CHATURBHUJ VALLABHDAS (HUF), MUMBAI V. DCIT 22(1), MUMBAI

MA 169/MUM/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7053 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 16-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K SHIVARAMRAHUL HAKANI
• Keywords: Rectification of order; Question of law; Cost of acquisition; Fair market value; Valuation report

Judgement Text

1 MA NO. 169/MUM/2011 ARISING OUT OF ITA NO. 3439/MUM/2007 (ASST YEAR 2004-05) . IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI C BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI R S SYAL, AM & SHRI VIJAY PAL RAO, JM MA NO. 169/MUM/2011 ARISING OUT OF ITA NO. 3439/MUM/2007 (ASST YEAR 2004-05) CHATRUBHU VALLABHADAS(HUF) 2012 B WINH 9 TH FLOOR CLOVER REGENCY RAMJI ASSAR LANE GHATKOPAR (E) MUMBAI 77 VS THE DY COMMR OF INCOME TAX MUMBAI (APPLICANT) (RESPONDENT) PAN NO. AACHC0434N ASSESSEE BY SHRI K SHIVARAM/RAHUL HAKANI REVENUE BY SHRI R K GUPTA DT.OF HEARING 15.7.2011 DT OF PRONOUNCEMENT 7 TH SEPT 2011 PER VIJAY PAL RAO, JM THIS MISCELLANEOUS APPLICATION BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20.12.2010 OF THE TRIBUNAL WHEREBY THE APPEAL OF THE REVENUE IN ITA NO.3439/MUM/2007 AND ASSESSEES CROSS OBJECTIONS NO .211/MUM/2007 FOR THE AY 2004-05 WERE DISPOSED OFF. THE ASSESSEE HAS STATED IN THE MISCELLANEOUS APPLICATION THAT THERE ARE MISTAKES APPARENT IN THE IMPUGNED OR DER AS MENTIONED IN PARA 3 OF THE MISCELLANEOUS APPLICATION AS UNDER: 3. THE APPLICANT SUBMITS THAT FOLLOWING ARE THE MI STAKE APPARENT ON RECORDS, WHICH GIVE RISE TO THE PRESENT MISCELLANEOUS APPLICATION: CROSS OBJECTION GROUND NO.1 & 2 NOT CONSIDERED, NO FINDING. 1. THE HONBLE MEMBERS ERRED IN NOT CONSIDERING AND GIVING ANY FINDING OF THE FACT THAT RS. 11,00,000/- OUT OF RS. 28,11,820/- BEING COMPENSATION FOR TRANSIT ACCOMMODATION RECEIVED BY SHRI MAHENDRA KUMAR MERCH ANT WAS ALREADY OFFERED 3 MA NO. 169/MUM/2011 ARISING OUT OF ITA NO. 3439/MUM/2007 (ASST YEAR 2004-05) . GROUND HAS BEEN RAISED BEFORE THE CIT(A) AND IN THE ABSENCE OF ANY FINDING OF THE CIT(A), THIS GROUND DOES NOT EMANATE FROM THE IMPUG NED ORDER. THUS, THE LD AR HAS SUBMITTED THAT THERE IS AN APPARENT MISTAKE IN THE IMPUGNED ORDER OF THE TRIBUNAL REGARDING NOT CONSIDERING THE FACTS THAT THE ASSESS EE RAISED THIS GROUND BEFORE THE CIT(A) BEING AN ADDITIONAL GROUND. THE LD AR FURTHE R CONTENDED THAT THE TRIBUNAL WHILE PASSING THE IMPUGNED ORDER HAS RELIED UPON T HE JUDGMENT IN THE IN THE CASE OF VIJAY KUMAR M SHAH VS DY CIT(SUPRA), M/S KILLICK NIXON LTD IN ITA NO.746/MUM/2005 AND THE DECISION OF THE HONBLE SUPREME COURT IN T HE CASE OF POORANMAL VS DIRECTOR OF INSPECTION (INVESTIGATION)(SUPRA), WHIC H WERE NEITHER CITED BY THE LD DR NOR CONFRONTED WITH THE ASSESSEE; THEREFORE, THE RE LIANCE PLACED ON THESE DECISIONS WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE CONSTITU TED APPARENT ERROR IN THE IMPUGNED ORDER. LASTLY, THE LD AR HAS SUBMITTED TH AT THE TRIBUNAL HAD COMMITTED AN ERROR IN NOT FOLLOWING THE RATIO OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS DAULAL MOHTA (HUF) ITA NO.1031 OF 20 08 DATED 22.9.2008 AND THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF HIABEN JAYANTILAL SHAH VS ITO AND ANR.(SUPRA). 2.1 SINCE THE LD AR OF THE ASSESSEE HAS ARGUED THAT WHILE DECIDING THE ISSUE AGAINST THE ASSESSEE, THE BENCH APPLIED SOME CASES WITHOUT CONFRONTING THEM TO THE ASSESSEE. THE CASE WAS RE-FIXED ON 19 TH AUG 2011 TO GIVE FAIR OPPORTUNITY TO BOTH THE PARTIES AS TO HOW THE RATIO OF THE CASES, WHICH WERE REFERRED BY THE TRIBUNAL, DOES NOT APPLY IN THE CASE OF THE ASSESSEE. THE LD AR HAS SUBMITTED THAT AS FAR AS THE ORDER OF THE TRIBUNAL IN THE CASE OF VIJAY KUMA R M SHAH VS DY CIT REPORTED IN 2 ITR 116 (MUM TRIB) IS CONCERNED, THE VALUATION OF THE A SSESSEE IN THAT CASE WAS FOUND AS INCORRECT WHEREAS IN THE CASE OF THE ASSESSEE, THE ASSESSEE HAS FILED THE VALUATION REPORT. SIMILARLY, IN THE CASE OF M/S KILLICK NIXO N LTD IN ITA NOS.746 & 883/MUM/2005 5 MA NO. 169/MUM/2011 ARISING OUT OF ITA NO. 3439/MUM/2007 (ASST YEAR 2004-05) . ACCOMMODATION WAS REQUIRED FOR THE HUF MEMBERS. H UF ITSELF IS NOT A LIVING PERSON WHO REQUIRES AN ACCOMMODATION FOR RE SIDENCE BUT IT IS THE MEMBERS OF THE HUF HAVE TO OCCUPY THE ACCOMMOD ATION. THEREFORE, THE MEMBERS AND CO-PARCENERS OF THE HUF WERE PROVIDED THE ACCOMMODATION BY THE DEVELOPER ONLY BECAUSE OF BEING THE MEMBERS OF THE CO-PARCENERS OF THE HUF AND NOT IN ANY INDEPENDENT AND INDIVIDUAL CAPACITY. THE SAID TRANSACTION IS B ETWEEN THE HUF AND THE DEVELOPER. THEREFORE, THE ACCOMMODATION WAS ALS O PROVIDED BY THE DEVELOPER TO THE HUF OR TO THE MEMBERS ON BEHAL F OF THE HUF AND TO BE OCCUPIED BY ITS MEMBERS. THE MEMBERS OF THE HUF CANNOT BE TREATED AT PAR WITH THE TENANTS BECAUSE THE MEMBER S WERE NOT PAYING ANY RENT OR RESIDING IN THE PREMISES IN THE CAPACIT Y OF THE TENANT BUT AS CO-PARCENERS BEING THE MEMBERS OF THE HUF. ACCOR DINGLY, WE DO NOT FIND ANY MERIT IN THE GROUND NO.1 AND 2 OF TH E CROSS-OBJECTION THE SAME ARE DISMISSED. 3.2 THUS THIS TRIBUNAL WHILE DECIDING THESE GROUNDS HAVE DULY CONSIDERED THE CONTENTIONS RAISED BY THE ASSESSEE AND IT HAS BEEN SPECIFICALLY OBSERVED BY THE TRIBUNAL THAT WE ARE NOT CONVINCED WITH THE CONTENTIONS OF THE ASSE SSEE THAT THESE ARE INDIVIDUAL ACCOMMODATIONS GIVEN TO T HE COPARCENERS IN THEIR INDIVIDUAL CAPACITY AND NOT TO THE HUF. WHEN IT WAS FOUND THAT THE CONSIDERATION WAS AGAINST THE TRANSFER OF THE PROPE RTY BY THE ASSESSEE HUF AND THE MEMBERS OF THE HUF WERE PROVIDED ACCOMMODATION BY T HE DEVELOPER ONLY IN THEIR CAPACITY OF BEING MEMBERS OR COPARCENERS OF THE HUF AND NOT IN ANY INDEPENDENT AND INDIVIDUAL CAPACITY. THEREFORE, ONCE THE TRAN SACTION OF TRANSFER PROVIDING THE TRANSIT ACCOMMODATION IS ONLY BETWEEN THE DEVELOPER AND THE ASSESSEE HUF, THEN, IT WILL NOT AFFECT THE MERITS OF THE CASE, IF ANY P ART OF THE COMPENSATION HAS BEEN OFFERED TO TAX BY ANY INDIVIDUAL MEMBER AND THEREFO RE, IN OUR OPINION, NO SPECIFIC FINDING IS REQUIRED ON THIS ASPECT. THEREFORE, W E DO NOT FIND ANY MERIT OR SUBSTANCE IN THE ALLEGED MISTAKES URGED BY THE ASSESSEE WITH RESPECT TO GROUND NOS 1 & 2 OF THE CO. 4 AS REGARDS THE GROUND NO.3 OF THE CO IS CONCERNED , THE TRIBUNAL WHILE ADJUDICATING THIS ISSUE IN THE IMPUGNED ORDER HAS R ECORDED THAT THIS GROUND WAS NOT 7 MA NO. 169/MUM/2011 ARISING OUT OF ITA NO. 3439/MUM/2007 (ASST YEAR 2004-05) . (INVESTIGATION)(SUPRA) IS CONCERNED , IT IS TO BE NOTED THAT WHILE DECIDING THE ISSUE OF REFERENCE TO THE VALUATION OFFICER THIS TRIBUNAL HA S GIVEN A FINDING ON THE BASIS OF THE FACTS THAT THE ASSESSING OFFICER HAS EXPRESSED AN O PINION WHILE REFERRING THE VALUATION OF THE PROPERTY TO THE DVO AND THEREBY T HE CONDITION PROVIDED U/S 55A (B)(II) ARE SPECIFIED. ONCE A FINDING HAS BEEN GIVE N AND THE TRIBUNAL FORMED AN OPINION ON THE BASIS OF THE FACTS OF THE CASE AND P ROVISIONS OF THE LAW THEN, REFERENCE TO VARIOUS DECISION IS NOT THE SOLE RELIA NCE PLACED BY THE TRIBUNAL ON ADJUDICATION OF THE ISSUE BUT THE REFERENCE HAS BEE N MADE TO FORTIFIED AND IN SUPPORT OF THE VIEW TAKEN BY THE TRIBUNAL ON THIS I SSUE. AFTER TAKING A DECISION ON THE BASIS OF FACTS AND PROVISIONS OF STATUTE, THIS TRIB UNAL HAS REFERRED THOSE DECISIONS WITH A VIEW THAT THERE ARE DECISIONS OF THE TRIBUNAL ON BOTH SIDES. THEREFORE, NO RELIANCE HAS BEEN PLACED BY THE TRIBUNAL ON ANY OF THE DECIS IONS WHILE ADJUDICATING THE ISSUE BUT ONLY REFERRED VARIOUS DECISIONS IN SUPPORT OF T HE VIEW TAKEN BY THE TRIBUNAL. SINCE THE ISSUE IN THE APPEAL OF THE ASSESSEE FOR A DJUDICATION WAS WHETHER THE REFERENCE MADE BY THE ASSESSING OFFICER U/S 55A W AS VALID OR NOT; THEREFORE, ONCE THE ASSESSING OFFICER HAS FORMED AN OPINION THAT TH E COST OF ACQUISITION AS CLAIMED BY THE ASSESSEE IS LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY IN QUESTION, THEN, IT IS IMMATERIAL WHETHER THE ASSESSEE HAS CLAIMED THE COS T OF ACQUISITION ON THE BASIS OF ANY VALUATION REPORT OR NOT. THEREFORE, THE PRINCI PLES LAID DOWN IN THE ORDERS ARE MATERIAL AND RELEVANCE ON THE POINT OF REFERENCE, THE OBJECTION OF THE AR THAT THE LD DR HAS NOT REFERRED ANY SUCH DECISION IN THE CAS E OF VIJAY KUMAR M SHAH VS DCIT(2010) 2 ITR116 (MUM) (TRIB). IT IS TO BE NOTED THAT IN PARA 10 OF THE IMPUGNED ORDER, THE TRIBUNAL HAS RECORDED THAT THIS DECISION IS AGAINST THE ASSESSEE AND NO RELIANCE HAS NOT BEEN PLACED ON THESE DECISIONS, WH ICH WERE CITED IN THE ORDER. 9 MA NO. 169/MUM/2011 ARISING OUT OF ITA NO. 3439/MUM/2007 (ASST YEAR 2004-05) . FINDING OF FACT AND THERE IS ABSOLUTELY NO QUESTION OF LAW INVOLVED IN THE ABOVE APPEAL. 7.1 THUS, THERE WAS NO PRECEDENT LAID DOWNED BY THE HONBLE JURISDICTIONAL HIGH COURT BUT IT WAS FOND THAT THE QUANTUM OF VALUATION IS FINDING OF THE FACT AND NO QUESTION OF LAW INVOLVED. 8 IN THE CASE OF HIABEN JAYANTILAL SHAH VS ITO AND ANR.(SUPRA), THE HONBLE GUJARAT HIGH COURT HAS OBSERVED IN PARA 10,11 & 1 4 AS UNDER: 10 UNDER CLAUSE (A) OF SECTION 55A OF THE ACT, THE ASSESSING OFFICER IS ENTITLED TO MAKE THE REFERENCE TO THE VALUATION OFFICER IN A CA SE WHERE THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE IS IN ACCORDANCE WITH THE E STIMATE MADE BY THE REGISTERED VALUER, IF THE ASSESSING OFFICER IS OF THE OPINION THAT THE VALUE SO CLAIMED IS LESS THAN THE FAIR MARKET VALUE. IN ANY OTHER CASE, AS PROVI DED UNDER CLAUSE (B) OF SECTION 55A OF THE ACT, THE ASSESSING OFFICER HAS TO RECORD AN OPINION THAT (I) THE FAIR MARKET VALUE OF THE ASSET EXCEEDS THE VALUE OF THE ASSET AS CLA IMED BY THE ASSESSEE BY MORE THAN SUCH PERCENTAGE OR BY MORE THAN SUCH AN AMOUNT AS MAY BE PRESCRIBED ; OR (II) HAVING REGARD TO THE NATURE OF THE ASSET AND OTHER RELEVANT CIRCUMSTANCES, IT IS NECESSARY TO MAKE SUCH A REFERENCE. 11 AS CAN BE SEEN FROM THE COMMUNICATION DATED NIL (ANNEXURE D) FROM RESPONDENT NO. 2-DVO TO THE PETITIONER IN SO FAR AS THE FAIR MARKET VALUE OF THE PROPERTY AS ON APRIL 1, 1981, IS CONCERNED, THE PET ITIONER HAD CLAIMED THE SAME AT A SUM OF RS. 6,25,000 AS PER THE REGISTERED VALUERS REPORT. THEREFORE, THE ASSESSING OFFICER WAS REQUIRED TO FORM AN OPINION THAT THE V ALUE SO CLAIMED IS LESS THAN THE FAIR MARKET VALUE. THE ESTIMATED VALUE PROPOSED BY THE DVO IS SHOWN AT RS. 3,97,000, WHICH IS LESS THAN THE FAIR MARKET VALUE SHOWN BY THE ASSESSEE AS ON APRIL 1, 1981. THEREFORE, CLAUSE (A) OF SECTION 55A OF THE ACT CA NNOT BE MADE APPLICABLE. CLAUSE (B) OF SECTION 55A OF THE ACT CAN BE INVOKED ONLY I N ANY OTHER CASE, NAMELY, WHEN THE VALUE OF THE ASSET CLAIMED BY THE ASSESSEE IS N OT SUPPORTED BY AN ESTIMATE MADE BY A REGISTERED VALUER. IN THE FACTS OF THE PRESENT CASE, CLAUSE (B) OF SECTION 55A OF THE ACT ALSO CANNOT BE INVOKED. THEREFORE, THERE IS NO QUESTION OF HAVING RECOURSE TO SUB-CLAUSE (II) OF CLAUSE (B) OF SECTION 55A OF TH E ACT. 12 THERE IS ONE MORE ASPECT OF THE MATTER. FOR INVO KING SECTION 55A OF THE ACT, THERE HAS TO BE A CLAIM MADE BY THE ASSESSEE, BEFOR E THE ASSESSING OFFICER CAN RECORD OPINION EITHER UNDER CLAUSE (A) OR CLAUSE (B ) OF SECTION 55A OF THE ACT TO MAKE A REFERENCE TO THE VALUATION OFFICER. THE FACT S OF THE PRESENT CASE GO TO SHOW THAT THE REFERENCE WAS MADE ON APRIL 26, 1996, WHE REAS THE RETURN OF INCOME HAD BEEN FILED BY THE ASSESSEE ONLY ON AUGUST 27, 1996 . HENCE, ON THE DATE OF MAKING THE REFERENCE BY THE ASSESSING OFFICER, NO CLAIM W AS MADE BY THE ASSESSEE AND THE ASSESSING OFFICER COULD NOT HAVE FORMED ANY OPINIO N AS TO EXISTENCE OF PRESCRIBED DIFFERENCE BETWEEN THE VALUE OF THE ASSET AS CLAIME D BY THE ASSESSEE AND THE FAIR MARKET VALUE. THEREFORE ALSO, THE PROVISIONS OF SEC TION 55A OF THE ACT COULD NOT HAVE BEEN RESORTED TO BY THE ASSESSING OFFICER. 14 THEREFORE, IT IS APPARENT THAT THE ASSESSING OFF ICER HAD, AT NO POINT OF TIME, FORMED AN OPINION THAT THE FAIR MARKET VALUE, IN SU BSTITUTION OF THE COST OF ACQUISITION, AS CLAIMED BY THE ASSESSEE WAS REQUIRED TO BE DISTU RBED BECAUSE PRESCRIBED PARAMETERS WERE FULFILLED. IN FACT, AS CAN BE SEEN FROM THE AFFIDAVIT-IN-REPLY THE ONLY 11 MA NO. 169/MUM/2011 ARISING OUT OF ITA NO. 3439/MUM/2007 (ASST YEAR 2004-05) . TRIBUNAL HAS NO POWER TO REVIEW ITS ORDER PASSED ON MERIT AND IN THE GRAB OF RECTIFICATION OF MISTAKE NO ORDER CAN BE PASSED U/S 254(2) WHICH AMOUNTS TO REVERSAL OF THE ORDER PASSED AFTER DISCUSSING ALL THE FACTS AND STATUTORY PROVISIONS IN DETAIL. WHEN THE ENTIRE ISSUE WAS EXAMINED AND DECIDED ON MERIT AFTER CONSIDERING THE JUDGMENTS RELIED UPON BY BOTH THE PARTIES AND, IN S UPPORT OF THE FINDINGS AND VIEW IF CERTAIN DECISIONS ARE REFERRED BY THE TRIBUNAL THEN IT WOULD NOT AMOUNT TO TOTAL RELIANCE PLACED ON THE CITED DECISIONS AND IN TURN AN APPARENT AND MANIFEST MISTAKE IN THE ORDER. THE DECISION OF THE SUPREME COURT IN THE CASE OF POORANMAL VS DIRECTOR OF INSPECTION (INVESTIGATION)(SUPRA), HAS BEEN REFERRED ONLY ON THE POINT OF ADMISSIBILITY OF THE EVIDENCES AND NOT ON THE POINT OF REFERENCE U/S 55A. THEREFORE, THE SAID DECISION OF THE SUPREME COURT WAS REFERRED TO DISCUSS A SITUATION WHERE THE EVIDENCE GATHERED IN A MANNER WHICH IS NOT AS PER T HE RULES; EVEN THEN THE ADMISSIBILITY OF THE EVIDENCE IS NOT AFFECTED. 11 IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE C ONSIDERED OPINION THAT THE ASSESSEE HAS NOT BROUGHT OUT ANY ERROR OR MISTAKE A PPARENT ON THE FACE OF THE RECORD, WHICH CAN BE RECTIFIED WITH THE PROVISION O F SEC 254(2) BUT ALL THE CONDITIONS RAISED BY THE ASSESSEE IN THE MA AS WELL AS IN THE ARGUMENTS ARE ON MERITS OF THE ISSUE DECIDED BY THE TRIBUNAL VIDE IMPUGNED ORDER. THEREFORE, THE MISCELLANEOUS APPLICATION IS NOTHING BUT SEEKING A REVIEW OF THE IMPUGNED ORDER OF THIS TRIBUNAL WHICH IS BEYOND THE SCOPE OF SEC 254(2). THE ORDER PASSED ON MERITS CANNOT BE AMENDED OR RECALLED BY GIVING A DIFFERENT REASON IN THE GARB OF RECTIFICATION OF MISTAKE. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THE MISCELLANEOUS APPLICATION TO THE EXTENT THE ISSUE ALREADY DECIDED ON MERITS.