Assistant Commissioner of Income-tax, V. M/s. Tribhuvanlal Kalya Co., Nashik

MA 27/PUN/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2191 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-06-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 03-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER M.A. NO.27/PN/2014 ARISING OUT OF ITA NO.991/PN/2010) (ASST.YEAR: 2006-07) ACIT, CIRCLE-2, NASHIK .. APPLICANT VS. M/S. TRIBHUVANLAL KALYA & CO., 3/4, TARAKUNJ APARTMENT, IST FLOOR, ADGAON NAKA, NASHIK PAN NO.AACFT7304E .. RESPONDENT APPLICANT BY : SHRI S.P. WALIMBE RESPONDENT BY : SHRI BHADRESH DOSHI DATE OF HEARING : 25-04-2014 DATE OF PRONOUNCEMENT : 11-06-2014 ORDER PER R.K.PANDA, AM : THE REVENUE THROUGH THIS MISCELLANEOUS APPLICATION REQUESTS THE TRIBUNAL TO RECALL THE ORDER PASSED BY IT DISMISSIN G THE APPEAL FILED BY THE REVENUE ON THE GROUND OF TAX EFFECT BEING BELOW RS. 3 LAKHS. 2. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED TH AT THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF WHOLESALE TRADING I N HIGH EXPLOSIVES BLASTING PRODUCTS. IT FILED ITS RETURN OF INCOME DECLARING TOTAL LOSS AT RS.5,75,986/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY M AKING THE FOLLOWING ADDITIONS/DISALLOWANCE : I. CAPITAL LOSS ON SALE OF LAND RS.67,22,876/- II. VALUATION OF STOCK RS.10,000/- III. PERSONAL ELEMENT TO VARIOUS EXPENSES RS.26,701/- 2 3. IN APPEAL THE LD.CIT(A) DELETED THE 3 ADDITIONS MADE BY THE ASSESSING OFFICER. THE REVENUE FILED AN APPEAL AG AINST THE ORDER OF THE CIT(A) CHALLENGING THE DELETION OF CAPITAL LOSS ON SALE OF LAND AMOUNTING TO RS.67,22,876/-. HE SUBMITTED THAT THE TRIBUNAL DIS MISSED THE APPEAL FILED BY THE REVENUE ON THE GROUND THAT THE TAX EFFECT IN TH E INSTANT CASE IS LESS THAN RS. 3 LAKHS. THEREFORE, THE APPEAL FILED BY THE RE VENUE IS NOT MAINTAINABLE. 4. REFERRING TO THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE HE SUBMITTED THAT THE ASSESSEE HAD DECLARED TOTAL LOSS OF RS.51,73,986/- IN THE RETURN OF INCOME FOR A.Y. 2006-07. THE ASSESSING O FFICER ASSESSED THE INCOME OF THE ASSESSEE AT RS.15,48,819/- AFTER DISA LLOWING THE CLAIM OF THE ASSESSEE REGARDING BUSINESS LOSS. HE SUBMITTED THA T THE TOTAL TAX EFFECT ON THIS POSITIVE INCOME AS DETERMINED IN THE ASSESSMEN T ORDER WORKS OUT TO RS.6,96,545/- WHICH IS MORE THAN THE PRESCRIBED LIM IT OF RS.3 LAKHS. HE SUBMITTED THAT THE NOTIONAL TAX EFFECT, IF CONSIDER ED, WOULD BE RS.22,62,920/- . HOWEVER, THE TRIBUNAL ON THE BASIS OF THE SUBMIS SION FILED BY THE ASSESSEE HELD THAT THE TAX EFFECT IS ONLY RS.1,85,704/- AND ACCORDINGLY DISMISSED THE APPEAL FILED BY THE REVENUE WHICH IS FACTUALLY INCO RRECT. HE ACCORDINGLY SUBMITTED THAT SINCE THE MISTAKE IS APPARENT FROM R ECORD, THEREFORE, THE ORDER OF THE TRIBUNAL SHOULD BE RECALLED AND THE ORDER BE DECIDED ON MERIT. 5. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND SUBMITTED THAT THE ASSESSEE HAS CALCULATED TAX EFFECT AT RS.1,85,704/- BY TREATING THE DIFFERENCE BETWEEN LONG TERM CAPITAL GAIN AND BUSINESS LOSS. THEREFORE, THE NOTIONAL TAX EFFECT AS CALCULATED BY THE ASSESSEE IS CORRECT AND THEREFORE THE ORDER OF THE TRIBUNAL DOES NOT SUFFER FROM ANY MISTAKE APPARENT FROM RECORD AND 3 THEREFORE THE MISCELLANEOUS APPLICATION FILED BY TH E REVENUE SHOULD BE DISMISSED. 6. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES. WE FIND AT THE TIME OF HEARING BEFORE THE TRIBUNAL THE ASSESSEE HAD CALCULATED THE TAX EFFECT AT RS.1,85,704/- BY TAKING THE DIFFE RENCE BETWEEN THE NOTIONAL TAX EFFECT BY TREATING THE LOSS ON SALE OF LAND DEV ELOPMENT RIGHTS AS BUSINESS LOSS AS AGAINST LONG TERM CAPITAL LOSS TREATED BY T HE ASSESSING OFFICER. WE FIND THE REVENUE IN THE APPEAL FILED BY IT HAD CHAL LENGED THE ORDER OF THE CIT(A) IN DELETING THE ADDITION ON ACCOUNT OF CAPIT AL LOSS ON SALE OF LAND AMOUNTING TO RS.67,22,876/- BY TREATING THE SAME AS BUSINESS LOSS. THEREFORE, THE NOTIONAL TAX EFFECT ON ACCOUNT OF TH E ADDITION DELETED BY THE CIT(A) HAS TO BE CALCULATED ON RS.67,22,876/- WHICH IS MORE THAN RS.3 LAKHS. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CO NSIDERED OPINION THAT A MISTAKE HAS CREPT IN THE ORDER OF THE TRIBUNAL DUE TO DISMISSAL OF THE APPEAL FILED BY THE REVENUE ON THE GROUND THAT THE TAX EFF ECT IS LESS THAN RS.3 LAKHS. WE, THEREFORE, RECALL THE ORDER OF THE TRIBUNAL AND DIRECT THE REGISTRY TO FIX THE APPEAL IN NORMAL COURSE. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE REVENUE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 11-06-2014. SD/- SD/- (R.S.PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED : 11 TH JUNE, 2014. SATISH 4 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-II, NASHIK 4. THE CIT-II, NASHIK 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SE CRETARY, ITAT, PUNE BENCHES, PUNE