DCIT 16(3), V. THE NEXT DIAMOND CO.,

MA 399/MUM/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4979 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-09-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2004-2005
• Appeal Filed On: 21-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Assessee Lawyers: VIJAY BIYANI
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI B. RAMAKOT AIAH,(AM) MA NO.399/MUM/2010 ARISING OUT OF ITA NO.6994/MUM/2008 ASSESSMENT YEAR : 2004-05 DY. COMMISSIONER OF INCOME TAX -16(3) MATRU MANDIR, TARDEO MUMBAI-400007. ..( APPLICANT ) VS. M/S. THE NEXT DIAMOND CO. 519, PRASAD CHAMBERS OPERA HOUSE MUMBAI-400 004. ..( RESPONDENT ) P.A. NO. (AAAFT 0806 F) APPLICANT BY : SHRI KESHAV SAXENA RESPONDENT BY : SHRI VI JAY BIYANI O R D E R PER D.K. AGARWAL (JM). THIS MISCELLANEOUS PETITION FILED BY THE REVENUE IS D IRECTED AGAINST THE ORDER DATED 4.3.2010 PASSED BY THE TRIBUN AL IN ITA NO.6994/M/08 FOR ASSESSMENT YEAR 2004-05. 2. IN THE MISCELLANEOUS PETITION DATED NIL IT WAS SUBMIT TED THAT THE TRIBUNAL HAS DECIDED THE GROUND TAKEN BY THE ASSESSEE ON THE BASIS OF DECISION OF SPECIAL BENCH OF TRIBUNAL IN LALSONS ENTERPRI SES 89 ITD 25 IN DIRECTING THE ASSESSING OFFICER TO ALLOW NETTING OFF OF INTEREST INCOME AGAINST THE INTEREST PAID FOR THE PURPOSE OF CALCULATIN G DEDUCTION U/S.80 HHC OF THE ACT. SINCE THE SPECIAL BENCH DECISION IN LALSONS ENTERPRISES HAS BEEN REVERSED BY THE HON'BLE JURISDICTI ONAL HIGH COURT MA NO.399/M/10 A.Y:04-05 2 IN CIT VS. ASIAN STAR COMPANY LTD. IN INCOME TAX APPE AL NO.200 OF 2009 UPHOLDING THE DECISION OF THE ASSESSING OFFICER THAT IN SUCH CASE NETTING OFF OF INTEREST IS NOT ALLOWABLE, THEREFORE, THE ORDER PASSED BY THE TRIBUNAL MAY BE REVIEWED IN THE LIGHT OF THE DE CISION OF THE HON'BLE JURISDICTIONAL HIGH COURT SUPRA. 3. AT THE TIME OF HEARING THE LD. DR SUBMITS THAT FO R THE REASONS AS MENTIONED IN THE MISCELLANEOUS PETITION FILED BY THE D EPARTMENT , THE ORDER PASSED BY THE TRIBUNAL IN THIS REGARD BE SUITABLY AMENDED UNDER THE PROVISIONS OF SEC.254(2) OF THE ACT. 4. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE SUB MITS THAT AT THE TIME OF HEARING OF THE APPEAL BY THE TRIBUNA L NO SUCH DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT WAS AVAILABLE, TH EREFORE, THE TRIBUNAL WAS JUSTIFIED IN FOLLOWING THE DECISION OF SP ECIAL BENCH OF THE TRIBUNAL IN LALSONS ENTERPRISES SUPRA, AND THEREFORE, T HERE IS NO APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL WHICH CO ULD BE RECTIFIED U/S.254(2) OF THE ACT. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT IS TRUE THAT AT THE TIME OF HEARING OF THE APPEAL AND PASSING THE ORDER BY THE TRIBUNAL ON 4.3.2010 THE SAID JUDGMENT OF HON'BLE JUR ISDICTIONAL HIGH COURT WAS NOT AVAILABLE AS THE SAID JUDGMENT IS DATED M ARCH 18/19, 2010. HOWEVER, IN IN ACIT VS. SAURASHTRA KUTCH STOCK E XCHANGE LTD. (2008) 305 ITR 227(SC) IT HAS BEEN OBSERVED AND HELD AT PLACITUM 41 AND 42 APPEARING AT PAGE 240 OF 305 ITR AS UNDER : 41. A SIMILAR QUESTION CAME UP FOR CONSIDERATION BEFORE THE HIGH COURT OF GUJARAT IN SUHRID GEIGY LTD. VS. COMMISSIONER OF SURTAX(1999)237 ITR MA NO.399/M/10 A.Y:04-05 3 834. IT WAS HELD BY THE DIVISION BENCH OF THE HIGH COURT THAT IF THE POINT IS COVERED BY A DECISION OF THE JURISDICTIONAL COURT RENDERED PRIOR OR EVEN SUBSEQUENT TO THE ORDER OF RECTIFICATION, IT COULD BE SAID TO BE A MISTAKE APPARENT FROM THE RECORD UNDER SECTION 254(2) OF THE ACT AND COULD BE CORRECTED BY THE TRIBUNAL. 42. IN OUR JUDGMENT, IT IS ALSO WELL-SETTLED THAT A JUDICIAL DECISION ACTS RETROSPECTIVELY 6. RESPECTFULLY FOLLOWING THE RATIO OF THE ABOVE DECISI ONS WE ARE OF THE VIEW THAT THERE IS AN APPARENT MISTAKE IN THE ORD ER OF THE TRIBUNAL IN TERMS OF THE PROVISIONS OF SECTION 254(2) OF THE ACT. ACCORDINGLY WE MODIFY THE TRIBUNAL ORDER DATED 4.3.2010 BY HOLDING THAT THE GROSS INTEREST ON FIXED DEPOSITS IN THE BANK RECEIVED BY THE ASSESSEE SHOULD BE CONSIDERED FOR THE PURPOSE OF WORKING OUT DEDUCTION U/S. 80HHC OF THE ACT. WE HOLD AND ORDER ACCORDINGLY. THE APPEAL O F THE ASSESSEE IS THEREFORE, DISMISSED. 7. IN THE RESULT, THE MISCELLANEOUS PETITION STANDS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.9.2010. SD/- SD/- (B. RAMAKOTAIAH ) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 15.9.2010 JV. COPY TO: THE APPLICANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.