Shri Prakash Vasantbhai Golwala, Surat V. The ACIT, Circle-5, Surat

MA 213/AHD/2013

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 2749 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 09-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: M K PATEL
• Keywords: Deemed to accrue or arise in india; Retrospective amendment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI , ACCOUNTANT MEMBER MA NO. 213 /AHD/201 3 ( ARISING OUT OF ITA NO . 558 /AHD/20 1 3 A. Y. 200 3 - 0 4 SHRI PRAKASH VASANTBHAI GOLWALA, 6 T H FLOOR, RIVER PALACE OPP: OLD CIVIL COURTS, NANPURA, SURAT. PAN: ACLPG 5458R VS THE ACIT, CIRCLE - 5, SURAT. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI V .K. SINGH , SR.D.R. ASSESSEE(S) BY : SHRI M.K. PATEL , A.R. / DATE OF HEARING : 16 / 01 /201 5 / DATE OF PRONOUNCEMENT: 26 / 0 3 /201 5 27 TH MARCH 2015 / O R D E R PER MUKUL K R . SHRAWAT , JUDICIAL MEMBER : THIS MISC. APPLICATION HAS BEEN MOVED BY THE ASSESSEE ON 9 TH DECEMBER, 2013 ARISING FROM THE ORDER OF THE TRIBUNAL AS MENTIONED IN THE NOMENCLATURE ABOVE DATED 11.10.2013. IN THIS APPLICATION , THE MAIN OBJECTION OF THE ASSESSEE WAS THAT AN ADDITION OF RS.42,000/ - WAS CONFIRMED AS DEEMED INCOME FROM HOUSE PROPERTY WITHOUT FOL LOWING THE ORDER OF HON BLE JURISDICTIONAL HIGH COURT PRONOUNCED IN THE CASE OF CIT VS. RASHIKLAL BALABHAI , 11 9 ITR 303 ( GUJARAT ) . IN THE APPLICATION, I T IS MENTIONED THAT THE TRIBUNAL HAS COMMITTED AN ERROR BY NOT FOLLOWING THE DECISION OF HON BLE GUJARAT HIGH COURT ALTHOUGH THERE WERE DECISIONS OF OTHER HIGH COURTS WHICH WERE RELIED UPON BY THE TRIBUNAL. FOR READY REFERENCE , RELEVANT PORTIONS OF THIS APPLICATION ARE EXTRACTED BELOW: MA NO. 213 /AHD/201 3 IN ITA NO. 558 /AHD/201 3 SHRI PRAKASH VASANTBHAI GOLWALA VS. ACIT, CIRCLE - 5, SURAT. FOR A.Y. 200 9 - 10 - 2 - 2. THE GROUND NO.1 IN THE APPEAL IS WITH RESPECT TO THE ADDITION OF RS.4 2,000/ - MADE AS DEEMED INCOME FROM HOUSE PROPERTY ON ESTIMATE BASIS ONLY. THE SAID ADDITION IS DISCUSSED BY AO ON PAGE 9, PARA 5.4, WHEREIN ADDITION IS MADE ON THE GROUND THAT LOCAL INQUIRIES CONDUCTED BY INSPECTOR REVEALED THAT THERE IS NOBODY STAYING IN THE FLAT AND IT COULD NOT BE PROVED THAT THE FLAT IS BEING USED BY THE EMPLOYEES OF THE FIRM IN WHICH THE ASSESSEE IS A PARTNER. (3) IN THE APPEAL FILED BY THE ASSESSEE, IN PARAGRAPHS 7 TO 9 OF HIS ORDER, THE CIT(A) HAS CLEARLY NOTED THE JUDGMENT OF HON'BL E GUJARAT HIGH COURT IN THE CASE OF RASIKLAL BALABHAI 119 ITR 303 (GUJ)IN WHICH IT HELD THAT IF A PARTNERS PROPERTY IS USED FOR FIRMS BUSINESS, NO INCOME FROM THE SAME CAN BE CHARGED TO TAX UNDER THE HEAD HOUSE PROPERTY. THE SAID JUDGMENT IS ALSO FOLLOWED BY THE AHMEDABAD ITAT IN THE CASE REPORTED AT 76 TTJ 148(AHD). THE CONTRARY JUDGMENT OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF PRADIP KUMAR BOTHRA 244 CTR 366 (CAL), WHICH HAS NOT FOLLOWED THE RATIO OF HON'BLE GUJARAT HIGH COURT IS ALSO NOTED BY CIT(A )IN PARA 8. HOWEVER, VIDE PARA 9, THE CIT (A) HOLDS THAT SINCE THERE IS NO JUDGMENT OF THE HON'BLE SUPREME COURT, HE IS BOUND BY THE DECISIONS OF HON'BLE GUJARAT HIGH COURT AND ALSO OF ITAT, AHMEDABAD BENCH ON THIS ISSUE. 4) HOWEVER, ON MERITS THE ADDITION IS CONFIRMED BY CIT(A) VIDE PAGE 3, PARA 10 OF HIS ORDER, FOR THE SAME REASONS AS THAT OF THE AO THAT THE FIELD INQUIRIES REVEALED THAT THE PROPERTY IS NOT BEING USED FOR ANY PURPOSE AND THAT IT IS NOT ESTABLISHED THAT IT IS USED FOR THE STAY OF STAFF MEM BERS 7) FURTHER, THE HON'BLE ITAT HAS HELD IN PARA 6 OF THE ABOVE ORDER THAT ALTHOUGH THE DECISIONS OF HON'BLE HIGH COURT OF GUJARAT AND HON'BLE HIGH COURT OF ALLAHABAD ARE IN FAVOUR OF THE ASSESSEE, YET THE HON'BLE HIGH COURTS OF CALCUTTA AND KARNATA KA HAVE DISSENTED FROM THE VIEW EXPRESSED BY THE HON'BLE HIGH COURT OF GUJARAT AND HELD IN FAVOUR OF THE DEPARTMENT. IN VIEW OF THE DIVERGENT VIEWS EXPRESSED BY THE HON'BLE COURTS, THE HON'BLE ITAT HAS APPLIED A RULE OF THUMB AND FOLLOWED THE LATEST DECISI ON OF THE HON'BLE HIGH COURT OF CALCUTTA, WHICH HAS DISSENTED FROM THE VIEW EXPRESSED BY THE HON'BLE JURISDICTIONAL HIGH COURT OF GUJARAT. 8. WITH UTMOST RESPECT, IT IS SUBMITTED THAT AS PER THE DOCTRINE OF BINDING PRECEDENTS, THE PROPOSITION OF LAW DECLAR ED BY THE HON'BLE JURISDICTIONAL HIGH COURT IS BINDING ON ALL THE COURTS, TRIBUNALS AND AUTHORITIES FUNCTIONING WITHIN THE TERRITORIAL JURISDICTION, UNTIL THE JUDGMENT OF THE JURISDICTIONAL COURT IS REVERSED BY HON'BLE SUPREME COURT. THE JUDGMENT OF RASIKL AL BALABHAI(SUPRA) IS NOT VARIED BY HON,BLE SUPREME COURT AND HENCE IT OUGHT TO HAVE BEEN FOLLOWED IN PREFERENCE TO THE JUDGMENTS OF THE OTHER HON'BLE HIGH COURTS. THIS PROPOSITION IS SUPPORTED BY THE RATIO LAID DOWN BY THE FOLLOWING JUDGMENTS: I. EAST IND IA COMMERCIAL CO. LTD. CALCUTTA A ND ANOTHER VS. THE COLLECTOR OF CUSTOMS, CALCUTTA AIR 1962 SC 1893. II. AIR CONDITIONING SPECIALISTS PVT. LTD., 221 ITR 739 (GUJ.) III. CIT VS. G.M. MITTAL STAINLESS STEEL P. LTD. MA NO. 213 /AHD/201 3 IN ITA NO. 558 /AHD/201 3 SHRI PRAKASH VASANTBHAI GOLWALA VS. ACIT, CIRCLE - 5, SURAT. FOR A.Y. 200 9 - 10 - 3 - 2. LEARNED AR, MR. M.K. PATEL HAS PLEADED THAT AL THOUGH THE LEARNED CIT(A) HAS DECIDED THE ISSUE ON MERITS AGAINST THE ASSESSEE BUT BY FOLLOWING THE DECISION OF HON BLE GUJARAT HIGH COURT OF RASIKLAL BALABHAI (SUPRA) ON LEGAL GROUND ALLOWED THE CLAIM OF THE ASSESSEE. HE HAS PLEADED THAT ALTHOUGH IT IS CO RRECT THAT FEW HIGH COURTS HAVE DISSENTED WITH THE ORDER OF THE HON BLE GUJARAT HIGH COURT BUT IN THE ABSENCE OF ANY SUPREME COURT DECISION THE JUDICIAL AUTHORITIES WITHIN THE JURISDICTION OF GUJARAT HIGH COURT ARE EXPECTED TO FOLLOW THE HIGH COURT DECISIO N. 3. ON THE OTHER HAND, FROM THE SIDE OF THE REVENUE, LEARNED SR.D.R., SRI V.K. SINGH HAS STRONGLY SUPPORTED THE ORDER OF THE TRIBUNAL SPECIALLY PLACING RELIANCE ON ALL THOSE DECISIONS WHICH WERE CITED BY THE TRIBUNAL IN FAVOUR OF THE REVENUE. LEARNED SR .D.R. HAS PLEADED THAT THERE ARE SERIES OF DECISIONS WHICH WERE PRONOUNCED LATER ON BY CALCUTTA HIGH COURT, BY ALLAHABAD HIGH COURT, BY KARNATAKA HIGH COURT , ETC . AND DULY DISCUSSED BY THE TRIBUNAL IN THIS ORDER THEREFORE NO MISTAKE, WHAT TO SAY AN APPAREN T MISTAKE, WAS COMMITTED BY THE TRIBUNAL. 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE VIEW THAT THE HON BLE COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE, 305 ITR 227 (SC) HAS HELD THAT NON CONSIDERATION OF A DECISION OF JURISDICTIONAL HIGH COURT CAN BE SAID TO BE A MISTAKE APPARENT FROM THE RECORD. ALTHOUGH WHILE DECIDING THIS APPEAL THE TRIBUNAL HAS CONSIDERED FEW OTHER DECISIONS OF THE HON BLE HIGH COURTS WHICH WERE IN CONTRADICTION OF THE ORDER OF H ON BLE GUJARAT HI GH COURT UNDER THE IMPRESSION THAT THE DECISION RENDERED LATER ON HAVE RETROSPECTIVE EFFECT MA NO. 213 /AHD/201 3 IN ITA NO. 558 /AHD/201 3 SHRI PRAKASH VASANTBHAI GOLWALA VS. ACIT, CIRCLE - 5, SURAT. FOR A.Y. 200 9 - 10 - 4 - AND SUCH AN ORDER OF THE HON BLE HIGH COURT OR HON BLE SUPREME COURT CLARIFY THE LEGAL POSITION WHICH WAS NOT CORRECTLY UNDERSTOOD IN THE PAST AND THAT A SUBSEQUENT DECISION DO NOT ALT E R THE EARLIER DECISION BECAUSE THE LATER DECISION DO NOT MAKE ANY NEW LAW BUT BY OVERRULING THE PREVIOUS DECISION CORRECTS THE PRINCIPLE OF LAW WHICH WAS IN EXISTENCE SINCE INCEPTION OF AN ENACTMENT. HOWEVER, THE HON BLE SUPREME COURT IN THE CASE OF SAURASHTRA KUTCH STOCK EXCHANGE (SUPRA) HAS OPINED THAT THE SUB - ORDINATE COURT WITHIN A TERRITORIAL JURISDICTION OF A HIGH COURT SHOULD FOLLOW THE DECISION OF JURISDICTIONAL HIGH COURT DECISION, THEREFORE, WE HEREBY RECALL OUR ORDER DATED 11 .10.2013 AND DIRECT THE REGISTRY TO FIX THE MATTER FOR REHEARING SO THAT THIS APPEAL CAN BE HEARD ON MERITS AS WELL AS ON LAW. 5. IN THE RESULT, THE MISC. APPLICATION IS ALLOWED. SD/ - SD/ - ( ANIL CHATURVEDI ) ( MUKUL K R . SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27 / 0 3 /20 1 5 PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD