PARSHWANATH REALTY PVT. LTD.,AHMEDABAD V. THE ITO, WARD-3(1)(1), AHMEDABAD

MA 51/AHD/2025

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Parshwanath Realty Pvt. Ltd. filed a Miscellaneous Application under section 254(2) of the Income-tax Act, 1961, seeking rectification of an earlier order that confirmed the disallowance of 75% of exhibition expenditure amounting to 27,46,312. The expenditure was claimed to promote the brand 'Parshwanath Corporation'. The Tribunal had previously considered the assessee's arguments and relevant case laws but concluded that the expenditure benefited a separate entity and thus could not be fully allowed in the assessee's hands. The Tribunal dismissed the application, stating it sought a review rather than rectification, which is not permissible under the law.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789986 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-11-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 30-06-2025
• Other Referred Cases: CIT v. Chandulal Keshavlal & Co. (38 ITR 601), CIT v. Rasiklal Balabhai (119 ITR 303), Jogendrasing Mohansingh (HUF) (76 TTJ 148), Union Cold Storage v. Jones 8 TC 725 (CA), ACIT v. Saurashtra Kutch Stock Exchange Ltd. (2008) 173 Taxman 322, United Liner Agencies v. DCIT 9 taxmann.com107 (Mum), R. Chelladurai 118 ITR 108 (MAD)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: SANJAY R SHAH
• Keywords: Commercial expediency
• Section: 37

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER M.A. No.51/Ahd/2025 in I.T.A. No. 322/Ahd/2025 (Assessment Year: 2018-19) Parshwanath Realty Pvt. Ltd., 50, Harsiddh Chambers, Ashram Road, Ahmedabad-380014 Vs. Income Tax Officer, Ward-3(1)(1), Ahmedabad [PAN No.AABCA2802N] (Appellant) .. (Respondent) Appellant by : Shri Sanjay R Shah, AR Respondent by: Shri Abhijit, Sr. D.R. Date of Hearing 18.07.2025 Date of Pronouncement 25.11.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: The assessee has filed this Miscellaneous Application under section 254(2) of the Income-tax Act, 1961 seeking rectification of the order dated 28.05.2025 passed by this Tribunal in ITA No. 322/Ahd/2025. In the present Miscellaneous Application, the assessee submitted that the Tribunal has committed a mistake of law in confirming the disallowance of 75% of the exhibition expenditure amounting to ₹27,46,312/-. According to the assessee, such expenditure had been incurred to promote the brand “Parshwanath Corporation”, which is the name by which both the assessee as well as M/s. Shree Parshwanath Corporation, a firm in which the assessee holds 10% share, are known in the market. It is asserted in the Miscellaneous Application that the Tribunal did not properly apply the ratio of the decisions of the Hon’ble Supreme Court in CIT v. Chandulal Keshavlal & Co. (38 ITR 601) and the Hon’ble Printed from counselvise.com M.A No. 51/Ahd/2025 (in ITA No. 322/Ahd/2025) Parshwanath Realty Pvt. Ltd. vs. ITO Asst. Year –2018-19 - 2– Gujarat High Court in CIT v. Rasiklal Balabhai (119 ITR 303), and also did not correctly appreciate the decision of the Ahmedabad Bench in Jogendrasing Mohansingh (HUF) (76 TTJ 148), which as per the assessee are directly applicable to the assessee. The assessee accordingly contended that the Tribunal committed a mistake in relying on Union Cold Storage v. Jones 8 TC 725 (CA), and submits that the decision of the Tribunal should be recalled in view of the principle laid down by the Supreme Court in ACIT v. Saurashtra Kutch Stock Exchange Ltd. (2008) 173 Taxman 322, which held that non-consideration of a binding judgment constitutes a mistake apparent from record. 2. We have considered the contents of the Miscellaneous Application along with the arguments advanced therein. On a holistic reading of the application, it becomes immediately evident that the assessee is not pointing out any error that is patent, obvious or self-evident on the face of the record. Instead, the assessee is seeking a complete re-examination of the factual findings recorded by the Tribunal, the appreciation of evidence, and the interpretation of judicial authorities already considered in the final order. The Tribunal, in its order dated 28.05.2025, had taken into account the assessee’s submissions regarding the partnership relationship, the nature of the firm’s business, the commercial expediency argument, and the case laws relied upon by the assessee. After considering the particular facts of the assessee’s case the Tribunal reached a conscious and reasoned conclusion that the expenditure was incurred for the benefit of a separate entity and therefore could not be allowed fully in the hands of the assessee under section 37 of the Act and that only part expenditure could be allowed in the hands of the assessee in proportion to it’s share in the partnership firm. Printed from counselvise.com M.A No. 51/Ahd/2025 (in ITA No. 322/Ahd/2025) Parshwanath Realty Pvt. Ltd. vs. ITO Asst. Year –2018-19 - 3– 3. It is well settled that the power of rectification under section 254(2) is a very limited power and cannot be equated with the power of review. In the case of United Liner Agencies v. DCIT 9 taxmann.com107 (Mum), ITAT made the following observations: 6. We have carefully considered the rival contentions and gone through the contents of the miscellaneous application and the relevant material on record. An application for rectification of the Tribunal's order under section 254(2) can be accepted only if the order contains mistakes which are apparent from the record. Any point decided by the Tribunal on which two or more opinions are possible or which may give rise to an argument or debate cannot be considered to fall under this category. It is also well-established that the Tribunal has no power of review of its order in the guise of correcting or rectifying mistakes apparent from the record. In the light of these principles, we find it difficult to accept the contentions of the learned counsel for the assessee. 4. In the case of R. Chelladurai 118 ITR 108 (MAD.), the High Court ITAT made the following observations: It is well settled that the Tribunal has no power of review. Section 254 confers a power on the Tribunal to rectify any mistake apparent from the record and to amend any order passed by it under sub section (1) of section 254. The Tribunal’s power under section 254(2) is only to amend the earlier order with a view to rectify any error apparent from the record. Even section 254(2) does not confer on the Tribunal the power to review its own order. That the Tribunal had actually reviewed its own order was clear from the passage in the statement of the case. However, the Tribunal while passing the original order failed to consider whither the penalty levied was arbitrary and excessive. A power to rectify a mistake does not include a power to review. As the Tribunal has no power of review and as the power of review can only be granted by the statute, which has not been done in the instant case, the order of the Tribunal, in so far as it went into the question of quantum of penalty was plainly without jurisdiction. In exercise of the power under section 254(2), the Tribunal could only have rectified that particular error which was pointed out by the ITO, namely, about the legality of the earlier order in so far as it was held that the penalty could not be levied under the provisions of the new Act. The result of the miscellaneous application filed by the ITO being accepted by the Tribunal would only have rendered the appeal against the order of the AAC being dismissed without any further aspect having to be gone into by way of reviewing its earlier order. The order in so far as it dealt with the quantum was without jurisdiction. The Tribunal could only rectify the mistake. Interference with quantum could not be effected in exercise of the power of rectification. It would amount to a reconsideration of the appeal, for doing which the Tribunal had no power or authority. Printed from counselvise.com M.A No. 51/Ahd/2025 (in ITA No. 322/Ahd/2025) Parshwanath Realty Pvt. Ltd. vs. ITO Asst. Year –2018-19 - 4– 5. In the present case, the assessee has reiterated the same factual submissions and legal propositions which were already examined by the Tribunal in detail. What the assessee now seeks is a rehearing of the appeal in the guise of a rectification petition. Such an exercise is impermissible in law. The order of the Tribunal dated 28.05.2025 was passed after full consideration of the facts, contentions and judicial authorities cited by the assessee and does not suffer from any mistake apparent from the record warranting recall or rectification under section 254(2) of the Act. 6. In view of the above discussion, we hold that the assessee is seeking a review of the earlier order of the Tribunal, which is outside the scope of Miscellaneous Application proceedings under section 254(2). Since no mistake apparent from the record has been demonstrated by the assessee, the Miscellaneous Application deserves to be dismissed. 7. Accordingly, the Miscellaneous Application filed by the assessee is dismissed. 8. In the result, the Miscellaneous Application filed by the assessee is dismissed. This Order pronounced in Open Court on 25/11/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 25/11/2025 Tanmay, Sr. PS TRUE COPY Printed from counselvise.com M.A No. 51/Ahd/2025 (in ITA No. 322/Ahd/2025) Parshwanath Realty Pvt. Ltd. vs. ITO Asst. Year –2018-19 - 5– आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 25.11.2025(Dictated over dragon software) 2. Date on which the typed draft is placed before the Dictating Member 25.11.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 25.11.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 25.11.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 25.11.2025 7. Date on which the file goes to the Bench Clerk 25.11.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "