Income Tax Appellate Tribunal - Mumbai
Tivoli Investment & Trading Co. (P) Ltd. vs Asstt. Cit on 13 September, 2004
Equivalent citations: [2005]1SOT150(MUM)
ORDER
M.K. Chaturvedi, V.P. By this Miscellaneous Petition, the assessee claims that mistakes have crept into the order of the Tribunal in ITA 3269/ Bom/1993 and 3009/Bom./1994, dated 30-6-2003 and requests that the mistakes may appropriately be rectified either by recalling the order or otherwise.
2. We have heard the rival submissions in the light of material placed before us and precedents relied upon. We have also considered the written submissinos. The question posed before the Tribunal was whether the revenue authorities were correct in ascertaining the ALV for the assessment years 1990-91 and 1991-92. If there is no rent paid and in lieu of rent excessive deposit is being made, whether usufructus of the said deposit can be construed to be rent. After considering the factual details, Tribunal treated the usufructus of the deposit as rent for the user of the property. Tribunal considered the scheme of section 23 of the Act. It is imperative on the part of the assessing officer to first compute the value of the property as per section 23(1)(a) of the Act, which prescribes that ALV shall be deemed to be the sum for which the property might reasonably be expected to let from year to year, because clause (b) of section 23(1) stipulates that where the annual rent received or receivable is in excess of the sum referred to in clause (a), the actual sum is to be taken into consideration, meaning thereby that higher of the two value is to be adopted. As such, even for arriving at the value under clause (b), it is mandatory to make computation under clause (a) to find out the sum for which the property might reasonably be expected to let from year to year.
3. A categorical finding is given by the Tribunal that no addition is possible with reference to the notional interest on interest free deposits. When the ALV is determined under clause (a) of section 23(1) with reference to the fair rent, then to such value no further addition can be made. The fair rent takes into considering everything. The notional interest on such deposit is not actual rent received or receivable. Under clause (b) of section 23(1) only the actual rent received or receivable can be taken into consideration and not any notional addition.
4. The term actual rent was used in conformity with the decision of the Hon'ble Bombay High Court in the case of CIT v. J.K Investors (Bombay) Ltd. (2001) 248 ITR 723 (Bom), wherein it was held that the notional interest would not form part of actual rent received or receivable under section 23(1)(b) of the Act. In view of the decision of the jurisdictional High Court, enquiry as to the actual rent was made. While making such enquiry, the statement of Shri S. Vaidyanathan, Asstt. Vice President and Head of Services Administration was examined. On the basis of the reply given by Shri S. Vaidyanathan vide question No. 8 that the interest free security deposit of Rs. 1,54,00,000 was given to the company as a part of compensation towards occupying the premises at Sakhar Bhavan, the Tribunal concluded that the deposit amount was the consideration for the user of the property. As such, the usuf ructus can be considered as the licence fee.
5. In view of the above, it cannot be said that mistake has crept qua the applicability of section 23(1)(a)123(1)(b) of the Act. Because of thepecuiar nature of the case the Tribunal considered the issue in entirety.
6. In regard to treating usufructus of the deposit as consideration for property let out, the Tribunal considered the material circumstances. It was noted that the assessee availed overdraft facility on an interst of 15% per annum. As such, the rate of 15% was applied to find out the usufructus. It was made clear vide para 21 of the order that this usufructus is not additional advantage to the assessee. It is sum of money for which the property was let out. It was the consideration for the user of the house property. While adjudicating this issue, the Tribunal relied on the decision of the Supreme Court rendered in the case of Bhagwan Dass Jain v. Union of India (1981) 128 ITR 315 (SC), wherein it was held that even in its ordinary economic sense, the expression "income" includes not merely what is received or what comes in by exploiting the use of the property but also what one saves by using it oneself. The Tribunal considered the question that what the assessee received by exploiting the user of the property. It was found that the deposit was not obtained to secure the payment of rent because there was no stipulation for any rent in the agreement. There is a clear cut finding on the aspect that what the assessee called rent was nothing but reimbursement of the actual expenditure. This was not the consideration for the user of the property. The assessee was entitled to get the usufructus out of the amount of deposit. The tree of money was belonging to Citibank. They gave the tree of money to the assessee in consideration of the user of assessee's property. The assessee was not the owner of that tree. It had the right to get the fruits of that tree. That is usufructus, which was the consideration for the user of the property. Having regard to the facts we find no mistake in the order on this count.
7. Apropos the argument relating to the conclusion that there is no double taxation the Tribunal considered the object of section 23 of the Act. It was held that if the income is derived from the exploitation of the property, it is to be charged under the head "Income from house property". As the assessee did not reflect the rental income, as such the rental income was determined in accordance with the prescription of law. Therefore, there was no double taxation. Admittedly, the property was exploited. The rental income was not offered for taxation. As such the rental income was determined with reference to the modus prescribdd under the law. We find no apparent mistake in the order of the Tribunal on this count.
8. The decision of the Apex Court rendered in the case of Bhagwan Dass Jain (supra) was befitting to the context. There is no error in applying this decision. A sum of Rs. 9,825 per month received from Citibank as reimbursement of outgoing is based on the statement of Shri S. Vaidyanathan. There is no error in this regard.
9. In regard to the decision of M.V. Sonavala v. CIT (1989) 177 ITR 246 (Bom.), the Tribunal considered the judgment in its entirety. We find that there is no error in regard to placing of reliance on the said decision of the Honble Jurisdictional High Court.
10. The Tribunal did not accept the Municipal rateable value by Aesthetic Builders Private Limited firstly because the letter from the builder was self-serving document. The conduct of the assessee in furnishing the incorrect certificate concerning the fresh evidence proved beyond the shadow of doubt that the evidence which was furnished originally was incorrect. Besides, a man should not be permitted to blow hot and cold with reference to the same fact or insist, at different times, on the truth of each two conflicting allegations according to the promptings of his private interest. Reliance was placed on the dictum: Allegans Contaria Non Est Audiendus" (he is not to be heard who alleges things contradictory to each other). This aspect is discussed in Para 24 of the order. Vide para 8 of the order, the submission of Shri Dastur was considered. Request was made to ignore the latter certificate issued by the builder. The Tribunal considered all the facts and circumstances and material produced and discussed at the time of hearing. It is not correct to say that the Tribunal ignored the letter dated 24-1-1994 from Citibank or any other document. All the factual details and arguments were taken into consideration. As per the records, the appeals were heard for both the assessment years.
11. The only mistake which is crept in the order, is in relation to para 2 of the order. Last line of Para 2 should be read as under :-
"Instead of for the assessment year 1991-92 at Rs. 22,69,000 it should be read as for the assessment year 1991-92 at Rs. 15,48,000."
12. In the case of CITv. Ramesh Electric & Trading Co. ( 1993) 203 ITR 497 (Bom.), Hon'ble Jurisdictional High Court has held that the power of rectification under section 254(2) of the Act can be exercised only when the mistake which sought to be rectified is an obviuos and patent mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may be conceivably be two opinions. 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 Tribunal cannot, in exercise of its powers of rectification look into some other circumstances which would support or not support its conclusion.
13. Merely because the Tribunal has considered and has not allowed a claim, even if the conclusion is wrong, that will be no ground for moving an application under section 254(2), unless it can be said that there is a mistake apparent from the face of the record. In the garb of an application for rectification, it is not open for the assessee to reopen and reargue the whole matter. Unless there is manifest error which is obvious, clear and self-evident, the provisions of section 254(2) of the Act cannot be resorted to. What can be rectified under section 254(2) of the Act is a mistake which is apparent and patent. The mistake has to be such for which no elaborate reasons or inquiry is necessary. What is not permitted to be done by the statute having deliberately omitted to confer review jurisdiction on the Tribunal, cannot be indirectly achieved by recourse to rectification proceedings contained under section 254(2) of the Act.
14. Now the question arise what is apparent mistake ? Various precedents are available to adjudge this issue. It is laid down by the Hon'ble Orissa High Court in the case of CIT v. ITAT (1992) 196 ITR 564 (Ori) that the apparent mistake must be one for the discovery of which no elaborate reasoning or enquiry is necessary. It must be visible and patent. Whether the Tribunal has committed an error of judgment the same would not be sufficient to exercise power of rectification under section 254(2) of the Act. Thus the correctness of a conclusion of facts cannot be the subject-matter of an application for rectification.
15. Invocation of section 254(2) of the Act is not proper where the matter needs long drawn arguments. Absence of adequate reasons in an order was not considered to be a mistake apparent from record in the case of Popular Engg. Co. v. ITA T (2001) 248 ITR 577 (Punj. & Har.)
16. In the case of Smt. Baljeet Jolly v. CIT (2001) 250 ITR 113 (Del) it was held that where an error was far from self evident, it ceased to be an apparent error. The so called inaccuracies or wrong recording of facts as alleged were not patent mistakes which constitute the sine qua non for exercise of power under section 254(2) of the Act.
17. From the long drawn arguments and the submissios made, it appears that the learned counsel for the assessee wants the Tribunal to review its order. It is not possible on our part to review the order. Review is a creature of a statute and if the statute does not contain powers for review, then the power canot be exercised. It is not possible within the ambit of section 254(2) of the Act, to reconsider the matter already decided. If the assessee is aggrieved of the order, remedy is prescribed within the statute for appeal to the higher forum. In our opinion, no other mistake has crept in the order of the Tribunal.
18. In the result, Miscellaneous Application of the assessee stands partly allowed.