CROMPTION GREAVES LTD, v. ASST CIT CIR 6(2),

MA 706/MUM/2012 | 1999-2000
Pronouncement Date: 17-07-2013 | Result: Dismissed

Appeal Details

RSA Number 70619924 RSA 2012
Assessee PAN EMBER1995C
Bench Mumbai
Appeal Number MA 706/MUM/2012
Duration Of Justice 7 month(s) 25 day(s)
Appellant CROMPTION GREAVES LTD,
Respondent ASST CIT CIR 6(2),
Appeal Type Miscellaneous Application
Pronouncement Date 17-07-2013
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 17-07-2013
Assessment Year 1999-2000
Appeal Filed On 22-11-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J MUMBAI .. ! '# $ $ $ $ .$. # % '# & BEFORE SHRI R.K.GUPTA JM AND SHRI R.S.SYAL AM M.A. NO.703/MUM/ 2012 : A.Y.1998-1999 (ARISING OUT OF ITA NO.3624/MUM/2002) M.A. NO.704/MUM/2012 : A.Y. 1998-1999 (ARISING OUT OF ITA NO.3541/MUM/2002) M.A. NO.705/MUM/2012 : A.Y. 1999-2000 (ARISING OUT OF ITA NO.4672/MUM/2003) M.A. NO.706/MUM/2012 : A.Y. 1999-2000 (ARISING OUT OF ITA NO.4394/MUM/2003) M/S CROMPTON GREAVES LTD. 6THE FLOOR C.G. HOUSE DR. A.B. ROAD PRABHADEVI MUMBAI-400025 THE ASST. COMMISSIONER OF INCOME-TAX CIRCLE 6(2) MUMBAI ( '( / // / APPELLANT) * * * * / VS. ( + '(/ RESPONDENT) '( - -- - . . . . / ASSESSEE BY : SHRI PRADIP KAPASI. + '( - . - . - . - . / REVENUE BY : SHRI O.P. SINGH * - /% / / / / DATE OF HEARING : 12.07.2013 012 - /% / DATE OF PRONOUNCEMENT : 17.07.2013 '3 '3 '3 '3 / / / / O R D E R PER R.S.SYAL ( AM) : THE ASSESSEE HAS FILED FOUR MISCELLANEOUS APPLICATI ONS IN THE RELATION TO ASSESSMENT YEARS 1998-1999 AND 1999-200 0. IT IS MA. NO. 703 704 705 & 706 OF 2012 M/S CROMPTON GREAVES LTD. 2 NOTICED THAT THE TRIBUNAL DISPOSED OF THE CROSS APP EALS OF THE ASSESSEE AS WELL AS THE REVENUE BY CONSOLIDATED ORD ER FOR EACH YEAR SEPARATELY. SOME OF THE ISSUES RAISED IN BOTH THE MISCELLANEOUS APPLICATIONS ARISE OUT OF ASSESSEES APPEAL AND OTHER OUT OF THE REVENUES APPEAL. SINCE IT IS THE ASSE SSEE ALONE WHO IS AGGRIEVED AGAINST THE TRIBUNAL ORDER ONE MA WAS R EQUIRED TO BE FILED FOR A.YS. 1998-1999 AND 1999-2000 EACH IRRESP ECTIVE OF THE FACT THAT THE ISSUES RAISED IN THESE AROSE OUT OF T HE ASSESSEES APPEAL OR THE REVENUES APPEALS. WE ARE THEREFORE DISMISSING TWO SURPLUS MISCELLANEOUS APPLICATIONS AT THE THRES HOLD AND TAKING UP THE REMAINING TWO MISCELLANEOUS APPLICATIONS FOR THE AYS 1998-199 AND 1999-2000 WHICH COVER ALL THE ISSUES RAISED FROM THE ORDERS IN RELATION TO THE ASSESSEES AND THE RE VENUES APPEALS. 2. AT THE VERY OUTSET THE LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT FOUR ISSUES HAVE BEEN RAISED IN THE MISCELLANE OUS APPLICATION PERTAINING TO THE A.Y. 1998-1999 OUT OF WHICH TWO ISSUES ARE COMMON IN THE MA FOR THE A.Y. 1999-2000. A.Y.-1998-1999 3. FIRST ISSUE RAISED IN THE MISCELLANEOUS APPLICAT ION IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF ADVERTISEMENT E XPENSES AMOUNTING TO RS.85 58 803/-. THE LD. AR CONTENDED THAT THE MA. NO. 703 704 705 & 706 OF 2012 M/S CROMPTON GREAVES LTD. 3 TRIBUNAL DISMISSED THE ASSESSEES GROUND BY HOLDING SUCH EXPENSES TO BE OF THE EARLIER YEAR. HE SUBMITTED T HAT THE ASSESSEE WAS FOLLOWING SUCH CONSISTENT PRACTICE IN EARLIER Y EARS AS WELL WHICH STOOD ACCEPTED BY THE TRIBUNAL. IN THE OPPOS ITION THE DR OPPOSED THE MA ON THIS ISSUE. 4. BEFORE PROCEEDING FURTHER WE WANT TO CLARIFY THAT THE INSTANT PROCEEDINGS ARE U/S 254(2) WHICH PROVISION DEALS W ITH RECTIFICATION OF A MISTAKE APPARENT FROM RECORD. A MISTAKE IS SAID TO APPARENT FROM RECORD WHEN IT IS SO GLARING SO AS TO BE DEDUCED WI THOUT ENTERING INTO LONG DELIBERATIONS. IF TWO LEGALLY SUSTAINABLE VIE WS EXIST ON A POINT AND ONE OF SUCH POSSIBLE VIEWS HAS BEEN TAKEN THE ISSU E BECOMES DEBATABLE AND GOES BEYOND THE KEN OF RECTIFICATION PROCEEDING S. 5. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE RELEVANT MATERIAL ON THE FIRST POINT IT IS OBSERVED THAT T HERE IS CATEGORICAL FINDING GIVEN BY THE TRIBUNAL IN PARA 10 OF THE IMP UGNED ORDER THAT THE AMOUNT OF DISALLOWANCE REPRESENTS OF AMOUNT FROM B ILLS DATED 17TH MARCH TO 31ST MARCH 1997. IT IMPLIES THAT NOT ONL Y SUCH EXPENDITURE WAS INCURRED IN THE PRECEDING YEAR BUT THE BILLS IN RESPECT THEREOF WERE ALSO RECEIVED BY THE ASSESSEE IN THE EARLIER YEAR. IN SUCH A SITUATION WE FAIL TO UNDERSTAND AS TO HOW UNDER THE MERCANTILE SYSTEM OF ACCOUNTING AN EXPENDITURE INCURRED DURING THE EARL IER YEAR CAN BE ALLOWED AS DEDUCTION IN THE SUCCEEDING YEAR ON THE BASIS OF PAYMENT. MA. NO. 703 704 705 & 706 OF 2012 M/S CROMPTON GREAVES LTD. 4 THE CONTENTION ON BEHALF OF THE ASSESSEE IN SUPPOR T OF DEDUCTION IN THE YEAR OF PAYMENT WOULD HAVE BEEN CORRECT IF IT HAD B EEN FOLLOWING CASH SYSTEM OF ACCOUNTING. BUT IF MERCANTILE SYSTEM IS FOLLOWED THEN AN ITEM OF EXPENSE QUALIFIES FOR DEDUCTION AT THE TIME OF INCURRING IRRESPECTIVE OF THE DATE OF PAYMENT. AS THE ASSESSE E INCURRED LIABILITY IN RESPECT OF THE EXPENSES IN QUESTION IN THE PRECEDIN G YEAR WHEN IT AVAILED THE BENEFIT THE CORRECT OCCASION FOR ALLOW ING DEDUCTION UNDER THE MERCANTILE SYSTEM OF ACCOUNTING IS AT THE TIME OF INCURRING OF SUCH LIABILITY AND NOT WHEN SUCH LIABILITY IS PAID OUT. IT IS FURTHER RELEVANT TO NOTE THAT THE TRIBUNAL HAS ALSO RECORDED IN THE IMP UGNED ORDER THAT THE ASSESSEE WILL BE AT LIBERTY TO TAKE REMEDIAL ACTION FOR DEDUCTION IN THE RELEVANT YEAR AS PER LAW. IN THAT VIEW OF THE MATT ER WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO MISTAKE IN THE ORDER WARRANTING RECTIFICATION. 6. THE SECOND ISSUE RAISED IN THIS APPLICATION IS A GAINST THE CONFIRMATION OF DISALLOWANCE OF RS.81 31 389/- ON A CCOUNT OF WRITE OFF OF SMALL DEBIT BALANCES. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE TRIBUNAL HAS RECORDED A CORRECT FINDING IN PARA 16 OF THE IMPUGNED ORDER THAT SUCH GROUND WAS NOT P RESSED. HE FURTHER STATED THAT IT WAS BONA-FIDE MISTAKE ON HIS PART NOT TO PRESS THIS GROUND. IN SUPPORT OF HIS CLAIM FOR RECTIFICAT ION HE RELIED ON THE JUDGMENT OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF BAGONA UDYOG V/S CIT (2011) 334 ITR 280 (CAL.). MA. NO. 703 704 705 & 706 OF 2012 M/S CROMPTON GREAVES LTD. 5 7. HAVING HEARD THE RIVAL SUBMISSIONS AND PE RUSED THE RELEVANT MATERIAL ON RECORD WE FIND THAT THE TRIBUNAL DISMI SSED THIS GROUND AS NOT PRESSED BY THE LD. AR. THIS FACT HAS ALSO BE EN CANDIDLY ACCEPTED BY THE LD AR THAT HE DID NOT PRESS THIS GR OUND BEFORE THE TRIBUNAL AT THE TIME OF HEARING. HOWEVER IT WAS S TATED THAT IT WAS HIS B ONA FIDE MISTAKE. IN OUR CONSIDERED OPINION THE RECTIFICATI ON OF SUCH TYPES OF MISTAKES COMMITTED BY THE RIVAL PA RTIES CANNOT BE BROUGHT WITHIN THE PURVIEW OF THE PROCEEDINGS U/S 2 54(2) OF THE ACT. IF THE PARTIES AFTER HAVING ARGUED THE CASE ARE ALLOWED TO FILE MAS AGAINST THE ORDER PASSED ON THE BASIS OF T HEIR SUBMISSIONS ON THE GROUND THAT THE CASE WAS WRONGLY ARGUED OR S OMETHING LEFT TO BE ARGUED AND HENCE THE ORDER BE RECALLED THEN THE TRIBUNAL WILL BE FLOODED WITH SUCH APPLICATIONS. OBVIOUSLY SUCH A COURSE OF ACTION CANNOT BE ALLOWED. THE JUDGMENT IN THE CA SE OF BAGONA UDYOG (SUPRA) IS ON A POINT IN WHICH THE NO CONCESSION WAS MADE BY THE PARTY BUT IT WAS WRONGLY RECORDED BY THE TR IBUNAL AS A CONCESSION IN ITS ORDER. IT WAS UNDER SUCH CIRCUMS TANCES THAT THE MISCELLANEOUS APPLICATION WAS HELD TO BE MAINTAINAB LE. IT IS QUITE NATURAL THAT THE TRIBUNAL HAVING WRONGLY RECORDED T HE MATTER OF CONCESSION WHICH WAS IN FACT NOT GIVEN WAS BOUND TO CORRECT THIS MISTAKE. HOWEVER THE FACTS IN THE PRESENT CASE ARE DIFFERENT IN AS MUCH AS THE LD. AR CHOSE NOT TO PRESS THIS GROUND I N THE MA. NO. 703 704 705 & 706 OF 2012 M/S CROMPTON GREAVES LTD. 6 PROCEEDINGS U/S 254(1). IN THAT VIEW OF MATTER IT CANNOT BE SAID THAT THE TRIBUNAL WRONGLY RECORDED IN ITS ORDER THA T THE GROUND WAS NOT PRESSED WHICH WAS IN FACT SO PRESSED. THUS IT IS PATENT THAT THE CASE OF BAGON UDYOG (SUPRA) HAS NO APPLICATION IN THE PRESENT CASE. THIS GROUND OF THE MA IS DISMISSED. 8. THE THIRD ISSUE RAISED IN THIS MA IS ABOUT THE DENIAL OF DEDUCTION U/S 80 O OF THE ACT. THE LD. AR SUBMITTE D THAT THE TRIBUNAL HAS DISMISSED THIS GROUND BY FOLLOWING THE ORDER PASSED FOR THE A.Y. 1997-98 THE FACTS OF WHICH WERE DIFFE RENT. THIS IN HIS OPINION CONSTITUTED A MISTAKE APPARENT FROM RE CORD. 9. WE ARE UNABLE TO ACCEPT THIS ARGUMENT FOR T HE REASON THAT THE CLAIM FOR DEDUCTION U/S 80O IN THE INSTANT YEAR IS ARISING FROM AN AGREEMENT DATED 17 TH NOVEMBER 1995 COVERING THE ORDER PASSED BY THE TRIBUNAL FOR THE EARLIER YEAR AS WELL. WHEN THE TRIBUNAL IN THE EARLIER YEAR HAS DECIDED THIS ISSUE AGAINST THE ASS ESSEE WE FAIL TO SEE HOW THE FACTS OF THE CURRENT YEAR CAN BE DIFFER ENT NECESSITATING DEPARTURE FROM THE EARLIER ORDER. WE THEREFORE DI SMISS THIS GROUND OF THE MA. 10. LAST GRIEVANCE RAISED THROUGH