MANUGRAPH INDIA LTD, MUMBAI V. DCIT 3(2)(1), MUMBAI

MA 597/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5978 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2011-2012
• Appeal Filed On: 22-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Keywords: Rectification of order
• Section: 92CA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES K , MUMBAI BEFORE S HRI S. RIFAUR RAHMAN (AM) AND SHRI RAM LAL NEGI (JM) M .A. N O. 597 / MUM /2019 ( ARISING OUT OF IT (TP) A NO. 51 /MUM /201 6 ) ( ASSESSMENT YEAR : 2011 1 2 ) MANUGRAPH INDIA LTD., SIDHWA HOUSE, N.A. SAWANT MARG, COLABA, MUMBAI - 400005 PAN: AAACM7246H VS. THE DCIT 3(2)(1), R. NO. 608, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. RD, CHURCHGATE, MUMBAI - 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.P. LOHIA ( A R ) REVENUE BY : SHRI AMIT PRATAP SINGH (D R) DATE OF HEARING : 10 /01 /20 20 DATE OF PRONOUNCEMENT: 10 / 0 9 /2020 O R D E R PER RAM LAL NEGI, JM THE ASSESSEE HAS FILED THE PRESENT MISCELLANEOUS APPLICATION FOR RECTIFICATION OF ORDER DATED 02.07.2019 PASSED BY THE K BENCH OF THE ITAT IN THE ASSESSEES CASE IT (TP) A NO. 51 /M UM/2016 PERTAI NING TO THE ASSESSMENT YEAR 2011 - 12 . 2. BEFORE US, T HE LD. COUNSEL HAS POINTED OUT THAT THE ASSESSEE CHALLENGED THE IMPUGNED ORDER INTER ALIA CHALLENGING THE ACTION OF LD. TPO IN MAKING ADJUSTMENT U/S 92CA (3) OF THE ACT ON ACCOUNT OF CORPORATE GUARANTEE GIVEN BY THE APPELLANT TO THE CONCERNED BANK. THE LD. COUNSEL FURTHER POINTED OUT THAT VIDE GROUND NO. 2.7, THE ASSESSEE CHALLENGED ACTION OF THE LD TPO IN APPLYING THE RATE OF GUARANTEE COMMISSION OF 2.5% ON ENTIRE AMOUNT OF GUARANTEE INSTEAD OF RESTRICTING THE ADJUSTMENT TO THE EXTENT OF AMOUNT OF LOAN AVAILED BY THE AE FROM OVERSEAS BANK DURING THE YEAR . THE TRIBUNAL ALLOWED THIS GROUND OF APPEAL BY FOLLO WING THE DECISION OF THE COORDINATE BENCHES IN ASSESSEES OWN CASES FOR THE AYS 2008 - 09 AND 2010 - 11 AND DIRECTED THE TPO TO RE - COMPUTE 2 M.A. NO . 597 / MUM/2019 ASSESSMENT YEAR: 2011 - 12 THE ADDITION @ 0.50% AS AGAINST 2.50% DETERMINED BY THE TPO, HOWEVER, THE TRIBUNAL DID NOT GIVE ANY DIRECTION TO RESTRICT THE ADJUSTMENT ON ACTUAL AMOUNT OF LOAN AVAILED FROM AE DURING THE YEAR. HENCE, THE ERROR IN THE ORDER NEEDS TO BE RECTIFIED BY PASSING INAPPROPRIATE ORDER. 3. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) OPPOSED THE APPLICATION . 4. WE HAV E HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. T HE COORDINATE BENCH HAS DIRECTED THE TPO TO RE - COMPUTE THE ADDITION ON ACCOUNT OF GUARANTEE COMMISSION TO 0.50% BY FOLLOWING THE ORDERS OF THE COORDINATE BENCHES RENDERED IN THE ASSESSEES OWN CASES FOR THE AY 2008 - 09 AND 2010 - 11 . THE OBSERVATIONS OF THE TRIBUNAL ARE AS UNDER: - 9. ON THIS ASPECT, IT WAS A COMMON POINT BETWEEN THE PARTIES THAT IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2 008 - 09 AS WELL AS FOR ASSESSMENT YEAR 2010 - 11 VIDE FOR ASSESSMENT YEAR 2008 - 09 AS WELL AS FOR ASSESSMENT YEAR 2010 - 11 VIDE ORDER DATED 25/03/2015 AND 16/09/2015 RESPECTIVELY. IN THE AFORESAID ASSESSMENT YEARS THE RATE OF BENCH MARKING THE GUARANTEE COMMISS ION WAS DETERMINED BY THE TRIBUNAL AT 0.50% AS AGAINST 2.50% CONSIDERED BY THE TPO IN THE INSTANT YEAR. FOLLOWING THE AFORESAID PRECEDENTS WE DIRECT THE TPO TO RECOMPUTED THE ADDITION ON THIS ASPECT. 5. AS POINTED OUT BY THE LD. COUNSEL FOR THE APPLICANT /ASSESSEE, VIDE PARA 2.7 OF GROUNDS OF APPEAL, THE ASSESSEE HAS TAKEN ALTERNATIVE THE PLEA AND CHALLENGED THE ACTION OF THE LD. TPO IN APPLYING THE RATE OF GUARANTEE COMMISSION ON ENTIRE AMOUNT OF GUARANTEE INSTEAD OF RESTRICTING THE SAME TO THE EXTENT OF AMOUNT OF LOAN AVAILED BY THE AE. WE NOTICE THAT THE TRIBUNAL HAS NOT GIVEN FINDING IN THIS REGARD AND DIRECTED THE LD. TPO TO RESTRICT THE COMMISSION TO 0.50% . WE FURTHER NOTICE THAT THE COORDINATE BENCH IN THE ASSESSEES APPEAL ITA NO 4761/MUM/2013 FOR A Y 2008 - 09 HAS DEALT WITH THE IDENTICAL ISSUE AND DIRECTED THE LD. TPO TO COMPUTE THE ADJUSTMENT BY TAKING INTO ACCOUNT THE ACTUAL LOAN AMOUNT AVAILED BY THE AE DURING THE YEAR RELEVANT 3 M.A. NO . 597 / MUM/2019 ASSESSMENT YEAR: 2011 - 12 TO THE ASSESSMENT YEAR UNDER CONSIDERATION. IN OUR CONSIDERED VIEW, THE ERROR POINTED OUT BY THE LD. COUNSEL NEEDS TO BE RECTIFIED U/S 254 (2) OF THE ACT. HENCE, WE ALLOW THE PRESENT MA AND DIRECT THE LD. TPO/ A O TO APPLY THE GUARANTEE COMMISSION @ 0.50 % ON ACTUAL AMOUNT OF LOAN AVAILED BY THE AE DURING THE YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND MAKE ADDITION ACCORDINGLY. IN THE RESULT, MISC. APPLICATION FILED BY THE ASSESSEE FOR A SSESSMENT YEAR 2011 - 12 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN CO U RT ON 10 TH SEPT , 2020 UNDER RULE 34 (4) O F THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963 . SD/ - SD/ - ( S.RIFAUR RAHMAN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 10 / 0 9 / 2020 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A ) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI