PENTAGON BUILDERS PRIVATE LIMITED , MUMBAI V. INCOME TAX OFFICER 5 (2) (4), MUMBAI

MA 73/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0422 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 31-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAVITA P KAUSHIK
• Keywords: Capital asset; Business income
• Section: 195; 264; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI MAHAVIR SINGH ( JUDICIAL MEMBER ) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) M.A. NO. 73/MUM/2018 (ITA NO. 7417/MUM/2014) ASSESSMENT YEAR: 2011 - 12 PENTAGON BUILDERS PVT. LTD., 6 TH FLOOR, DEEJAY APARTMENT, 46, BHULABHAI DESAI ROAD, MUMBAI - 400026. VS. THE INCOME TAX OFFICER - 5(2)(4), MUMBAI. PAN NO. AABCP8971F APPELLANT RESPONDENT ASSESSEE BY : MR. AKASH KUMAR , AR REVENUE BY : MS. KAVITA P. KAUSHIK , DR DATE OF HEARING : 27 /09/2019 DATE OF PRONOUNCEMENT : 18/12/2019 ORDER PER N.K. PRADHAN, A.M. BY MEANS OF THIS MISCELLANEOUS APPLICATION (MA), THE APPLICANT SEEKS RECALL OF THE ORDER DATED 31.05.2017 PASSED BY THE ITAT C BENCH MUMBAI (ITA NO. 7417 /MUM/201 4 ) FOR THE ASSESSMENT YEAR (AY) 2011 - 12 . 2. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT IT IS NOT SHOWN IN THE IMPUGNED ORDER OF THE TRIBUNAL AS TO HOW THE FACTS ARE SIMILAR WITHOUT NARRATING THE FACTS OF THE YEAR UNDER REFERENCE AND THOSE OF THE PREVIOUS YEARS RELEVANT TO THE EARLIER ASSESSMENT YEARS OF WHICH THE FACTS ARE SIMILAR; THE FACTS SHOULD BE THE PRIMARY FACTS. REFERRING TO THE ORDER OF THE TRIBUNAL FOR THE PENTAGON BUILDERS PVT. LTD. MA NO. 73/MUM/2018 2 AY 2005 - 06, IT IS STATED THAT ONLY REFERENCE HAS BEEN MADE TO A PART OF THE TRANSACTION THAT BELONG TO THE CATEGORY OF SHORT TERM CAPITAL ASSET AND NO REFERENCE WAS MADE TO THE SHARES HELD AS LONG TERM. IT IS STATED THAT THE TRIBUNAL IN THE IMPUGNED ORDER AS WELL DID NOT REFER TO THE SHARES HELD LONG TERM, EVEN THOUGH THE DETAILS WERE PROVIDED IN THE PAPER BOOK (PAGE 6, 7, 87 AND 89). IT IS STATED THAT THE ORDER OF THE TRIBUNAL FOR AY 2005 - 06 CAN BE CONSIDERED TO BE GIVEN ON THE FACTS OF THE CASE OF THAT YEAR AND O UGHT TO BE RESTRICTED TO THAT YEAR ONLY. IT IS STATED THAT FACTS AND CIRCUMSTANCES OF EACH YEAR ARE DIFFERENT AND HAVE TO BE CONSIDERED AND LOOKED INTO SEPARATELY. THE LD. COUNSEL FILES A COPY OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF JA YA CHH EDA (89 TAXMANN.COM 152); CIT V. IHP FINVEST LTD . 236 TAXMAN 64. THUS THE LD. COUNSEL SUBMITS THAT THE IMPUGNED ORDER PASSED BY THE TRIBUNAL BE SUITABLY AMENDED OR RECALLED. 