ROYAL ANTIBIOTIC & INVESTMENT P. LTD, v. ITO WD 4(3)(2),

MA 795/MUM/2009 | 1993-1994
Pronouncement Date: 21-05-2010 | Result: Dismissed

Appeal Details

RSA Number 79519924 RSA 2009
Assessee PAN AAACR3244E
Bench Mumbai
Appeal Number MA 795/MUM/2009
Duration Of Justice 5 month(s) 25 day(s)
Appellant ROYAL ANTIBIOTIC & INVESTMENT P. LTD,
Respondent ITO WD 4(3)(2),
Appeal Type Miscellaneous Application
Pronouncement Date 21-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 21-05-2010
Assessment Year 1993-1994
Appeal Filed On 26-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI R.S.SYAL AM AND SHRI D.K.AGARWAL JM M.A.NO.795/MUM/2009 (ARISING OUT OF ITA NO.4251/MUM/2007 : ASST.YEAR 19 93-1994) M/S.ROYAL ANTI-BIOTICS & INVESTMENTS PRIVATE LIMITED B-39 MANGALDAS BLDG. NO.1 2 ND FLOOR MUMBAI 400 002. PA NO.AAACR3244E. VS. THE INCOME TAX OFFICER WARD 4(3)(2) MUMBAI. (APPLICANT) (RESPONDENT) APPLICANT BY : MS.USHA DALAL RESPONDENT BY : SHRI AARSI PRASAD O R D E R PER R.S.SYAL AM : THIS MISCELLANEOUS APPLICATION U/S.254(2) OF THE IN COME-TAX ACT 1961 HAS BEEN MOVED BY THE ASSESSEE PRAYING FOR THE RECTIFIC ATION OF THE ORDER OF THE TRIBUNAL DATED 20.02.2009 IN ITA NO.4251/MUM/2007. 2. THE LEARNED COUNSEL FOR THE ASSESSEE CONT ENDED THAT THE TRIBUNAL HAS UPHELD THE IMPOSITION OF PENALTY U/S.271(1)(C) BY RELYING ON THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA AND ORS. VS. DHARMENDRA TEXTILE PROCESSORS & ORS. [(2008) 306 ITR 277 (SC)] WHICH WAS NOT CITED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE AT THE TIME OF HEARING. SHE RELIED ON THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF NARESH PAHUJA VS. DCIT IN WHICH IT HAS BEEN HELD THAT THE JUDGEMENT NOT CITED BY THE PARTIES DURING THE COURSE OF HEARING SHOULD NOT BE REFERRED TO IN DECIDING TH E APPEAL. SHE CONTENDED THAT SINCE THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS & ORS. (SUPRA) WAS NOT REFERRED TO BY THE LEARNED DEPARTMENTAL REPRESENTATIVE DURING THE COURSE OF HEARING THUS T HE TRIBUNAL ERRED IN RELYING ON SUCH JUDGEMENT FOR THE PURPOSE OF DISMISSING THE AS SESSEES APPEAL. MA NO.795/MUM/2009 M/S.ROYAL ANTI-BIOTICS & INVESTMENTS PVT.LTD. 2 3. ON THE CONTRARY THE LEARNED DEPARTMENT AL REPRESENTATIVE HAS FILED AN AFFIDAVIT STATING THAT HE HAD RELIED ON THIS JUDGEM ENT DURING THE COURSE OF HEARING BEFORE THE TRIBUNAL. WHEN THIS FACT WAS BROUGHT TO THE NOTICE OF THE LEARNED A.R. SHE ALSO CAUSED AN AFFIDAVIT FILED FROM SHRI VISHWA S VASUDEV MAHENDALE THE PRACTICING CHARTERED ACCOUNTANT ASSERTING THAT THE JUDGEMENT IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS & ORS. (SUPRA) WAS NOT CITED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS FOUND THAT BOTH THE SIDES HAVE FILED A FFIDAVITS IN SUPPORT OF THEIR CLAIM THAT THE JUDGEMENT IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS & ORS. (SUPRA) WAS OR WAS NOT CITED BY THE LEARNED DEPARTMENTAL RE PRESENTATIVE DURING THE COURSE OF HEARING BEFORE THE TRIBUNAL. IT IS AXIOMATIC THA T ONE OF THE AFFIDAVITS IS CERTAINLY WRONG. IN VIEW OF THE FACT THAT BOTH THE MEMBERS WHO HEARD THIS APPEAL HAVE SINCE BEEN TRANSFERRED FROM MUMBAI. IN SUCH CIRCUM STANCES IT IS NOT POSSIBLE FOR THE PRESENT BENCH TO DETERMINE THAT WHICH OF THE TW O AFFIDAVITS IS CORRECT. 