Gujarat Gas Tradiang Co.Ltd., Ahmedabad V. The Income Tax Officer, Ward-4(1), Ahmedabad

MA 36/AHD/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6540 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 14A

Judgement Text

MA NO. 36/AHD/2018 GUJARAT GAS TRADING CO. LTD VS. ITO ASSESSMENT YEAR: 2008-09 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MS. MADHUMITA ROY JM] M.A. NO.36/AHD/2018 (IN ITA NO. 364/AHD/2014) ASSESSMENT YEAR: 2008-09 GUJARAT GAS TRADING CO. LTD. ............APP LICANT 2, SHANTISADAN, NEAR PARIMAL GARDEN, ELLISBRIDGE, AHMEDABAD [PAN : AAECG 8093 Q] VS. INCOME TAX OFFICER .......................RESPONDENT WARD-4(1), AHMEDABAD APPEARANCES BY: URVASHI SHODHAN FOR THE APPLICANT MUDIT NAGPAL FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 04.05.2018 DATE OF PRONOUNCING THE ORDER : 08.05.2018 O R D E R PER PRAMOD KUMAR, AM: 1. BY WAY OF THIS RECTIFICATION PETITION, THE ASSES SEE-APPLICANT HAS INVITED OUR ATTENTION TO A MISTAKE ALLEGED TO HAVE CREPT IN THE ORDER DATED 21 ST SEPTEMBER, 2017 PASSED BY THE TRIBUNAL IN ASSESSEES CASE. WHILE T HIS ORDER IS A CONSOLIDATED ORDER, ON CROSS-APPEALS FOR THE ASSESSMENT YEAR 2007-08, 2 008-09 AND 2009-10, THE MISTAKE ALLEGED TO HAVE CREPT IN IS WITH RESPECT TO THE ASSESSMENT YEAR 2008-09 ONLY. 2. THE NATURE OF MISTAKE, AS POINTED IN THE RECTIFI CATION APPLICATION DATED 23 RD JANUARY 2018, IS AS FOLLOWS:- 1. THE APPLICANT ABOVE NAMED FILES THE PRESENT AP PLICATION AGAINST ORDER DATED 21/09/2017 PASSED BY THIS HON'BLE TRIBUNAL. I T IS RESPECTFULLY SUBMITTED THAT IN THE SAID ORDER OF THE HON'BLE ITAT, FOLLOWI NG ERROR IS APPARENT ON THE RECORD. 2. THE APPLICANT MOST RESPECTFULLY SUBMITS THAT THE APPLICANT HAD RAISED GRIEVANCE IN GROUND NO. 2.4 IN RESPECT OF ERROR IN CALCULATION OF AMOUNT IN DETERMINING DISALLOWANCE U/S 14A OF THE ACT. THE SA ME WAS ALSO ARGUED BY THE ID. AR DURING COURSE OF HEARING OF THE APPEAL. HOWEVER THROUGH OVERSIGHT SAME WAS NOT ADJUDICATED BY THE HON'BLE BENCH. GROU ND NO. 2.4 OF APPEAL MEMO IS REPRODUCED HEREUNDER. '2.4 THE LEARNED CIT (APPEALS) HAS GROSSLY ERRED I N LAW & ON FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE MADE BY THE AO WITHOUT CONSIDERING THE APPELLANT'S PLEA THAT THE AO HAS WR ONGLY TAKEN THE MA NO. 36/AHD/2018 GUJARAT GAS TRADING CO. LTD VS. ITO ASSESSMENT YEAR: 2008-09 PAGE 2 OF 4 AMOUNT OF CLOSING BALANCE OF INVESTMENT AT RS. 73,9 0,20,000/- AS AGAINST THE CORRECT FIGURE OF RS.7,39,02,000/-. DIS ALLOWANCE UNDER RULE 8D IF AT ALL ANY WERE TO BE MADE WOULD THEREFORE WO RKOUT TO RS.13,92,698/- AND NOT RS.30,40,260/- AS FOLLOWS:- AVERAGE VALUE OF INVESTMENT = OPENING BALANCE OF INVESTMENT 48,31,77,000/- CLOSING BALANCE OF INVESTMENT 7,39,02,000/- TOTAL 55,70,79.000/- AVERAGE 27,85,39,500/- % 13,92,698/- IT IS THEREFORE PRAYED THAT THE IMPUGNED DISALLOWAN CE MADE BY THE AO MAY PLEASE BE DELETED OR ALTERNATIVELY RESTRICTED T O RS.13,92,698/-.' 3. THE APPLICANT MOST RESPECTFULLY SUBMITS THAT TH E ORDER OF HON'BLE TRIBUNAL BE RECALLED AND RE FIXED FOR ADJUDICATION OF GROUND NO. 2.4 OF APPEAL MEMO FILED BY THE APPLICANT. NON ADJUDICATION OF GROUND CONSTITUTES THE MISTAKE APPARENT ON RECORD. IT IS THEREFORE, SUBMITTED THAT IN LARGER INTEREST OF JUSTICE THE HON'BLE TRIBUNAL BE PLEASED TO ACCEPT PRAYER OF THE APPLICANT AND PASS APPROPRIATE ORDER. 3. WHEN THIS APPLICATION WAS CALLED OUT FOR HEARING , THE LEARNED COUNSEL FOR THE ASSESSEE POINTS OUT OUR ATTENTION TO PARAGRAPH NO.1 7, BEGINNING AT PAGE NO.32 OF THE ORDER, AND SUBMITTED THAT WHILE DISPOSING OF GROUND S OF APPEAL RAISED BY THE ASSESSEE, ALL THAT THE TRIBUNAL HAS SAID IS THAT .....RULE 8D HAD ADMITTEDLY COME INTO FORCE ........ AND .....THE DISALLOWANCE HAS BEEN MADE ON THE BASIS OF THE FORMULA SET OUT IN RULE 8D IN RESPECT OF ADMINISTRATIVE EXPENSE S AND WE SEE NO INFIRMITY IN THE ORDER OF CIT(A) IN CONFIRMING THIS DISALLOWANCE.... SHE POINTS OUT THAT THE CONCLUSION SO ARRIVED AT BY THE TRIBUNAL OVERLOOKED THE SPECIF IC GRIEVANCE RAISED BY THE ASSESSEE IN GROUND NO.2.4 WHICH FOR THE SAKE OF REA DY REFERENCE IS NOW REPRODUCED BELOW:- 2.4 THE LEARNED CIT (APPEALS) HAS GROSSLY ERRED IN LAW & ON FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE MADE BY THE AO WITHO UT CONSIDERING THE APPELLANT'S PLEA THAT THE AO HAS WRONGLY TAKEN THE AMOUNT OF CLOSING BALANCE OF INVESTMENT AT RS.73,90,20,000/- AS AGAINST THE C ORRECT FIGURE OF RS.7,39,02,000/-. DISALLOWANCE UNDER RULE 8D IF AT ALL ANY WERE TO BE MADE WOULD THEREFORE WORKOUT TO RS.13,92,698/- AND NOT R S.30,40,260/- AS FOLLOWS:- AVERAGE VALUE OF INVESTMENT 48,31,77,000/- OPENING BALANCE OF INVESTMENT 7,39,02,000/- CLOSING BALANCE OF INVESTMENT TOTAL 55,70,79.000/- AVERAGE 27,85,39,500/- % 13,92,698/- IT IS THEREFORE PRAYED THAT THE IMPUGNED DISALLOWAN CE MADE BY THE AO MAY PLEASE BE DELETED OR ALTERNATIVELY RESTRICTED TO RS .13,92,698/-. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT TH E PLAIN READING OF THE ABOVE GROUND OF APPEAL WHICH WAS IN FACT AN ALTERNATE PLE A RAISED BY THE ASSESSEE, WOULD SHOW THE ASSESSEE HAD NOT ONLY CHALLENGED THE APPLI CATION OF RULE 8D, BUT ALSO THE MA NO. 36/AHD/2018 GUJARAT GAS TRADING CO. LTD VS. ITO ASSESSMENT YEAR: 2008-09 PAGE 3 OF 4 ADOPTION OF INCORRECT FIGURES FOR THE PURPOSE OF AP PLYING RULE 8D. IN THE LIGHT OF THE UNAMBIGUOUS POSITION THE MERE FACT THAT RULE 8D HAD INDEED COME INTO FORCE IN THE RELEVANT PREVIOUS YEAR, IT CANNOT LEAD TO THE CONCL USION THAT THERE WAS NO NEED FOR INTERFERENCE IN THE CONCLUSION ARRIVED AT BY THE CI T(A) PARTICULARLY WHEN EVEN THE FIGURES ADOPTED IN THE APPLICATION OF RULE 8D WERE CLEARLY IN DISPUTE AS EVIDENT FROM THE GROUND OF APPEAL NO.2.4. SHE SUBMITS THAT IN T HE LIGHT OF THIS CLEAR POSITION THE ORDER OF THE TRIBUNAL MAY BE RECALLED FOR THE LIMIT ED PURPOSE OF DISPOSING OF GROUND NO.2.4 INDICATED ABOVE. 5. LEARNED DEPARTMENTAL REPRESENTATIVE VERY FAIRLY DOES NOT RAISE ANY ISSUE ABOUT THE CORRECTNESS OF WHAT WAS ARGUED BY THE LEA RNED COUNSEL FOR THE ASSESSEE, BUT LEAVES IT FOR US AS TO WHETHER THE ORDER OF THE TRIBUNAL CAN BE SUBJECTED TO THE RECTIFICATION PROCEEDINGS FOR THE SAID INCORRECTNES S, IF ANY. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLIC ABLE LEGAL POSITION. 7. AS HELD BY HONBLE SUPREME COURT IN THE CASE OF ITO VS. VOLKART BROTHERS AND OTHERS, [1971] 82 ITR 50 (SC), A MISTAKE APPARE NT ON RECORD COVERS AND INCLUDES ANY MISTAKE WHICH IS GLARING AND IS AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS . VIEWED IN THIS PERSPECTIVE, UNDOUBTEDLY, THE MISTAKE POINTED OUT BY THE LEARNED COUNSEL IS NOT ONLY A CLEAR ERROR OF OMISSION IN DEALING WITH GROUND NO.2.4 BUT ALSO SOMETHING WHICH CANNOT BE OF TWO VIEWS BEING TAKEN IN RESPECT OF THE SAME. ONCE THE ASSESSEE SPECIFICALLY RAISES A GROUND WITH RESPECT TO ERROR IN QUANTIFICATION OF D ISALLOWANCE, SUCH GROUND CANNOT BE DISMISSED ONLY FOR THE REASON THAT THE RELEVANT LEG AL PROVISION WAS IN FORCE AT THE MATERIAL POINT OF TIME. WHETHER THAT PARTICULAR PR OVISION WAS IN FORCE OR NOT, THE ISSUES RAISED WITH RESPECT TO QUANTIFICATION WILL A LSO HAVE TO BE SEEN. IN THIS VIEW OF THE MATTER AND BEARING IN MIND ENTIRETY OF THE CASE , WE ARE OF THE CONSIDERED VIEW THAT THERE WAS INDEED AN ERROR COMMITTED BY THE TRI BUNAL IN NOT DISPOSING OF THE GRIEVANCE RAISED BY THE ASSESSEE VIDE GROUND NO.2.4 . WE, THEREFORE, DEEM IT FIT AND PROPER TO RECALL PARAGRAPH NO.17OF THE SAID ORDER W HEREBY ENTIRE GROUND NO.2, INCLUDING ITS SUB-GROUNDS OF APPEAL WAS SUMMARILY D ISMISSED ON THE GROUND THAT RULE 8D WAS IN FORCE IN THE RELEVANT PREVIOUS YEAR, AND WE DIRECT THE REGISTRY TO FIX THE MATTER AFRESH FOR THE LIMITED PURPOSES OF DISPO SING OF GROUND NO.2.4. TO THIS EXTENT, THIS ORDER IS RECALLED AND THE MATTER IS DI RECTED TO BE LISTED FOR FRESH HEARING. THIS HEARING IS TO TAKE PLACE ON 4 TH JULY 2018 AS ANNOUNCED IN THE OPEN COURT, AND, SINCE THE DATE OF HEARING IS ANNOUNCED IN THE OPEN COURT, THERE IS NO NEED TO ISSUE SEPARATE NOTICES. 8. IN THE RESULT, RECTIFICATION PETITION IS ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON THE 8 TH DAY OF MAY, 2018. SD/- SD/- SD/- SD/- MS. MADHUMITA ROY PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 8 TH DAY OF MAY, 2018 **BT MA NO. 36/AHD/2018 GUJARAT GAS TRADING CO. LTD VS. ITO ASSESSMENT YEAR: 2008-09 PAGE 4 OF 4 COPIES TO: (1) THE APPELLANT (2) THE RESPONDE NT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD