BOMBAY GAS CO LTD, V. DCIT CIR 1(1),

MA 25/MUM/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0663 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-06-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 21-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY
• Assessee Lawyers: MANISH V SHAH
• Keywords: Business income; Additional evidence
• Section: 11

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL MUMBAI - B BENCH MUMBAI . . , / ! ! ! ! , BEFORE S/SH.B.R.MITTAL,JUDICIAL MEMBER & RAJEN DRA,ACCOUNTANT MEMBER M.A. 25/MUM/2013(ARISING OUT OF ITA/ 3173/MUM/2011) AY . .. . 2007-08 DCIT-1(1),MUMBAI. JCIT(OSD)-1(1),ROOMNO.533 579, AAYAKAR BHAVAN,MUMBAI-400 020. VS. $ M/S. BOMBAY GAS CO. LTD., EMPIRE HOUSE,A.K. NAIK MARG, FORT, MUMBAI 400 001. % % % % . .. . / PAN: AAACB 5863 D ( %& / APPELLANT) ( '(%& / RESPONDENT) %& %& %& %& ) )) ) * * * * / ASSESSEE BY : SH. MANISH V. SHAH '(%& ) * /RESPONDENT BY : SH. AJAY (DR) $ $ $ $ ) )) ) +, +, +, +, / DATE OF HEARING :24.05.2013 -./ ) +, /DATE OF PRONOUNCEMENT :26 .06.2013 $ $ $ $ , 1961 ) )) ) 254 +0+ +0+ +0+ +0+ 1 1 1 1 ORDER U/S.254OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,A.M: VIDE ITS APPLICATION DATED 21.01.2013,ASSESSEE-COMP ANY, HAS SUBMITTED THAT CERTAIN MISTAKES WERE APPARENT IN THE ORDER DTD.07.11.2012 PASSED BY THE B BENCH OF ITAT,MUMBAI, THAT SAME NEEDED TO BE RECTIFIED AS PER THE PROVISIONS OF SECTION 25 4 OF THE ACT.IT WAS SUBMITTED THAT AUTHORISED REPRESENTATIVE (AR) HAD NOT CONCEDED THAT ISSUE WAS COVERED AGAINST THE ASSESSEE,AS MENTIONED IN PARAGRAPH 4 OF THE ORDER.IT WAS FURTHER SUBMITTE D THAT ASSESSEE WAS DECLARED ILLEGAL OCCUPANT OF THE PREMISES SINCE 1999 BY AN ORDER OF ESTATE OFFIC ER,THAT ASSESSEE HAD NOT CONCEDED THAT ISSUE WAS DECIDED AGAINST IT ,THAT IT WAS NOT CORRECT THA T NO CONTRARY MATERIAL WAS BROUGHT ON RECORD, THAT AR HAD RELIED UPON THE PAGES 161-204 OF THE PAPER BOOK .IT WAS FURTHER SUBMITTED THAT TRIBUNAL HAD MADE FOLLOWING OBSERVATION IN PARAGRAPH 5 OF TH E ORDER : 5. AFTER HEARING RIVAL PARTIES AND PERUSAL OF THE MATE RIAL AVAILABLE ON RECORD, WE FIND MERIT IN THE PLEA OF THE PARTIES THAT THE ISSUE IS COVERE D AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE BY THE ORDER OF THE TRIBUNAL, WHEREIN IT HA S BEEN HELD VIDE PARAGRAPH 10.1 OF THE ORDER OF THE TRIBUNAL AS UNDER: 10.1 IN VIEW OF THE ABOVE DISCUSSION, WE HOLD THAT THE LOWER AUTHORITIES HAVE RIGHTLY TREATED THE ASSESSEE AS DEEMED OWNER U/S 27(IIIB) OF THE AC T AND SUBSEQUENTLY TREATED THE RENTAL INCOME FROM STATE BANK OF INDORE AS INCOME FROM HOUSE PROP ERTY. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS DISMISSED. IN THE ABSENCE OF ANY CONTRARY MATERIAL BROUGHT ON RECORD BY THE ASSESSEE, WE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA), DECLIN E TO INTERFERE WITH THE ORDER PASSED BY THE M. A. 25/MUM/2013(ARISING OUT OF ITA/3173/MUM/2011)AY . 2007-08 M/S BOMBAY GAS CO. LTD. FAA ON THIS ACCOUNT. 2. AS PER THE ASSESSEE, FAA HAD NOT DECIDED THE MATTER IN ITS FAVOUR.SO,ONCE GROUND OF APPEALS FILED BY THE AO WERE DECIDED AGAINST THE ASSESSEE R EVERSING THE ORDER OF THE FAA,IT SHOULD NOT HAVE BEEN HELD THAT FOLLOWING THE ORDER OF THE TRIB UNAL (ITA NO.2465/ MUM/ 2007DATED 31.10.2011-AY.2003-04) ITAT DID NOT WANT TO INTERFE RE WITH THE ORDER OF THE FAA. WE FIND THAT MISTAKE POINTED OUT BY THE ASSESSEE IS FACTUALLY CO RRECT. THEREFORE, AMENDING THE LAST LINES OF PARAGRAPH 5 WE HOLD THAT SAME SHOULD BE READ AS UND ER : RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNA L (SUPRA), WE DECLINE TO INTERFERE WITH THE ORDER PASSED BY THE AO AND REVERSE THE ORDER OF THE FAA. 3. NOW WE WOULD DISCUSS THE ISSUE RAISED BY THE ASSESS EE WITH REGARD TO PARAGRAPH NO.4.BEFORE THAT IT WOULD BE USEFUL TO CONSIDER THE BACK GROUND OF THE CASE.IN THIS CASE REVENUE AND ASSESSEE HAD FILED APPEAL AND CROSS-OBJECTION AGAINST THE O RDER DATED 09. 11. 2010 PASSED BY THE CIT(A)- 1. GROUND NOS.1 AND 2 OF THE APPEAL FILED BY THE AO WERE ABOUT THE RENTAL INCOME RECEIVED BY THE ASSESSEE.IN THE CROSS-OBJECTIONS ASSESSEE HAD RAISE D ONLY ONE GROUND AND THAT PERTAINED TO EXPENSES INCURRED AS PORTFOLIO MANAGEMENT FEES.GROU NDS OF APPEAL FILED BY THE ASSESSEE WAS ABOUT HEAD UNDER WHICH INCOME RECEIVED BY IT HAD TO CHARGED.AO HAD ASSESSED THE INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY, WHERE AS ASSES SEE HAD SHOWN THE SAME UNDER THE HEAD BUSINESS INCOME.FAA ALLOWED THE APPEAL FILED BY THE ASSESSEE AND HELD THAT INCOME TO BE ASSESSED AS BUSINESS INCOME.WHILE DECIDING THE APPE AL FILED BY THE AO WE HAD FOLLOWED THE ORDER OF THE ITAT PASSED FOR THE AY.2003-04. IN THAT YEAR ISSUE WAS DECIDED AGAINST THE ASSESSEE. 3.1. AS STATED EARLIER,AS PER THE ASSESSEE, AR HAD NOT F AIRLY CONCEDED THAT THE ISSUE WAS DECIDED AGAINST THE ASSESSEE,THAT ASSESSEE WAS DECLARED ILL EGAL OCCUPANT OF THE PREMISES,THAT IT WAS NOT CORRECT TO STATE THAT NO CONTRARY MATERIAL WAS BROU GHT ON RECORD,THAT ORDER OF THE ESTATE OFFICER WAS BROUGHT TO THE NOTICE OF THE TRIBUNAL.IT WAS SUBMIT TED,BY THE AR,THAT CONSIDERING THESE IT SHOULD BE HELD THAT INCOME HAD TO BE ASSESSED UNDER THE HE AD BUSINESS INCOME.DR SUBMITTED THAT NO MISTAKE WAS APPARENT FROM THE RECORD.HE RELIED UPON THE CASES OF (203ITR497)AND (232 ITR 395). 3.2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL.IN THIS CASE EFFECTIVE ISSUE TO BE DECIDED WAS THE HEAD UNDER WHICH INCOME EARNED BY T HE ASSESSEE WAS TO BE ASSESSED. FOLLOWING THE ORDER OF AY.2003-04 WE HAD DECIDED THE ISSUE AG AINST THE ASSESSEE.IT IS NOT THE CASE OF THE ASSESSEE THAT IT HAD NOT RECEIVED ANY INCOME FROM T HE PROPERTY.IN THE EARLIER YEAR SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE REVENUE.WE FIND THAT ON TH E DAY OF HEARING NO MATERIAL WAS BROUGHT TO OUR NOTICE THAT COULD LEAD US TO DIFFER FROM THE EA RLIER ORDER.AR HAD SUBMITTED THAT ASSESSEE WAS DECLARED ILLEGAL OCCUPANT FROM YEAR 1999.IN OUR OPI NION THESE FACTORS CANNOT ALTER THE FINAL CONCLUSION TAKEN BY US.AS FAR AS PAGE 161-200 OF T HE PAPER BOOK ARE CONCERNED WHICH WERE REFERRED DURING THE COURSE OF HEARING OF MISCELLANE OUS APPLICATION, WE FIND THAT SAME ARE MENTIONED AT SERIAL NUMBER 16 OF THE PAPER BOOK.AS PER THE CERTIFICATE OF THE PAPER BOOK ITEM NO.16(COPY OF ORDER ESTATE OFFICER LIFE INSURANCE C ORPORATION OF INDIA WESTERN ZONAL OFFICE VS. M/S.BOMBAY GAS COMPANY LTD. DATED 10.07.2012)HAD NO T BEEN FILED BEFORE THE LEARNED CIT(A)AND THE AO,SINCE THE SAME WAS PASSED ONLY ON JULY 10,2012. BEFORE COMMENTING UPON THE MERITS OF THE ARGUMENT O F THE ASSESSEE, WE WOULD LIKE TO DISCUSS THE PROVISIONS OF THE INCOME-TAX (APPELLATE TRIBUNAL) R ULES,1963 (ITAT RULES)-ESPECIALLY RULE 29 AND RULE 18.AS PER RULE 29 PARTIES TO THE APPEAL AR E NOT BE ENTITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIBUNAL.RULE 18 PRESCRIBES THE METHOD OF SUBMISSION OF PAPER BOOK, INCLUDING THE ADDITIONAL EVIDENCES.RELE VANT PORTION OF THE RULE 18 ARE REPRODUCED HERE: 18. (1) IF THE APPELLANT OR THE RESPONDENT, AS THE CASE MAY BE, PROPOSES TO REFER OR RELY UPON ANY DOC UMENT OR STATEMENTS OR OTHER PAPERS ON THE FILE OF OR REF ERRED TO IN THE ASSESSMENT OR APPELLATE ORDERS, HE MAY SUBMIT A PAPER BOOK IN DUPLICATE CONTAINING SUCH PA PERS DULY INDEXED AND PAGED AT LEAST A DAY BEFORE T HE DATE OF HEARING OF THE APPEAL ALONG WITH PROOF OF S ERVICE OF A COPY OF THE SAME ON THE OTHER SIDE AT L EAST A WEEK BEFORE: PROVIDED, HOWEVER, THE BENCH MAY IN AN APPROPRIATE CASE CONDONE THE DELAY AND ADMIT THE PAPER BOOK. M. A. 25/MUM/2013(ARISING OUT OF ITA/3173/MUM/2011)AY . 2007-08 M/S BOMBAY GAS CO. LTD. (3) THE PAPERS REFERRED TO IN SUB-RULE (1) ABOVE MU ST ALWAYS BE LEGIBLY WRITTEN OR TYPE-WRITTEN IN DOU BLE SPACE OR PRINTED. IF XEROX COPY OF A DOCUMENT IS FI LED, THEN THE SAME SHOULD BE LEGIBLE. EACH PAPER SH OULD BE CERTIFIED AS TRUE COPY BY THE PARTY FILING THE S AME, OR HIS AUTHORISED REPRESENTATIVE AND INDEXED I N SUCH A MANNER AS TO GIVE THE BRIEF DESCRIPTION OF THE RE LEVANCE OF THE DOCUMENT, WITH PAGE NUMBERS AND THE AUTHORITY BEFORE WHOM IT WAS FILED. (4)THE ADDITIONAL EVIDENCE, IF ANY, SHALL NOT FORM PART OF THE SAME PAPER BOOK. IF ANY PARTY DESIRES T O FILE ADDITIONAL EVIDENCE, THEN THE SAME SHALL BE FILED B Y WAY OF A SEPARATE PAPER BOOK CONTAINING SUCH PARTICULARS AS ARE REFERRED TO IN SUB-RULE (3) ACCO MPANIED BY AN APPLICATION STATING THE REASONS FOR F ILING SUCH ADDITIONAL EVIDENCE. (7) PAPER/PAPER BOOKS NOT CONFORMING TO THE ABOVE R ULES ARE LIABLE TO BE IGNORED. RULE18(4)OF THE ITAT,RULES PRESCRIBES THE MANNER IN WHICH ADDITIONAL EVIDENCES CAN BE PRODUCED.WE FIND THAT ASSESSEE HAD NOT SUBMITTED AN Y APPLICATION,AS REQUIRED BY THE RULE,TO ADMIT ITEM NO.16 OF THE PAPER BOOK AS ADDITIONAL EV IDENCE.AS PER RULE 18(7) PAPERS NOT CONFIRMING TO THE SUB-RULE 1-6 ARE LIABLE TO BE IGN ORED.IF THE ASSESSEE HAD CHOOSE TO NOT TO FOLLOW PROVISIONS OF LAW ABOUT FILING OF ADDITIONAL EVIDEN CE/PAPER BOOK FAULT LIES WITH IT. FAILURE OF THE ASSESSEE; THAT WAS THE REASON FOR NOT CONSIDERING A PARTICULAR PAPER; CANNOT BE TERMED MISTAKE APPARENT FROM RECORD.IF THE DOCUMENT WAS VITAL TO D ECIDING THE ISSUE AND IT WAS NOT AVAILABLE TO THE ASSESSEE AT A PARTICULAR POINT OF TIME,IT WAS T HE DUTY OF THE ASSESSEE TO BRING THE SAID FACT TO T HE NOTICE OF THE TRIBUNAL IN PRESCRIBED MANNER.THEREFO RE,WE FIND THAT OBSERVATION MADE BY US; THAT NO CONTRARY MATERIAL WAS BROUGHT TO US;IS FACTUALLY AND LEGALLY CORRECT AND DOES NOT NEED ANY RECTIFICATION. AS FAR AS SUBMISSION THAT ASSESSEE W AS DECLARED ILLEGAL OCCUPANT IS CONCERNED,WE ARE OF THE OPINION THAT IT DOES NOT CHANGE THE NATURE O F THE HEAD UNDER WHICH INCOME HAD TO BE ASSESSED. 3.3. AS STATED EARLIER,ONLY QUESTION TO BE DECIDED IN TH E YEAR UNDER CONSIDERATION,WAS TO DETERMINE THE HEAD UNDER WHICH IT HAD TO BE ASSESSED.TRIBUNAL CHOOSE ONE OF THE TWO AVAILABLE OPTIONS.IN OUR OPINION,IN SUCH CIRCUMSTANCES IT CANNOT BE HELD THA T TRIBUNAL HAD COMMITTED AN ERROR.AN ERROR APPARENT ON THE RECORD MEANS AN ERROR WHICH STRIKES ON MERE LOOKING AND DOES NOT NEED A LONG DRAWN OUT PROCESS OF REASONING ON POINTS ON WHICH T HERE MIGHT BE CONCEIVABLY TWO OPINIONS.IN OTHER WORDS,IF THE VIEW ACCEPTED BY THE TRIBUNAL IN THE ORIGINAL JUDGMENT IS ONE OF POSSIBLE VIEWS,THE MATTER CANNOT BE RECTIFIED U/S. 254 (2)OF THE ACT.IN OUR OPINION,BY A LONG DRAWN PROCESS OF REASONING,ASSESSEE WANTS US TO REVIEW THE ORDER DTD. 07.11.2012. BUT,IT IS NOT PERMISSIBLE AS PER THE PROVISIONS OF SECTION 254(2) OF THE ACT. HERE,W E WOULD ALSO LIKE TO DISCUSS THE SCOPE OF THE RECTIFICATION PROVISIONS I.E. SECTION 254(2) OF THE ACT. WE ARE ALSO OF THE OPINION THAT UNDER THESE PROVISIONS,IT IS NOT PERMISSIBLE FOR THE PETITIONER TO CONTEND THAT THE APPELLATE ORDER WAS VITIATED ON THE GROUND THAT THE TRIBUNAL FAILED TO DISCUSS A LL THE CONTENTIONS RAISED BY COUNSEL BEFORE IT AND TO GIVE REASONS FOR COMING TO THE CONCLUSION WHICH IT DID.IF ASSESSEE FINDS AN ORDER DEFECTIVE ON THIS GROUND, THE REMEDY LAY ELSEWHERE,AND NOT BY WA Y OF A MISCELLANEOUS APPLICATION. IN OUR OPINION,TRIBUNAL IS A CREATURE OF THE STATUTE AND I T IS NOT BEEN VESTED WITH THE REVIEW JURISDICTION.IN OTHER WORDS,IT DOES NOT HAVE ANY PO WER TO REVIEW ITS ORDERS.WHAT ASSESSEE DESIRES,IN THE CASE UNDER CONSIDERATION, IS REVIEW OF THE ORDER PASSED ON 07.11.2012.AS PER THE HONBLE MUMBAI HIGH COURT,THE POWER OF RECTIFICATIO N AVAILABLE TO THE TRIBUNAL U/S. 254(2) OF THE ACT,CANNOT BE EXERCISED ON FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION ,BECAUSE IT IS A N ERROR OF JUDGMENT AND NOT AN ERROR APPARENT ON THE RECORD.IN OUR OPINION,IN THE CASE OF RAMESH EL ECTRIC AND TRADING CO. (203 ITR 497) HONBLE JURISDICTIONAL HIGH COURT HAS LAID DOWN GUIDE LINES AND THE BOUNDARIES OF THE RECTIFICATION PROVISIONS.RESPECTFULLY,FOLLOWING THE SAME WE HOLD THAT THERE IS NO MISTAKE; PERTAINING TO HEAD OF INCOME;APPARENT FROM THE RECORD THAT COULD BE RECTI FIED. AS A RESULT MA FILED BY THE ASSESSEE STANDS PART LY ALLOWED. 2 3 $2+ 4 5 6 0 77 $ 1 3 6 + 89. M. A. 25/MUM/2013(ARISING OUT OF ITA/3173/MUM/2011)AY . 2007-08 M/S BOMBAY GAS CO. LTD. ORDER PRONOUN CED IN THE OPEN COURT ON 26 TH JUNE,2013 . 1 ) -./ : 6$ 26 ,2013 . ) 0 A SD/ SD/- ( . .. . . .. . . .. . B.R.MITTAL ) ( ! ! ! ! / RAJENDRA ) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 6$ /DATE: 26 TH JUNE,2013 1 1 1 1 ) )) ) '+7 '+7 '+7 '+7 B 7/+ B 7/+ B 7/+ B 7/+ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / %& 2. RESPONDENT / '(%& 3. THE CONCERNED CIT (A) / C D 4. THE CONCERNED CIT / C D 5. DR B BENCH, ITAT, MUMBAI / 7E0 '+$ , . . . 6. GUARD FILE/ 0 F (7+ '+ //TRUE COPY// 1$ / BY ORDER, G / 8 DY./ASST. REGISTRAR , /ITAT, MUMBAI