RAOUL S. THACKERSEY,MUMBAI V. ASST CIT 12(1), MUMBAI

MA 236/MUM/2024

AI Insights

The case involves two assessees, Raoul S. Thackersey and Khushaal C. Thackersey, who filed Miscellaneous Applications against the Tribunal's earlier decision concerning the taxability of surplus from the redemption of debentures. The assessees contended that the Tribunal's earlier order did not address their procedural concerns under section 251(2) of the Income Tax Act, which they argued was necessary before enhancing their income assessments. They also claimed that certain clauses in the Debenture Trust Deed, which could impact the Tribunal's decision, were overlooked. The Departmental Representative argued that the Tribunal had considered all contentions and that the applications sought a review, which was not permissible. The Tribunal acknowledged the need to address the procedural oversight but declined to revisit other contentions, emphasizing the limitations of section 254(2) of the Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47269 (ITAT-MUMBAI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: K. GOPAL; NEHA PARANJPE
• Section: 254(2); 54F

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D”, MUMBAI BEFORE JUSTICE (RETD.) SHRI C.V. BHADANG, PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER M.A. No. A.Y. Applicant Respondent 236/Mum/2024 (Arising out of ITA No. 3678/Mum/2015) 2010-11 Raoul S. Thackersey, Sir Vithaldas Chambers, 3rd Floor, 16 Mumbai Samachar Marg, Fort, Mumbai-400001. PAN: ACLPT5869P ACIT-12(1), R.No. 263, Aayakar Bhavan, M.K. Road, Mumbai-400020. 237/Mum/2024 (Arising out of ITA No. 3679/Mum/2015) 2010-11 Khushaal C. Thackersey, Sir Vithaldas Chambers, 3rd Floor, 16 Mumbai Samachar Marg, Fort, Mumbai-400001. PAN: AFHPT2561H For Assessee : Shri K. Gopal & Ms. Neha Paranjpe For Revenue : Shri Hemanshu Joshi, Sr.DR Date of Hearing : 04-04-2025 Date of Pronouncement : 09-04-2025 ORDER PER B.R. BASKARAN, A.M : Both the assessees have filed these Miscellaneous Applications against the order dated 15-04-2024 passed by the Tribunal in their respective hands. In these Miscellaneous Applications, both the assessees have submitted that there are mistakes apparent from record in the order(s) passed in their respective hands in the captioned appeals on an identical issue urged by them.Since the alleged mistakes pointed out by both the assessees are similar in nature, both these 2 M.A. Nos. 236 & 237/Mum/2024 Miscellaneous Applications were heard together and are being disposed of by this common order. 2. The Ld.AR submitted that the findings given by the ITAT in the impugned order dt. 15-04-2024 in the hands of both the assessees are not consistent with the facts available on record. Further, it is submitted that both the assessees have raised a specific issue in Ground No. 1, viz., the Ld.CIT(A) has failed to follow the procedure prescribed u/s. 251(2) of the Act before enhancing the income in the hands of both the assessees. The Ld A.R submitted that the above said ground has not been adjudicated by the ITAT in the hands of both the assessees. It is also submitted that the Tribunal has failed to consider certain clauses in the Debenture Trust Deed which allowed the companies to re-issue the debentures redeemed by them, which would have had impact on the final decision taken by the Tribunal. Accordingly, the Ld.AR submitted that the above said mistakes apparent from record(s) may kindly be rectified. 3. The Ld.DR, on the contrary, submitted that the Tribunal has adjudicated appeals of both the assessees after considering all the contentions raised by both the parties. Accordingly, he submitted that it cannot be said there are mistakes apparent from record as alleged by the assessees. He further submitted that the contentions raised in the present petitions would result in the review of the orders passed by the Tribunal, which is not permitted u/s 254(2) of the Act. 4. We heard the parties and perused the record. We notice that the issue adjudicated by the Tribunal relates to the taxability of surplus arising to the assessees upon redemption of debentures issued by M/s. Bhishma Realty Ltd.,and M/s. Capricorn Realty Ltd. The assessee had offered the same as Long Term Capital Gainagainst which deduction u/s. 54F of the Act was also claimed by both the assessees. The AO 3 M.A. Nos. 236 & 237/Mum/2024 accepted the claim of the Long Term Capital Gain, but disallowed the deduction claimed u/s. 54F of the Act. In the appellate proceedings, the Ld.CIT(A) held that the redemption of Non-Convertible Debentures (NCDs) would not give rise to Long Term Capital Gain as claimed by the assessees. He further held that the difference between maturity proceeds received upon redemption of NCDs and cost thereof has to be assessed as interest income under the head ‘income from other sources’. 5. Before the Tribunal, both the assessees contended that the Ld.CIT(A) has exceeded his power by directing the AO to assess a new source of income. The Tribunal, however, held that the Ld.CIT(A) has only changed the head of income under which the gain realized of redemption of NCDs is required to be assessed. Accordingly, the above said contention of the assessees was rejected. With regard to the contention of the assessee inGround No. 1 that there is enhancement of income by the Ld.CIT(A), we notice that the observations made by the Tribunal in paragraph No.10 of its order with regard to new source of income would address that issue also, since mere change of head of income under which particular receipt is assessable, would not result in enhancement of incomeas contemplated in sec. 251(2) of the Act. However, since there is no specific observation with regard to Ground No.1, we carry out necessary modification in paragraph No. 10 in the said orders passed in the hands of both the assessees by adding following sentence:- “In Ground No. 1, the assessee has raised a ground that the Ld.CIT(A) has enhanced the income without following the procedure prescribed u/s. 251(2) of the Act.In our view, mere change in the head of income would not result in enhancement of income. Accordingly, this legal ground is also rejected.” 4 M.A. Nos. 236 & 237/Mum/2024 6. If we consider, all other contentions raised by both the assessees, then it would result in review of the orders passed by the Tribunal, which is not permitted u/s. 251(2) of the Act. Accordingly, we decline to examine all those contentions. 7. In the result, both the Miscellaneous Applications are treated as partly allowed. Order pronounced in the open court on 09-04-2025 Sd/- Sd/- (JUSTICE (RETD.) C.V. BHADANG) PRESIDENT (B.R. BASKARAN) ACCOUNTANT MEMBER Mumbai, Date: 09-04-2025 TNMM Copy to : 1. The Applicant 2. The Respondent 3. The Pr. CIT concerned 4. The D.R. ITAT, Mumbai 5. Guard File. //By Order// //True Copy // Dy./Asst. Registrar, ITAT, Mumbai "