SAHIB WAREHOUSING AND LOGISTICS, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-29(3), MUMBAI

MA 573/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6926 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 05-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE S/SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER M.A. N O . 573 /M/201 8 (ARISING OUT OF ITA NO. 6297 /M/201 7 ) ( / ASSESSMENT YEAR: 2014 - 15 ) SAHIB WAREHOUSING AND LOGISTICS 8/A, CHAGPUR KHIMJI BUILDING, R.R.T. ROAD, MULUND (W), MUMBAI - 400080. / VS. ACIT, CIRCLE 29(3), C - 10, 2 ND FLOOR, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 400051. /. /. PAN/GIR NO. : ABKFS 1797 F ( / APPELLANT ) / APPLICANT .. ( / RESPONDENT ) / DATE OF HEARING: 21 . 12 .201 8 /DATE OF PRONOUNCEMENT: 07. 0 1 . 201 9 ORDER PER AMARJIT SINGH, J M THE ASSESSEE HAS FILED THE PRESENT MISCELLANEOUS APPLICATION NO. 573 /M/201 8 MOVED BY APPELLANT ARISING OUT OF ITA. NO.6297 /M/201 7 DATED 31 .0 5 .201 8 . 2. THE FACTS OF THE CASE ARE THAT THE ABOVE MENTIONED APPEAL HAS BEEN DECIDED BY HONBLE ITAT BY VIRTUE OF ORDER DATED 31.05.2018 IN WHICH THE ORDER U/S 263 OF THE ACT PASSED BY CIT(A) DATED 14.09.2017 HAS BEEN CHALLENGED IN FACT, THE SAID ORDER HAS BEE N CHALLENGED ON THE BASIS OF TWO GROUNDS OUT OF WHICH ONE IS IN CONNECTION WITH THE DOUBLE TAXATION OF THE AMOUNT IN SUM OF RS. 62,68,563/ - CLAIMED AS INTEREST. THE SAME WAS NOT FOUND PROPER TO INVOKE THE PROVISION U/S 263 OF THE ACT , BY VIRTUE OF ORDER OF TRIBUNAL DATED 31.05.2018 . REVENUE BY: SHRI CHAUMYA (DR) ASSESSEE BY: RAJIV KHANDELWAL (AR) MA 573 / MUM/201 8 3. SO FAR AS THE OTHER GROUND IN CONNECTION WITH THE CLAIMING OF BUSINESS LOSS IN SUM OF RS.46,67,552/ - IS CONCERNED. THE SAME WAS NOT DEALT WITH PROPERLY BEING NO PROPER SPEAKING ORDER HAS BEEN PASSED. 4 . IT IS ALSO AVERRED THAT THE ASSESSEE ALSO RELIED UPON THE CASE TITLED AS MALABAR INDUSTRIAL CO. LTD. (248 ITR 83) & DELHI HIGH COURT IN THE CASE OF VIKAS POLYMERS (194 TAXMAN 57) BUT THE SAID DECISION S WERE NOT DISCUSSED WHICH IS A MISTAKE APPARENT ON RECO RD, THEREFORE, THE ORDER DATED 31.05.2018 IS REQUIRED TO BE AMENDED OR ANY OTHER RELIEF AS IT DEEMED FIT IS REQUIRED TO BE GIVEN IN THE INTEREST OF JUSTICE. 5 . NOTICE GIVEN . 6 . WE HAVE HEARD THE ARGUMENT AND ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. WE NOTICED THAT THE ASSESSEE FIRM PURCHASE THE LAND DURING THE PREVIOUS YE AR RELEVANT TO THE A.Y. 2008 - 09 AND THE PARTNER INTRODUCED CAPITAL TO THE TUNE OF RS.109 LACS WHICH WAS UTILISED IN THE PURCHASE OF THE SAID LAND. CON STRUCTION OF THE WAREHOUSE WAS COMPLETED DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2010 - 11 AND THE SAME IS SHOWN AS WAREHOUSE - 1 AT RS.525.53 LACS IN THE BALANCE - SHEET AS AT 31.03.2010 WHICH WAS FINANCED BY PARTNERS AND SECURED LOAN WAS TO THE TUNE OF RS.86 .05 LACS. THE ASSESSEE STARTED TO COMMENCE THE ANOTHER WAREHOUSE (WHICH IS ADJACENT TO THE FIRST WAREHOUSE) WAREHOSUE - 1 WAS GIVEN ON RENT IN THE A.Y. 2010 - 11. THE ASSESSEE RECEIVED IN SUM OF RS.1,22,81,560/ - WHICH WAS CREDIT TO THE PROFIT AND LOSS ACCOUNT. THE SECOND WAREHOUSE WAS COMPLETED IN A.Y. 2012 - 13 WHICH WAS SHOWN AS WAREHOUSE - 2 AT RS. 465.84/ - LACS IN THE BALACE - SHEET AT 31.03.2012 WHICH WAS FINANCED BY PARTNERS AND SECURED LOAN OF RS.472.08 LACS. BOTH THE WAREHOUSE WERE GIVEN THE ASSESSEE FIRM RECE IVED THE RENT OF RS.1,85,50,000/ - WHICH WAS CREDIT TO THE PROFIT AND LOSS ACCOUNT. BOTH THE WAREHOUSE WAS GIVEN ON RENT AND THE APPLICANT RECEIVED THE RENT IN SUM OF RS.2,23,76,241/ - WHICH WAS CREDIT TO THE PROFIT AND LOSS ACCOUNT WHICH HAS BEEN PROFIT AND LOSS ACCOUNT THE COPY OF WHICH LIES AT PAGE NO. 174 OF THE PAPER BOOK. IN ALL THE BALANCE - SHEET W.E.F MA 573 / MUM/201 8 31.03.2012 THE ONLY ASSET ON THE ASSET SIDE OF BALANCE - SHEET ARE THE WAREHOUSE AND ON THE LIABILITIES SIDE ARE THE PARTNERSS CAPITAL AND SECURED LOANS. THE INTEREST THUS THOUGH THE CLAIM UNDER THE HEAD OF BUSINESS INCOME IF NOT ALLOWABLE, THEREFORE, CERTAINLY WAS ALLOWABLE U/S 24(B) OF THE ACT, HENCE, THE ORDER OF THE AO WAS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN BRIEF, THE CLAIM RAISED BY TH E ASSESSEE IF NOT ON ELIGIBLE UNDER THE HEAD BUSINESS INCOME NO DOUBT THE SAME WAS ALLOWABLE U/S 24(B) OF THE AC T. THERE IS NO LOSS TO REVENUE. I T I S NECESSARY FOR THE AUTHORITY WHILE INVOKING THE PROVISIONS U/S 263 OF THE ACT THAT THE ORDER OF THE AO SHOU LD BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IF, ONE CONDITION IS NOT SATISFIED THEN IN THE SAID CIRCUMSTANCES, NO DOUBT THE PROVISIONS U/S 263 OF THE ACT IS NOT REQUIRED TO BE INVOKED. WE ALSO FUND THAT THE LAW RELIED BY THE LD. REPRESENTATIVE OF THE ASSESSEE IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. (248 ITR 83) & DELHI HIGH COURT IN THE CASE OF VIKAS POLYMERS (194 TAXMAN 57) WERE NOT REFERRED. IT IS NECESSARY TO ARRIVE AT THIS CONCLUSION THAT THE ASSESSMENT ORDER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND SHOULD BE ERRONEOUS. SINCE IN BOTH THE ASPECTS THERE IS NO LO SS TO REVENUE, THEREFORE, RELYING UPON THE LAW SETTLED IN MALABAR INDUSTRIAL CO. LTD. (248 ITR 83) & DELHI HIGH COURT IN THE CASE OF VIKAS POLYMERS (194 TAXMAN 57) THERE IS NO MERIT IN THE ORDER PASSED U/S 263 OF THE ACT . WE ARE OF THE VIEW THAT THE PROVISIONS U/S 263 OF THE ACT HAS BEEN WRONGLY INVOKED BY PR. CIT, THEREFORE, WE SET ASIDE THE FINDING OF THE CIT ON THIS GROUND ALSO . IN THE RESULT , THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS HEREBY ALLOWED . ORDER WAS PRON OUNCED IN TH E OPEN COURT ON 07. 01 . 201 9 SD/ - SD/ - ( R.C. SHARMA ) ( AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI, DT: 07. 01.2019 MA 573 / MUM/201 8 VIJAY COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE, E , BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES