAD ERRED IN SETTING ASIDE THE ISSUE WITH A DIRECTION TO THE AS S ESSEE TO ESTABLISH M.A. 117/MUM/2021 A.Y. 2014 - 15 (ARISING OUT OF ITA NO.6679/MUM/2018) AGILITY LOGISTICS PVT. LTD. VS. THE ACIT, RANGE 9(1)(1) 3 THE FACT THAT I T HAD SUFFICIENT INTEREST FREE FUNDS AVAILABLE WITH IT TO JUSTIFY THE CAPITAL ADVANCES /INVESTMENTS , LOOSING SIGHT OF THE FACT THAT THE RELEVANT FACTS QUA THE SAID ISSUE WERE ALREADY THERE BEFORE THE LOWER AUTHORITIES. 3. THE LD. AUTHORI Z ED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE APPLICANT TOOK US THROUGH THE FACTS RECORDED IN THE ASSESSEES APPLICATION THAT HAD RESULTED TO THE CONTROVERSY IN HAND. OUR ATTENTION WAS DRAWN BY THE LD. A.R TO P AGE 41 OF THE ORDER PASSED BY THE DRP U/S 144C(5), DATED 18.07.2018, WHEREIN THE ASSESSEE HAD FURNISHED A HART TO SUBSTANTIATE ITS CLAIM THAT IT HAD ADEQUATE INTERNAL WORKING CAPITAL AND SELF - GENERATED FUNDS VIS - - VIS BORROWED FUNDS FOR FUNDING THE CAPITAL ADVANCES /INVESTMENTS QUA THE PROPERTIES IN QUESTION. THE LD. A.R DRAWING SUPPORT FROM THE AFORESAID FACTS , SUBMITTED , THAT THE TRIBUNAL HAD WRONGLY OBSERVED AT PAGE 40 OF ITS ORDER THAT THE ASSESSEE HAD FAILED TO PLACE ON RECORD ANY MATERIAL WHICH WOULD ESTABLISH THAT IT HAD SUFFICIE NT INTEREST FREE FUNDS TO JUSTIFY THE CAPITAL ADVANCE S /INVESTMENT S IN QUESTION . ACCORDINGLY, IT WAS SUBMITTED BY THE LD. A.R , THAT AS THE FACT THAT THE ASSESSEE HAD SUFFICIENT INTEREST FREE FUNDS TO JUSTIFY THE CAPITAL ADVANCES /INVESTMENTS QUA THE PROPERTI ES IN QUESTION WAS BORNE FROM THE RECORD , THEREFORE, THE TRIBUNAL OUGHT NOT TO HAVE RESTORE D THE MATTER TO THE FILE OF THE A.O . IT WAS , THUS, SUBMITTED BY THE LD. A.R THAT THE ORDER PASSED BY THE TRIBUNAL VIS - - VIS THE G ROUND OF APPEAL NO. 3 RAISED BY TH E ASSESSEE APPLICANT BE RECALLED FOR THE PURPOSE OF RECTIFY ING ITS AFORESAID MISTAKE. 4. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) SUBMITTED THAT NO INFIRMITY DID EMERGE FROM THE ORDER PASSED BY THE TRIBUNAL VIS - - VIS THE ADJUDICAT ION OF THE G ROUND OF APPEAL NO. 3 THAT WAS RAISED BY THE ASSESSEE APPELLANT. IN ORDER TO BUTTRESS HIS AFORESAID CLAIM THE LD. D.R TOOK US THROUGH THE RELEVANT OBSERVATION S OF THE TRIBUNAL AT PAGE 35 PARA 33 AND PAGE 42 OF ITS ORDER, WHEREIN AFTER REFERRING TO THE FACTS QUA THE ISSUE IN QUESTION , THE TRIBUNAL HAD RESTORE D THE MATTER TO THE FILE OF THE A.O , WITH A DIRECTION , TO VERIFY AS TO M.A. 117/MUM/2021 A.Y. 2014 - 15 (ARISING OUT OF ITA NO.6679/MUM/2018) AGILITY LOGISTICS PVT. LTD. VS. THE ACIT, RANGE 9(1)(1) 4 WHETHER OR NOT THE ASSESSEE AT THE RELEVANT POINT OF TIME HAD SUFFICIENT INTEREST FREE FUNDS AVAILABLE WITH IT TO JUSTIFY THE SOURCE OF THE CAPITAL ADVANCES /INVESTMENTS THAT WERE MADE IN THE AFORESAID PROPERTIES. IT WAS SUBMITTED BY THE LD. D.R THAT AS THE ADJUDICATION OF THE ISSUE IN HAND UNDISPUTEDLY REQUIRE D VERIFICATION OF THE FACT UAL POSITION, THEREFORE, THE TRIBUNAL IN ALL FAIRNESS HAD RESTORED THE MATTER TO THE FILE OF THE A.O. ACCORDINGLY, IT WAS SUBMITTED BY THE LD. D.R THAT AS THE APPLICATION FILED BY THE ASSESSEE APPLICANT SEEKING RECALL OF THE ORDER VIS - - VIS THE G ROUND OF APPEAL NO. 3 WAS ABSOLUTELY MISCONCEIVED AND MISPLACED, THE SAME, THUS , WAS LIABLE TO BE REJECTED. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES AND PERUSED THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL IN ITA NO.6679/MUM/2018 FOR A.Y 2014 - 15, VIDE ITS ORDER DATED 11.02.2021. AS OBSERVED BY US HEREINABOVE, THE TRIBUNAL AFTER DELIBERATING AT LENGTH ON THE DISALLOWANCE BY THE A.O OF THE ASSESSEES CLAIM FOR DEDUCTION U/S 36(1)(III) OF THE INTEREST EXPENSES , HAD AFTER REFERRING TO THE OBSERVATIONS OF THE LOWER AUTHORITIES, TAKEN A VIEW THAT THE MATTER IN ALL FAIRNESS REQUIRED TO BE REVISITED BY THE A.O FOR CARRYING OUT NECESSARY VERIFICATION S I.E AS TO WHETHER OR NOT THE ASSESSEE AT THE RELEVANT POINT OF TIME HAD INTEREST FREE FUNDS AVAILABLE WITH IT TO JUSTIFY THE CAPITAL ADVANCE /INVESTMENTS MADE IN THE PROPERTIES IN QUESTION. THE TRIBUNAL WHILE CONCLUDING AS HEREINABOVE, HAD OBSERVED, THAT IN CASE IF THE ASSESSEE IS ABLE TO ESTABLISH THE AVAILABILITY OF SUFFICIEN T INTEREST FREE FUNDS IN THE COURSE OF THE SET - ASIDE PROCEEDINGS, THEN, IT WAS TO BE PRESUMED THAT THE CAPITAL ADVANCE S /INVESTMENTS WERE SOURCED OUT OF SUCH INTEREST FREE FUNDS SO AVAILABLE WITH IT. AS OBSERVED BY US HEREINABOVE, IT IS THE CLAIM OF THE ASSESSEE THAT AS THE DETAILS REGARDING AVAILABILITY OF ADEQUATE INTERNAL WORKING CAPITAL AND SELF - GENERATED FUNDS VIS - - VIS BORROWED FUNDS FOR MAKING PAYMENTS TOWARDS CAPITAL ADVANCES /INVESTMENTS IN THE PROPERTIES IN QUESTION WERE THERE BEFORE THE DRP, THEREFORE, THE RE WAS NO REQUIREMENT FOR SET TING ASIDE THE MATTER TO THE FILE OF THE M.A. 117/MUM/2021 A.Y. 2014 - 15 (ARISING OUT OF ITA NO.6679/MUM/2018) AGILITY LOGISTICS PVT. LTD. VS. THE ACIT, RANGE 9(1)(1) 5 A.O . WE ARE AFRAID THAT THE AFORESAID CONTENTION OF THE ASSESSEE SUFFERS FROM CERTAIN INFIRMIT IES , AND THUS , THE SAME CANNOT BE ACCEPTED. INSOFAR THE RELIANCE THAT HAS BEEN PLACED BY THE ASSESSEE ON THE C HART AT P AGE 41 OF THE ORDER PASSED BY THE DRP U/S 144C(5), DATED 18.07.2018 , TO DRIVE HOME ITS CLAIM AS REGARDS AVAILABILITY O F SUFFICIENT SELF - OWN ED FUNDS WITH IT TO JUSTIFY THE CAPITAL ADVANCES/INVESTMENTS MADE QUA THE PROPERTIES IN QUESTION, WE FIND , THAT THE SAME THOUGH DOES FIND A MENTION IN THE ORDER OF THE DRP, HOWEVER , IT IS ONLY AN EXTRACT OF THE SUBMISSION OF THE ASSESS EE AND NOT A FACT RECORDED BY THE DRP. BE THAT AS IT MAY, WE MAY HEREIN OBSERVE , THAT THE TRIBUNAL WHILE RESTORING THE MATTER TO THE FILE OF THE A.O, HAD DIRECTED HIM TO VERIFY AS TO WHETHER OR NOT THE ASSESSEE AT THE RELEVANT POINT OF TIME HAD SUFFICIENT INTEREST - FREE FUNDS AVAILABLE WITH IT TO JUSTIFY THE CAPITAL ADVANCES /INVESTMENTS THAT WERE MADE WITH RESPECT TO THE AFORESAID PROPERTIES. IN OUR CONSIDERED VIEW, AS THE TRIBUNAL AFTER EXHAUSTIVE DELIBERATIONS HAD FORMED A VIEW THAT THE MATTER AS REGARDS SUSTAINING OF THE ASSESSEES CLAIM