ACIT 19(3), MUMBAI V. VISHWASHAKTI CONSTRUCTION, MUMBAI

MA 89/MUM/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6436 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 08-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Assessee Lawyers: DR K SIVARAM
• Keywords: Accommodation entries; Tax effect; Set aside

Judgement Text

F IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI C.N.PRASAD , JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER MA NO. 89 /MUM/2019 ARISING OUT OF ITA NO. 4064/MUM/2018 ASSESSMENT YEAR 2010 - 11 ASSISTANT COMMISSIONER OF INCOME - TAX 19(3) MATRU MANDIR 2 ND FLOOR, ROOM NO. 206 TARDEO ROAD, MUMBAI - 400007 V. VISHWASHAKTI CONSTRUCTION 7 TH KHETWADI LANE 10 ATUL NIWAS BUILDING 1 ST FLOOR NO. 20/21, MUMBAI - 400024 APPLICANT RESPONDENT PAN AACFV6900A REVENUE BY SHRI CHAITANYA ANJARIA, DR RESPONDENT BY DR. K SIVARAM DATE OF HEARING : 26 - 04 - 2019 DATE OF PRONOUNCEMENT : 26 - 04 - 2019 ORDER PER RAMIT KOCHAR, ACCOUNTANT MEMBER THE REVENUE HAS FILED THIS MISCELLANEOUS APPLICATION(MA) IN MA NO. 89 /MUM/2019 ARISING OUT OF REVENUES APPEAL IN ITA NO. 4064 /MUM/201 8 FOR ASSESSMENT YEAR 2010 - 11 WHICH STOOD DISMISSED BY THE APPELLATE ORDER OF THE I NCOME TAX APPELLATE TRIBUNAL, A BENCH, MUMBAI DATED 10 .0 8 .2018 OWING TO LOW TAX EFFECT BEING COVERED BY CBDT CIRCULAR NO. 3/2018 DATED 11.07.2018 . IT IS ADMITTED IN PARA 6 OF THE MA FILED BY REVENUE THAT IN THIS APPEAL THE TAX AFFECT WAS RS.11,00,994/ - WHICH WAS BELOW THE MONETARY LIMIT AS ENVISAGED IN CBDTS CIRCULAR NO. 3/2018 DATED 11.07.2018. THERE IS NO DISPUTE AS TO THE TAX EFFECT IN THE APPEAL ADJUDICATED BY ITAT. 2. THE REVENUE HAS FILED THIS MA ON THE GROUND THAT IN THIS APPEAL THE INFORMATION WAS RECEIVED FROM MAHARASHTRA VAT DEPARTMENT THAT THE ASSESSEE IS BENEFICIARY OF ACCOMMODATION ENTRIES AND THE AO HAD PROVED THAT THE PURCHASE S WERE NOT GENUINE. IT IS EXPLAINED IN THIS MA THAT IN OTHER MA NO. 89/MUM/2019 ARISING OUT OF ITA NO.4064/MUM/2018 2 YEARS , THE REVENUE HAS PREFERRED AN APPEAL WITH HON BLE BOMBAY HIGH COURT. IT IS EXPLAINED THAT CBDT CIRCULAR NO. 3/2018 DATED 11.07.2018 WAS AMENDED ON 20.08.2018 WHICH AMENDED PARA 10 OF THE CBDT C IRCULAR DATED 11.07.2018 , INTER - ALIA, BY INSERTING CLAUSE (E) TO PARA 10 OF CBDT CIRCULAR DATED 11.07.2018 WHICH IS RELEVANT FOR THIS MA AND WHICH READS AS UNDER: (E) WHERE ADDITION IS BASED ON INFORMATION RECEIVED FROM EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES SUCH AS CBI/ED /DRI/ SFIO /DIRECTORATE GENERAL OF GST INTELLIGENCE(DGGI) THUS ON THE STRENGTH OF THIS AMENDMENT , IT IS PRAYED BY LEARNED DR THAT THIS MA BE ALLOWED AND THE ORDER OF TRIBUNAL IN ITA NO. 4064/MUM/2018 DATED 10.08.2018 BE SET ASIDE 3. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND BROUGHT TO OUR NOTICE THA T THE CBDT CIRCULAR DATED 11.07.2018 WAS AMENDED BY AN AMENDMENT DATED 20.08.2018 AND PARA 4 OF THE SAID AMENDMENT DATED 20.08.2018 CLEARLY STIPULATE THAT IT SHALL BE EFFECTIVE FROM THE DATE OF ISSUE OF THIS AMENDING LETTER VIZ. 20.08.2018 , WHILE THE IMPU GNED APPELLATE ORDER IN ITA NO. 4064/MUM/2018 WAS PASSED BY ITAT ON 10.08.2018 WHICH IS PRIOR TO THE ISSUE OF THIS LETTER DATED 20.08.2018 AMENDING CBDT CIRCULAR DATED 11.07.2018. THE LEARNED COUNSEL ALSO RELIED ON THE DECISION OF ITAT, MUMBAI IN MA NO. 04 /MUM/2019 ARISING OUT OF APPEAL IN ITA NO. 6345/MUM/2017 FOR AY 2010 - 11 , VIDE MA ORDER DATED 20.03.2019 TO CONTEND THAT MA ON SIMILAR ISSUE WAS DISMISSED BY ITAT. 4 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE HAVE OBSERVED THAT T HE ITAT, MUMBAI HAS DISMISSED THE APPEAL OF THE REVENUE IN ITA NO. 4064/MUM/2018 FOR AY 2010 - 11 OWING TO LOW TAX EFFECT BY FOLLOWING CBDT CIRCULAR NO. 3/2018 DATED 11.07.2018, VIDE APPELLATE ORDERS DATED 10.08.2018. NOW , IT IS BROUGHT TO OUR NOTICE THAT VIDE LETTER DATED 20.08.2018, THERE WAS AN AMENDMENT IN THE SAID CBDT CIRCULAR DATED 11.07.2018 WHICH IS TO BE EFFECTIVE FROM 20.08.2018 WHEREIN , INTER - ALIA, CLAUSE (E) WAS INSERTED IN PARA 10 OF CBDT CIRCULAR DATED 11.07.2018 , AS UNDER: MA NO. 89/MUM/2019 ARISING OUT OF ITA NO.4064/MUM/2018 3 10.... (E) WH ERE ADDITION IS BASED ON INFORMATION RECEIVED FROM EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES SUCH AS CBI/ED /DRI/ SFIO /DIRECTORATE GENERAL OF GST INTELLIGENCE(DGGI) IT IS MADE CLEAR IN THIS LETTER DATED 20.08.2018 THAT THESE MODIFICATIO N SHALL COME INTO EFFECT FROM THE DATE OF ISSUE OF THIS LETTER, VIDE PARA 4 OF LETTER DATED 20.08.2018 WHICH READ AS UNDER: 4. THE SAID MODIFICATION SHALL COME INTO EFFECT FROM THE DATE OF ISSUE OF THIS LETTER. THE TRIBUNAL HAS PASSED AN ORDER IN APPEAL IN ITA NO. 4064/MUM/2018 FOR AY 2010 - 11 ON 10.08.2018 WHICH IS PRIOR TO THE MODIFICATION ISSUED BY CBDT ON 20.08.2018. FURTHER, WE HAVE OBSERVED THAT CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V. RAM BUILDERS IN MA NO. 04/MUM/2019 ARISING OUT OF ITA NO. 6345/MUM/2019 VIDE ORDER DATED 20.03.2019 IN MA HAS DISMISSED THE MA UNDER SIMILAR CIRCUMSTANCES, WHEREIN TRIBUNAL WHILE DISMISSING MA HAS HELD AS UNDER: 4 WE HAVE HEARD THE COUNSELS FOR BOTH THE PARTIES ON THIS APPLICATION AND ALSO PERUSED THE RECORDS AND AFTER VERIFYING THE RECORDS AS WELL AS AFTER GOING THROUGH THE ORDER DATED 31.08.18 PASSED IN ITA NO. 6345/M/17, WE NOTICED THAT THE MAIN APPEAL WAS HEARD ON 10.08.18 AND ADMITTEDLY, ON THAT DAY, THERE WAS NO REVISED CIRCULAR REFERRED TO OR ARGUED BEFORE THE BENCH. THEREFORE, GOING INTO THE MERITS OF THE SAID CIRCULAR, IT IS ADMITTED BY LD. DR HIMSELF THAT NO SUCH CIRCULAR WAS IN EXISTENCE OR WAS REFERRED BEFORE THE BENCH ON 10.08.18 AT THE TIME OF HEARING. IN CASE TITLE CIT VS. RAMESH ELECTR IC AND TRADING CO. (203 ITR 497) WHEREIN THE HONBLE BOMBAY HIGH COURT HELD THAT UNDER SECTION 254(2)OF THE INCOME - TAX ACT, 1961, THE APPELLATE TRIBUNAL MAY, 'WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD', AMEND ANY ORDER PASSED BY IT UND ER SUB - SECTION (1) WITHIN THE TIME PRESCRIBED THEREIN. IT IS AN ACCEPTED POSITION THAT THE APPELLATE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER THE PROVISIONS OF THE ACT. THE ONLY POWER WHICH THE TRIBUNAL POSSESSES IS TO RECTIFY ANY MI STAKE IN ITS OWN ORDER WHICH IS APPARENT FROM THE RECORD. THIS IS MERELY A POWER OF AMENDING ITS ORDER. THE POWER OF RECTIFICATION UNDER SECTION 254(2) CAN BE EXERCISED ONLY WHEN THE MISTAKE WHICH IS SOUGHT TO BE RECTIFIED IS AN OBVIOUS AND PATENT MISTAKE WHICH IS APPARENT FROM THE RECORD, AND NOT A MISTAKE WHICH REQUIRES TO BE ESTABLISHED BY ARGUMENTS AND A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLE BE TWO OPINIONS. FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY E ITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGEMENT. THE TRIBUNAL CANNOT, IN THE EXERCISE OF ITS POWER OF RECTIFICATION, LOOK INTO SOME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUP PORT ITS CONCLUSION.' MA NO. 89/MUM/2019 ARISING OUT OF ITA NO.4064/MUM/2018 4 6.IN VIEW OF THE ABOVE DISCUSSION AND CONSIDERING THE FACT THAT NO SUCH REVISED CIRCULAR WAS EVER REFERRED OR PLACED ON RECORD AT THE TIME OF HEARING AND HENCE, AT THIS STAGE, WE CANNOT CONSIDER THE MERITS OF REVISED CIRCULAR WHICH W AS NOT IN EXISTENCE AT THE TIME OF HEARING OR PLACED ON RECORD AS IT AMOUNTS TO REVIEW, WE FIND THAT NO GLARING, OBVIOUS OR PATENT MISTAKE HAS BEEN POINTED OUT BY THE ASSESSEE WHICH IS APPARENT FROM THE RECORD, THEREFORE WE ARE INCLINED TO DISMISS THE MA FILED BY THE REVENUE. 7.IN THE NET RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE R E VENUE STANDS DISMISSED WITH NO ORDER AS TO COST . THUS BASED ON THE CONJOINT READING OF OUR ABOVE DISCUSSIONS, WE DONOT FIND ANY MERIT IN THIS MA FILED BY REVENUE, WHIC H WE ARE INCLINED TO DISMISS. REVENUE FAILS IN THIS MA WHICH STAND DISMISSED. WE ORDER ACCORDINGLY. 5 . THUS, THIS M.A. NO. 89 /MUM/2019 ARISING OUT OF APPEAL IN ITA NO. 4064/MUM/2018 FOR AY 2010 - 11 FILED BY THE REVENUE IS DISMISSED AS INDICATED ABOVE. ORDER P RONOUNCED IN THE OPEN COURT ON 2 6 .04.2019 2 6 .04.2019 S D / - S D / - ( C. N. PRASAD ) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 26 .04.2019 COPY TO NISHANT VERMA SR. PRIVATE SECRETARY 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) CONCERNED, MUMBAI 4 . THE CIT - CONCERNED, MUMBAI 5 . THE DR BENCH, 6 . MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI