Lifecell International Pvt Ltd., CHENNAI V. ACIT, CHENNAI

MA 248/CHNY/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4389 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 7 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 24-09-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 254(2); 13

Judgement Text

आयकर अपील य अ धकरण,‘बी’ यायपीठ, चे नई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘B’ BENCH, CHENNAI ी वी .द ु गा राव, या यक सद य एवं ी जी. मंज ु नाथ, लेखा सद य के सम$ BEFORE SHRI V.DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER Misc. Petition N os . 2 4 8 & 2 4 9/ C hn y/ 2 0 1 9 (In ITA Nos.2 4 7 & 2 4 8 / Ch n y/ 2 0 1 8) ( नधा रणवष / A ss e ss m en t Ye ar s : 20 13 - 1 4 & 20 14 - 1 5) M/s. Lifecell International Pvt.Ltd 26, Vandalur Kelambakkam Main Road Keelakottaiyur Village, Chennai-600 048. V s The Assistant Commissioner of Income Tax, Corporate Circle-4(1) Chennai. P AN: A A E CA 7 9 97 B (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओरसे/ Appellant by : Mr. T.Banusekar, C.A यथ क ओरसे/Respondent by : Mr. AR V Sreenivasan, Addl.CIT स ु नवाईक तार&ख/D a t e o f h e a r i n g : 29.04.2022 घोषणाक तार&ख /D a t e o f P r o n o u n c e m e n t : 11.05.2022 आदेश / O R D E R PER G.MANJUNATHA, AM: These two Miscellaneous Applications filed by the assessee are directed against common order passed by the Tribunal in ITA Nos.247 & 248/Chny/2018 dated 28.05.2019 and relevant to the assessment years 2013-14 & 2014-15. 2. The learned A.R for the assessee, at the time of hearing, submitted that the assessee wants to withdraw Miscellaneous Application No.248/Chny/2019 filed against ITA No.247/Chny/2019 for the assessment year 2013-14, for which 2 Misc. Petition Nos. 248 & 249/Chny/2019 the learned DR for the Revenue has no objection and hence, Miscellaneous Application No.248/Chny/2019 is dismissed as not pressed. M.P.No.249/Chny/2019 (A.Y.2014-15):- 3. The assessee has narrated facts of its case and mistakes stated to be apparent on record in the order of the Tribunal dated 28.05.2019 and relevant contents of the Misc. Petition filed by the assessee are reproduced as under:- “1. It has been stated in the order passed by the Hon’ble Tribunal that in the decision of the Co-ordinate bench in the assessee’s own case, the issue whether the corresponding expenditure had been deferred over the period of contract was not discussed nor the tribunal analyzed the profit and loss account of the assessee and therefore the decision of the coordinate bench loses the binding nature. 1.1 In this connection it can be seen that in the Hon’ble Tribunal’s order for the assessment year 2006-07 at para 10 it has been clearly stated that the assesse has given a proper treatment to the accounting of storage fee collected in advance after deciding that the matching principle is applicable. This clearly shows that the Hon’ble Tribunal has applied its mind to matching principle which includes expenses. 1.2 Likewise in the appeal for the assessment year 2011-12 the revenue has taken a specific ground at para 2.4 that “the C!T(A) erred in not appreciating the findings of the AO that the 3 Misc. Petition Nos. 248 & 249/Chny/2019 assessee has not provided any proof or document in support of its claim that the expenditures incurred for upkeep of the samples are met only out of the storage fee collected in advance” which also shows that the Hon’ble Tribunal has after considering this ground dismissed the appeal of the revenue and therefore it cannot be said that the spread over of expenditure has not been considered by the co-ordinate Bench of Hon’ble Tribunal in these appeals. Therefore, to say that the co-ordinate Bench of the Hon’ble Tribunal did not discuss the issue relating to deferment of expenditureover the period of contract is a mistake apparent on record. 2. The increase of expenditure in one year over a preceding year cannot be a basis to say that all expenditure has already been incurred and nothingis left to be incurred in future. This has been approved by the Hon’ble Tribunal which is a mistake apparent on record. 3. The Commissioner of Income Tax (Appeals) has in his order further taken into account all expenses irrespective of the corresponding revenue streams. The appellant has two revenue streams, namely revenue from stem cell banking services and revenue from trading in bone marrow aspiration kit (Refer Note 22 of Notes to Financial Statement filed before the Hon’ble Tribunal). Further, the income from stem cell banking services has three sub streams namely fee charged towards enrolment, fee charged for processing and extraction of stem cells and fee charged for storage of stem cells, out of which only the storage fee received is deferred. (Refer Note 2.6 of Notes to Financial Statement filed before the Hon’ble Tribunal). The other incomes are accounted in the same year in which the said services are rendered. Therefore to compare the total expenditure of all 4 Misc. Petition Nos. 248 & 249/Chny/2019 revenue streams is not a correct proposition. This has been approved by the Tribunal which is a mistake apparent on record. 