RATIONAL ART & PRESS P.LTD, MUMBAI V. DCIT CEN CIR 8 ( 1) , MUMBAI

MA 449/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6744 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 05-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GURBINDER SINGH
• Keywords: Business income; Search and seizure

Judgement Text

P A G E | 1 M.A. NO.449/MUM/2019 (ARISING OUT OF ITA NO.7615/MUM/2016) RATIONAL ART & PRESS PVT. LTD. VS. DY. CIT, CC - 8(1) A.Y. 2010 - 11 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH , M UMBAI BEFORE SHRI M. BALAGANESH , AM AND SHRI RAVISH SOOD, JM M.A. NO. 449 /MUM/2019 (ARISING OUT OF ITA NO.7615/MUM/2016 ) ( / ASSESSMENT YEAR: 2010 - 11 ) RATIONAL ART & PRESS PVT. LTD. 21, NIRMAL, NARIMAN POINT, MUMBAI 400 021 / VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 8(1) AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020 ./ ./ PAN NO. AAACR7185E ( / APPLICANT) : ( / RESPONDENT ) / APPLICANT BY : SHRI PANKAJ R. TOPRANI, A.R. / RESPONDENT BY : SHRI GURBINDER SINGH , D.R / DATE OF HEARING : 12 .02 .20 21 / DATE OF PRONOUNCEMENT : 2 6 . 03 .202 1 / O R D E R PER RAVISH SOOD, JM: THE PRESENT MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE COMPANY ARISES FROM THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF ITS APPEAL I.E M/S RATIONAL ART & PRESS PVT. LTD. VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 44, MUMBAI IN ITA NO. 7615/MUM/2016 FOR A.Y. 2010 - 11. P A G E | 2 M.A. NO.449/MUM/2019 (ARISING OUT OF ITA NO.7615/MUM/2016) RATIONAL ART & PRESS PVT. LTD. VS. DY. CIT, CC - 8(1) A.Y. 2010 - 11 2. THE LD. AUTHORIZED REPRESENTATIV E (FOR SHORT A.R) FOR THE ASSESSEE TOOK US THROUGH THE APPLICATION AND SUBMITTED THAT THE ORDER OF THE TRIBUNAL SUFFERED FROM CERTAIN MISTAKES WHICH WERE APPARENT FROM RECORD. IT WAS FURTHER SUBMITTED BY THE LD. A.R TH AT THE TRIBUNAL WHILE DISPOSING OFF ITS APPEAL HAD ALSO FAILED TO TAKE COGNIZANCE OF A JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF MANEK LAL AGARWAL VS. DCIT (2017) 396 ITR 721 (SC) AND THAT OF THE HONBLE HIGH COURT OF BOMBAY IN CIT VS. AKSHAY TEXTILE TRADING & AGENCIES PVT. LTD. ( 2008) 304 ITR 401 (BOM) . IT WAS SUBMITTED BY THE LD. A.R THAT THOUGH SUPPORT WAS DRAWN ON THE AFORESAID JUDICIAL PRONOUNCEMENTS IN THE COURSE OF HEARING OF THE APPEAL, HOWEVER, THE SAME WERE NOT CONSIDERED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL. THE ASSESSEE HAD ALONGWITH ITS MISCELLANEOUS APPLICATION FILED AN AFFIDAVIT, DATED 02 ND AUGUST, 2019 OF S HRI PANKAJ R. TOPRANI, ADVOCATE , THE LD. AUTHORIZED REPRESENTATIVE WHO HAD APPEARED IN THE COURSE OF THE APPELLATE PROCEEDING BEFORE THE TRIBUNAL. ON THE BASIS OF HIS AFORESAID CLAIM, IT WAS SUBMITTED BY THE LD. A.R THAT THE MISTAKES IN THE ORDER AND ALSO THE FAILURE ON THE PART OF THE TRIBUNAL TO CONSIDER THE AFORESAID JUDICIAL PRONOUNCEMENT S , HAD THUS , RENDERED THE ORDER PASSED WHILE DISPOSING OFF TH E APPEAL AS SUFFERING FROM MISTAKE S WHICH WERE AMENABLE FOR RECTIFICATION UNDER SEC.254(2) OF THE ACT. 3. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) OBJECTED TO THE APPLICATION FILED BY THE ASSESSEE. IT WAS SUBMITTED BY THE LD. D.R T HAT AS THE TRIBUNAL HAD DISPOSED OFF THE APPEAL BY WAY OF A SPEAKING ORDER, THEREFORE, NO MISTAKE EMERGED FROM ITS ORDER WHICH WOULD THEREIN RENDER THE SAME AMENABLE FOR RECTIFICATION UNDER SEC.254(2) OF THE ACT. 4. WE HAVE HEARD THE AUTHORIZED REPRESENTA TIVES FOR BOTH THE PARTIES , PERUSED THE APPLICATION FILED BY THE ASSESSEE AND ALSO THE MATERIAL AVAILABLE ON RECORD. WE WOULD MINCE NO WORDS IN OBSERVING THAT A PERUSAL OF THE APPLICATION FILED BY THE ASSESSEE REVEALS THAT IN THE GARB OF THE APPLICATION FI LED UNDER SUB - SECTION (2) OF SEC.254 OF THE ACT, IT H AS PRIMARILY SOUGHT REVIEW OF THE ORDER THAT WAS PASSED BY THE TRIBUNAL WHILE DISPOSING OFF ITS APPEAL . WE ARE AFRAID THAT AS THE TRIBUNAL IN EXERCISE OF THE POWERS VESTED WITH IT UNDER SUB - SECTION (2) SEC. 254 CANNOT REVIEW ITS ORDER, THEREFORE , THE EXHAUSTIVE SUBMISSION S FILED BY THE ASSESSEE TO IMPRESS UPON US THAT THE VIEW TAKEN BY THE TRIBUNAL WHILE D ISPOSING OFF THE APPEAL IS NOT CORRECT CANNOT BE ACCEPTED AND THUS , THE APPLICATION FILED BY IT TO THE SAID EXTENT IS LIABLE TO BE REJECTED. AT THE P A G E | 3 M.A. NO.449/MUM/2019 (ARISING OUT OF ITA NO.7615/MUM/2016) RATIONAL ART & PRESS PVT. LTD. VS. DY. CIT, CC - 8(1) A.Y. 2010 - 11 SAME TIME, WE FIND THAT IT IS ALSO CLAIMED BY THE ASSESSEE THAT THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL HAD ON ACCOUNT OF AN INADVERTENT OMISSION NOT CONSIDERED AND DEALT WITH TWO JUDICIAL PRONOUNCEMENTS WHICH WERE RELIED UPON IN THE COURSE OF HEARING OF THE APPEAL VIZ. (I ) CIT VS. AKSHAY TEXTILE TRADING & AGENCIES PVT. LTD. (2008) 304 ITR 401 (BOM) AND (II) MANEK LAL AGARWAL VS DCIT (2017) 396 ITR 721 (SC) . AS REGARDS THE CONTENTION OF THE ASSESSEE THAT THE FAILURE ON THE PART OF THE TRIBUNAL TO CONSIDER THE AFORESAID TWO JUDICIAL PRONOUNCEMENT S VIZ. THE JUDGMENT OF THE HONBLE HIGH COURT AS WAS RELIED UPON BY THE ASSESSEE IN THE COURSE OF THE PROCEEDINGS BEFORE THE CIT(A), AND THAT OF THE HONBLE APEX COURT, WHILE DISPOSING OFF THE APPEAL, HAD THUS, RENDERED THE SAME AS SUFFERING FROM A MISTAKE APPARENT FROM RECORD, WHICH WOULD BE AMENABLE FOR RECTIFICATION UNDER SUB - SECTION (2) OF SEC.254 OF THE ACT, IN OUR CONSIDERED VIEW CARRIES