Shri Dananjaya Rao, Hyderabad V. DCIT, Circle-1(3), Hyderabad

MA 42/HYD/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0241 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 05-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: N PURNACHANDRA RAO
• Keywords: Rectification of order; Additional evidence; Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMB ER MA NO. (IN ITA NO.) ASSESS-MENT YEAR APPLICANT RESPONDENT MA NO.41/HYD/2013 (IN ITA 443/HYD/2012) 2002-03 SHRI B. DHANUNJAYA RAO, HYDERABAD (PAN ADHPB 1821 A) DY. COMMISSIONER OF INCOME-TAX CIRCLE 1(3), HYDERABAD MA NO.42/HYD/2013 (IN ITA 444/HYD/2012) 2006-07 MA NO.43/HYD/2013 (IN ITA 445/HYD/2012) 2003-04 SMT.B.SEETA RATNAM, HYDERABAD (PAN AGKPB 9150 E) DY. COMMISSIONER OF INCOME-TAX CIRCLE 1(3), HYDERABAD MA NO.44/HYD/2013 (IN ITA 446/HYD/2012) 2006-07 APPLICANTS BY : SHRI N.PURNACHANDRA RAO RESPONDENT BY : SHRI M.H.NAIK DATE OF HEARING 22.03.2013 DATE OF PRONOUNCEMENT 19.04. 2 013 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: BY THESE APPLICATIONS UNDER S.254(2) OF THE INCOM E-TAX ACT. 1961, THE ASSESSEES SEEK RECTIFICATION/RECALL OF TH E ORDER OF THIS TRIBUNAL DATED 14.12.2012 IN ITA NO.S.443 TO 446/HYD/2012 FO R THE ASSESSMENT YEARS 2002-03 AND 2006-07, ON THE GROUND THAT CERTAIN MIS TAKES APPARENT FROM THE RECORD HAVE CREPT INTO THE SAME. 2. AT THE OUTSET, LEARNED COUNSEL OR THE ASSESSEES POINTED OUT THAT THERE IS A MISTAKE IN NOTING THE APPEARANCE FOR THE ASSESSEE AT THE TIME OF HEARING ON THE APPEALS, INASMUCH THE NAME OF ONE P .V.RAMACHANDRA RAO WAS MENTIONED WHEREAS THE NAME SHRI N.PURNACHANDRA RAO SHOULD HAVE MA NOS.41 TO 44/HYD/2013 (IN ITA NO.443 TO 446/HYD/2012) SHRI B.DHANUNJAYA RAO AND ANR., HYDERABAD. 2 BEEN MENTIONED. WE FIND, THERE IS INDEED A MISTAKE APPARENT FROM RECORD IN NOTING THE APPEARANCE ON BEHALF OF THE ASSESSEES IN THE CAUSE TITLE OF THE ORDER. WE ACCORDINGLY RECTIFY THE SAME, AND DIRECT THAT THE NAME SHRI N.PURNACHANDRA RAO SHOULD BE READ IN PLACE OF SHR I P.V.RAMCHANDRA RAO AGAINST ASSESSEES BY IN THE APPEARANCES PART OF T HE CAUSE-TITLE OF THE ORDER OF THE TRIBUNAL DATED 14.12.2012. WE ORDER ACCORDI NGLY. 3. IT IS FURTHER MENTIONED THAT AT THE TIME OF HE ARING, THE LEARNED DEPARTMENTAL REPRESENTATIVE BROUGHT TO THE NOTICE O F THE BENCH, THE RELEVANT PARA OF THE ORDER OF THE CIT(A) WHEREIN A MENTION W AS MADE ABOUT THE PROPERTY AGAINST WHICH ADVANCES WERE DRAWN FROM THE COMPANY, WHERE CONSTRUCTION TOOK PLACE, BY MORTGAGING THE BUILDING AND AVAILING THE CREDIT FACILITIES FORM THE BANK, BUT POINTED OUT THAT FROM THE LIST OF DOCUMENTS APPEARING IN THE SANCTION LETTER ISSUED BY THE BANK DOES NOT HAVE THE DETAILS RELATING TO THE SAID PROPERTY AND HENCE CONTENDED T HAT THE ADVANCES ARE THE DEEMED DIVIDEND. HOWEVER, THE TRIBUNAL DIRECTED TO PRODUCE SUCH DETAILS SHOWING THAT THIS PARTICULAR PROPERTY WAS MADE EITH ER AS A COLLATERAL SECURITY OR MORTGAGED IN THE BANK FOR GETTING SANCTIONS, ETC ., SUBJECT TO WHICH THE CASE WAS HEARD. FURTHER, THE DEPARTMENTAL REPRESEN TATIVE HAS NOT RAISED ANY FURTHER CONTENTIONS. IN OBEDIENCE TO THE DIREC TIONS OF THE TRIBUNAL, IT IS STATED THAT THE ASSESSEE SUBMITTED NECESSARY DETAIL S ON 5.11.2012. HOWEVER, WITHOUT CONSIDERING THE FACT OF SUBMITTING THE REQUIRED INFORMATION AS DIRECTED BY THE TRIBUNAL, IT IS PLEADED, THE TRI BUNAL DISPOSED OFF THE APPEALS WITH COMMON OBSERVATIONS MADE IN PARA 12 O F ITS ORDER DATED 14.12.2012. IN THIS CONNECTION IT IS SUBMITTED TH AT THE LETTER ISSUED BY THE ANDHRA BANK, SULTAN BAZAR BRANCH, HYDERABAD DATED 2 7.9.2012 REFLECTING THE PROPERTY BEARING NO.8-2-293/82/NL/61A, INCLUDED IN THE LIST OF PROPERTIES AGAINST WHICH CREDIT LIMITS WERE SANCTIONED, WAS SU BMITTED AS PER THE DIRECTIONS OF THE TRIBUNAL FOR SUBSTANTIAL CAUSE UN DER RULE 29 OF THE ITAT MA NOS.41 TO 44/HYD/2013 (IN ITA NO.443 TO 446/HYD/2012) SHRI B.DHANUNJAYA RAO AND ANR., HYDERABAD. 3 RULES AND NOT AS AN ADDITIONAL EVIDENCE. REITERATI NG THESE CONTENTIONS, LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO FILED WRI TTEN SUBMISSIONS, AND SUBMITTED THAT THERE IS MISTAKE IN THE ORDER OF THE TRIBUNAL IN APPRECIATING THE FACTS OF THE CASE IN RELATION TO THIS ISSUE, AN D AS SUCH THE ORDER OF THE TRIBUNAL ON THIS ISSUE IS LIABLE TO RECTIFIED OR RE CALLED. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE CONTRARY, STRONGLY SUPPORTED THE ORDER OF THE TRIBUNAL, STATI NG THAT THERE IS NO MISTAKE APPARENT FROM RECORD, AS POINTED OUT BY THE ASSESSE ES IN THE PRESENT PETITIONS. 5. WE HEARD BOTH SIDES AND PERUSED THE ORDER OF TH IS TRIBUNAL DATED 14.12.2012, IN THE LIGHT OF VARIOUS AVERMENTS MADE IN THE PRESENT APPLICATION. ON CAREFUL CONSIDERATION OF THE MATT ER AND ON DUE VERIFICATION OF THE MATERIAL RECORD, WE FIND THAT NO SPECIFIC DIREC TION HAS BEEN GIVEN BY THE TRIBUNAL TO THE ASSESSEES TO FURNISH RELEVANT EVIDE NCE TO SUBSTANTIATE ITS CLAIM THAT THE PROPERTY IN QUESTION WAS MORTGAGED I N FAVOUR OF THE ANDHRA BANK. IT MAY BE THAT THE ASSESSEE HAS FILED THE LE TTER OF THE BANK DATED 27.9.2012 OF THE BANK, ON HIS OWN, TO COUNTER THE C ONTENTIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE BEFORE THE TRIBUNAL. T HAT BEING SO, THERE IS NO MISTAKE, IN OUR OPINION, IN THE ORDER OF THE TRIBUN AL IN SO FAR AS TREATING THE SAID LETTER OF THE BANK FILED BY THE ASSESSEES AS AN ADDITIONAL EVIDENCE. FURTHER, EVEN THOUGH THE TRIBUNAL HAS NOT ADMITTED THE SAID LETTER, FILED BEFORE IT AS AN ADDITIONAL EVIDENCE, IT PROCEEDED T O DEAL WITH THE MERITS OF THE SAID LETTER AND FOUND NO MERIT IN THE CASE OF THE A SSESSEE EVEN IF SUCH LETTER WAS TAKEN ON RECORD, BY ADMITTING THE ADDITIONAL EV IDENCE. RELEVANT OBSERVATIONS OF THE TRIBUNAL IN THAT BEHALF ARE AS FOLLOWS. 12. IT WILL BE PERTINENT TO MENTION HERE THAT LON G AFTER THE HEARING OF THE APPEAL WAS CLOSED, THE ASSESSEES, ON 5.11.20 02, HAS SUBMITTED A COPY OF THE LETTER OF THE ANDHRA BANK DATED 27.9.2012, INDI CATING THAT A PROPERTY OF THE MA NOS.41 TO 44/HYD/2013 (IN ITA NO.443 TO 446/HYD/2012) SHRI B.DHANUNJAYA RAO AND ANR., HYDERABAD. 4 DIRECTOR, SMT. B.SEETARATNAM, WAS GIVEN AS A SECURI TY TOWARDS CREDIT FACILITY AVAILED BY THE COMPANY. HOWEVER, IN THE ABSENCE OF ANY PETITION BY THE ASSESSEE SEEKING ACCEPTANCE OF THE ADDITIONAL EVIDE NCE, NO COGNIZANCE CAN BE TAKEN BY US, WHILE ADJUDICATING UPON THE ISSUE IN D ISPUTE. EVEN ACCEPTING THAT LETTER ALSO DOES NOT LEAD US TO ANY CONCLUSION SO FAR AS ASSESSEES CLAIM OF MORTGAGING THE PROPERTY IS CONCERNED, AS T HE SAID LETTER DOES NOT ESTABLISH THE FACT THAT THE PROPERTY IN QUESTIO N WAS ACTUALLY MORTGAGED WITH THE BANK. THAT APART, THE LANGUAGE OF S.2(22)(E) IS CLEAR AND UNAMBIGUOUS AND DOES NOT LEAVE ANY SCOPE FOR INTERPRETING IT IN A DIFFERENT MANNER. THE SAID PROVISION BEING A DEEMING PROVISION, IT HAS TO BE INTERPRETED STRICTLY IN ACCORDANCE WITH T HE SPIRIT OF THE LANGUAGE CONTAINED THEREIN. AS WE HAVE ALREADY RE ITERATED HEREINABOVE, THE PAYMENTS MADE BY THE COMPANY TOWAR DS ADVANCES TO THE ASSESSEE FULFILS ALL THE CHARACTERISTICS OF DI VIDEND AS ENVISAGED IN S.2(22)(E) OF THE ACT. IN THE AFORESAID CIRCUMSTAN CES, THERE ACNN0T BE ANY OTHER CONCLUSION EXCEPTING TO CONSIDER THE ADVA NCES GIVEN BY THE COMPANY TO THE ASSESSEES AS DEEM ED DIVIDEND AT THE HANDS OF THE ASSESSEE. THE CASE-LAW RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO SUPPORTS THIS VIEW. 6. THUS, THE TRIBUNAL HAS DECIDED THE ISSUE ON V ARIOUS COUNTS AND NON-ADMISSION OF THE EVIDENCE IN THE FORM OF BANKS LETTER FILED BY THE LEARNED COUNSEL FOR THE ASSESSEE, DID NOT CLINCH THE ISSUE AGAINST THE ASSESSEE. THAT BEING THE CASE, EVEN ADMISSION OF THE SAID LETTER, WOULD NOT HAVE MADE ANY CHANGE TO THE CONCLUSION ARRIVED AT BY THE TRIBUNAL . IN ANY VIEW OF THE MATTER, THEREFORE, THERE IS NO MISTAKE APPARENT FRO M RECORD IN THE ORDER OF THE TRIBUNAL IN ITS DECISION ON THIS ISSUE. IN ANY EVENT, THE DECISIONS/OBSERVATIONS OF THE TRIBUNAL- (A) TO TREA T THE LETTER OF THE ANDHRA BANK FILED BY THE LEARNED COUNSEL FOR THE ASSESSEE AS ADDITIONAL EVIDENCE; (B) NOT TO ADMIT THE SAID ADDITIONAL EVIDENCE; AND (C) THE CONSEQUENTIAL FINDINGS EVEN IF THE SAID ADDITIONAL EVIDENCE IS ADMITTED AN D CONSIDERED- ARE CONSCIOUS ONES, AND ALL THAT THE ASSESSEE IS SEEKING BY THE PRESENT APPLICATIONS IS A MERE REVIEW OF THOSE DECISIONS/OBSERVATIONS, WHICH IS NOT PERMISSIBLE IN THESE PROCEEDINGS UNDER S.254(2) OF THE ACT, THE SC OPE OF WHICH IS CONFINED TO MERE RECTIFICATION OF MISTAKES APPARENT FROM REC ORD. WE THEREFORE, FIND NO MERIT IN THE CONTENTIONS OF THE ASSESSEES IN THESE APPLICATIONS ON THIS ISSUE, WHICH ARE ACCORDINGLY REJECTED. MA NOS.41 TO 44/HYD/2013 (IN ITA NO.443 TO 446/HYD/2012) SHRI B.DHANUNJAYA RAO AND ANR., HYDERABAD. 5 7. IN THE RESULT, ALL THE FOUR APPLICATIONS OF TH E ASSESSEES ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 19.4.2013 SD/- (CHANDRA POOJARI) SD/- (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED/- 19 TH APRIL, 2012 COPY FORWARDED TO: 1. SHRI B.DHANUNJAYA RAO, SHRI ANJANEYULU & CO., CHART ERED ACCOUNTANTS, 30, BHAGYALAKSHMI NAGAR, GANDHINAGAR, HYDERABAD 2. SMT.B.SEETA RATNAM, SHRI ANJANEYULU & CO., CHARTER ED ACCOUNTANTS, 30, BHAGYALAKSHMI NAGAR, GANDHINAGAR, HYDERABAD 3 4. 5. 6. DY. COMMISSIONER OF INCOME - TAX, CIRCLE 1(3), HYDERABAD COMMISSIONER OF INCOME-TAX(APPEALS) II, HYDERABAD COMMISSIONER OF INCOME-TAX I, HYDERABAD DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.