DCIT CIR 4(1), V. DALAL AND BROACHA STOCK BROKING LTD,

MA 407/MUM/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9723 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 22-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEERAJ PRADHAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D , BENCH MUMBAI BEFORE SHRI R.K.GUPTA , J M & SHRI B.RAMAKOTAIAH , A M MA NO. 407 /MUM/20 12 (ARISING OUT OF ITA NO. 2461/M/2008) ( ASSESSMENT YEAR :200 4 - 200 5 ) DCIT,CIR - 4(1) , MUMBAI VS. M/S DALAL & BROACHA STO CK BROKING LTD., 506 MAKER CHAMBER V, 221, NARIMAN POINT, MUMBAI - 400 021 . PAN NO. : AAACA 8798 G ( APP LICANT ) .. ( RESPONDENT ) REVENUE BY : MR. NEERAJ PRADHAN ASSESSEE BY : MR. VIJAY MEHTA DATE OF HEARING : 14 TH DEC . , 2012 DATE O F PRONOUNCEMENT : 14 TH DEC .,2012 O R D E R PER SHRI R.K.GUPTA, JM : THIS MISCELLANEOUS APPLICATION HAS BEEN PREFERRED BY THE DEPARTMENT ARISING OUT OF THE ORDER DATED 31 - 3 - 2010, PASSED IN ITA NO. 2461/M/2008 FOR THE ASSESSMENT YEAR 2004 - 05 . 2 . IN T HIS CASE, AN ADDITION OF RS. 75 LAKHS OUT OF SUM OF RS. 1.5 CRORES HAD BEEN PAID BY THE ASSESSEE TO TH R EE OF ITS DIRECTORS AS COMMISSION , WHICH WAS DISALLOWED BY THE AO IN VIEW OF THE PROVISIONS OF SECTI ON 40A(2)(B) OF THE ACT. 3 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) , WHO DELETED THE ADDITION OF RS. 75,00,000/ - . THEREAFTER THE DEPARTMENT FILED AN APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF CIT(A) , WHO ALSO DELETED THE DISALLOWANCE OF RS. 75,00,000/ - . AN ADDITIONAL GROUND WAS M.ANO.407/2012 2 ALSO RAISED BEFOR E THE TRIBUNAL THAT COMMISSION PAYMENT IS NOT ALLOWABLE EVEN UNDER SECTION 36(1)(II) OF THE ACT AS THE LEARNED CIT(A) HAS CONFIRMED THE ADDITION ON SIMILAR GROUND FOR THE ASSESSMENT YEAR 2005 - 06. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, THE TRIBUNAL CONFIRMED THE DELETION OF ADDITION OF RS. 75,00,000/ - DELETED BY THE LEARNED CIT(A) . THE TRIBUNAL ALSO REJECTED THE ADDITIONAL GROUND FOR THE REASON THAT THE DEPARTMENT IS SEEKING THAT THE ENTIRE AMOUNT OF RS. 1.5 CRORES IS DISALLOWAB LE BY OBSERVING THAT SINCE THE AO HIMSELF HAD MADE ANY DISALLOWANCE, THEREFORE, THERE IS NO POINT TO CONSIDER THE AMOUNT OF RS. 75 LAKHS WHICH WAS NOT ADDED BY THE AO HIMSELF. ACCORDINGLY, THE ADDITIONAL GROUND WAS ALSO REJECTED BY THE TRIBUNAL. 4 . NOW, T HE DEPARTMENT HAS FILED THIS MISCELLANEOUS APPLICATION BY WHICH IT HAS BEEN AGITATED THAT THE ORDER OF THE TRIBUNAL SUFFERS FROM LEGAL INFIRMITY. IT WAS FURTHER SUBMITTED THAT THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF THE ASSESSEE ITSELF HAS CONFIR MED THE DISALLOWANCE IN SUBSEQUENT YEARS. COPY OF THE ORDER OF THE SPECIAL BENCH HAS ALSO BEEN FILED. 5 . ON THE OTHER HAND, LEARNED COUNSEL OF THE ASSESSEE, WHO APPEARED BEFORE THE TRIBUNAL STATED THAT THERE IS NO MISTAKE APPARENT IN THE ORDER OF THE TRIB UNAL. IT WAS FURTHER STATED THAT THE TRIBUNAL WAS JUSTIFIED IN NOT ENTERTAINING THE ADDITIONAL GROUND AS THE AO HIMSELF HAS NOT MADE ANY ADDITION BECAUSE THE AO HAS DISALLOWED THE COMMISSION M.ANO.407/2012 3 IN VIEW OF THE PROVISIONS OF SECTION 40A (2)(B) @ 50%. THEN 50% D ISALLOWANCE WHICH WAS DELETED BY THE LEARNED CIT(A) , HAS BEEN AFFIRMED BY THE TRIBUNAL AFTER CONSIDERING VARIOUS CASE LAWS AND THEREAFTER PASSED A DETAILED ORDER, THEREFORE, THERE IS NO MISTAKE APPARENT IN THE ORDER OF THE TRIBUNAL. IT WAS FURTHER SUBMITTE D THAT EVEN THE HON BLE HIGH COURT HAS AFFIRMED THE DECISION OF THE TRIBUNAL BY FOLLOWING THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF LOKMAT NEWSPAPER PVT. LTD., 230 CTR 521 . COPY OF THE ORDER THE HONBLE HIGH COURT HAS ALSO BEEN FILED. 6 . AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD , WE FOUND THAT THIS MISCELLANEOUS APPLICATION FILED BY THE DEPARTMENT IS LIABLE TO BE DISMISSED. WE NOTED THAT THE TRIBUNAL AFTER DISCUSSING THE ISSUE IN DETAIL AND FOLLOWING VARIOUS DECISION S OF THE HON BLE HIGH COURT AS WELL AS OTHER DECISION S , IT CAME TO A CONCLUSION THAT THE ORDER OF THE LEARNED CIT(A) WAS CORRECT, WHO DELETED THE ADDITION MADE BY THE AO AT RS. 75,00,000/ - BY ATTRACTING THE PROVISIONS OF SECTION 40A(2)(B) . POWER OF THE TRIBU NAL FOR RECTIFYING THE ORDER PASSED BY IT IS IN RESPECT TO RECTIFY THE MISTAKES BUT THE TRIBUNAL HAS NO POWER TO REVIEW OR RECTIFY ITS OWN ORDER WHERE THE ORDER HAS BEEN PASSED ON GREAT DELIBERATIONS AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES. T HEREFORE, FOR THIS REASON ALONE, THE MISCELLANEOUS APPLICATION OF THE DEPARTMENT IS LIABLE TO BE DISMISSED. THE DEPARTMENT HAS PLACED RELIANCE ON A DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN M.ANO.407/2012 4 SUBSEQUENT YEAR. HOWEVER, IN OUR CONSIDERED VIEW, THE DECISION OF THE SPECIAL BENCH MAY BE CONSIDERED IN SUBSEQUENT YEAR BUT NOT IN THE ORDER WHERE THE DISPUTE HAS ALREADY BEEN SETTLED BY THE TRIBUNAL. WE FURTHER NOTED THAT EVEN THE DEPARTMENT HA S FILED BEFORE THE HON BLE HIGH COURT AND THE APPEAL OF THE DEPARTMENT H AS BEEN DISMISSED IN THE ITA NO. 6938/2010, VIDE ORDER DATED 1 5 - 9 - 2011 , COPY OF WHICH HAS ALSO BEEN FILED BY THE LEARNED AR DURING THE COURSE OF HEARING OF THIS MISCELLANEOUS APPLICATION, THEREFORE, THE JURISDICTION OF THE TRIBUNAL DOES NOT REMAIN NOW AS TH E ORDER OF THE TRIBUNAL HAS ALREADY BEEN CONSIDERED BY THE HON BLE HIGH COURT. 7 . IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE DISMISS THE MISCELLANEOUS APPLICATION FILED BY THE DEPARTMENT . 8 . RESULTANTLY , MISCELLANEOUS APPLICATION FILED BY THE DEPARTMENT IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH D AY OF DEC . , 2012. SD/ - SD/ - ( B.RAMAKOTAIAH ) ( R.K.GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED : 14 /12 / 2012. /P KM , PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - X, MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI