BRIJMOHAN SAGARMAL CAPITAL SERVICES P.LTD, V. DCIT 4(1),

MA 217/MUM/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 3879 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 16-09-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B S BISTDR
• Keywords: Charitable institution; Earning of tax free income
• Section: 14A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER M.A. NO.217/MUM/2015 (ARISING OUT OF ITA NO.5569/MUM/2013) ASSESSMENT YEAR: 2010-11 BRIJMOHAN SAGARMAL CAPITAL SERVICES P. LTD., 412, STOCK EXCHANGE TOWER, DALAL STREE, MUMBAI-400023 / VS. DCIT-4(1), ROOM NO.640, 6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( ! ' /ASSESSEE) ( # / REVENUE) P.A. NO. AAACB7335E ! ' / ASSESSEE BY SHRI PANKAJ R. TOPRANI # / REVENUE BY SHRI B.S. BIST-DR $ #% & ' ' / DATE OF HEARING : 15/01/2016 & ' ' / DATE OF ORDER: 18/01/2016 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THIS MISCELLANEOUS APPLICATION IS BY THE ASSESSEE SEEKING RECTIFICATION/RECALLING IN THE ORDER OF THE TRIBUNA L DATED 24/07/2015. M.A. NO.217/MUM/2015 (ARISING OUT OF ITA NO.5569/MUM/2013) BRIJMOHAN SAGARMAL CAPITAL SERVICES LTD. 2 2. DURING HEARING OF THIS MISCELLANEOUS APPLICATION , THE LD. COUNSEL FOR THE ASSESSEE, SHRI. PANKAJ R. TOPRANI, CONTENDED THAT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, WHILE HEARING THE APPEAL OF THE ASSESSEE ON 24/06/2015 CITED THE DECISION OF THE THIRD MEMBER IN THE CASE OF D.H. SECURITIES PVT . LTD. VS DCIT (146 ITD 1) WITH RESPECT TO DISALLOWANCE U/S 1 4A OF THE ACT READ WITH RULE 8D (2)(II) OF THE RULES, THEREFORE, THE ORDER MAY BE RECTIFIED/RECALLED. ON THE OTHER HAND, THE LD. DR, SHRI B. S. BIST, STRONGLY OPPOSED THE CONTENTION OF THE ASSESS EE BY EXPLAINING THAT THIS ISSUE WAS COVERED AGAINST THE ASSESSEE AND EVEN DURING HEARING, THE LD. COUNSEL FOR THE ASSESS EE AGREED THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE BY INVIT ING OUR ATTENTION TO THE FACTUAL FINDING RECORDED AT PAGE-2 (PARA-2) OF THE ORDER OF THE TRIBUNAL DATED 24/07/2015. THIS ASSERT ION OF THE LD. DR WAS NOT CONTROVERTED BY THE LD. COUNSEL FOR THE ASSESSEE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE AFORESAID ORDER OF THE TRIBUNAL DATED 24/07/2015 FOR READY RE FERENCE:- 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD, S HRI JEETENDRA KUMAR, LD. DR, WHO ADVANCED HIS ARGUMENTS , WHICH ARE IDENTICAL TO THE GROUND RAISED. THE LD. DR. POINTED OUT THAT THE ISSUE IS COVERED IN FAVOUR OF THE REVENUE. ON THE OTHER HAND, MS. KEYURI DESAI, LD. COUNSEL FOR THE ASSESSEE, FAIRLY AGREED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE. M.A. NO.217/MUM/2015 (ARISING OUT OF ITA NO.5569/MUM/2013) BRIJMOHAN SAGARMAL CAPITAL SERVICES LTD. 3 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS A PRIVATE COMPANY ENGAGED IN T HE BUSINESS OF BROKERAGE AND DEALING IN SHARES, AS A MEMBER OF BOM BAY STOCK EXCHANGE. THE ASSESSEE HAVING INSUFFICIENT FUNDS T O TRADE IN SHARES, BORROWED FUNDS AND UTILIZE THE SAME FOR PUR CHASE OF SHARES. THE TOTAL LOAN OUTSTANDING AS ON 31/03/2010 WERE TO THE TUNE OF RS.21,84,53,513/- AND THE CLOSING STOCK OF SHARES AS ON 31/03/2010 WERE TO THE TUNE OF RS.23,39,71,313/-. T HE HUGE BORROWED MONEY WAS UTILIZED FOR TRADING IN SHARES. THE ASSESSEE CLAIMED DIVIDEND INCOME OF RS.1,09,55,090/- AND CLA IMED THE SAME AS EXEMPT. THE ASSESSEE DID NOT DISALLOW THE PROPORTIONATE EXPENSES RELATING TO CLAIMED EXEMPT INCOME. THE LD . ASSESSING OFFICER ASKED THE WORKING OF DISALLOWANCES U/S 14A OF THE ACT READ WITH RULE-8D. THE WORKING, FILED BY THE ASSESSEE, WAS FOUND UNSATISFACTORY. ADMITTEDLY, THE ASSESSEE USED BOR ROWED FUNDS FOR MAKING INVESTMENT IN THE SHARES OF VARIOUS COMP ANIES. THE IMPUGNED ASSESSMENT YEAR BEFORE US IS 2010-11, THER EFORE, THE CASE OF GODREJ & BOYCE MFG. COMPANY IS VERY MUCH AP PLICABLE TO THE FACTS OF THE PRESENT APPEAL. THUS, FOLLOWING T HE AFORESAID DECISION, WE FIND MERIT IN THE CONCLUSION DRAWN BY THE LD. ASSESSING OFFICER. THE STAND OF THE LD. COMMISSIONE R OF INCOME TAX (APPEALS) IS REVERSED. FINALLY, THE APPEAL OF THE REVENUE IS ALLOWED. 2.2. WE NOTE THAT THERE IS SPECIFIC FINDING IN PAR A -2 (PAGE- 2) OF THE ORDER OF THE TRIBUNAL THAT THE LD. COUNSE L FOR THE ASSESSEE, DURING HEARING OF THE APPEAL, FAIRLY AGRE ED THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE AND SECONDLY, THE ASSESSEE WAS HAVING INSUFFICIENT FUNDS FOR TRADING THE SHARE S AND UTILIZE M.A. NO.217/MUM/2015 (ARISING OUT OF ITA NO.5569/MUM/2013) BRIJMOHAN SAGARMAL CAPITAL SERVICES LTD. 4 THE BORROWED FUNDS FOR PURCHASING SUCH SHARES. THE TOTAL LOAN OUTSTANDING AS ON 31/03/2010 WERE TO THE TUNE OF RS.21,84,53,513/-. EVEN THE WORKING FILED BEFORE TH E LD. ASSESSING OFFICER WAS UNSATISFACTORY AND UNCONTROVE RTEDLY, IT WAS ADMITTED BY THE ASSESSEE THAT THE BORROWED FUND S WERE USED FOR MAKING THE INVESTMENT IN SHARES OF VARIOUS COMP ANIES. THE ASSESSMENT YEAR INVOLVED IS 2010-11, THEREFORE, THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN GODREJ & BOYCE MFG. LTD. IS APPLICABLE TO THE FACTS. 2.4. IT IS NOTED THAT THROUGH THIS APPLICATION U/S 254(2 ) OF THE ACT, THE ASSESSEE IS TRYING TO GET THE ORDER OF THE TRIBUNAL REVIEWED, WHICH IS NOT PERMISSIBLE U/S 254 (2) OF T HE ACT. BECAUSE, ONLY ARITHMETICAL ERROR OR OF LIKE NATURE CAN ONLY BE RECTIFIED. WE OBSERVE THAT IF WE WOULD HAVE BEEN S ATISFIED, WITH THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE, C ERTAINLY WITH AN OPEN MIND, WE COULD HAVE RECTIFIED OUR ORDER, IF THERE WOULD HAVE BEEN ANY MISTAKE. HOWEVER, NO SUCH MISTAKE IS FOUND IN THE ORDER OF THE TRIBUNAL, THEREFORE, WE FIND NO ME RIT IN THE CONTENTION OF THE ASSESSEE. 2.5. WHILE DEALING WITH MISCELLANEOUS APPLICATION U/S 254(2) OF THE ACT, ONLY ARITHMETICAL, GRAMMATICAL O R MISTAKE OF LIKE NATURE, IF ANY, CAN ONLY BE RECTIFIED AND NOT WHICH CAN BE DRAWN BY A LONG PROCESS OF ARGUMENT/REASONING LEADI NG TO CONTRARY DECISION. OUR VIEW FIND SUPPORTS FROM VAR IOUS DECISIONS FROM HONBLE APEX COURT AND HONBLE HIGH COURTS, M.A. NO.217/MUM/2015 (ARISING OUT OF ITA NO.5569/MUM/2013) BRIJMOHAN SAGARMAL CAPITAL SERVICES LTD. 5 THAT THE TRIBUNAL CANNOT REVIEW ITS EARLIER ORDER B UT ONLY CAN RECTIFY MISTAKE, IF ANY, WHICH IS APPARENT FROM REC ORD. THE SCOPE AND AMBIT OF APPLICATION U/S 254(2) OF THE ACT IS V ERY LIMITED AND MERITS OF THE CASE CANNOT BE GONE INTO, THEREFORE, WE FIND NO MISTAKE IN THE ORDER OF THE TRIBUNAL. THE RATIO LAI D DOWN IN FOLLOWING CASES SUPPORTS OUR VIEW:- A) CIT VS GOKULCHAND AGRAWAL, 202 ITR 14 (CAL.), B) CIT VS RAMESH ELECTRIC & TRADING COMPANY 203 ITR 49 7, 502 (BOM.), C) GAYWAYS PUBLICITY PVT. LTD. 211 ITR 506 (DEL.), D) CIT VS RAMLAL RAJGARIA 104 CTR (CAL.) 403, E) CIT VS MODEL MANUFACTURING COMPANY PVT. LTD. 111 CT R (CAL.) 2016, F) JAIN DHARMSHALA CHARITABLE TRUST VS CIT 121 CTR (DE L.) 86, G) CIT VS ITAT 206 ITR 126 (AP), H) CIT VS KABIRDAS INVESTMENT LTD. 210 ITR 898 (DEL.) FOLLOWED IN I) DIRECTOR OF INCOME TAX (EXEMPTION) VS ITAT 232 ITR 688 (DEL.), J) MENTHA & ALLIED PRODUCTS COMPANY PVT. LTD. VS ITAT 244 ITR 470 (DEL.), K) CIT VS VARDHMAN SPINNING 226 ITR 296 (P & H), L) DEEKSHA SURI ETC. VS ITAT 232 ITR 395 (DEL.), M) CIT VS ITAT 196 ITR 564 (ORISSA) 196 ITR 590, AND N) LAXMI ELECTRONIC CORPORATION LTD. VS CIT 188 ITR 39 8 (ALL.), IN VIEW OF THE FACTUAL MATRIX, CASES DISCUSSED HERE INABOVE, IT CAN BE CONCLUDED THAT THE SCOPE AND THE AMBIT OF APPLICATION U/S 254(2) IS VERY LIMITED AS WAS HELD BY HONBLE D ELHI HIGH COURT IN CIT VS ITAT (2007) 293 ITR 118 (DEL.), HON BLE M.P. HIGH COURT IN CIT VS K.D. WIRES PVT. LTD. (2010) 32 3 ITR 257 (M.P.). IDENTICAL RATIO WAS LAID DOWN IN APEX METCH EM P. LTD. VS M.A. NO.217/MUM/2015 (ARISING OUT OF ITA NO.5569/MUM/2013) BRIJMOHAN SAGARMAL CAPITAL SERVICES LTD. 6 ITAT (2009) 318 ITR 48 (RAJ.), STATE BANK OF INDORE VS ITAT 284 ITR 125 (M.P.), CIT VS MCDOWELL & COMPANY LTD. (200 9) 310 ITR 215 (KARN.), CIT VS PEARL WOOLEN MILLS (2011) 330 I TR 164 (P & H), DHOLADHAR INVESTMENT PVT. LTD. VS CIT (2014) 36 2 ITR 111 (DEL.), RAJENDRA PRASAD BORAH VS ITAT (2008) 302 IT R 243 (GUWAH.) AND CIT VS FIVE STAR MARINE EXPORT PVT. LT D. (2010) 322 ITR 218 (MAD.), CIT VS TATA IRON & STEEL COMPANY LT D. (2001) 248 ITR 190, 192 (BOM.), J.M. SAHNI VS ITAT 257 ITR 16 (DEL.), KARAN & COMPANY VS ITAT 253 ITR 131 (DEL.). AS MEN TIONED EARLIER, THE LD. COUNSEL FOR THE ASSESSEE, DURING H EARING OF THE MAIN APPEAL ON 24/06/2015 AGREED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE, THEREFORE, HOW THE ASSESSEE I S AGGRIEVED IS NOT KNOWN. THUS, IN VIEW OF THE CLEAR FACTS AND THE JUDICIAL PRONOUNCEMENTS DISCUSSED, HEREINABOVE, WE FIND NO E RROR IN THE ORDER OF THE TRIBUNAL. THROUGH THIS APPLICATION THE ASSESSEE IS TRYING TO GET THE ORDER RECALLED, WHICH IS NOT PERM ISSIBLE U/S 254(2) OF THE ACT, THEREFORE, THE APPLICATION OF AS SESSEE IS HAVING NO MERIT, CONSEQUENTLY, DISMISSED. FINALLY, THE MISCELLANEOUS APPLICATION OF THE ASSES SEE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18/01/2016. SD/- SD/- ( RAJENDRA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ % MUMBAI; ( DATED : 18/01/2016 M.A. NO.217/MUM/2015 (ARISING OUT OF ITA NO.5569/MUM/2013) BRIJMOHAN SAGARMAL CAPITAL SERVICES LTD. 7 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 $ 1' ( *+ ) / THE CIT, MUMBAI. 4. 0 0 $ 1' / CIT(A)- , MUMBAI 5. 3#4 .' , 0 *+' * 5 , $ % / DR, ITAT, MUMBAI 6. 6 7% / GUARD FILE. / BY ORDER, /3+' .' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI