SHYAM BABA FERRO ALLOYS PRIVATE LIMITED,HYDERABAD V. INCOME TAX OFFICER, WARD-3(3), HYDERABAD

MA 80/HYD/2021

AI Insights

The case involves Shyam Baba Ferro Alloys Pvt. Ltd., which filed a Miscellaneous Application against an earlier Tribunal order concerning the assessment year 2014-2015. The original dispute centered on the rejection of a loss claim by the assessee, which was upheld by the CIT(A) and subsequently by the Tribunal. The assessee argued that the Tribunal had erred in not considering the depreciation calculated by the Straight Line Method (SLM) as per the Income Tax Act, 1961, instead of the Written Down Value (WDV) method used in their books. The Tribunal, however, found that the issues raised in the Miscellaneous Application did not constitute a mistake apparent on the record but rather sought a review of the decision, which is not permissible under section 254(2) of the Income Tax Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314247 (ITAT-HYDERABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2014-2015
• Other Referred Cases: Express Newspapers Lid. v. DCIT [2010] 186 Taxman 111 (Mad.), CIT vs. Reliance Telecom Ltd., [2021] 133 taxmann.com 41 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAHUL SINGHANIA
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Set aside; Business income; Depreciation
• Section: 143(3); 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER M.A.No.80/Hyd./2021 Arising out of ITA.No.2059/Hyd./2017 - Assessment Year 2014-2015 Shyam Baba Ferro Alloys Pvt. Ltd., Hyderabad. PAN AAOCS3654H vs. Income Tax Officer, Ward-3(3), Hyderabad. Telangana. (Applicant) (Respondent) For Assessee : CA P Murali Mohan Rao For Revenue : Shri Rahul Singhania, Sr. AR Date of Hearing : 09.05.2025 Date of Pronouncement : 09.05.2025 ORDER PER MANJUNATHA G. : The assessee has filed the present Miscellaneous Application M.A.No.80/Hyd./2021 u/sec.254(2) of the Income Tax Act, 1961 against the common order of the Tribunal in ITA.No. 2059/Hyd./2017, dated 21.09.2021, pertains to the assessment year 2014-2015. 2 M.A.No.80/Hyd./2021 2. The assessee has narrated the facts of it’s case and mistakes stated to be apparent on record from the order of the Tribunal dated 21.09.2021 and relevant contents of the Miscellaneous Application filed by the assessee are reproduced as under : “1. The appellant herein, submits humbly that, the Hon'ble ITAT, Bench 'A' Hyderabad vide their order in ITA Nos. 2059/Hyd/2017dated 21.09.2021, had dismissed the appeal of the assessee for the AY 2014-15. In this regard, this miscellaneous petition is filed now. The appellant herein would like to submit brief facts of the case for kind consideration of the Hon'ble Tribunal for recalling and posting the appeal for hearing. 2. Brief Facts of the case: 2.1. The assessee company is engaged in the business of manufacturing of Silicon Manganese and Ferro Silicon. For the assessment year 2014-15 it filed its return of income on 17.10.2014 declaring total loss of Rs.50,08,146 on the turnover of Rs.23,77,81,918/-. The case was selected for complete scrutiny and notices u/s 143(2) and 142(1) are issued. Subsequently, the assessment was completed u/s 143(3) of the IT Act, 1961 by the Assessing Officer vide passing an assessment order dated 30.12.2016, by arriving at business income of Rs.38,88,694/- and treating an amount of Rs.4,23,51,491/ as \"income from speculation business\" thereby computing the total income of the assessment year at Rs.4,62,40,184/-as against the admitted loss of Rs.50,08,147/-. 2.2. Aggrieved by the above order, the appellant preferred an appeal before the Ld CIT(A) wherein the first appellate authority ie., CIT(A) -3 vide order dated 12-10-2017 has allowed the appeal partly. 2.3. Aggrieved by the above order of the Ld. CIT(A), the assessee and the revenue have preferred the appeals before the Hon'ble. Tribunal. Your Honors vide its order in ITA 2059/ Hyd/2017 dated 21.09.2021, has directed as under in relation to rejection of loss return as follows: \"With regard to ground No.8 3 M.A.No.80/Hyd./2021 relating to rejecting the loss claimed of Rs.50,08,147/-, the Ld. CIT(A)'s reasoning by considering the reconstructed trading account is proper and we do not find any reason to interfere with decision of CTT(A). Accordingly, we uphold the order of the CIT(A) and dismiss the ground No. 8.\" While adjudicating ground no.8 the Hon'ble ITAT has erred in confirming the order of the Ld. CIT(A) and we would like to bring to your kind notice that the Ld CIT(A) in its order adjudicated the ground No. 4 of the CIT(A) order. 2.4. Whereas the assesses specific ground no.8 before Hon'ble ITAT is not covered by the Ld. CIT(A) and the same has arose against the CIT(A) order, in which the assessee contends that depreciation calculated as per SLM method shall be taken into account for the purpose of calculating profit/Loss as per the trading account and not the depreciation calculated (by WDV Method)as per Income Tax Act, 1961 and allow the losses. 2.5. However, the Hon'ble ITAT while passing the order has mentioned the view taken by theLd. CIT(A) and not adjudicated the ground no. 8 filed before your honours. 2.6. In view of the above it is requested to re-call the order passed by the Hon'ble Bench, Hyderabad in cited ITA 2059/ H/2017 dated: 21-09-2021 and requests to consider the computation filed by the assessee and allow the depreciation as per Income Tax Act. Prayer: In view of the above facts and circumstances of the case, it is humbly prayed to recall the order of ITAT Dt. 21.09.2021 in ITA no. 2059/Hyd/2017to re consider the facts, grounds of appeal and submissions along with relied upon case laws filed before your Honorsand to kindly set aside the earlier order and recall the appeal to be decided on facts & merits.” 3. CA P Murali Mohan Rao, Learned Counsel for the Assessee, referring to the order of the Tribunal dated 21.09.2021 and more particularly, the finding in paragraph- 7 of the order submitted that, although, the assessee has 4 M.A.No.80/Hyd./2021 taken a specific ground challenging the finding of the Tribunal in restricting the addition made by the Assessing Officer to the extent of Rs.NIL income by ignoring the loss claimed by the assessee, but, while upholding the reasons given by the learned CIT(A), ignored the fact that the assessee has debited depreciation into P & L A/c as per WDV method, even though, the correct way of claiming depreciation in the books of accounts is depreciation as per straight line method. The assessee has explained this fact before the learned CIT(A). however, the learned CIT(A) ignored the submissions of the assessee and has simply restricted the addition made by the Assessing Officer to the extent of Rs.NIL income by rejecting the loss claimed of Rs.50,08,147/- and the said finding constitute a mistake apparent on record, which needs to be rectified u/sec.254(2) of the Act. Therefore, he submitted that, the order in ITA.No. 2059/Hyd./2017 dated 21.09.2021 should be recalled. 4. Shri Rahul Singhania, learned SR. AR for the Revenue, on the other hand, submitted that, there is no prima facie mistake apparent from the order of the Tribunal 5 M.A.No.80/Hyd./2021 dated 21.09.2021 in ITA.No.2059/Hyd./2017 and what is canvassed through the present Miscellaneous Application is, to review the decision rendered by the Tribunal in the given facts and circumstances of the case, which is not permissible u/sec.254(2) of the Act. He submitted that, the plain meaning of the word 'apparent' is that, it must be something which appears to be ex-facie and incapable of argument and debate. If such a 'mistake apparent on the face of record' is brought to the notice, section 254(2) empowers the Tribunal to amend the order passed u/sec. 254(1) of the Act. In this regard, he relied upon the decision of Hon’ble High Court of Madras in the case of Express Newspapers Lid. v. DCIT [2010] 186 Taxman 111 (Mad.). 5. We have heard both the parties and considered the relevant contents of Miscellaneous Application filed by the assessee against the order of the Tribunal dated 21.09.2021 in ITA.No.2059/Hyd./2017. We find that, the Tribunal while concurring with the findings of the learned CIT(A) has recorded a categorical finding that the reasoning given by the learned CIT(A) considering the re-constructed 6 M.A.No.80/Hyd./2021 trading account is proper and we do not find any reason to interfere with the decision of the learned CIT(A). On further verification of the findings of the learned CIT(A), we find that, the learned CIT(A) after considering the reconstructed trading account submitted by the appellant, has allowed relief to the appellant by restricting the addition made by the Assessing Officer towards disallowance of various expenditure to the extent of Rs.Nil income by rejecting the loss claimed to have been incurred by the appellant. Going by the findings recorded by the learned CIT(A) which has been subsequently approved by the Tribunal, in our considered view, there is no mistake in the order of the Tribunal as canvassed by the Learned Counsel for the Assessee in light of petition filed by the assessee u/sec.254(2) of the act. But, what is canvassed through the present Miscellaneous Application is reviewing the decision rendered by the Tribunal in the given facts of the present case, which is not permissible u/sec.254(2) of the Act. Further, the scope of provisions of sec.254(2) of the Act is very limited to the extent of rectifying the apparent mistakes 7 M.A.No.80/Hyd./2021 that it must be something which appears ex-facie and incapable of argument and debate. The expression ‘mistake apparent on the record’ means a mistake either clerical or grammatical or arithmetical or of like nature, which can be detected without there being any necessity to re-argue the matter or to re-appraise the facts as appearing from the records. Further, the Hon’ble Supreme Court in the case of CIT vs., Reliance Telecom Ltd., [2021] 133 taxmann.com 41 (SC) held that, in case the findings by the Tribunal is incorrect, then, the course of action for the assessee is to challenge the finding of the Tribunal before the High Court, but, under the garb of rectification, the assessee cannot seek for review of the decision rendered by the Tribunal. Therefore, we are of the considered view that, there is no merit in the Miscellaneous Application filed by the assessee against the order of the Tribunal dated 21.09.2021 in ITA.No.2059/Hyd./2017. Thus, we reject the Miscellaneous Application filed by the assessee. 6. In the result, Miscellaneous Application M.A.No.80/Hyd./2021 of the assessee is dismissed. 8 M.A.No.80/Hyd./2021 Order pronounced in the open Court on 09.05.2025. Sd/- Sd/- [RAVISH SOOD] [MANJUNATHA G] JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 09th May, 2025 VBP Copy to 1. Shri Shyam Baba Ferro Alloys Pvt. Ltd., C/o. P. Murali & Co. Chartered Accountants, 6-3-655/1/3, Somajiguda, Hyderabad - 500 082. 2. Income Tax Officer, Ward-3(3), Hyderabad. 3. The CIT(A)-3, Hyderabad 4. The Pr. CIT-3, Hyderabad. 5. The DR ITAT “A” Bench, Hyderabad. 6. Guard File. /By Order// //True Copy// "