NITIN PARKASH, THANE V. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3, THANE

MA 271/MUM/2018

• Counselvise Citation: [2018] 111 COUNSELVISE.COM (IT) 1467 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 09-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T A KHAN
• Keywords: Depreciation; Cost of acquisition
• Section: 254(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' B ' BENCH, MUMBAI BEFORE HONBLE SHRI G. S. PANNU , ACCOUNTANT MEMBER A ND HONBLE SHRI SANDEEP GOSAIN , JUDICIAL MEMBER MA NO. 271 /MUM/201 8 (ARISING OUT OF ITA NO. 817 /MUM/2015 (ASSESSMENT YEAR : 2011 - 12 ) NITIN PRAKASH 221/222 SWASTIKPLAZ, POKHRAN RD NO. 2, SUBHASH NAGAR THANE(W) THANE - 400601. / VS. DCIT CIR 3 THANE PIN - ./ ./ PAN NO. AASPP1411G ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI RAJEEV KHANDELWAL, AR / RESPONDENTBY : SHRI T. A. KHAN, DR / DATE OF HEARING : 06/07 /201 8 / DATE OF PRONOUNCEMENT : 03/10/2018 O R D E R PER SANDEEP GOSAIN , JUDICIAL MEMBER VIDE THIS MISCELLANEOUS APPLICATION THE ASSESSEE SEEKS RECTIFICATION OF THE MISTAKE APPARENT FROM RECORD, CREPT IN THE ORDER OF THE TRIBUNAL IN ITA NO. 817 /MUM/2015 DATED 19.03.2018 . ITA NO. 873 /MUM/ 2017 SHRI ASHOK G. CHAUHAN / ASSISTANT COMMISSIONR OF 2 2. THE BRIEF FACTS ARE THAT ASSESSEE HAS MOVED AN APPLICATION POINTING OUT APPARENT MISTAKES THAT HAS BEEN CREPT IN THE ORDER OF TRIBUNAL DATED 19.03.201 8 AND THE SAME IS EXPLAINED IN PARA NO. 2 (2.1 TO 2.3) OF THE APPLICATION AND THE SAME IS REPRODUCED BELOW: - 2.1. IN PARA 8 ON PAGE NO 13 OF THE IMPUGNED ORDER, THE HONOURABLE T RIBUNAL WHILE DEALING WITH THE GROUND OF APPEAL NO 2 FOR ALLOWING INDEXATION ON THE BASIS OF THE LETTE( OF ALLOTMENT DATED 23.12.2004 GIVEN BY THE BUILDER IN PLACE OF ALLOWING INDEXATION ON THE BASIS OF THE YEAR OF PAYMENT OF INSTALLMENTS, HAS STATED THAT THE APPELLANT TO EVADE TAX, HAS CLAIMED INDEXATION ON THE PURCHASE PRICE RS 2,03,36,000 FROM FINANCIAL YEAR 2004 - 05, THAT IS, FROM THE DATE OF THE FIRST PAYMENT INSTEAD OF CLAIMING IT IN ACCORDANCE WITH THE SCHEDULE OF PAYMENT. IT IS FURTHER STATED IN THE ORDER THAT THERE IS NO PROVISION IN THE ACT WHICH SUGGESTS THAT INDEXATION IS ALLOWED FROM THE DATE OF ADVANCE PAYMENT ON THE WHOLE AMOUNT. 2.1.1 THE APPLICANT SUBMITS THAT IN SUPPORT OF THE GROUND OF APPEAL NO 2, THE AUTHORISED REPRESENTATIVE, DURING THE COURSE OF HEARING, READ THE PROVISIONS CONTAINED IN SECTION 48(II) TOGETHER WITH THE SECOND PROVISO AND EXPLANATION (III) WHICH EXPLAINS THE MEANING OF 'INDEXED COST OF ACQUISITION'. ITA NO. 873 /MUM/ 2017 SHRI ASHOK G. CHAUHAN / ASSISTANT COMMISSIONR OF 3 THE AUTHORISED REPRESENTATIVE PLEADED THAT THE INDEXED COST OF ACQUISITIO N AS PER EXPLANATION (III) MEANS THE COST OF THE ASSET AS ON THE DATE SUCH ASSET WAS ACQUIRED/ALLOTTED, (WHICH IS CLEAR FROM THE PHRASE 'THE COST INFLATION INDEX FOR THE FIRST YEAR IN WHICH THE ASSET WAS HELD BY THE ASSESSEE') (EMPHASIS MINE) IRRESPECTIVE OF THE DATE ON WHICH THE PAYMENTS ARE MADE, THAT IS, THE ACTUAL COST OF ACQUISITION OF THE ASSET OUGHT TO BE CONSIDERED FOR THE PURPOSE OF INDEXATION, AND NOT THE PAYMENTS MADE AS PER THE PAYMENT SCHEDULE. IT WAS PARTICULARLY STRESSED DURING THE COURSE OF HEARING THAT EACH INSTALLMENT PAYMENT IS ONLY A PART OF THE COST OF THE ASSET, AND NOT THE 'COST' PER SE. 2.1.2 FURTHER, THIS IS NOT FOR THE PURPOSE OF EVASION OF TAX. 2.2. IN PARA 8 ON PAGE NO 15 OF THE ORDER, THE HONOURABLE TRIBUNAL HAS STATED THAT 'MOR EOVER, NO NEW FACTS OR CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US IN ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD CIT(A)...... 2.2.1 THE APPLICANT SUBMITS THAT THE AUTHORISED REPRESENTATIVE HAD SUBMITTED A PAPER BOOK OF DECISI ONS AND IN SUPPORT OF THIS GROUND OF APPEAL, CITED THE DECISIONS AT SR NOS 9 TO 11. 2.3. THE HONOURABLE TRIBUNAL IN THE IMPUGNED ORDER HAS INADVERTENTLY, NOT ACKNOWLEDGED/ MENTIONED THE CONTENTIONS RAISED BY THE AUTHORISED REPRESENTATIVE IN SUPPORT OF THE GROUND OF APPEAL NO 2 AND THE DECISIONS CITED BY HIM. ITA NO. 873 /MUM/ 2017 SHRI ASHOK G. CHAUHAN / ASSISTANT COMMISSIONR OF 4 3. ON THE OTHER HAND, THE LEARNED D.R. APPEARING ON BEHALF OF THE REVENUE SUBMITTED THAT THERE IS NO ERROR WHICH IS APPARENT FROM RECORD AND THE IMPUGNED ORDER DATED 19.03.2018 IS A WELL REASONED AND SPEAK ING ORDER AND NO RECTIFICATION IS REQUIRED. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD . FROM THE RECORD WE NOTICED THAT LD. AR HAD SUBMITTED A PAPER BOOK OF DECISIONS IN SUPPORT OF THE ABOVE GROUND OF APPEAL AND CITED THE DECISI ONS AT SR. NO. 9 TO 11 IN SUPPORT OF HIS ARGUMENTS. THE SAID DECISIONS CITED AT SR. NO 9 TO 11 COULD NOT BE CONSIDERED AND BECAUSE OF OVERSIGHT , THEY WERE MISSED IN THE ORDER WHILE DISMISSING GROUND NO. 2 OF THE APPEAL FILED BY THE ASSESSEE. 5. IN THE CASE OF ACIT VRS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. (2008) 305 ITR 227 (SC) , IT WAS HELD THAT SUB - SECTION (2) OF SECTION 254 THUS COVERS TWO DISTINCT SITUATIONS: - (I) IT ENABLES THE TRIBUNAL AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE OR DER TO AMEND ANY ORDER PASSED UNDER SUB - SECTION (1) WITH A VIEW TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD; AND (II) IT REQUIRES THE TRIBUNAL TO MAKE SUCH AMENDMENT IF THE MISTAKE IS BOUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESSING OFFICER. ITA NO. 873 /MUM/ 2017 SHRI ASHOK G. CHAUHAN / ASSISTANT COMMISSIONR OF 5 TH US THE COURT CONCLUDED AS UNDER: - 'IT IS, OF COURSE, NOT EASY TO DEFINE OR ADEQUATELY DESCRIBE WHAT AN ERROR OF LAW APPARENT ON THE FACE OF THE RECORD MEANS. WHAT CAN BE CORRECTED BY A WRIT HAS TO BE AN ERROR OF LAW; BUT IT MUST BE SUCH AN ERROR OF LAW AS CAN BE REGARDED AS ONE WHICH IS AP PARENT ON THE FACE OF THE RECORD. WHERE IT IS MANIFEST OR CLEAR THAT THE CONCLUSION OF LAW RECORDED BY AN INFERIOR COURT OR TRIBUNAL IS BASED ON AN OBVIOUS MIS - INTERPRETATION OF THE RELEVANT STATUTORY PROVISION, OR SOMETIMES IN IGNORANCE OF IT, OR MAY BE, EVEN IN DISREGARD OF IT, OR IS EXPRESSLY FOUNDED ON REASONS WHICH ARE WRONG IN LAW, THE SAID CONCLUSION CAN BE CORRECTED BY A WRIT OF CERTIORARI. IN ALL THESE CASES, THE IMPUGNED CONCLUSION SHOULD BE SO PLAINLY INCONSISTENT WITH THE RELEVANT STATUTORY PROV ISION THAT NO DIFFICULTY IS EXPERIENCED BY THE HIGH COURT IN HOLDING THAT THE SAID ERROR OF LAW IS APPARENT ON THE FACE OF THE RECORD. IT MAY ALSO BE THAT IN SOME CASES, THE IMPUGNED ERROR OF LAW MAY NOT BE OBVIOUS OR PATENT ON THE FACE OF THE RECORD AS SU CH AND THE COURT MAY NEED AN ARGUMENT TO DISCOVER THE SAID ERROR; BUT THERE CAN BE NO DOUBT THAT WHAT CAN BE CORRECTED BY A WRIT OF CERTIORARI IS AN ERROR OF LAW AND THE SAID ERROR MUST, ON THE WHOLE, BE OF SUCH A CHARACTER AS WOULD SATISFY THE TEST THAT I T IS AN ERROR OF LAW APPARENT ON THE FACE OF THE RECORD. IF A STATUTORY PROVISION IS REASONABLY CAPABLE OF TWO CONSTRUCTIONS AND ONE CONSTRUCTION HAS BEEN ADOPTED BY THE INFERIOR COURT OR TRIBUNAL, ITS CONCLUSION MAY NOT NECESSARILY OR ALWAYS BE OPEN TO CO RRECTION BY A WRIT OF CERTIORARI. IN OUR OPINION, IT IS NEITHER POSSIBLE NOR DESIRABLE TO ATTEMPT EITHER TO DEFINE OR TO DESCRIBE ADEQUATELY ALL CASES OF ERRORS WHICH CAN BE APPROPRIATELY DESCRIBED AS ERRORS OF LAW APPARENT ON THE FACE OF THE RECORD. WHETH ER OR NOT AN IMPUGNED ERROR IS AN ERROR OF LAW AND AN ERROR OF LAW WHICH IS APPARENT ON THE FACE OF THE RECORD, MUST ALWAYS DEPEND UPON THE FACTS AND ITA NO. 873 /MUM/ 2017 SHRI ASHOK G. CHAUHAN / ASSISTANT COMMISSIONR OF 6 CIRCUMSTANCES OF EACH CASE AND UPON THE NATURE AND SCOPE OF THE LEGAL PROVISION WHICH IS ALLEGED TO HAVE B EEN MISCONSTRUED OR CONTRAVENED'. 6. IT WAS FURTHER HELD BY THE COURT THAT NON - CONSIDERATION OF A DECISION OF THE JURISDICTIONAL COURT OR OF SUPREME COURT CAN BE SAID TO BE A MISTAKE APPARENT FROM RECORD WHICH CAN BE RECTIFIED UNDER SECTION 254(2) OF TH E ACT. 7. APART FROM THAT WE HAVE ALSO CONSIDERED THE JUDGEMENT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. VRS. CIT (2007) 295 ITR 466 (SC) WHEREIN IT WAS HELD AS UNDER: - APPEAL TO APPELLATE TRIBUNAL POWERS OR TRIBUNAL POWERS TO RECRIFY MISTAKES ON RECORD SCOPE OF FUNDAMENTAL PRINCIPLE NO PARTY APPEARING BEFORE TRIBUNAL SHOULD SUFFER ON ACCOUNT OF MISTAKE COMMITTED BY TRIBUNAL FAILURE TO CONSIDER DECISION OF COORDINATE BENCH CITED BY ASSESSEE IS A MISTAKE INCOME TAX ACT, 1961 , SS. 43A, 154, 254. IT WAS FURTHER HELD AS UNDER: - REVERSING THE DECISION OF THE HIGH COURT, HAD IN ALLOWING THE RECTIFICATION APPLICATION THE TRIBUNAL GAVE A FINDING THAT THE EARLIER DECISION OF A CO - ORDINATE BENCH WAS CITED BEFORE IT BUT THROUGH OVER SIGHT IT HAD MISSED THE JUDGEMENT WHILE DISMISSING THE APPEAL FILED BY THE ASSESSEE ON THE QUESTION OF ADMISSIBILITY/ALLOWABILITY OF THE CLAIM OF THE ASSESSEE FOR ENHANCED DEPRECIATION UNDER SECTION 43A. ONE OF THE IMPORTANT REASONS FOR GIVING THE POWER OF RECTIFICATION TO THE TRIBUNAL UNDER SECTION 254(2) WAS TO SEE THAT NO PREJUDICE WAS CAUSED TO EITHER OF THE PARTIES APPEARING BEFORE IT. THE RULE OF PRECEDENT WAS ITA NO. 873 /MUM/ 2017 SHRI ASHOK G. CHAUHAN / ASSISTANT COMMISSIONR OF 7 AN IMPORTANT ASPECT OF CERTAINTY IN THE RULE OF LAW, AND PREJUDICE HAD RESULTED TO THE ASSES SEE SINCE THE PRECEDENT HAD NOT BEEN CONSIDERED BY THE TRIBUNAL. THE TRIBUNAL WAS JUSTIFIED IN RECTIFYING THE MISTAKE ON RECORD. 8. KEEPING IN VIEW THE ABOVE FACTUAL AND LEGAL POSITION , WE ARE OF THE VIEW THAT THE DECISIONS AT SR. NO. 9 TO 11 OF THE PAPER BOOK OF THE DECISIONS SUBMITTED BY THE ASSESSEE IN SUPPORT OF GROUND NO. 2 OF THE APPEAL, THOUGH WERE CITED BEFORE US, BUT BECAUSE OF OVERSIGHT IT COULD NOT BE CONSIDERED OR DISTINGUISHED IN THE ORDER WHILE DI SMISSING GROUND NO. 2 OF THE APPEAL FILED BY THE ASSESSEE. 9. THEREFORE, WHILE KEEPING IN VIEW THE PRINCIPLE S LAID DOWN BY THE HON'BLE SUPREME COURT IN THE AFOREMENTIONED TWO JUDGEMENTS, WE ARE OF THE VIEW THAT THERE IS MISTAKE APPARENT FROM RECORD , THEREFO RE, WE RECALL OUR DECISION ON GROUND NO. 2 OF THE APPEAL IN ORDER DATED 1 9.03.18 AND DIRECT THE REGISTRY TO FIX THE MATTER FOR RE - HEARING ON GROUND NO. 2 AND AS SUCH THIS GROUND OF APPEAL WILL BE HEARD AFRESH ON MERITS. 10. BEFORE PARTING WE MAKE IT CLEAR THAT WE HAVE NOT EXPRESSED ANY OPINION IN ONE WAY OR THE OTHER AND NOT STATED ANYTHING ON MERITS OF THE MATTER. THEREFORE THE REGULAR BENCH OF THE TRIBUNAL WILL HEAR GROUND NO. 2 AND WILL ITA NO. 873 /MUM/ 2017 SHRI ASHOK G. CHAUHAN / ASSISTANT COMMISSIONR OF 8 DECIDE ON ITS OWN MERITS WITHOUT BEING INFLUENCED BY ANY OBSERVATION MAD E IN THE ABOVE ORDER. ORDER ACCORDINGLY. 11. IN THE RESULT, THE MA FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 3RD OCTOBER , 2018. SD/ - SD/ - ( G. S. PANNU ) ( SANDEEP GOSAIN ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 3 OCTOBER , 2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) - 32 , MUMBAI 4. THE CIT - XX , MUMBAI 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI SPS DHANANJAY