FOR DEDUCTION OF INTEREST EXPENDITURE U/S 36(1)(III) OF THE ACT, IN ALL FAIRNESS, REQUIRED TO BE REVISITED BY THE A.O FOR VERIFYING THE AVAILABILITY OF THE SELF - OWNED FUNDS WITH THE ASSESSEE , THEREFORE, FOR THE SAID REASO N IT HAD RESTORED THE MATTER TO HIS FILE WITH SPECIFIC DIRECTIONS. IN OUR CONSIDERED VIEW, THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL COULD NOT BE HELD TO BE SUFFERING FROM A MISTAKE APPARENT FROM RECORD WHICH WOULD RENDER IT AMENABLE FOR RECTIFICATION UNDER SUB - SECTION (2) OF SEC. 254 OF THE ACT, FOR THE REASON, THAT THE ASSESSEE HOLDS A CONVICTION THAT THE SAME OUGHT NOT TO HAVE BEEN RESTORED , BUT SHOULD HAVE BEEN ADJUDICATED BY THE TRIBUNAL. AT THIS STAGE, WE MAY HEREIN CLARIFY , THAT IN CASE IF THE ADJUDICATION OF THE ASSESSEES CLAIM FOR DEDUCTION U/S 36(1)(III) OF THE INTEREST EXPENDITURE COULD HAVE BEEN POSSIBLE ON THE BASIS OF THE FACTS BORNE FROM THE RECORD, THEN , THE SAME WOULD NOT HAVE BEEN RESTORED BY THE TRIBUNAL BUT WOULD HA VE BEEN ADJUDICATED. HOWEVER, WE ARE AFRAID THAT AS THE REQUISITE FACTS THAT WERE REQUIRED FOR ADJUDICATING THE AFORESAID ISSUE COULD NOT BE M.A. 117/MUM/2021 A.Y. 2014 - 15 (ARISING OUT OF ITA NO.6679/MUM/2018) AGILITY LOGISTICS PVT. LTD. VS. THE ACIT, RANGE 9(1)(1) 6 GATH E RED FROM THE RECORDS , THEREFORE, IN ALL FAIRNESS AND IN THE INTEREST OF JUSTICE THE MATTER HAD BEEN RESTORED T O THE FILE OF THE A.O WITH SPECIFIC DIRECTIONS . AS REGARDS THE CLAIM OF THE LD. A.R THAT THE C HART REFLECTING THE AVAILABILITY OF SELF - GENERATED FUND S VIS - - VIS BORROWED FUNDS THAT WAS FURNISHED BY THE ASSESSEE BEFORE THE DRP, AND WAS REPRODUCED IN ITS O RDER , OUGHT TO HAVE BEEN SUMMARILY ACTED UPON AND ACCEPTED BY THE TRIBUNAL FOR ADJUDICATING THE ISSUE, WE ARE AFRAID IS TOO W IDE A PROPOSITION TO BE ACCEPTED. AS THE FACTS CLAIMED BY THE ASSESSEE IN THE C HART THAT WAS FILED BEFORE THE DRP NOT ONLY REQUIR E D VERIFICATION, BUT ALSO HA D TO BE LOOKED INTO IN CONTEXT OF THE RELEVANT POINT OF TIME OF AVAILABILITY OF SUCH FUNDS, THEREFORE, THE SAME COULD NOT HAVE BEEN ACTED UPON ON THE VERY FACE OF IT FOR ADJUDICATING THE ISSUE IN HAND . BE THAT AS IT MAY, WE ARE OF A STRONG CONVICTION THAT THE ASSESSEE BY FILING THE PRESENT APPLICATION UNDER SUB - SECTION (2) OF SEC. 2 54 OF THE ACT IS AS A MATTER OF FACT SEEKING A REVIEW OF THE ORDER PASSED BY THE TRIBUNAL, WHICH WE ARE AFRAID IS BEYOND THE SCOPE AND GAMUT OF THE POWERS VESTED WITH THE TRIBUNAL. ACCORDINGLY, NOT FINDING FAVOR WITH THE AFORESAID APPLICATION FILED BY THE ASSESSEE, WE HEREIN DISMISS THE SAME. 6. RESULTANTLY, THE APPLICATION FILED BY THE ASSESSE IS DISMISSED IN TERMS OF OUR AFORESAID OBSERVATIONS. ORD ER PR ONOUNCED IN THE OPEN COURT ON 09 .08.2021 SD/ - SD/ - ( S.RIFAUR RAHMAN ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 09 .08 .2021 PS : ROHIT M.A. 117/MUM/2021 A.Y. 2014 - 15 (ARISING OUT OF ITA NO.6679/MUM/2018) AGILITY LOGISTICS PVT. LTD. VS. THE ACIT, RANGE 9(1)(1) 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI