MAHINDRA GESCO DEVELOPERS LTD, V. ASST CIT CEN CIR 47,

MA 519/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8192 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 01-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B : MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER M.A.NO. 519/MUM/2011 ARISING OUT OF ITA. NO. 4291/MUM/2007 ASSESSMENT YEAR 2003-2004 MAHINDRA GESCO DEVELOPERS LTD. MUMBAI PAN AAACG8904C VS. ACIT, C.C.47 MUMBAI. (APPLICANT (RESPONDENT) FOR APPLICANT : SHRI D.P.BAPAT FOR RESPONDENT : SHRI JITENDRA YADAV ORDER PER D.MANMOHAN, V.P. 1. THIS APPLICATION ARISES OUT OF THE ORDER DATED 30 TH JUNE, 2011, PASSED BY THE ITAT B BENCH, MUMBAI. 2. AS COULD BE NOTICED FROM PARA 13 ONWARDS IN THE IMPUGNED ORDER, THE ASSESSEE FRAMED DEDUCTION OF RS.15,50,15,000/- ON THE GROUND THAT IT WAS A PROVISION FOR IMPAIRMENT OF THE VALUE OF ASSETS A ND THE SAME WAS DEBITED TO THE P & L ACCOUNT. IT APPEARS THAT A COMPANY NAMED MAHENDRA & MAHENDRA LIMITED MADE A NON-INTEREST BEARING SECURITY DEPOSI T OF RS.29.27 CRORES WITH A COMPANY BY NAME THE NEW GREAT EASTERN SHIPPING AND WEAVING COMPANY. SUBSEQUENTLY THE DEPOSIT, ALONG WITH ALL RIGHTS AND OBLIGATIONS, VESTED IN THE ASSESSEE-COMPANY. THE COMPANY INTENDED TO CHARGE IN TEREST OF RS.37.26 CRORES FOR THE PERIOD RELEVANT TO THE ASSESSMENT YEARS 199 7-98 TO 2003-2004. HOWEVER, INTEREST COULD NOT BE RECEIVED AND HENCE, INTEREST RECEIVABLE WAS REVISED DOWNWARDS TO RS.21.76 CRORES AND THE DIFFER ENTIAL AMOUNT OF RS.15.50 CRORES WAS DEBITED TO THE P & L ACCOUNT ON THE GROU ND THAT INTEREST INCOME TO THIS EXTENT DID NOT ACCRUE TO THE ASSESSEE AT ALL A ND THEREFORE, IT WAS NOT CHARGEABLE AS INCOME OF THE BUSINESS UNDER SECTION 28 OF THE ACT. THE ASSESSING OFFICER AS WELL AS CIT(A) DID NOT ACCEPT THE CLAIM OF THE ASSESSEE. THE 2 ITAT. B BENCH, MUMBAI HAS ELABORATELY CONSIDERED THE ISSUE TO HOLD THAT IT CANNOT BE TREATED AS A CASE OF NON-ACCRUAL OF INTER EST INCOME. 3. WITH REGARD TO ALTERNATIVE CONTENTION I.E., THE SAME SHOULD BE ALLOWED AS BAD DEBT, THE BENCH CONSIDERED THE ISSUE IN PARA 25 ONWARDS AND UPON REFERRING TO THE DECISION OF APEX COURT IN THE CASE OF VIJAYA BANK VS. CIT 323 ITR 166, THE HONBLE MEMBERS ARRIVED AT A CONCL USION THAT DEDUCTION IS NOT PERMISSIBLE UNDER SECTION 36(1)(VII) OF THE ACT . ASSESSEE APPEARS TO HAVE PLACED HEAVY RELIANCE UPON THE DECISION OF THE APEX COURT IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. 320 ITR 577 BUT, EVENAFT ER TAKING INTO CONSIDERATION OF THE SAID JUDGMENT, THE BENCH TOOK A CONSCIOUS DECISION THAT THE PRINCIPLES LAID DOWN BY THE APEX COURT IN THE C ASE OF VIJAYA BANK (SUPRA) APTLY APPLIES TO THE FACTS OF THE CASE AND, ACCORDI NGLY, REJECTED THE CONTENTION OF THE ASSESSEE. 4. THE ASSESSEE-COMPANY FILED MISCELLANEOUS APPLIC ATION STATING THAT THE BENCH HAD COMMITTED AN ERROR IN LAW IN NOT APPL YING DECISION OF THE APEX COURT IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. 320 ITR 577 AND HENCE, THE ORDER CONTAINS A MISTAKE APPARENT FROM RECORD WHICH REQUIRES RECTIFICATION UNDER SECTION 254 (2) OF THE ACT. 5. PETITION FILED BY THE ASSESSEE CONTAINS THE ARG UMENTS ON BEHALF OF THE ASSESSEE AS TO WHY, IN ITS OPINION, THE DECISIO N OF THE APEX COURT IN THE CASE OF SOUTHERN TECHNOLOGIES (SUPRA) HAS TO BE APP LIED, IN PREFERENCE TO THE DECISION OF THE APEX COURT IN THE CASE OF VIJAYA BA NK (SUPRA). 6. WE HAVE HEARD THE LEARNED COUNSEL, APPEARING ON BEHALF OF THE ASSESSEE, AS WELL AS THE LEARNED D.R. IN THIS REGAR D. IT IS NOT A CASE OF NON- CONSIDERATION OF A SUPREME COURT JUDGMENT. AS COULD BE NOTICED FROM THE IMPUGNED ORDER, THE BENCH HAD TAKEN NOTE OF BOTH TH E JUDGMENTS OF THE APEX COURT AND UPON ANALYSING THE RATIO LAID DOWN IN BOT H THE CASES, IT HAD TAKEN A CONSCIOUS DECISION THAT THE RATIO LAID DOWN IN THE CASE OF VIJAYA BANK (SUPRA) APTLY APPLIES TO THE FACTS OF THE CASE. THEREFORE, FRESH CONSIDERATION ON THE SAME ISSUE WOULD AMOUNT TO REVIEW OF THE ORDER PASS ED BY THE TRIBUNAL WHICH 3 IS NOT PERMISSIBLE UNDER SECTION 254 (2) OF THE ACT . IN THE CASE OF RAMESH ELECTRIC & TRADING COMPANY (BOM.) VS. CIT (1993) 20 3 ITR 497 (BOM.), THE COURT, WHILE ANALYSING THE POWERS VESTED IN THE TRI BUNAL UNDER SECTION 254 (2) OF THE ACT, OBSERVED AS UNDER : .. THE TRIBUNAL CANNOT, IN EXERCISE OF IT S POWER OF RECTIFICATION, LOOK INTO SOME OTHER CIRCUMSTANCES W HICH WOULD SUPPORT OR NOT SUPPORT ITS CONCLUSION SO ARRIVED AT . THE MISTAKE WHICH THE TRIBUNAL IS ENTITLED TO CORRECT IS NOT AN ERROR OF JUDGMENT BUT A MISTAKE WHICH IS APPARENT FROM THE RECORD ITS ELF. ..... ..... .. IN OUR VIEW, THE POWER OF RE CTIFICATION UNDER SECTION 254(2) OF THE INCOME-TAX ACT CAN BE EXERCISED ONLY WHEN THE MISTAKE WHICH IS SOUGHT TO BE RECTIFIED IS AN OBVIOUS AND P ATENT MISTAKE WHICH IS APPARENT FROM THE RECORD, AND NOT A MISTAK E WHICH REQUIRES TO BE ESTABLISHED BY ARGUMENTS AND A LONG DRAWN PRO CESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS, AS HAS BEEN SHOWN IN THE PRESENT CASE. FA ILURE BY THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT O N THE RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. 7. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE TRIBUNAL DOES NOT SUFFER FROM ANY MISTAKE APPARENT FROM RECORD. WE, THEREFORE, REJECT THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE. ORDER PRONOUNCED IN THE OPEN COURT ON 09-05-2012. SD/- SD/- (J.SUDHAKAR REDDY) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 09 TH MAY, 2012 VBP/- 4 COPY TO 1. MAHINDRA GESCO DEVELOPERS LTD., 5 TH FLOOR, MAHINDRA TOWERS, ROAD NO.13, WORLI, MUMBAI. PAN AAACG8904C 2. ACIT, CENTRAL CIRCLE 47, MUMBAI 3. CIT, CENTRAL - IV, MUMBAI 4. CIT(A), CENTRAL - III, MUMBAI 5. DR B BENCH 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR, I.T.A.T. MUMBAI BENCHES MUMBAI.