MALAY N SANGHVI, V. ITO 8(3)(2),

MA 300/MUM/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2380 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 11-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PARMINDER
• Assessee Lawyers: KIRIT J SHETH
• Keywords: Depreciation

Judgement Text

INCOME TAX APPELLATE TRIBUNAL,MUMBAI - B BENCH , , BEFORE S/SH. VIJAY PAL RAO, JUDICIAL ME MBER & SHRI RAJENDRA,ACCOUNTANT MEMBER MA NO.300/MUM/2014-ARISING OUT OF ITA NO.6265/MU M/2012-ASSESSMENT YEAR 2009-10 MALAY N. SANGHVI, M/S M-1, KALPITA ENCLAVE CO-OP. HSG. SOCIETY, SAHARA ROAD, ANDHERI(E),MUMBAI-400069 PAN:AKEPS3301A VS. ITO 8(3)(2), 201, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( / APPELLANT) ( / RESPONDENT) APPELLANT BY : SHRI KIRIT J. SHETH RESPONDENT BY : SMT. PARMINDER ! / DATE OF HEARING : 12-09-2014 '#$% ! / DATE OF PRONOUNCEMENT : 19-09-2014 &' / O R D E R PER RAJENDRA, A.M. : VIDE HIS APPLICATION DATED 11.06.2014 THE ASSESSEE HAS STATED THAT THERE WERE MISTAKE IN THE ORDER OF THE TRIBUNAL DATED,THAT THERE WAS NO MENTION/DIS CUSSION IN THE ORDER OF THE TRIBUNAL OF THE CERTAIN FACTS,THAT THE AO HAD EITHER IGNORED OR NOT APPRECIATED THE SUBMISSIONS MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS RELATING TO DIFFER ENCE IN NET PROFIT RATION BETWEEN SHRI MALAY SANGHAVI(PROP: M/S. MALAY SANGHAVAI & CO. (JAMMU)) AND SMT. PARUL SANGHAVI (PROP: M/S. UMBERGAM INDUSTRIES- UMBERGAM),THAT NOWHERE IN THE ASSESSMENT ORDER THE AO HAD RECORDED ANY FINDING THAT THE SUBMISSIONS RELATED TO NET PRO FIT RATIO MADE BY OUR CLIENT WERE INCORRECT IN ANY MANNER,THAT SUBMISSIONS MADE BEFORE THE FIRST APPEL LATE AUTHORITY (FAA)WERE NOT CONSIDERED, THAT THE AUTHORISED REPRESENTATIVE(AR) HAD MADE A REQUEST TO REMIT BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER (AO),THAT THE TRIBUNAL HAD NO T CITED ANY REASON FOR REJECTING HIS PLEA FOR NOT REMITTING BACK THE MATTER TO THE FILE OF THE AO. 2. DURING THE COURSE OF HEARING BEFORE US,AR REITERATE D THE ARGUMENTS THAT HAVE BEEN MENTIONED ABOVE APPLICATION.ON SPECIFIC QUERY BY THE BENCH,H E ADMITTED THAT ASSESSEE HAD FILED AN APPEAL BEFORE THE HON'BLE BOMBAY HIGH COURT AGAINST THE OR DER OF THE TRIBUNAL.DEPARTMENTAL REPRESENT- ATIVE(DR)STATED THAT THERE WAS NO MISTAKE IN THE OR DER OF THE TRIBUNAL,THAT COULD BE RECTIFIED. 3. BEFORE PROCEEDING FURTHER,WE WOULD LIKE TO NARRATE THE FACTS OF THE CASE IN THIS MATTER.THE ASSESSEE HAD FILED HIS RETURN OF INCOME ON 30.09.20 09 DECLARING INCOME AT RS. 2.02 LAKHS. THE AO FOUND THAT ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING IN LIQUID SHOPS, CHEMICALS PLASTIC ITEMS ETC AND WAS OPERATING THREE UNITS NAMELY M/S MALAY SANGHAVI & CO. (MUMBAI),JAMMU UNIT AND UMBERGAM INDUSTRIES (UI) A T VALSAD.AFTER COMPARING THE RESULTS OF ALL THE UNITS THE AO,FOUND THAT JAMMU UNIT HAD SHOW N NET PROFIT @ 35,WHEREAS UI,OWNED BY HIS WIFE,HAD SHOWN ONLY 5% PROFIT.AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE,DATED 24.08. 2011,HE VERIFIED THE DETAILS OF EXPENSES IN COMPARI SON TO THE SALES.AFTER COMPARING THE SALES OTHER INCOME, COST OF MATERIAL, MANUFACTURING EXPENSES, A DMINISTRATIVE EXPENSES, DEPRECIATION ETC.,HE 2 M.A.NO.300/MUM/20-14 MALAY N. SANGHVI HELD THAT THE ASSESSEE HAD MANUFACTURING THE PRODUC TS SIMILAR TO THAT OF ITS SISTER CONCERN,THAT SALES WERE MADE BY BOTH THE CONCERNS MAINLY TO M/S KIMBER LY CLARK HYGINE PRODUCTS (KCHP).DURING THE COURSE OF ORIGINAL HEARING THE BENCH HAD RAISED A QUERY ABOUT THE ADMINISTRATIVE COST AND MANUFACTURING COST OF THE GOODS MANUFACTURED BY BOT H THE UNITS AND THE REASON BEHIND THE ABNORMAL PROFIT OF THE UNIT THAT WAS ENTITLED TO CL AIM DEDUCTION U/S.80IA OF THE ACT.AS PER THE ORDER OF THE TRIBUNAL,THE ASSESSEE COULD NOT EXPLAI N THE REASONS FOR THE EXTRA ORDINARY PROFIT MARGIN OF THE J & K UNIT. TRIBUNAL HAD TAKEN THE SA ID ASPECT IN TO CONSIDERATION ALONG WITH THE OTHER FACTORS.IT WAS FOUND BY THE TRIBUNAL THAT THE PURCHASER OF THE PRODUCTS FROM BOTH THE UNITS WAS THE SAME ENTITY I.E. AND PRODUCTS WERE ALSO MOR E OR LESS SAME. AFTER ANYLYSING THE RELEVANT FACTS THE BENCH REACHED AT THE CONCLUSION THAT NO F URTHER INVESTIGATION WAS REQUIRED AT THE LEVEL OF THE AO.SO,THE BENCH DECIDED THE ISSUE ON MERITS AND AFTER CONSIDERING ALL THE RELEVANT FACTS.SUCH AN ORDER CANNOT BE TERMED AN ORDER WHEREIN MISTAKES ARE APPARENT. ACTUALLY,THE ASSESSEE WANTS US TO REVIEW THE ORIGINAL ORDER,BUT THE PROVISIONS OF SECTION 254(2) DO NOT ALLOW REVISION OR REAPPRAISAL OF THE CASE. HERE,WE WOULD LIKE TO QUOT E RELEVANT PORTION OF THE JUDGMENT DELIVERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F RAMESH ELECTRIC AND TRADING CO.(203 ITR 497),HONBLE COURT HELD AS UNDER: UNDER SECTION 254(2) OF THE INCOME-TAX ACT, 1961, THE APPELLAT E TRIBUNAL MAY, 'WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD', AMEND ANY ORDER PASSED BY I T UNDER SUB-SECTION (1) WITHIN THE TIME PRESCRIBED THEREIN. IT IS AN ACCEPTED POSITION THAT THE APPELLAT E TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER THE PROVISIONS OF THE ACT. THE ONLY POWER WH ICH THE TRIBUNAL POSSESSES IS TO RECTIFY ANY MISTAKE IN ITS OWN ORDER WHICH IS APPARENT FROM THE RECORD. THIS IS MERELY A POWER OF AMENDING ITS ORDER. THE POWER OF RECTIFICATION UNDER SECTION 254(2) CAN BE EXERCISE D ONLY WHEN THE MISTAKE WHICH IS SOUGHT TO BE RECTIFIED IS AN OBVIOUS AND PATENT MISTAKE WHICH IS APPARE NT FROM THE RECORD, AND NOT A MISTAKE WHICH REQUIRES TO BE ESTABLISHED BY ARGUMENTS AND A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. FAILURE OF THE TRIBUNAL TO CO NSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RE CORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. THE TRIBUNAL CANNOT, IN THE EXERCISE OF ITS POWER OF RECTI FICATION, LOOK INTO SOME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT ITS CONCLUSION. IN THE CASE UNDER APPEAL NEITHER THE CONCLUSION ARR IVED AT BY THE TRIBUNAL IS INCORRECT NOR ANY OF THE ARGUMENTS WAS IGNORED WHILE DECIDING THE APPEAL .THEREFORE,WE ARE OF THE OPINION THAT THE APPLICATION FILED BY THE ASSESSEE U/S.254 IS NOT MA INTAINABLE AND IS WITHOUT ANY MERITS. AS A RESULT,MISCELLANEOUS APPLICATI N FILED BY THE ASSESSEE STAND DISMISSED. ( %) * ( %) * ( %) * ( %) * ,( ,( ,( ,( - - - - . . . . / / / / 0 0 0 0 , , , , & & & & 1 11 1 2 2 2 2 / / / / 34 3434 34 . ORDER PRONOUNCED IN THE OP EN COURT ON 19TH,SEPTEMBER,2014. &' '#$% )5 / 19 FLRACJ FLRACJ FLRACJ FLRACJ 201 4 # 0 9 SD/- SD/- ( / VIJAY PAL RAO) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ): / MUMBAI, / /DATE: 19.09.2014 SK &' &' &' &' ;$ ;$ ;$ ;$ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ :< & &= , 4. THE CONCERNED CIT / :< & &= 5. DR B BENCH, ITAT, MUMBAI / >0 , ?@ , & . . . ): 6. GUARD FILE/ 0? A 3 M.A.NO.300/MUM/20-14 MALAY N. SANGHVI //TRUE COPY// &' / BY ORDER, B / 3 DY./ASST. REGISTRAR & , % , ): /ITAT, MUMBAI