R. Devilal Sharma,, R.R.Dist v. ACIT, Circle-3(1), Hyderabad

MA 218/HYD/2011 | misc
Pronouncement Date: 31-07-2012 | Result: Dismissed

Appeal Details

RSA Number 21822524 RSA 2011
Assessee PAN ABNPS7481H
Bench Hyderabad
Appeal Number MA 218/HYD/2011
Duration Of Justice 9 month(s) 5 day(s)
Appellant R. Devilal Sharma,, R.R.Dist
Respondent ACIT, Circle-3(1), Hyderabad
Appeal Type Miscellaneous Application
Pronouncement Date 31-07-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-07-2012
Assessment Year misc
Appeal Filed On 25-10-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B' HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY JUDICIAL MEMBER MA NO. 218/HYD/2011 ARISING OUT OF ITA NO. 679/HYD/2001 ASSESSMENT YEAR 1996-97 SRI R. DEVILAL SHARMA UPPAL KALAN R.R. DISTRICT PAN: ABNPS7481H VS. ASST. COMMISSIONER OF INCOME-TAX CIRCLE-3(1) HYDERABAD. APPLICANT RESPONDENT APPLICANT BY: SRI SYED JAMEELUDDIN RESPONDENT BY: SMT. AMISHA S. GUPTA DATE OF HEARING: 20.07.2012 DATE OF PRONOUNCEMENT: 31.07.2012 O R D E R PER CHANDRA POOJARI AM: BY THIS MISCELLANEOUS APPLICATION (MA) THE ASSESS EE IS SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL IN ITA NO. 679/HYD/2001 DATED 26.8.2011. 2. THE ASSESSEE'S APPEAL IN ITA NO. 679/HYD/2001 WAS ORIGINALLY DISPOSED OF BY THIS TRIBUNAL VIDE ORDER DATED 9.6.2005. LATER THE ASSESSEE FILED AN MA IN MP NO. 74/HYD/20 05. THERE WAS A DIFFERENCE OF OPINION BETWEEN THE MEMBERS OF THE BENCH WHILE DISPOSING OF THIS MA REGARDING THE ISSUE OF A LLOWABILITY OF INTEREST EXPENDITURE AS DEDUCTION EITHER U/S. 36(1) (III) OR U/S. 37(1) OF THE INCOME-TAX ACT 1961. ON REFERENCE TO 3 RD MEMBER THE 3 RD MEMBER OBSERVED THAT THERE WAS DIFFERENCE OF OPI NION REGARDING THE ALLOWABILITY OF INTEREST U/S. 36(1)(I II) OF THE ACT. HOWEVER THE LEARNED ACCOUNTANT MEMBER DID NOT CONS IDER IT FIT TO EXAMINE THE ALTERNATIVE CLAIM OF THE ASSESSEE U/ S. 37(1) OF MA NO. 218/HYD/2011 SHRI R. DEVILAL SHARMA ================= 2 THE ACT AND HE HELD THE SAME TO BE INFRUCTUOUS IN V IEW OF HIS FINDINGS THAT THE INTEREST WAS ALLOWABLE U/S. 36(1) (III) ITSELF. THUS THE LEARNED ACCOUNTANT MEMBER HAS NOT EXPRESSE D ANY OPINION ON THE APPLICABILITY OF SECTION 37(1) OF TH E ACT. THEREFORE THE THIRD MEMBER OBSERVED THAT THERE IS NO DISSENT ON THIS POINT I.E. ALLOWABILITY OF DEDUCTION U/S. 37(1) AND HE REFRAINED HIMSELF FROM GOING INTO THE ISSUE OF ALLO WABILITY OF INTEREST U/S. 37(1) OF THE ACT AS IT WAS BEYOND HIS JURISDICTION. HOWEVER REGARDING THE ALLOWABILITY OF CLAIM U/S. 3 6(1)(III) OF THE ACT HE AGREED WITH THE JUDICIAL MEMBER THAT INTERE ST CLAIMED IS NOT ALLOWABLE U/S. 36(1)(III) OF THE ACT. FOR THAT PURPOSE HE PLACED RELIANCE ON THE JUDGEMENT OF MADRAS HIGH COU RT IN THE CASE OF V. RAMASWAMY IYYANGAR (18 ITR 150). AS THE THIRD MEMBER AGREED WITH THE VIEW OF THE JUDICIAL MEMBER THE CONSEQUENTIAL ORDER WAS PASSED BY THIS BENCH VIDE O RDER DATED 26 TH AUGUST 2011 WHEREIN IT WAS HELD THAT THE ASSESSEE 'S CLAIM OF DEDUCTION IN RESPECT OF INTEREST EXPENDITURE IS NOT ALLOWABLE EITHER U/S. 36(1)(III) OR U/S. 37(1) OF THE ACT. A GAINST THIS THE ASSESSEE FILED THE PRESENT MA STATING THAT IF INTER EST IS NOT ALLOWABLE U/S. 36(1)(III) THE SAME HAS TO BE ALLOW ED U/S. 37(1) OF THE ACT IN VIEW OF THE JUDGEMENT OF SUPREME COUR T IN THE CASE OF SA BUILDERS VS. CIT (288 ITR 1). ACCORDING TO THE AR THE TRIBUNAL HAS NOT CONSIDERED THE ALLOWABILITY OF DEDUCTION U/S. 37(1) OF THE ACT. FOR THIS PURPOSE THE LEARNED AR RELIED ON THE FOLLOWING JUDGEMENTS: A) CIT VS. RAMESHCHAND MODI (249 ITR 323) (RAJ.) B) MAHARAJA MARTANT SINGH JU DEO V. CIT (171 ITR 586) (MP) C) CIT V. MITHILAL ASHOK KUMAR (158 ITR 755) D) CIT V. SHANKUNTALA RAJESWAR (160 ITR 40) (DELHI) E) CIT V. UMESHCHAND K. PATEL (225 ITR 1050) (MP) F) SETH MADANLAL MODI VS. CIT (261 ITR 49) (DELHI) G) CIT VS. BALLABH PRASAD AGARWALA (233 ITR 354) (CAL) H) RAHUL KUMAR BAJAJ VS. ITO (69 ITD 1) (SB) (NAG) I) FINQUICK FINANCE PVT. LTD. VS. CIT (87 ITD 323) (TM ) (DEL) J) CHAMPALAL CHOPRA VS. STATE OF RAJASTHAN (257 ITR 74 ) (RAJ) MA NO. 218/HYD/2011 SHRI R. DEVILAL SHARMA ================= 3 K) CIT VS. SS GUPTA (257 ITR 440) (RAJ) L) LAXMI ELECTRONIC CORPORATION LTD. VS. CIT (188 ITR 398) (ALL) M) AMRUTH BOTTLES PVT. LTD. VS. ITO (49 ITD 1) (TM) (K OL.) N) NATHPA JHAKRI JOINT VENTURE VS. ACIT (37 SOT 160) ( MUM) 3. THE LEARNED DR SUPPORTED THE ORDER OF THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. AS SEEN FROM THE ARGUMENT OF THE ASSESS EE'S COUNSEL THE ASSESSEE WANTS TO RE-ARGUE HIS CASE WH ICH IS NOT PERMITTED U/S. 254(2) OF THE ACT. THE TRIBUNAL ON EARLIER OCCASION DULY CONSIDERED THE ARGUMENTS OF THE LEARN ED COUNSEL FOR THE ASSESSEE AND PASSED A DETAILED ORDER ON THE ISSUE AND HELD THAT THE CLAIM OF THE ASSESSEE U/S. 37(1) IS N OT ALLOWABLE. BEING SO WE FIND NO MERIT IN THE MA FILED BY THE A SSESSEE. 5. IN THIS REGARD WE WOULD LIKE TO MENTION THAT IN TH E ORDER THE TRIBUNAL FIRST METICULOUSLY MENTIONED THE ARGUM ENTS OF THE LEARNED AR FOR THE ASSESSEE THE POINTS RAISED BY H IM THEN THE RELEVANT CASE-LAWS RELIED UPON BY THE AR OF THE ASS ESSEE. THEREAFTER THE TRIBUNAL CONSIDERED THE SAME AND PA SSED A SPEAKING ORDER FOR NOT ENTERTAINING THE CLAIM OF TH E ASSESSEE. WHILE REJECTING THE CLAIM OF THE ASSESSEE THE TRIBU NAL PLACED RELIANCE ON THE JUDGEMENT OF MADRAS HIGH COURT IN T HE CASE OF V. RAMASWAMY IYYANGAR (18 ITR 150) WHICH IS DIRECTLY O N THE ISSUE RAISED BY THE ASSESSEE. THUS IN VIEW OF THE DETAILED DISCUSSION AND APPLYING THE RATIO OF THE DECISION O F THE MADRAS HIGH COURT (CITED SUPRA) IT WAS CONCLUDED THAT DED UCTION U/S. 37(1) OF THE I.T. ACT 1961 IS NOT ALLOWABLE 6. FURTHER IN THE CASE OF CIT VS. HINDUSTAN COCA COLA BEVERAGES (P) LTD. (2007) 207 CTR (DEL) 119; (2007) 293 ITR 163 (DEL) THEIR LORDSHIPS WHILE CONSIDERING THE PO WERS OF THE TRIBUNAL UNDER S. 254(2) OF THE IT ACT 1961 OBSERV ED AS UNDER: MA NO. 218/HYD/2011 SHRI R. DEVILAL SHARMA ================= 4 UNDER S. 254(2) OF THE IT ACT 1961 THE TRIBUNAL HAS THE POWER TO RECTIFY MISTAKES IN ITS ORDER. HOWEVER IT IS P LAIN THAT THE POWER TO RECTIFY A MISTAKE IS NOT EQUIVALENT TO A POWER T O REVIEW OR RECALL THE ORDER SOUGHT TO BE RECTIFIED. RECTIFICATION IS A SPECIES OF THE LARGER CONCEPT OF REVIEW. ALTHOUGH IT IS POSSIBLE THAT THE PRE- REQUISITE FOR EXERCISE OF EITHER POWER MAY BE SIMIL AR (A MISTAKE APPARENT FROM THE RECORD) BY ITS VERY NATURE THE P OWER TO RECTIFY A MISTAKE CANNOT RESULT IN THE RECALL AND REVIEW OF T HE ORDER SOUGHT TO BE RECTIFIED. 7. THUS THE SCOPE AND AMBIT OF APPLICATION U/S. 254(2) IS AS FOLLOWS: (A) FIRSTLY THE SCOPE AND AMBIT OF APPLICATION OF S. 2 54(2) OF IT ACT IS RESTRICTED TO RECTIFICATION OF THE MISTAK ES APPARENT FROM THE RECORD. (B) SECONDLY THAT NO PARTY APPEARING BEFORE THE TRIBUN AL SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED B Y THE TRIBUNAL AND IF THE PREJUDICE HAS RESULTED TO THE P ARTY WHICH PREJUDICE IS ATTRIBUTABLE TO THE TRIBUNALS MISTAKE/ERROR OR OMISSION AND WHICH AN ERROR IS A MANIFEST ERROR THEN THE TRIBUNAL WOULD BE JUSTIFIE D IN RECTIFYING ITS MISTAKE. THE RULE OF PRECEDENT IS AN IMPORTANT ASPECT OF LEGAL CERTAINTY IN THE RULE OF LAW AND THAT PRINCIPLE IS NOT OBLITERATED BY S. 254(2) OF T HE ACT AND NON-CONSIDERATION OF PRECEDENT BY THE TRIBUNAL CAUS ES A PREJUDICE TO THE ASSESSEE. (C) THIRDLY POWER TO RECTIFY A MISTAKE IS NOT EQUIVALE NT TO A POWER TO REVIEW OR RECALL THE ORDER SOUGHT TO BE RE CTIFIED. (D) FOURTHLY UNDER S. 254(2) AN OVERSIGHT OF A FACT CA NNOT CONSTITUTE AN APPARENT MISTAKE RECTIFIABLE UNDER TH E SECTION. (E) FIFTHLY FAILURE ON THE PART OF THE TRIBUNAL TO CON SIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A MA NO. 218/HYD/2011 SHRI R. DEVILAL SHARMA ================= 5 CONCLUSION IS NOT AN ERROR APPARENT ON RECORD ALTH OUGH IT MAY BE AN ERROR OF JUDGEMENT. (F) SIXTHLY EVEN IF ON THE BASIS OF A WRONG CONCLUSION THE TRIBUNAL HAS NOT ALLOWED A CLAIM OF THE PARTY IT WI LL NOT BE A GROUND FOR MOVING AN APPLICATION UNDER S. 254(2) OF THE ACT. (G) LASTLY IN THE GARB OF AN APPLICATION FOR RECTIFICA TION UNDER S. 254(2) THE ASSESSEE CANNOT BE PERMITTED TO REOPE N AND REARGUE THE WHOLE MATTER AS THE SAME IS BEYOND THE SCOPE OF S. 254(2) OF THE IT ACT. 8. KEEPING IN MIND THE ABOVE PARAMETERS WE ARE OF THE OPINION THAT THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS DEVOID OF MERIT. 9. IN VIEW OF THE ABOVE WE ARE INCLINED TO DISMISS TH E MA FILED BY THE ASSESSEE. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY 2012. SD/- (SAKTIJIT DEY) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD DATED THE 31 ST JULY 2012 COPY FORWARDED TO: 1. SRI R. DEVILAL SHARMA C/O. SRI SYED JAMEELUDDIN INCOME-TAX CONSULTANT 16-7-302 ERRAM COTTAGE AZAMPURA HYDERABAD-500 024. 2. THE ASST. COMMISSIONER OF INCOME-TAX CIRCLE-3(1 ) HYDERABAD. 3. CIT(A)-VI HYDERABAD. 4. THE CIT-V HYDERABAD. 5. THE DR B BENCH ITAT HYDERABAD. TPRAO