LUPIN LIMITED , MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX LTU, MUMBAI

MA 49/MUM/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6319 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 01-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MEHALATHA
• Keywords: Business expenditure

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER M.A. NO.49/MUM/2017 (ARISING OUT OF ITA NO.4338/MUM/2011) ASSESSMENT YEAR: 2007-08 M/S. LUPIN LTD. , 3 RD FLOOR KALPATARU INSPIRE OPP. GRAND HYATT OFF. W.E. HIGHWAY SANTACRUZ (EAST) MUMBAI 400 055 / VS. ACIT - LTU, CENTR E NO.1 WORLD TRADE CENTRE 28 TH FLOOR, CUFFE PARADE MUMBAI 400 005 ( !' /ASSESSEE) ( # / REVENUE) PAN. NO. AAACL1069K !' / ASSESSEE BY MS. VASANTI PATEL # / REVENUE BY MS. N. MEHALATHA #$ % '& / DATE OF HEARING : 16/03/2018 % '& / DATE OF ORDER: 16/04/2018 / O R D E R PER JOGINDER SINGH, JM THIS MISC. PETITION IS BY THE ASSESSEE SEEKING RECA LLING OF THE ORDER OF THE TRIBUNAL DATED 17.02.2016 (ITA NO. 4061 & M/S. LUPIN LTD. 2 4338/MUM./2011 FOR ASSESSMENT YEAR 2007-08 PASSED B Y THIS TRIBUNAL. 2. DURING THE HEARING, MS. VASANTI PATEL, LD. COUNS EL FOR THE ASSESSEE STRONGLY CONTENDED THAT THE DECISIONS MENTIONED BY THE BENCH WERE NEVER CITED BY EITHER SIDE AND NO R APPLICABLE TO THE FACTS OF THE PRESENT APPEAL. OUR ATTENTION WAS INVITED TO PAGE-8 OF THE ORDER WITH RESPECT TO THE RIDER MENTIONED IN THE ORDER WHICH IS NOT BORNE OUT OF FA CTS. OUR ATTENTION WAS FURTHER INVITED TO THE OBSERVATIONS M ADE AT PAGE-10 OF THE ORDER AND FURTHER THE SUBMISSIONS OF THE ASSESSEE CONTAINED AT PAGE-6 OF THIS MISC. APPLICAT ION. THE CRUX OF THE ARGUMENT IS IDENTICAL TO THE SUBMISSION S MENTIONED IN THE MISC. APPLICATION OF THE ASSESSEE. ON THE OTHER HAND, THE LEARNED D.R., MS. N. HEMLATHA, CONT ENDED THAT THERE IS NO MISTAKE IN THE ORDER OF THE TRIBUN AL WHICH CAN BE RECTIFIED BY FURTHER CONTENDING THAT U/S 254 (2) OF THE ACT THE POWER OF THE TRIBUNAL ARE VERY LIMITED AND ONLY ARITHMETICAL MISTAKES OR LIKE MISTAKES CAN ONLY BE RECTIFIED U/S 254(2) OF THE ACT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. WE HAVE HEARD / C ONSIDERED M/S. LUPIN LTD. 3 THE FACTUAL MATRIX AND SUBMISSIONS FROM BOTH THE SI DES WITH AN OPEN MIND. IN ITS APPLICATION AT PAGE-6, THE ASS ESSEE HAS SUBMITTED AS UNDER:- A. FIRSTLY, THE TRIBUNAL HAS ADJUDICATED THE ISSUE OF NETTING OF INTEREST BY OVERLOOKING AND DISREGARDING THE FACT THAT HON'BLE HIGH COURT HAS UPHELD THE ORDER OF TRIBUNAL IN CASE OF BANK OF AMERICA AFTER DEALING WITH THE SAID ISSUE ON THE MERITS OF THE CASE AND WHICH IS AMPLY CLEAR FROM THE FINDING GIVEN BY THE HON'BLE HIGH COURT IN PARAGRAPH 3 TO 5 OF THE SAID ORDER. FURTHER THIS FA CT WAS NOT EVEN DISPUTED BY THE DEPARTMENTAL REPRESENTATIVE IN THE COURSE OF HEARING ON THE SAID ISSUE. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE EXPLAI NED THAT THE TRIBUNAL WHILE PASSING THE ORDER OVERLOOKE D THE FACT IN THE CASE OF BANK OF AMERICA AND IN THE APPEAL BE FORE THE HON'BLE HIGH COURT, THE DECISION OF THE TRIBUNAL WA S UPHELD BY THE HON'BLE HIGH COURT (ITA NO.177 OF 2012) AND THE HON'BLE HIGH COURT HAD DEALT WITH THE MERITS OF THE CASE AND HELD AS UNDER:- 4. WE DO NOT SEE HOW THIS ORDER CAN BE CITED AS PRECEDENT IN AS MUCH AS THE ASSESSEE BEFORE THE TRIBUNAL AND BEFORE UNDER SECTION PAID INTEREST TO THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) DEPARTMENT AMOUNTING TO RS. 10,26,906. THE ASSESSEE CLAIMED THAT THIS WAS BUSINESS EXPENDITURE AND THIS SHOULD HAVE BEEN ALLOWED. THE ASSESSEE HAS RECEIVED THE INTEREST OF RS. 1,07,57,930. IT WAS SUBMITTED THAT THE AMOUNT OF M/S. LUPIN LTD. 4 INTEREST PAID BY THE ASSESSEE SHOULD HAVE BEEN ALLOWED TO BE SET OFF AGAINST THE INTEREST DEPOSITE D WITH THE DEPARTMENT ADDITION TAXED IN THE HANDS OF THE ASSESSEE. THE ARGUMENT WAS THAT THE INTEREST PAID TO AND RECEIVED FROM IS THE SAME PARTY I.E., GOVERNMENT OF INDIA AND THEREFORE, BOTH TRANSACTION S SHOULD BE TAKEN TOGETHER. WE DO NOT FIND THAT THE TRIBUNAL HAS, IN PERMITTING THIS EXERCISE, IN ANY W AY VIOLATED ANY OF THE PROVISIONS OF THE INCOME TAX AC T, 1961. IT WAS A PECULIAR SITUATION BETWEEN THE ASSESSEE AND THE DEPARTMENT. THE TRIBUNAL HAS FOLLOWED THE SIMILAR EXERCISE IN THE CASE OF VERY ASSESSEE ON THE PRIOR OCCASION AS WELL. IN SUCH CIRCUMSTANCE WE ARE OF THE OPINION THAT THE SECOND QUESTION ALSO DOES NOT RISE ANY SUBSTANTIAL QUESTIO N OF LAW. IN THE LIGHT OF THE ABOVE, THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO PARA-6 (PAGE-7) OF THE ORD ER BY CONTENDING THAT THE DECISION MENTIONED FROM HON'BLE APEX COURT IN THE CASE OF BHARAT COMMERCE AND INDUSTRIES LTD. V/S UNION OF INDIA, (1998) 230 ITR 733 (SC) AND EAS T INDIA PHARMACEUTICAL WORKS V/S CIT, (1997) 224 ITR 672 (S C) WERE NOT RELIED UPON/CITED BY THE REVENUE DURING THE COU RSE OF HEARING. BEFORE US, A PLEA WAS ALSO RAISED THAT THE TRIBUNAL OVERLOOKED THE DECISION OF THE HON'BLE BOMBAY HIGH COURT AND OTHER CASES RELIED UPON BY THE ASSESSEE. THEREF ORE, THERE IS A MISTAKE IN THE ORDER OF THE TRIBUNAL WHICH REQ UIRES RECTIFICATION / RECALLING. M/S. LUPIN LTD. 5 4. IT IS ALSO NOTED THAT THE TRIBUNAL VIDE ORDER DA TED 18/11/2016 IN A GROUP OF CASES ADJUDICATED THE MISCELLANEOUS APPLICATIONS IN THE CASE OF RELIANCE COMMUNICATION LTD. VS DIT, CONSIDERED THE DECISION OF THE COORDINATE BENCH, HON'BLE HIGH COURT IN THE CASE OF HATKESH COOPERATIVE HOUSING SOCIETY VS ACIT (ITA NO.328 OF 2014) ORDER DATED 22/08/2016, ANOTHER DECISION IN SIND CO OP. HSG. SOCIETY VS INCOME TAX OFFICER (2009) 317 ITR 47(BOM .), CASE OF DSP INVESTMENT PVT. LTD. VS CIT (ITA NO.2432 OF 2013), MOHAN MIKINJ LTD. VS INCOME TAX OFFICER 89 ITD 179 , HON'BLE DELHI HIGH COURT IN ERICSSON, HON'BLE KARNA TAKA HIGH COURT IN SAMSUNG COMPANY, HON'BLE ALLAHABAD HI GH COURT IN CIT VS QUALITY STEELS TUBE LTD. 253 CTR 29 8. ANOTHER DECISION IN PLAZA INVESTMENT PVT. LTD. (108 ITD 239) AND CONCLUDED THAT MISREADING OF THIS DECISION OF H ON'BLE HIGH COURT WOULD RESULT IN A MISTAKE APPARENT FROM RECORD, WARRANTING RECALLING OF THE ORDER. EVEN THE TRIBUNA L IN THE IMPUGNED ORDER HAS OBSERVED AS UNDER:- BE THAT AS IT MAY, THE ONLY COURSE AVAILABLE TO UN DER SECTION UNDER THE CIRCUMSTANCES IS TO REFER THE MAT TER FOR THE CONSIDERATION BY THE LARGER BENCH OF THE TRIBUNAL, I.E., IN VIEW OF THE DECISIONS BY THE CO- ORDINATE BENCHES OF THIS TRIBUNAL. WE ARE, IN VIEW OF THE MATTER BEING NOT OF WIDE IMPORT, DISINCLINED TO DO M/S. LUPIN LTD. 6 SO, AND SHALL ACCORDINGLY ADOPT THE SAID DECISIONS BY THE TRIBUNAL. OUR OPINION IN THE MATTER, STATED HER E-IN- BEFORE, IS ONLY FOR THE CONSIDERATION BY THE HON'BL E JURISDICTIONAL HIGH COURT, IF AND WHERE DEEMED FIT IN A PARTICULAR CASE THE LARGER PRINCIPLE INVOLVED BEI NG: WOULD THE CONDITIONS OF TAXABILITY AND DEDUCTIBILIT Y IN RELATION TO A PARTICULAR SUM (INTEREST IN THE PRESE NT CASE) OBTAIN EVEN WHERE IT BECOMES BOTH DUE FROM AS WELL AS DUE TO, THE SAME PARTY, WITH WE HAVING EXPRESSED OUR CLEAR VIEW THAT THE CONDITIONS OF TAXABILITY AND DEDUCTIBILITY, BEING REGULATED BY LA W BASED ON THE NATURE OF THE PAYMENTS, ARE PARAMOUNT, AND THE IDENTITY OF THE PERSON, WHETHER SAME OR DIFFERENT, IS OF LITTLE CONSEQUENCE IN LAW. 5. WE HAVE PERUSED THE IMPUGNED ORDER IN THE LIGHT OF THE VARIOUS DECISIONS CONSIDERED IN THE CASE OF RELIANC E COMMUNICATIONS LTD. VS DCIT (SUPRA) ORDER DATED 18/11/2016 AND ARE SATISFIED THAT THERE IS A MISTAK E IN APPRECIATION OF FACTS AND THE DECISION FROM HON'BLE JURISDICTIONAL HIGH COURT, THEREFORE, WITHOUT GOING INTO MUCH DELIBERATION, WE FEEL THAT IN THE LIGHT OF THE DECI SIONS RENDERED BY THE COORDINATE BENCH AND MISREADING OF DECISION RENDERED BY HON'BLE DELHI HIGH COURT IN THE CASE OF ERICSSON ((SUPRA)), WE RECALL THE ORDER OF THE TRIBUNAL DATED 17/02/201 6. THE REGISTRY IS DIRECTED TO FIX THIS APPEAL FOR FRESH A DJUDICATION IN ACCORDANCE WITH LAW BEFORE A REGULAR BENCH ON ANY CONVENIENT DATE. BOTH THE PARTIES BE INFORMED. M/S. LUPIN LTD. 7 FINALLY, THE MISCELLANEOUS APPLICATION OF THE ASSES SEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 16/03/2018. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) #$ / ACCOUNTANT MEMBER %$ / JUDICIAL MEMBER $ MUMBAI; ( DATED:- 16/04/2018 SHEKHER/PS. &%'()*)+' / COPY OF THE ORDER FORWARDED TO : 1. )*+, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. / / 0' ( )* ) / THE CIT, MUMBAI. 4. / / 0' / CIT(A)- , MUMBAI 5. 2#3 -' , / )*& )4 , $ / DR, ITAT, MUMBAI 6. 5 6$ / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI