DHRUVA WOOLLEN MILLS PVT. LTD., MUMBAI V. ACIT CENT. CIR. 4(1), MUMBAI

MA 688/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6569 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 27-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 254(2)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H , MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER M.A. NO.688/MUM/2018 (ARISING OUT OF ITA NO.6185/MUM/2016) ASSESSMENT YEAR: 2012-13 M/S DHRUVA WOLLEN MILLS PVT. LTD. RUNWAL & OMKAR ESQUARE, 5 TH FLOOR, OPP. SION, CHUNABHATTI SIGNAL, SION(E), MUMBAI-400022 / VS. ACIT, CENTRAL CIRCLE-4(1), MUMBAI ( /ASSESSEE) ( / REVENUE) P.A. NO.AAACR3893P / DATE OF HEARING : 15/02/2019 / DATE OF ORDER: 22/02/2019 / O R D E R PER G. MANJUNATHA (ACCOUNTANT MEMBER) THE ASSESSEE HAS FILED THIS MISCELLANEOUS APPLICATI ON U/S 254(2) OF THE INCOME TAX ACT, 1961 TO RECALL ORDER PASSED BY THE ITAT, MUMBAI H BENCH IN ITA NO.6185/MUM/2016 FOR AY 2012-13, ORDER DATED 08/08/ 2018. / ASSESSEE BY SHRI GAURAV KABRA / REVENUE BY SHRI RAJEEV GUBGOTRA - DR 2 MA NO.688/MUM/2018 M/S DHRUVA WOLLEN MILLS PVT. LTD. 2. THE ASSESSEE HAS FILED MISCELLANEOUS APPLICATIO N EXPLAINING FACTS AND MISTAKES APPARENT FROM THE ORDER OF THE ITAT, MUMBA I, DATED 08/08/2018. THE RELEVANT CONTENTS OF THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE ARE REPRODUCED HEREUNDER:- 1. BY THE CAPTIONED ORDER, APPEAL FOR ASSESSMENT YE AR 2012-13 WAS DISPOSED OFF. THE AFORESAID APPEAL WAS HEARD ON 05T H JUNE, 2018. THE ORDER WAS PASSED BY THE HON'BTE TRIBUNAL ON 081 H AUGUST, 2018. 2. THE GROUNDS RAISED BY THE APPELLANT ARE AS FOLLO WS: 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN MAKING AN ADDITION OF RS.21,49,140/- ON ACCOUNT OF ALLEGED NOTIONAL ANNUAL LETTING VALUE OF UNSOLD FLAT HELD A S STOCK IN TRADE, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE .' 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN BRINGING TO TAX NOTIONAL ANNUAL LETTING VALUE OF UNSOLD FLATS HELD AS STOCK IN TRADE, UNDER THE HEAD INCOME FROM HOUSE PROPERTY', IN TERMS OF SECTION 22 READ WITH SECTION 23 OF THE ACT, WITH OUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE.' THIS ISSUE INVOLVED IN THE ABOVE GROUND WAS ALSO A SUBJECT TO APPEAL IN THE SISTER CONCERN OF APPELLANT I.E M/S RUNWAL CONS TRUCTION (ITA NO. 5408/MUM/2016) WHEREIN THE HON'BLE BENCH AFTER CONS IDERING THE DECISION OF HON'BLE DELHI HC IN CASE OF ANSAL HOUSI NG FINACE A LEASING CO. LTD AND ALSO THE DECISION OF THE HON'BLE SUPREM E COURT IN CASE OF CHENNAI PROPERTIES ET INVESTMENT LTD VS CIT HELD TH AT THE UNSOLD FLATS WHICH WERE HELD AS STOCK IN TRADE, THE INCOME DERIV ED FROM SUCH FLATS SHOULD BE ASSESSABLE UNDER THE HEAD 'INCOME FROM BU SINESS OR PROFESSION.' IN THIS CASE ALSO THE AR OF THE APPELL ANT RELIED UPON THE SAID DECISION OF THE COORDINATE BENCH AND FILED COPY OF THE SAME AND THIS FACT IS ALSO ACKNOWLEDGED BY THE HON'BLE BENCH ON PAGE 1 3 OF THE ORDER. HOWEVER, WHILE DECIDING THE AFORESAID GROUND AGAINS T THE APPELLANT, THE HON'BLE BENCH INADVERTENTLY HAS NOT FOLLOWED THE DE CISION GIVEN IN CASE OF ASSESSEE'S SISTER CONCERN M/S RUNWAL CONSTRUCTION ( ITA NO. 5408/MUM/2016). SINCE, THE ORDER OF CO-ORDINATE BEN CH OF TRIBUNAL WHICH WAS RELIED UPON WAS NOT FOLLOWED AND THAT IN FORMIN G ANOTHER VIEW, THE VIEW TAKEN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL WAS NOT DISTINGUISHED, THEREFORE, A MISTAKE APPARENT FROM R ECORD HAS CREPT IN. THE ISSUE COULD NOT BE DECIDED WITHOUT BEING REFERRED T O A SPECIAL BENCH TO RECONCILE THE DIFFERENCE, IF AT ALL, BETWEEN TWO VI EWS. REFERENCE IN THIS REGARD IS INVITED TO THE DECISIONS OF HON'BLE SUPRE ME COURT IN THE CASE OF 3 MA NO.688/MUM/2018 M/S DHRUVA WOLLEN MILLS PVT. LTD. SUNDARJAS KANYALAL BHATIJA ET ORS. VS. COLLECTOR, T HANE, MAHARASHTRA ET ORS. (1990) 183 ITR 130 (SC), UNION OF INDIA & ANR. VS. PARAS LAMINATES (P) LTD. (1990) 87 CTR (SC) 180 : (1990) 186 ITR 72 2 (SC) AND HONDA SIC! POWER PRODUCT LTD. VS. CIT (2007) 295 ITR 466 (SC). IT IS, THEREFORE, SUBMITTED THAT THE ORDER MAY KINDLY BE RECTIFIED. 2.2 FURTHER WHILE DECIDING THE ISSUE THE HON'BLE ME MBERS HAS PLACED RELIANCE ON THE DECISIONS GIVEN BY BOMBAY HC IN CAS E OF CIT VS SANE & DOSHI ENTERPRISES (377 ITR 165), THOUGH THE SAID DE CISION WAS NOT CONFRONTED TO THE APPELLANT DURING THE COURSE OF HE ARING NEITHER BY THE BENCH NOR BY THE LD DEPARTMENTAL REPRESENTATIVE. FU RTHER THE FACTS OF THE THIS CASE ARE COMPLETELY DIFFERENT AS IN THIS CASE THE APPELLANT HAD SUO- MOTO GIVEN THE UNSOLD PROPERTY ON RENT HOWEVER IN O UR CASE THE AG HAS CALCULATED A NOTIONAL INCOME ON THE UNSOLD FLATS. T HE UNSOLD FLATS HAVE NOT BEEN GIVEN ON RENT AT ALL. A NOTIONAL CALCULATION H AS BEEN DONE BY THE AG ASSUMING THAT RS42,98,280/- WOULD HAVE BE EARNED BY THE APPELLANT IF THEY WERE GIVEN ON RENT. 2. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED IN THE PRESENT APPAL WAS ALSO A SUBJECT MATTER OF APPEAL IN THE SI STER CONCERN OF ASSESSEE I.E. M/S RUNWAL CONSTRUCTION IN ITA NO.5408/MUM/2016, WHEREI N, THE TRIBUNAL AFTER CONSIDERING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF ANASAL HOUSING FINANCE & LEASING CO. LTD. AND ALSO THE DEC ISION OF THE HONBLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES & INVESTMEN TS LTD. VS CIT HELD THAT THE UNSOLD FLATS WHICH WERE HELD AS STOCK-IN-TRADE, THE INCOME DERIVED FROM SUCH FLATS SHOULD BE ASSESSABLE UNDER THE HEAD INCOME FROM HO USE PROPERTY. THE LD. AR FURTHER SUBMITTED THAT ALTHOUGH THE SAID DECISION H AS BEEN RELIED UPON, THE BENCH HAS INADVERTENTLY NOT FOLLOWED THE DECISION GIVEN I N THE CASE OF SISTER CONCERN AND HENCE THE SAID INADVERTENT ERROR CONSTITUTE A MISTA KES APPARENT FROM RECORD, WHICH REQUIRES RECTIFICATION U/S 254(2) OF THE ACT. ACCOR DINGLY, REQUESTED TO RECALL ORDER OF THE ITAT DATED 08/08/2018 IN ITAT NO.6185/MUM/2016. 4 MA NO.688/MUM/2018 M/S DHRUVA WOLLEN MILLS PVT. LTD. 3. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT TH E LD. AR FOR THE ASSESSEE FAILS TO MAKE OUT A PRIMA FACIE CASE OF MISTAKES AP PARENT ON RECORD FROM THE ORDER OF THE ITAT AND WHAT THE LD. AR FOR THE ASSESSEE SEEKI NG IS REVISION OF FINDINGS RECORDED BY THE TRIBUNAL IN THE LIGHT OF FACTS OF T HE PRESENT CASE AND ALSO ARGUMENTS ADVANCED BY BOTH PARTIES, THEREFORE, THERE IS NO RE ASON TO RECALL THE ORDER PASSED BY THE TRIBUNAL IN ITA NO.6185/MUM/2016. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE ALONG WITH ORDER OF THE TRIBUNAL IN ITA NO.6185/MUM/2016, DATED 08/08/2018. WE FIND THAT T HE TRIBUNAL HAS CONSIDERED THE ARGUMENTS OF THE ASSESSEE IN LIGHT OF DECISION OF C O-ORDINATE BENCH OF ITAT G BENCH IN THE CASE OF M/S RUNWAL CONSTRUCTIONS IN I TA NO.5408/MUM/2016 WHILE RECORDING ITS FINDING IN RESPECT OF TAXABILITY OF RENTAL INCOME DERIVED FROM PROPERTIES HELD AS STOCK-IN-TRADE IN CASE OF ASSESSEE ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER AND AFTER CONSIDERING THE RELEVANT FACTS AND ALSO BY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF ANAS AL HOUSING FINANCE & LEASING CO. LTD. (SUPRA) AND IN LIGHT OF RATIO LAID DOWN BY HONBLE SUPREME COURT IN THE CASE CHENNAI PROPERTIES & INVESTMENTS LTD. VS CIT (SUPRA ), CAME TO THE CONCLUSION THAT RENTAL INCOME DERIVED FROM UNSOLD FLATS HELD AS STO CK IN TRADE, THE INCOME DERIVED FROM SUCH FLATS SHOULD BE ASSESSABLE UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY, THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO MERIT IN THE MISCELLANEOUS 5 MA NO.688/MUM/2018 M/S DHRUVA WOLLEN MILLS PVT. LTD. APPLICATION FILED BY THE ASSESSEE, ACCORDINGLY, THE SAME IS DISMISSED AS NOT MAINTAINABLE. FINALLY, THE MISCELLANEOUS APPLICATION IS FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/02/2019. SD/- SD/- ( MAHAVIR SINGH ) (G. MANJUNATHA) ! ' /JUDICIAL MEMBER # ' / ACCOUNTANT MEMBER MUMBAI; DATED : 22/02/2019 F{X~{T? P.S / /. . . $!%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. !'# / THE APPELLANT (RESPECTIVE ASSESSEE) 2. $%&'# / THE RESPONDENT. 3. '& '& ( ( ! ) / THE CIT, MUMBAI. 4. '& '& ( / CIT(A)- , MUMBAI, 5. *+, &$ - , '& !&- / , / DR, ITAT, MUMBAI 6. ,01! / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI