DCIT (OSD)-II CEN RG 7, MUMBAI V. PATHIK CONSTRUCTION, NAVI MUMBAI

MA 119/MUM/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4312 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 28-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMATHA
• Keywords: Deemed dividend; Set aside
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL V I RTUAL COURT C BENCH, MUMBAI BEFORE SHRI M.BALAGANESH, AM & SHRI AMARJIT SINGH , JM MA NO.119/MUM/2020 ARISING OUT OF ITA NO. 4371/MUM/2016 ( ASSESSMENT YEAR : 2011 - 12 ) DCIT(OSD) - II, CEN RG 7 MUMBAI R.NO.413, 4 TH FLOOR AAYAKAR BHAVAN MUMBAI 400 020 VS. M/S. PRATHIK CONSTRUCTION E - 101, 1 ST FLOOR, SANPADA RAILWAY STATION COMPLEX NAVI MUMBAI 400 705 PAN/GIR NO. AAHFP7633H (APPELLANT ) .. (RESPONDENT ) REVENUE BY MS. SAMATHA , DR ASSESSEE BY MS. HIRAL SEJPAL DATE OF HEARING 23 / 10 /2020 DATE OF PRONOUNCEMENT 23 / 10 /2020 / O R D E R PER M. BALAGANESH (A.M) : BY VIRTUE OF THIS MISCELLANEOUS APPLICATION, THE REVENUE SEEKS TO RECALL THE ORDER PASSED BY THIS TRIBUNAL IN IT A NO.4317/MUM/2016 DATED 02/08/2019 ON THE GROUND THAT THERE WAS CONTRADICTORY VIEW TAKEN BY THE TRIBUNAL WHILE DECIDING THE CASE ON 02/08/2019 WITH THAT OF THE EARLIER ORDER PASSED BY THIS TRIBUNAL ON 16/05/2018. THE RELEVANT POTION OF THE REVENUES MISCE LLANEOUS APPLICATION IS HEREBY REPRODUCED: - M A NO . 119/ MUM/ 2020 M/S. PRATHIK CONSTRUCTION 2 3.1 THE REVENUE APPEALED AGAINST THE DECISION OF THE LD.CIT(A) ON THE ISSUE OF DELETION OF ADDITION OF RS,2,14,00,000/ - ON ACCOUNT OF DEEMED DIVIDEND U/S.2(22)(E) OF THE ACT, VIDE ITA NO.4247/MUM/2016. THE HON'B LE ITAT, VIDE ORDER DATED 27.04.2018, UPHELD THE DECISION OF THE LD.CIT(A) ON THE ISSUE OF DEEMED DIVIDEND OF RS.2,14,00,000/ - U/S.2(22)(E) OF THE ACT. 3.2 THE ASSESSEE APPEALED AGAINST THE DECISION OF THE LD.CIT(A) CONFIRMING THE ADDITION OF RS.24,00,000 / - ON ACCOUNT OF COMMISSION PAID TO KALPANA STRUCT - CON PRIVATE LIMITED BEFORE THE HON'BLE ITAT IN APPEAL BEING ITA NO.4317/MUM/2017. 3.3 THE HON'BLE ITAT, VIDE ORDER DATED 16.05.2018, DISMISSED THE ASSESSEE'S APPEAL BEING ITA NO.4317/MUM/2016. IN THE SAID APPELLATE ORDER DATED 16.05.2018, THE HON'BLE ITAT HAD CONCLUDED THAT (I) APART FROM PROVIDING FINANCE TO THE ASSESSEE, KALPANA STRUCT - CON PRIVATE LIMITED HAD NOT RENDERED ANY SERVICES TO THE ASSESSEE; (II) ON THE AMOUNT FINANCED BY KALPANA STRUCT - CON PRI VATE LIMITED, THE ASSESSEE IS PAYING INTEREST TO IT; & (III) THAT THE ASSESSEE'S CONTENTION THAT KALPANA STRUCT - CON PRIVATE LIMITED HAS PAID TAXES ON SUCH RECEIPT OF COMMISSION IS OF NO CONSEQUENCE TO DECIDE THE SAID ISSUE IN THE CASE OF THE ASSESSEE AS IT IS A SETTLED LEGAL POSITION THAT THE INCOME HAS TO BE TAXED IN CORRECT HANDS IN THE APPLICABLE ASSESSMENT YEAR. THUS, VIDE ITS ORDER DATED 16.05.2018, THE HON'BLE ITAT CONFIRMED THE SAID DISALLOWANCE ON ACCOUNT OF COMMISSION EXPENDITURE OF RS.24,00,000/ - AND DISMISSED THE APPEAL FILED BY THE ASSESSEE I.E. ITA NO.4317/MUM/2016. HOWEVER, IN THE INSTANT ORDER DATED 02.08.2019, THE HON'BLE ITAT HAS DECIDED THE SAME APPEAL OF THE ASSESSEE I.E. ITA NO.4317/MUM/2016 WHEREIN THE HON'BLE ITAT HAS NOT ONLY FAILED TO APPRECIATE THE RELEVANT FACTS OF THE CASE WHICH WERE OBSERVED BY IT WHILE CONFIRMING THE SAID ADDITION VIDE ITS EARLIER ORDER DATED 16.05.2018 BUT ALSO ALLOWED RELIEF TO THE ASSESSEE, WHICH IS TOTALLY IN CONTRAST OF THE ORDER PASSED EARLIER. THUS, THE HON 'BLE ITAT, IN THE PRESENT APPELLATE ORDER DATED 02.08.2019 HAS REVISITED AN ISSUE ALREADY SETTLED BY IT VIDE ITS EARLIER ORDER DATED 16.05.2018. THE HON'BLE ITAT HAS TAKEN A COMPLETELY DIVERGENT VIEW IN THESE TWO ORDERS DATED 16.05.2018 AND 02.08.2019 ON T HE VERY SAME ISSUE, I.E. BY DISMISSING THE APPEAL OF THE ASSESSEE VIDE ITS ORDER DATED 16.05.2018 AND ALLOWING THE VERY SAME ISSUE VIDE ITS INSTANT ORDER DATED 02.08.2019, THEREBY COMPLETELY DISREGARDING ITS OWN FINDINGS MADE BY ITS EARLIER ORDER DATED 16. 05.2018, WHICH WERE NOT EVEN DISCUSSED IN THE PRESENT ORDER DATED 02.08.2019. IT IS SIGNIFICANT TO MENTION HERE THAT FROM THE OFFICIAL WEBSITE OF THE HONBLE 1TAT, I.E. WWW.ITATONLINE.ORG, IT COULD BE GATHERED THAT THE ASSESSEE HAD FILED A MISCELLANEOUS AP PLICATION BEING M.A. NO.571/2018 AGAINST THE EARLIER APPELLATE ORDER DATED 16.05.2018, HOWEVER, THE SAME APPEARS TO HAVE NOT BEEN DECIDED AS YET. NONETHELESS, AN ALREADY DECIDED APPEAL HAS BEEN RE - DECIDED WITHOUT DECIDING UPON THE FATE OF THE ASSESSEE'S PE NDING M.A. !N VIEW OF THE ABOVE MENTIONED FACTS, PASSING OF ANOTHER ORDER DATED 02.08.2019 BY THE HON'BLE ITAT IS NOT CORRECT WHILE THERE ALREADY EXISTS AN ORDER PASSED ON M A NO . 119/ MUM/ 2020 M/S. PRATHIK CONSTRUCTION 3 16.05.2018 IN THE SAME APPEAL ON MERITS WHEREAS THE ISSUE DECIDED ALREADY ON MERITS HAS BEEN RE - DECIDED BY THE HON'BLE ITAT, WHICH IS A MISTAKE APPARENT FROM RECORD AND HENCE THE ORDER PASSED ON 02.08.2019 DESERVES TO BE SET ASIDE AND THE ORDER PASSED EARLIER ON 16.05.2018 IS LIABLE TO BE RESTORED. 4. IT IS, THEREFORE, HUMBLY PRA YED THAT; (A) THE HON'BLE TRIBUNAL BE PLEASED TO RECALL THE ORDER DATED 02.08.2019 PASSED IN THE ASSESSEE'S APPEAL BEING ITA NO.4317/MUM/2016; AND (B) THE HON'BLE TRIBUNAL BE PLEASED TO RESTORE THE ORDER ALREADY PASSED ON 16.05.2018 IN THE ASSES SEE'S APPEAL BEING ITA NO.4317/MUM/2016; (C) THAT THE DELAY, IF ANY, IN FILING THE PRESENT M.A. MAY KINDLY BE CONDONED. 2. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET, WE FIND THAT APPEAL OF THE ASSES SEE IN ITA NO.4317/MUM/2016 WAS ORIGINALLY DISMISSED VIDE ORDER DATED 16/05/2018 WHEREIN NONE APPEARED ON BEHALF OF THE ASSESSEE. SUBSEQUENTLY, THE MISCELLANEOUS APPLICATION WAS PREFERRED BY THE ASSESSEE AND THE SAME WAS DISPOSED OFF BY THIS TRIBUNAL IN M. A.NO.571/MUM/2018 O N 13/05/2019 WHEREIN THE ORDER OF THIS TRIBUNAL WAS RECALLED AND MISCELLANEOUS APPLICATION WAS ALLOWED. SUBSEQUENTLY, IN THE SECOND ROUND , THIS TRIBUNAL IN ITA NO.4317/MUM/2016 HAD DISPOSED OFF THE APPEAL ON 02/08/2019 AFTER HEARING BOTH THE PARTIES. HENCE, WE FIND THAT THERE IS ABSOLUTELY NO MISTAKE APPARENT FROM THE RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE ACT WARRANTING ANY RECTIFICATION AS ALLEGED BY THE L EARNED REVENUE BEFORE US IN ITS MISCELLANEOUS APPLICATION. 3. THE LD. DR WAS NOT AWARE OF THE FACT THAT THE ORIGINAL TRIBUNAL ORDER DATED 16/05/2018 WHICH WAS PASSED WITHOUT THE PRESENCE OF THE ASSESSEES COUNSEL WAS RECALLED BY THIS TRIBUNAL ON 13/05/2019. ONCE, THE ORDER IS RECALLED, IT IS NO ORDER IN THE EYES OF LAW. HEN CE, THERE IS NO QUESTION OF TAKING ANY CONTRA DI CTOR Y VIEW AS SUBMITTED BY THE REVENUE IN ITS MISCELLANEOUS APPLICATION. M A NO . 119/ MUM/ 2020 M/S. PRATHIK CONSTRUCTION 4 4. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 23/10/2020 IN THE OPEN COURT . SD/ - ( AMARJIT SINGH ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 23 / 10 / 2020 KARUNA , SR.PS 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//