Shri Jivabhai M.Patel,HUF,, Baroda v. The ACIT.,Circle-2(1),, Baroda

MA 180/AHD/2009 | 2004-2005
Pronouncement Date: 18-02-2010 | Result: Dismissed

Appeal Details

RSA Number 18020524 RSA 2009
Assessee PAN AFLPS9242Q
Bench Ahmedabad
Appeal Number MA 180/AHD/2009
Duration Of Justice 8 month(s) 21 day(s)
Appellant Shri Jivabhai M.Patel,HUF,, Baroda
Respondent The ACIT.,Circle-2(1),, Baroda
Appeal Type Miscellaneous Application
Pronouncement Date 18-02-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 18-02-2010
Assessment Year 2004-2005
Appeal Filed On 28-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : A HMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA J.M. & HONBLE SH RI D.C. AGRAWAL A.M.) M.A. NO. 180/AHD./2009 (ARISING OUT OF I.T.A. NO. 1806/AHD./2008) ASSESSMENT YEAR : 2004-2005 JIVABHAI M. PATEL HUF BARODA -VS.- ASSISTANT COMMISSIONER OF INCOME TAX (PAN : AFLPS 9242 Q) CIRCLE-2(1) BAROD A (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI G.S. PATEL RESPONDENT BY : SHRI GOVIND SINGHAL S R. D.R. O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER : THIS MISCELLANEOUS APPLICATION FILED BY THE ASSESSE E IS ARISING OUT OF THE DECISION DATED 24.04.2009 OF THE ITAT D BENCH AHMEDABAD IN I.T .A. NO. 1806/AHD./2008 FOR THE ASSESSMENT YEAR 2004-05. THE CONTENTS OF THE MISCELLANEOUS APPLICAT IONS FILED BY THE ASSESSEE READ AS UNDER :- 2. MISTAKES APPARENT FROM RECORD :- PARA 3 OF THE ORDER. (I) THE OBSERVATIONS IN PARA 3 OF THE ORDER OF HON' BLE BENCH ARE NOT BASED ON FACTS ON RECORD AND AS SUCH THIS BEING A MISTAKE OF FACTS APPARENT FROM RECORD REQUIRES RECTIFICATION U/S. 2 54(2) OF THE ACT. (II) THE APPELLANTS SUBMIT THAT THE A.R. HAD NOT CO NTENDED AND THERE WAS NO REASON FOR THE A.R. TO CONTEND BEFORE THE HON'BL E BENCH THAT THE ASSESSEE HAD CHARGED INTEREST AT 13.5% AND NOT AT 9 % FROM THE PARTIES TO WHOM SECTION 40A(2)(B) IS APPLICABLE IN VIEW OF TH E FACTS FILED WITH HON'BLE BENCH IN RESPECT OF INTEREST CHARGED AT 9% ON THE ADVANCES TO THE RELATED PARTIES AS UNDER :- (A) PARA 3 OF THE ORDER OF THE A.O. U/S. 143(3) DATED 1 9.12.2006. ON VERIFICATION OF DETAILS FILED IT IS REVEALED THAT THE ASSESSEE HAS CHARGED INTEREST @ 9% ONLY FROM THE FOLLOWING PERSO NS : (1) C.P. PATEL HUF (2) M.P. PATEL HUF (3) V.P. PATEL HUF (4) P.J. PATEL HUF. (B) NO.2 OF STATEMENT OF FACTS FILED WITH LD. C.I.T(A). DURING THE YEAR THE HUF HAD RECEIVED INTEREST @ 13 .5% FROM ALL PERSONS TO WHOM LOAN HAD BEEN GIVEN EXCEPT (1) SHRI C.P. PATEL HUF. (2) SHRI M.P. PATEL HUF AND (3) SHRI V.P. PATEL HUF FROM WHOM INTEREST WAS CHARGED AT @ 9%. 2 MA NO. 180/AHD/2009 (C) NO. 1 OF GROUND OF APPEAL FILED WITH LD. C.I.T( A). THE LD. A.O. ERRED IN CALCULATING THE INTEREST RECEIVABLE FROM THE ABO VE 3 PERSONS OF 13.5% AS AGAINST THE ACTUAL INTEREST RECEIVED AT 9% ONLY. (D) PARA 2.3 OF THE ORDER OF THE LD. C.I.T.(A). IT IS NOT IN DISPUTE THAT THE APPELLANT GRANTED LO AN TO SISTER CONCERN @ 9% AS AGAINST 13.5% BEING PAID ON BORROWED FUND. (E) IN FACT AS THE FOLLOWING SUBMISSIONS WERE FILED WITH HON'BLE TRIBUNAL FOR THE FIRST TIME THE A.R. HAD CONTENDED BEFORE THE HON'BLE BENCH THAT AS THERE WAS NO FINDING ON THAT ISSUE OF LOWER AUTHORITIES AS IT MAY BE SENT BACK TO THE A.O. (I) ON PAGE 2(E)(II) OF PAPER BOOK FILED ON 13.03.2 009 IT WAS SUBMITTED THAT THE APPELLANTS HAVE NOT CLAIMED ANY DEDUCTION ON ACCOUNT OF INTEREST DEFICIT IN THE P&L A/C. AND HEN CE NO DISALLOWANCE U/S. 36(I)(III) WAS CALLED FOR. (II) IN THE SUMMARY FILED ON 19.03.09 IT WAS SUBMI TTED IN NOTES NO. 2 & 3 ON PAGE 2 THAT THERE IS SURPLUS IN INTEREST AC COUNT AND HENCE NO DEDUCTION OF INTEREST WAS CLAIMED IN P&L A/C. U/S. 36(I)(III) OF THE I.T. ACT. 3. MISTAKES APPARENT FROM RECORD : PARA 5 OF THE OR DER. THE FINDINGS IN PARA 5 OF THE ORDER ARE NOT BASED O N FACTS AND WRITTEN SUBMISSIONS FILED ON RECORD WITH HON'BLE BENCH AND AS SUCH THESE ARE MISTAKES OF FACTS AND LAW APPARENT FROM RECORD AND REQUIRE RECTIFICATION U/S. 254(2) OF THE I.T. ACT ON THE FOLLOWING GROUN DS :- (I) THE ADDITION WAS MADE BY THE A.O. U/S.40A(2)(B) ON THE GROUND THAT THE ASSESSEE HAD CHARGED INTEREST AT 9% TO RELATED PARTIES WHICH WAS NOT SUSTAINED BY THE LD. C.I.T.(A) AS PER FINDING RECORDED IN PARA 2.3 OF HIS ORDER TO THE EFFECT THAT THE A.O. HAD THOUGH MADE DISALLOWANCE U/S. 40A (2)(B) THE PROVISIONS OF SECTION 36(I)(III) CAN BE USED FO R MAKING SUCH DISALLOWANCE AND CONFIRMED THE ADDITION U/S. 3 6(I)(III) OF THE I.T. ACT. (II) THE LD. D.R. HAS NOT DISPUTED THE FINDING OF THE LD . C.I.T.(A) AS THE PROVISIONS OF SECTION 40A(2) WERE NOT APPLIC ABLE TO THE FACTS OF THE CASE OF THE ASSESSEE. (III) THEREFORE THE APPELLANTS SUBMIT THAT THE FINDING T O SET ASIDE THE ORDER OF THE LD. C.I.T.(A) AND RESTORE THE ISSU E AGAIN ON THE SAME FACTS AND LAW TO THE FILE OF THE A.O. TO V ERIFY WHETHER THE ASSESSEE HAD CHARGED AT 13.5% OR AT 9% TO THE PARTIES FALLING U/S. 40A(2)(B) OF THE ACT IS NOT I N CONFORMITY WITH THE FINDINGS OF A.O. AND THE LD. C.I.T.(A). 4. THE APPELLANTS SUBMIT THAT PARA 3 AND PARA 5 OF THE ORDER MAY BE RECTIFIED U/S.254(2) OF THE ACT AS DEEMED FIT BY HO N'BLE BENCH AND OBLIGE. 3 MA NO. 180/AHD/2009 2. AT THE TIME OF HEARING ON BEHALF OF THE ASSESSEE SHRI G.S. PATEL APPEARED AND CONTENDED THAT AT THE TIME OF HEARING OF THE APPEAL ON PAGE 2(E)(II) OF THE PAPER BOOK IT WAS SUBMITTED THAT THE ASSESSEE H AS NOT CLAIMED DEDUCTION ON ACCOUNT OF INTEREST DEFICIT IN THE PROFIT & LOSS A/C. THEREFORE NO DISALLOWANCE UNDER SECTION 36(I)(III) IS CALLED FOR. THE LD. COU NSEL OF THE ASSESSEE ALSO SUBMITTED THAT FROM THE S UMMARY FILED ON 19.03.2009 IT CAN BE SEEN THAT THERE IS S URPLUS IN INTEREST ACCOUNT THEREFORE NO DEDUCTION OF INTEREST WAS CLAIMED IN THE PROFIT & LOSS A/C. UNDE R SECTION 36(I)(III) OF THE INCOME TAX ACT 1961. T HE LD. COUNSEL OF THE ASSESSEE ACCORDINGLY SUBMITTED T HAT TRIBUNAL HAS COMMITTED A MISTAKE BY IGNORING TH AT THE ASSESSEE HAS NOT CLAIMED DEDUCTION UNDER SECTIO N 36(I)(III) OF THE I.T. ACT THEREFORE NO DISALLO WANCE IS CALLED FOR. 3. ON THE OTHER HAND SHRI GOVIND SINGHAL SR. D.R. APPEARING ON BEHALF OF THE REVENUE CONTENDED THAT THE ASSESSEE BY THIS MISCELLANEOUS APPLICATION IS SEEKING REVIEW AND TRIBUNAL HAS NO POWER TO REVIEW ITS OWN ORDER. THE LD. D.R. STRONGLY OBJECTE D TO THE PLEA OF THE LD. COUNSEL OF THE ASSESSEE. H E SUBMITTED THAT THERE IS NO MISTAKE APPARENT FROM RE CORD. THE LD. D.R. FURTHER SUBMITTED THAT THE MERE FACT THAT THE ASSESSEE HAS SHOWN NET INTEREST INCOME DO ES NOT MEAN THAT IT HAS NOT CLAIMED DEDUCTION UNDER SECTION 36(I)(III) OF THE INCOME TAX ACT 1961. HE SUBMITTED THAT IT WAS A DUTY OF THE ASSESSEE TO SHO W GROSS RECEIPTS AND THEREAFTER CLAIMED THE DEDUCTION OF INTEREST. INSTEAD OF DOING THIS THE ASSESSEE H AS SHOWN NET INTEREST INCOME THAT DOES NOT MEAN THAT THERE IS NO INTEREST INCOME AND NO DISALLOWANCE CAN BE MADE UNDER SECTION 36(I)(III). THE LD. D.R. SUBMITT ED THAT UNDER THE GRAB OF RECTIFICATION THE TRIBUN AL CANNOT EXERCISE THE POWER OF REVIEW. THE RECTIFICAT ION OF MISTAKE SHOULD NOT AMOUNT TO REVIEW OR REWRITING OF THE PREVIOUS YEAR EITHER ON FINDING OF LAW OR ON FINDING OF FACTS. THERE IS NO MISTAKE AP PARENT FROM RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE INCOME TAX ACT. AFTER READING THE ENTIRE ORDER IT CAN BE SEEN THAT WHATEVER PLEA RAISED AT THE TIME O F HEARING WAS DULY CONSIDERED OR DEEMED TO BE CONSIDERED. BY THESE MISCELLANEOUS APPLICATIONS TH E ASSESSEE HAS MERELY SEEKING REVIEW AND TRIBUNAL HAS NO POWER TO REVIEW ITS OWN ORDER. 4. AFTER HEARING BOTH THE SIDES WE HAVE CAREFULLY GONE THROUGH THE CONTENTS OF THE MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE. WE FIND CONSIDE RABLE FORCE IN THE SUBMISSION MADE BY THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT TH ERE IS NO MISTAKE APPARENT FROM RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE INCOME TAX ACT 19 61. IT IS WELL SETTLED LAW THAT TRIBUNAL HAS NO POW ER TO REVIEW ITS OWN ORDER UNDER SECTION 254(2) OF THE ACT. THE TRIBUNAL CANNOT IN EXERCISE OF ITS POWER OF RECTIFICATION UNDER SECTION 254(2) LOOK INTO SOME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT OF ITS VIEW. IN THIS CASE TRIBUNAL AFTER C ONSIDERING THE RIVAL SUBMISSIONS AT THE TIME OF HE ARING OF 4 MA NO. 180/AHD/2009 APPEAL ITSELF POINTED OUT THAT TRIBUNAL WILL RESTOR E THE MATTER BACK TO THE FILE OF A.O. TO THIS PROPO SITION AT THE TIME OF HEARING NO OBJECTION WAS RAISED BY THE LD. COUNSEL OF THE ASSESSEE. BE THAT AS IT MAY BY THIS MISCELLANEOUS APPLICATION THE ASSESSEE IS MERELY S EEKING REVIEW OF ORDER OF THE TRIBUNAL AND ADMITTED LY THE TRIBUNAL HAS NO POWER TO REVIEW ITS OWN ORDER. 5. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. KA RAM CHAND THAPAR AND BROSS P. LTD. REPORTED IN 176 ITR 535 (SC) HELD THAT THE DECISION OF THE TRIBUNAL HAS NOT TO BE SCRUTINIZED SENTENCE BY SENTENCE MERELY TO FIND OUT WHETHER SOME INCIDENTAL FACT WHICH APPEARS ON THE RECORD HAS NOT BEEN NOTICED BY THE TRIBUNAL IN ITS JUDGMENT. IN OUR OPI NION THERE IS NO MISTAKE APPARENT FROM RECORD WITH IN THE MEANING OF SECTION 254 (2). HOWEVER IT IS WEL L SETTLED LAW THAT WHAT CAN BE RECTIFIED U/S. 254 ( 2) IS A MISTAKE WHICH IS APPARENT AND PATENT FROM THE RECO RD. UNLESS THERE ARE MANIFEST ERRORS WHICH ARE OBVIOUS CLEAR AND SELF-EVIDENT THE TRIBUNAL CANNO T RECALL ITS PREVIOUS ORDER IN AN ATTEMPT TO REVIEW THE ORDER. THE MISTAKE HAS TO BE SUCH FOR WHICH NO ELAB ORATE REASON OR ENQUIRY IS NECESSARY. THE POWERS SO CONFERRED U/S. 254 (2) DO NOT CONTEMPLATE REHEARING WHICH WOULD HAVE THE EFFECT OF RE-WRITING AN ORDER AFFECTING THE MERITS OF THE CASE. OTHERWISE THERE W OULD BE NO DISTINCTION BETWEEN THE POWER TO REVIEW AND THE POWER TO RECTIFY A MISTAKE. THE POINT RAISED IN THE MISC. APPLICATION SUBMITTED BY THE REVENUE VIRTUALLY SEEKS A REVIEW OF THE ORDER PASSED BY THI S TRIBUNAL WHICH IS CLEARLY BEYOND THE SCOPE OF SECTION 254 (2). 6. IT IS PERTINENT TO NOTE THAT AFTER CONSIDERING T HE RIVAL SUBMISSIONS AND THE FACT THAT THE ASSESSEE PAID INTEREST @ 13.5% PER ANNUM TO ITS DEPOSITS AND CHARGED INTEREST FROM DEPOSITORS @ 9% WHILE FROM THE CUSTOMERS THE ASSESSEE CHARGED INTEREST @ 15.5% . AFTER CONSIDERING ALL THESE ASPECTS TRIBUNAL AT PARA 5 IN PAGE 2 OF THE IMPUGNED ORDER DATED 24.04.2009 DECIDED THE CONTROVERSY AS UNDER :- 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE MATERIALS ON RECORD ALONGWITH ORDERS OF THE TAX AUT HORITIES BELOW. WE SET ASIDE THE ORDER OF THE C.I.T(A) AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO VERIFY WHETHER THE ASSESSEE HAD CHARGED INTEREST @ 13.5% FROM THE PARTIES FALLING U/S. 40A(2)(B) OF THE ACT. IN CASE THE ASS ESSING OFFICER FOUND THAT THE INTEREST HAS BEEN CHARGED @ 13.5% NO DISALLOWANCE S HOULD BE CHARGED AND IN CASE IT IS FOUND THAT THE INTEREST IS CHARGED @9% D ISALLOWANCE BE SUSTAINED. THUS THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. WE ALSO FOUND CONSIDERABLE FORCE IN SUBMISSION MADE BY THE LD. D.R. THAT THE MERE FACT THAT THE ASSESS EE HAS SHOWN NET INTEREST INCOME DOES NOT MEAN THAT I T HAS NOT CLAIMED ANY INTEREST EXPENDITURE UNDER SECTION 36(I)(III) OF THE INCOME TAX ACT 1961. IT IS ALSO WELL SETTLED LAW THAT WHEN A MISTAKE OCCURR ED EITHER CLERICAL OR ARITHMETICAL WHICH CAN BE DETEC TED FIRST WITHOUT THERE BEING ANY NECESSITY TO RE- ARGUE THE MATTER OR TO REAPPRAISE THE FACTS AS PER FROM THE RECORD. 5 MA NO. 180/AHD/2009 7. IN VIEW OF THE FOREGOING DISCUSSION WE ARE CONV INCED THAT THERE CANNOT BE ANY DISPUTE WITH THE PROPOSITION THAT POWER UNDER SUB-SECTION (2) OF SEC TION 254 IS TO RECTIFY THE MISTAKE APPARENT FROM TH E RECORD BUT THAT POWER DOES NOT CLOTHE THE TRIBUNAL WITH THE JURISDICTION TO REVIEW OF ITS EARLIER ORD ER OR RE- WRITE A FRESH JUDGMENT. BY PRESENT MISCELLANEOUS AP PLICATION ASSESSEE VIRTUALLY SEEKING REVIEW THEREFORE THE MISCELLANEOUS APPLICATION FILED BY T HE ASSESSEE IS REJECTED. 8. IN THE RESULT THE MISCELLANEOUS APPLICATION FIL ED BY THE ASSESSEE IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 18.02.201 0 SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18/ 02 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AHMEDABAD LAHA/SR.P.S.