INDUS ELECTRONICS, V. ADDL CIT CIR 20(1),

MA 173/MUM/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0935 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2007-2008
• Appeal Filed On: 13-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R K BOTHRA
• Keywords: Business income; Business expenditure; Capital expenditure
• Section: 45(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH , MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D DR. S.T.M. PAVALAN, JUDICIAL MEMBER M.A.NO.173/M/2013 (ARISING OUT OF I.T.A. NO.8615/M/2010) (AY (ASSESSMENT YEAR : 2007-2008 ) M/S. INDUS ELECTRONICS, INDUS HOUSE, B-53, NEW LINK ROAD, ANDHERI (W), MUMBAI-53. / VS. ADDL. CIT-20(1), MUMBAI. ./PAN : AACFI 0670 E ( /APPELLANT) .. ( / RESPONDENT) / APPELLANT BY : SHRI R.K. BOTHRA / RESPONDENT BY : SHRI P.K. SINGH, DR /DATE OF HEARING : 23.8.2013 /DATE OF PRONOUNCEMENT : 13.09.2013 !' !' !' !' / O R D E R PER DR. S.T.M. PAVALAN, JM: THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASSE SSEE ON 13.5.2013 UNDER SECTION 254(2) OF THE ACT SEEKING RECTIFICATION WI TH REFERENCE TO THE GROUND NO. 4 & 5 OF APPEAL ITA NO.8615/M/2010 FOR THE AY 2007-08, WHICH IS ADJUDICATED BY US VIDE ORDER DATED 10.4.2013. 2. DURING THE PROCEEDING BEFORE US, SHRI R.K. BOTHR A, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE MISCELLANEOUS APPLICATION AND STATED THAT THERE IS NEED FOR MAKING CERTAIN RECTIFICATION IN T HE SAID ORDER OF THE TRIBUNAL DATED 10.4.2013. THE IMPUGNED RECTIFICATIONS ARE REQUIRE D TO BE DONE AND THE RELEVANT GROUNDS ARE GROUND NO.4 AND 5 OF THE APPEAL. THE I SSUE WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAPHS. 3. GROUND NO.4 OF THE APPEAL RELATES TO THE CONFIR MING OF THE DISALLOWANCE OF VARIOUS EXPENSES AMOUNTING TO RS. 15,45,982/-. GIV ING THE BREAKUP FOR THE SAID AMOUNT, LD COUNSEL MENTIONED THAT THE SAID EXPENDIT URE IS AN ALLOWABLE BUSINESS EXPENDITURE AS THE SAME IS INCURRED AFTER COMPLETIO N OF CONSTRUCTION OF THE BUILDING. 2 FURTHER, LD COUNSEL SUBMITTED, SINCE THE SAID EXPEN DITURE DOES NOT AMOUNT TO CAPITAL EXPENDITURE, THEREFORE, THE ADDITION OF R S. 15,45,982/- IS REQUIRED TO BE DELETED. HOWEVER, THE TRIBUNAL CONFIRMED THE CONCL USIONS OF THE CIT (A). THEREBY, THE TRIBUNAL MISTAKENLY CONFIRMED THE DOUBLE DISALL OWANCE OF THE BMC TAX OF RS. 2,79,181/- TOO. THIS ASPECT OF DOUBLE DEDUCTION WA S DULY SUBMITTED BY THE LD COUNSEL DURING THE COURSE OF HEARING BEFORE THE TRI BUNAL. FOR THE SAME REASONS, THE MISTAKE PERSISTED IN THE ORDER OF THE TRIBUNAL. TH US, THE ASSESSEE NOW SEEKS ALLOWING THE CLAIM OF THE ASSESSEE ON THE WHOLE OF THE AMOUNT OF RS. 15,45,982/- OR AT LEAST A SUM OF RS. 2,79,181/- RELATING TO BMC TA X. 3. ON THE OTHER HAND, ON THIS ISSUE, LD DR MENTIONE D THAT THE ORDER OF THE TRIBUNAL DOES NOT CALL FOR ANY RECTIFICATION AS THE Y SIMPLY CONFIRMED THE CONCLUSIONS OF THE CIT (A). HOWEVER, WITH REGARD TO THE BMC TA X, WHICH IS DISALLOWED TWICE, LD DR RELIED ON THE ORDER OF THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE OF ALLOWABILITY OF DISALLOWANCE OF RS. 15,45,982/- AND WHETHER THERE IS ANY MISTAKE IN CONFIRMING THE SAID DISALLOWANCE, IN GENERAL, OR THE BMC TAX OF RS. 2,7 9,181/-, IN PARTICULAR. WE HAVE PERUSED THE RECORD AVAILABLE BEFORE US AND FOUND TH AT THE CLAIM OF THE ASSESSEE WITH REGARD TO THE BMC TAX OF RS. 2,79,181/- IS RECTIFIA BLE ONE WITHIN THE MEANING OF SECTION 254(2) OF THE ACT. WE DIRECT THE AO TO RECT IFY ACCORDINGLY. REGARDING THE ASSESSEES REQUEST WITH REGARD TO THE BALANCE CLAIM OF RS. 15,45,982/-, WE DISMISS THE SAME AS ANY CHANGE TO OUR ORDER WILL AMOUNT TO REVIEW WHICH IS NOT PERMITTED BY THE LAW. ACCORDINGLY, THIS PART OF THE MISCELLAN EOUS APPLICATION IS PARTLY ALLOWED . 5. GROUND NO.5 OF THE MISCELLANEOUS APPLICATION IS THE GENESIS FOR ALLEGED MISTAKE, WHICH IS SOUGHT TO BE RECTIFIED. PARA 8 A ND 9 OF THE MISCELLANEOUS APPLICATION ARE RELEVANT IN THIS REGARD. GROUND NO .5 OF THE APPEAL RELATES TO THE TAXABILITY OF RS. 23,00,000/- AS BUSINESS INCOME OF THE ASSESSEE INSTEAD OF LONG TERM CAPITAL GAINS AS CLAIMED BY THE ASSESSEE. IN THIS REGARD, ASSESSEE CLAIMED THE EXEMPTION U/S 54EC OF THE ACT IN RESPECT OF INSTEAD OF LONG TERM CAPITAL GAINS TO THE EXTENT OF RS. 23 LACS. IT IS THE CLAIM OF THE A SSESSEE THAT THE SAID AMOUNT OF RS. 3 23 LACS CONSTITUTES CAPITAL GAINS AS PER THE PROVIS IONS OF SECTION 45(2) OF THE ACT. AO REJECTED THE CLAIM OF THE ASSESSEE AND TREATED THE SAME AS BUSINESS INCOME AND CONSEQUENTLY, DENIED THE CLAIM OF EXEMPTION U/S 54E C IN RESPECT OF SUM OF RS. 23 LACS. CIT (A) CONFIRMED THE DECISION OF THE AO. ON FINDING THAT THE ASSESSEE FAILED TO FURNISH THE REQUISITE EVIDENCES, PARTICULARLY WI TH REGARD TO THE EXISTENCE OF FIRM BY WAY OF ORAL AGREEMENT DATED 1.4.1992, THE TRIBUNAL CONFIRMED THE PRESUMPTION AGAINST THE ASSESSEE AND CONFIRMED THE VIEWS OF THE CIT (A). THUS, FOR WANT OF EVIDENCES AND THE ASSESSEES FAILURE TO DISCHARGE T HE ONUS, THE CONCLUSIONS OF THE CIT (A) WERE CONFIRMED BY THE TRIBUNAL. THE CLAIM O F CONVERSION OF THE INVESTMENT INTO STOCK-IN-TRADE AND THE APPLICABILITY OF THE PR OVISIONS OF SECTION 45(2) IS DIRECTLY LINKED TO SUCH EVIDENCES SOUGHT BY THE REVENUE OFFI CERS. THE SAME WAS NOT DEMONSTRATED BY THE ASSESSEE AND WE AGREE THE SAME. THEREFORE, THE ISSUES RAISED BY THE ASSESSEE IN PARA 8 AND 9 OF THE MISCELLANEOU S APPLICATION ARE UNSUSTAINABLE CONSIDERING THE LIMITED SCOPE PROVIDED TO THE TRIBU NAL UNDER THE PROVISIONS OF SECTION 254(2) OF THE ACT. 6. BEFORE PARTING, IT IS RELEVANT TO MENTION HERE T HAT THE CONTENTS OF PARA 6.2 OF THE ORDER IN TOTO ARE MISTAKENLY PLACED IN THE ORDER OF THE TRIBUNAL . IN FACT, THE CONTENTS OF THE SAID PARA 6.2 ARE NOTHING BUT THE C ONTENTS OF PARA 7.3.1 OF THE IMPUGNED ORDER OF THE CIT (A). ON FINDING THAT THE PARA 6.2 IS SUPERFLUOUS, THE SAID PARA STANDS OMITTED AND CONSEQUENTLY, EXISTING PARA S 6.3 AND 6.4 SHALL BE READ AS 6.2 AND 6.3 RESPECTIVELY. 7. IN THE RESULT, MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPTEMBER, 2013. SD/- SD/- (D. KARUNAKARA RAO) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; #! 13.9.2013 . $ . ./ OKK , SR. PS 4 !' !' !' !' $$% $$% $$% $$% &% &% &% &% / 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. % $ //TRUE COPY// !' !' !' !' / BY ORDER, . .. . / / / / / 0 0 0 0 (DY./ASSTT. REGISTRAR) $* $* $* $* , / ITAT, MUMBAI