5. BE THAT AS IT MAY WE FIND FROM THE IMPUGNED ORDE R THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF TOOTH P ASTE. IT CLAIMED DEDUCTION U/S.80-I AND 80-HHA IN RESPECT OF PROFIT ON SALE OF SHARES AMOUNTING TO RS.2 76 300. THE ASSESSING OFFICER HELD THAT THE AS SESSEE HAD WRONGLY CLAIMED DEDUCTION ON THIS AMOUNT WHICH WAS NOT AVAILABLE A S IT COULD NOT BE HELD AS INCOME DERIVED FROM THE INDUSTRIAL UNDERTAKING. HE ACCORDINGLY ASSESSED SUCH INCOME UNDER THE HEAD CAPITAL GAINS AND DENIED THE DEDUCTION. THIS VIEW OF THE AO WAS UPHELD IN FURTHER APPEALS. MA NO.795/MUM/2009 M/S.ROYAL ANTI-BIOTICS & INVESTMENTS PVT.LTD. 3 6. THEREAFTER THE ASSESSING OFFICER IMPOSED PENALTY U/S 271(1) IN RESPECT OF THIS AMOUNT WHICH WAS UPHELD BY THE LEARNED CIT(A) . THE ASSESSEE CAME UP IN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL NOTED THAT THE ASSESSEE CLAIMED DEDUCTION IN RESPECT OF PROFIT ON SALE OF SHARES WHICH WAS PA TENTLY NOT INCOME EARNED FROM MANUFACTURING AND SALE OF TOOTH PASTE. THIS ISSUE HAS BEEN DISCUSSED AT LENGTH IN PARA 5 ONWARDS OF THE IMPUGNED ORDER AND IN PARA 6 A CATEGORICAL FINDING HAS BEEN RECORDED THAT THE ASSESSEE HAD CLAIMED DEDUCTION I N RESPECT OF PROFIT ON SALE OF SHARES AMOUNTING TO RS.2 76 300/- WHICH IS PATENT LY NOT INCOME EARNED BY THE ASSESSEE FROM MANUFACTURING AND SALE OF TOOTH PASTE . THE CONTENTION OF THE ASSESSEE REMAINS A BARE ASSERTION IN CONTENDING T HAT THE TREATMENT OF INCOME UNDER CERTAIN HEAD WAS BASED ON THE LAW PREVAILING ON THE DATE OF FILING THE RETURN OF INCOME. THE CAPITAL GAINS OR INCOME EARNED BY THE A SSESSEE FROM THE SALE OF SHARES HAS NOT BEEN DERIVED FROM THE SALE OF PRODUCT VIZ. TOOTH PASTE MANUFACTURED BY THE ASSESSEE COMPANY. IT IS NOT A CLAIM OF DEDUCTION MA DE ON BONAFIDE BELIEF OR UNDER IGNORANCE ... 7. FROM THE ABOVE FINDING RECORDED BY TH E TRIBUNAL IN THE IMPUGNED ORDER IT IS CLEAR THAT ITS DECISION AGAINST THE ASSESSEE IS ON APPRECIATION OF THE ENTIRE FACTUAL POSITION PREVAILING IN THIS CASE. NO DOUBT THERE IS REFERENCE TO THE JUDGEMENT IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS & ORS. (SUPRA) BUT THAT IS NOT THE SOLE BASIS FOR THE UPHOLDING OF THE PENALTY. EVEN IF THE REFERENCE TO THE JUDGMENT IN DHARMENDRA TEXTILE PROCESSORS & ORS IS EXCLUDED THE PENALTY IS SUSTAINABLE ON THE BASIS OF THE INDEPENDENT REASONING. 8. HERE IT IS IMPORTANT TO MENTION THAT W E ARE DEALING WITH THE MISCELLANEOUS APPLICATION. THE PROCEEDINGS U/S.254(2) CANNOT BE T AKEN AS A TOOL FOR SEEKING REVIEW OF AN EARLIER ORDER PASSED BY THE BENCH. ONL Y TO THE EXTENT THERE IS SOME MISTAKE APPARENT ON RECORD THE PARTIES CAN APPROAC H FOR RECTIFICATION OF SUCH MISTAKE. IT CANNOT BE PERMITTED TO IMPRESS UPON THE BENCH TO CARRY OUT THE REVIEW IN MA NO.795/MUM/2009 M/S.ROYAL ANTI-BIOTICS & INVESTMENTS PVT.LTD. 4 THE GARB OF RECTIFICATION OF THE ORDER. OUR VIEW IS FORTIFIED BY THE RECENT JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF CIT VS. EARNEST EXPORTS LTD. [2010-TIOL-164-HC-MUM (BOM.)] . 9. IN VIEW OF THE FOREGOING DISCUSSION WE ARE OF THE CONSIDERED OPINION THAT THE IMPUGNED ORDER DOES NOT CALL FOR ANY RECTIFICAT ION WITHIN THE MEANING OF SECTION 254(2) OF THE ACT. 10. IN THE RESULT THE MISCELLANEOUS APPLICATION IS DISMISSED. ORDER PRONOUNCED ON THIS 21 ST DAY OF MAY 2010. SD/- SD/- ( D.K.AGARWAL ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 21 ST MAY 2010. DEVDAS* COPY TO : 1. THE APPLICANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XIV MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI.