M/s. Anoopgarh Kray Vikraya Sahakari Samiti Ltd., SRIGANGANAGAR V. ACIT, SRIGANGANAGAR

MA 8/JODH/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0292 (ITAT-JODHPUR)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 1995-1996
• Appeal Filed On: 05-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Keywords: Depreciation; Bonafide belief; Question of law

Judgement Text

1 IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. M.A. NO. 08JODH/201E (ARISING OUT OF ITA NO. 587/JODH/2010 A.Y. 1995-96) M/S. ANOOPGARH KRAY VIKRAYA SAHAKARI SAMITI LTD. V S ACIT, CIRCLE, ANOOPGARH, SRIGANGANAGAR. SRIGANGANAGAR PAN NO. AAALA0011B (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI SURESH OJHA. DEPARTMENT BY : SHRI G.R. KOKANI (DR) DATE OF HEARING : 14/03/2013. DATE OF PRONOUNCEMENT : 30/04/2013. PER HARI OM MARATHA, J.M.: THROUGH THE ABOVE CAPTIONED MISCELLANEOUS APPLICAT ION, THE APPLICANT/ASSESSEE/APPELLANT HAS SOUGHT RECTIFICATI ON OF THE TRIBUNAL ORDER FOR A.Y. 1995-96 DATED 14/09/2012 PASSED IN T HIS CASE IN ITA NO. 587/JU/2010 (M/S. ANOOPGARH KRAYA VIKRAYA SAHAKARI SAMITI LTD.), BY RAISING THE FOLLOWING GROUNDS :- 2 THE APPELLANT HAS RECEIVED ORDER OF THE HON'BLE BEN CH DATED 14.09.2012 PASSED IN ABOVE CASE, WHEREBY THE APPEAL OF THE ASSESSEE WAS NOT ACCEPTED. ON CAREFUL STUDY OF THE ORDER THE APPELLANT HAS NOT ICED THAT THERE ARE FOLLOWING APPARENT MISTAKES IN THE O RDER OF THE HON'BLE BENCH WHICH REQUIRES A RECTIFICATORY ORDER TO BE PASSED CORRECTING THE MISTAKES :- PARA 9 PAGE 10 OF THE ORDER WHICH DEALS WITH THE CONCLUSION OF THE DECISION IS REPRODUCED FROM PAGE. 11 AS UNDER:- IT IS TRUE THAT THE ASSESSEE HAD DISCLOSED THE TRAN SACTION REGARDING SALE OF MILL AND ALSO RELATING TO SALE OF MILL IN THE COMPUTATION OF INCOME FILED WITH THE RETURN OF INCO ME. BUT K IT HAS FAILED TO SHOW AS TO WHY AND HOW THE CLAIM WAS BONAFIDE. IT IS AN UNDENIABLE FACT THAT THE MILL WAS A PART OF B LOCK OF ASSETS SEPARATE FROM GINNING FACTORY AND THE ASSESSEE HAS BEEN CLAIMING DEPRECIATION THEREON FROM THE VERY BEGINNI NG TILL THE YEAR 1987. THESE FACTS WERE NOT DENIED, RATHER, WER E CONFIRMED FROM THE REPORT. THE MILL WAS CLOSED FOR FOUR YEAR BUT THE DEPRECIATION WAS BEING CLAIMED. THE QUESTIO N THAT THE ASSESSEE IS A COOPERATIVE SOCIETY AND IT IS RUN BY EMPLOYEES WILL NOT ABSOLVE IT FROM PENAL PROVISIONS OF SECTION 217 (L)(C) OF THE ACT BECAUSE ITS ACCOUNTS ARE AUDITED AND BENEFIT OF LEGAL EXPERTS WERE AVAILABLE TO IT ALTOGETHER. THUS THERE IS NO SHRED OF BONAFIDE BELIEF WHICH HAS BEEN PROVED ON RECORD BY THE APPELLANT. BY SAYING AND MENTIONING IN A ROUTINE MA NNER THAT THE COOPERATIVE SOCIETY BEING RUN BY EMPLOYEES CANN OT BE 