4. The Commissioner of Income Tax (Appeals) has in his comparison also taken into account at para 7.6 of his order the capital expenditure incurred on plant and machinery as part of expenditure. It will be noticed that no expenditure is claimed on plant and machinery excepting depreciation on the same. Therefore taking the whole of the expenditure is an incorrect proposition. This has been approved by the Tribunal which is a mistake apparent on record. 5. The Hon’ble Tribunal has in its order stated that the counsel for the assessee has not controverted the findings that the profits of the year are not distorted by not apportioning the expenditure over the period of contract. This is contrary to the facts on record where the counsel has in fact placed the financials on record to show that there is no such distortion. This also constitutes a mistake apparent on record. 6. The assessee had raised the following alternate prayer by way of Ground No.6 Without prejudice to the above, the Commissioner of Income Tax (Appeals) is not justified in not giving deduction for Rs. 7,19,93,151/- being the revenue of earlier year enrollments recognized during the year. However the same was not adjudicated by the Hon’ble Tribunal. Non adjudication of the above ground constitutes mistake apparent on record. Since the above mentioned errors are apparent on record, it is most humbly prayed that the Hon’ble Tribunal may be pleased to rectify the same arising from the order of the Hon’ble Tribunal 5 Misc. Petition Nos. 248 & 249/Chny/2019 in ITA No.248/ Chny/2018 for the assessment year 2014-15, dated 28.05.2019.” 4. The learned A.R for the assessee referring to Miscellaneous Petition filed by the assessee against order of the Tribunal in ITA Nos.248/Chny/2018 dated 28.05.2019 submitted that the Tribunal has not followed co-ordinate Bench decision in assessee’s own case for earlier year by observing that in the earlier year order, the issue is whether expenditure has been deferred over the period of contract was not discussed, nor the Tribunal analyzed profit & loss account of the assessee and therefore, decision of the co-ordinate Bench losses its binding nature. However, fact remains that the issue before the Tribunal right from assessment year 2006-07 to present assessment year is on accounting to income received by the assessee from storage fee and the Tribunal, after considering relevant facts has rightly held that the assessee has given correct treatment in books of account in respect of storage fee received and deferred income over the period of contract. He further submitted that even though, there is no difference in facts and circumstances of the case for the impugned assessment year, the Tribunal has given altogether 6 Misc. Petition Nos. 248 & 249/Chny/2019 different finding by not following co-ordinate Bench decision in assessee’s own case and therefore, said observations of the Tribunal constitutes mistake apparent on record which can be rectified u/s. 254(2) of the Income Tax Act, 1961. He further referring to para 3 of Misc.Application submitted that the Tribunal has given its finding on the basis of findings given by the learned CIT(A) in his order that the assessee has deferred income from all streams of revenue. However, fact remains that the assessee has accounted revenue from stem cell banking services and revenue from trading in bone marrow aspiration kit. Further, income from stem cell banking services has three sub streams namely fee charged towards enrolment, fee charged for processing and extraction of stem cells and fee charged for storage of stem cells, out of which only the storage fee received is deferred. The other incomes are accounted in the same year in which the said services are rendered. Therefore, to compare the total expenditure of all revenue streams is not a correct proposition. This has been approved by the Tribunal which is a mistake apparent on record. Therefore, the learned A.R submitted that there is mistake apparent in the order of the Tribunal which needs to be rectified u/s.254(2) of 7 Misc. Petition Nos. 248 & 249/Chny/2019 the Income Tax Act, 1961, and hence, requested to recall order of the Tribunal dated 28.05.2019. 5. The learned DR, on the other hand, submitted that the assessee has failed to make out a case of prima-facie mistake on record from the Tribunal order dated 28.05.2019, but what is canvassed by the learned A.R for the assessee is revision of order rendered by the Tribunal, which does not come under mistake apparent on record which can be rectified u/s.254(2) of the Income Tax Act, 1961, and hence, the Misc. Application filed by the assessee needs to be dismissed. 6. We have heard both the parties and perused Miscellaneous Application filed by the assessee in M.A.No.249/Chny/2019 in light of order passed by the Tribunal in ITA No.248/Chny/2018 dated 28.05.2019 relevant to the assessment year 2014-15. We find that the issue involved in appeal filed by the assessee for the assessment year 2014-15 is recognition of income from storage fee received by the assessee over a period of contract instead of accounting of income as and when the assessee received said fees. The 8 Misc. Petition Nos. 248 & 249/Chny/2019 said issue is recurring issue which has been disputed by the revenue right from assessment year 2006-07. The assessee has carried the matter in appeal before the Tribunal and the Tribunal for earlier years, including assessment year 2006-07 had considered the issue and held that there is no error in the method of accounting followed by the assessee to recognize income received from storage fee on the basis of terms of agreement between the parties and period of agreement. The very same issue has been challenged before the Tribunal for the assessment year 2014-15 and the Tribunal has taken a different view and held that there is no error in the reasons given by the Assessing Officer as well as the learned CIT(A) to recognize income received by the assessee from storage fee in the year of receipt, even though there was decision from the Tribunal for earlier years in favour of the assessee. However, while taking a different view, the Tribunal has considered an order passed by the co-ordinate Bench in the assessee’s own case for earlier years and held that decision of the co-ordinate Bench of the Tribunal for earlier years is on the issue of whether corresponding expenditure had been deferred over a period of contract was not discussed nor the Tribunal analyzed 9 Misc. Petition Nos. 248 & 249/Chny/2019 profit & loss account of the assessee and therefore, decision of the co-ordinate Bench losses binding nature. From the above, what we understand is that the Tribunal has considered arguments of both the sides and also order of the co-ordinate Bench for earlier years and has taken a view and therefore, same cannot be considered as mistake apparent on record which can be rectified u/s.254(2) of the Income Tax Act, 1961. 7. As regards para 3 of Miscellaneous Petition filed by the assessee in light of findings of the learned CIT(A) on deferral of income from all streams of income, we find that although, the assessee has canvassed altogether different arguments in the Misc. Application, but the learned A.R for the assessee failed to demonstrate with evidence before us that the assessee has made these arguments before the Tribunal and the Tribunal has failed to consider the arguments. In our considered view, in absence of any evidence to the contrary, the arguments taken by the assessee in paragraph nos. 3 of this Misc. Application cannot be entertained. 8. As regards para 6 of Miscellaneous Petition, the learned A.R for the assessee made a statement at Bar that the 10 Misc. Petition Nos. 248 & 249/Chny/2019 assessee does not want to press para 6 of its Miscellaneous Petition. 9. To sum up, considering facts and circumstances of the case and also on the basis of order passed by the Tribunal, we are of the considered view that there is no merit in the Miscellaneous Petition filed by the assessee to rectify mistake in the order passed by the Tribunal dated 28.05.2019 for the assessment year 2014-15. We further noted that what is canvassed by the assessee by way of this Miscellaneous Petition is review of decision rendered by the Tribunal in the given facts and circumstances of the case which is not permissible under the law. This legal principle is supported by the decision of the Hon'ble Supreme Court in the case of CIT vs. Reliance Telecom (2021) 284 taxman 517(SC) , where it has been categorically held that the Tribunal does not have power to recall its order in guise of mistake apparent from record and review its decision. 10. In this view of the matter and considering fact and circumstances of the case, we are of the considered view that there is no merit in the Miscellaneous Petition filed by the 11 Misc. Petition Nos. 248 & 249/Chny/2019 assessee and thus, the Miscellaneous Application filed for the assessment year 2014-15 is dismissed. 11. In the result, both the Miscellaneous Applications filed by the assessee are dismissed. Order pronounced in the open court on 11 th May, 2022 Sd/- Sd/- ( वी. द ु गा राव) (जी. मंज ु नाथ) (V.Durga Rao) (G.Manjunatha) *या यक सद,य /Judicial Member लेखा सद,य / Accountant Member चे*नई/Chennai, /दनांक/Dated 11 th May, 2022 DS आदेश क त3ल4प अ5े4षत/Copy to: 1. Appellant 2. Respondent 3. आयकर आय ु 6त (अपील)/CIT(A) 4. आयकर आय ु 6त/CIT 5. 4वभागीय त न:ध/DR 6. गाड फाईल/GF.