TOLANI PRIVATE LIMITED , MUMBAI V. ADDITIONAL COMMISSIONER OF INCOME TAX SPECIAL RANGE 31, MUMBAI

MA 166/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 8957 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 1998-1999
• Appeal Filed On: 08-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARTIKEYAN
• Keywords: Business income
• Section: 143(3)

Judgement Text

INCOME - TAX APPELLATE TRIBUNAL E BENCH MUMBAI BEFORE S/SH. R.C. SHARMA , ACCOUNTANT MEMBER & PAWAN SINGH, JUDICIAL MEMBE R MA NO. 166 / MUM/2018 ( IN I.T.A./ 5562 /MUM/201 3 , ASSESSMENT YEAR: 1998 - 99 ) TOLANI PVT.LTD. (TOLANI PRIVATE LIMITED MERGED WITH TOLANI SH IPPING COMPANY LIMITED ) 10 - A, BAKHTAWAR, NARIMAN POINT MUMBAI 400 02 1 . PAN:AA DC T 4127 C VS. ADDL CIT SPL. RANGE 31, MUMBAI. ( APPELLANT ) ( RESPONDENT ) APPELLANT BY SHRI RAJEEV KHANDELWAL - A R RESPONDENT BY SHRI ABI RAMA KARTIKEYAN - D R DATE OF HEARING 05/10/2018 DATE OF PRONOUNCEMENT 12 /10/2018 O R D E R UNDER SECTION 254(2) OF INCOME TAX ACT PER PAWAN SINGH , JUDICIAL MEMBER : 1 . THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASSESSEE FOR RECTIFICATION OF CERTAIN ALLEGED MISTAKES IN ORDER DATED 04/0/2018 IN ITA NO.5562/MUM/2013 . 2 . (A). IN THE MISCELLANEOUS APPLICATION THE ASSESSEE CONTENDED THAT THE A SSESSEE COMPANY WAS AMALGAMATED WITH TOLANI SHIPPING COMPANY LTD . AND THIS FACT HAS BEEN INFORMED TO THE TRIBUNAL VIDE APPLICATION DATED 22/06/2015. THE LD. AR SUBMITS THAT IN THE MEMO OF PARTIES OF THE TRIBUNAL ORDER DATED 04/01/2018 , THE NAME OF AMALGAMA TED COMPANY IS NOT MENTIONE D, WHICH IS MISTAKE APPARENT IN THE ORDER. ( B ) THE APPLICANT ASSESSEE FURTHER CONTENDED IN PARA - 4 OF THE TRIBUNALS ORDER, IT IS REFERRED THAT IN THE COMPUTATION OF INCOME AND P&L ACCOUNT , WHEREIN INCOME OF RS.46,87,343/ - HAS BEEN B IFURCATED IS WRONG IN FACT THE FIGURE IS RS.11,52,03,414/ - , WHICH IS MISTAKE APPARENT (PAGE 63 OF PB) . ( C ) IT IS FURTHER CONTENDED THAT IN PARA - 4 OF THE TRIBUNALS ORDER THE DATE OF THE ASSESSMENT ORDER IS MENTIONED AS 23/03/ 2011; HOWEVER THE SAME IS 23/03/2 001 , WHICH IS ALSO MISTAKE APPARENT . ( D ) IT IS FURTHER CONTENDED THAT IN PARA - 9 OF THE ORDER , THE TRIBUNAL HAS HELD THAT THE REST OF THE INCOME I.E. INT EREST ON STAFF LOAN, INTEREST ON SECURITIES, MISCELLANEOUS EARNING, RENT RECEIVED AS WELL AS INCOME TAX RE FUND TO THE EXTENT SUSTAINED BY US, MA NO. 166/M/2018 IN ITA NO.5562/M/2013 TOLANI SHIPPING COMPANY LTD 2 CANNOT BE REGARDED AS INCOME FROM BUSINESS . WE , THEREFORE, DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE CIT(A) TO THAT EXTENT THAT TH ESE INCOME AS ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES . THE LD. AR SUBMITS THAT INCOME EARNED ON INTEREST ON STAFF LOAN AND MISCELLANEOUS EARNING IS EARNED ON ACCOUNT OF DELIVERY AND RE - DELIVERY OF BUNKERS IS TO BE TREATED AS INCOME FROM SHIPPING BUSINESS. FURTHER, WITH REGARD TO RENT RECEIVED THE SAME SHOULD BE T AXED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND DEDUCTION U/S.24(A) SHOULD BE ALLOWED. ( E ) IT IS FURTHER CONTENDED THAT THERE IS FURTHER MISTAKE IN PARA - 11 OF THE ORDER WHEREIN IT IS MENTIONED THAT NOW COMING TO THE SUMMARIZED GROUND TAKEN BY THE ASSE SSEE, GROUND NO. 1 & 2 RELATES TO THE CLAIM OF DEDUCTION TOWARDS THE EXPENSES AS WELL AS THE INTEREST RECEIVED FROM SUBSIDIARY AND INTER CORPORATE LOANS, BILL DISCOUNTING TO BE PART OF PROFIT OF SHIPPING BUSINESS . SINCE WHILE DISPOSING OF ADDITIONAL GROUND NO. I, WE HAVE DIRECTED THE AO TO TREAT THE INTEREST RECEIVED FROM SUBSIDIARY COMPANY AS WELL AS INTEREST AND DISCOUNTING CHARGES ON TRADE BILLS AS 'INCOME FROM BUSINESS' OF THE ASSESSEE AS PART OF SHIPPING BUSINESS , THE NATURAL INFERENCE WILL BE THAT THE INTEREST PAID AS WELL AS OTHER EXPENSES WHICH HAS BEEN DISALLOWED TO THE EXTENT OF RS. 2,23,17,217/ - WILL AUTOMATICALLY BE ALLOWED AS DEDUCTION OUT OF THE INCOME COMPUTED FROM BUSINESS. THUS, TO THAT EXTENT GROUND 1 AND 2 ARE ALLOWED. ' ( F ) THE LD. AR SUBMIT S THAT THE SUMMARIZED GROUND NO.1 AND 2 RELATES TO CLAIM OF DEDUCTION TOWARDS THE EXPENSES AS WELL AS TREATED THE INTEREST RECEIVED FROM SUBSIDIARY AND INTER - CORPORATE LOANS, BILL DISCOUNTING IS A PART OF PROFIT OF BUSINESS OF ASSESSEE. THEREFORE, THE EXPE NSES DISALLOWED TO THE EXTENT OF RS.2.23 CRORES SHOULD HAVE BEEN ALLOWED AS DEDUCTION FROM THE BUSINESS INCOME AND NOT ALLOWING RELIEF TO THE ASSESSEE IS MISTAKE APPARENT ON RECORD . 3 . ON THE OTHER HAND THE LD. DR SUBMITS THAT EXCEPT REFERENCE OF AMALGAMATED COMPANY IN THE NAME OF PARTY, THE DATE OF ASSESSMENT ORDER AND FIGURE OF COMPUTATION OF INCOME AND P&L ACCOUNT THERE IS NO OTHER MISTAKE APPARENT IN THE ORDER WHICH REQUIRES RECTIFICATION . THE ASSESSEE IS SEEKING REVIEW OF THE ORDER WHICH IS BEYOND THE SCO PE OF SECTION 254(2) OF THE INCOME TAX ACT . 4 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF PARTIES AND HAVE GONE THROUGH THE RECORD OF THE CASE AND THE ORDE R OF TRIBUNAL DATED 19.12.2017 . THE PERUSAL OF RECORD REVEALS THAT THE ASSESSEE FILED APPLICATION FOR A DJOURNMENT DATED 22.06.2015, ON THE GROUND THAT THE APPEAL IS LARGE AND HAVING VARIOUS POINTS OF DISPUTE AND THAT THE ASSESSEE IS INTENDS TO FILE WRITTEN SUBMISSIONS. ALONG WITH THE APPLICATION THE ASSESSEE FILED THE COPY OF ORDER OF HONBLE BOMBAY HIGH C OURT DATED 27.06.201 4, ALLOWING THE SCHEME MA NO. 166/M/2018 IN ITA NO.5562/M/2013 TOLANI SHIPPING COMPANY LTD 3 OF AMALGAMATION OF ASSESSEE COMPANY, TOLANI BULK CARRIERS LIMITED WITH TOLANI SHIPPING COMPANY LIMITED. THOUGH NO FRESH MEME OF PARTIES SUBSTITUTING THE NAME OF ASSESSEE IS FOUND ON RECORD. HOWEVER, AFTER THE ORDE R OF HONBLE BOMBAY HIGH COURT DATED 27.06.2014, THE ASSESSEE COMPANY IS NO MORE IN EXISTENCE. THEREFORE, KEEPING IN VIEW THE LEGAL STATUS OF ASSESSEE WE DIRECT THAT THE NAME OF THE ASSESSEE COMPANY IN THE ORDER OF TRIBUNAL BE READ BE READ AS UNDER : - TOLAN I SHIPPING COMPANY LIMITED (TOLANI PRIVATE LIMITED MERGED WITH TOLANI SHIPPING COMPANY LIMITED ) 10 - A, BAKHTAWAR, NARIMAN POINT MUMBAI 400 021 . 5 . THE SECOND CONTENTION OF THE APPLICANT/ ASSESSEE RELATES TO THE WRONG FIGURE OF BIFURCATION OF IN COME OF RS.11,52,03,414 / - , WHICH IS MENTIONED AS RS. 46,87,343/ - IN PARA 5 AT PAGE 4 OF THE ORDER . PERUSAL OF THE COMPUTATION OF INCOME SHOWS THAT THE ASSESSEE HAS SHOWN INCOME OF RS. 11,52,03,414/ - (PAGE 63 OF PB), WHICH IS IN FACT WRONGLY TYPED AS RS. 46,87,343/ - . THEREFORE, WE DIRECT THAT THE FIGURE MENTIONED IN PARA 5 AT PAGE 4 OF THE ORDER BE READ AS RS. 11,52,03,414/ - . 6 . THE THIRD CONTENTION OF THE APPLICANT ASSESSEE RELATES TO DATE OF ASSESSMENT ORDER. PERUSAL OF THE RECORD REVEALS THAT THE ASSESSME NT ORDER PASSED UNDER SECTION 143(3) IS DATED 23.03.2001 AND NOT 23.03.2011. THEREFORE, WE DIRECT THAT THE DATE OF ASSESSMENT BE MENTIONED IN PARA 5 AT PAGE 5 BE READ AS 23.03.2001 . 7 . THE FOURTH CONTENTION OF THE APPLICANT / ASSESSEE RELATES TREATING THE INT EREST INCOME ON STAFF LOAN, INTEREST ON SECURITIES, MISCELLANEOUS EARNING, RENT RECEIVED AND INCOME TAX REFUND AS BUSINESS INCOME. FIFTH CONTENTION OF THE APPLICANT/ ASSESSEE RELATES TO CLAIMS OF DEDUCTIONS OF EXPENSES AND INTEREST RECEIVED FROM THE SUBSID IARY AND INTER CORPORATE LOAN, BILLS DISCOUNTING. WE HAVE NOTED THAT WHILE PASSING THE ORDER DATED 04.01.2018, THE TRIBUNAL PASSED REASONED . THE APPLICANT / ASSESSEE IS SEEKING THE REVIEW OF THE ORDER WHICH IS BEYOND THE SCOPE OF SECTION 254(2) OF THE AC T. THEREFORE , THE CONTENTIONS RAISED BY THE APPLICANT / ASSESSEE IN PARA 5 AND 6 OF THE APPLICATION ARE REJECTED. 8 . IN THE RESULT MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDE R PRONOUNCED IN THE OPE N COURT ON 12 TH DAY OF OCTOBER 201 8 . SD/ - SD/ - ( R.C.SHARMA ) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED : 12. 10 .201 8 . JV.SR.PS. MA NO. 166/M/2018 IN ITA NO.5562/M/2013 TOLANI SHIPPING COMPANY LTD 4 / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI. MA NO. 166/M/2018 IN ITA NO.5562/M/2013 TOLANI SHIPPING COMPANY LTD 5 DATE INITIALS INITIAL THIS ORDER WAS DIRECTLY DICTATED TO THE SR.PS/PS ON COMPUTER 1. DRAFT DICTATED ON - DICTATION SHEETS ATTACHED/DIRECT ON PC 0 9/ 10 /18 2. DRAFT PLACED BEFORE AUTHOR 0 9 / 10 /18 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO THE SR.PS 6. KEPT FOR PRONOUNCEMENT 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE A.R. FOR SIGNATURE OF THE ORDER 9. DATE OF DISPATCH OF THE ORDER