ACIT 7(2)(1), MUMBAI V. MAHINDRA GESCO DEVELOPES LTF, MUMBAI

MA 703/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2694 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 30-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 271(1)(c); 143(3); 115JB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/SHRI M. BALAGANESH , ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER M.A. N O . 703 /M/201 8 (ARISING OUT OF ITA NO. 13 /M/201 6 ) ( / ASSESSMENT YEAR: 2003 - 04 ) ACIT - 7(2)(1) ROOM NO. 573, 5 TH FLOOR, AAYAKARBHAVAN, M.K. ROAD, MUMBAI - 400020 . / VS. MAHINDRA GESCO DEVELOPERS LTD. (NOW KNOWN AS MAHINDRA LIFESPACE DEVELOPERS LTD.) MAHINDRA TOWERS, 5 TH FLOOR, ROAD NO. 13, WORLI, MUMBAI - 400018. /. /. PAN/GIR NO. : AAACG 8904 C ( / APPELLANT ) / APPLICANT .. ( / RESPONDENT ) / DATE OF HEARING: 25 . 01 .201 9 /DATE OF PRONOUNCEMENT: 18. 0 2 . 201 9 ORDER PER AMARJIT SINGH, J M THE ASSESSEE HAS FILED THE PRESENT MISCELLANEOUS APPLICATION NO. 703 /M/201 8 MOVED BY REVENUE ARISING OUT OF ITA. NO.13 /M/201 6 DATED 01.06.2018 . 2. THE FACTS OF THE CASE ARE THAT THE ASSESSMENT WAS COMPLETED ON 28.02.2005 ASSESSING THE INCOME TO THE TUNE OF RS.27,97,50,140/ - . AT THE TIME OF ASSESSING THE INCOME UNDER THE NORMAL PROVISION OF THE ACT, THE AO DID NOT COMPUTE THE BOOK PROFIT U/S 115JB OF THE ACT. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE HONBLE CIT(A) AS WELL AS BEFORE THE TRIBUNAL. THE HONBLE TRIBUNAL REVENUE BY: SHRI SATISH CHANDRA RAJORE (DR) ASSESSEE BY: SHRI H.P. MAHAJANI PRASAD BAPAT (AR) MA 703 / MUM/201 8 PASSED THE ORDER DATED 30.06.2011 IN ITA. NO.4291/M/2007. THE AO ALSO PASSED THE ORDER FOR GIVING AN EFFECT TO THE ORDER OF TRIBUNAL ON 06.01.2012 DETERMINING THE INCOME UNDER NORMAL PROVISIONS OF THE ACT IN SUM OF RS.NIL. THE AO ALSO COMPUTED THE BOOK PROFIT U/S 115JB OF THE ACT AT RS.5,48,71,162/ - . AS PER THE RETURN OF INCOME FILED BY THE ASSESSEE, THE AO AGAIN PASSED THE ORDER U/S 154 OF THE ACT BY RECTIFYING THE ORDER GIVING AN EFFECT TO THE TRIBUNAL BY ADDING BACK FOR PROVISION FOR DIMINUTION IN VALUE OF ASSETS AND PROVISION AND COMPUTED THE BOOK PROFIT IN SUM OF RS.21,03,86,222/ - OBSERVING THAT THERE IS A MISTAKE APPARENT ON RECORD IN PASSING THE ORDER AS PER THE PROV ISIONS OF SECTION 115JB OF THE ACT AS AMENDED BY FINANCE ACT 2008 W.E.F. 01.04.2001 REQUIRING ADDITION OF THE AMOUNT OR AMOUNTS SET ASIDE AS PROVISION FOR DIMINUTION IN THE VALUE OF ANY ASSET TO THE BOOK PROFITS. AGAIN, THE ASSESSEE FILED THE APPEAL BEFOR E THE CIT(A) WHO QUASHED THE ORDER AND REVENUE FILED AN APPEAL BEFORE THE HONBLE ITAT WHICH WAS DISMISSED HOLDING THAT THE RECTIFICATION ORDER PASSED BY THE AO, MODIFYING THE ORDER GIVING EFFECT TO THE TRIBUNAL ORDER AND COMPUTING THE BOOK PROFIT ADDING B ACK THE DIMINUTION IN VALUE OF INVESTMENTS/ASSETS IS BAD IN LAW AS THERE WAS NOT ANY MISTAKE IN THE ORDER PASSED BY THE AO GIVING EFFECT TO THE ORDER OF THE TRIBUNAL. FURTHER, THE HONBLE ITAT STATED THAT THE MISTAKE IF ANY, WAS IN THE ASSESSMENT ORDER ORI GINALLY PASSED BY THE AO U/S 143(3) OF THE ACT ON 28.02.2005 AND NOT IN THE ORDER PASSED GIVING EFFECT TO THE TRIBUNAL ON 06.01.2012 AND UPHELD THE DECISION OF THE LD. CIT(A). 3. IN THE MEANWHILE, THE AO INITIATED THE PENALTY PROCEEDINGS INVOKING THE PROVI SIONS OF SECTION 271(1)(C) OF THE ACT. THE CIT(A) HAS DELETED THE PENALTY. THE HONBLE ITAT HAS HELD THAT THE ORIGINAL RECTIFICATION ORDER PASSED BY THE AO HAS BEEN QUASHED BY THE TRIBUNAL, SO THE PENALTY ORDER WOULD NOT SURVIVE. OTHERWISE, PENALTY IS NOT LEVIABLE IN THE MAT MATTERS FOR THE YEAR UNDER CONSIDERATION IN THE LIGHT OF CIRCULAR NO. 25 OF 2015 (SUPRA) ISSUED BY THE CBDT. MA 703 / MUM/201 8 4. IT WAS OBSERVED THAT THE ORDER U/S 154 OF THE ACT ON 14.03.2013 WHILE THE PENALTY ORDER UNDER CONSIDERATION WAS PASSED ON 30 .04.2012 IN CONSEQUENCE UPON THE CONFIRMATION OF ADDITIONS/DISALLOWANCE BY HONBLE ITAT ORDER DATED 30.06.2011. 5. ON APPRAISAL OF THE APPLICATION AND AFTER HEARING THE ARGUMENT ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES, W E FOUND THAT THE APPLICANT HAS MENTIONED THE PROCEEDING HELD BEFORE THE AO, CIT(A) AS WELL AS BEFORE THE HONBLE ITAT. THE APPLICANT WANTED TO AMEND THE PARA NO. 4 OF THE ORDER PASSED BY HONBLE ITAT DATED 01.06.2 018 BUT FAILED TO SPECIFY THE F A CT WHICH NEEDS TO RECTIFIED . O N APPRA ISAL OF THE ORDE R OF HONBLE ITAT DATED 01.06.2018, W E NOWHERE FOUND ANY MISTAKE APPARENT ON RECORD WHICH NEEDS TO BE RECTIFIED. THEREFORE, TAKING INTO ACCOUNT, ALL THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE APPLICATION NOWHERE ACCOMPANIED WI TH FORCE WHICH NEEDS TO BE RECTIFIED IN VIEW OF THE PROVISIONS U/S 254(2) OF THE ACT. IN THE RESULT , THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS HEREBY DISMISSED . ORDER WAS PRON OUNCED IN TH E OPEN COURT ON 18. 02 . 201 9 SD/ - SD/ - ( M. BALAGANES ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI, DT: 18.0 2 .2019 VIJAY COPY TO : MA 703 / MUM/201 8 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE, B , BENCH (TRUE COPY) BY ORDER SR. PS , ITAT, MUMBAI BENCHES