3 ACCEPTED AS A GENERAL RULE FOR TREATING ANY CLAIM F ALLING UNDER PENAL PROVISIONS AS BONAFIDE ACTION. IT IS SUBMITTED THAT THE ASSESSMENT YEAR UNDER CONSIDERATION I$ 1995-96 AND THE MILL WHICH WAS SUB JECT MATTER OF SALE WAS CLOSED AT THE END OF ACCOUNT YEAR RELEV ANT TO A.Y. 1987-88. THE ASSESSEE HAS CLAIMED DEPRECIATION IN 3 YEARS OF ITS EXISTENCE AS PER DETAILS GIVEN BELOW WHICH ARE AVAI LABLE ON PAGE 3 OF PAPER BOOK, ON FILE OF ITAT. 1985-86 29,672/- 1986-87 31,050/- 1987-88 30,162/- 90,884/- THIS FACT IS ALSO MENTIONED ON PAGE 3 TOP PARA OF W RITTEN SUBMISSION MADE BY THE COUNSEL OF THE ASSESSEE. THE HON'BLE BENCH HAS HOWEVER CONSIDERED THE ERRONEOUS FACTS TH AT THE MILL WAS CLOSED FOR FOUR YEARS BUT THE DEPRECIATION WAS BEING CLAIMED. NO DEPRECIATION WAS EVER CLAIMED AFTER A.Y . 1987-88 AND WDV WORKED OUT AT THE END OF A.Y. 1987-88 WAS T AKEN TO BE WDV WHILE WORKING OUT CAPITAL GAINS IN A.Y. 1995-96 . THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT AFTER 7 YEA RS OF CLOSURE OF MILL, WHILE NO DEPRECIATION IS BEING CLAIMED OR ALLOWED, THE SURPLUS IS ASSESSABLE AS LONG TERM CAPITAL GAINS. 2. IN PARA 9 PAGE 12 OF THE ORDER, THE HON'BLE IT A T HAS DISCUSSED ISSUE RELATING TO LEASE MONEY BEING TAXED ON RECEIPT BASIS IN EARLIER YEAR AND FOUND NO REASON FOR CHANG E IN THE METHOD OF ACCOUNTING. 4 HERE IT IS SUBMITTED THAT THERE IS NO CHANGE IN ACC OUNTING METHOD. THE ASSESSEE HAS RECEIVED ADVANCE LEASE MON EY FOR GINNING OF NARMA. AN ADVANCE IS NO INCOME. IN EARLI ER YEAR THE ASSESSEE WAS WRONGLY SHOWING ADVANCE AS INCOME. THI S YEAR THE ASSESSEE WAS ADVISED THAT UNLESS THE CONTRACT IS EX ECUTED, THE ADVANCE DOES NOT GET CONVERTED INTO INCOME. THUS, T HE ADVANCE LEASE MONEY WAS DISCLOSED AS INCOME ON COMPLETION O F CONTRACT. THIS IS THE RIGHT PROCEDURE AND IN ACCORDANCE WITH ACCOUNTING STANDARD. IF CONTRACT IS NOT PERFORMED, THE ADVANCE IS RECOVERABLE. THE ASSESSEE HAS DISCLOSED THESE FACTS IN THE INCOME AND EXPENDITURE ACCOUNT AND BALANCE SHEET. THERE CA NNOT BE ANY PENALTY FOR FOLLOWING CORRECT ACCOUNTING STANDA RD. AN ADDITIONAL GROUND OF APPEAL WAS RAISED VIDE LETTER DATED 16.07.2012 WHICH INCLUDED WRITTEN SUBMISSIONS IN PA GE 5, PAPER BOOK WITH INDEX 36 PAGES FORM NO. 35 AND AN A DDITIONAL GROUND DULY SIGNED BY THE CHIEF MANAGER OF SOCIETY WHICH IS ALREADY ON THE FILE OF THE IT AT. IN THIS GROUND IT WAS CLAIMED THAT PENALTY LEVIED @ 150% OF TAX SOUGHT TO BE LEVIED IS EXCESSIVE AND UNREASONABLE. THIS GROUND WAS ALSO RAISED BEFORE CI T (A) TOO. HOWEVER, IN THE ORDER OF THE HON'BLE BENCH THIS GRO UND DOES NOT FIND MENTION, ALTHOUGH IN THE WRITTEN SUBM ISSION, IT WAS REQUESTED THAT PENALTY MAY KINDLY BE REDUCED TO MINIMUM. THE ASSESSEE'S CASE IS FULLY COVERED BY THE DECISIO N OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIAN CE PETRO PRODUCTS PVT. LTD. 322 ITR P. 158 RAJASTHAN HIGH CO URT'S DECISION IN CIT VS. ORIENTAL POWER CABLES LTD. (RAJ) 303 ITR P. 49 AND THUS THE ORDER OF THE HON'BLE BENCH DATED 14.09.2012 REQUIRE S TO BE 5 AMENDED. THE APPELLANT SEEKS AMENDMENT OF THE ORDER ACCORDINGLY. 2. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE ALSO CO NSIDERED THE WRITTEN SUBMISSIONS. WE EXTRACT THE WRITTEN SUBMISS ION OF LD. AR IN TOTO, AS UNDER :- WITH REFERENCE TO ABOVE IT IS SUBMITTED THAT THE A PPEAL OF THE ASSESSEE HAS BEEN DECIDED BY THE HON'BLE BENCH. AT THE TIME OF PASSING THE ORDER, HON'BLE BENCH HAS FAILS TO DECID E THE ADDITIONAL GROUND OF APPEAL WHICH WAS RAISED VIDE L ETTER DATED 16.7.2012, WHICH ALSO INCLUDES THE SUBMISSION IN TH E PAPER BOOK WITH FORM NO. 36. IN THIS RESPECT IT IS ALSO SUBMIT TED THAT THE ASSISTANT COMMISSIONER OF INCOME-TAX FAILS TO DISPO SE OFF THE GROUNDS. BESIDE THE OTHER GROUND TAKEN IN THE MEMO OF APPEAL WAS ALSO NOT DISPOSED OFF. AS REGARDS THE GROUNDS IT IS SUBMITTED THAT THE FOL LOWING GROUNDS WERE NOT DISPOSED OFF: 'VARIOUS COURT'S DECISION SITE ON WHICH RELIANCE WA S PLACED WHICH WAS FULLY SUPPORTED THE CASE OF THE ASSESSEE WERE SIMPLY IGNORED,' FROM THE PERUSAL OF THE ABOVE YOU WILL OBSERVE THAT THIS GROUND WAS NOT DISPOSED OFF. 6 THE ASSESSEE RELIED BEFORE THE CIT(A) AS WELL AS BE FORE THIS HON'BLE BENCH ON THE FOLLOWING JUDGMENT OF SUPREME COURT AND RAJASTHAN HIGH COURT :- 1. CIT VS. ORIENTAL POWER CABLE LTD. 303 ITR 49 (RAJ.) . 2. CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 1 58 (SC) 3. CIT VS. SHYAM SUNDER GOPAL DAS 310 ITR 5 (SC) FROM THE PERUSAL OF THE SUBMISSION YOU WILL OBSERVE THAT THIS GROUND WAS NOT DISPOSED OFF BY THE HON'BLE BENCH WH ILE DECIDING THE APPEAL. THE ABOVE GROUND WAS NOT DISPOSED OFF. THEREFORE TH E MISTAKE IS A MISTAKE APPARENT FROM RECORD. AS FAR AS THE GROUND NOT DISPOSED FOR IS ALSO FALLI NG UNDER THE DEFINITION OF THE MISTAKE APPARENT FROM THE RECORD, IN VIEW OF THE JUDGMENT OF HON'BLE RAJASTHAN HIGH COURT DELIVERED IN CASE OF COMMISSIONER OF INCOME-TAX VS RAMESH CHAND MODI REP ORTED 249 ITR 323 (RAJ. THE RELEVANT PORTION OF HEAD NOTE IS BEING REPRODUCED HEREUNDER : FACTS THE APPELLANT CHALLENGES THE ORDER PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL DATED SEPTEMBER 20, 1999, IN MISC. APPLICATION NO. 43/JP OF 1998. THE ASSESSEE-RESPONDENT PREFERRED AN APPEAL AGAINST THE 7 ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 158BC OF THE INCOME-TAX ACT, 1961. ISSUE WHETHER, RECALLING ORDER FOR DECISION AFRESH AMO UNT TO REVIEW ? FINDINGS NO. REASONING WHERE A TRIBUNAL FAILS TO NOTICE THE QUESTION RAISE D BEFORE IT INADVERTENTLY UNDER ANY MISAPPREHENSION, IN CORRECT ING SUCH ERROR BY RECALLING THE ORDER MADE WITHOUT DECIDING SUCH Q UESTION WHICH GOES TO THE ROOT OF THE MATTER FOR DECIDING T HE SAME APPROPRIATELY FALLS IN SUCH CATEGORY OF PROCEDURAL MISTAKES WHICH SUCH TRIBUNAL MUST CORRECT EX DEBITO JUSTITIA E, EVEN IN THE ABSENCE OF ANY POWER. THE PRESENT CASE FALLS IN THAT CLASS. THUS, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL. THE APPEAL IS, THEREFORE, DISMISSED IN LIMINE. IF THE ARGUMENTS WERE NOT CONSIDERED IS ALSO COVERED UNDER THE DEFINITION OF MISTAKE APPARENT FROM RECORD. AS REGARDS THE ARGUMENT, IN THIS RESPECT IT IS SUBM ITTED THAT I WANT TO DRAW YOUR KIND ATTENTION TOWARDS THE WRITTEN SUBMISSION SUBMITTED BEFORE THE HON'BLE BENCH IN CO URSE OF HEARING. THE ASSESSEE ALSO SUBMITTED WRITTEN SUBMIS SION IN WHICH IT WAS ALSO MENTIONED ALSO SUBMITTED THE RELEVANT P ARA IS AS UNDER: 'IN PURSUANCE OF THIS IMPUGNED ORDER HAS BEEN PASSE D BY THE CITA BIKANER ON 7.10.2010 AND UPHELD THE ORDER OF LEARNED AO. WHILE DECIDING THE APPEAL, LEARNED CITA 8 HAS EVEN NOT DECIDED THE GROUNDS OF APPEAL RAISED A S PERFORM NO. 35 FILED BEFORE HIM.' THE ASSESSEE ALSO ARGUED AND SUBMITTED THAT ALTERNA TIVE GROUND IN THE LAST PARA WHICH IS BEING REPRODUCED HEREUNDER: 'AN ALTERNATIVE GROUND IS RAISED IN THIS APPEAL THA T THE PENALTY LEVIED IS UNREASONABLE AND EXCESSIVE. THE A O HAS LEVIED PENALTY @ 150% OF THE TAX SOUGHT TO BE EVADED. IN FACT IT WAS FIRST YEAR WHEN THE SOCIETY' S INCOME CROSSED TAXABLE LIMIT BY MAKING THE ADDITION .' IF THE ARGUMENT AND GROUND WERE NOT DISPOSED OFF IS A MISTAKE APPARENT FROM RERECORD. FROM THE ABOVE SUBM ISSION YOU WILL OBSERVE THAT ARGUMENT WAS TAKEN IN COURSE OF H EARING WAS ALSO NOT CONSIDER AND ADJUDICATED. THIS TOO IS COVE RED BY THE JUDGMENT OF 249 ITR 323 (RAJ.). IN ADDITION TO THIS JUDGMENT YOUR KIND ATTENTION IS INVITED TOWARDS 199 ITR 771 C1T V S. KESHAV FRUIT MART (ALL.) THE ENTIRE JUDGMENT IS BEING REPRODUCED HEREUNDER: HEARD COUNSEL FOR THE PARTIES. BEFORE THE TRIBUNAL, THE QUESTION FOR CONSIDERATION WAS WHETHER THERE WA S A MISTAKE APPARENT FROM THE RECORD IN THAT A GROUND RAISED IN THE MEMORANDUM OF APPEAL BEFORE THE TRIBUNAL WAS NOT AT ALL CONSIDERED BY THE TRIBUNAL. TAKING THE VIEW THAT COMMISSION TO CONSIDER THE GRO UND RAISED IN THE APPEAL WAS A MISTAKE APPARENT FROM TH E RECORD, THE TRIBUNAL SET ASIDE THE ORDER PASSED THE REBY 9 AND FIXED THE DATE FOR A REHEARING. ON THESE FACTS, THE REVENUE HAS RAISED THE FOLLOWING QUESTION IN AN APPLICATION MADE UNDER SECTION 256(2) : ' WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON'BLE TRIBUNAL WAS IN LAW JUSTIFIED IN RECALLING THEIR ORDER DATED JULY 2,1987, IN I.T.A. NO. 2113(ALL.)