3. ON THE OTHER HAND, THE LD. DR SUBMITS THAT THERE IS NO MISTAKE APPA RENT FROM RECORD IN THE IMPUGNED ORDER PASSED BY THE TRIBUNAL. HE SUBMITS THAT THE TRIBUNAL HAS NO POWER TO REVIEW ITS ORDER IN THE GARB OF SECTION 254(2) OF THE ACT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE REASONS FOR OUR DECISIONS ARE GIVEN BELOW. WE MAK E IT ABUNDANTLY CLEAR THAT JAYA CHHEDA (SUPRA) AND IHP FINVEST LTD . (SUPRA) RELIED ON BY THE LD. COUNSEL IN THE WRITTEN SUBMISSION FILED ALONG WITH THE PRESENT MA WERE NOT REFERRED TO OR RELIED UPON DURING THE COURSE OF HEARING ON 24.05.2017 IN ITA NO. 7417/MUM/2014 FOR THE IMPUGNED PENTAGON BUILDERS PVT. LTD. MA NO. 73/MUM/2018 3 ASSESSMENT YEAR. THEREFORE, THE FINDINGS IN THE ABOVE DECISION S CANNOT BE APP LIED IN THE ORDER DISPOSING OF THE PRESENT MA. WE HAVE MENTIONED IN THE ORDER DATED 31.05.2017 IN I TA NO. 7417/MUM/2014 FOR THE IMPUGNED ASSESSMENT YEAR THE FOLLOWING : 8. WE FIND THAT THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2005 - 06 AND 2006 - 07 VIDE ITA NOS. 4384/MUM/2008 DATED 29.10.2010 AND 6045/MUM/2009 & 6110/MUM/ 2009 DATED 22.12.2010 HAS CONSIDERED SIMILAR DISPUTE AND HELD THAT THE PROFIT OR LOSS EARNED IN TRANSACTION OF PURCHASE AND SALE OF SHARES AND SECURITIES WAS LIABLE TO BE ASSESSED AS BUSINESS INCOME. WE ALSO FIND THE CO - ORDINATE BENCH IN THE CASE OF THE AS SESSEE FOR THE A.Y. 2007 - 08 AND 2009 - 10 VIDE ITA NO. 379/MUM/2011 AND ITA NO. 5407/MUM/2012 HAS FOLLOWED THE ABOVE ORDER AND HELD THAT THE TRANSACTION OF PURCHASE AND SALE OF SHARES WERE LIABLE TO BE ASSESSED AS BUSINESS INCOME. HAVING EXAMINED THAT THE FACTS ARE SIMILAR, WE FOLLOWED THE ORDER OF THE CO - ORDINATE BENCH FOR AYS 2005 - 06, 2006 - 07, 2007 - 08 AND 2009 - 10 AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. 4.1 A PERUSAL OF THE ABOVE FACTS CLEARLY INDICATE THAT THE APPLICANT HAS NOT POINTED OUT ANY MISTAKE APPARENT FROM THE RECORD. A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOUS MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REA SONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIONS. A DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM THE RECORD. THIS VIEW IS SUPPORTED BY THE DECISION OF THE HONBLE SUPREME COURT IN T.S. BALARAM, ITO V. VOLKART BROS ., (1 971) 82 ITR 50 (SC), MASTER CONSTRUCTION CO. P. LTD. V. STATE OF ORISSA , AIR 1966 SC 1047, PENTAGON BUILDERS PVT. LTD. MA NO. 73/MUM/2018 4 KARAM CHAND THAPAR & BROS. (COAL SALES) LTD. V. STATE OF U.P. (1976) TAX LR 1921, 1927 (SC) AND CCE V. ASCU LTD ., (2003) 9 SCC 230, 232. IN FACT, NOT A SINGLE ERROR IN THE IMPUGNED ORDER HAS BEEN POINTED OUT BY THE APPLICANT. WHAT THE APPLICANT WANTS IS A REVIEW OF THE ORDER PASSED BY THE TRIBUNAL. THE TRIBUNAL IS A CREATURE OF THE STATUTE. THE TRIBUNAL CANNOT REVIEW ITS OWN DECISION UNLESS IT IS PERMITTED TO DO SO BY THE STATUTE. THE HONBLE SUPREME COURT HAS HELD IN PATEL NARSHI THAKERSHI V. PRADYUMANSINGHJI ARJUNSINGHJI [AIR 1970 SC 1273] THAT THE POWER TO REVIEW IS NOT AN INHERENT POWER. IT MUST BE CONFERRED BY LAW EITHER SPECIFICALLY OR BY NECESSARY IMPLICATION. I T IS A SETTLED LAW THAT THE TRIBUNAL HAS NO POWER TO REVIEW ITS ORDER IN THE GARB OF SECTION 254(2) OF THE ACT AS HELD IN CIT V. GLOBE TRANSPORT CORPN. [1992] 195 ITR 311 (RAJ) (HC), CIT V. ROOP NARAIN SARDAR MAL [2004] 267 ITR 601 (RAJ) (HC), CIT V. DEVIL AL SONI [2004] 271 ITR 566 (RAJ) (HC), JAINARAIN JEEVRAJ V. CIT [1980] 121 ITR 358 (RAJ.) (HC), PRAJATANTRA PRACHAR SAMITI V. CIT [2003] 264 ITR 160 (ORISSA) (HC), CIT V. JAGABANDHU ROUL [1984] 145 ITR 153 (ORISSA) (HC), CIT & ANR. V. ITAT & ANR. [1992] 19 6 ITR 640 (ORISSA) (HC), SHAW WALLACE & CO. LTD. V. ITAT & OTHERS [1999] 240 ITR 579 (CAL) (HC), CIT V. SUMAN TEA & PLYWOOD INDUSTRIES PVT. LTD. [1997] 226 ITR 34 (CAL) (HC), ITO V. ITAT & ANR. [1998] 229 ITR 651 (PAT.) (HC), CIT & ANR. V. ITAT & ANR. [199 4] 206 ITR 126 (AP) (HC), ACIT V. C. N. ANANTHRAM [2004] 266 ITR 470 (KAR) (HC). 4.2 IN THE CASE OF RAMESH ELECTRIC & TRADING CO . (SUPRA), THEIR LORDSHIPS OF THE HONBLE BOMBAY HIGH COURT HAVE HELD: UNDER S. 254(2) OF THE IT ACT, 1961, THE TRIBUNAL MAY, WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB - S (1) WITHIN THE PENTAGON BUILDERS PVT. LTD. MA NO. 73/MUM/2018 5 TIME PRESCRIBED THEREIN. IT IS AN ACCEPTED POSITION THAT THE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER THE PROV ISIONS OF THE IT ACT, 1961. THE ONLY POWER WHICH THE TRIBUNAL POSSESSES IS TO RECTIFY ANY MISTAKE IN ITS OWN ORDER WHICH IS APPARENT FROM THE RECORD. THIS IS MERELY A POWER OF AMENDING ITS ORDER. IN THE PRESENT CASE, IN THE FIRST ORDER, THERE IS NO MISTAKE WHICH IS APPARENT FROM THE RECORD AT ALL. THE TRIBUNAL WAS REQUIRED TO DECIDE WHETHER THE COMMISSION PAYMENT OF RS.54,000 WAS DEDUCTIBLE UNDER S. 37. AFTER EXAMINING THE CIRCUMSTANCES, THE TRIBUNAL CAME TO A CONCLUSION THAT IT WAS NOT SO DEDUCTIBLE. THE T RIBUNAL CANNOT, IN EXERCISE OF ITS POWER OF RECTIFICATION, LOOK INTO SOME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT ITS CONCLUSION SO ARRIVED AT. THE MISTAKE THE TRIBUNAL IS ENTITLED TO CORRECT IS NOT AN ERROR OF JUDGMENT BUT A MISTAKE WHICH I S APPARENT FROM THE RECORD ITSELF. THE TRIBUNAL HAS, PATENTLY, FAR EXCEEDED ITS JURISDICTION UNDER S. 254(2) IN REDECIDING THE ENTIRE DISPUTE WHICH WAS BEFORE IT, IN THIS FASHION, AND THE TRIBUNAL HAS COMMITTED A GROSS AND INEXPLICABLE ERROR. FAILURE BY TH E TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. 5. IN VIEW OF THE FACTUAL SCENARIO AND POSITION OF LAW DELINEATED HEREINBEFORE, THE P RESENT MA, BEING DEVOID OF MERIT, IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/12/2019. SD/ - SD/ - ( MAHAVIR SINGH ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 18/12/2019 RAHUL SHARMA, SR. P.S. PENTAGON BUILDERS PVT. LTD. MA NO. 73/MUM/2018 6 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