JAYANTILAL INVESMENT, V. ITO 25(3)(2),

MA 306/MUM/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2402 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-08-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2007-2008
• Appeal Filed On: 20-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JKTLP DH LS SHRI VIVEK BATRA
• Keywords: Business income; Business expenditure; Rectification of order; Retrospective amendment
• Section: 43B; 80G; 194C

Judgement Text

VK;DJ VIHYH; VF/KDJ.K VKBZ U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; ,OA JH JH JH JH JKTSUNZ JKTSUNZ JKTSUNZ JKTSUNZ] YS[KK LNL; DS LE{K ] YS[KK LNL; DS LE{K ] YS[KK LNL; DS LE{K ] YS[KK LNL; DS LE{K BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER FOFO/K VKOSNU LA[;K /MA NO. 306/MUM/2014 ARISING OUT OF ITA NO. 5151/MUM/201 0 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR:- 2007-08. FOFO/K VKOSNU LA[;K /MA NO. 307/MUM/2014 ARISING OUT OF ITA NO. 5629/MUM/201 0 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR:- 2007-08. JAYANTILAL INVESTMENTS 101, BALAJI ARCADE, OPP: CENTRAL BANK OF INDIA, S.V. ROAD, KANDIVLI (WEST), MUMBAI 400 054 VS. ITO WARD 25(3)(2) C-11,/306, PRATYAKSHA KAR BHAVAN, BANDRA (EAST) MUMBAI - 400 050. PAN: - AAAFJ1402D APPELLANT RESPONDENT ASSESSEE BY/ FU/KKZFJRH DH VKSJ LS DR. K. SHIVARAM AND SHRI RAHUL SARDA REVENUE BY/ JKTLP DH VKSJ LS SHRI VIVEK BATRA ORDER PER VIJAY PAL RAO, JM BY WAY OF THESE MISCELLANEOUS APPLICATION, THE ASSE SSEE IS SEEKING RECTIFICATION OF MISTAKES IN THE ORDER DATED 30.04. 2014 OF THIS TRIBUNAL, WHEREBY THE CROSS OBJECTION OF THE ASSESSEE WAS DIS POSED OFF. DATE OF HEARING 08.08.2014 DATE OF PRONOUNCEMENT 13.08.2014 JAYANTILAL INVESTMENTS 2 | P A GE 2. THE FIRST MISTAKE ALLEGED IN THE MISCELLANEOUS A PPLICATION IS IN RESPECT OF PARA 20 OF THE IMPUGNED ORDER WHEREIN THE TRIBUN AL HAS OBSERVED THAT THERE IS NO DISPUTE THAT PAYMENT MADE BY THE ASSES SEE IS TOWARDS THE COST OF CONSTRUCTION OF THE PROJECT AND SAME IS RECOGNIZED BY THE RECIPIENT (MCC) AS ITS INCOME. THE LD. AUTHORIZED REPRESENTATIVE OF T HE ASSESSEE HAS SUBMITTED THAT THERE IS NO PAYMENT MADE BY THE ASSESSEE TO MC C BUT THE ASSESSEE HAS GIVEN THE MCC THE RIGHT TO SELL THE FLATS DIRECTLY TO THE PURCHASERS AND APPROPRIATE THE SALES PROCEEDS TOWARDS THE CONSTRUC TION COST. HE HAS FURTHER SUBMITTED THAT THAT THE FLATS WERE NOT IN EXISTENCE ON DATE OF AGREEMENT I.E. 25.1.2005 AND SUCH RIGHT TO SELL WAS TO ACCRUE TO M CC IN PROPORTION TO THE CONSTRUCTION WORK TO BE COMPLETED BY IT. THUS THE L D. AUTHORIZED REPRESENTATIVE HAS SUBMITTED THAT THE TRIBUNAL HAS INCORRECTLY ASSUMED THESE ASPECTS AND, THEREFORE, THE IMPUGNED ORDER RE QUIRES RECALL. THE LD. AUTHORIZED REPRESENTATIVE HAS FURTHER SUBMITTED THA T IT IS ALSO FACTUALLY INCORRECT THAT MCC HAS OFFERED THE RECEIPT FROM ASS ESSEE TO TAX AND, THEREFORE, THIS INCORRECT FACT WAS ASSUMED BY THE T RIBUNAL. IN SUPPORT OF HIS CONTENCITON HE HAS RELIED UPON THE THIRD MEMBERS D ECISION OF THIS TRIBUNAL DATED 5.11.2013 IN THE CASE OF M/S AMZEL LIMITED VS . ACIT. SIMILARLY THE LD. AUTHORIZED REPRESENTATIVE HAS SUBMITTED THAT THE TR IBUNAL HAS MADE INCORRECT OBSERVATION IN PARA 7 OF THE IMPUGNED ORD ER REGARDING THE TRANSFER OF THESE FLATS DURING THE YEAR WHEREAS NO SUCH TRAN SFER TOOKPLACE DURING THE YEAR AND THE DATE OF AGREEMENT IS 25.01.2005 ON WHI CH THE FLATS WERE NOT IN EXISTENCE. THE TRIBUNAL HAS FURTHER STATED IN PARA 7 OF THE ORDER THAT THE ASSESSEE ADMITTED THAT 85% OF THE PROJECT WAS COMPLE TED DURING THE YEAR WHICH WAS ALSO ACCEPTED BY M/S CLASSIC CONSTRUCTION . THE LD. AUTHORIZED REPRESENTATIVE HAS SUBMITTED THAT 85% OF THE PROJECT WAS NOT COMPLETED DURING THE YEAR BUT IT WAS COMPLETED IN THREE YEAR S I.E. 2004-05, 2005-06 AND 2006-07, ACCORDINGLY THIS OBSERVATION OF THE TR IBUNAL IS INCORRECT. JAYANTILAL INVESTMENTS 3 | P A GE 3. THE NEXT MISTAKE ALLEGED BY THE ASSESSEE IS IN RESPECT OF PARA 9 AND 18 OF THE IMPUGNED ORDER, WHEREIN THE ASSESSEES CONTE NTION THAT SINCE THE RECIPIENT OF THE INCOME HAS PAID TAX ON THE INCOME, NO DISALLOWANCE IS CALLED FOR BY VIRTUE OF RETROSPECTIVE APPLICATION OF SECON D PROVISO TO SECTION 40(A)(IA) OF THE ACT. THE LD. AUTHORIZED REPRESENTATIVE OF TH E ASSESSEE HAS SUBMITTED THAT THE SECOND PROVISO TO SECTION 40(A)(IA) IS CUR ATIVE IN NATURE AND SHOULD BE CONSIDERED AS RETROSPECTIVE W.E.F 1.04.2005 AND NOT W.E.F 1.4.2013 AS PER THE FINANCE ACT 2013. THE LD. AUTHORIZED REPRESENTAT IVE HAS RELIED UPON THE DECISION OF AGRA BENCHES OF THIS TRIBUNAL IN THE C ASE OF RAJIV KUMAR AGARWAL VS. ACIT AND SUBMITTED THAT THE AGRA BENCHES OF THI S TRIBUNAL HAS CONSIDERED THIS PROVISO TO BE A CURATIVE AND TO HAV E RETROSPECTIVE EFFECT 4. THE NEXT MISTAKE POINTED OUT IS REGARDING NON CO NSIDERATION OF DECISION OF HON'BLE SUPREME COURT IN THE CASE OF H.H. SRI R AMA VERMA VS COMMISSIONER OF INCOME TAX (187 ITR 308) AND IN THE CASE OF. CIT VS MC DOWELL & CO. LTD. ( 314 ITR 167). THE LD. AUTHORIZE D REPRESENTATIVE HAS SUBMITTED THAT THE TRIBUNAL HAS NOT CONSIDERED THES E TWO DECISIONS OF THE HON'BLE SUPREME COURT WHICH ARE APPLICABLE TO THE F ACTS OF THE ASSESSEES CASE. HENCE NON CONSIDERATION OF THESE TWO DECISION S IS A MISTAKE APPARENT FROM RECORD. 5. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE TRIBUNAL HAS GIVEN THE FINDING ON MERITS OF THE CASE AFTER CONSI DERING ALL THE FACTS AND CONTENTION OF THE PARTIES, THEREFORE, THE MISCELLAN EOUS APPLICATION OF THE ASSESSEE SEEKING RECTIFICATION IS BEYOND THE SCOPE OF PROVISIONS OF SECTION 254(2). THE ASSESSEE IS SEEKING REVIEW OF THE ORDER OF THIS TRIBUNAL PASSED ON MERITS WHICH IS NOT PERMITTED UNDER THE PROVISIONS OF SECTION 254(2). THUS THE LD. DR HAS SUBMITTED THAT THE MISCELLANEOUS APP LICATIONS OF THE ASSESSEE JAYANTILAL INVESTMENTS 4 | P A GE DO NOT POINT OUT ANY PATENT AND APPARENT MISTAKE IN THE IMPUGNED ORDER AND ACCORDINGLY DESERVE DISMISSAL. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. AS REGARDS THE MISTAKE POINTED OUT BY THE ASSESSEE IN PARA 20 OF THE IMPUGNED ORDER OF TRIBUN AL, WE NOTE THAT THE TRIBUNAL HAS DEALT WITH THE CONTENTION OF THE ASSES SEE REGARDING NON APPLICABILITY OF SECTION 194C AS THE PAYMENTS WERE STATED TO BE MADE AS PER THE DEVELOPMENT AGREEMENT AND NOT TO THE CONTRACTOR . FOR READY REFERENCE WE QUOTE PARA 20 OF THE IMPUGNED ORDER AS UNDER:- 20. THE NEXT CONTENTION OF THE ASSESSEE IS THAT THE PAYMENT MADE AS PER THE DEVELOPMENT AGREEMENT AND IT WAS NOT A PAYMENT MADE TO THE CONTRACTOR. THERE IS NO DISPUTE THAT THE PAYMENT MADE BY THE ASSESSEE IS TOWARDS THE COST OF CONSTRUCTION OF THE PROJECT AND THE SAME IS RECOGNI ZED BY THE RECIPIENT AS ITS INCOME. EVEN UNDER THE TERMS OF THE CONTRACT, IT IS A CLEAR CASE OF PAYMENT MADE TO M/S CLASSIC CONSTRUCTION COMPANY FOR THE CONTRAC T OF CONSTRUCTION OF THE PROJECT EXCLUDING AMENITIES. THE PARTIES ARE NOT TH E PARTNERS IN THE PROJECT BUT THE ASSESSEE ALONE IS THE OWNER OF THE PROJECT AND THE AGREEMENT WITH M/S CLASSIC CONSTRUCTION COMPANY IS ONLY FOR CONSTRUCT ION OF FLATS AND NOT FOR SHARING OF THE INCOME FROM THE PROJECT. THEREFORE, THE OBJECTIONS RAISED BY THE ASSESSEE UNDER RULE 27 ARE NOT ACCEPTABLE IN THE FA CTS AND CIRCUMSTANCES OF THE CASE AND ACCORDINGLY REJECTED. 7. AS IT IS CLEAR FORM THE FINDING OF THE TRIBUNAL THAT THIS WAS THE ONLY CONTENTION OF THE ASSESSEE THAT THE PAYMENT WAS MAD E AS PER THE DEVELOPMENT AGREEMENT AND NOT A PAYMENT MADE TO THE CONTRACTOR. THIS CONTENTION BY THE ASSESSEE WAS RAISED UNDER RULE 27 WHICH WAS NOT ACCEPTED BY THE TRIBUNAL. THEREFORE, THE OBSERVATION OF TRIB UNAL IN PARA 20 IS ONLY IN THE CONTEXT OF THE NATURE OF ALLEGED PAYMENT AND WA S BASED ON THE FACTS RECORDED IN THE EARLIER PART OF THE IMPUGNED ORDER, WHEREIN THE TRIBUNAL FOUND THAT THE PAYMENT IN QUESTION WAS TOWARDS THE COST OF CONSTRUCTION OF THE PROJECT AND IN THE SHAPE OF 27 FLATS GIVEN TO M /S CLASSIC CONSTRUCTION JAYANTILAL INVESTMENTS 5 | P A GE COMPANY IN LIEU OF CASH. THE FACTUAL POSITION HAS B EEN DEALT WITH BY THE TRIBUNAL IN PARA 7 OF THE IMPUGNED ORDER AS UNDER:- 7 . AS REGARDS THE GRIEVANCE OF THE ASSESSEE WITH RES PECT OF THE 85% OF RS.2,41,56,250/- TO BE INCLUDED IN THE WORK IN PROG RESS FOR THE PURPOSE OF ESTIMATING THE PROFIT AT 15%, WE NOTE THAT AS PER T HE ORIGINAL AGREEMENT THE COST OF CONSTRUCTION OF THE PROJECT EXCLUDING THE AMENIT IES WAS DETERMINED BETWEEN THE PARTIES AT RS. 2,41,56,250/- WHICH WAS TO BE PA ID AT THE VARIOUS STAGES OF THE COMPLETION OF CONSTRUCTION. HOWEVER THE ASSESSE E COULD NOT PAY THE SAID CONSIDERATION IN CASH TO M/S CLASSIC CONSTRUCTION C OMPANY AND SUBSEQUENTLY BOTH THE PARTIES AGREED UPON THAT INSTEAD OF PAYMEN T IN CASH THE ASSESSEE WOULD ALLOT 27 FLATS ADMEASURING 12,846 SQ. FT TO M /S CLASSIC CONSTRUCTION COMPANY AS PER THE MOU/AGREEMENT DATED 25.01.2005. WE FIND THAT M/S CLASSIC CONSTRUCTION COMPANY HAS RECOGNIZED THESE 2 7 FLATS AS ITS CLOSING STOCK IN THIS YEAR AND ALSO SOLD THE SAME IN THE SUBSEQUE NT YEARS. THUS THERE IS NO DISPUTE THAT THESE FLATS WERE TRANSFERRED DURING TH E YEAR AND THE TRANSFER IS IN LIEU OF THE PAYMENT OF RS. 2,41,56,250/-. THE ASSES SEE ADMITTED THAT 85% OF THE PROJECT WAS COMPLETED DURING THE YEAR WHICH WAS ALSO ACCEPTED BY M/S CLASSIC CONSTRUCTION COMPANY. THEREFORE, IN VIEW OF THE ADMITTED POSITION OF ALLOTMENT OF FLATS AS CONSIDERATION FOR CONSTRUCTIO N COST, THE AMOUNT OF RS. 2,41,56,250/- HAS RIGHTLY BEEN CONSIDERED AS COST O F CONSTRUCTION AND, THEREFORE, THE SAME WOULD BE PART OF WORK-IN-PROGRE SS FOR THE PURPOSE OF ESTIMATING THE PROFIT FOR THE YEAR UNDER CONSIDERAT ION. THE CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO CONSIDER ONLY 85% OF THE S AID AMOUNT AS INCREASE IN THE WORK-IN-PROGRESS ON THE REASON THAT THE PROJECT WAS COMPLETED ONLY UPTO 85% DURING THE YEAR. THEREFORE, WE DO NOT FIND ANY ERRO R OR ILLEGALITY IN THE FINDING OF CIT(A) IN DIRECTING THE AO TO ESTIMATE THE PROFIT O N 85%, RS. 2,41,56,250/-BEING THE PART OF THE WORK-IN-PROGRESS DURING THE YEAR. A CCORDINGLY THE ORDER OF CIT(A) ON THIS ISSUE IS CONFIRMED. 8. THE ASSESSEE HAS CONTENDED IN THE MISCELLANEOUS APP LICATION THAT THE OBSERVATION OF THE TRIBUNAL THAT THE PAYMENT MADE B Y THE ASSESSEE TOWARDS THE COST OF CONSTRUCTION OF THE PROJECT AND SAME IS RECOGNIZED BY THE RECIPIENT AS ITS INCOME IS INCORRECT FACTS ASSUMED BY THE TRI BUNAL. WE FIND THAT AS PER THE GROUND NO. 2 OF THE ASSESSEES APPEAL THE ASSES SEE HAS RAISED THIS CONTENTION THAT THE CONTRACTOR HAS DECLARED THE INC OME FROM SALE OF THE FLATS AND APPROPRIATE TAX WAS PAID BY THEM BEFORE FILING THEIR RETURN OF INCOME FOR THE A.Y. 2007-08. EVEN OTHERWISE, THE ASSESSING OFFI CER HAS RECORDED THE FACT THAT M/S CLASSIC CONSTRUCTION COMPANY IN ITS RETURN OF INCOME HAS STATED THAT 85% OF THE WORK PERTAINING TO ITS PROJECT WAS C OMPLETED AND OFFERED SALE JAYANTILAL INVESTMENTS 6 | P A GE PROCEEDS OF FLAT WHICH WERE ALLOTTED TO IT IN LIEU OF THE CONSTRUCTION CHARGES IN TERMS OF THE AGREEMENT DATED 25.01.2005. THUS THERE WAS NO AMBIGUITY OR DOUBT ABOUT THE FACT THAT 85% OF THE CONSTRUCTION WO RK PERTAINING TO THE PROJECT WAS COMPLETED BEFORE THE END OF THE FINANCIA L YEAR RELEVANT TO THE ASSESSMENT YEAR 2007-08 AND M/S CLASSIC CONSTRUCTIO N COMPANY HAS OFFERED THE SALE OF THESE 27 FLATS IN THE YEAR UNDE R CONSIDERATION. THEREFORE, WE DO NOT FIND ANY SUBSTANCE IN THE MISCELLANEOUS A PPLICATION OF THE ASSESSEE WITH RESPECT TO MISTAKES ALLEGED IN PARA 20 AND 7 O F THE IMPUGNED ORDER OF THE TRIBUNAL. THE CONTENTION AND AVERMENTS IN THE M ISCELLANEOUS APPLICATIONS ARE CONTRARY TO THE STAND OF THE ASSES SEE IN GROUND NO. 2 AND FURTHER THERE IS NO DISPUTE REGARDING THE FACT THAT M/S CLASSIC CONSTRUCTION COMPANY OFFERED THE INCOME FROM SALE OF THESE 27 FL ATS AS CONTRACT CHARGES. 9. THE NEXT MISTAKE POINTED OUT IS REGARDING PARA 9 AND 18 OF THE IMPUGNED ORDER. FOR THE SAKE OF READY REFERENCE WE QUOTE PARA 9 AND 18 OF THE IMPUGNED ORDER AS UNDER:- 9. ON APPEAL, THE ASSESSEE HAS TAKEN VARIOUS PLEA AND ARGUMENTS BEFORE THE CIT(A) AND SUBMITTED THAT TDS IS NOT DEDUCTIBLE IN RESPECT OF ALLOTMENT OF 27 FLATS TO M/S CLASSIC CONSTRUCTION COMPANY. THE CIT(A) HAS NO T ACCEPTED THE CONTENTIONS RAISED BY THE ASSESSEE. HOWEVER THE CIT (A) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE SAID AMOUNT WAS NO MORE PAYABLE AND, THEREFORE, THE PROVISIONS OF SECTION 40(A)(IA) IS N OT APPLICABLE. IT WAS NOTED THAT THE ALLOTMENT OF FLATS TO M/S CLASSIC CONSTRUCTION COMPANY IS NOT ROUTED THROUGH BOOKS OF ACCOUNTS AND NOTHING IS REMAINING PAYABLE AS PER THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THUS THE CIT(A) HELD THAT THE PROVISIONS OF SECTION 40(A) IS NOT APPLICABLE AS THE FLATS HAVE ALREADY B EEN HANDED OVER TO M/S CLASSIC CONSTRUCTION COMPANY AND THE SAME HAS TO BE TREATED AS PAID DURING THE YEAR BY WAY OF ALLOTMENT OF FLATS. 18. THE NEXT CONTENTION OF THE ASSESSEE IS THAT TH E RECIPIENT OF THE AMOUNT HAS ALREADY PAID THE TAX ON THE SAID INCOME AND, THEREF ORE, NO DISALLOWANCE CAN BE MADE IN RESPECT OF THE SAID AMOUNT U/S 40(A)(IA). R ELIANCE HAS BEEN PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F HINDUSTAN COCA COLA BEVERAGE (P.) LTD. VS. CIT (SUPRA). AT THE OUTSET I T IS TO BE NOTED THAT THE DECISION IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE (P.) LT D.VS. CIT (SUPRA) IS ON THE JAYANTILAL INVESTMENTS 7 | P A GE ISSUE OF TREATING THE ASSESSEEE IN DEFAULT IN RESPE CT OF SUCH TAX WHICH WAS NOT DEDUCTED AS PER THE PROVISIONS OF CHAPTER XVII OF T HE INCOME TAX ACT. THEREFORE, THE ISSUE BEFORE THE HONBLE SUPREME COURT WAS ONLY THE LIABILITY OF THE PAYER U/S 201 BEING AN ASSESSEE IN DEFAULT AND IN CASE TH E RECIPIENT OF THE AMOUNT HAS ALREADY PAID THE TAX THEN THE QUESTION OF DEFAU LT OF TAX DOES NOT ARISE U/S 201. ON THE CONTRARY FOR THE PURPOSE OF SECTION 40( A)(IA) THE PAYMENT OF TAX BY THE RECIPIENT IS NOT AT ALL RELEVANT. WHAT IS RELEV ANT IS THE TAXABILITY OF THE AMOUNT PAID BY THE ASSESSEE IN THE HANDS OF THE REC IPIENT AND TO ENSURE THE DEDUCTION OF TAX AT SOURCE, THE PROVISIONS OF SECTI ON 40(A)(IA) HAS BEEN BROUGHT ON THE STATUTE AS A MEASURE OF BETTER COMPLIANCE. T HEREFORE, ONCE THE ASSESSEE FAILED TO DEDUCT TAX ON THE AMOUNT PAID, WHICH IS A N EXPENDITURE IN THE HANDS OF THE ASSESSEE, THE PROVISIONS OF SECTION 40(A)(IA ) ARE APPLICABLE. 10. THE FINDING OF THE TRIBUNA IN PARA 18 IS REGARD ING THE CONTENTION OF THE ASSESSEE THAT THE RECIPIENT OF THE AMOUNT HAS ALREA DY PAID THE TAX ON THE SAID INCOME. AT THE TIME OF HEARING OF THE APPEAL, THE A SSESSEE HAS RELIED UPON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF HI NDUSTAN COCA COLA BEVERAGE (P.) LTD. VS. CIT WHICH WAS DULY CONSIDERE D BY THE TRIBUNAL AND, THEREFORE, A NEW PLEA TAKEN IN THE MISCELLANEOUS AP PLICATION IS BEYOND THE SCOPE OF PROVISIONS OF SECTION 254(2). IT IS NOT TH E CASE THAT THE TRIBUNAL HAS FAILED TO CONSIDER ANY BINDING PRECEDENT OF HON'BLE SUPREME COURT OR HON'BLE HIGH COURT OR EXISTING DECISION OF CO-ORDINATE BENC H OF THE TRIBUNAL. THE ASSESSEE IN THE MISCELLANEOUS APPLICATIONS HAS RELI ED UPON THE ORDER OF AGRA BENCHES OF THIS TRIBUNAL, WHICH WAS NEITHER RELIED UPON NOR AVAILABLE AT THE TIME OF HEARING OF THE APPEAL OR PASSING OF THE ORD ER. THEREFORE, ON A DEBATABLE ISSUE WHEN THE TRIBUNAL HAS TAKEN A POSSI BLE VIEW THEN IT CANNOT BE SAID TO BE A MISTAKE PATENT AND APPARENT ON RECO RD TO BE RECTIFIED U/S 254 (2). THE SCOPE OF SECTION 254(2) IS LIMITED AND RES TRICTED TO RECTIFICATION OF MISTAKE APPARENT AND PATENT WHICH DOES NOT REQUIRE ANY LONG DRAWN PROCESS OF REASONING ON THE POINT OF FACT OR LAW. ACCORDING LY THE CONTENTION RAISED BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION CANNO T BE ACCEPTED AS IT WOULD AMOUNT TO REVIEW OF THE FINDING GIVEN ON MERITS. AS REGARDS THIRD MEMBERS DECISION IN THECASE OF M/S AMZEL LIMITED VS. ACIT ( SUPRA), IT IS CLEAR THAT THE JAYANTILAL INVESTMENTS 8 | P A GE SAID DECISION IS ON THE POINT OF AN APPARENT AND PA TENT MISTAKE REGARDING DATE OF ASSESSMENT ORDER AND NOT REGARDING THE VIEW TAKEN BY THE TRIBUNAL. EVEN IN THE SAID DECISION, THE TRIBUNAL HAS DISCUSS ED THE SCOPE OF SECTION 254(2) IN PARA 8 AS UNDER:- 8 AT THE OUTSET, I WANT TO MAKE IT CLEAR THAT PRES ENTLY I AM DEALING WITH THE RECTIFICATION OF MISTAKE IN PROCEEDINGS U/S 254(2) OF THE TAX. I IS TRUE LAW THAT ANY PARTY AGGRIEVED WITH THE ORDER PASSED U/S 254(1 ) IS FREE TO ASSAIL ITS CORRECTNESS BY POINTING OUT ANY LEGAL OR FACTUAL IN FIRMITIES WITHIN THE OVERALL AMBIT OF RECTIFICATION. HOWEVER, THE SCOPE OF PROCE EDINGS U/S 254(2) OF THE ACT IS A RESTRICTED ONE INASMUCH AS IT IS CONFINED ONLY TO RECTIFYING ANY MISTAKE WHICH IS APPARENT FROM RECORD. WITHOUT GOING INTO A PLETH ORA OF PRECEDENTS AVAILABLE ON THE POINT, IT IS WORTHWHILE TO NOTE THAT THAT IF ONE POSSIBLE VIEW HAS BEEN TAKEN BY THE TRIBUNAL IN ITS ORDER U/S 254(1) OF TH E ACT, IT IS NOT PERMISSIBLE TO THE PARTIES TO CONTEND THROUGH MISCELLANEOUS THAT T HE OTHER POSSIBLE VIEW SHOULD BE PREFERRED AND ADOPTED. TO PUT IT IN SIMP LE WORDS, A DEBATABLE QUESTION IS OUTSIDE THE REALM OF PROCEEDINGS U/S 25 4(2) OF THE ACT. SIMILARLY, NEITHER THE AGGRIEVED PARTY CAN PRESS FOR THE REVIE W OF THE ORDER PASSED U/S 254(1) OF THE ACT IN GARB OR RECTIFICATION U/S 254 (2)OF THE ACT NOR THE TRIBUNAL ITSELF IS COMPETENT TO DO IT SUO MOTU. REVIEW MEANS REACHING AN ALTOGETHER DIFFERENT CONCLUSION BY RECONSIDERING THE SAME MATE RIAL WHICH WAS CONSIDERED EARLIER. AT THE SAME TIME, IF THERE IS SOME MISTAKE , WHETHER FACTUAL OR LEGAL, COMMITTED BY THE TRIBUNAL WHICH IS APPARENT FROM RE CORD, THEN IT IS WITHIN THE DOMAIN OF THE AFFECTED PARTY TO POINT OUT SUCH MIST AKE IN MISCELLANEOUS APPLICATION U/S 254(2), WHICH THE TRIBUNAL WILL BE OBLIGED TO RECTIFY. 11. THE MISTAKE WHICH WAS FOUND ON THE FACE OF RECO RD IS REGARDING THE DATE OF ASSESSMENT ORDER, THEREFORE, THE SAID THIRD MEMB ERS DECISION OF THE TRIBUNAL IS NOT APPLICABLE TO THE FACTS OF THE ASSE SSEES CASE. 12. AS REGARDS THE NON CONSIDERATION OF DECISIONS O F HON'BLE SUPREME COURT IN THE CASE OF H.H. SRI RAMA VERMA VS COMMISSIONER OF INCOME TAX ( SUPRA) AND IN THE CASE OF. CIT VS MC DOWELL & CO. LTD. ( S UPRA), IT IS PERTINENT TO NOTE THAT THE DECISION IN THE CASE OF H.H. SRI RAMA VERM A VS COMMISSIONER OF INCOME TAX (SUPRA) IS REGARDING THE EFFECT OF EXPLA NATION 5 INSERTED TO SECTION 80G WHEREBY THE LEGISLATIVE INTENT WAS MADE CLEAR T HAT ONLY CASH AMOUNT WHICH MAY HAVE BEEN DONATED WOULD BE TAKEN INTO ACC OUNT U/S 80G. THE JAYANTILAL INVESTMENTS 9 | P A GE HON'BLE SUPREME COURT HAS HELD THAT THE PROVISIONS IS NOT RETROSPECTIVE IN NATURE. THEREFORE, THAT DECISION DOES NOT HELP THE CASE OF THE ASSESSEE RATHER IT IS AGAINST THE ASSESSEE TO THE EXTENT THAT AN AM ENDMENT BROUGHT INTO STATUTE BY THE FINANCE ACT 2013 W.E.F 1.4.2013 IS NO T RETROSPECTIVE. IN THE SAID DECISION THE QUESTION BEFORE THE HON'BLE SUPRE ME COURT WAS REGARDING THE DONATION MADE IN KIND AND NOT AS A SUM OF MONEY WHICH DOES NOT FALL WITHIN THE AMBIT OF SECTION 80G (2)(A). IN THE CASE IN HAND, THE PAYMENT IN QUESTION IS A BUSINESS EXPENDITURE AND NOT A DONATI ON WHICH HAS BEEN DULY CONSIDERED BY THE TRIBUNAL IN PARA 19 OF THE IMPUGN ED ORDER AS UNDER:- 19 THE NEXT CONTENTION OF THE ASSESSEE IS THAT SEC TION 194C IS NOT APPLICABLE BECAUSE THE SUM PAID IN ITS CASE IS NOT BY WAY OF C ASH OR CHEQUE AND ALSO DOES NOT FALL UNDER THE TERM ANY OTHER MODE AS USED IN SECTION 194C. IF THIS CONTENTION OF THE ASSESSEE IS ACCEPTED THEN ANYBODY CAN CIRCUMVENT THE PROVISIONS OF SECTION 40(A)(IA) BY MAKING THE PAYME NT OTHER THAN IN CASH, CHEQUE OR DRAFT. IN OUR VIEW ANY OTHER MODE PRESCRI BED U/S 194C COVERS ALL MODE OF PAYMENTS AND, THEREFORE, WHERE THE PAYMENT IS IN CASH, CHEQUE OR DRAFT OR IN KIND THE ASSESSEE IS UNDER OBLIGATION T O DEDUCT TAX IF IT SATISFIES THE CONDITIONS OF SECTION 194C. THUS WE DECLINE TO ACCE PT THIS CONTENTION OF THE ASSESSEE. 13. THEREFORE, THE ASSESSEE HAS NOT BROUGHT OUT ANY APPARENT MISTAKE IN THIS RESPECT. THE DECISION IN CASE OF CIT VS MC DOW ELL & CO. LTD. (SUPRA) IS ON THE PROVISIONS OF SECTION 43B AND THE ISSUE BEFORE THE HON'BLE SUPREME COURT WAS WHETHER THE FURNISHING OF BANK GUARANTEE TO BE TREATED AS ACTUAL PAYMENT AND ACCORDINGLY THE DEDUCTION IN THIS RESPE CT CANNOT BE CLAIMED U/S 43B. IT WAS HELD THAT THE REQUIREMENT OF SECTION 43 B IS ACTUAL PAYMENT AND NOT DEEMED PAYMENT AS A CONDITION PRECEDENT FOR MAK ING THE CLAIM OF TAX IN RESPECT OF EXPENDITURE INCURRED BY ASSESSEE DURING THE RELEVANT PREVIOUS YEAR SPECIFIED IN SECTION 43. THE FURNISHING OF BANK GUA RANTEE CANNOT BE EQUATED WITH ACTUAL PAYMENT WHICH REQUIRES THAT MONEY MUST FLOW FROM THE ASSESSEE TO THE PUBLIC EXCHEQUER AS REQUIRED UNDER SECTION 4 3B. WE FIND THAT SAID DECISION HAS NO APPLICATION IN THE FACTS OF THE PRE SENT CASE WHERE THE JAYANTILAL INVESTMENTS 10 | P A GE ASSESSEE HAS SQUARED UP THE BUSINESS EXPENDITURE BY TRANSFERRING THE FLATS IN THE PROJECT IN LIEU OF THE PAYMENT OF CONSTRUCTION COST OF FLATS. WHEN THERE IS NO DISPUTE THAT THE VALUE OF 27 FLATS GIVEN BY THE ASSESSEE TO M/S CLASSIC CONSTRUCTION COMPANY WAS A BUSINESS EXPENDITURE AND WHICH WAS RECOGNIZED BY THE RECIPIENT AS BUSINESS INCOME, THE REFORE, THESE TWO DECISIONS RELIED UPON BY THE ASSESSEE WOULD NOT APPLY ON THE FACTS OF THE CASE. ACCORDINGLY, THE CONTENTION OF THE ASSESSEE REJECTE D BY THE TRIBUNAL IN PARA 19 OF THE IMPUGNED ORDER EVEN WITHOUT REFERRING TO THESE TWO DECISIONS DOES NOT RENDER THE FINDING AS ERRONEOUS. IN VIEW OF THE ABOVE DISCUSSION, WE FIND THAT THE MISCELLANEOUS APPLICATIONS ARE DEVOID OF A NY SUBSTANCE OR MERIT AS THE RELIEF SOUGHT IN THE MISCELLANEOUS APPLICATION IS BEYOND THE SCOPE OF PROVISIONS OF SECTION 254(2). THE ASSESSEE IS SEEKI NG REVIEW OF THE IMPUGNED ORDER PASSED ON MERITS BY CONSIDERING THE RELEVANT FACTS, EVIDENCE AND PROVISIONS OF LAW WHICH IS NOT PERMISSIBLE UNDER TH E PROVISIONS OF SECTION 254(2). ACCORDINGLY THESE MISCELLANEOUS APPLICATION S ARE DISMISSED. 14. IN THE RESULT MISCELLANEOUS APPLICATIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT TODAY I.E 1 3-08-2014 SD/- SD/- ( RAJENDRA ) ( VIJAY PAL RAO ) (ACCOUNTANT MEMBER/ YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; MUMBAI DATED 13 -8-2014 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI