MARINE CASSIERS P.LTD, V. ASST CIT 3(2),

MA 707/MUM/2012

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0366 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-04-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 23-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: H S RAHEJA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, M UMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND D.KARUNAKAR RAO (AM) . . , . ! , '# ' $ && '' /M .A.MO.707/M/2012 (ARISING OUT OF ./I.T.A. NO.2828/M/2007) ( ' 3 / ASSESSMENT YEAR:2001-02 ) MARINE CARRIERS PVT LTD., C/O. S.I MOGUL & CO., CAS, 738, MITTAL COURT, NARIMAN POINT, MUMBAI-21. ' ' ' ' / VS. ACIT 3(2), MUMBAI 4 '# ./ 56 ./PAN/GIR NO. : PA NO.AAACM 4456 F ( 47 / APPELLANT) .. ( 8947 / RESPONDENT) 47 : ' / APPELLANT BY : SHRI H.S.RAHEJA 8947 ; : ' /RESPONDENT BY : SHRI MOHIT JAIN ' ; <# / DATE OF HEARING : 26.4.2013 =>3 ; <# /DATE OF PRONOUNCEMENT : 30 .4.2013 '? / O R D E R PER B.R.MITTAL, JM: BY THIS MISCELLANEOUS APPLICATION U/S.254(2) OF TH E ACT, THE ASSESSEE HAS STATED THAT THE ORDER OF THE TRIBUNAL DATED 12.10.2012 IN I.T.A. NO.2828/M/2007 FOR ASSESSMENT YEAR 2001-02 BE RECALLED AND CASE OF THE ASSESSEE BE CONSIDERED IN THE LIGHT OF THE RESOLUTION OF THE BOARD OF DIRECTORS PASSED IN THEIR MEETING HELD ON 23.3.2000 AS THE TRIBUNAL HAS STATED IN PARA 9 OF THE IMPUGNED O RDER THAT ASSESSEE COULD NOT FILE COPY OF THE RESOLUTION ON OR BEFORE 8.10.2012 AND S UBJECT TO THAT, HEARING OF THE CASE WAS COMPLETED. IF SAID RESOLUTION IS CONSIDERED THA T THE DIRECTORS OF ASSESSEE COMPANY ARE NOT EMPLOYEES, THIS FACT WILL BE MATERIAL TO TH E DECISION OF THE APPEAL OF THE ASSESSEE. 2. AT THE TIME OF HEARING, LD A.R. REITERATED ABOVE FACTS AND SUBMITTED THAT ORDER OF THE TRIBUNAL BE RECALLED TO DECIDE THE ISSUE AFRESH AFTER CONSIDERING COPY OF RESOLUTION 2 WHICH WAS NOT CONSIDERED WHILE DECIDING THE APPEAL. LD D.R. SUBMITTED THAT THERE IS NO ERROR IN THE ORDER OF THE TRIBUNAL AND THE SAID RES OLUTION DOES NOT GIVE NEW FACTS. HENCE, M.A. OF THE ASSESSEE BE DISMISSED. 3. IT IS RELEVANT TO STATE THAT ASSESSEE HAD SHOWN OUTSTANDING AMOUNT OF RS.13,62,352 ON ACCOUNT OF COMMISSION PAYABLE TO DI RECTORS AS ON 31.3.2001 IN THE CREDITORS LIST. THE SAID AMOUNT WAS NOT ALLOWED IN VIEW OF PROVISIONS OF SECTION 43B(C)R.W.S 36(1)(II) OF THE ACT CONSIDERING THE SA ID AMOUNT PAYABLE TO THE DIRECTORS WAS A PART OF SALARY IN THE CAPACITY OF EMPLOYEES A ND IT WAS NOT A FEE PAID TO THE DIRECTORS FOR ATTENDING MEETING, ETC. LD CIT(A) ALS O CONFIRMED THE ACTION OF ASSESSING OFFICER. IN FURTHER APPEAL BEFORE THE TRIBUNAL, LD A.R. WAS ASKED TO FURNISH COPY OF THE RESOLUTION OF THE BOARD OF DIRECTORS TO ASCERTAIN A S TO WHETHER SAID OUTSTANDING AMOUNT WAS A PART OF SALARY OR WAS A FEE PAYABLE TO DIRECT ORS. THE HEARING WAS CONCLUDED STATING THAT ASSESSEE COULD NOT FURNISH COPY OF THE RESOLUTION ON OR BEFORE 8.10.2012. UNDOUBTEDLY, THE TRIBUNAL IN PARA 9 OF ITS ORDER HA S MENTIONED THAT TILL 10.10.2012, COPY OF THE SAID RESOLUTION HAS NOT BEEN FURNISHED AND, ACCORDINGLY, THE TRIBUNAL PROCEEDED TO DISPOSE OFF THE APPEAL ON THE BASIS OF FACTS ON RECORD. 4. ON BEHALF OF ASSESSEE, AN AFFIDAVIT WAS FILED BY THE CLERK OF LD A.R. STATING THAT THE COPY OF RESOLUTION WAS GIVEN TO THE REGISTRY OF THE TRIBUNAL ON 8.10.2012 BUT NO ACKNOWLEDGEMENT WAS GIVEN. BE THAT AS IT MAY, WE A CCEPT SAID CONTENTION OF LD A.R.THAT COPY OF THE RESOLUTION WAS GIVEN TO THE RE GISTRY OF ITAT ON 8.10.2012 AND THE SAME WAS NOT PLACED BEFORE THE CONCERNED MEMBERS. WE CONSIDER IT APPROPRIATE TO EXAMINE AS TO WHETHER ON CONSIDERATION OF THE SAID RESOLUTION, THERE WILL BE ANY EFFECT ON THE OUTCOME OF THE CONCLUSION TAKEN BY THE TRIBU NAL IN ITS ORDER DATED 12.10.2012. 5. DURING THE COURSE OF HEARING, ATTENTION OF LD A. R. WAS DRAWN TO THE SAID RESOLUTION THAT AMOUNT WHICH IS PAYABLE TO THE SAID DIRECTORS IS INDICATED AS REMUNERATION PAYABLE EVERY MONTH AND THE BREAK-UP O F WHICH HAS BEEN GIVEN IN THE FORM OF HOUSE RENT ALLOWANCE, TRAVEL ALLOWANCE PER YEAR EQUIVALENT TO ONE MONTHS DIRECTOR REMUNERATION, YEARLY BONUS EQUIVALENT TO 2 0% OF YEARLY REMUNERATION AND COMMISSION @ 2% PAYABLE TO SHRI KISHORE K SIPPY AND SHRI VISHAL V PURI AND @ 1% TO SHRI K.P.DESAI OF THE YEARLY OPERATIONAL INCOME OF THE ASSESSEE COMPANY. THE SAID BREAK UP INDICATES CLEARLY THAT THE SAID DIRECTORS WERE NOT GETTING REMUNERATION FROM 3 THE ASSESSEE COMPANY AS A FEE FOR ATTENDING BOARD M EETINGS, ETC BUT GETTING REMUNERATION AS EMPLOYEES WITH THE ASSESSEE COMPANY . THEREFORE, SAID BOARD RESOLUTION FURTHER FORTIFIED OUR CONCLUSION THAT AL L THE THREE DIRECTORS NAMELY; SHRI KISHORE K SIPPY, SHRI VISHAL V PURI AND SHRI K.P.DE SAI WERE WORKING AS EMPLOYEES WITH THE ASSESSEE COMPANY AND WERE NOT BEING PAID MERELY AS DIRECTORS OF ASSESSEE COMPANY. SINCE COMMISSION PAYABLE TO THEM AS ON 31 .3.2001 WAS A PART OF SALARY AND SAME WAS NOT PAID, WE HOLD THAT THE TRIBUNAL HAS R IGHTLY CONCLUDED THAT IT COULD NOT BE ALLOWED AS DEDUCTION IN VIEW OF PROVISIONS OF SECTI ON 43B(C) R.W.S 36(1)(II) OF THE ACT. 6. IN VIEW OF ABOVE, WE HOLD THAT THERE IS NO MISTA KE IN THE ORDER OF THE TRIBUNAL AND THE APPLICATION OF THE ASSESSEE IS REJECTED. 7. IN THE RESULT, MISCELLANEOUS APPLICATION FILED B Y ASSESSEE IS DISMISSED. @ 3 #' D E'A 30 TH APRIL, 2013 > ; F SD/- SD/- ( . ! /D.KARUNAKAR RAO) ( . . /B.R.MITTAL) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; E' DATED 30 / 04/2012 . ' . ./ PARIDA , SR. PS '? '? '? '? ; ;; ; 8<& 8<& 8<& 8<& G'&3< G'&3< G'&3< G'&3< / COPY OF THE ORDER FORWARDED TO : 1. 47 / THE APPELLANT 2. 8947 / THE RESPONDENT. 3. H ( ) / THE CIT(A)- 4. H / CIT 5. &IF 8<' , , / DR, ITAT, MUMBAI 6. F J / GUARD FILE. '?' / BY ORDER, 9&< 9&< 9&< 9&< 8< 8<8< 8< //TRUE COPY// B 5 (ASSTT. REGISTRAR) , / ITAT, MUMBAI