UNIQUE ESTATES DEVELOPMENT CO.LTD, V. DCI CEN CIR 23,

MA 409/MUM/2012

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1466 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 22-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SAHU
• Assessee Lawyers: SANJIV M SHAH
• Keywords: Business income; Depreciation; Rectification of order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI F BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI VIJAY PAL RAO, JM & SHRI N. K. BILLAIYA , AM MISCELLANEOUS APPLICATION NO. 408/MUM/2012 ( ARISING FROM ITA NO. 1537/MUM/2009 A. Y - 2005-06 ) MISCELLANEOUS APPLICATION NO. 409/MUM/2012 ( ARISING FROM ITA NO. 3212/MUM/2009 A. Y - 2006-07 ) & MISCELLANEOUS APPLICATION NO. 410/MUM/2012 ( ARISING FROM ITA NO. 6056/MUM/2012 A. Y - 2007-08 ) UNIQUE ESTATES DEVELOPMENT CO. LTD., CONSTRUCTION HOUSE B, 2 ND FLOOR, OPP. KHAR TELEPHONE EXCHANGE, KHAR (W) MUMBAI-400052 VS DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-23, MUMBAI-400020 (APPLICANT) (RESPONDENT) PAN NO. AAACU0699N ASSESSEE BY SHRI SANJIV M. SHAH REVENUE BY SHRI R. K. SAHU DATE OF HEARING 10 TH JANUARY 2014 DATE OF PRONOUNCEMENT 17 TH JANUARY 2014 ORDER PER VIJAY PAL RAO, JM THESE MISCELLANEOUS APPLICATIONS BY THE ASSESSEE A RE DIRECTED AGAINST THE COMPOSITE ORDER DATED 30.4.2012 OF THIS TRIBUNAL FOR THE ASSESSMENT YEARS 2005-06 TO 2007-08. 2. THE ASSESSEE IS SEEKING RECTIFICATION OF MISTAKE IN THE IMPUGNED ORDER WITH RESPECT TO THE FINDING ON GROUND NO. 2, 3 WHICH IS COMMON FOR ALL THE THREE YEARS AND GROUND NO. 4 FOR THE ASSESS MENT YEAR 2005-06. APART FROM THIS THE ASSESSEE HAS ALSO POINTED OUT T HAT THE NAME AND PARTICULARS OF THE REPRESENTATIVES OF THE ASSESSEE AND DEPARTMENT HAS BEEN WRONGLY MENTIONED. MA 408, 409 & 410/M/2012 UNIQUE ESTATES DEVELOPMENT CO. LTD. 2 3. THE LD. A.R OF THE ASSESSEE HAS SUBMITTED THAT T HE GROUND NO. 2 & 3 PERTAINS TO THE INCOME FROM INFINITY MALL TREATED B Y THE A.O AS INCOME FROM HOUSE PROPERTY WHICH WAS REVERSED BY THE CIT(A ). HE HAS FURTHER SUBMITTED THAT THE MISCELLANEOUS APPLICATION IS CON FINED ONLY TO THE ISSUE OF RECEIPT AGAINST THE AMENITIES AGREEMENT. HE HAS REFERRED PARA 9 & 10 OF THE IMPUGNED ORDER OF THE TRIBUNAL AND SUBMITTED THAT THE TRIBUNAL HAS HELD THAT THE RECEIPT AGAINST AMENITIES CANNOT BE T REATED AS INCOME FROM BUSINESS BUT IT IS A PART OF THE INCOME FROM HOUSE PROPERTY. THE LD. A.R HAS POINTED OUT THAT THE ASSESSEE HAS RELIED UPON T HE DECISION OF KOLKATA BENCH OF THIS TRIBUNAL IN CASE OF PFH MAL & RETAIL MANAGEMENT LTD. VS ITO REPORTED IN 110 ITD 337 (KOL) AS WELL AS