PRERAK GOEL, V. ACIT CEN CIR 10,

MA 325/MUM/2010

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 3849 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 17-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER MA NO. 325/MUM/2010 (ARISING OUT OF ITA NOS.2932, 2936 & 2935/MUM/2008) (ASSESSMENT YEARS: 2002-03, 2003-04 & 2005-06) SHRI PRERAK GOEL ACIT, CENTRAL CIRCLE - 10 101, DHEERAJ ARMA 8TH FLOOR, CGO BLDG. ANNEX ANANT KANEKAR MARG VS. M.K. MARG, MUMBAI 400020 BAMDRA (E), MUMBAI PAN - AAKPG 8954 B APPLICANT RESPONDENT APPLICANT BY: SHRI VINOD KUMAR BINDAL RESPONDENT BY: SHRI A.K. NAYAK O R D E R PER B. RAMAKOTAIAH, A.M. THE PRESENT MISCELLANEOUS APPLICATION IS RAISED BY THE ASSESSEE ON THE FOLLOWING REASONS: - 1.1 THE DECISION IN THE CASE OF MRS. BAKHTAWAR B. DUBHASH DELIVERED BY THE HON'BLE ITAT G BENCH MUMBAI REPORTED AS 20 09-TIOL-288-ITAT- MUM WAS RELIED BY THE AR OF THE APPELLANT DURING TH E COURSE OF THE APPELLATE PROCEEDINGS AND COPIES OF THE SAME WERE A LSO SUBMITTED DURING THE COURSE OF THE HEARING. KIND ATTENTION OF THE HONBLE BENCH WAS ALSO DRAWN TO THE RATIO OF THIS DECISION TO THE EFFECT IN OUR OPINION, NONE OF THE ABOVE PROVISION S ARE APPLICABLE TO THE ASSESSEE. WE FIND THE FOREIGN TOUR EXPENSES HAV E BEEN DISALLOWED IN THE HANDS OF THE ASSESSEE COMPANY FOR WANT OF EVIDE NCE TO SHOW THAT THE EXPENSES HAVE BEEN INCURRED BY THE COMPANY WHOL LY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS. THE SAME HAS NOT B EEN ALLOWED AS AN EXPENDITURE IN THE HANDS OF THE ASSESSEE COMPANY AS THE VALUE OF ANY BENEFIT OR PERQUISITE. THEREFORE, TAXING THE SAID A MOUNT IN THE HANDS OF THE ASSESSEE, IN OUR OPINION, WILL AMOUNT TO TAXING THE SAME AMOUNT TWICE SINCE THE EXPENDITURE HAS ALREADY BEEN DISALL OWED AND TAXED IN THE HANDS OF THE COMPANY AND AGAIN BEING TAXED IN T HE HANDS OF THE DIRECTOR AS A PERQUISITE. IT IS THE SETTLED PROPOSI TION OF LAW THAT AN AMOUNT CAN BE TAXED ONLY ONCE AND NOT TWICE. SINCE IN THE INSTANT CASE THE AMOUNT HAS ALREADY BEEN TAXED IN THE HANDS OF T HE COMPANY BY DISALLOWING THE SAME AS NOT AN ALLOWABLE EXPENDITUR E, THEREFORE, IN OUR OPINION, THE SAME CANNOT BE ADDED IN THE HANDS OF T HE DIRECTOR AS VALUE OF ANY BENEFIT OR PERQUISITE HEREBY ATTRACTING THE PROVISIONS OF SECTION 2(24)(IV) OR 28(IV) OF THE ACT. MA NO. 325/MUM/2010 SHRI PRERAK GOEL 2 1.2 IT SEEMS THAT INADVERTENTLY THIS DECISION COULD NOT BE CONSIDERED BY THE HON'BLE BENCH AS IT IS NOT APPARENT IN THE APPE LLATE ORDER. THIS DECISION IS OF FUNDAMENTAL AND BASIC IMPORTANCE TO THE ISSUES INVOLVED IN THIS CASE AS EVERY OTHER MERIT AGAINST THE ASSESSEE WOULD PALE UNDER THIS DECISION AS ALL THE CONCERNED EXPENSES HAVE ALSO BE EN DISALLOWED IN THE HANDS OF THE COMPANY WHO INCURRED THESE EXPENSES. I N DECIDING THE APPEALS AGAINST THE ASSESSEE, THE HON'BLE BENCH INA DVERTENTLY HAS NOT REFERRED TO THE DECISION IN MRS. BAKHTAWAR DUBHASH. SINCE, THE ORDER OF THE CO-ORDINATE BENCH OF THE TRIBUNAL WHICH WAS REL IED UPON HAS NOT BEEN CONSIDERED AND THAT IN FORMING ANOTHER VIEW, THE VI EW TAKEN BY DIFFERENT BENCHES OF THE TRIBUNAL WAS NOT DISTINGUISHED, THER EFORE, A MISTAKE APPARENT FROM RECORD HAS CREPT IN. THE ISSUE COULD NOT BE DECIDED WITHOUT BEING REFERRED TO A SPECIAL BENCH TO RECONCILE THE DIFFERENCE, IF AT ALL, BETWEEN THE TWO VIEWS. REFERENCE IN THIS REGARD IS INVITED TO THE DECISIONS OF THE HON'BLE SUPREME COURT IN THE CASE OF SUNDARJ AS KANYALAL BHATIJA V. COLLECTOR, THANE [1990] 183 ITR 130 AND UOI V. PARA S LAMINATES P. LTD. [1990] 186 ITR 722. IT IS, THEREFORE, SUBMITTED THA T THE ORDER MAY BE RECTIFIED UNDER THE PROVISIONS OF SECTION 254(2). 2. WE HAVE CONSIDERED THE ARGUMENTS OF THE LEARNED COU NSEL AND THE OBJECTIONS OF THE LEARNED D.R. THE LEARNED COUNSEL ALSO RELIED ON THE COORDINATE BENCH DECISION IN THE CASE OF M/S. NICHO LAS PIRAMAL INDIA LTD. IN MA NO. 571/MUM/2009 REPORTED AS 2010-TIOL-273-ITAT- MUM DATED 17- 02-2010. 3. BRIEFLY STATED, THE ASSESSEE WAS A BENEFICIARY OF E XPENDITURE INCURRED FOR MBA STUDY IN A FOREIGN COUNTRY FOR A.Y. 2002-03 AND 2003-04 OF RS.15,28,428/- AND INCURRING EXPENDITURE IN MARRIAG E RECEPTION TO THE EXTENT OF RS.6,00,000/- IN A.Y. 2005-06. IT WAS TRE ATED AS INCOME INVOKING THE PROVISIONS OF SECTION 2(24)(IV). THE ITAT, AFTE R CONSIDERING THE FACTS AND LAW, CONCURRED WITH THE FINDINGS OF THE CIT(A) REJE CTING THE CONTENTIONS. 4. IT IS THE CONTENTION OF THE ASSESSEE THAT THE ABOVE SAID CASE OF MRS. BAKHTAWAR DUBHASH B. DUBHASH IN 2009-TIOL-288-ITAT- MUM WAS RELIED UPON BUT THE SAME WAS NOT DISCUSSED OR DISTINGUISHE D. SINCE THIS COORDINATE BENCH DECISION HAS A BEARING ON THE ISSUE THE TRIBU NAL OUGHT TO HAVE CONSIDERED THE SAME AND NOT CONSIDERING THE SAME WO ULD BE CONSIDERED AS A MISTAKE APPARENT FROM RECORD ON VARIOUS PRINCIPLES ON THIS ISSUE. 5. AS SEEN FROM THE RECORD THE ABOVE SAID DECISION WAS PLACED BEFORE THE BENCH BUT INADVERTENTLY THE SAME WAS NOT DISCUSSED OR DISTINGUISHED. IN VIEW OF THIS, WE ARE OF THE OPINION THAT THE ASSESS EE SHOULD BE GIVEN AN OPPORTUNITY TO PLACE THE ARGUMENTS IN THIS REGARD A ND THE MISCELLANEOUS MA NO. 325/MUM/2010 SHRI PRERAK GOEL 3 APPLICATION IS TO BE ALLOWED BY RECALLING THE ORDER DATED 10.08.2010. IT IS ALSO NECESSARY TO EXAMINE WHETHER THE ABOVE COORDIN ATE BENCH DECISION IS APPLICABLE ON THE FACTS OF THE CASE. FOR THESE REAS ONS THE ORDER IS RECALLED AND THE REGISTRY IS DIRECTED TO POST THE CASES AFRE SH FOR FRESH CONSIDERATION IN THE DUE COURSE. 6. IN THE RESULT, MA IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JULY 2010. SD/- SD/- (D.K. AGARWAL) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 30 TH JULY 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CENTRAL II, MUMBAI 4. THE CIT CENTRAL I, MUMBAI CITY 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.