RAMA INDUSTRIES LTD, V. DCIT 3(3),

MA 298/MUM/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5632 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 06-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: J D MISTRIAR
• Keywords: Capital asset; Depreciation; Question of law; Capital receipt
• Section: 28

Judgement Text

, , , , INCOME-TAX APPELLATE TRIBUNAL -DBENCH MUMBAI , , , BEFORE S/SHRI RAJENDRA,ACCOUNTANT MEMBER AND PAWAN SINGH,JUDICIAL MEMBER / MA NO.298/MUM/2016 (ARISING OUT OF / / ITA NO.1857/MUM/2013, /ASSESSMENT YEAR-2009-10) M/S. RAMA INDUSTRIES LTD. 812, RAHEJA CHAMBERS NARIMAN POINT,MUMBAI-400 021. PAN: AAACR 5096 C VS. DCIT-3(3) ROOM NO.609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD,MUMBAI-400 020. / MA NO.299/MUM/2016 (ARISING OUT OF / / ITA NO.1858/MUM/2013, /ASSESSMENT YEAR-2009-10 ) M/S. RAMA PETROCHEMICALS PVT. LTD. 51/52, FREE PRESS HOUSE 215, NARIMAN POINT,MUMBAI-400 021. PAN: AAACR 7193 N VS. DCIT-3(3) ROOM NO.609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020. / MA NO.300/MUM/2016 (ARISING OUT OF / / ITA NO.1859/MUM/2013, /ASSESSMENT YEAR-2009-10) M/S. RAMA PHOSPHATES LTD. 812, RAHEJA CHAMBERS NARIMAN POINT,MUMBAI-400 021. PAN: AAACR 7191 Q VS. DCIT-3(3) ROOM NO.609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020. (APPLICANT) (RESPONDENT) REVEN UE BY: SHRI PURSHOTTAM KUMAR-DR ASS ESSEE BY: SHRI J.D. MISTRI-AR / DATE OF HEARING: 24.03.2017 / DATE OF PRONOUNCEMENT:19.05.2017 ,1961 254(2) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , / PER RAJENDRA A.M. - VIDE THEIR APPLICATIONS,DATED 06.09.2016,THE ASSESS EES HAVE MENTIONED THAT CERTAIN MISTAKES HAVE CREPT IN THE ORDER OF THE TRIBUNAL DATED 28.0 3.2016,THAT SAME WERE TO BE RECTIFIED U/S. 254(2)OF THE ACT,THAT GROUND NO.1 RELATED TO PRINCI PAL AMOUNT OF LOAN WAIVED BY BANK AND FINANCIAL INSTITUTIONS THAT WAS TREATED AS INCOME O F THE ASSESSEE BY THE ASSESSING OFFICER (AO),THAT THE FIRST APPELLATE AUTHORITY(FAA)HAD HE LD THAT NO DEDUCTION WAS GIVEN IN RESPECT OF THE LOAN, THAT SECTION 41(1)/SECTION 28(IV) COUL D NOT BE APPLIED, THAT THE DECISION OF SOLID CONTAINERS LTD.(308ITR417) WAS CONSIDERED, THAT THE TRIBUNAL RESTORED THE MATTER BACK TO THE FILE OF AO TO DECIDE APPLICABILITY OF SECTION 41(1) AFRESH AFTER CONSIDERING THE LOAN SANCTIONING AND LOAN WAIVER DOCUMENTS,THAT THE TRIB UNAL HAD DISPOSED THE GROUND BY RELYING ON THE DECISION OF LOGITRONICS P. LTD.(333ITR386) O F HON'BLE DELHI HIGH COURT, THAT NEITHER MA/298-300/M/16-RAMA 2 THE REVENUE NOR THE ASSESSEE HAD CITED OR RELIED UPON THE SAID DECISION DURING THE HEARING OF THE APPEAL, THAT THE ASSESSEE HAD NO OPPORTUNITY T O DEAL WITH THE SAME, THUS, THERE WAS MISTAKES IN THE ORDER OF THE TRIBUNAL, THAT ON PAG E -5 AT PARA 3.3 THE TRIBUNAL HAD REFERRED TO CASES OF MAHINDRA AND MAHINDRA AND SOLID CONTAINERS LTD. ALONGWITH XYLON HOLDINGS PVT. LTD., THAT THE ASSESSEE /REVENUE HAD NOT ARGUED TH E PREPOSITION. 2. DURING THE COURSE OF HEARING THE AUTHORISED REPRESE NTATIVE(AR) REITERATED THE ARGUMENTS THAT ARE PART OF THE MA.S.FIRST OF ALL,WE WOULD LIK E TO DEAL WITH THE MATTER OF M/S. RAMA PETROCHEMICALS PVT. LTD. IN THAT MATTER THE MAIN OBJECTIONS OF THE ASSESSEE IS THAT THE TRIBUNAL HAD ADJUDICATED THE MATTER RELYING UPON A CASE THAT WAS CONFRONTED THE ASSESSEE. 2.1. AS PER THE SETTLED PRINCIPLES OF TAXATION, SCOPE OF SECTION 254(2)OF THE ACT IS VERY LIMITED AND THAT THE TRIBUNAL HAS NO POWER TO REVIEW ITS OR DERS UNLESS AN ARITHMETICAL ERROR,CLERICAL MISTAKE OR A BLATANT LEGAL OMISSION HAS TAKEN PLACE .IN THE CASE OF EARNEST EXPORTS LTD. (323 ITR 577),THE HONBLE BOMBAY HIGH COURT HAS HELD THA T THE POWER UNDER SECTION 254(2) OF THE ACT IS CONFINED TO MERELY RECTIFICATION OF A MI STAKE APPARENT ON RECORD,THAT IT DOES NOT EMPOWER THE TRIBUNAL AT THE STAGE OF DECIDING THE A PPLICATION U/S.254(2) OF THE ACT TO SUBSTITUTE ITS VIEW FOR THE VIEW TAKEN IN THE ORDER SOUGHT TO BE RECTIFIED. THE COURT FURTHER HELD THAT THE SCOPE OF SECTION 254(2) IS ONLY TO CORRECT THE MISTAKE AND ERRORS APPARENT ON THE FACE OF THE RECORD AND IT DOES NOT CONTEMPLATE GIVING A FRESH DECISION ON THE MERITS BY SUBSTITUTING THE EARLIER VIEW..,THAT IT WOULD AMOUNT TO A RE- APPRECIATION OF THE CORRECTNESS OF THE EARLIER DECISION ON THE MERITS,THAT IT WAS NOT PERM ISSIBLE,THAT RE-EVALUATING THE CORRECTNESS ON THE MERITS OF AN EARLIER DECISION WAS BEYOND THE SC OPE OF THE POWER CONFERRED U/S.254(2) OF THE ACT. IN LIGHT OF THE ABOVE OBSERVATIONS,WE WOULD LIKE TO REPRODUCE THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL AND IT READS AS UNDER: 3.SECOND GROUND OF APPEAL IS ABOUT APPLICABILITY O F THE PROVISIONS OF SECTION 41 (1)/28 OF THE ACT.DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD DERIVED THE BENEFIT OF WAIVER OF P RINCIPAL AMOUNTS IN RESPECT OF THE LOANS TAKEN FROM STATE BANK OF HYDERABAD (RS.1.20 CRORES) AND UNIT TRUST OF INDIA (RS.6.25 CRORES). HE OBSERVED THAT THE ASSESSEE HAD TAKEN LOANS FROM THE BANKS IN THE NORMAL COURSE OF THE BUSINESS, THAT FOR THE YEAR UNDER APPEAL IT GOT A B ENEFIT OF WAIVER OF SUCH LOANS, THAT IT HAD NO LIABILITY TO PAY SUCH LOAN. HE DIRECTED THE ASSESSE E TO EXPLAIN AS TO WHY THE BENEFIT DERIVED BY WAY OF WAIVER OF OUTSTANDING LOAN AMOUNTING TO RS. 7.45 CRORES SHOULD NOT BE CONSIDERED AS INCOME AND ADDED TO ITS TOTAL INCOME.THE ASSESSEE C ONTENDED THAT THERE WAS NO REDUCTION OF LIABILITY,THAT THE RECEIPT WAS NOT TAXABLE,THAT EVE N IF THE COMPANY HAD BEEN TAKEN TO LIQUIDATION THE PREFERENCE SHAREHOLDER WOULD NOT GE T ANY AMOUNT, THAT THE COMPANIES ASSETS WOULD BE INSUFFICIENT TO DISCHARGE ITS CREDITORS, T HAT THE PREFERENCE SHAREHOLDERS WOULD RANK AFTER THEM IN PRIORITY OF DISTRIBUTION OF ASSETS, T HAT THE WAIVER OF REFERENCE CAPITAL IS A CAPITAL RESTRUCTURING EXERCISE. AFTER CONSIDERING THE SUBMI SSION OF THE ASSESSEE, THE AO REFERRED TO MA/298-300/M/16-RAMA 3 THE CASE OF SOLID CONTAINERS LTD.(308 ITR 417), DEL IVERED BY THE HONBLE POSITION HIGH COURT AND HELD THAT ASSESSEE HAD ACQUIRED BENEFIT OF WAIV ER OF PRINCIPAL AMOUNTS, THAT IT HAD NO LIABILITY TO MAKE PAYMENT OF RS. 7.45CRORES,THAT TH E AMOUNT IN QUESTION RECEIVED BY THE ASSESSEE,BEING WAIVER,WAS CHARGEABLE TO TAX.ACCORDI NGLY,HE MADE AN ADDITION OF RS.7,45,64, 838/- TO THE TOTAL INCOME OF THE ASSESSEE. 3.1.DURING THE APPELLATE PROCEEDINGS BEFORE THE FAA , THE ASSESSEE CONTENDED THAT THAT THE AMOUNT CREDITED IN THE ACCOUNT HAD BEEN WRITTEN BAC K IN THE PROFIT AND LOSS APPROPRIATION PART OF THE PROFIT AND LOSS ACCOUNT AFTER THE FIGUR E OF PROFIT BEFORE TAX COMMONLY REFERRED TO AS BELOW THE LINE, THAT THE AMOUNT IN QUESTION HAD BEE N TRANSFERRED TO CAPITAL RESERVE IS PART OF TOTAL AMOUNT OF RS. 16.98 CRORES, THAT THE FACTS OF THE CASE UNDER CONSIDERATION WERE DIFFERENT FROM THE FACTS OF THE CASE OF SOLID CONTAINERS AS W ELL AS THE JUDGEMENT OF TV SUNDRAM IYENGAR AND SONS LTD.,THAT IN BOTH THE CASES THE WA IVER OF LOAN OR AMOUNT RECEIVED WAS FROM REGULAR CUSTOMERS/SUPPLIERS DURING THE COURSE OF TR ADE, THAT THOSE FACTS HAD BEEN CLEARLY DISCUSSED IN BOTH THE CASES, IN THOSE CASES THE LOA N WAS TAKEN FOR TRADING ACTIVITY, THAT THE FACTS OF THE MAHINDRA AND MAHINDRA LTD.(128 TAXMANN 394) WERE APPLICABLE TO THE FACTS OF THE CASE UNDER APPEAL, THAT THE HONBLE BOMBAY HIGH COURT HAD LAID DOWN THE RATIO IN THE CASE OF MAHINDRA AND MAHINDRA (SUPRA),THAT NO DEDUC TION WAS CLAIMED IN EARLIER YEARS IN RESPECT OF THE LIABILITY THE PROVISIONS OF SECTION 41(1) WOULD NOT BE APPLICABLE,THAT THE PROVISIONS OF SECTION 28 (IV) WERE NOT APPLICABLE,T HAT THERE WAS NO BENEFIT OR PERQUISITE ARISING TO THE ASSESSEE IN THAT REGARD. AFTER CONSI DERING THE SUBMISSION OF THE ASSESSEE AND THE ASSESSMENT ORDER, THE FAA REFERRED TO THE PROVI SION OF SECTIONS 41(1)AND 28(IV) OF THE ACT AND HELD THAT THERE HAD BEEN NO ALLOWANCE OR DEDUCT ION IN ANY OF THE PRECEDING YEARS, THAT THERE WAS NO QUESTION OF APPLYING THE PROVISIONS OF THE ABOVE MENTIONED TWO SECTIONS, IT COULD NOT BE SAID THAT THE ASSESSEE WAS CARRYING ON BUSIN ESS OF OBTAINING LOANS AND THE WAIVER OF SUCH LOAN BY BANKS/FINANCIAL INSTITUTION WAS A BENE FIT ARISING FROM SUCH BUSINESS. HE REFERRED TO THE CASE OF MAHINDRA AND MAHINDRA LTD. (SUPRA) A ND HELD THAT WAIVER OF PRINCIPAL AMOUNT OF DEBENTURES WAS A CAPITAL SURPLUS ARISING OUT OF WAIVER OF PRINCIPAL LIABILITY WAS A CAPITAL RECEIPT. 3.2.BEFORE US, THE DR CONTENDED THAT FACTS OF THE C ASE WERE SIMILAR TO THE FACTS OF SOLID CONTAINERS LTD (SUPRA), THAT THERE WAS CESSATION OF LIABILITY, THAT THE PROVISIONS OF SECTION 41 (1) WERE APPLICABLE. THE AR ARGUED THAT THE FAA HAD RIGHTLY POINTED OUT THAT FACTS OF THE CASE OF MAHINDRA AND MAHINDRA (SUPRA) WERE SIMILAR TO TH E FACTS OF THE CASE UNDER CONSIDERATION, THAT ASSESSEE HAD OFFERED THE INTEREST PORTION OF T HE WAIVER FOR TAXATION, THAT THE WAIVER OF PRINCIPAL AMOUNT WAS A CAPITAL RECEIPT. HE RELIED U PON THE CASE OF XYLON HOLDINGS PRIVATE LIMITED (90 DTR 205). 3.3.WE HAVE HEARD THE RIVAL SUBMISSIONS AND BARRIER S THE MATERIAL BEFORE US. WE FIND THAT THE STATE BANK OF HYDERABAD AND UNIT TRUST OF INDIA HAD WAIVED RS. 7.45 CRORES DURING THE YEAR UNDER CONSIDERATION, DURING THE ASSESSMENT PROCEEDI NGS THE ASSESSEE HAD CLAIMED THAT THERE WAS NO REDUCTION OF LIABILITY AND THEREFORE IT WAS NOT A TAXABLE RECEIPT, THAT THE WAIVER OF PREFERENCE CAPITAL WAS A CAPITAL RESTRUCTURING EXER CISE, THAT THE AO HAD MADE THE ADDITION APPLYING THE RATIO LAID DOWN IN THE CASE OF SOLID C ONTAINERS LTD (SUPRA), THAT THE FAA HAD HELD THAT FACTS OF THE CASE UNDER CONSIDERATION WER E SIMILAR TO THE FACTS OF CASE OF MAHINDRA AND MAHINDRA. WE ARE OF THE OPINION THAT BEFORE PROCEEDING FURTHE R, IT WOULD BE USEFUL TO REFER TO THE CASES RELIED UPON BY THE AO AND THE AR.IN THE CASE OF XYL ON HOLDINGS PRIVATE LIMITED (SUPRA) IT WAS FOUND THAT THE ASSESSEE HAD ENTERED INTO AN AGR EEMENT WITH ITS HOLDING COMPANY BY VIRTUE OF WHICH THE LIABILITY TO PAY A LOAN OF RS. 29.17 L AKHS TAKEN TOWARDS THE PURCHASE OF A CAR WAS TAKEN OVER BY THE HOLDING COMPANY,THAT THE MOTOR CA R FOR WHICH THE LOAN WAS TAKEN CONTINUED TO BE A PART OF THE SCHEDULE OF ASSETS OF THE ASSES SEE AND DEPRECIATION THEREON WAS ALSO CLAIM, THAT THE AO ADDED BACK AN AMOUNT OF RS. 29.7 LAKHS TO THE INCOME OF THE ASSESSEE AS BEING TAXABLE U/S.41 (1) OF THE ACT.THE FAA ALLOWED THE A PPEAL OF THE ASSESSEE HOLDING THAT THE MA/298-300/M/16-RAMA 4 LIABILITY TO REPAY A LOAN TAKEN TOWARDS THE PURCHAS E OF A MOTOR CAR COULD NOT BE SUBJECTED TO TAX, THAT THE EXTINGUISHMENT OF LOAN TAKEN FOR PURC HASE OF A CAPITAL ASSET, LIKE A MOTOR, WAS NOT A REVENUE RECEIPT AND HENCE NOT TAXABLE. THE DE PARTMENT PREFERRED AN APPEAL BEFORE THE TRIBUNAL.UPHOLDING THE ORDER OF THE FAA, THE TRIBUN AL HELD THAT CESSATION OF LIABILITY TO REPAY A LOAN TAKEN TO PURCHASE A CAPITAL ASSET DID NOT RE SULT IN A REVENUE RECEIPT, THAT THE PROVISIONS OF SECTION 41 (1) WERE NOT APPLICABLE.IT REFERRED T O THE JUDGMENT OF MAHINDRA AND MAHINDRA LTD.(SUPRA) AND HELD THAT THE AMOUNT OF RS. 29.17 L AKHS WAS NOT TAXABLE EITHER U/S.41 (1) OR 28 (IV)OF THE ACT. BEFORE THE HONBLE HIGH COURT IT WA S CONTENDED ON BEHALF OF THE REVENUE THAT THE DECISION IN THE MATTER OF MAHINDRA AND MAHINDRA LTD.(SUPRA) WAS NOT APPLICABLE IN VIEW OF THE SUBSEQUENT DECISION DELIVERED IN THE CASE OF SOLID CONTAINERS LTD.(SUPRA), THAT IN THE CASE OF SOLID CONTAINERS LTD.THE COURT HAD DISTINGU ISHED THE DECISION RENDERED IN THE MATTER OF MAHINDRA AND MAHINDRA LTD.,THAT IT WAS HELD THAT WAIVER OF LOAN TAKEN FOR TRADING ACTIVITY WOULD BECOME THE ASSESSEES INCOME AND SUBJECT TO T AX. ON BEHALF OF THE ASSESSEE IT WAS ARGUED THAT ISSUE STOOD COVERED BY THE DECISION OF THE HONBLE COURT IN THE MATTER OF MAHINDRA AND MAHINDRA LTD.,THAT THE JUDGMENT IN THE MATTER OF SOLID CONTAINERS WAS NOT APPLICABLE, THAT IN THAT CASE LOAN WAS TAKEN FOR BU SINESS PURPOSES AND NOT FOR PURCHASE OF CAPITAL ASSET.DECIDING THE APPEAL, THE HONBLE HIGH COURT HELD AS UNDER: 8.WE HAVE CONSIDERED THE SUBMISSIONS. THE ISSUE AR ISING IN THIS CASE STAND COVERED BY THE DECISION OF THIS COURT IN THE MATTER OF MAHI NDRA AND MAHINDRA (SUPRA). THE DECISION OF THIS COURT IN THE MATTER OF SOLID CONTA INERS (SUPRA) IS ON COMPLETELY DIFFERENT FACTS AND IN APPLICABLE TO THIS CASE. IN THE MATTER OF SOLID CONTAINERS (SUPRA) THE ASSESSEE THEREIN HAD TAKEN A LOAN FOR BUSINESS PURPOSES. IN VIEW OF THE CONSIDERED TERMS ARRIVED AT, THE AMOUNT OF LOAN TAKEN WAS WAIV ED BY THE LENDER. THE CASE OF THE ASSESSEE THEREIN WAS THAT THE LOAN WAS A CAPITAL RE CEIPT AND HAS NOT BEEN CLAIMED AS DEDUCTION FROM THE TAXABLE INCOME IN THE EARLIER YE ARS AND WOULD NOT COME WITHIN THE PURVIEW OF SECTION 41 (1) OF THE ACT. HOWEVER THIS COURT BY PLACING RELIANCE UPON THE DECISION OF THE APEX COURT IN THE MATTER OF CIT V. SUBRAMANIAN & SONS LTD TO 22 ITR 344 HELD THAT THE LOAN WAS RECEIVED BY THE ASSESSEE FOR CARRYING ON ITS BUSINESS AND THEREFORE, NOT A LOAN TAKEN FOR THE PURCHASE OF CAP ITAL ASSETS. CONSEQUENTLY, THE DECISION OF THIS COURT IN THE MATTER OF MAHINDRA AN D MAHINDRA LTD (SUPRA) WAS DISTINGUISHED AS IN THE SAID CASE THE LOAN WAS TAKE N FOR THE PURCHASE OF CAPITAL ASSET AND NOT FOR TRADING ACTIVITIES AS IN THE CASE OF SO LID CONTAINERS LTD (SUPRA). IN VIEW OF THE ABOVE THE DECISION OF THIS COURT IN THE MATTER OF SOLID CONTAINERS LTD (SUPRA) WILL HAVE NO APPLICATION TO THE FACTS OF THE PRESENT CAS E AND THE MATTER STANDS COVERED BY THE DECISION OF THIS COURT IN THE MATTER OF 1857-59 -RAMA 5 MAHINDRA AND MAHINDRA LTD (SUPRA). THE ALTERNATIVE SUBMISSION THAT THE AM OUNT OF LOAN WRITTEN OFF WOULD BE TAXABLE U/S.28 (IV) OF THE ACT ALSO CAME UP FOR CON SIDERATION BEFORE THIS COURT IN THE MATTER OF MAHINDRA AND MAHINDRA LTD (SUPRA) AND IT WAS HELD THEREIN THAT SECTION 28 (IV) OF THE ACT WOULD APPLY ONLY WHEN A BENEFIT OR PERQUISITE IS RECEIVED IN KIND AND HAS NO APPLICATION WHERE BENEFIT RECEIVED IN CASH O R MONEY . 9. IN VIEW OF THE ISSUE ARISING THIS APPEAL BEING COVERED BY THE DECISION OF THIS SCORE IN THE MATTER OF MAHINDRA AND MAHINDRA LTD (SUPRA), NO SUBSTANTIAL QUESTION OF LAW ARISES AND BOTH THE QUESTIONS ARE DISMISSED. WE ARE OF THE OPINION THAT IF THE JUDGMENTS OF MAHI NDRA AND MAHINDRA LTD.(SUPRA) AND SOLID CONTAINERS LTD.(SUPRA)ARE ANALYSED IN LIGHT OF THE DECISION OF XYLON HOLDINGS PRIVATE LTD.,IT BECOMES CLEAR THAT THE BASIC ISSUE TO BE DECIDED FO R INVOKING THE PROVISIONS OF SECTION 41 (1) OF THE ACT IS TO DECIDE THE NATURE OF THE TRANSACTI ON.IF THE LOAN WAIVED RELATES TO CAPITAL ASSET THE WAIVER WOULD NOT RESULT IN A REVENUE RECEIPT,BU T IF THE WAIVER OF LOAN IS FOR TRADING LIABILITY, THE AO WILL BE JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 41(1). THUS, THE NATURE OF THE LOAN IS THE TOUCHSTONE ON WHICH THE WAIVER I S TO BE EXAMINED.IN OTHER WORDS,IF A LOAN WAS TAKEN FOR ACQUIRING A CAPITAL ASSET,WAIVER THER EOF WOULD NOT AMOUNT TO ANY INCOME EXIGIBLE TO TAX. ON THE OTHER HAND,IF THE LOAN WAS FOR TRADING PURPOSE AND WAS TREATED AS SUCH FROM THE VERY BEGINNING IN THE BOOKS OF ACCOUNT THE WAIVER THEREOF MAY RESULT IN INCOME MORE SO WHEN IT WAS TRANSFERRED TO THE PROFIT AND LOSS A CCOUNT.WE FIND THAT IN THE CASE UNDER MA/298-300/M/16-RAMA 5 CONSIDERATION,THIS VERY BASIC ASPECT HAS NOT BEEN L OOKED INTO BY THE AO OR THE FAA.BEFORE THE AO THE ASSESSEE HAD STATED THAT THERE WAS NO REDUCT ION OF LIABILITY AND THAT IT WAS A CAPITAL RESTRUCTURING EXERCISE.THE ASSESSEE HAD NOT PRODUCE D THE DOCUMENTS WITH REGARD TO SANCTION OR WAIVER OF THE LOAN AND THE AO HAD NOT CALLED FOR SUCH DETAILS.THE FAA ALSO DID NOT DELIBERATE UPON THE ISSUE AS TO WHETHER THE LOAN WA S IN THE FIELD OF CAPITAL ASSET OR WAS TRADING LIABILITY.NOMENCLATURE GIVEN BY THE ASSESSE E/AO DO NOT DECIDE THE REAL NATURE OF ANY TRANSACTION UNTIL AND UNLESS THE RELEVANT DOCUMENTS ARE EXAMINED AND LOOKED INTO.IT IS TRUE THAT CASES RELIED UPON BY THE AO/FAA LAID DOWN CERT AIN PRINCIPLES. BUT,HOW THOSE PRINCIPLES WERE APPLICABLE TO THE FACTS OF THE CASE UNDER CONS IDERATION HAS NOT BEEN DISCUSSED EITHER BY THE AO/FAA.WE ARE OF THE OPINION,THAT PROVISIONS OF SECTION 28 ARE NOT APPLICABLE TO THE FACTS OF THE CASE.BUT,SAME CANNOT BE HELD FOR THE PROVISI ONS OF SECTION 41(1)OF THE ACT, AS PROPER INVESTIGATION ABOUT THE REAL NATURE OF THE WAIVED A MOUNTS HAVE NOT BEEN CARRIED OUT. CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE,WE ARE OF THE OPINION THAT THE MATTER NEEDS FURTHER VERIFICATION .THEREFORE,IN THE INTEREST OF JUSTICE,MATTER IS BEING RESTORED BACK TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRE SH AFTER CONSIDERING THE LOAN SANCTIONING AND THE LOAN WAIVER DOCUMENTS.HE IS DIRECTED TO AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. HERE,WE WOULD LIKE TO REFER TO THE CASE OF LOGITRON ICS P.LTD.(333ITR386),DELIVERED BY THE HONBLE HIGH COURT OF DELHI.THE FACTS OF THE CASE W ERE THAT UNDER A ONE-TIME SETTLEMENT WITH THE BANK,THE ASSESSEE DISCHARGED RS.1, 85, 00,000/- AGAINST THE PRINCIPAL AMOUNT OF LOAN OF RS.4,76,92,213 AND THE REMAINING SUM OF RS.1, 90,42 ,295/-WAS WAIVED,THAT THE AO TAXED THE PRINCIPAL AMOUNT OF LOAN WAIVED AS INCOME,THAT THE FAA DELETED THE ADDITION HOLDING THAT THE PROVISIONS OF SECTIONS 2(24),28(I),(IV) AND 41(1) W ERE NOT APPLICABLE AND THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.2,91,42,213/ -BEING THE PRINCIPAL AMOUNT OF LOAN WAIVED. THE TRIBUNAL REVERSED THE ORDER OF THE FAA.ON FURTH ER APPEAL,THE HONBLE HIGH COURT HELD AS UNDER: THE TRIBUNAL HAD FOUND THAT NOTHING WAS BROUGHT ON RECORD TO SHOW THAT THE LOAN TAKEN BY THE ASSESSEE FROM THE BANK WAS UTILISED FO R THE PURPOSE OF ACQUIRING CAPITAL ASSETS. ON THE CONTRARY, THE MATERIAL ON RECORD IND ICATED THAT THE ASSESSEE HAD OBTAINED THE LOAN OR CREDIT FACILITY BY WAY OF HYPO THECATION OF FINISHED GOODS, SEMI- FINISHED GOODS, RAW MATERIAL, BOOK DEBTS, RECEIVABL E CLAIMS,SECURITIES AND RIGHTS BY WAY OF FIRST CHARGE WHICH INDICATED THAT THE ASSESS EE HAD OBTAINED THE LOAN FACILITY FOR ITS BUSINESS ACTIVITY OR TRADING OPERATIONS. ON THE QUESTION WHETHER THE WHOLE AMOUNT OF THE LOAN HAD BEEN UTILISED EITHER FOR THE PURPOS E OF ACQUIRING A CAPITAL ASSET OR FOR THE PURPOSE OF BUSINESS ACTIVITY OR TRADING ACTIVIT Y THE TRIBUNAL REMITTED THE MATTER TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION.THE TR IBUNAL HAD RIGHTLY CULLED OUT THE PRINCIPLE LAID DOWN FROM THE VARIOUS JUDGMENTS AND HAD GIVEN AN OPPORTUNITY TO THE ASSESSEE TO PROVE ITS CASE BEFORE THE ASSESSING OFF ICER. THEREFORE, THERE WAS NO REASON OR OCCASION FOR THE ASSESSEE TO FEEL AGGRIEV ED BY THE ORDER OF THE TRIBUNAL. CONSIDERING THE ABOVE DISCUSSION,WE DECIDE THE SECO ND GROUND OF APPEAL IN FAVOUR OF THE AO, IN PART. IT IS NOT A CASE WHERE THE MATERIAL,ALREADY ON RECO RD,HAS NOT BEEN CONSIDERED OR WHERE A DECISION OF THE HONBLE SUPREME COURT OR THE HONBL E JURISDICTIONAL HIGH COURT HAS BEEN IGNORED.ALL THE CASES,EXCEPT ONE,WERE REFERRED TO B Y THE EITHER OF THE PARTIES WERE CONSIDERED BY THE TRIBUNAL.PARA 3.2. IS BEING REPRODUCED AGAIN FOR SAKE OF CLARIFICATION 3.2.BEFORE US,THE DR CONTENDED THAT FACTS OF THE CA SE WERE SIMILAR TO THE FACTS OF SOLID CONTAINERS LTD (SUPRA), THAT THERE WAS CES SATION OF LIABILITY, THAT THE PROVISIONS OF SECTION 41 (1) WERE APPLICABLE. THE A R ARGUED THAT THE FAA HAD RIGHTLY POINTED OUT THAT FACTS OF THE CASE OF MAHIN DRA AND MAHINDRA (SUPRA) WERE SIMILAR TO THE FACTS OF THE CASE UNDER CONSIDE RATION, THAT ASSESSEE HAD OFFERED THE INTEREST PORTION OF THE WAIVER FOR TAXA TION, THAT THE WAIVER OF MA/298-300/M/16-RAMA 6 PRINCIPAL AMOUNT WAS A CAPITAL RECEIPT. HE RELIED U PON THE CASE OF XYLON HOLDINGS PRIVATE LIMITED (90 DTR 205). IN LIGHT OF THE ABOVE,THE ASSERTION MADE BY THE ASS ESSEE ABOUT NOT CONFRONTING IT WITH CASE LAWS IS FACTUALLY INCORRECT.THE TRIBUNAL HAD TAKEN NOTE OF THE CASES CONSIDERED BY THE AO/ FAA OR RELIED UPON BY THE AR/DR.THUS,THE ASSESSEE W AS AWARE OF THE CASES RELIED UPON BY THE AO/FAA OR REFERRED BY ITSELF.AFTER CONSIDERING THE AVAILABLE MATERIAL THE TRIBUNAL HAD RESTORED BACK THE MATTER TO THE FILE OF THE AO FOR FRESH ADJUDICATION.THUS,RESTORING BACK THE ISSUE TO THE AO WAS BASED ON THE MATERIAL AVAILABLE ON RECORD AND NOT ON UN-CONFRONTED CASE. AFTER DECIDING THE ISSUE IN FAVOUR OF THE AO,IN PAR T,THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF LOGITRONICS P.LTD.(333ITR386) FINDS PLACE IN THE ORDER,BUT AFTER THE DECISION OF SENDING BACK THE MATTER TO THE AO WAS A RRIVED AT.THUS,SAID JUDGMENT HAD NO ROLE IN DECIDING THE ISSUE.WE ARE OF THE OPINION THAT AF TER REACHING AT A FINAL CONCLUSION IF THE TRIBUNAL MENTIONS A CASE WHICH DOES NOT AFFECT THE OUTCOME,IT WOULD AMOUNT TO A MISTAKE APPARENT FROM RECORD. IN SHORT,THE TRIBUNAL HAD TAKEN A DECISION OF REMAN DING BACK THE MATTER TO THE FILE OF THE AO ON THE BASIS OF CASES ALREADY REFERRED TO BY THE FA A.AS FAR AS CASE OF LOGITRONICS P.LTD. IS CONCERNED IT HAS BEEN MENTIONED AS SUPPORTING THE D ECISION ALREADY TAKEN.IT WAS NOT DECIDING FACTOR.THUS,THERE IS NO MATERIAL WHICH WAS NOT CONF RONTED TO THE ASSESSEE BY THE TRIBUNAL. AFTER CONSIDERING THE CONCLUSION DRAWN THE TRIBUNAL HAD QUOTED ONE MORE CASE.EVEN IF SAME IS IGNORED THE DECISION ARRIVED AT BY IT WOULD NOT CHANGE.CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCE OF THE CASE,WE ARE OF THE OPINION THAT THERE IS NO MISTAKE IN ORDER OF THE TRIBUNAL DTD.28.03.2016 WHICH COULD BE RECTIFIED U/ S.254(2)OF THE ACT. WHAT THE ASSESSEE WANTS FROM US IS TO REVIEW SAID DECISION.TRIBUNAL H AS NO POWER TO REVIEW ITS OWN CASE.SO,WE REJECT THE MA FILED BY THE ASSESSEE. MA NO.299/MUM/2016 & MA NO.300/MUM/2016 IN THE CASES OF M/S. RAMA INDUSTRIES LTD. & M/S. RA MA PHOSPHATES LTD. FOLLOWING OUR ORDER IN THE CASE OF M/S. RAMA PETROC HEMICALS PVT. LTD.,WE DISMISS THE APPLICATIONS FILED BY ABOVE REFERRED TWO ASSESSEES, AS THE FACTS OF THESE CASES ARE IDENTICAL TO THE CASE OF M/S. RAMA PETROCHEMICALS PVT. LTD. AS A RESULT,MA.S FILE D BY ALL THE ASSESSEES STAND DISMISSED. MA/298-300/M/16-RAMA 7 ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MAY, 2017. 19 2017 SD/- SD/- ( / PAWAN SINGH ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 19.05.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR D BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.