TATA POWER CO. LTD, MUMBAI V. ACIT 2(3), MUMBAI

MA 596/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7582 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 21-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MICHEAL JERALD
• Keywords: Rectification of order; Capital receipt; Capital expenditure
• Section: 201; 254(2); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY , JUDICIAL MEMBER M.A. NO.596/MUM./2019 ( ARISING OUT OF ITA NO. 3036 / MUM . /20 09 ) ( ASSESSMENT YEAR : 2003 04 ) TATA POWER COMPANY LTD. CORPORATE CENTRE, B BLOCK 5 TH FLOOR, 34, SANT TUKARAM ROAD CARNAC BUNDER, MUMBAI 400 009 PAN AAACT0054A . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 2(3), MUMBAI . RESPONDENT ASSESSEE BY : SHRI NITESH JOSHI REVENUE BY : SHRI MICHEAL JERALD DATE OF HEARING 21.02.2020 DATE OF ORDER 22.05.2020 O R D E R PER SAKTIJIT DEY. J.M. BY THIS APPLICATION, PURPORTED LY FILED UNDER SECTION 254(2) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ), THE ASSESSEE SEEKS RECALL/ RECTIFICATION OF ORDER DATED 21 ST MAY 2019, PASSED IN ITA NO.3036/ MUM./2009. 2. T HOUGH, IN THE MISC. APPLICATION THE ASSESSEE HAS TAKEN VARIOUS AVERMENTS TO SUBSTANTIATE ITS CLAIM THAT THE APPEAL ORDER PASSED BY 2 TATA POWER COMPANY LTD. THE TRIBUNAL SUFFERS FROM MISTAK E APPARENT ON THE FACE OF RECORD, HOWEVER, A T THE TIME OF HEARING LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DUE TO NON CONSIDERATION OF A DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S RELIANCE INDUSTRIES LTD., IN ITA NO.993 OF 2016, DA TED 15 TH JANUARY 2019, THERE IS MISTAKE APPARENT ON THE FACE OF RECORD REQUIRING RECALL OF THE APPEAL ORDER. THE LEARNED COUNSEL , THOUGH , FAIRLY ADMITTED THAT THE AFORESAID DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT WAS NOT BROUGHT TO THE NOTICE OF THE TRIBUNAL A T THE TIME OF HEARING OF APPEAL. H OWEVER, RELYING UPON THE DECISION OF THE HON'BLE SUPREME COURT IN ACIT V/S SAURASHTRA KUTCH STOCK EXCHANGE LTD., [2008] 305 ITR 227 (SC), H E SUBMITTED , NON CONSIDERATION OF A DECISION OF THE HON'BLE JURISDICT IONAL HIGH COURT CONSTITUTES MISTAKE APPARENT ON RECORD. THUS, HE SUBMITTED , THE ORDER PASSED BY THE TRIBUNAL ON THE ISSUE SHOULD BE RECALLED . 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE OPPOSING THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED , THE TRIBUNAL HAVING DECIDED THE ISSUE IN A PARTICULAR MANNER, THE ORDER SHOULD NOT BE RECALLED. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN, IN GROUND NO.3 OF ITA NO.3036/MUM./2009, THE REVENUE HAS CHALLENGED THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN DELETING THE SURPLUS ON BUYBACK ON 3 TATA POWER COMPANY LTD. EURO NOTES ISSUED BY THE ASSESSEE EARLIER. IT WAS THE CLAIM OF THE ASSESSEE THAT SINCE EURO NOTES WERE ISSUED BY THE ASSESSEE FOR CAPITAL EXPENDITURE, THE INCOM E DERIVED AS A SURPLUS ON BUYBACK OF EURO NOTES WOULD BE CAPITAL RECEIPT, HENCE, NOT TAXABLE. THOUGH , THE ASSESSING OFFICER TREATED IT AS INCO ME OF THE ASSESSEE, HOWEVER, LEARNED COMMISSIONER (APPEALS) RELYING UPON THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2000 01, ALLOWED ASSESSEES CLAIM AND DELETED THE ADDITION. BEFORE THE TRIBUNAL, THE ASSESSEE, APART FROM RELYING UPON THE DECISION OF THE TRIBUNAL IN ITS OWN CASE ALSO RELIED UPON THE DECISION OF THE HON'BLE SUPREME COUR T IN CIT V/S MAHINDRA & MAHINDRA LTD., [2018] 302 CTR 201 (SC), TO CONTEND THAT FOREIGN EXCHANGE FLUCTUATION GAIN ON BUYBACK OF EURO NOTES CANNOT BE TREATED AS INCOME CHARGEABLE TO TAX AS EURO NOTES WERE RAISED FOR INCURRING CAPITAL EXPENDITURE. THOUGH , TH E TRIBUNAL HAS RESTORED THE ISSUE TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER APPLYING THE RATIO LAID DOWN IN MAHINDRA & MAHINDRA LTD. (SUPRA), HOWEVER, BEFORE US, LEANED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT AFTER TAKING NOTE OF THE DECISI ON S OF THE HON'BLE SUPREME COURT IN MAHINDRA & MAHINDRA LTD. (SUPRA) AND IN CIT V/S T.V. SUNDARAM IYENGAR & SONS, [1996] 2 22 ITR 344 (SC), THE HON'BLE JURISDICTIONAL HIGH COURT HAS REITERATED THE VIEW EXPRESSED BY THE HON'BLE SUPREME COURT IN MAHINDRA & MA HINDRA LTD. (SUPRA). HE SUBMITTED , BY VIRTUE OF THE AFORESAID DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT, THE 4 TATA POWER COMPANY LTD. ISSUE STANDS SETTLED IN FAVOUR OF THE ASSESSEE. THEREFORE, THERE IS NO NEED FOR RESTORING THE ISSUE TO THE ASSESSING OFFICER. HAVING CONSID ERED THE SUBMISSIONS OF THE PARTIES, WE FIND THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN RELIANCE INDUSTRIES LTD. (SUPRA), AFTER TAKING NOTE OF THE DECISIONS OF THE HON'BLE SUPREME COURT IN CIT V/S MAHINDRA & MAHINDRA LTD., [2018] 404 ITR 001 (SC) AND T. V. SUNDARAM IYENGAR & SONS (SUPRA) HAS UPHELD THE DECISION OF THE TRIBUNAL IN HOLDING THAT THE GAIN DERIVED FROM BUYBACK OF FOREIGN CURRENCY BONDS ISSUED BY THE ASSESSEE CANNOT BE TREATED AS REVENUE RECEIPT. THOUGH, IT MAY BE A FACT THAT THE AFORESAID DECI SION WAS NOT CITED BEFORE THE TRIBUNAL AT THE TIME OF HEARING OF APPEAL, HOWEVER, AS HELD BY THE HON'BLE SUPREME COURT IN SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA), NON CO NSIDERATION OF A DECISION OF HON' BLE SUPREME COURT OR THE JURISDICTIONAL HIGH COUR T , EVEN RENDERED POSTERIOR TO DISPOSAL OF APPEAL WOULD CONSTITUTE A MISTAKE APPARENT ON THE FACE OF RECORD. IN OUR VIEW, SINCE THE AFORESAID DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT WILL HAVE A CRUCIAL BEARING ON THE DISPUTED ISSUE, NON CONSIDERAT ION OF THE SAID DECISION CERTAINLY CONSTITUTE S A MISTAKE APPARENT ON THE FACE OF RECORD AS ENVISAGED UNDER SECTION 254(2 ) OF THE ACT. ACCORDINGLY, WE RECALL THE ORDER DATED 21 ST MAY 2019, PASSED IN ITA NO.3036/ MUM./2009, AND RESTORE THE APPEAL TO ITS ORIGINAL POSITION. THE REGISTRY IS DIRECTED TO FIX THE APPEAL 5 TATA POWER COMPANY LTD. FOR HEARING BEFORE THE ASSIGNED BENCH IN REGULAR COURSE UPON INTIMATION TO BOTH THE PARTIES. 5. IN THE RESULT, MISC. APP LICATION IS ALLOWED. ORDER PRONOUNCED THROUGH CIRCULATION IN THE NOTICE BOARD UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES,1962 ON SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 22.05.2020 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 ASSISTANT REGISTRAR ITAT, MUMBAI