Shri Suresh Kumar Neotia, V. ACIT, Circle - 7, Kolkata, Kolkata

MA 43/KOL/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7804 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-03-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 23-05-2011
• Court: TRIBUNAL
• Department Lawyers: D R SINDHAL
• Assessee Lawyers: D S DAMLE
• Keywords: Business income; Depreciation; Share purchase agreement; Opportunity of being heard; Principle of natural justice; Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- A , KOLKATA [ , ,, , . .. . . .. . , , , , ! ] [BEFORE SHRI MAHAVIR SINGH , JUDICIAL MEMBER & SRI C.D.RAO , ACCOUNTANT MEMBER] '' # '' # '' # '' # $ $ $ $ /M.A.NO.42/KOL/2011 $ $ $ $ / ITA NO. 770/(KOL) OF 2010 #% &'/ ASSESSMENT YEARA 2006-07 M/S.R.K.B.K.FISCAL SERVICES LTD., KOLKATA (PAN:AABCR 5623 E) A.C.I.T., CIRCLE-7, KOLKATA . (*+ / APPELLANT ) - # - VERSUS - (./*+/ RESPONDENT ) '' # '' # '' # '' # $ $ $ $ /M.A.NO.43/KOL/2011 $ $ $ $ / ITA NO.771/ (KOL) OF 2010 #% &'/ ASSESSMENT YEAR : 2006-07 SHRI SURESH KUMAR NEOTIA, KOLKATA (PAN:ABSPN 0223B) A.C.I.T., CIRCLE-7, KOLKATA . (*+ / APPELLANT ) - # - VERSUS - (./*+/ RESPONDENT ) '' # '' # '' # '' # $ $ $ $ /M.A.NO.44/KOL/2011 $ $ $ $ / ITA NO.772/(KOL) OF 2010 #% &'/ ASSESSMENT YEAR : 2006-07 M/S.LAKHAMI COMMERCIAL CO.LTD., KOLKATA (PAN AAACL 4341 A) A.C.I.T., CIRCLE-7, KOLKATA (*+ / APPELLANT ) # - VERSUS - (./*+/ RESPONDENT ) '' # '' # '' # '' # $ $ $ $ /M.A.NO.45/KOL/2011 $ $ $ $ / ITA NO.773/(KOL) OF 2010 #% &'/ ASSESSMENT YEAR : 2005-06 M/S.GOVIND COMMERCIAL CO.LTD, KOLKATA (PAN:AABCG 1643 D) A.C.I.T., CIRCLE-7, KOLKATA (*+ / APPELLANT ) # - VERSUS - (./*+/ RESPONDENT ) 2 '' # '' # '' # '' # $ $ $ $ /M.A.NO.46/KOL/2011 $ $ $ $ / ITA NO. 774/ (KOL) OF 2010 #% &'/ ASSESSMENT YEAR : 2006-07 SMT.BIMALA DEVI PODDAR, KOLKATA (PAN:EYPP 3823 Q) A.C.I.T., CIRCLE-7, KOLKATA (*+ / APPELLANT ) # - VERSUS - (./*+/ RESPONDENT ) *+ 0 1 / FOR THE APPELLANTS: SHRI D.S.DAMLE ./*+ 0 1 / FOR THE RESPONDENT: / SHRI D.R.SINDHAL 2#3 0 ! /DATE OF HEARING : 16.03.2012. 4& 0 ! /DATE OF PRONOUNCEMENT : 28.03.2012. 5 / ORDER .., ! PER SHRI C.D.RAO, AM THE ABOVE MISCELLANEOUS APPLICATIONS HAVE BEEN FILE D BY FIVE ASSESSEES TO RECALL THE ORDERS OF THE TRIBUNAL DATED 03.02.1011 VIDE ITA NOS.770-774/KOL/2010 PERTAINING TO A.YEAR 2006-07. 2. BY THESE MISCELLANEOUS APPLICATIONS THE ASSESSES WANT TO RECALL THE ORDER OF THIS TRIBUNAL DATED 03.02.2011 BY MAINLY STATING THAT TH E TRIBUNAL HAD DECIDED THE ISSUE WHICH WAS NOT AT ALL A GROUND BEFORE THE TRIBUNAL B Y THE REVENUE. BY REFERRING TO VARIOUS PARAS WHEREIN THE TRIBUNAL HAS GIVEN THE FI NDINGS ON NON COMPETE FEE OF RS.15 PER SHARE WHICH IS NEVER A GROUND BEFORE THE TRIBUNAL. 3. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L APPEARING ON BEHALF OF ASSESSEE HAS FILED AN AFFIDAVIT WHICH READS AS UNDE R :- 2. IN THE MEMORANDUM OF APPEAL AND THEREAFTER BY W AY OF ADDITIONAL GROUNDS THE REVENUE HAD TAKEN FOLLOWING GROUNDS OF APPEAL IN IT A NOS. 770 TO 774/KOL/2010 I) THAT THE LD. CIT (A) ERRED ON FACTS AND IN LAW, THAT CONTROLLING INTEREST HAS A SEPARATE EXISTENCE FROM THE SHARES AND IS SEPARATEL Y TRADABLE. II) THAT THE LD. CIT(A) ERRED IN HOLDING THAT FOR T HE PURPOSES OF CAPITAL GAINS ONLY THE PORTION OF RS. 74.20 SHOULD BE CONSIDERED AS SALE V ALUE AND THE BALANCE WAS NON TAXABLE IGNORING THE JUDGMENT OF MADRAS HIGH COURT IN THE CASE OF VENKATESH MINOR VS. CIT 234 ITR 367 WHERE THE FACTS WERE ABSOLUTELY IDENTICAL. III) THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOL DING THE CONTENTION OF THE ASSESSEE THAT CONSIDERATION AMOUNTING TO RS.28, 45,68,900/- WAS RECEIVED FOR PARTING WITH CONTROLLING INTEREST AND THUS WAS NOT TAXABLE. . 3 IV) THAT THE LD. CIT(A) ERRED IN HOLDING THAT THE D ECISION OF THE BOMBAY HIGH COURT IN THE CASE OF M/S. VODAFONE (2009) 311 ITR 46 SUPP ORTS THE CASE OF THE PRESENT ASSESSEE, WHEREAS IN FACT IT IS THE OTHER WAY ROUND . V) WITHOUT PREJUDICE, THE LD. CIT(A) HAS FURTHER ER RED IN HOLDING THAT THE BASIS OF VALUING THE ALLEGED NON-CONTROLLING EQUITY VALUE AT RS. 74.20 PER SHARE WAS LOGICAL, IGNORING THE FACT THAT EVEN THE QUOTED VALUE OF THE SUBJECT SHARES AS ON THE DATE OF TRANSFER, WAS AT A MUCH HIGHER AMOUNT. VI) THAT, WITHOUT PREJUDICE, THE LD. CIT(A) HAS PAT ENTLY ERRED IN IGNORING THE PROVISIONS OF SECTION 55(2)(A) WHEREBY THE COST OF ACQUISITION IN RELATION TO A RIGHT TO MANUFACTURE, PROD. CE OR PROCESS, ANY ARTI CLE OR THING, OR RIGHT TO CARRY ON ANY BUSINESS IS DEEMED TO BE TAKEN AS NIL. VII) THAT THE APPELLANT BEGS THE LIBERTY TO ADD, DE LETE, ALTER, MODIFY OR TAKE NEW GROUNDS OF APPEAL. 3. THE A BENCH OF THE INCOME TAX APPELLATE TRIBUN AL, KOLKATA WHILE ADJUDICATING THE REVENUES ABOVE APPEALS IN PARA NOS. 22.18 & 25 OF ITS ORDER DATED 03.02.2011 HELD AS FOLLOWS: - A) THE FULL VALUE OF CONSIDERATION FOR TRANSFER OF IMPUGNED SHARES IS RS. 90/- PER SHARE FOR THE PURPOSE OF CALCULATION OF CAPITAL GAINS: B) RS. 15/- PER SHARE IS TO BE ASSESSED AS INCOME U NDER THE HEAD BUSINESS AS PER SECTION 28(VA) 4. THE DIRECTIONS OF THE TRIBUNAL REQUIRING ASSESSM ENT OF RS.15 PER SHARE AS INCOME UNDER THE HEAD BUSINESS AS PER SEC 28(VA) WERE CO NTRARY TO THE GROUNDS OF APPEALS TAKEN BY THE REVENUE. THE FINDINGS WERE RECORDED EV EN THOUGH NO ARGUMENTS TO THAT EFFECT WAS MADE BY THE REVENUE WHEN THE APPEALS WER E HEARD. 5. THE FINDINGS RECORDED BY THE TRIBUNAL ON THE ISS UES NOT COVERED BY THE GROUNDS OF APPEAL HAVE RESULTED IN THE ENHANCEMENT IN THE ASSE SSMENT OF THE ASSESSEE, WHICH IS NOT PERMISSIBLE. 6. THE ORDER OF THE TRIBUNAL DATED 03/02/2011 THERE FORE SUFFERS FROM APPARENT ERRORS AND THEREFORE THE SAID ORDER NEEDS TO BE RECALLED, FOR DECISION AFRESH ONLY WITH REFERENCE TO GROUNDS TAKEN BY THE REVENUE. 7. THAT THE STATEMENTS MADE IN THE FOREGOING PARAGR APHS ARE THE KNOWLEDGE OF THE DEPONENT. 3.1. IN SUPPORT OF THIS AFFIDAVIT HE FILED WRITTEN SUBMISSIONS DATED 08.09.2011 AND RELIED ON SEVERAL CASE LAWS WHEREIN VARIOUS HIGH CO URTS HELD THAT THE TRIBUNAL HAS EXCEEDED ITS JURISDICTION WHILE DECIDING THE APPEAL BEFORE THEM. 3.2. THE CONTENTION OF THE ASSESSEE IS SUMMARIZED AS UNDER :- (A) THE TRIBUNAL SUO MOTO RECORDED ITS FINDING ON AN ISSUE WHICH WAS NEVER RAISED BY THE AO IN HIS ASSESSMENT ORDER NOR IT WAS ADJUDI CATED BY THE CIT(A) NOR ANY GROUND OF APPEAL IN RESPECT THEREOF WAS TAKEN BY TH E REVENUE. AS SUCH THE TRIBUNAL UNILATERALLY COULD NOT ENLARGE THE SCOPE OF THE APP EAL. THE ENLARGEMENT OF THE SCOPE OF APPEAL BY THE TRIBUNAL WAS THEREFORE AGAINST THE PO WERS CONFERRED ON IT BY SEC.254(1) OF THE ACT. B) THE FINDING OR DIRECTION OF THE TRIBUNAL TO ASSE SS RS.15 PER SHARE AS BUSINESS INCOME U/S 28(VA) OF THE ACT AMOUNTED TO ENHANCEMEN T BY THE TRIBUNAL WHICH POWER THE TRIBUNAL DID NOT HAVE. 4 C) BEFORE ISSUING DIRECTION FOR ASSESSMENT OF RS.15 .00 AS BUSINESS INCOME U/S 28(VA) THE TRIBUNAL HAD NOT AFFORDED ANY OPPORTUNITY OF BE ING HEARD TO THE PARTIES AND THE SAID FINDING WAS RECORDED IN COMPLETE BREACH OF PRI NCIPLE OF NATURAL JUSTICE AND WITHOUT CONSIDERING THE MERITS AND FACTS OF THE CAS E AND THEREFORE THE SAID FINDING IS LIABLE TO BE VACATED AND/OR RECALLED BY THE TRIBUNA L SINCE THE SAME IS RECORDED IN COMPLETE BREACH OF PRINCIPLES OF NATURAL JUSTICE. 4. ON THE OTHER HAND THE LD. DR APPEARING ON BEHALF OF THE REVENUE HAD ALSO SUBMITTED A WRITTEN SUBMISSION TO COUNTER THE ARGUM ENTS OF THE LD. AR FOR ASSESEE AND FURTHER CONTENDED THAT THE CASE LAWS REFERRED BY TH E LD. AR THE HIGH COURTS HAS THOSE SAID THAT THE TRIBUNAL IS NOT HAVING JURISDICTION A ND NONE OF THE CASE LAWS REFERRED BY THE LD.AR ARE ON THE ISSUE THAT WHEN ONCE THE JURIS DICTION HAS BEEN EXCEEDED BY THE TRIBUNAL THE SAME CAN BE RECTIFIED UNDER THE MISCEL LANEOUS PETITION BY THIS TRIBUNAL ITSELF. THEREFORE HE REQUESTED THAT THE ISSUE RAISE D BY THE ASSESSEE IS NOT WITHIN THE PURVIEW OF THE PROVISION OF SECTION 254(2) OF THE IT ACT. THEREFORE HE REQUESTED TO DISMISS THE MISCELLANEOUS APPLICATIONS OF THE ASSES SES. 5. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD, WE CONSIDER IT FIT TO ABSTRACT THE RELEVANT PORTION OF THE TRIBUNAL ORDER WHICH IS DISPUTED BY THE LD. COUNSEL FOR ASSE SSEE. WHILE DISPOSING OF FIVE APPEALS THE TRIBUNAL HAS DISCUSSED THE FACTS UPTO P ARAGRAPH 15 FROM PAGE NOS. 1 TO 37. AT PARA 16 THE TRIBUNAL HAS SUMMARIZED THE LD. DRS SUBMISSIONS. AFTER THEY HAVE SUMMARIZED THE WRITTEN SUBMISSIONS FILED BY THE LD. DR DATED 18.06.2010, 29.06.2010 AND 15.09.2010. THE RELEVANT PORTION OF THE DISPUTE IS AS UNDER : IX NON COMPETE FEE OF RS.15 PER SHARE, WHICH FO RMS PART OF THE FULL VALUE OF CONSIDERATION OF RS.105/- PER SHARE AS PER SAID AGR EEMENT DATED 28-01-06, IS ALSO TAXABLE AS PER PROVISION OF SECTION 28(VA) INSERTED BY THE FINANCE ACT02 W.E.F. 01-04- 2003. AGAIN AT PARA 17 THE TRIBUNAL HAS OBSERVED THAT 17. IT WAS, THEREFORE, CONTENDED THAT THE ORDER O F THE AO BE UPHELD. AT PARA 18 THE TRIBUNAL HAS SUMMARIZED THE SUBMISSI ONS MADE BY THE LD. COUNSEL FOR ASSESSEE. AT PARA 20 THE BENCH REQUESTED THE RESPO NDENT-ASSESSEE TO FURNISH THE FOLLOWING DOCUMENTS A. EVIDENCE OF HOLICIM COMPLYING WITH REGULATIONS-7 OF SEBI REGULATIONS 1997. B. COPY OF D-MAT A/C OF THE ASSESSEE PORTRAYING TRA NSFER OF IMPUGNED SHARES. 5 C. -COPY OF EXHIBIT-B OF AGREEMENT DATED 28-01-06 B EING POWER OF ATTORNEY AND BOARDS RESOLUTIONS D. ANNUAL REPORTS OF THE COMPANY ENDING IN 2005 AND 2006. E. MEMORANDUM OF ARTICLE OF ASSOCIATION OF M/S. GAC L F. COMPOSITION OF BOARD OF DIRECTORS PRIOR AND SUBS EQUENT TO SHARE SALE AGREEMENT. 20.1 HOWEVER, THE ASSESSEE HAS SHOWN HIS INABILITY TO FURNISH THE FOLLOWING DOCUMENTS: A.. COPY OF D-MAT ACCOUNT B. POWER OF ATTORNEY & BOARDS RESOLUTIONS BEING EX HIBIT-B OF AGREEMENT DATED 28.01.06. IT HAS ALSO FAILED TO FURNISH ANY EVIDENCE OF HOLIC IM COMPLYING WITH REGULATIONS -7 OF SEBI REGULATIONS 1997. . AFTER TAKING INTO CONSIDERATION OF THE ABOVE, THE T RIBUNAL HAS GIVEN ITS FINDINGS AT PARA 22.1. WHICH IS AS UNDER :- 22.1 AT THE OUTSET WE WOULD LIKE TO CLARIFY THAT E VEN THOUGH THE REVENUE HAS TAKEN VARIOUS GROUNDS OF APPEAL, THE SUBJECT MATTER OF AP PEAL BEFORE THE TRIBUNAL IS THE TRANSACTIONS ENTERED INTO BY THE PARTIES AS PER SHA RE PURCHASE AGREEMENT DATED 28- 01-06. IT IS VERY UNUSUAL THAT NEITHER THE AO NOR T HE LD.CIT(A) HAS TAKEN NOTE OF ARTICLE 5 OF THE SAID AGREEMENT, WHERE HAS BEEN CLE ARLY STATED THAT RS. 15/- PER SHARE IS BEING PAID PER SALE SHARE TOWARDS NON-COMPETE UN DERTAKING, WHICH IS INCLUDED IN THE SALE CONSIDERATION PAYABLE TO THE SELLERS IN TE RMS OF ARTICLE 2.2 OF THE AGREEMENT. IN SUCH PECULIAR CIRCUMSTANCES, WE WILL GIVE OUR FA CTUAL FINDINGS ON THE ISSUE OF CAPITAL GAINS OR ANY OTHER INCOME ARISING OUT OF TH E TRANSACTIONS ENTERED INTO BY THE CONCERNED PARTIES AS PER SHARE PURCHASE AGREEMENT D ATED 28-01-06. THUS, THE CONTENTION OF THE ASSESSEE THAT THERE IS NO DISPUTE THAT CONTROLLING INTEREST WAS TRANSFERRED TOGETHER WITH SHARES IS NOT ACCEPTED BY US. WE WILL GIVE OUR FINDINGS ON THIS BASIS. AGAIN AT PARA 22.5.THE TRIBUNAL SUPPORTED THE ACTIO N OF THE ACTION PROPOSED TO TAKE IN PARA 22.1. BY STATING AT PARA 22.5. WHICH IS AS UND ER :- 22.5. IT IS A WELL SETTLED PRINCIPLE OF LAW THAT W HILE ANALYZING A DOCUMENT WHAT IS EXPRESSLY WRITTEN THEREIN AND THE SURROUNDING CIRCU MSTANCES ARE REQUIRED TO BE TAKEN INTO CONSIDERATION. NATURE AND CHARACTER OF TRANSAC TIONS ENTERED INTO THROUGH SUCH A DOCUMENT COULD NOT BE DETERMINED BY THE LABEL, WHIC H THE PARTIES MAY ASCRIBE TO THE TRANSACTION. AS SUCH THE HONBLE BOMBAY HIGH COURT IN THEIR JUDGEMENT IN THE CASE OF VODAPHONE INTERNATIONAL (SUPRA) IN PARA 140 HAVE ANLAYSED THE ABOVE POSITION OF LAW. AFTER DISCUSSING THE VARIOUS CLAUSES OF THIS SALE A GREEMENT THIS TRIBUNAL HAS FINALLY CONCLUDED AT PARA 22.12. WHICH IS AS UNDER :- 22.12. FROM THE RECITAL IN THE SAID AGREEMENT, R ELEVANT PORTIONS OF WHICH HAVE BEEN REPRODUCED BY US HEREINABOVE, IT IS CRYSTAL CLEAR T HAT THE SALE OF SHARE WAS COMPLETED ON 28.01.06. THE OBJECT OF SALE WAS THE SHARE AND F ULL VALUE OF SHARE SALE CONSIDERATION WAS RS.90/- PER SHARE. RS.15/- PER SH ARE WAS PAID BY THE PURCHASER ON 6 ACCOUNT OF NON-COMPETE UNDERTAKING. THUS, TOTAL SAL E CONSIDERATION OF RS.105/- PER SHARE CONSISTED OF ABOVE TWO ITEMS. IT DID NOT RELA TE TO TRANSFER OF ANY CONTROLLING INTEREST AS CLAIMED BY THE ASSESSEE. AS SUCH WHAT T HE ASSESSEE IS CLAIMING TO BE CONTROLLING INTEREST IS NOTHING, BUT FULFILLMENT OF NON-COMPETE UNDERTAKING. WE NOTE THAT EVEN WHEN THE LD. AR FOR THE ASSESSEE WAS ASKE D TO ADDRESS THE BENCH ON THE ISSUE OF NON COMPETE UNDERTAKING AS ENUMERATED IN THE SAID AGREEMENT DATED 28-01- 2006, THE LD. AR FOR THE ASSESSEE DID NOT ADDRESS T HE BENCH ON THE ISSUE. WE HAVE ALSO NOTED THAT THE AGREEMENT DT. 28.01.2006 HAVE NOT BE EN AMENDED IN ANY WAY AS STIPULATED IN THE SAID AGREEMENT. IN THE FACTS AND CIRCUMSTANCES OF THEC ASE, WE ARE OF THE CONSIDERED OPINION THAT THE AMOUNT RECEIVED BY THE ASSESSEE FOR THE SAID NON- COMPETE UNDERTAKING IS SQUARELY COVERED BY SECTION 28(VA) OF THE ACT. IT HAS NOTHING TO DO WITH TRANSFER OF CONTROLLING INTEREST. WE, TH EREFORE, HOLD THAT IN TERMS OF SAID AGREEMENT RS.15/- PER SHARE IS ASSESSABLE AS INCOME UNDER THE HEAD BUSINESS AS PER PROVISION OF SECTION 28(VA) OF THE ACT. AND AGAIN AT PARA 22.18 THE TRIBUNAL HAS EXPRESSED ITS OPINION ON RS.15/- PER SHARE WHICH IS AS UNDER : B. RS.15/- PER SHARE IS TO BE ASSESSED AS INCOME U NDER THE HEAD BUSINESS AS PER SECTION 28(VA). SIMILARLY, AT PARA 25 THIS TRIBUNAL HAS OBSERVED AS UNDER :- B. RS.15/- PER SHARE IS TO BE ASSESSED AS INCOME U NDER THE HEAD BUSINESS AS PER SECTION 28(VA). 5.1 AFTER CAREFUL PERUSAL OF THE WRITTEN SUBMISSION S MADE BY BOTH THE PARTIES AND ON PERUSAL OF THE ABOVE OBSERVATIONS MADE BY THE TR IBUNAL, THE CONTENTION OF THE ASSESSEE THAT TRIBUNAL UNILATERALLY COULD NOT ENLAR GE THE SCOPE OF THE APPEAL IS NOT ACCEPTED. WHILE DEALING THIS ISSUE THIS TRIBUNAL IT SELF HAS OBSERVED AT PARA 22.1. WHICH IS AS UNDER :- 22.1 AT THE OUTSET WE WOULD LIKE TO CLARIFY THAT E VEN THOUGH THE REVENUE HAS TAKEN VARIOUS GROUNDS OF APPEAL, THE SUBJECT MATTER OF AP PEAL BEFORE THE TRIBUNAL IS THE TRANSACTIONS ENTERED INTO BY THE PARTIES AS PER SHA RE PURCHASE AGREEMENT DATED 28- 01-06. IT IS VERY UNUSUAL THAT NEITHER THE AO NOR T HE LD.CIT(A) HAS TAKEN NOTE OF ARTICLE 5 OF THE SAID AGREEMENT, WHERE HAS BEEN CLE ARLY STATED THAT RS. 15/- PER SHARE IS BEING PAID PER SALE SHARE TOWARDS NON-COMPETE UN DERTAKING, WHICH IS INCLUDED IN THE SALE CONSIDERATION PAYABLE TO THE SELLERS IN TE RMS OF ARTICLE 2.2 OF THE AGREEMENT. IN SUCH PECULIAR CIRCUMSTANCES, WE WILL GIVE OUR FA CTUAL FINDINGS ON THE ISSUE OF CAPITAL GAINS OR ANY OTHER INCOME ARISING OUT OF TH E TRANSACTIONS ENTERED INTO BY THE CONCERNED PARTIES AS PER SHARE PURCHASE AGREEMENT D ATED 28-01-06. THUS, THE CONTENTION OF THE ASSESSEE THAT THERE IS NO DISPUTE THAT CONTROLLING INTEREST WAS TRANSFERRED TOGETHER WITH SHARES IS NOT ACCEPTED BY US. WE WILL GIVE OUR FINDINGS ON THIS BASIS. 7 WE FIND THAT THERE IS NO MISTAKE APPARENT FROM RECO RD AS POINTED OUT BY THE LD. COUNSEL FOR ASSESSEE. IN THIS REGARD THE TRIBUNAL I TSELF HAS CLARIFIED ITS POSITION AT PARA 22.5. WHICH WAS ABSTRACTED IN THE PRECEDING PARAGRA PHS. 5.2. IN ADDITION TO THE ABOVE, IT IS OBSERVED THAT IN THE CASE OF INDIAN MANAGEMENT ADVISORS AND LEASING (P) LTD. VS COMMISSIONER OF IN COME TAX AS REPORTED IN 289 ITR 179 (DEL) THE HONBLE DELHI HIGH COURT WHILE DE ALING WITH THE POWERS OF THE TRIBUNAL HAS OBSERVED AS UNDER :- DEVIATION FROM FINDINGS OF LOWER AUTHORITIES VIS-A -VIS NATURE OF DOCUMENTWHERE THE TRIBUNAL FINDS THAT SOME DOCUMENT IS CRUCIAL TO ALLOW OR REFUSE THE CLAIM MADE BY THE ASSESSEE, IT CANNOT IGNORE THE REAL NATURE OF T HE DOCUMENT AND IT IS NOT BARRED IN COMING TO A DIFFERENT CONCLUSION THAN THE AO AND TH E CIT(A) ABOUT THE TRUE MEANING AND NATURE OF THE DOCUMENTASSESSEE RELYING UPON LE ASE AGREEMENTS ENTERED INTO BY IT WITH THE LESSEES TO CLAIM DEPRECIATION ON LEASED ASSETSAO AND THE CIT(A) HAVING NOT LOOKED INTO THE LEASE AGREEMENTS AND CONSIDERED THE CLAIM OF THE ASSESSEE ONLY ON THE FACE OF IT, NO FAULT CAN BE FOUND WITH THE TRIB UNAL FOR ANLYSING THE LEASE AGREEMENTS BY LOOKING INTO ITS DIFFERENT CLAUSES AN D FINDING ITS TRUE IMPORT. 5.3. AS REGARDING THE SECOND CONTENTION I.E. ENHAN CEMENT OF TAX LIABILITY WE ARE OF THE VIEW THAT THE TRIBUNAL BEING THE LAST FACT FIND ING BODY AND WE ARE OF THE VIEW THAT IN DECIDING THE ISSUE OF NON COMPETE FEE OF RS.15 T HE TRIBUNAL HAS NOT EXCEEDED ITS JURISDICTION AS INDICATED IN PARA 5.1 AND 5.2. THEN THE TAX LIABILITY IS A CONSEQUENTIAL EFFECT AND HAS NOT COME AS A MISTAKE APPARENT FROM RECORD. IN THIS CONNECTION WE RELY ON THE DECISION OF HONBLE HIMACHAL PRADESH HIGH CO URT IN THE CASE OF CIT VS H.P.STATE FOREST CORPORATION LTD. (2010) 230 CTR 28 4 WHEREIN THE HONBLE HIMACHAL PRADESH HIGH COURT WHILE COMMENTING UPON THE POWERS OF THE TRIBUNAL HAS OBSERVED THAT DIRECTION TO RESTRICT INCOME WHILE SETTING ASIDE AS SESSMENTWHILE REMANDING THE MATTER TO DO ASSESSMENT ON THE BASIS OF AUDITED ACCOUNTS, TRIBUNAL, HOWEVER, HAD NO JURISDICTION, WHATSOEVER, TO HAVE FURTHER GIVEN A DIRECTION THAT THE INCOME OF THE ASSESSEE COULD NOT BE ASSESSED AT LESS THAN THE AMO UNT OF INCOME RETURNED BY IT IN THE RETURNS WHICH WERE TREATED TO BE NON EST BY THE A OFURTHER, THE TRIBUNAL COULD NOT HAVE GIVEN A DIRECTION, WHILE DISPOSING OF THE RECTIFICATION APPLICATIONS, THAT THE INCOME OR FRESH ASSESSMENT SHOULD NOT BE ASSESSED A T AN AMOUNT ABOVE THE INCOME ASSESSED UNDER S. 144AO SHALL ASSESS THE INCOME AF RESH WITHOUT BEING BOUND BY ANY LOWER OR UPPER LIMIT AS LAID DOWN BY THE TRIBUNAL 8 5.4. KEEPING IN VIEW OF THE ABOVE RATIO LAID DOWN B Y HONBLE HIMACHAL PRADESH HIGH COURT AND THE OBSERVATIONS MADE BY THIS TRIBUN AL AT PARAS 5.1. AND 5.2. THE SECOND CONTENTION OF THE ASSESSEE IS NOT ACCEPTABLE AND CANNOT CONSIDER THE SAME AS A MISTAKE APPARENT FROM RECORD. 5.5 .HOWEVER, AS REGARDING THE THIRD CONTENTION THA T THE ASSESSEE HAS NOT BEEN GIVEN PROPER OPPORTUNITY OF BEING HEARD, THAT THE TRIBUNA L HAS NOT EXCEEDED ITS JURISDICTION. HOWEVER, WE FURTHER OBSERVE THAT THE TRIBUNAL HAS G IVEN ITS OPINION ON NON COMPETE FEE OF RS.15/- PER SHARE WITHOUT GIVING PROPER OPPO RTUNITY OF BEING HEARD TO ASSESSEE WHICH IS APPARENT FROM THE ABOVE RECORDING OF THE F INDINGS AT PARA 20.1. AND FROM THE ORDER SHEET WHEREIN THE FIRST HEARING OF THIS CASE BEFORE THE BENCH WHO PASSED THE ORDER WAS ON 10.01.2011. THE SAME HAS BEEN KEPT AS PART HEARD AND ADJOURNED TO 11.01.2011 AND AGAIN THE SAME HAS BEEN ADJOURNED ON 12.01.2011. THAT MEANS THEY HAVE COMPLETED THE HEARING OF THE CASE WITHIN THREE DAYS AND NOWHERE IT WAS RECORDED THAT THE ASSESSEE HAS ASKED TO ADDRESS ON NON COMPE TE FEE. EVEN AT PARA NO.20 WHERE THE BENCH REQUESTED THE RESPONDENT-ASSESSEE TO FURN ISH THE RELEVANT DOCUMENTS THE SAME HAS NOT BEEN APPEARING IN THE TRIBUNAL ORDER. REGARDING THE NON-COMPETE FEE EXCEPT THE OBSERVATIONS MADE BY THE TRIBUNAL THAT T HE LD. AR OF THE ASSESSEE WAS ASKED BY THE BENCH ON THE ISSUE OF NON-COMPETE FEE OF RS.15/- AS NARRATED IN THE SAID AGREEMENT DATED 28.01.2006 WHICH WAS RECORDED AT PA RA 22.12. OF THE TRIBUNAL ORDER. KEEPING IN VIEW OF THE ABOVE FACTS, WE ARE OF THE V IEW THAT THIS TRIBUNAL WHILE DECIDING THE TAXABILITY OF NON COMPETE FEE HAS NOT GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN OUR CONSIDERED VIEW WHILE DECIDING THE ISSUE AFRESH WHICH WAS NEITHER BEFORE THE AO NOR BEFORE THE LD. CIT(A) THE TRIBUNAL SHOULD HAVE GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AT THIS JUNCTURE WE WOULD LIKE TO MENTION THE DECISION OF HONBLE SUPREME COU RTS OBSERVATIONS MADE IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. REPORTED IN 295 ITR 466 WHICH READS AS UNDER :- THE PURPOSE BEHIND ENACTMENT OF SEC. 254(2) IS BAS ED ON THE FUNDAMENTAL PRINCIPLE THAT NO PARTY APPEARING BEFORE THE TRIBUNAL SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED BY THE TRIBUNAL. THIS FUNDAMENTAL PRINCIP LE HAS NOTHING TO DO WITH THE INHERENT POWER OF THE TRIBUNAL. ONE OF THE IMPORTAN T REASONS FOR GIVING THE POWER OF RECTIFICATION TO THE TRIBUNAL IS TO SEE THAT NO PRE JUDICE IS CAUSED TO EITHER OF THE PARTIES APPEARING BEFORE IT BY ITS DECISION BASED O N A MISTAKE APPARENT FROM THE 9 RECORD. WHEN PREJUDICE RESULTS FROM AN ORDER ATTRIB UTABLE TO THE TRIBUNALS MISTAKE, ERROR OR OMISSION THEN IT IS THE DUTY OF THE TRIBUN AL TO SET IT RIGHT. ATONEMENT TO THE WRONG PARTY BY THE COURT OR THE TRIBUNAL FOR THE WR ONG COMMITTED BY IT HAS NOTHING TO DO WITH THE CONCEPT OF INHERENT POWER TO REVIEW. 5.6. RESPECTFULLY FOLLOWING THE ABOVE PROPOSITION OF THE HONBLE SUPREME COURT THE HONBLE DELHI HIGH COURT IN THE CASE OF LACHMAN DASS BHATIA HINGWALA (P) LTD. VS ACIT (2011) 330 ITR (DEL) 243 HAS OBSERVED THA T FUNDAMENTAL PRINCIPLE IS THAT NO PARTY APPEARING B EFORE THE TRIBUNAL SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED BY THE TRIBUNAL AND NO PREJUDICE IS CAUSED TO EITHER OF THE PARTIES BEFORE THE TRIBUNAL WHICH IS ATTRIBUTABLE TO THE TRIBUNALS MISTAKE, OMISSION OR COMMISSION AND IF THE SAME ERR OR IS A MANIFEST ERROR, THEN THE TRIBUNAL WOULD BE JUSTIFIED TO RECALL ITS ORDER WH ILE EXERCISING THE POWER OF RECTIFICATION UNDER S. 254(2), TRIBUNAL CAN RECALL ITS ORDER IN ENTIRETY IF IT IS SATISFIED THAT PREJUDICE HAS RESULTED TO THE PARTY WHICH IS A TTRIBUTABLE TO THE TRIBUNALS MISTAKE, ERROR OR OMISSION AND WHICH ERROR IS A MANIFEST ERR OR AND IT HAS NOTHING TO DO WITH THE DOCTRINE OR CONCEPT OF INHERENT POWER OF REVIEW . 5.7. KEEPING IN VIEW OF THE ABOVE PROPOSITIONS OF T HE HONBLE APEX COURT AND HONBLE DELHI HIGH COURT AND THE FACTS OF THE PRESE NT CASE, WE ARE OF THE VIEW THAT IN THIS CASE WHILE DECIDING THE NON-COMPETE FEE OF RS. 15/- PER SHARE THE TRIBUNAL HAS NOT GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN OUR CONSIDERED VIEW THIS WILL TANTAMOUNT TO A MISTAKE APPARENT FROM RECORD. THEREFORE, IN THE INTEREST OF JUSTICE, WE WOULD LIKE TO KEEP IN ABEYANCE THE FOLLOWING OBS ERVATIONS MADE BY THE TRIBUNAL ON ACCOUNT OF NON COMPETE FEE TILL THE DISPOSAL OF THE SAME AFRESH BY THE TRIBUNAL.. 5.8. IN PARA 22.12 .. WE, THEREFORE, HOLD THAT IN TERMS OF SAID AGREEMENT RS.15/- PER SHARE IS ASSESSABLE AS INCOME UNDER THE HEAD BUSINESS AS PER PROVISION O F SECTION 28(VA) OF THE ACT. 5.9. AT PARA 22.18 (B) . B. RS.15/- PER SHARE IS TO BE ASSESSED AS INCOME U NDER THE HEAD BUSINESS AS PER SECTION 28(VA) 5.10. AT PARA 25(B) . 10 B. RS.15/- PER SHARE IS TO BE ASSESSED AS INCOME U NDER THE HEAD BUSINESS AS PER SECTION 28(VA) 5.11. SINCE WE HAVE KEPT IN ABEYANCE THE ABOVE OBSE RVATIONS OF THE TRIBUNAL FOR WANT OF FRESH HEARING ON NON COMPETE FEE OF RS.15/- PER SHARE WE DIRECT THE REGISTRY TO FIX THE CASE IN DUE COURSE IN ORDER TO DISPOSE OF THE ISSUE IN RESPECT OF NON-COMPETE FEE OF RS.15/- PER SHARE. 6. IN THE RESULT THE MISCELLANEOUS APPLICATIONS OF ALL THE ASSESSEE ARE ALLOWED IN PART AS INDICATED ABOVE. ORDER PRONOUNCED IN THE COURT ON 28.03.2012. SD/- SD/- , , , , MAHAVIR SINGH, JUDICIAL MEMBER . .. . . .. . , ,, , ! ! ! ! , C.D.RAO, ACCOUNTANT MEMBER. ( (( (! ! ! !) )) ) DATE: 28.03.2012. 5 0 .' 6 '&7- COPY OF THE ORDER FORWARDED TO: 1. M/S.R.K.B.K.FISCAL SERVICES, PVT. LTD., 216, A.J .C.BOSE ROAD, KOLKATA-700017. 2..SHRI SURESH KUMAR NEOTIA, 7/2, QUEENS PARK, BALL YGUNJE, KOLKATA-700069. 3. M/S. LAKAHMI COMMERCIAL COMPANY LTD., 216, A.J.C .BOSE ROAD, KOLKATA-700017. 4. M/S.GOVIND COMMERCIAL COMPANY LTD., 216, A.J.C.B OSE ROAD, KOLKATA-700017 5. SMT.BIMALA DEVI PODDAR, 7/2, QUEENS PARK, BALLYG UNJE, KOLKATA-700069. 6. A.C.I.T., CIRCLE-7, KOLKATA 10. CIT. 11. CIT(A)-VIII, KOLKATA 11. DR, KOLKATA BENCHES, KOLKATA /' ./ TRUE COPY, 5#2/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.)