SUBSTANTIAL FORCE. AS OBSERVED BY US HEREINABOVE , THE LD. A.R IN THE COURSE OF THE HEARING OF THE APPEAL HAD RELIED ON THE AFORESAID TWO JUDGMENTS. IN OUR CONSIDERED VIEW THE NON - CONSIDERATION OF A DECISION OF THE HONBLE SUPREME COURT OR THAT OF THE JURISDICTIONAL HIGH COURT WOULD CONSTITUTE A MISTAKE APPARENT FROM RECORD, WHICH WOULD THEREIN R ENDER IT AMENABLE FOR RECTIFICATION UNDER SUB - SECTION (2) OF SEC.254 OF THE ACT. OUR AFORESAID OBSERVATION IS FORTIFIED BY THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS . SAURASHTRA KUTCH STOCK EXCHANGE LTD. (2008) 305 ITR 227 (SC). IN TH E AFORESAID CASE THE HONBLE SUPREME COURT HAD OBSERVED THAT THE FAILURE ON THE PART OF THE TRIBUNAL TO CONSIDER A DECISION OF THE SUPREME COURT OR THAT OF THE JURISDICTIONAL HIGH COURT , THOUGH NOT RELIED UPON IN THE COURSE OF HEARING OF THE APPEAL WOULD H OWEVER BE A MISTAKE APPARENT FROM RECORD RECTIFIABLE UNDER SUB - SECTION (2) OF SEC.254 OF THE ACT. ACCORDINGLY, IN THE BACKDROP OF THE AFORESAID FACTS READ IN LIGHT OF THE SETTLED POSITION OF LAW, WE ARE OF THE CONSIDERED VIEW , THAT THE CLAIM OF THE ASSESSE E THAT THE FAILURE ON THE PART OF THE TRIBUNAL TO CONSIDER THE AFORESAID TWO JUDGMENTS DESPITE THE FACT THAT THE SAME WERE RELIED UPON IN THE COURSE OF THE HEARING OF THE APPEAL HAD THEREIN RENDERED ITS ORDER AS SUFFERING FROM A MISTAKE AMENABLE FOR RECTIFICATION UNDER S UB - S ECTION (2) OF SEC.254 OF THE ACT, MERITS ACCEPTANCE. 5. WE SHALL NOW ADVERT TO THE CLAIM OF THE ASSESSEE THAT THE TRIBUNAL HAD WRONGLY OBSERVED IN ITS ORDER THAT THE LD. AUTHORISED REPRESENTATIVE (FOR SHORT A.R) HAD SUBMITTED BEFORE THE TRIBUNAL (AS REPRODUCED AT PARA 7 OF ITS ORDER) , AS UNDER : P A G E | 4 M.A. NO.449/MUM/2019 (ARISING OUT OF ITA NO.7615/MUM/2016) RATIONAL ART & PRESS PVT. LTD. VS. DY. CIT, CC - 8(1) A.Y. 2010 - 11 T H E LD. A .R TAKING US THROUGH THE FACTS THAT WERE INVOLVED IN THE AFORESAID APPEAL SUBMITTED THAT THE ISSUE BEFO RE THE TRIBUNAL WAS AS TO WHETHER THE INCOME RECEIVED BY FAZLANI EXPORTS PVT. LTD. FROM SUBLETTING THE PROPERTY WAS LIABLE TO BE ASSESSED UNDER THE HEAD BUSINESS INCOME OR AS INCOME FROM OTHER SOURCES. THE LD. A.R TAKING US THROUGH THE ORDER OF THE TRIBU NAL SUBMITTED THAT AFTER NECESSARY DELIBERATIONS, THE TRIBUNAL HAD CONCLUDED THAT THE SUBLETTING RECEIPTS ARE LIABLE TO BE ASSESSED AS INCOME FROM OTHER SOURCES. WE HAVE PERUSED OUR RECORDS AND FIND THE AFORESAID CLAIM OF THE ASSESSEE TO BE CORRECT. IN FACT, THE LD. A.R IN THE COURSE OF THE HEARING OF THE APPEAL HAD TAKEN US THROUGH THE ORDER OF A CO - ORDINATE BENCH OF THE TRIBUNAL VIZ. ITAT F BENCH, MUMBAI IN THE CASE OF A SISTER CONC ERN OF THE ASSESSEE I.E M/S FAZI ANI EXPORTS PVT. LTD (TENANT OF THE A SSESSEE) FOR A.Y 2010 - 11 IN ITA NO. 4090/MUM/2016 [ PAGE 83 - 100 OF THE ASSESSEES PAPER BOOK ] (FOR SHORT APB) . IN ITS ORDER PASSED IN THE CASE OF M/S FAZIANI EXPORTS PVT. LTD. (SUPRA) FOR A.Y 2010 - 11 , IT WAS OBSERVED BY THE TRIBUNAL THAT EARLIE R IN THE APPEAL OF THE SAID ASS E SS E E FOR A.Y 2005 - 06 IN ITA N O. 7150/MUM/2007, DATED 30.03.2010, AN ISSUE HAD CAME UP BEFORE IT AS TO WHETHER THE RENTAL INCOME RECEIVED BY THE ASSESSEE BEFORE THEM VIZ. M/S FAZIANI EXPORTS PVT. LTD. (SUPRA) FROM SUB - LEASING WAS TO BE ASSESSED AS BUSINESS INCOME (AS OFFERED BY THE ASSESSEE) OR WAS TO BE BROUGHT TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES , PAGE 91 OF APB . IT WAS OBSERVED THAT THE TRIBUNAL WHILE DISPOSING OFF THE SAID EARLIER APPEAL HAD CONCLUDED THAT THE SUB - LETTING RECEIPTS WERE LIABLE TO BE ASSESSED AS INCOME FROM OTHER SOURCES IN THE HANDS OF THE ASSESSEE BEFORE THEM VIZ. M/S FAZIANI EXPORTS PVT. LTD. (SUPRA). IN THE BACKDROP OF THE AFORESAID FACTS, WE ARE OF THE CONSIDERED VIEW THAT THOUGH THE AFORESAID FACTS EMANATE FROM THE AFORESAID ORDER OF THE TRIBUNAL PASSED IN THE CASE OF THE SISTER CONCERN OF THE ASSESSEE VIZ. M/S FAZIANI EXPORTS PVT. LTD. VS. DY. CI [ITA NO. 4090/MUM/2016, DATED 04.0 5.2018 FOR A.Y 2010 - 11] , WHICH WAS REFER RED TO BY THE LD. A.R IN THE COURSE OF THE HEARING OF THE APPEAL BEFORE US, HOWEVER, THE SAME WAS NOT SPECIFICALLY ARGUED BY THE LD. A.R . AS SUCH, THE AFORESAID OBSERVATIONS RECORDED AT PARA 7 OF THE ORDER (AS REPROD UCED HEREINABOVE) ARE EXPUNGED FROM THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL VIZ . M/S RATIONAL ART & PRESS PVT. LTD. VS. DY. CIT, CENTRAL CIRCLE - 44, MUMBAI [ITA NO. 7615/MUM/2016, DATED 28.02.2019 FOR A.Y 2010 - 11]. HOWEVER, AS THE SAID FACTS ARE BORNE FROM THE RECORDS AND FACTUALLY CORRECT, THEREFORE, THE SAME WILL NOT HAVE ANY BEARING ON THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE AFORESAID APPEAL OF THE ASSESSEE. P A G E | 5 M.A. NO.449/MUM/2019 (ARISING OUT OF ITA NO.7615/MUM/2016) RATIONAL ART & PRESS PVT. LTD. VS. DY. CIT, CC - 8(1) A.Y. 2010 - 11 6. FURTHER, IT IS THE CLAIM OF THE ASSESSEE THAT HE HAD IN THE COURSE OF HEARING OF THE APPEAL ARGUED THAT THE ISSUE BEFORE THE TRIBUNAL IN ITS AFORESAID ORDER VIZ. M/S FAZIANI EXPORTS PVT. LTD. VS. DY. CIT [ITA NO. 4090/MUM/2016, DATED 04.05.2018 FOR A.Y 2010 - 11] WAS THAT NOW WHEN THE SUB - LEASING RECEIPTS OF PROPERTY RATIONAL HOUSE HAD BEEN OFFERED BY M/S FAZIANI EXPORTS PVT. LTD. AS ITS INCOME FOR THE YEAR UNDER CONSIDERATION I.E A.Y 2010 - 11, AND WAS ASSESSED AS SUCH IN ITS HANDS, THEREFORE, IN THE BACKDROP OF THE FACT THAT THE A.O HAD ASSESSED THE SAME AMOUNT OF RS. 11,02,50,000/ - IN THE HANDS OF THE ASSESSEE I.E M/S RATIONAL ART & PRESS PVT. LTD. IN A.Y 2010 - 11 ON THE PREMISE THAT THE SAID SUM CONSTITUTED THE ANNUAL LETTABLE VALUE OF THE PROPERTY U/S 23(1)(A) IN ITS HANDS, THE INCOME TO THE SAID EXTENT I.E RS. 11,02,50,000/ - WAS TO BE DELETED IN THE HANDS OF THE M/S FAZLANI EXPORTS PVT. LTD. WE FIND THAT THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE VIZ . M/S RATIONAL ART & PRESS PVT. LTD. VS. DY. CIT, CENTRAL CIRCLE - 44, MUMBAI [ITA NO. 7615/MUM/2016, DA TED 28.02.2019 FOR A.Y 2010 - 11] HAD DULY CONSIDERED THE AFORESAID CLAIM OF THE ASSESSEE. 7. AS REGARDS THE REMAINING SUBMISSIONS OF THE ASSESSEE IN ITS MISCELLANEOUS APPLICATION, AS OBSERVED BY US HEREINABOVE, THE ASSESSEE IN THE GARB OF ITS APPLICATION FILED UNDER SUB - SE CTION (2) OF SEC.254 OF THE ACT HAD PRIMARILY SOUGHT REVIEW OF THE ORDER THAT WAS PASSED BY THE TRIBUNAL WHILE DISPOSING OFF ITS APPEAL. WE ARE AFRAID THAT AS THE TRIBUNAL IN EXERCISE OF THE POWERS VESTED WITH IT UNDER SUB - SECTION (2) SEC. 254 CANNOT REVIEW ITS ORDER, THEREFORE, THE EXHAUSTIVE SUBMISSIONS FILED BY THE ASSESSEE TO IMPRESS UPON US THAT THE VIEW TAKEN BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL IS NOT CORRECT CANNOT BE ACCEPTED AND IS THUS REJECTED . 8. W E , THUS , IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS MODIFY THE CONTENTIONS ADVANCED BY THE LD. A.R (AS OBSERVED AT PARA 5 HEREINABOVE) , AS RECORDED AT PARA 6 OF THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL . FURTHER, WE RECALL THE ORDER THAT WAS PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE IN ITA 7615/MUM/2016, DATED 28.02.2019 FOR THE LIMITED PURPOSE OF CONSIDERING THE AFORESAID JUDICIAL PRONOUNCEMENT S WHICH WERE RELIED UPON BY THE ASSESSEE S COUNSEL IN TH E COURSE OF HEARING OF THE APPEAL BUT HAD INADVERTENTLY REMAINED OMITTED TO BE CONSIDERED WHILE PASSING THE ORDER VIZ. (I ) CIT VS. AKSHAY TEXTILE TRADING & AGENCIES PVT. LTD. (2008) 304 ITR 401 (BOM) AND (II) MANEK LAL AGARWAL VS DCIT (2017) 396 ITR 721 (SC) . THE REGISTRY IS ACCORDINGLY DIRECTED TO FIX THE MATTER ON 23.04.2021 . P A G E | 6 M.A. NO.449/MUM/2019 (ARISING OUT OF ITA NO.7615/MUM/2016) RATIONAL ART & PRESS PVT. LTD. VS. DY. CIT, CC - 8(1) A.Y. 2010 - 11 9 . RESULTANTLY, T HE APPLICATION FILED BY THE ASSESSEE UNDER SUB - SECTION (2) OF SEC. 254 OF THE ACT IS PARTLY ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. ORDER P RONOUNCED IN THE OPEN COURT ON 2 6 . 03 .2021 . S D / - S D / - ( M. BALAGANESH ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 26. 03 .2021 PS: ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI