Shri.Tippu Sultan, Bangalore v. Dy.CIT, Bangalore

MA 87/BANG/2009 | misc
Pronouncement Date: 24-01-2011 | Result: Dismissed

Appeal Details

RSA Number 8721124 RSA 2009
Bench Bangalore
Appeal Number MA 87/BANG/2009
Duration Of Justice 1 year(s) 3 month(s) 9 day(s)
Appellant Shri.Tippu Sultan, Bangalore
Respondent Dy.CIT, Bangalore
Appeal Type Miscellaneous Application
Pronouncement Date 24-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 24-01-2011
Assessment Year misc
Appeal Filed On 15-10-2009
Judgment Text
PAGE 1 OF 8 M.P. NOS.86 TO 89/BANG/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B' BEFORE DR. O K NARAYANAN VICE PRESIDENT AND SHRI GEORGE GEORGE K J.M. M.P.NO. IN IT(SS)A NO. BLOCK PERIOD APPELLANT RESPONDENT 86/BANG/2009 3/BANG/2006 1/4/1991 TO 29/5/2001 SHRI CHAND PASHA 217/55 11 TH CROSS WILSON GARDEN BANGALORE. DCIT CENTRAL CIRCLE-2(2) BANGALORE. 87/BANG/2009 4/BANG/2006 1/4/1991 TO 29/5/2001 SHRI TIPU SULTAN 217/55 11 TH CROSS WILSON GARDEN BANGALORE. DCIT CENTRAL CIRCLE-2(2) BANGALORE. 88/BANG/2009 5/BANG/2006 1/4/1991 TO 29/5/2001 SHRI MOHD. KHASIM 217/55 11 TH CROSS WILSON GARDEN BANGALORE. DCIT CENTRAL CIRCLE-2(2) BANGALORE. 89/BANG/2009 6/BANG/2006 1/4/1991 TO 29/5/2001 SHRI IMTIAZ PASHA 217/55 11 TH CROSS WILSON GARDEN BANGALORE. DCIT CENTRAL CIRCLE-2(2) BANGALORE. APPELLANT BY : SHRI S PARTHASARATHI ADVOCATE RESPONDENT BY : SMT. SWATHI S PATIL CIT-II O R D E R PER GEORGE GEORGE K : THESE MISCELLANEOUS PETITIONS ARE DIRECTED AGAINS T ORDER OF INCOME TAX APPELLATE TRIBUNAL DATED 26.6.2009 IN IT (SS)A NOS. 3 TO 6/BANG/2006 FOR THE BLOCK PERIOD 1/4/1991 TO 29/5/2 001. 2. THESE MISCELLANEOUS PETITIONS HAVE BEEN FILED ACCORDING TO THE PETITIONERS FOR THE REASON THAT THE TRIBUNA L HAS FAILED TO CONSIDER PAGE 2 OF 8 M.P. NOS.86 TO 89/BANG/2009 2 SOME OF THE ARGUMENTS AND THE SUPPORTING MATERIALS FURNISHED WHILE DECIDING THE ISSUE. IT WAS STATED THAT THE RELEVAN T ARGUMENTS AND MATERIALS FURNISHED WERE CRUCIAL AND GO TO THE ROUT E OF THE ISSUE AND THUS THE OMISSION TO CONSIDER THE SAME BEING ERRON EOUS REQUIRES RECTIFICATION U/S 254(2) OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS:- WHILE COMPLETING THE ASSESSMENTS THE IMPUGNED AD DITION OF RS.31 18 585/- WAS MADE IN THE HANDS OF EACH OF THE ASSESSEES UNDER THE HEAD SHORT TERM CAPITAL GAINS. THE REASON FO R THE ADDITION WAS THAT THERE WAS UNDISCLOSED CONSIDERATION FOR THE TRANSFE R OF LAND AT BILEKANAHALLI BEGUR HOBLI BANGALORE. THE ASSESS EES WERE THE CO- OWNERS OF PROPERTY WHICH WAS PURCHASED BY M/S DOMIC ILE DEVELOPERS. M/S DOMICILE DEVELOPERS PURSUANT TO SEARCH ADMITT ED THAT IT HAD PAID RS.2.75 CRORES BY WAY OF CONSIDERATION FOR THE PURC HASE OF LAND FROM THE ASSESSEES WHEREAS THE SELLERS (ASSESSEES) STAT ED THAT TILL DATE THEY RECEIVED ONLY RS.67 LAKHS. THE DIFFERENCE BETWEEN THE AMOUNT DISCLOSED BY THE ASSESSEES AND THE AMOUNT THAT WAS STATED TO HAVE BEEN PAID BY M/S DOMICILE DEVELOPERS WAS ADDED TO THE S ALE CONSIDERATION WHILE COMPUTING SHORT TERM CAPITAL GAINS TAX IN THE HANDS OF THE RESPECTIVE ASSESSEES. 3.1 THE ADDITION MADE BY THE ASSESSING OFFICER FOR THE PURPOSE OF CALCULATING CAPITAL GAIN TAX WAS CONFIRM ED BY THE CIT(A). APPEALS AGAINST THE CIT(A)S ORDER WERE FILED BEFOR E THE TRIBUNAL. THE TRIBUNAL SUSTAINED THE ADDITION MADE. PAGE 3 OF 8 M.P. NOS.86 TO 89/BANG/2009 3 4. AGGRIEVED BY THE ORDER OF THE TRIBUNAL IN CONFI RMING THE ACTION OF THE CIT(A) THE ASSESSEES HAVE FILED THES E MISCELLANEOUS PETITIONS. 5. IT WAS SUBMITTED THAT THE TRIBUNAL FAILED TO NO TICE THAT THE EVIDENCES COLLECTED IN THE CASE OF M/S DOMICILE DEV ELOPERS WERE NOT PUT TO THE ASSESSEES FOR THEIR REBUTTAL. FURTHER I T WAS CONTENDED THAT WHEN THE PARTNER OF M/S DOMICILE DEVELOPERS WAS EXA MINED HE HAD NOT SPECIFICALLY STATED THAT THERE IS DOCUMENTARY P ROOF TO SHOW THAT FIRM HAD PAID THE ADDITIONAL CONSIDERATION TO THE A SSESSEES FOR THE PURCHASE OF THE PROPERTY. IT WAS STATED THAT THE T RIBUNAL IS WRONG TO HAVE GIVEN RELIANCE TO THE STATEMENT OF THE TWO CO- OWNERS OF THE PROPERTY (TWO ASSESSEES IN THIS CASE) FOR HAVING AD MITTED THAT THEY HAVE RECEIVED THE ADDITIONAL CONSIDERATION. IT WAS SUBM ITTED THAT THESE WERE STATEMENT OF THE CO-OWNERS WITHOUT VERIFICATION OF THE RECORDS. IT WAS POINTED OUT THAT THE LETTER DATED 2/8/2001 ADDRESSE D TO THE DY. DIRECTOR OF INCOME TAX WAS FILED BEFORE THE TRIBUNAL TO PROV E THAT THE ACTUAL CONSIDERATION RECEIVED WAS ONLY RS.67 LAKHS AND THA T THERE WAS NO QUESTION OF EXPLAINING THE RECEIPT OF RS.2.75 CRORE S. 5.1 WITHOUT PREJUDICE TO THE ABOVE CONTENTION IT WAS SUBMITTED THAT THE TRANSACTION WAS WITH REGARD TO T HE ASSET HELD BY THE FIRM M/S TIPPU SULTAN AND CO. IN WHICH THE ASSES SEES WERE PARTNERS. IT WAS SUBMITTED THAT THE LAND IN QUESTION WAS CONT RIBUTED TO THE FIRM BY WAY OF CAPITAL AND THE ASSET BELONGED TO THE FIR M WHEN THE TRANSACTION WAS EXECUTED. THEREFORE IT WAS CONTEN DED THAT THE CAPITAL GAIN TAX SHOULD HAVE BEEN ASSESSED IN THE HANDS OF THE FIRM AND NOT IN PAGE 4 OF 8 M.P. NOS.86 TO 89/BANG/2009 4 THE HANDS OF THE RESPECTIVE ASSESSEES WHO ARE ONLY THE PARTNERS OF THE FIRM. 6. THE LEARNED DR ON THE OTHER HAND PLACED RELIA NCE ON THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S ST. JOHN M EDICAL COLLEGE HOSPITAL IN M.P.NOS.7 TO 14/BANG/2010 IN ITA NOS.32 1 TO 324/BANG/2008 DATED 10/8/2010. IT WAS SUBMITTED TH AT THERE IS NO MISTAKE APPARENT ON RECORD WARRANTING INTERFERENCE U/S 254(2) OF THE ACT. 7. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE GRIEVANCE O F THE ASSESSEES IS WITHOUT ANY SUBSTANCE. EVIDENCE/DOCUMENTS COLLECTE D BY THE INCOME TAX DEPARTMENT WERE PUT TO THE RESPECTIVE ASSESSEES FOR THEIR REBUTTAL. THE ASSESSEES WERE ALSO ALLOWED TO CROSS EXAMINE TH E PARTNER OF M/S DOMICILE DEVELOPERS. THEREFORE THE DEPARTMENT HAS COMPLIED WITH THE PRINCIPLES OF NATURAL JUSTICE. 7.1 THE IMPUGNED PROPERTY WAS PURCHASED BY THE ASS ESSEES AS CO-OWNERS WAY BACK IN THE FINANCIAL YEAR 1994-95 FO R A CONSIDERATION OF RS.18 LAKHS. EACH OF THE FAMILY MEMBERS (ASSESS EES) HAS ENTERED INTO SEPARATE AGREEMENT WITH M/S DOMICILE DEVELOPER S FOR THE SALE OF THE RESPECTIVE LAND. THESE SALE AGREEMENTS WERE FO UND WITH M/S DOMICILE DEVELOPERS (SEIZED MATERIAL A/DD/44). TH ESE AGREEMENTS WITH THE ASSESSEES AND M/S DOMICILE DEVELOPERS DO N OT INDICATE EXISTENCE OF ANY FIRM. THE TRIBUNAL IN ITS CONSOLI DATED ORDER (ITA NO.3 TO 6/BANG/2006 DATED 26.6.2009) AT PAGE 8 HAS HELD AS FOLLOWS:- PAGE 5 OF 8 M.P. NOS.86 TO 89/BANG/2009 5 THE LEARNED CIT(A) IN THE CASE OF DOMICILE DEVELOPERS RIGHTLY HELD THAT WHEN THE SUBSTANTIVE CIRCUMSTANCES LEAD TO THE FINDING THAT THE SUM WAS ROUTED THROUGH BOOKS OF ACCOUNTS BY WAY OF REGULAR ACCOUNTS COULD NOT BE TAXED IN THE HANDS OF THE FIRM MERELY BY A LATER RETRACTION WHICH HE UPHELD. FROM THIS ANGLE ALSO THE SAID SUM CANNOT BE CONSIDERED BUT IN THE HANDS OF THE INDIVIDUAL ASSESSEES BEFORE US ONLY 7.2 FROM THE ABOVE IT IS CLEAR THAT THE TRIBUNAL HAD CONSIDERED THE ALTERNATIVE PLEA THAT IS RAISED BY THE ASSESSEE S IN THESE MISCELLANEOUS PETITIONS AND HELD THAT CAPITAL GAIN TAX IS CORRECTLY ASSESSED IN THE HANDS OF THE ASSESSEES AND NOT IN T HE HANDS OF THE FIRM VIZ. M/S TIPPU SULTAN & CO. THEREFORE THE ASSESSE ES MISCONCEPTION THAT EARLIER BENCH HAD NOT TAKEN COGNIZANCE OF THE MATERIAL FACTS ADVANCED BY THEM IS WITHOUT ANY BASIS AND DESERVES TO BE REJECTED OUTRIGHTLY. THEREFORE WE FIND THAT THERE IS NO MI STAKE APPARENT FROM THE RECORDS IN THE ORDER OF THE TRIBUNAL DATED 26 TH JUNE 2009 WHICH REQUIRES RECOURSE TO ACTION U/S 254(2) OF THE ACT. 7.3 WE SHALL ALSO DRAW STRENGTH FROM THE LEGAL PR OCEEDINGS FOR OUR ENDEAVOUR AS QUOTED BELOW:- (1) THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CI T V RAMESH ELECTRIC AND TRADING CO. 203 ITR 497 HAD H ELD THAT THE TRIBUNAL HAS NO POWER U/S 254(2) TO REVIEW ITS ORDE RS AND ITS POWER EXTENDS ONLY TO RECTIFICATION OF MISTAKES WHICH ARE APPARENT FROM RECORD AND FAILURE TO CONSIDER AN ARGUMENT MAY CONS TITUTE AN ERROR OF PAGE 6 OF 8 M.P. NOS.86 TO 89/BANG/2009 6 JUDGEMENT BUT IT IS NOT A MISTAKE APPARENT WITHIN T HE SCOPE OF SECTION 254(2). (2) THE HONBLE DELHI HIGH COURT IN THE CASE OF RAS BIHARI BANSAL V. CIT & ANR. REPORTED IN 293 ITR 368 WHILE ELABORATING ON THE SCOPE OF S.254 (2) OF THE ACT HAD UNFOLDED THE ISSUE THUS - THIS SECTION ENABLES THE CONCERNED AUTHORITIES TO RECTIFY ANY 'MISTAKE APPARENT FROM THE RECORD'. IT IS WELL SETTLED THAT AN OVERSIGHT OF A FACT CANNOT CONSTITUTE AN APPARENT MISTAKE RECTIFIABLE UNDER TH IS SECTION. SIMILARLY FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT THE MERE FACT THAT THE TRIBUNAL HAS NOT ALLOWED A DEDUCTION EVEN IF THE CONCLUSION IS WRONG THAT WILL BE NO GROUND FOR MOVING AN APPLICATION UNDER SECTION 254(2) OF THE ACT. FURTHE R IN THE GARB OF AN APPLICATION FOR RECTIFICATION TH E ASSESSEE CANNOT BE ALLOWED TO BE PERMITTED TO REOPEN AND RE-ARGUE THE WHOLE MATTER WHICH IS BEYOND THE SCOPE OF THIS SECTION. (3) THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT & ANR. V. MCDOWELL & CO. LTD. REPORTED IN (2 009) 310 ITR 215 HAS IN ITS WISDOM RULED THAT - APPLICATION OF THE PRINCIPLES LAID DOWN BY THE SUPERIOR COURTS TO THE FACTS OF THE CASE BEFORE THE TRIBUNAL ON ERRONEOUS UNDERSTANDING OF SUCH PRINCIPLES RECORDING OF AN ERRONEOUS FINDING BY IT BASED ON THE FACTS ON RECORD ARRIVING AT A CONCLUSION ON ERRONEOUS APPLICATION OF PROVISIONS OF LAW TO PAGE 7 OF 8 M.P. NOS.86 TO 89/BANG/2009 7 THE FACTS OF THE CASE ETC. CANNOT BE HELD TO BE 'A MISTAKE APPARENT FROM THE RECORD' WARRANTING ANY RECTIFICATION BY THE TRIBUNAL IN EXERCISE OF ITS POWER UNDER S. 254(2) OF THE IT ACT BY RECONSIDERING THE APPLICATION OF PRINCIPLES OF SUPERIOR COURTS TO THE FACTS OF THE CASE OR BY RECONSIDERING ITS FINDINGS RECORDED OR BY RECONSIDERING THE APPLICATION OF THE RELEVANT PROVISIONS OF LAW TO THE FACTS OF THE CASE AS IS DONE BY THE TRIBUNAL IN THE INSTANT CASE. SUCH AN EXERCISE OF POWER UNDER S. 254(2) OF THE ACT AMOUNTS TO REVIEW OF ITS EARLIER ORDER ON MERITS BUT NOT 'RECTIFICATION OF MISTAKE APPARENT FROM THE RECORD' AND SUCH REVIEW WOULD CERTAINLY BE BEYOND THE SCOPE OF S. 254(2) OF THE IT ACT. 7.4 TO ILLUSTRATE FURTHER IN THE CASE OF THE PRES ENT ASSESSEES IT CANNOT BE SAID THAT THERE WAS A MISTAKE WARRANTING INTERFERENCE OF THIS BENCH U/S 254(2) OF THE ACT. THE WORST IT CAN BE SAID THAT THERE BEING ANY ERROR FOR WHICH THE REMEDY AVAILABLE TO THE ASS ESSEES IS NOT U/S 254(2) OF THE ACT BUT U/S 260A OF THE ACT FOR RED RESSAL. OUR CONCLUSION IS SUPPORTED BY THE FINDING OF THE HONB LE JURISDICTIONAL HIGH COURT REFERRED SUPRA. 8. IN THE RESULT THE MISC. PETITIONS OF THE ASSESSEES ARE DISMISSED. THE ORDER IS PRONOUNCED ON 24 TH JANUARY 2011. SD/- SD/- (DR. O K NARAYANAN) (GEORGE GEORGE K) VICE PRESIDENT JUDICIA L MEMBER PAGE 8 OF 8 M.P. NOS.86 TO 89/BANG/2009 8 COPY TO : 1. THE ASSESSEE 2.THE REVENUE 3. THE CIT(A) CONCERNED. 4. THE CIT CONCERNED. 5. THE DR 6. GUARD FILE. MSP/13.1./17.1 BY ORDER ASST. REGISTRAR ITAT BANGALORE.