BLOSSOM DEVELOPERS, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX 30(1), MUMBAI

MA 561/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7966 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2012-2013
• Appeal Filed On: 24-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER M.A. NO. 561 /MUM./2018 ( ARISING OUT OF ITA NO. 5875 / MUM . /201 6 ) ( ASSESSMENT YEAR : 20 1 2 13 ) M/S. BLOSSOM DEVELOPERS SURVEY NO.2073, VILLAGE DINDOSHIPATHANWADI MALAD (E), MUMBAI 400 097 PAN AAHFB6147Q . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCL E 30 ( 1 ), MUMBAI . RESPONDENT ASSESSEE BY : SHRI PRAKASH PANDIT REVENUE BY : SHRI GANESH BARE DATE OF HEARING 1 8 . 0 1 .201 9 DATE OF ORDER 15.04.2019 O R D E R PER SAKTIJIT DEY, J.M. BY THE AFORESAID APPLICATION PURPORTED FILED UNDER SECTION 254(2) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) , THE ASSESSEE SEEKS RECALL/RECTIFICATION OF THE ORDER DATED 8 TH JUNE 2018, PASSED IN ITA NO.5875/MUM./2016. 2 M/S. BLOSSOM DEVELOPERS 2 . T HE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THERE IS MISTAKE IN THE ORDER OF THE TRIBUNAL AS THE DECISION TAKEN BY THE TRIBUNAL IS CONTRARY TO THE CASE LAWS AND CBDT CIRCULAR CITED BEFORE THE BENCH. 3 . THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY OPPOSING THE CONTENTION OF THE ASSESSEE SUBMITTED , ALLOWING ASSESSEES CLAIM MADE IN THE MISC. APPLICATION WOULD AMOUNT TO REVIEW OF THE APPEAL ORDER , HENCE, THE MISC. APPLICATION SHOULD NOT BE ENTERTAINED. 4 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. THE DISPUTE IN THE PRESENT APPEAL WAS WITH REGARD TO APPLICABILITY OF SECTION 40A(2) OF THE ACT TO SALARY PAID TO THE WIFE OF TH E TWO PARTNERS OF THE ASSESSEE FIRM. AS COULD BE SEEN , THE TRIBUNAL AFTER CONSIDERING THE FACTS AVAILABLE ON RECORD FOUND THAT THERE WAS A QUANTUM JUMP IN PAYMENT OF SALARY TO THE WI VES OF THE PARTNERS OF THE ASSESSEE FIRM IN THE IMPUGNED ASSESSMENT YEAR COMPARED TO THE PRECEDING ASSESSMENT YEARS. THE TRIBUNAL HAS ALSO RECORDED A FINDING OF FACT THAT THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO DEMONSTRATE ANY EXTRA EFFORT OR S ERVICE RENDERED BY THE WI VES OF THE PARTNERS TO JUSTIFY SUCH QUANTUM JUMP IN THE SALARY IN THE IMPUGNED ASSESSMENT YEAR. THE TRIBUNAL HAS ALSO RECORDED A FINDING OF FACT THAT THE ASSESSEE FAILED TO DEMONSTRATE THAT THE SALARY PAID TO THE WI VES OF 3 M/S. BLOSSOM DEVELOPERS THE PARTN ERS IN THE IMPUGNED ASSESSMENT YEAR IS COMMENSURATE WITH THE WORK PERFORMED OR SERVICES RENDERED BY THEM TO THE FIRM. THEREFORE, KEEPING PARITY WITH THE SALARY PAID IN THE PRECEDING ASSESSMENT YEARS TO THE CONCERNED PERSON S , THE TRIBUNAL GRANTED PARTIAL RE LIEF TO THE ASSESSEE BY RESTRICTING THE DISALLOWANCE UNDER SECTION 40A(2) OF THE ACT TO ` 30 LAKH. SIMILAR IS THE FACT WITH REGARD TO PAYMENT OF COMMISSION TO THE RELATED PARTIES. THEREFORE, THE DECISION OF THE TRIBUNAL IS PURELY ON THE BASIS OF FACTS INVO LVED IN THE APPEAL BEFORE IT. APPLICABILITY OF SECTION 40A(2) OF THE ACT IS A PURELY FACTUAL ISSUE , SINCE , THE REASONABLENESS OF THE PAYMENT HAS TO BE SEEN ON THE BASIS OF FACTS INVOLVED IN EACH CASE. AFTER CONSIDERING THE FACTS INVOLVED IN ASSESSEES CASE , INCLUDING THE SIMILAR PAYMENT MADE IN THE PRECEDING ASSESSMENT YEARS, THE TRIBUNAL GRANTED PARTIAL RELIEF TO THE ASSESSEE . WHILE DOING SO, THE TRIBUNAL HAS ALSO TAKEN NOTE OF THE DECISIONS CITED ON BEHALF OF THE ASSESSEE. IF THE ASSESSEE IS AGGRIEVED WITH THE DECISION OF THE TRIBUNAL, IT HAS AN EFFICACIOUS REMEDY BY WAY OF APPEAL UNDER SECTION 260A OF THE ACT AND CERTAINLY NOT BY WAY OF SEEKING REVIEW OF THE APPEAL ORDER UNDER THE PRETEXT OF RECTIFICATION OF MISTAKE APPARENT ON RECORD AS ENVISAGED UNDER SE CTION 254(2) OF THE ACT. THE RELIEF SOUGHT BY T HE ASSESSEE IN THE PRESENT APPLICATION, IF ALLOWED , WOULD AMOUNT TO REVIEW OF THE APPEAL ORDER, HENCE, NOT PERMISSIBLE UNDER THE PROVISIONS OF SECTION 254(2) OF THE ACT. 4 M/S. BLOSSOM DEVELOPERS ACCORDINGLY, FINDING NO MERIT IN THE PR ESENT APPLICATION, WE DISMISS THE SAME. 5 . IN THE RESULT, MISC. APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.04.2019 SD/ RAJESH KUMAR ACCOUNTANT MEMBER SD/ SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 15.04.2019 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI