SHRI. SATYANARAYAN NANGALIA, MUMBAI V. ITO 17 (3)(2), MUMBAI

MA 280/MUM/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 5221 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 15-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Rectification of order; Bad and doubtful debts
• Section: 133(6); 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER MA No. 280/Mum/2021 (in ITA No. 7364/Mum/2019) (Assessment Year: 2007-08) Shri Saty anarayan Nangalia, 402 , Stock Ex change Towers, Dalal Street, Fort Mu mbai – 400023. बनाम/ Vs. ITO 1 7(3)(2 ) 1 s t Floor, Kautilya Bhavan BKC Ban dra East, Mu mbai – 400051. ./ज आइआर ./PAN/GI R No. : AAAP N5 524G ( /Appellant) . . ( / Respondent) र / Appellant by : Mr.S.L Jain.CA. AR र /Respondent by : Mr.Tejinder Pal Singh.DR र / D a t e o f H e a r i n g 04/02/2022 घोषण र /D a t e o f P r o n o u n c e m e n t 14/02/2022 आद श / O R D E R PER PAVAN KUMAR GADALE - JM: The assessee has filed the miscellaneous application (M.A) in ITA. No. 7364/Mum/2019 dated 30.07.2021 seeking rectification of mistake apparent in the Honble Tribunal order. 2. The Ld.AR submitted that, the Hon’ble Tribunal has confirmed the sustainment of the addition by the MA No. 280/Mum/2021 Satyanarayan Nangalia, Mumbai. - 2 - CIT(A) in respect of loan obtained from M/s Brij.MohanSagarmal Capital Services Pvt Ltd which was written off in their books of accounts. The contentions of the Ld.AR are that the judicial decision of the Honble supreme court was not considered and the Tribunal has considered the earlier Honble supreme court decision in deciding the appeal and sustained the action of the CIT(A).The Ld.AR prayed for rectification of the Honble Tribunal order. 3. Contra, the Ld.DR supported the order of the Honble Tribunal and submitted that the Hon’ble Supreme Court decision was considered in the ITAT order. 4. We have heard the rival submissions and perused the material on record.The contentions of the Ld.AR are that the Hon’ble Tribunal has not considered the judicial decision and the ITAT order has to be rectified. Prima-facie on perusal of the facts, we find that the Honble Tribunal has considered the facts, circumstances, material information and Honble supremecourt decision and dealt at page 7 Para 7 of the order, which is read as under: MA No. 280/Mum/2021 Satyanarayan Nangalia, Mumbai. - 3 - 7. We find the loan amount is outstanding for more than 10 years and in the assessment proceedings, in compliance to notice issued u/s 133(6) of the Act . M/s BSCSPL informed the write off of amount as bad debt in the books of accounts and the assessee is not required to make any payment. We found at para 3.3 of the assesseement order the A.O. has specifically dealt on these facts of Bad debts. The CIT(A) has very methodically dealt on this issue in his order and granted assessee relief in respect of other loan creditors but has confirmed this loan creditor liability as business income. At this juncture we considered it appropriate to refer to the observations of the CIT(A) at page 37 Para 5.8 of the order which is read as under: “5.8 Further, it is pertinent to note that the addition to the tune of Rs.1,14,68,107/- has been purely made on account of cessation of liability u/s.41 (1)(a) of the Act. In the present case, the total liability of Rs.1,14,68,107/- pertains to loans obtained of Rs.34,40,250/- and other sundry creditors of Rs.80,27,857/- on account of sale of shares done on behalf of the appellant's clients. Out of the loans taken of Rs.34,40,250/-, the appellant has failed to substantiate that a sum of Rs.25,25,000/- pertaining to BrijmohanSagarmalCapital Services P. Ltd (BSCSPL)is still payable. During the course of assessment proceedings, notice u/s 133(6) of the Act was issued wherein the said party had confirmed that Rs.25,25,000/- due from the appellant was written off as bad debts in its books of account. Further, it is also net the case of the appellant that the said loans have not been utilized for the purpose of his business. In the event, the loans standing to the credit in the books of account of the appellant are no longer payable and is therefore a benefit accrued in the course of his business of the appellant. Therefore, in such a scenario benefit that has MA No. 280/Mum/2021 Satyanarayan Nangalia, Mumbai. - 4 - accrued to the appellant needs to be taxed as his business income u/s. 28(i) of the Act as it can safely be presumed that the same has inextricably and naturally arisen in the furtherance of the due course of business. Therefore, I find that the AO was absolutely correct in making theaddition of Rs.25,25,000/- in respect of BSCSPL and the same deserves to be suitably upheld. Consequently, indeed, the addition of Rs.25,25,000/- in respect of the said BSCSPL is upheld.” 5. We find that, while deciding the issue, the Honble Tribunal has considered the overall facts of write off of amount as bad debt in the books of accounts by the lender and the assessee is not required to make any payment/discharge the loan liability and the Ld.AR has accepted the facts in the course of hearing and is not disputed.The Honble Tribunal relied on the applicable decision of the Honble Supreme court and confirmed the sustainment of addition by the appellate authority. Whereas, now the Ld.AR tried to argue on the merits of the case in the miscellaneous application. We find the provisions of section 254(2) of the Act are envisaged for rectification of mistake apparent from the record but not to review the order. Further, if the submissions of the Ld.AR are accepted, it amount to review of the order, which is not within the purview of MA No. 280/Mum/2021 Satyanarayan Nangalia, Mumbai. - 5 - Section 254(2) of the Act. Accordingly, we do not find merits in the miscellaneous application filed by the assessee and is dismissed. 6. In the result, the M.A filed by the assessee is dismissed. Order pronounced in the open court on 14.02.2022 Sd/- Sd/- (SHAMIM YAHYA) (PAVAN KUMAR GADALE ) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 14 /02/2022. KRK, PS /Copy of the Order forwarded to : 1. / The Appellant 2. / The Respondent. 3. & '( आ र आ ) / The CIT(A) 4. आ र आ ) ( ) / Concerned CIT 5. , - . / / '(, आ र '( रण, हमद & द / DR, ITAT, Mumbai 6. . 34 5 / Guard file. ान ु सार/ BY ORDER, , / //True Copy// 1. उ /सहाय ंजी ार ( Asst. Registrar) य र ी य !" र#, हम ाबा / ITAT, Mumbai