/1 984, WITH A DIRECTION TO REHEAR THE CASE WHICH WAS PASSE D BY THEM AFTER A CAREFUL CONSIDERATION OF ALL THE GROUN DS OF APPEAL TAKEN BY THE REVENUE ? IT IS URGED BY LEARNED STANDING COUNSEL THAT THE ARGUMENTS WERE DULY ADDRESSED BEFORE THE TRIBUNAL O N THIS GROUND. IT IS CONCEDED BY HIM THAT THE TRIBUNA L HAS NOT AT ALL DISCUSSED THAT GROUND IN ITS ORDER A ND COMPLETE OMISSION TO DISCUSS THE GROUND SET UP IN APPEAL IS UNDOUBTEDLY A MISTAKE APPARENT FROM THE RECORD. THERE BEING NO CONTROVERSY ON THE FACT THAT THE TRIBUNAL COMPLETELY OMITTED TO CONSIDER THE GROUND, IN OUR OPINION, THE AFORESAID QUESTION IS NOT REFER ABLE AND, THEREFORE, THE APPLICATION IS DISMISSED. NO OR DER AS TO COSTS. LASTLY YOUR KIND ATTENTION IS INVITED TOWARDS 91 IT D 398 (AMRITSAR THIRD MEMBER) IN CASE OF B. KARAMCHAND PI ARELAL VS. LNCOME TAX OFFICER IN WHICH THE HON'BLE BENCH HELD AS UNDER : ON A CAREFUL CONSIDERATION OF THE ENTIRE RELEVANT F ACTS, WHICH HAVE VERY APTLY BEEN DISCUSSED IN THE ORDER 10 PROPOSED BY THE LEARNED MEMBERS IN THE AFORESAID M. A. AND IN THE INTEREST OF FAIRNESS AND JUSTICE, I AM O F THE CONSIDERED OPINION THAT THE VIEW TAKEN BY THE LEARN ED ACCOUNTANT MEMBER SHOULD BE PREFERRED OVER THE VIEW EXPRESSED BY THE LEARNED JUDICIAL MEMBER, SO THAT N O LITIGANT CAN HAVE A GRIEVANCE THAT CERTAIN VITAL ARGUMENTS MADE BY THEM AND IMPORTANT JUDGMENTS CITED BY THEM HAVE NOT BEEN CONSIDERED BY THE TRIBU NAL. IN VIEW OF ABOVE MENTIONED FACTS AND CIRCUMSTANCES YOU WILL OBSERVE THAT THERE BEING A MISTAKE APPARENT FR OM RECORD AS POINTED OUT ABOVE YOU ARE REQUESTED TO KINDLY RECTI FY THE MISTAKE. 3. THE LD. D.R. HAS SUBMITTED THAT THERE IS NO RECT IFIABLE MISTAKE IN THIS TRIBUNAL ORDER AND SUPPORTED THE SAME. 4. AFTER CONSIDERING THE ABOVE SUBMISSIONS WE ARE S ATISFIED, THAT THE ADDITION GROUND RAISED REGARDING EXCESSIVENES S OF THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT REMAINED UNADJUDICA TED. THIS IS A RECTIFIABLE MISTAKE INADVERTENTLY COMMITTED, AND TH IS CAN BE RECTIFIED UNDER THE PROVISIONS OF SECTION 254(2) OF THE ACT. OTHER SUBMISSIONS ARE SIMPLY ADMITTED AT THE RE-WRITING OF THE ORDER WHICH IS NOT PERMISSIBLE UNDER SECTION 254(2) OF THE ACT. ACCORD INGLY, WE RECALL THE 11 TRIBUNAL ORDER ONLY FOR THE LIMITED PURPOSE OF DECI DING THE ADDITIONAL LEGAL GROUND RAISED AND REJECT OTHER REFERRED MISTA KES. 5. IN THE RESULT, THIS M.A. IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL, 2013. SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH APRIL, 2013. VL COPY TO ALL CONCERNED.