LAKADAWALA DEVELOPERS P.LTD, MUMBAI v. ACIT 10(1), MUMBAI

ITA 4704/MUM/2012 | 2006-2007
Pronouncement Date: 18-10-2013 | Result: Partly Allowed

Appeal Details

RSA Number 470419914 RSA 2012
Assessee PAN AAACL7083M
Bench Mumbai
Appeal Number ITA 4704/MUM/2012
Duration Of Justice 1 year(s) 3 month(s) 2 day(s)
Appellant LAKADAWALA DEVELOPERS P.LTD, MUMBAI
Respondent ACIT 10(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 18-10-2013
Assessment Year 2006-2007
Appeal Filed On 16-07-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH MUM BAI BEFORE SHRI D. MANMOHAN VP AND SHRI SANJAY ARORA AM I.T.A. NO. 4704/MUM/2012 ( / ASSESSMENT YEAR: 2006-07) LAKADAWALA DEVELOPERS PVT. LTD. 1 ST FLOOR LATHIWALA APARTMENTS SHIVDAS CHAPASI ROAD MUMBAI-400 010 VS. ASST. CIT-10(1) 455 4 TH FLOOR AAYKAR BHAVAN MUMBAI-400 020 ! ' ./PAN/GIR NO. AAACL 7083 M ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) !#& / APPELLANT BY : SHRI K. SHIVARAM $%!#'& / RESPONDENT BY : SHRI S. K. MADHUK ( )*'+ / DATE OF HEARING : 22.08.2013 -./'+ / DATE OF PRONOUNCEMENT : 18.10.2013 0 O R D E R PER SANJAY ARORA A. M.: THIS IS AN APPEAL BY THE ASSESSEE AGITATING THE ORD ER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-21 MUMBAI (CIT(A) FOR SHORT ) DATED 11.04.2012 DISMISSING THE ASSESSEES APPEAL CONTESTING THE ORDER U/S.154 OF T HE INCOME TAX ACT 1961 (THE ACT HEREINAFTER) DATED 03.11.2011 PASSED IN RECTIFICATI ON OF THE REMAND FOR THE ASSESSMENT YEAR (A.Y.) 2006-07. 2 ITA NO. 4704/MUM/2012 (A.Y. 2006-07) LAKADAWALA DEVELOPERS PVT. LTD. VS. ASST. CIT 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSM ENT IN THE INSTANT CASE STOOD COMPLETED ON 22.12.2010 VIDE ORDER U/S. 143(3) R.W. S. 147 OF THE ACT COMPUTING THE ASSESSEES TOTAL INCOME AS UNDER: A) UNDER THE REGULAR PROVISIONS OF THE ACT RS.24 7 3 066/- B) BOOK PROFIT U/S.115JB RS.2 72 78 718/- THE TAX PAYABLE HOWEVER STOOD COMPUTED UNDER THE REGULAR PROVISIONS OF THE ACT AS THE SAME WAS CONSIDERED BY THE ASSESSING OFFICER (A.O.) AS BEING HIGHER THAN THAT PAYABLE UNDER THE MINIMUM ALTERNATE TAX (MAT) PROVISION OF SECTION 115JB SO THAT THE SAME WOULD NOT BE APPLICABLE FOR THE CURRENT YEAR. SUBSE QUENTLY HOWEVER THE A.O. REALIZED THAT HE HAD CALCULATED THE TAX PAYABLE ON THE BOOK PROFIT INCORRECTLY AND WHICH AT RS.20 45 904 /- (PB PG.14) WAS IN FACT HIGHER THAN THE TAX PAYA BLE UNDER THE REGULAR PROVISIONS OF THE ACT I.E. RS.7 41 921 /- (PB PG.4). ACCORDINGLY RECTIFICATION PROCEEDINGS U/S.154 OF THE ACT WERE INITIATED AND AFTER PROVIDING THE ASSESSEE DUE OPPORTUNITY OF BEING HEARD THE TAX DEMAND REVISED IN TERMS OF THE TAX PAYABLE ON THE BOOK PROFIT I.E. AT RS.20.46 LACS. THE ASSESSEE C ARRIED THE MATTER IN APPEAL THOUGH TO NO AVAIL INASMUCH AS THERE WAS CLEARLY A MISTAKE APPA RENT FROM THE RECORD; THE TAX PAYABLE (INCLUDING SURCHARGE AND CESS) UNDER THE REGULAR PR OVISIONS OF THE ACT ON THE ASSESSED INCOME AMOUNTING ONLY TO RS.8 32 434/- SO WAS IT W AS CLEARLY LOWER AND NOT HIGHER THAN THE TAX PAYABLE ON THE BOOK PROFIT WITH THE LAW BE ING CLEAR THAT THE TAX LIABILITY FOR THE YEAR IS TO BE RECKONED WITH REFERENCE TO THE HIGHER OF THE TWO. AGGRIEVED THE ASSESSEE IS IN SECOND APPEAL. 3. BEFORE US AS BEFORE THE FIRST APPELLATE AUTHORI TY THE ASSESSEES SOLE CASE IS THAT THE TAX PAYABLE ON THE BOOK PROFIT I.E. AT RS.20.46 L ACS IS NOT CORRECT INASMUCH AS THE ASSESSEE HAS CLAIMED AND BEEN ALLOWED THE DEDUCTION U/S.80-IB (10) AT RS.254.96 LACS UNDER THE REGULAR PROVISIONS OF THE ACT AND WHICH WOULD THEREFORE ALSO BE ALLOWABLE TO IT IN THE COMPUTATION OF THE BOOK PROFIT. FOR THE S AME THE ASSESSEE RELIES ON THE PROVISION OF SUB-SECTION (5) OF SECTION 115JB WHICH READS AS UNDER: 3 ITA NO. 4704/MUM/2012 (A.Y. 2006-07) LAKADAWALA DEVELOPERS PVT. LTD. VS. ASST. CIT (5) SAVE AS OTHERWISE PROVIDED IN THIS SECTION AL L OTHER PROVISIONS OF THIS ACT SHALL APPLY TO EVERY ASSESSEE BEING A COMPANY MENTIONED IN THIS SECTION. ON THE BASIS THEREOF IT IS CLAIMED THAT THE DEDUCTI ON U/S. 80-IB (10) WOULD ALSO NEED TO BE TAKEN INTO ACCOUNT IN COMPUTING THE BOOK PROFIT U/S .115JB OF THE ACT. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) ON THE O THER HAND WOULD RELY ON THE ORDERS OF THE AUTHORITIES BELOW CLAIMING THE SAME TO BE LEGALLY VALID AND THAT THE ASSESSEE HAS NOT BEEN UNABLE TO SHOW ANY INFIRMITY THEREIN. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD. WE ARE COMPLETELY AT LOSS TO UNDERSTAND THE ASSESSE ES CASE. IT DOES NOT DISPUTE THE COMPUTATION OF BOOK PROFIT U/S.115JB AS WELL AS THE INCOME ASSESSED UNDER THE REGULAR PROVISIONS OF THE ACT I.E. AT RS.272.79 LACS AND RS.24.73 LACS RESPECTIVELY. NO CLAIM U/S. 80-IB(10) STANDS PREFERRED BY IT IN THE COMPUTATION OF BOOK PROFIT PER ITS RETURN OF INCOME OR EVEN DURING THE COURSE OF THE ASSESSMENT PROCEED INGS. CONSEQUENTLY THE TAX LIABILITY ON THE SAME BEING AT RS.20 45 904/- AND RS.7 41 92 1/- AND THEREFORE THE TAX PAYABLE FOR THE YEAR IS ALSO NOT DISPUTED. HOW WE WONDER COULD IT THEN DISPUTE THE RECTIFICATI ON UNDER REFERENCE ? IF AT ALL THE ASSESSEE HAD ANY GRIEVANCE WITH REG ARD TO THE ASSESSMENT OF THE BOOK PROFIT; THE SAME HAVING BEEN COMPUTED WITHOUT ALLOWING DEDUCTION U/S.80-IB(10) AS NOW CLAIMED U/S.154 PROCEEDINGS THE ASSESSEE OU GHT TO HAVE CHALLENGED ITS ASSESSMENT DATED 22.12.2010. NOT HAVING DONE SO IT IS NOT OPEN FOR IT TO RAISE A CLAIM CHALLENGING THE SAID ASSESSMENT OF BOOK PROFIT. IN THIS VIEW OF THE MATTER EXCLUDING THE ASSESSEES CASE ON JURISDICTION WE DO NOT CONSIDER ED IT EITHER RELEVANT OR NECESSARY TO DISCUSS THE ASSESSEES LEGAL CLAIM RAISED ON THE B ASIS OF A DECISION BY THE TRIBUNAL (AND WHICH FURTHER IS NOT ON THE POINT) ON MERITS; TH E SCOPE OF THE RECTIFICATION PROCEEDINGS BEING EVEN OTHERWISE LIMITED TO CLEAR AND PATENT MI STAKES. IN VIEW OF THE FOREGOING IN OUR CLEAR VIEW THE ASS ESSEES CLAIM STANDS RIGHTLY REJECTED BY THE REVENUE AND WE UPHOLD THE RECTIFIC ATION AS MADE. IN FACT THE LD. AR WOULD CONCEDE BEFORE US TO BE ONLY RAISING A LEGAL ISSUE INASMUCH AS ONLY A DEBATABLE 4 ITA NO. 4704/MUM/2012 (A.Y. 2006-07) LAKADAWALA DEVELOPERS PVT. LTD. VS. ASST. CIT ISSUE STANDS EXCLUDED FROM THE PURVIEW OF SECTION 1 54 PROCEEDINGS. THIS ANSWERS GROUND NOS. 1 AND 2 RAISED BEFORE US. 5. GROUND NO. 3 CHALLENGING THE CONFIRMATION OF TH E INTEREST U/S.234B AND 234C WAS NOT PRESSED DURING HEARING ADMITTING THE SAME TO B E ONLY CONSEQUENTIAL. THE SAME IS THEREFORE AGAIN DISMISSED. 6. VIDE ITS FOURTH AND THE LAST GROUND THE ASSESSE E CHALLENGES THE LEVY OF INTEREST U/S. 220(2) OF THE ACT. THE SAME STOOD HOWEVER NOT ACC EPTED BY THE FIRST APPELLATE AUTHORITY ON THE BASIS THAT THE INTEREST CHARGEABLE OR PAYABL E UNDER THE VARIOUS PROVISIONS OF THE ACT IS ONLY WITH REFERENCE TO THE ORIGINAL ASSESSME NT ORDER. IN OTHER WORDS THE IMPUGNED RECTIFICATION THOUGH DATED 03.11.2011 WOULD DATE BACK TO 22.12.2010 THE DATE OF ASSESSMENT AND ACCORDINGLY THE DEMAND CONSTRUED A S RAISED FROM THAT DATE LEADING TO CHARGE OF INTEREST FROM THE SAID DATE; THE AMOUNT H AVING NOT BEEN PAID. RELIANCE STANDS PLACED BY HIM ON THE DECISION IN THE CASE OF GIRNAR INVESTMENT LTD. VS. CIT [2012] 247 CTR 509 (DELHI) (340 ITR 529) WHEREIN IT HAS BEEN HELD THAT WHERE THE ASSESSMENT IS RESTORED THE ORIGINAL DEMAND IS REVISED FROM AN AN TERIOR DATE AND THE ASSESSEE IS LIABLE TO PAY INTEREST U/S. 220(2) FROM THAT DATE ON THE UNPA ID AMOUNT. 7. WE HAVE HEARD THE PARTIES AND GIVEN OUR CAREFUL CONSIDERATION TO THE MATTER. WE DO NOT FIND MUCH SUBSTANCE IN THE REVENUES CASE. T HIS IS FOR THE SIMPLE REASON THAT THE INTEREST U/S. 220(2) THOUGH COMPENSATORY COULD YE T BE LEVIED ONLY IN TERMS OF THE RELEVANT PROVISION. THE CHARGE FOR THE SAME GETS AC TIVATED ON THE NON-PAYMENT OF THE DEMAND RAISED U/S.156 WITHIN THE PERIOD SPECIFIED U NDER SUB-SECTION (1) THEREOF SO THAT THE ASSESSEE IS DEEMED TO BE IN DEFAULT AND FOR TH E PERIOD OF THE DEFAULT. IN THE INSTANT CASE THE ENHANCED DEMAND STOOD RAISED ON THE ASSES SEE ONLY CONSEQUENT TO THE RECTIFICATION DATED 03.11.2011. THE NOTICE U/S.156 FOR THE ADDITIONAL DEMAND THUS RAISED COULD ONLY BE AND IS IN FACT ON THE SAID DATE (PB P G.14). HOW COULD THEREFORE THE ASSESSEE BE CONSIDERED AS IN DEFAULT FOR HAVING NOT PAID A DEMAND THAT STANDS NOT RAISED ON IT IN THE FIRST PLACE ? 5 ITA NO. 4704/MUM/2012 (A.Y. 2006-07) LAKADAWALA DEVELOPERS PVT. LTD. VS. ASST. CIT IN FACT PER PROVISO TO SECTION 220(2) WHERE AS A RESULT OF PROCEEDING S AMONG OTHERS U/S.154 THE DEMAND AS RAISED STANDS REDUCE D THE INTEREST LEVIABLE UNDER THE SAID SECTION WOULD STAND CORRESPONDINGLY REDUCED. THIS A LSO APPEALS TO REASON INASMUCH AS THE HIGHER DEMAND RAISED STANDS SINCE RECTIFIED SO THAT THE SAME INCLUDED AN AMOUNT THAT ADMITTEDLY OUGHT NOT TO HAVE BEEN RAISED IN THE FIR ST PLACE. IF THE ASSESSEE THEREFORE HAS BEEN CHARGED INTEREST U/S. 220(2) THE PRINCIPAL AM OUNT ITSELF BEING FOUND TO BE IN EXCESS WOULD STAND TO BE REDUCED. THE REVERSE HOWEVER WO ULD NOT HOLD INASMUCH AS A LOWER DEMAND CANNOT INCLUDE A HIGHER SUM. THERE IS ALSO N O PROVISION PERHAPS FOR THIS REASON FOR CORRESPONDINGLY A DEEMED ENHANCEMENT IN THE A MOUNT OF THE DEMAND RAISED WITH REFERENCE TO INTER ALIA PROCEEDINGS U/S.154. AS SUCH IN OUR VIEW NO INT EREST U/S. 220(2) ON THE ENHANCED DEMAND FOR THE PERIOD INTERVENING T HE DATE OF THE ASSESSMENT AND THE DATE OF ITS RECTIFICATION SHALL ARISE. THE DECISION IN THE CASE OF GIRNAR INVESTMENT LTD. (SUPRA) STANDS PERUSED. THE SAME CONCERNS A SITUATI ON WHERE THE TAX DEMANDED PURSUANT TO THE ASSESSMENT HAS NOT BEEN PAID IN FULL. AND F URTHER THE EFFECT OF REVIVAL OF DEMAND ON THE AFFIRMATION OF ASSESSMENT IN APPEAL OR IN RE VISION. THE SAME WOULD THEREFORE IN OUR CLEAR VIEW BE NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. WE DECIDE ACCORDINGLY. 8. IN THE RESULT THE ASSESSEES APPEAL IS PARTLY A LLOWED. 1/+23451+' 60) 7 +'+8 ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 18 2 013 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / ACCOUNTANT MEMBER ( 9* MUMBAI; : DATED : 18.10.2013 )3 ROSHANI SR. PS 6 ITA NO. 4704/MUM/2012 (A.Y. 2006-07) LAKADAWALA DEVELOPERS PVT. LTD. VS. ASST. CIT ! ' #$%& ' &$ COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( ;+ < = / THE CIT(A) 4. ( ;+ / CIT - CONCERNED 5. >)?@$3+3A4 A4/ ( 9* / DR ITAT MUMBAI 6. @5B* GUARD FILE ! ( / BY ORDER )/(* + (DY./ASSTT. REGISTRAR) ( 9* / ITAT MUMBAI