KIRIT D. MEHTA, v. ITO 25(3)(2),

MA 247/MUM/2011 | 2005-2006
Pronouncement Date: 28-09-2011 | Result: Dismissed

Appeal Details

RSA Number 24719924 RSA 2011
Assessee PAN AADPM5167H
Bench Mumbai
Appeal Number MA 247/MUM/2011
Duration Of Justice 4 month(s) 29 day(s)
Appellant KIRIT D. MEHTA,
Respondent ITO 25(3)(2),
Appeal Type Miscellaneous Application
Pronouncement Date 28-09-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Assessment Year 2005-2006
Appeal Filed On 29-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : MUMBAI BEFORE SHRI D. MANMOHAN VICE PRESIDENT AND SHRI PRAMOD KUMAR ACCOUNTANT MEMBER M.A. NO. 247/MUM/2011 ARISING OUT OF ITA. NO. 4034/MUM/2009 - ASSESSMENT YEAR 2005-2006 KIRIT D. MEHTA MUMBAI 400 101 PAN AADPM5167H VS. ITO 25 (3) (2) MUMBAI (APPLICANT) (RESPONDENT) FOR APPLICANT : SHRI HITEN DEDHIA FOR RESPONDENT : SHRI A.K. NAYAK DATE OF HEARING : 26-08-2011 DATE OF PRONOUNCEMENT : 28-09-2011 ORDER PER D. MANMOHAN V.P. 1. BY THIS APPLICATION THE ASSESSEE SUBMITS THAT THE ORDER PASSED BY THE ITAT A BENCH MUMBAI IN ITA. NO. 4 034/MUM/2009 SUFFERS FROM MISTAKES APPARENT FROM RECORD AND DESE RVES TO BE MODIFIED FOR THE REASONS STATED IN HIS APPLICATION. 1.1. THE CONTENTION OF THE ASSESSEE IS THAT THE BE NCH HAS PRONOUNCED ITS ORDER IN THE OPEN COURT ON 28 TH JANUARY 2011 WHEREAS THE ORDER WHICH WAS FORMALLY PUT UP FOR PRO NOUNCEMENT ON 22 ND NOVEMBER 2010 WAS CONTRARY TO WHAT WAS PRONOUNCED IN THE OPEN COURT. IN SUPPORT THEREOF HE HAS FILED AN AFF IDAVIT BEFORE US. DURING THE COURSE OF HEARING HE STRONGLY SUBMITTED THAT THE BENCH HAS PRONOUNCED ITS ORDER IN A PARTICULAR MANNER AND NO DEVIATION IS PERMISSIBLE IN THE LIGHT OF DECISION OF HONBLE DEL HI HIGH COURT IN THE CASE OF CIT VS. G.SAGAR SURI & SONS (1990) 185 ITR 484 (DEL.). 2 2. IT WAS FURTHER SUBMITTED THAT GROUND NO.1 IN TH E APPEAL FILED BEFORE THE APPELLATE TRIBUNAL IS WITH REGARD TO THE ADDITION OF RS.17 30 526/- MADE UNDER SECTION 41 (1) OF THE ACT . THIS PERTAINS TO CREDIT BALANCE OF 5 DIFFERENT SUNDRY CREDITORS. ONE CREDIT WAS IN THE NAME OF ASIATRONIC (NEW) TO THE TUNE OF RS.2 13 816 /-. ACCORDING TO THE LEARNED COUNSEL THE BENCH WHILE HEARING THE AP PEAL VERIFIED THE PAYMENT WITH BANK STATEMENT OF SUBSEQUENT YEAR AN D EXPRESSED SATISFACTION WITH REGARD TO THE GENUINENESS OF THE CREDITOR WHEREAS CONTRARY TO THE PRONOUNCEMENT THE TRIBUNAL CONFIRME D THE ADDITION OF RS.2 13 816/- WHICH DESERVES TO BE RECTIFIED. IN HI S OPINION THE IMPUGNED ADDITION OF RS.2 13 816/-SHOULD EITHER BE DELETED OR SET ASIDE. 3. GROUND NO.2 RELATES TO ADHOC DISALLOWANCE OF RS.2 59 256/- OUT OF EXPENSES DEBITED TO P & L ACCO UNTS. ACCORDING TO THE COUNSEL THE MEMBERS PRONOUNCED IN THE OPEN COU RT THAT SUFFICIENT DETAILS WERE AVAILABLE FOR DELETING THE ADDITION SINCE THE BENCH VERIFIED THE DETAILS OF EXPENSE WITH LEDGER C OPIES (SEE PAPER BOOK PAGES 9 TO 20). HOWEVER THE BENCH CONFIRMED T HE DISALLOWANCE WHICH IS CONTRARY TO THE ASSURANCE GIVEN ON THE BEN CH AND THUS IT GIVES RAISE TO A MISTAKE APPARENT ON RECORD. 4. SIMILARLY GROUND NO.5 RELATES TO ADDITION OF RS.10 40 590/- UNDER THE HEAD LONG TERM CAPITAL GA INS. ASSESSEE PURCHASED 1 + 7 STOREYED RESIDENTIAL BUILDING AND C LAIMED EXEMPTION UNDER SECTION 54F OF THE ACT ON THE GROUND THAT THE SAID BUILDING WAS INTENDED FOR RESIDENTIAL USE IN WHICH EVENT IT HAS TO BE TREATED AS A RESIDENTIAL HOUSE. HERE AGAIN THE LEARNED COUNSEL SUBMITS THAT THE BENCH DECLARED IN THE OPEN COURT THAT THE CASE HAS TO BE DECIDED IN THE LIGHT OF DECISION OF THE SPECIAL BENCH OF THE M UMBAI TRIBUNAL AS TO WHAT CONSTITUTES A SINGLE RESIDENTIAL UNIT AND INTENDED TO SET ASIDE THE ADDITION AND TO RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH. HOWEVER IN THE WRITTEN O RDER THE ADDITION WAS CONFIRMED WITHOUT CONSIDERING THE ARGUMENTS IN THE OPEN COURT. 3 LEARNED COUNSEL SUBMITS THAT THE DECISION OF THE IT AT MUMBAI SPECIAL BENCH IN THE CASE OF ITO VS. MS. SUSHILA M. JHAVERI (2007) 292 ITR (AT) 1 (MUM.) (SB) WAS NOT PROPERLY APPRECI ATED. IT MAY BE NOTICED THAT IN THE AFORECITED DECISION THE BENCH O BSERVED THAT THE EXPRESSION A MEANS ANY AND WHERE MORE THAN ONE UNIT IS PURCHASED BY AN ASSESSEE WHICH ARE ADJACENT TO EACH OTHER AND IF THEY ARE CONVERTED INTO ONE HOUSE FOR THE PURPOSE OF RES IDENCE IT WOULD BE A CASE OF INVESTMENT IN ONE RESIDENTIAL HOUSE. SINC E ASSESSEE HAD PURCHASED A COMPLEX CONSISTING OF 1 + 7 STOREYS IT SHOULD BE TREATED AS A SINGLE RESIDENTIAL UNIT. HE THUS SUBMITTED THA T THE ORDER DATED 28 TH JANUARY 2011 PASSED BY THE ITAT SUFFERS FROM A MISTAKE APPARENT FROM RECORD. 5. ON THE OTHER HAND LEARNED DR SUBMITTED THAT TH ERE IS NO NOTING IN THEIR RECORDS THAT IT IS PRONOUNCED IN TH E OPEN COURT. IN FACT ASSESSEE HAS NOT DISPUTED CERTAIN ADDITIONS CONFIRM ED BY THE TRIBUNAL WHICH IN ITSELF INDICATE THAT THE TRIBUNAL HAS NOT PRONOUNCED ITS JUDGMENT IN THE OPEN COURT. EVEN ON MERITS IT WAS S UBMITTED THAT AN ADDITION OF RS.2 13 816/- REFERABLE TO THE CREDIT I N THE NAME OF ASIATRONIC (NEW) WAS RIGHTLY CONFIRMED BY THE TRIBU NAL. BY MERELY SAYING THAT SOME PAYMENTS ARE RECEIVED BY A PERSON IS NOT SUFFICIENT UNLESS ASSESSEE SHOWS THAT THE PARTY IS GENUINE. IN THE INSTANT CASE THE TRIBUNAL HAS RECORDED A FINDING OF FACT THAT A COPY OF THE ACCOUNT IN THE NAME OF M/S. ASIATRONIC (NEW) WAS SIGNED BY SOMEBODY WHOSE NAME IS NOT IDENTIFIABLE; NO PROOF OF PAYMENT WAS F URNISHED. EVEN AT THIS STAGE THE ASSESSEE DID NOT FURNISH ANY EVIDENC E EXCEPT RELYING UPON PAGES 6 TO 8 OF THE PAPER BOOK WHICH WERE ALRE ADY CONSIDERED BY THE TRIBUNAL. THEREFORE IT CANNOT BE SAID TO BE A MISTAKE APPARENT FROM RECORD. 6. AS REGARDS ADHOC DISALLOWANCE OF RS.2 59 256/- THE BENCH HAD TAKEN A VIEW ON THE FACTS AVAILABLE ON RE CORD AND ARRIVED AT A CONCLUSION THAT THE DISALLOWANCE IS REASONABLE. I N FACT THE BENCH OBSERVED THAT EVEN BEFORE THE TRIBUNAL NO EVIDENCE WAS FURNISHED TO 4 SHOW THE AVAILABILITY OF ASSETS FOR PROVING THE COR RECTNESS OF CLAIM OF DEPRECIATION AND THE BUSINESS NECESSITY TO INCUR CE RTAIN EXPENDITURE. LEARNED DR AGAIN EMPHASISED THAT THE BENCH HAD NOT EXPRESSED ITS OPINION AT THE TIME OF HEARING AND HENCE THE RELIAN CE PLACED BY THE ASSESSEE ON THE DECISION OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF SAGAR SURI & SONS (SUPRA) IS MISPLACED. 7. SIMILARLY WITH REGARD TO ADDITION OF RS.10 40 590/- MERE RELIANCE UPON DECISION OF ITAT SPECIAL BENCH IS N OT SUFFICIENT UNLESS IT IS PROVED THAT THE COMPLEX IS UTILISED AS ONE RE SIDENTIAL HOUSE WITH ONE COMMON ENTRANCE ETC. ; IN THE INSTANT CASE TH E BUILDING CONSISTING OF 1 + 7 FLOORS CANNOT BE TREATED AS ONE RESIDENTIAL UNIT SINCE EACH FLOOR CAN SEPARATELY BE USED AND IN THE ABSENCE OF ANY EVIDENCE TO CONTRADICT THE FINDINGS OF THE TAX AUTH ORITIES THE TRIBUNAL WAS JUSTIFIED IN AFFIRMING THE ACTION OF THE ASSESS ING OFFICER. HE THUS CONTENDED THAT THERE IS NO MISTAKE IN THE ORDER OF THE TRIBUNAL ON ALL THE ISSUES. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RECORD. WHEN A CASE IS PRONOUNCED IN TH E OPEN COURT THE PRACTICE OF THE BENCH IS ORDINARILY TO PASS THE ORD ER ON THE SAME DATE AND THE FACTUM OF PRONOUNCEMENT IS MENTIONED IN THE ORDER SHEET STATING THAT IT IS PRONOUNCED IN THE OPEN COURT ON THE DATE OF HEARING. IN THE INSTANT CASE ADMITTEDLY THE ORDER WAS PRONO UNCED ON A DIFFERENT DATE WHICH IN ITSELF INDICATE THAT THE BE NCH HAD NOT EXPRESSED ITS VIEW ON THE DATE OF HEARING. IN FACT THE LOG BOOKS OF THE MEMBERS AS WELL AS THE FILE OF THE D.R. DO NOT SUPP ORT THE CONTENTION OF THE LEARNED COUNSEL APPEARING ON BEHALF OF THE A SSESSEE. IN OTHERWORDS THERE WAS NO PRONOUNCEMENT IN THE OPEN COURT ON ANY OF THE ISSUES REFERRED TO IN THE MISCELLANEOUS APPLICA TION. UNDER THE CIRCUMSTANCES RELIANCE PLACED BY THE ASSESSEE ON T HE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF G.SAGAR SUR I & SONS (SUPRA) IS MISPLACED. 5 9. THE DECISION OF THE TRIBUNAL IS BASED UPON FACT S AVAILABLE ON RECORD AND EVEN IT IS ASSUMED THAT A DIFFERENT V IEW IS POSSIBLE ON RE-APPRECIATION OF THE FACTS IT CANNOT BE SAID THA T SUCH ORDER PASSED BY THE TRIBUNAL SUFFERS FROM A MISTAKE APPARENT FRO M RECORD. 9.1. IN THE CASE OF RAMESH ELECTRIC & TRADING CO. 203 ITR 497 THE HONBLE BOMBAY HIGH COURT OBSERVED THAT THE TRI BUNAL HAS NO POWER TO REVIEW ITS ORDER. THE COURT FURTHER OBSERV ED THAT THE TRIBUNAL IS NOT ENTITLED TO CORRECT AN ERROR OF JUD GMENT BUT IT CAN ONLY CORRECT A MISTAKE WHICH IS APPARENT FROM RECORD ITS ELF. FAILURE BY THE TRIBUNAL TO CONSIDER ANY ARGUMENT ADVANCED BY EITH ER PARTY WHILE ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT O N THE RECORD ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. HAVING REG ARD TO THE VIEW TAKEN BY THE HONBLE BOMBAY HIGH COURT WHILE EXPLA INING THE SCOPE AND AMBIT OF THE PROVISIONS OF SECTION 254 (2) OF T HE I.T. ACT WE ARE OF THE HUMBLE OPINION THAT THE IMPUGNED ORDER OF THE T RIBUNAL DOES NOT SUFFER FROM ANY MISTAKE APPARENT FROM RECORD. IN T HE RESULT MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 2 8 TH DAY OF SEPTEMBER 2011. SD/- SD/- (PRAMOD KUMAR) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI DATE 28 TH SEPTEMBER 2011 VBP/- COPY TO 1. KIRIT D. MEHTA C-101 BONANZA INDUSTRIAL ESTATE CHAKRAVARTI ASHOK ROAD KANOIVALI (E) MUMBAI 400 101 PAN AADPM 5167H 2. INCOME TAX OFFICER 25(3)(2) MUMBAI. 3. CIT (APPEALS)-XXVI MUMBAI 4. CIT-25 MUMBAI. 5. DR A BENCH 6. GUARD FILE. TRUE COPY BY ORDER ASSTT. REGISTRAR ITAT MUMBAI