DECISION O F THIS TRIBUNAL IN CASE OF GESCO CORPORATION LTD. VS ACIT REPORTED IN 31 SOT 1 32 WHICH HAS BEEN REFERRED BY THE TRIBUNAL IN PARA 6.5 OF THE IMPUGNE D ORDER BUT THESE DECISIONS HAVE NOT BEEN CONSIDERED WHILE DECIDING T HE ISSUE IN PARA 9 TO 11 OF THE IMPUGNED ORDER ON THIS POINT. THUS, THE L D. A.R HAS SUBMITTED THAT THE NON-CONSIDERATION OF THE DECISION OF THE C O-ORDINATE BENCH IS A MISTAKE APPARENT FROM RECORD WHICH REQUIRES TO BE R ECTIFIED. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE DECISION OF H ONBLE SUPREME COURT IN CASE OF HONDA SIEL POWER PRODUCTS LTD. VS CIT 29 5 ITR 466 AS WELL AS DECISION IN CASE OF ACIT VS SAURASHTRA KUTCH STOCK EXCHANGE LTD. 305 ITR 227. THE LD. A.R HAS FURTHER SUBMITTED THAT THE TRI BUNAL HAS TAKEN INTO CONSIDERATION CLAUSE 8A OF THE AGREEMENT WHEREIN TH E ASSESSEE HAS RECEIVED AS SUM OF ` 44,00,000/- AS INTEREST FREE S ECURITY FROM PANTALOON AND HELD THAT THE ASSESSEE HAS RECEIVED THE INTERES T FREE DEPOSIT BEING RECOVERY OF INVESTMENT WHEREAS THIS AMOUNT OF ` 44, 00,000/- IS NEGLIGIBLE MA 408, 409 & 410/M/2012 UNIQUE ESTATES DEVELOPMENT CO. LTD. 3 IN COMPARISON TO THE INVESTMENT IN RESPECT OF THE A REA O 19900 SQ. FT. LET OUT TO THE PANTALOON. THE LD. A.R HAS THEN POINTED OUT THAT A SECOND MISTAKE HAS ALSO CREPT IN THE IMPUGNED ORDER WITH R ESPECT TO THE GROUND NO. 4 FOR THE ASSESSMENT YEAR 2004-05 IN RESPECT OF SOCIETY CHARGES. HE HAS SUBMITTED THAT THIS ISSUE OF SOCIETY CHARGES HA S BEEN CONSIDERED AND DECIDED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03. HE HAS REFERRED THE DECISION OF TRIBUNAL A T PAGE NO. 13 OF THE PAPER BOOK AND SUBMITTED THAT WHILE DECIDING THE IS SUE IN PARA 13 OF THE IMPUGNED ORDER THE TRIBUNAL HAS NOT CONSIDERED THE DECISION DATED 29.9.2008 OF THE CO-ORDINATE BENCH IN ASSESSEES OW N CASE FOR THE ASSESSMENT YEAR 2002-03 IN ITA NO. 3406/2006. THUS, THE LD. A.R HAS SUBMITTED THAT THERE IS A MISTAKE APPARENT FROM REC ORD IN RESPECT OF THE FINDING ON THE ISSUE OF SOCIETY CHARGES AS THIS TRI BUNAL HAS NOT CONSIDERED THE DECISION OF THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE. THE THIRD MISTAKE POINTED OUT BY THE LD. A.R IS REGARDING THE PARTICULARS AND NAME OF THE REPRESENTATIVE OF THE PARTIES ARE WRONGLY ME NTIONED. THE LD. A.R HAS ALSO POINTED OUT THAT IN THE IMPUGNED ORDER IT IS MENTIONED THAT ALL THE GROUNDS ARE IN THE REVENUES APPEAL ARE COMMON WHEREAS GROUND NO. 1,2 & 3 ARE COMMON IN ALL THE APPEALS AND GROUND NO . 4 IS ONLY FOR THE ASSESSMENT YEAR 2005-06. 4. ON THE OTHER HAND, THE LD. D.R VEHEMENTLY OPPOSE D THE MISCELLANEOUS APPLICATION OF THE ASSESSEE AND SUBMI TTED THAT THE TRIBUNAL HAS DECIDED THE ISSUE OF AMENITIES CHARGES BY GIVIN G DETAIL REASONING ON MERITS AND THEREFORE, THERE IS NO APPARENT MISTAKE WHICH CAN BE RECTIFIED MA 408, 409 & 410/M/2012 UNIQUE ESTATES DEVELOPMENT CO. LTD. 4 U/S 254(2). HE HAS FURTHER SUBMITTED THAT FAILURE T O CONSIDER ANY ARGUMENT OF THE ASSESSEE IS NOT A MISTAKE APPARENT ON RECORD WHICH CAN BE RECTIFIED U/ 254(2). MERE NON-CONSIDERATION OF THE DECISION W OULD NOT AMOUNT TO MISTAKE APPARENT WHEN THE ISSUE IS OTHERWISE DECIDE D ON MERITS AND GIVING REASONS. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE FOLLOWING DECISIONS: DHARTI DREDGING & INFRASTRUCTURE LTD. VS ACIT 38 TA XMAN 85 (HYD.) SMT. M. POCHAMMA VS DCIT 30 TAXMAN 266 (HYD.) HYCONS INFRASTRUCTURE (INDIA) LTD. VS DCIT 36 TAXMA N 92 (HYD.) 5. AS REGARDS, THE SOCIETY CHARGES THE LD. D.R HAS SUBMITTED THAT THE TRIBUNAL HAS DECIDED THE ISSUE BY CONSIDERING THE P ROVISIONS OF THE STATUTE AND THEREFORE, WHEN A DECISION IS TAKEN ON A DEBATA BLE ISSUE THEN THE NON-CONSIDERATION OF THE DECISION OF THE CO-ORDINAT E BENCH WOULD NOT AMOUNT TO A MISTAKE APPARENT ON RECORD. THE TRIBUNA L HAS GIVEN THE INDEPENDENT FINDING AND EARLIER YEARS ORDER OF THE TRIBUNAL IS NOT BINDING ON THE TRIBUNAL. SINCE THE ORDER IS WELL REASON ON MERITS AND THEREFORE, THERE IS NO APPARENT MISTAKE WHICH CAN BE RECTIFIED U/S 254(2). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY PERUSED THE RELEVANT RECORD. THE FIRST GRIEVANCE OF THE ASSESSE E IN THE MISCELLANEOUS APPLICATION IS REGARDING ASSESSMENT OF AMENITIES CH ARGES AS INCOME FROM HOUSE PROPERTY IN STEAD OF BUSINESS INCOME. THE TRI BUNAL WHILE DECIDING THE REVENUES APPEAL HELD THAT THESE AMENITIES CHAR GES CANNOT BE TREATED AS BUSINESS INCOME. IT IS APPARENT FROM THE IMPUGNE D ORDER THAT THE ASSESSEE RELIED UPON TWO DECISIONS OF THE CO-ORDINA TE BENCHES IN CASE OF MA 408, 409 & 410/M/2012 UNIQUE ESTATES DEVELOPMENT CO. LTD. 5 PFH MALL AND RETAIL MANAGEMENT LTD. VS ITO (SUPRA) AS WELL AS GESCO CORPORATION LTD. VS ACIT (SUPRA) ON THIS POINT. THE SE TWO DECISIONS HAS BEEN DULY MENTIONED IN THE IMPUGNED ORDER AS PART O F THE CONTENTION OF THE LD. A.R OF THE ASSESSEE. HOWEVER, WE FIND THAT WHILE DECIDING THE ISSUE ON RECEIPT AGAINST THE AMENITIES PROVIDED BY THE ASSESSEE IN THE MALL IN PARA 9 TO 11, THESE TWO DECISIONS WERE ESCA PED CONSIDERATION. THOUGH THE TRIBUNAL HAS GIVEN A DETAIL FINDING BUT THESE TWO DECISIONS OF THE CO-ORDINATE BENCH ARE APPARENTLY NOT CONSIDERED BY THE TRIBUNAL WHILE DECIDING THE ISSUE. WE FURTHER NOTE THAT ON THE ISS UE OF ALLOWABILITY OF SOCIETY CHARGES THE TRIBUNAL HAS GIVEN A CONTRARY F INDING TO THE FINDING OF THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR TH E ASSESSMENT YEAR 2002-03 WHICH IS AVAILABLE AT PAGE 13 OF THE PAPER BOOK. THE TRIBUNAL FOR THE ASSESSMENT YEAR 2002-03 VIDE ORDER DATED 29.9.2 008 IN ITA NO. 3406/2006 HAS ALLOWED THE CLAIM OF SOCIETY CHARGES BY HOLDING THAT THESE CHARGES WOULD NOT FORM PART OF ANNUAL LETTING VALUE COMPUTED U/S 23 OF THE INCOME TAX ACT. WE NOTE THAT THIS ASPECT HAS NO T BEEN CONSIDERED BY THE TRIBUNAL AS THE DECISION OF THE CO-ORDINATE BEN CH FOR THE ASSESSMENT YEAR 2002-03 HAS ESCAPED ATTENTION AND CONSIDERATIO N. THEREFORE, IN VIEW OF THE FACT THAT WHILE DECIDING THE ISSUE ON THE RE CEIPTS AGAINST AMENITIES PROVIDED BY THE ASSESSEE AND SOCIETY CHARGES THE DE CISIONS RELIED UPON BY THE ASSESSEE HAVE BEEN OVER LOOKED AND THEREFORE WE RE NOT TAKEN INTO CONSIDERATION. THE HONBLE SUPREME COURT IN CASE OF HONDA SIEL POWER PRODUCTS LTD. VS CIT (SUPRA) WHILE DECIDING THE IDE NTICAL ISSUE HAS HELD IN PAR 13 AS UNDER: MA 408, 409 & 410/M/2012 UNIQUE ESTATES DEVELOPMENT CO. LTD. 6 RULE OF PRECEDENT IS AN IMPORTANT ASPECT OF LEGAL CERTAINTY IN RULE OF LAW. THAT PRINCIPLE IS NOT OBLITERATED BY S ECTION 254(2) OF THE INCOME-TAX ACT, 1961. WHEN PREJUDICE RESULTS FR OM AN ORDER ATTRIBUTABLE TO THE TRIBUNALS MISTAKE, ERROR OR OM ISSION, THEN IT IS THE DUTY OF THE TRIBUNAL TO SET IT RIGHT. ATONEMENT TO THE WRONGED PARTY BY THE COURT OR THE TRIBUNAL FOR THE WRONG CO MMITTED BY IT HAS NOTHING TO DO WITH THE CONCEPT OF INHERENT POW ER TO REVIEW. IN THE PRESENT CASE, THE TRIBUNAL WAS JUSTIFIED IN EXERCISING ITS POWERS UNDER SECTION 254(2) WHEN IT WAS POINTED OUT TO THE TRIBUNAL THAT THE JUDGMENT OF THE CO-ORDINATE BENCH WAS PLACED BEFORE THE TRIBUNAL WHEN THE ORIGINAL ORDER CAME TO BE PASSED BUT IT HAD COMMITTED A MISTAKE IN NOT CONSIDERING T HE MATERIAL WHICH WAS ALREADY ON RECORD. THE TRIBUNAL HAS ACKNO WLEDGED ITS MISTAKE, IT HAS ACCORDINGLY RECTIFIED ITS ORDER. IN OUR VIEW, THE HIGH COURT WAS NOT JUSTIFIED IN INTERFERING WITH TH E SAID ORDER. WE ARE NOT GOING BY THE DOCTRINE OR CONCEPT OF INHEREN T POWER. WE ARE SIMPLY PROCEEDING ON THE BASIS THAT IF PREJUDIC E HAD RESULTED TO THE PARTY, WHICH PREJUDICE IS ATTRIBUTABLE TO TH E TRIBUNAL'S MISTAKE, ERROR OR OMISSION AND WHICH ERROR IS A MA NIFEST ERROR THEN THE TRIBUNAL WOULD BE JUSTIFIED IN RECTIFYING ITS MISTAKE, WHICH HAD BEEN DONE IN THE PRESENT CASE. 7. A SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE SUP REME COURT IN CASE OF ACIT VS ACIT VS SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA). 8. RESPECTFULLY THE FOLLOWING DECISION OF HONBLE S UPREME COURT WE HOLD THAT THERE IS A MISTAKE APPARENT FROM RECORD S O FAR AS THE ORDER OF THE TRIBUNAL IN PARA 9 TO 13.2 WITH RESPECT TO THE ISSUE OF AMENITIES CHARGES, DEPRECIATION BEING CONSEQUENTIAL AND SOCIE TY CHARGES FOR NOT CONSIDERING THE DECISIONS RELIED UPON BY THE ASSESS EE AND WERE ALREADY ON RECORD. THE DECISIONS RELIED UPON BY LD. D.R ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. ACCORDINGLY, WE RECALL T HE IMPUGNED ORDER TO THE EXTENT OF FINDING GIVEN IN PARA 9 TO 13.2 FOR F RESH HEARING AND ADJUDICATION AFTER CONSIDERING THE DECISIONS OF THE CO-ORDINATE BENCHES AS RELIED UPON BY THE ASSESSEE. AS REGARDS, THE MISTAK E IN THE PARTICULARS AND NAME OF THE REPRESENTATIVE OF THE PARTIES IN TH E ARRAY OF PARTIES OF THE MA 408, 409 & 410/M/2012 UNIQUE ESTATES DEVELOPMENT CO. LTD. 7 IMPUGNED ORDER WE FIND THAT THE NAME OF THE REPRESE NTATIVES ARE WRONGLY APPEARING AGAINST THE OPPOSITE PARTIES. ACCORDINGLY , THE SAME IS RECTIFIED AND READ AS UNDER: ASSESSEE BY SHRI S. D. PURANDARE & SHRI MAYUR MAKW ANA REVENUE BY SHRI SUBACHAM RAM 9. AS REGARDS THE PARA NO. 2 OF THE IMPUGNED ORDER WE FIND A MINOR MISTAKE WHICH STAND RECTIFIED. THE PARA NO. 2 OF TH E IMPUGNED ORDER MAY BE READ AS UNDER: THE REVENUE HAS RAISED GROUND NO. 1 TO 3 AS COMMON IN THREE APPEALS THE REVENUE HAS RAISED GROUND NO. 1 TO 3 AS COMMON IN THREE APPEALS THE REVENUE HAS RAISED GROUND NO. 1 TO 3 AS COMMON IN THREE APPEALS THE REVENUE HAS RAISED GROUND NO. 1 TO 3 AS COMMON IN THREE APPEALS AND GROUND NO. 4 FOR THE ASSESSMENT YEAR 2005 AND GROUND NO. 4 FOR THE ASSESSMENT YEAR 2005 AND GROUND NO. 4 FOR THE ASSESSMENT YEAR 2005 AND GROUND NO. 4 FOR THE ASSESSMENT YEAR 2005- -- -06 06 06 06 ARE ARE ARE ARE AS UNDER: AS UNDER: AS UNDER: AS UNDER: . . 10. THE REGISTRY IS DIRECTED TO FIX THESE THREE APP EALS OF THE REVENUE FOR FRESH HEARING ON THE ISSUE OF AMENITIES CHARGES, DE PRECIATION AND SOCIETY CHARGES ON 28.4.2014. NOTICE OF HEARING BE ISSUED T O PARTY. 11. IN THE RESULT, THE MISCELLANEOUS APPLICATIONS F ILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF JANUARY 2014 SD/- SD/- (N. K. BILLAIYA) ACCOUNTANT MEMBER (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI: DATED: 17 TH JANUARY 2014 SUBODH. MA 408, 409 & 410/M/2012 UNIQUE ESTATES DEVELOPMENT CO. LTD. 8 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI DY /AR, ITAT, MUMBAI 1. DRAFT DICTATED ON 10 TH JANUARY 2014 DICT PAD PLACED IN THE ORG. 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