AKTIEBOLAGET ELECTROLUX SWEDEN, MUMBAI v. DCIT (INTL. TAX) RANGE 1(1)(1), MUMBAI

MA 135/MUM/2016 | 2006-2007
Pronouncement Date: 14-10-2016 | Result: Dismissed

Appeal Details

RSA Number 13519924 RSA 2016
Assessee PAN AADCA9239R
Bench Mumbai
Appeal Number MA 135/MUM/2016
Duration Of Justice 3 month(s) 27 day(s)
Appellant AKTIEBOLAGET ELECTROLUX SWEDEN, MUMBAI
Respondent DCIT (INTL. TAX) RANGE 1(1)(1), MUMBAI
Appeal Type Miscellaneous Application
Pronouncement Date 14-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 14-10-2016
Assessment Year 2006-2007
Appeal Filed On 17-06-2016
Judgment Text
IN THE INCOME-TAX APPELLATE TRIBUNAL -ABENCH M UMBAI BEFORE S/SH.RAJENDRA ACCOUNTANT MEMBER AND AMA RJIT SINGH JUDICIAL MEMBER / MA NO.135 & 136/MUM/2016 ARISING OUT OF / ITA NO.7628 /MUM/2012 /ASSESSMENT YEAR-2006-07 ARISING OUT OF / ITA NO.8695 /MUM/2010 /ASSESSMENT YEAR-2007-08 DCIT(INTL-TAXN)-(1)(1) MUMBAI. VS AKTIEBOLAGET ELECTROLUX SWEDEN C/O. SRBC & ASSOCIATES14 TH FLOOR THE RUBY 29 SENAPATI BAPAT MARG DADAR (W) MUMBAI-400 028. PAN: AADCA 9239 R . ( / APPLICANT) ( / RESPONDENT) / APPELLANT BY : SHRI RAJAN VORA / RESPONDENT BY : SHRI K.L. KANAK / DATE OF HEARING :14-10 -2016 !'# / DATE OF PRONOUNCEMENT :14 -10 -2016 1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT 1961(ACT) PER RAJENDRA A.M. $%& VIDE ITS APPLICATION DATED 16.06.2016 THE ASSESSING OFFICER(AO) HAS STATED THAT THERE WERE SOME MISTAKES IN THE ORDER OF THE TRIBUNAL DATED 21 .10.2015 THAT SAME WERE TO BE RECTIFIED AS PER PROVISIONS OF SECTION 254(2) OF THE ACT THAT A T PG.NO.8 OF THE ORDER THE TRIBUNAL HAD HELD THAT THE TRANSACTIONS PRIMA FACIE NEEDED VERIFICATI ON AND INVESTIGATION AS THE SALE PRICE WAS MEAGER AS POINTED OUT BY THE AO AND THE DRP THAT T HE TRIBUNAL HAD ALSO HELD THAT IT WAS ONLY THE STARTING POINT FOR SCRUTINIZING THE MATTER DEEPLY AND TO PROVE THAT THE TRANSACTION WAS SHAM THAT AFTER MAKING THE ABOVE OBSERVATION THE TR IBUNAL HAD ALLOWED THE APPEAL OF THE ASSESSEE AND HELD THAT TRANSACTION WAS GENUINE THA T VARIOUS INCONSISTENCIES AND FACTUAL SHORT- COMINGS HAD COME TO THE NOTICE OF THE AO THAT SUCH FACTS WERE REQUIRED TO BE CONSIDERED AND PROPER EXPLANATION OF THE ENTIRE DEAL HAD TO BE EXA MINED THAT THE TRANSACTION WAS A COLOURABLE DEVICE THAT THE TRANSACTION WAS DEVOID OF ANY BUSI NESS SENSE THAT THE TRIBUNAL HAD NOT CALLED UPON THE PARTIES TO PROVIDE FURTHER EVIDENCE THAT T HE CAUSE OF JUSTICE AND THE OBSERVATION OF THE TRIBUNAL IN ITS ORDER ITSELF WOULD HAVE BEEN BE ST SERVED IF THE TRIBUNAL HAD SET ASIDE THE MATTER TO THE FILE OF AO FOR FRESH ADJUDICATION OR REVIEW THE CASE FOR VERIFICATION OR INVESTIGATION. 2. DURING THE COURSE OF HEARING BEFORE US THE DEPARTME NTAL REPRESENTATIVE (DR) REITERATED THE ARGUMENTS ADVANCED IN THE APPLICATION THAT THE ASS ESSEE HAD NOT PROVIDED REQUISITIONED DOCUMENTS TO THE AO AND THE DRP THE INVESTIGATION BY THE AO WAS FRUSTRATED DUE TO NON COMPLIANCE BY THE ASSESSEE THAT THE TRIBUNAL HAD NOT ADDRESSED THE ISSUE POINTED OUT BY THE 135/M/16-AKTIEBOLAGET ELECTROLUX 2 AO. HE REFERRED TO THE CASE OF JAN SAMPARK ADVERTIS ING & MARKETING (P) LTD. (375ITR373). THE AUTHORISED REPRESENTATIVE (AR) STATED THAT THE ASSESSEE HAD SUBMITTED ALL THE RELEVANT DOCUMENTS BEFORE AO AND HAD MET ALL HIS ALLEGATIONS THAT THE TRIBUNAL HAD ADVANCED ALL THE ARGUMENTS ADVANCED BY THE DEPARTMENT THAT IN THE N AME OF RECTIFICATION APPLICATION AO WANTED REVIEW THE CASE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT AFTER CONSIDERING THE FACTS OF THE CASE THE TRIBUNAL HAD DECIDED THE ISSUE ON MERITS.THE DR HAD EMPHASIZED THAT TRIBUNAL HAD HELD THAT TRANSACTION NEEDED VERIFICATION AND INVESTIGATION. WE FIND THAT THE OBSERVATION OF THE TRIBUNAL WAS IN CO NTEXT OF ONE OF THE ARGUMENTS OF THE AO WHEREIN HE HAD HELD AS UNDER :- . BECAUSE IT IS QUITE POSSIBLE THAT THE ASSESSEE MIGHT HAVE OFFERED MORE PRICE THAN IT HAD RECEIVED THROUGH THE TRANSACTION WITH DHOOT. THE TRIBUNAL HAD HELD THAT IN ITS OPINION ANY POSS IBILITY COULD NOT TAKE PLACE OF AN EVIDENCE AND ASSESSMENTS MADE WITHOUT EVIDENCES COULD NOT BE SUSTAINED. IT WAS IN THAT CONTEXT THAT THE TRIBUNAL HAD MADE OBSERVATION ABOUT VERIFICATIO N AND INVESTIGATION. THE TRIBUNAL HAD CONSIDERED THE CASES RELEVANT TO THE ISSUE I.E.OBER OI HOTELS (P) LTD. (334ITR293);SALITHO ORES LTD.( 344 161); K.P. VARGHESE(131ITR597) AND P REMIER AUTOMOBILES(264ITR193).WE WOULD ALSO LIKE TO REPRODUCE THE LAST PARAGRAPH OF THE ORDER OF THE TRIBUNAL DEALING WITH THE ISSUE AND SAME READS AS UNDER :- THE ENTIRE CHAIN OF EVENTS-INCLUDING DELISTING OF SHARES PERMISSION OF SEBI AND RBI AGREEMENT WITH THIRD AND UNRELATED PARTY LOSSES SU FFERED BY ELK EROSION OF VALUE OF SHARES OF ELK VALUATION BY INDEPENDENT VALUER-WE WOULD HOLD THAT THE TRANSACTION ENTERED BY THE ASSESSEE WAS GENUINE AND LTCL AND STCL SUFFERED BY IT ON SALE OF SHARES AND ON REDEMPTION OF PREFERENCE SHARES OF ELK HAS TO BE ALLOWED. CLEARLY THE TRIBUNAL HAD CONSIDERED ALL THE RELEVAN T FACTS AND LEGAL POSITION BEFORE ALLOWING THE APPEAL OF THE ASSESSEE.IF THE DEPARTMENTAL AUTH ORITIES WERE AGGRIEVED BY THE ORDER OF THE TRIBUAN RIGHT COURSE OF ACTION WAS BE TO CHALLENGE THE ORDER BEFORE THE PROPER JUDICIAL FORUM I.E. HON'BLE HIGH COURT.MISCELLANEOUS APPLICATION C ANNOT BE USED FOR CHALLENGING AN ORDER PASSED BY THE TRIBUNAL JUST TO REVIEW ITS EARLIER ORDER. THE TRIBUNAL HAD FOUND THAT THE PERIOD OF CLAIMING THE LOSS HAD LAPSED AND THE ASSESSEE HA D INFORMED THE AO THAT IT WOULD NOT SET OFF THE LOSS AGAINST ANY FUTURE INCOME TO BE EARNED UND ER THE HEAD CAPITAL GAINS. THUS THE TRIBUNAL HAD TAKEN AN INFORMED DECISION.SECONDLY T HE APPEAL BEFORE THE TRIBUNAL WAS FILED BY THE ASSESSEE AGAINST ORDER OF THE FAA AND IT WAS SUPPOSED TO DECIDE THE POINTS RAISED 135/M/16-AKTIEBOLAGET ELECTROLUX 3 BEFORE IT IN THE APPEAL.HERE IT WOULD BE USEFUL TO REFER TO THE CASE OF DHOLADHAR INVESTMENT P.LTD.( 362 ITR 111) OF THE HONBLE DELHI HIGH COUR T.THE HONBLE COURT HAS HELD AS UNDER: THE DUTY OF THE TRIBUNAL IS LIMITED TO THE POINTS R AISED BEFORE IT. IT WOULD BE PLACING AN IMPOSSIBLE BURDEN ON THE TRIBUNAL IF IT IS ORDAINED TO RULE UPON ASPECTS AND CONTENTIONS WHICH WERE NOT RAISED BY THE PARTIES BEFORE IT OR T O DEAL WITH PLEADINGS EVIDENCE OR MATERIAL TO WHICH ITS POINTED ATTENTION WAS NOT DRAWN IN THE COURSE OF THE PROCEEDINGS AND WHICH LIE BURIED IN THE FOREST OF PAPERS FILED BY THE PARTIES . THE FACT THAT AN APPEAL UNDER THE INCOME- TAX ACT IS NOT A LIS BETWEEN THE PARTIES AND IS ONL Y AN ADJUSTMENT OF THE TAX LIABILITY DOES NOT ALSO IMPLY THAT THE TRIBUNAL SHALL EXHIBIT SUCH AN IMAGINATION THAT IT WOULD BE REQUIRED TO DEAL WITH ISSUES THAT COULD HAVE BEEN BUT WERE NOT RAISED. THE TRIBUNAL IS NOT EXPECTED TO UNEARTH EVIDENCE OR MATERIAL TO WHICH ITS ATTENTION WAS NOT DRAWN BY THE PARTIES NOR TO EXPLORE THE AREA TO FIND OUT WHAT POSSIBLE CONTENTI ONS THE PARTIES COULD HAVE TAKEN AND GRANT THEM RELIEF ON THE BASIS OF SUCH AN EXPEDITIO N IN EXERCISE OF THE LIMITED JURISDICTION UNDER SECTION 254(2) WHICH CONFERS UPON THE TRIBUNA L ONLY A POWER TO RECTIFY A MISTAKE APPARENT FROM THE RECORD AND NOT TO INDULGE IN A REVIEW( EMPHASIS ADDED ). 3.1. WE WOULD LIKE TO ADD THAT HE SCOPE OF SECTION 254(2 ) OF THE ACT IS VERY LIMITED AND SPECIFIC.IF A MISTAKE IS SO GLARING THAT ON THE FAC E OF IT SAME HAS TO BE AMENDED THEN ONLY THE PROVISIONS OF SECTION 254(2)CAN BE INVOKED.IT IS SA ID THAT THE SECTION IS LIMITED TO MISTAKE APPARENT FROM RECORD LIKE ARITHMETICAL ERRORS TYPOG RAPHICAL MISTAKES NON-ADJUDICATION OF GROUND OF APPEAL OR NON-CONSIDERATION OF A JUDGMENT OF HONBLE SUPREME COURT OR JURISDIC - TIONAL HIGH COURT HAVING DIRECT BEARING ON THE CASE .HONBLE DELHI HIGH COURT HAS IN THE MATTER OF GEOFIN INVESTMENT (P.) LTD. DESCRIBED THE CONCEPT OF MISTAKE APPARENT FROM RECORD AS UNDER: THE POWER IS CIRCUMSCRIBED AND LIMITED. THERE SHOUL D BE A MISTAKE WHICH IS APPARENT BEFORE THE POWER CAN BE EXERCISED.THIS IS A MANDATORY PRE- CONDITION. THE TRIBUNAL IN ITS ORDER REFERRED TO THE CONTROVERSY IN QUESTION RELATING TO THE DISALLOWANCE MADE ON ACCOUNT OF SHORT- TERM CAPITAL LOSS AND LONG-TERM CAPITAL LOSS. THE E NTIRE ISSUE WAS EXAMINED ON THE MERITS INCLUDING THE JUDGMENTS RELIED UPON BY THE ASSESSEE . AFTER EXAMINING THE MATTER IN DETAIL IT ALLOWED THE APPEAL FILED BY THE REVENUE. (348ITR118). FOLLOWING IS THE DECISION OF THE HONBLE JURISDICTI ONAL HIGH COURT HAS IN THE CASE OF RAMESH ELECTRICALS (203ITR497): 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 UNDER 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 R ECTIFY ANY MISTAKE 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 ARGUMEN TS AND A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FO R ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. THE TRIBUNAL CANNOT IN THE EXERCISE OF ITS POWER OF RECTIFICATION LOOK INTO S OME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT ITS CONCLUSION. 135/M/16-AKTIEBOLAGET ELECTROLUX 4 FROM THE ABOVE IT IS CLEAR THAT TRIBUNAL HAS GOT LI MITED POWER TO RECTIFY MISTAKE U/S.254(2) OF THE ACT.IN THE CASE BEFORE US THE AO HAS NOT POINTE D OUT ANY ARITHMETICAL MISTAKE IN THE ORDER OF THE TRIBUNAL NOR HAS HE PROVED THAT LEGAL POSITI ON TAKEN BY THE TRIBUNAL HAS ALTERED BECAUSE OF SUBSEQUENT JUDGMENT OF THE HONBLE JURISDICTIONA L HIGH COURT OR THE HONBLE APEX COURT.THE TRIBUNAL HAS DECIDED THE ISSUE AFTER CONS IDERING ALL THE FACTS AND PROVISIONS OF LAW. IN OUR OPINION NO MISTAKE IS APPARENT IN THE IMPUG NED ORDER OF THE TRIBUNAL. WE WOULD ALSO LIKE TO MENTION THAT THE CASE OF JANSAMPARK(SUPRA) RELIED UPON BY THE DR HAS NO RELEVANCE TO DECIDE THE ISSUE BEFORE US.THE MATTER DEALS WITH SE CTION 68 OF THE ACT AND DOES NOT DEAL WITH SCOPE OF SECTION 254(2)OF THE ACT.THEREFORE WE ARE OF THE OPINION THAT APPLICATION FILED BY THE AO DESERVES TO BE REJECTED. AS A RESULT THE MISCELLANEOUS APPLICATION FILED BY THE AO STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH OCTOBER 2016. 14 2016 SD/- SD/- ( / AMARJITSINGH) ( / RAJENDRA) / JUDICIAL MEMBER ! ! ! ! / ACCOUNTANT MEMBER MUMBAI DATE: 14.10.2016 / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ 4. THE CONCERNED CIT / 5. DR K BENCH ITAT MUMBAI / . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER / DY./ASST. REGISTRAR /ITAT MUMBAI.