THIS MISCELLANEOU S APPLICATION IS ABOUT THE DENIAL OF DEDUCTION U/S 35D FOR GDR IS SUE EXPENSES. MA. NO. 703 704 705 & 706 OF 2012 M/S CROMPTON GREAVES LTD. 7 11. THE LD. AR CONTENDED THAT TRIBUNAL IN DECIDING THE ISSUE AGAINST THE ASSESSEE FAILED TO NOTE THAT THE EXPEND ITURE WAS INCURRED IN THE PREVIOUS ORDER RELEVANT YEAR 1997-9 8 FOR WHICH DEDUCTION WAS CLAIMED U/S 35D BUT NO DISALLOWANCE W AS MADE. IT WAS SUBMITTED THAT SIMILAR VIEW OUGHT TO HAVE BEEN TAKEN IN THE CURRENT YEAR AS WELL. 12. WE ARE NOT IMPRESSED WITH THIS CONTENTION BECAUSE ELABORATE REASONS HAVE BEEN GIVEN IN PARAS 33 AND 3 4 OF THE IMPUGNED ORDER FOR REJECTION OF SUCH CLAIM. THIS I SSUE HAS BEEN DISCUSSED THREADBARE IN THE LIGHT OF JUDGMENTS OF T HE HONBLE SUPREME COURT IN THE CASE OF PUNJAB STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD . AND BROOKE BOND INDIA LTD . AS REGARDS THE CONTENTION ABOUT THE AVAILABILITY OF DEDUCTION U/S 35D AGAIN WE FIND THAT SUCH CONTENTION HAS BEEN REJECTED BY RELY ING ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF HINDUSTAN INSECTICIDES LTD. [(2001) 250 ITR 338 (DEL.)]. APART FROM THAT ANOTHER TRIBUNAL ORDER PASSED BY THE M UMBAI BENCH OF THE TRIBUNAL HAS ALSO BEEN TAKEN INTO CONSIDERATION FOR REACHING THE CONCLUSION AGAINST THE ASSESSEE. THE MERE FACT THAT NO ADDITION WAS MADE ON THIS ISSUE IN THE EARLIER YEAR CANNOT BE DE TERMINATIVE IN THE SUCCEEDING YEAR BECAUSE OF THE RULE OF RES JUDICATA NOT MA. NO. 703 704 705 & 706 OF 2012 M/S CROMPTON GREAVES LTD. 8 APPLYING TO THE TAX PROCEEDINGS. FURTHER THERE CAN BE NO ESTOPPEL AGAINST THE ACT. IN SUCH CIRCUMSTANCES WE ARE OF TH E CONSIDERED OPINION THAT THE IMPUGNED ORDER CANNOT BE SAID TO B E ERRONEOUS REQUIRING RECTIFICATION ON THIS ISSUE. A.Y.-1999-2000 13. FIRST ISSUE RAISED IN THIS MA IS AGAINST THE DE NIAL OF DEDUCTION U/S 80 O AND THE SECOND ISSUE IS ABOUT DE DUCTION U/S 35D FOR GDR ISSUE EXPENSES. BOTH THE ISSUE RAISED I N THE PRESENT MA ARE SIMILAR TO THOSE RAISED IN THE MA FOR THE AY 1998-99. IN OUR ORDER FOR SUCH PROCEEDING YEAR ABOVE WE HAVE R EJECTED THE ASSESSEES CLAIM ON BOTH THESE GROUNDS. THE SAME DE CISION IS FOLLOWED HERE ALSO TO REJECT THIS MISCELLANEOUS APP LICATION ALSO. 14. IN THE RESULT ALL THE MISCELLANEOUS APPLICAT IONS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JULY 2013 SD/- SD/- (R.K.GUPTA) (R.S.SYAL) ! '# ! '# ! '# ! '# / JUDICIAL MEMBER % '# % '# % '# % '# / ACCOUNTANT MEMBER MUMBAI ; 4'* DATED : 17 TH JULY 2013. SHEKHAR MA. NO. 703 704 705 & 706 OF 2012 M/S CROMPTON GREAVES LTD. 9 '3 - +!/56 762/ '3 - +!/56 762/ '3 - +!/56 762/ '3 - +!/56 762// COPY OF THE ORDER FORWARDED TO : 1. '( / THE APPELLANT 2. + '( / THE RESPONDENT. 3. 8 () / THE CIT-7 MUMBAI. 4. 8 / CIT(A)-13 MUMBAI 5. 6; +!/!* / DR ITAT MUMBAI 6. < = / GUARD FILE. '3* '3* '3* '3* / BY ORDER 6/ +!/ //TRUE COPY// > > > >/ // /? ? ? ? ( DY./ASSTT. REGISTRAR) / ITAT MUMBAI