Appeal details
Counselvise Citation
[2019] 112 COUNSELVISE.COM (IT) 0344 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 month(s) 21 day(s)
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
09-12-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2011-2012
Appeal Filed On
19-07-2019
Judgement Text
1 MA NOS.413-415/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) M.A. NOS.413 /MUM/2019 (ARISING OUT OF ITA NO.4434/MUM/2018) (ASSESSMENT YEAR: 2011-12) & M.A. NOS.414/MUM/2019 (ARISING OUT OF ITA NO.4435/MUM/2018) (ASSESSMENT YEAR: 2012-13) & M.A. NOS.415 /MUM/2019 (ARISING OUT OF ITA NO.4436/MUM/2018) (ASSESSMENT YEAR: 2013-14) & LYPSA DIAMONDS 347, PANCHARATNA OPERA HOUSE MUMBAI-400 004 PAN : AAAFL0410F VS ITO,WARD - 30(2)(1) C-13, 6 TH FLOOR PRATYAKSHAKAR BHAWAN BKC, BANDRA(E) MUMBAI-400 051 APPLICANT RESPONDENT APPLICANT BY SHRI.SUCHET ANCHALIYA,AR RESPONDENT BY MS. KAVITA P.KAUSHIK, DR DATE OF HEARING 27/09/2019 DATE OF PRONOUNCEMENT 09 /12/ 2019 O R D ER PER G MANJUNATHA,AM: THESE THREE MISCELLANEOUS APPLICATIONS FILED BY THE ASSESEE ARE FILED AGAINST ORDER OF THE TRIBUNAL IN ITA.NO.4434/ MUM/2018 TO ITA.NO.4436/MUM/2018 FOR AY 2011-12 TO 2013-14. THE ASSESSEE HAS FILED SEPARATE PETITION FOR EACH ASSESSMENT YEAR, B UT THE CONTENTS OF PETITION FILED BY THE ASSESSEE ARE IDENTICAL. THERE FORE, FOR THE SAKE OF 2 MA NOS.413-415/MUM/2019 BREVITY, THE FACTS AND MISTAKES STATED TO BE APPARE NT ON RECORD AS NARRATED BY THE ASSESSEE IN ITS MISCELLANEOUS APPLI CATION 413/MUM/2019 FOR AY 2011-12 ARE REPRODUCED AS UNDER:- 1. SOME OF THE GROUNDS RAIDED IN ALL YEARS WE RE COMMON, OTHER THAN FEW SEPARATE GROUNDS IN EACH YEAR. ACCORDINGLY, THESE A PPEALS WERE HEARD TOGETHER AND WERE DISPOSED OF THE BY THE AFORESAID COMMON ORDER OF THE HON'BLE ITAT, 2. THE GROUNDS OF APPEAL RAISED BY THE APPELL ANT FOR A.Y. 2011-12 IS REPRODUCED HEREUNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD CIT(A) ERRED IN CONFIRMING THE INITIATION OF THE REASSESSM ENT PROCEEDING UNDER SECTION 147. 2. ON THE FACTS AND CIRCUMSTANCES OF THE EASE AND I N LAW THE LD CIT(A) FAILED TO CONSIDER THAT REASSESSMENT PROCEEDINGS CA NNOT BE INITIALED. A. NO REASSESSMENT CAN BE MADE JUST TO MAKE AN ENQU IRY OR VERIFICATION, B. REASSESSMENT PROCEEDINGS CANNOT BE INITIATE MERELY ON THE INFORMATION RECEIVED FROM INVESTIGATION WING C. REASSESSMENT PROCEEDING CANNOT BE INITIATED WHEN THE LD. CIT(A) HAVE REASON TO SUSPECT AND NOT REASON TO BELIEVE. 3. ON THE FACTS AND CIRCUMSTANCES OF CASE AND LAW T HE LD CIT(A) ERRED IN CONFIRMING THE ASSESSMENT ORDER UNDER SECTION 143 S UB SECTION 3 R W S 147 OF INCOME TAX ACT WHICH IS PASSED AGAINST THE PRINCIPA L OF NATURAL JUSTICE. 4. THE LD CIT(A) ERRED IN CONFIRMING AND REJECTING THE BOOKS OF ACCOUNTS UNDER SECTION 145 OF THE. INCOME TAX ACT. 5. THE LD.CIT(A) ERRED IN CONFIRMING AND TREATING R S. 42,05,6507-BEING! 2.5 PERCENT OF THE TOTAL PURCHASES OF RS, 3,36,45,1977 - AS BOGUS NON-GENUINE EXPENDITURE AND THEREBY ERRED IN ADDING THE SAME TO THE TOTAL INCNMC OF THE ASSESSES IN VIEW OF SECTION 69C OF THE INCOME TAX A CT,1961, 6. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWA NCE OF UNSECURED LOANS TAKEN OF RS.1,50.00,000/- AND THEREBY ERRED IN CONF IRMING AND TREATING THE SAME AS UNEXPLAINED CASH CREDITS IN VIEW OF SECTION 68 OF THE INCOME TAX ACT, 1961. 7. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOW ANCE OF UNSECURED LOANS TAKEN OF RS. 20,958/- AND THEREBY ERRED M CONFIRMIN G AND TREATING THE SAME AS UNEXPLAINED CASH CREDITS IN VIEW OF SECTION 68 O F THE INCOME TAX ACT. 1961. 8. THE LD. CIT(A} ERRED IN CONFIRMING THE DISALLOWA NCE OF GENUINE COMMISSION/ BROKERAGE OF RS. 350,000/- AND THEREBY ERRED IN TREATING THE SAME AS UNEXPLAINED EXPENDITURE AND ADDED THE SAME IN VIEW OF SECTION 69C OF THE INCOME TAX ACT, 1961 R 9. THE LD. C1T(A) ERRED IN CONFIRMING THE DISALLOWA NCE OF THE EXPENSES OF RS. 2,24,3987-ATTRIBUTED FOR EXEMPT INCOME AS PER SECTI ON 14A R. W.R 8D OF THE INCOME TAX, 1961. 3 MA NOS.413-415/MUM/2019 10. THE LD. CIT(A) ERRED IN CONFIRMING & CHARGING O F INTEREST UNDER SECTION 234A, 234B, 234C AND 234D OF THE INCOME TAX ACT 196 1. 11 THE LD. CIT(A) ERRED IN CONFIRMING THE INITIA TION OF THE PENALTY PROCEEDING UNDER SECTION 274 R.W.S. 271(1)(C) OF TH E INCOME TAX ACT, 1961. 12. THE ASSESSEE CRAVES LEAVE TO ADD FURTHER GROUND S OR TO AMEND OR ALTER THE EXISTING GROUNDS OF APPEAL ON OR BEFORE THE DAT E OF HEARING. 3. IN THE AFORESAID ORDER, THE HONBLE ITAT HAS ENL ISTED THE GROUNDS OF APPEAL AS UNDER: 'THE ASSESSES HAS RAISED, MORE OR LESS, COMMON GROU NDS OF APPEAL FOR ALL ASSESSMENT YEWS. FOR THE YOKE OF BREVITY, GROUNDS O F APPEAL RAISED FOR A.Y. 2011-12 IN ITA NO,4434/MUM/2QL8 ARE REPRODUCED BELO W: - ' 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW SHE LD CIT(A)ERRED IN CONFIRMING THE INITIATION OF THE REASSESSMENT PR OCEEDING UNDER SECTION 147. 2. ON THE FADS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) FAILED TO CONSIDER THAT REASSESSMENT PROCEEDINGS CANNOT HE INITIATED. A NO REASSESSMENT CAN BE MADE JUST TO MAKE AN ENQUI RY OR VERIFICATION, B. REASSESSMENT PROCEEDINGS CANNOT BE INITIATE ME RELY ON THE INFORMATION RECEIVED FRONT INVESTIGATION WING. C. REASSESSMENT PROCEEDING CANNOT BE INITIATED WHEN THE LD. CIT(A) HAVE REASON TO SUSPECT AND NOT REASON TO BELIEVE. 3. ON THE FACTS AND CIRCUMSTANCES OF CASE AND TAW T HE LD CIT(A) ERRED IN CONFIRMING THE ASSESSMENT ORDER UNDER SECTION 143 S UB SECTION 3 R.W.S. 147 OF INCOME TAX ACT WHICH IS PASSED AGAINST THE PRINC IPAL OF NATURAL JUSTICE. 4. THE LD CIT(A) ERRED IN CONFIRMING AND REJECTING THE BOOKS VF ACCOUNTS UNDER SECTION 145 OF THE. INCOME TAX ACT. 5. THE LD.CIT(A) ERRED IN CONFIRMING AND TREATING R S, 42,05,6507- BEING 12.5 PERCENT OF THE TOTAL PURCHASES OF RS. 3,36.45,1977- AS BOGUS NON-GENUINE EXPENDITURE AND THEREBY ERRED IN ADDING THE SAME TO THE TOTAL INCOME OF T HE ASSESSEE IN VIEW OF. SECTION 69C OF THE INCOME TAX ACT, 1961. 6. THE LD. CIT(A) ERRED IN CONFIRMING THE DISAL LOWANCE OF UNSECURED LOANS TAKEN OF RS. 1,.50,00,000/- AND THEREBY ERRED IN CO NFIRMING AND TREATING THE SAME AS UNEXPLAINED CASH CREDITS IN VIEW OF SECTION 68 OF THE INCOME TAXACT,I96I. 7 THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWAN CE OF UNSECURED LOANS TAKEN OF RS. 20,958/ AND THEREBY ERRED IN CONFIRMIN G AND TREATING THE SAME AS UNEXPLAINED CASH CREDITS IN VIEW OF SECTION 68 OF T HE INCOME TAX ACT, 1961. 8. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWA NCE OF GENUINE COMMISSION/ BROKERAGE OF RS. 3.50.0007- AND THEREBY ERRED IN TREATING THE SAME AS UNEXPLAINED EXPENDITURE AND ADDED THE SAME IN VIEW OF SECTION 69C OF THE INCOME TAX ACT, 1961. 9. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALL OWANCE OF THE EXPENSES OF RS. 2,24,3987-ATTRIBUTED FOR EXEMPT INCOME AS PER S ECTION I4A R. W.R 8D OF THE INCOME TAX, 1961. 10. THE LD. C1T(A) ERRED IN CONFIRMING & CHARGING O F INTEREST UNDER SECTION 234A, 234B, 234C AND 234D OF THE INCOME TAX ACT 196 1. 4 MA NOS.413-415/MUM/2019 11. THE LD. CIT(A) ERRED IN CONFIRMING THE INITIATI ON OF THE PENALTY PROCEEDING UNDER SECTION 274 R.W.S. 271(1)(C) OF THE INCOME TA X ACT. 4. THE HON'BLE ITAT DISPOSED THE AFORESAID APPEALS BY WAY OF A COMMON ORDER DATED 27.03.2019. THE RELEVANT OPERATI VE PART OF THE SAID ORDER IS REPRODUCED BELOW: '10. IN THIS VIEW OF THE MATTER AND CONSISTENT WIT H THE VIEW TAKEN BY THE COORDINATE BENCHES IN NUMBER OF CASES IN ALLEGED BO GUS PURCHASES' CASES, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) AND HENCE, REJECT GROUND TAKEN BY THE ASSESSEE. 11. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON IS ADDITION TOWARDS UNSECURED HAFT TAKEN FROM M/S AMIT DIAMONDS, M/S JE WEL DIAM AND M/S MONEY DIAM FOR RS.1.50 CRORES. THE FACTS WITH REGAR D TO THIS ISSUE ARE IDENTICAL TO FACTS WHICH WE HAVE ALREADY DISCUSSED IN RESPECT OF ALLEGED BOGUS PURCHASES FROM FIRMS / COMPANIES CONTROLLED BY SHRI BHANWARLAL JAIN GROUP OF COMPANIES. THE ASSESSES HAS OBTAINED UNSECURED LOAN S FROM THREE COMPANIES BELONGING TO SHRI BHANWARLAL JAIN GROUP O F COMPANIES. THE ASSESSES CLAIMS TO HAVE FILED VARIOUS DETAILS IN OR DER TO PROVE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDIT-WORTHINESS O F THE PARTIES. WHEN WE ANALYZE THE DOCUMENTS FILED BY THE ASSESSES IN LIGH T OF FACTS BROUGHT OUT BY THE AO, INCLUDING THE DEPARTMENT DURING THE COURSE OF SEARCH IN CASE OF SHRI BHANWARLAL! JAIN GROUP OF COMPANIES, WE FIND THAT A LTHOUGH THE ASSESSEE HAS FILED VARIOUS DOCUMENTS, BUT THE UNDISPUTED FAD REM AINS THAT THE ASSESSES IS ONE OJ THE BENEFICIARIES OF ACCOMMODATION ENTRIES P ROVIDED BY SHRI BHANWARLAL JAIN WHICH IS FURTHER EVIDENCED FROM THE FACT THAT DURING SEARCH IN CASE OF SHRI BHANWARLAL JAIN, THE DEPARTMENT HITS F OUND OUT PARALLEL BOOKS OF ACCOUNT MAINTAINED BY SHRI BHANWARLAL! JAIN IN RESP ECT OF ASSESSEE WHICH IS EXACTLY MATCHED WITH THE ENTRIES RECORDED IN THE BO OKS OF ACCOUNT OF THE ASSESSEE IN RESPECT OF UNSECURED LOAN. FURTHER, MER E FURNISHING OF CONFIRMATION LETTER, LEDGER EXTRACT AND BANK STATEM ENT IS NOT SUFFICIENT ENOUGH TO COME OUT OF THE SHADOW CAST UPON THE ASSESSES AN D WHAT IS REQUIRED TO BE PROVED IS GENUINENESS OJ TRANSACTIONS. IN THIS CASE , THE AO HAS BROUGHT OUT NUMBER OF REASONS TO DOUBT TRANSACTIONS BETWEEN THE PARTIES, BAT THE ASSESSES FAILED TO FILE ANY EVIDENCE TO CONTRADICT THE FACTS BROUGHT OUT BY THE AO WHILE MAKING ADDITION TOWARDS UNSECURED LOAN. TH EREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE LOWER AUTHORITIES WERE FIG HT IN MAKING ADDITION TOWARDS UNSECURED LOAN TAKEN FROM THREE COMPANIES B ELONGING TO SHRI BHANWARLAL JAIN AND HENCE, WE ARE NOT INCLINED TO D EVIATE FROM THE FINDINGS RECORDED BY THE LD. CIT(A). ACCORDINGLY, THE GROUND OF APPEAL TAKEN BY THE ASSESSES IS REJECTED. 12. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON IS DISALLOWANCE OF EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME U / 14A OF THE I.T. ACT, 1961. THE AO HAS DETERMINED DISALLOWANCE OF RS.2,24,398 U /S 14A R.W.R. 8D. ACCORDING TO THE AO, ALTHOUGH THE ASSESSES HAS EXEM PT INCOME BUT, FAILED TO DISALLOW EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME. THEREFORE, HE HAS QUANTIFIED THE AMOUNT OF EXPENDITURE BY INVOKING PR ESCRIBED METHOD PROVIDED UNDER' RULE 8D. IT IS THE CONTENTION OF THE ASSESSE S THAT IT HAS OWN FUNDS 5 MA NOS.413-415/MUM/2019 INFORM OF CAPITAL ACCOUNT WHICH T MORE THAN THE AM OUNT OF INVESTMENTS. THEREFORE, THE QUESTION OF DISALLOWANCE OF INTEREST EXPENDITURE U/R 8D(2)(II) DOES NOT ARISE. IN RESPECT OF OTHER EXPENDITURE, IT WAS SUBMITTED THAT THE ASSESSES HAS DEBITED DIRECT EXPENSES ON ACCOUNT OF DENIAL CHARGES AND STT INTO THE CAPITAL ACCOUNT. NO OTHER EXPENDITURE INCL UDING SALARY, TELEPHONE AND OTHER ADMINISTRATIVE CHARGES HAS BEEN INCURRED FIR EARNING EXEMPT INCOME. THEREFORE, THE AO WAS INCORRECT IN DETERMINING THE DISALLOWANCES OF RS.2,24,398 U/S I4A OF THE I. T. ACT, 1961. 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATE RIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT TH E ASSESSES HAS EARNED EXEMPT INCOME. IT IS ALSO AN ADMITTED FACT (HAT THE ASSESSEE HAS NOT MADE SUO MOTO DISALLOWANCE OF EXPENDITURE INCURRED IN RE LATION TO EXEMPT INCOME. THE AO HAS DETERMINED DISALLOWANCE OF EXPENDITURE I NCLUDING INTEREST U/R 8D(2}(II) AND 8D(2){III) OF I.T, RULES, 1962. THE A SSESSES CLAIMS THAT NO INTEREST BEARING FUNDS HAVE BEEN USED FOR INVESTMEN T- THEREFORE, INTEREST EXPENDITURE CANNOT BE DISALLOWED U/R 8D(2)(II). WE FIND THAT THE ASSESSEE HAS FILED COMPLETE DETAILS IN ORDER TO PROVE AVAILABILI TY OF INTEREST FREE FUNDS. WE FIND THAT SHE ASSESSEE 'S CAPITAL IS MORE THAN THE AMOUNT OF INVESTMENTS IN SHARES WHICH YIELDED EXEMPT INCOME. THEREFORE, WE A RE OF THE CONSIDERED VIEW THAT THE AO WAS ERRED IN QUANTIFYING DISALLOWA NCE OF INTEREST U/R 8D(2)(II) OF I.T. RULES, 1962. ACCORDINGLY, WE DIRECT THE AO TO DELETE ADDITION TOWARDS INTEREST EXPENDITURE. 14. COMING TO DISALLOWANCE OF EXPENDITURE U/R 8D{2 )(III). ALTHOUGH, THE ASSESSES CLAIMS TO NOT INCURRED ARTY EXPENDITURE FO R EAR/TING EXEMPT INCOME, POSSIBILITY OF INCURRING CERTAIN ROUTINE EXPENDITUR E LIKE OFFICE MANAGEMENT AND COMMUNICATION EXPENSES CANNOT BE RULED OUT, MORE PA RTICULARLY, WHEN ASSESSES HAS NOT MAINTAINED SEPARATE BOOKS OF ACCOU NT FOR INVESTMENT ACTIVITY AND BUSINESS ACTIVITY. INI THIS CASE, ON P ERUSAL OF DETAILS FILED BY THE ASSESSES WE FIND THAT THE ASSESSEE HAS INCURRED VAR IOUS COMMON EXPENDITURE INCLUDING SALARIES, CONVEYANCE FELT-PH ONE AND OTHER OVERHEAD EXPENSES. SINCE THE ASSESSES HAS NOT DISPUTED THE F ACT OF EARNING EXEMPT INCOME, THE POSSIBILITY OF INCURRING CERTAIN EXPEND ITURE TOWARDS SUCH INCOME CANNOT HE RULED OUT. FURTHER, SINCE THE ASSESSEE HA S NOT FILED ANY APPORTIONMENT OF EXPENSES IN RESPECT OF EXEMPT INCO ME, WE FIND NO REASON TO INTERFERE WITH THE FINDINGS OF AO IN APPLYING PRESC RIBED PROCEDURE PROVIDED U/R SD{2){III) WHITE DETERMINING DISALLOWANCES U/S !4A IN RELATION TO EXEMPT INCOME. THEREFORE, WE CONCUR WITH THE FINDINGS OF L D.CIT(A) IN CONFIRMING THE DISALLOWANCE OF EXPENDITURE U/R 8D(2)(III) @0.5% O F AVERAGE VALUE OF INVESTMENTS AMOUNTING TO RS.26,049/-. 15. IN THE RESULT, AIL APPEALS FILED BY THE ASSESSS E ARE PARTLY ALLOWED. ' 5. IN THE AFORESAID ORDER DISPOSED OF BY THE H ON'BLE TRIBUNAL, ONLY THE FOLLOWING GROUNDS WERE ADJUDICATED: A. ADDITION OF ALLEGED BOGUS PURCHASES FROM BHANWA RLAL JAIN GROUP CONCERNS U/S. 69C OF THE ACT. B. ADDITION OF ALLEGED BOGUS JOAN TRANSACTIONS FROM BHANWARLAL JAIN GROUP CONCERNS U/S 68 OF THE ACT. C. DISALLOWANCE U/S 14AOF THE ACT. 6 MA NOS.413-415/MUM/2019 6. HOWEVER, THE HONBLE TRIBUNAL IN THE AFORE MENTIONED ORDER HAS NOT DISCUSSED OR ADJUDICATED THE FOLLOWING GROUNDS AS S LATED IN THE MEMORANDUM OF APPEAL FOR A,Y. 2011-12 BEARING ITA NO.4434/MUM/2018. GROUND NO. 1 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A)ERRED IN CONFIRMING THE INITIATION OF THE REA SSESSMENT PROCEEDING UNDER SECTION 147.' GROUND NO. 2 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW. THE LD CIT(A) FAILED TO CONSIDER THAT REASSESSMENT PROC EEDINGS CANNOT BE INITIATED, A. NO REASSESSMENT CAN BE MADE JUST TO MAKE AN ENQU IRY OR VERIFICATION, B. REASSESSMENT PROCEEDINGS CANNOT BE INITIATE MERE LY ON THE INFORMATION RECEIVED FROM INVESTIGATION WING, C. REASSESSMENT PROCEEDING CANNOT BE INITIATED WHEN THE LD.CIT(A) HAVE REASON TO SUSPECT AND NOT REASON TO BELIEVE.' GROUND NO. 3 'ON THE FACTS AND CIRCUMSTANCES OF CASE AND LAW THE LD CIT(A) ERRED IN CONFIRMING THE ASSESSMENT ORDER UND ER SECTION 143 SUB SECTION 3 R W S 147 OF INCOME LAX ACT WHICH IS PASSED AGAINST THE PRINCIPAL OF NATURAL JUSTICE. GROUND NO. 4 'THE LD CIT(A) ERRED IN CONFIRMING AND REJECTING TH E BOOKS OF ACCOUNTS UNDER SECTION 145 OF THE INCOME TAX ACT,' GROUND NO, 8 'THE LD, CJT(A) ERRED IN CONFIRMING THE DISALLOWANC E OF GENUINE COMMISSION/ BROKERAGE OF RS.350000/- AND TH EREBY ERRED IN TREATING THE SAME AS UNEXPLAINED EXPENDITU RE AND ADDED THE SAME IN VIEW OF SECTION 69C OF THE INCOME TAX. ACT, 1961.' 7. AS CAN BE SEED, THERE ARE VARIOUS GROUNDS WHICH WERE VEHEMENTLY ARGUED AND PRESSED BY THE APPELLANT AT THE TIME OF HEARING , BUT WERE NOT ADJUDICATED BY THE HONBLE TRIBUNAL. ACCORDINGLY MISTAKE APPARENT FROM RECORD HAS CREPT IN. REFERENCE IN THE REGARD IS INVITED TO THE DECISION IN CASE OF COMMISSIONER OF INCOME-TAX VS KESHAV FRUIT MART [1993] 199 ITR 771, (ALL) WHICH H ELD THAT 'OMISSION TO CONSIDER A GROUND RAISED IN THE MEMORA NDUM OF APPEAL BEFORE THE INCOME-LAX APPELLATE TRIBUNAL IS A MISTAKE APPARENT FROM THE RECORD AND THE TRIBUNAL WOULD BE JUSTIFIED IN .VETTING ASIDE ITS ORDER PASS ED WITHOUT DOING SO. ' FURTHER RELIANCE IS PLATED ON: COMMISSIONER OF INCOME-TAX V. K.M.SUGAR MILLS(P.) LTD. [2005] 275 ITR 247, (ALL) NEPC INDIA UD. V.CIT [2006] 100 ITD 65 (CHENNAI ) (TRIB.) (TM) COMMISSIONER OF INCOME-TAX V. RAESH CHAND MODI 249 ITR 323 (RAJASTAN) 7 MA NOS.413-415/MUM/2019 8. FURTHERMORE, AT THE TIME OF THE HEARING OF BEFORE THE HONBLE TRIBUNAL, THE LD. AR OF THE APPELLANT HAD STRONGLY RELIED ON NUMEROUS CASE LAWS AND JUDICIAL PRECEDENTS. HOWEVER, IN THE ORDER PASSED B Y THE HON'BLE BENCH, THE CASE LAWS RELIED UPON BY THE APPELLANT HAVE NOT BEE N DISCUSSED AND HAVE BEEN SUMMARILY REJECTED STATING THAT THE FACTS IN T HE CASE ARE DIFFERENT FROM THOSE OF THE APPELLANT'S CASE. IN THIS REGARD REFER ENCE IS INVITED ON THE JURISDICT IONAL HIGH COURT JUDGMENT IN THE CASE OF AMORE_JEWELS PVT.LTD. V, THE DY. COMMISSIONER OF INCOME TAX [WRIT PETITION NO.12833 OF 2018] WHICH STATES THAT: '6. WE FIND THAT, THOUGH THE ORDER DATED I3TH FEBRU ARY, 2015 DOES RENDER A FINDING THAT NO POSITIVE MATERIAL WAS BROUGHT ON RE CORD, THEM IS NO DISCUSSION WHATSOEVER OF THE VARIOUS CASE LAWS DETAILED IN THE SUBMISSIONS WHICH ACCORDING TO THE PETITIONER CLINCHES THE ISSUES IN SUPPORT OJ ITS CASE THAT (HE SHAREHOLDING INVESTMENT BY THE JIVE COMPANIES WAS G ENUINE. IN THE ABOVE VIEW, THE TRIBUNAL OUGHT TO HAVE ALLOWED THE PETITI ONER'S RECTIFICATION APPLICATION AND CONSIDERED THE PETITIONER'S APPEAL BEFORE IT ON MERITS, INTER- ALIA, TAKING INTO ACCOUNT THE MATERIAL AND CASE LAW S WHICH HAS BEEN ALREADY FILED BY THE PETITIONER'S DURING THE HEARING LEADIN G LO THE ORDER DATED 1 3TH FEBRUARY, 2015. 7. IN VIEW OF THE PECULIAR FACTS OF THE PRESENT CAS E, WE ARE NOT ONLY SETTING ASIDE THE IMPUGNED ORDER DATED 4TH MAY, 2018 HUT AL SO THE ORDER DATED 13 TH FEBRUARY, 2018 TO THE EXTENT IT DISMISSED THE PETIT IONER'S APPEAL BEFORE IT. THIS FOR THE REASON THAT, WE FIND THE ORDER DATED 1 3TH FEBRUARY, 2015 IN THE CONTEXT OF THE MATERIAL AVAILABLE AN RECORD, TO BE A NONSPEAKING ORDER AS IT GIVES NO REASONS TO REJECT THE APPEAL IN THE CONTEX T OF THE DECISIONS ADMITTEDLY RELIED UPON AT THE HEATING BY THE PETITI ONERS. 8. IN THE ABOVE VIEW THE PETITION IS ALLOWED IN' 9. ACCORDINGLY MISTAKES APPARENT FROM RECORD H AVE CREPT IN. 10. IN THE VIEW OF THE ABOVE FACTUAL POSITION IT IS RESPECTFULLY SUBMITTED THAT THE HON'BLE TRIBUNAL MAY AMEND ITS ORDER TO RECTIFY THE AFORESAID MISTAKES, WHICH ARE APPARENT FROM RECORD. 2. THE LD. AR FOR THE ASSESEE, AT THE TIME OF HEARI NG SUBMITTED THAT THERE IS AN ERROR IN THE ORDER OF THE TRIBUNAL, DAT ED 27/03/2019 IN ITA NO.4434/MUM/2018 TO ITA.NO.4436/MUM/2018, INASMUCH AS, THE TRIBUNAL HAS RECORDED ERRONEOUS FACTS, WITHOUT CONS IDERING ARGUMENTS OF THE ASSESEE, INSOFAR AS, GROUND NO.5 RELATES TO ALL EGED NON GENUINE PURCHASES. THE LD. AR, FURTHER, SUBMITTED THAT ALTH OUGH, THE ASSESEE HAS TAKEN SPECIFIC GROUNDS CHALLENGING INITIATION O F REASSESSMENT PROCEEDINGS U/S 147, IN LIGHT OF CERTAIN JUDICIAL P RECEDENTS, BUT THE TRIBUNAL HAS INADVERTENTLY OMITTED TO CONSIDER AND ADJUDICATE SAID 8 MA NOS.413-415/MUM/2019 GROUND. FURTHER, THE ASSESSEE HAS CHALLENGED REJECT ION OF BOOKS OF ACCOUNTS U/S 145 OF THE I.T.ACT, 1961, BY WAY OF GR OUND NO.4, BUT THE SAID GROUND HAS NOT BEEN SPECIFICALLY ADJUDICATED. THEREFORE, THE ABOVE APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL COMES WITHIN THE AMBIT OF PROVISION OF SECTION 254(2) OF THE I.T.ACT, 1961, W HICH NEEDS TO BE RECTIFIED. THE LD. AR, FURTHER, SUBMITTED THAT ALTH OUGH, THE ASSESSEE HAS TAKEN A SEPARATE GROUND, IN RESPECT OF DISALLOWANCE S OF INTEREST PAID ON UNSECURED LOANS U/S 68, BUT THE TRIBUNAL BY INADVER TENT MISTAKE HAD OMITTED TO CONSIDER SAID GROUND. FURTHER, THE GROUN D NO.6 AND 7 ARE INTERLINKED, BECAUSE THE LD. AO HAS MADE ADDITIONS TOWARDS UNSECURED LOANS TAKEN FROM CERTAIN PARTIES AND CONSEQUENT INT EREST PAID ON SAID LOANS U/S. 68 OF THE ACT. THE TRIBUNAL HAS ADJUDICA TED ADDITIONS MADE TOWARDS LOANS, BUT AT THE SAME TIME DID NOT CONSIDE R INTEREST DISALLOWANCES, WHICH FORMS PART OF AND ARISES OUT OF ADDITIONS MADE TOWARDS UNSECURED LOANS. THE ABOVE ERRORS ARE PRIMA -FACIE MISTAKE APPARENT ON RECORD, WHICH NEEDS TO BE RECTIFIED U/S 254(2) OF THE I.T.ACT, 1961 AND HENCE, THE ORDER OF THE TRIBUNAL MAY BE RE CALLED IN THE INTEREST OF JUSTICE. 3. THE LD. DR, ON THE OTHER HAND, STRONGLY SUPPORTI NG ORDER OF THE TRIBUNAL SUBMITTED THAT THE ASSESSE HAS FAILED TO M AKES OUT A CASE OF PRIMA-FACIE MISTAKE APPARENT ON RECORD, WHICH COULD BE RECTIFIED U/S 254(2) OF THE I.T.ACT, 1961, BUT WHAT THE LD. AR F OR THE ASSESSEE SEEKING BY WAY OF THIS MISCELLANEOUS APPLICATION I S TO REVIEW THE DECISION RENDERED BY THE TRIBUNAL IN THE GIVEN FACT S AND CIRCUMSTANCES OF THE CASE, WHICH IS NOT PERMISSIBLE U/S 254(2) OF THE I.T ACT,1961 AND HENCE, THE MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSE FOR ALL ASSESSMENT YEARS NEEDS TO BE DISMISSED. 9 MA NOS.413-415/MUM/2019 4. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MISC ELLANEOUS APPLICATION FILED BY THE ASSESEE ALONG WITH ORDER O F THE TRIBUNAL, DATED 27/03/2019. WE FIND THAT THE ASSESSEE HAS TAKEN CER TAIN GROUNDS IN ITS APPAL, FILED FOR THE AY 2011-12 TO 2013-14, IN RESP ECT OF REOPENING OF ASSESSMENT U/S 147 OF THE ACT 1961. THE TRIBUNAL, W HILE ADJUDICATING THE APPEAL FILED BY THE ASSESSEE HAS FAILED TO CONSIDER GROUNDS NO.1, 2 AND 3 OF ASSESEE, WHICH CHALLENGES INITIATION OF REASSE SSMENT PROCEEDINGS U/S 147, ON THE ERRONEOUS PRESUMPTION THAT THE ASSE SEE HAS NOT PRESSED GROUNDS RELATING TO INITIATION OF REASSESSMENT PROC EEDINGS U/S 147. BUT ,FACT REMAINS THAT IT IS A SETTLED POSITION OF LAW, ONCE THERE IS A SPECIFIC GROUND IN AN APPEAL, THE SAME NEEDS TO BE ADJUDICAT ED IRRESPECTIVE OF THE FACT THAT WHETHER, SAID GROUND IS PRESSED OR NO T . THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT INSOFAR AS, GROUNDS NO. 1 TO 3 OF ASSESSEE APPEAL REGARDING INITIATION REASSESSMENT PROCEEDING S U/S. 147. THERE IS AN ERROR IN THE ORDER OF THE TRIBUNAL IN NOT ADJUDI CATING SPECIFIC GROUND TAKEN BY THE ASSESEE, WHICH CONSTITUTE MISTAKE APPA RENT ON RECORD, WHICH CAN BE RECTIFIED U/S 254(2) OF THE I.T.ACT, 1 961. 5. COMING BACK TO ANOTHER OBJECTION OF THE ASSESSEE IN ITS MISCELLANEOUS APPLICATION FILED FOR ALL THREE YEARS . THE AR FOR THE ASSESSE SUBMITTED THAT ALTHOUGH, THERE IS A SPECIFI C GROUND IN RELATION TO DISALLOWANCES OF INTEREST AND COMMISSION PAID ON LO ANS, BUT THERE IS NO SPECIFIC ADJUDICATION ON THOSE GROUNDS IN THE ORDER OF THE TRIBUNAL. WE FIND THAT ALTHOUGH, THE ASSESEE HAS TAKEN SPECIFIC GROUNDS CHALLENGING ADDITIONS MADE BY THE LD. AO TOWARDS DISALLOWANCES OF CONSEQUENT INTEREST PAID ON UNSECURED LOANS U/S 68 AND RELATED COMMISSION EXPENDITURE INCURRED IN RELATION TO SAID UNSECURED LOANS, BUT THE TRIBUNAL HAS BY INADVERTENT MISTAKE OMITTED TO CONSIDER AND ADJUDICATES THOSE GROUNDS. FURTHER, THE ISSUE OF ADDITION TOWARDS UNS ECURED LOANS, 10 MA NOS.413-415/MUM/2019 CONSEQUNET INTEREST PAID ON SAID LOAN AND RELATED C OMMISSION AND BROKERAGE EXPENSES ARE INTERRLATED AND INTERCONNECT ED, BECAUE THE FINDINGS OF ONE GROUND MAY BAHVE BEARING ON THE OTH ER GROUND AND HENCE ALL GROUNDS NEEDS TO BE CONSIDERED TOGETHER. IF, ONE GROUND IS CONOSDERED AND OTHER GROUND IS NOT ADJUDICATED, THE N CERTAINLY IT CONSTITUTES A MISTAKE ON FACE OF THE ORDER. THEREFO RE, WE ARE OF THE CONSIDERED VIEW THAT NON CONSIDERATION OF SPECIFIC GROUND TAKEN BY THE ASSESSEE CONSTITUTES A MISTAKE APPARENT ON RECORD, WHICH CAN BE RECTIFIED U/S 254(2) OF THE I.T.ACT, 1961. 6. IN THIS VIEW OF THE MATTER AND CONSIDERING FACTS AND CIRCUMSTANCES OF THIS CASE, WE ARE OF THE CONSIDERED VIEW THAT TH ERE IS AN ERROR IN THE ORDER OF THE TRIBUNAL, DATED 27/03/2019 IN ITA.NO.4 434/MUM/2018 TO 4436/MUM/2018 FOR AY 2011-12 TO 2013-14. HENCE, WE RECALLED THE ORDER OF THE TRIBUNAL IN ITA.NO.4434/MUM/2018 TO 44 36/MUM/2018 FOR AY 2011-12 TO AY 2013-14, VIDE ORDER DATED 27/03/20 19. THE REGISTRY IS DIRECTED TO POST THE APPEALS FOR HEARING IN DUE COU RSE. 7. IN THE RESULT, ALL MISCELLANEOUS APPLICATIONS FI LED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.12.2019. SD/- SD/- MAHAVIR SINGH G . MANJUNATHA JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 09 .12.2019 THIRUMALESH, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 11 MA NOS.413-415/MUM/2019 BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//
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