Income Tax Appellate Tribunal - Mumbai
Aasia Management And Consultant , vs Assessee on 18 November, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "A", MUMBAI
Before Shri P.M.Jagtap, Accountant Member
and Shri Vijay Pal Rao, Judicial Member.
M.A. No. 347/Mum/2011.
(Arising out of ITA No. 1916/Mum/2010)
Assessment Year : 2006-07.
M/s Asia Management & Consultancy Asstt. Commissioner of
Pvt. Ltd., Hinduja House, Vs. Income-tax-6(1),
171 Dr. Annie Besant Road, Worli, Mumbai.
Mumbai - 400 016.
PAN-AAACI 3370C
Applicant. Respondent.
Applicant by : Shri J.P. Bairagra.
Respondent by : Shri P.K.B.Menor
Date of Hearing : 18-11-2011.
Date of Pronouncement : 09-12-2011.
ORDER
Per P.M. Jagtap, A.M. :
By this Miscellaneous Application, the assessee is seeking rectification of the mistakes alleged to have been crept in the order of the Tribunal dated 13th April, 2011 passed in ITA No. 1916/Mum/2010.
2. As submitted by the assessee in this application and further reiterated by the learned counsel for the assessee at the time of hearing, the following mistakes have been allegedly crept in the order of the Tribunal dated 13th April, 2011 (supra) :
2M.A.No.347/Mum/2011.
1) In para 7 of the order, the Hon. Tribunal has held as under-
"Although an attempt has been made on behalf of the assessee to submit before the authorities below as well as before us that the said mistake in misclassifying short term capital gain as long term capital gain was attributable to human error inadvertently occurred, there is nothing on record to support and substantiate the same."
In this respect, it is submitted that during the course of the hearing, on the query raised by the Hon. Bench, it was pointed out that as per the Profit & Loss Account at page 36 of the Paper Book, there is income shown as 'profit on sale of investment of Rs.52,66,68,726/- and while preparing the statement of total income, the total amount of profit on sale of investments is reduced from the profit as per Profit & Loss Account and under the head Income from capital Gains, it was shown as-
Long Term Gains on sale of shares Rs.52,66,68,726 Less Exempt from tax u/s. 10(38) Rs.52,66,68,726
That proved the fact that due to non-availability of the Taxation Manager and Manager (Accounts) at that time and subsequent changes in the persons so appointed, while preparing the return of income, the Manager who has prepared the same, has taken the total profit on sale of investments as long term capital on sale of shares without making the statement of capital gain which would have shown that some part of it consisted of short term capital gain also.
2. The Hon. Tribunal further held in the said para 7 of the order that "the details furnished by the assessee along with its return of income while making the claim for exemption of long term capital gain are placed at Page No. 39 of the assessee's paper book and a perusal of the same shows that the very material and relevant details in the form of corresponding dates of purchase and sale of shares were not given therein".
In this respect, it is submitted that -
While giving this finding, the Hon. Bench has relied on the statement of long term investments attached with the Balance Sheet prepared as Schedule VI of the Companies Act, which is at Page No. 39 of the Paper Book.
3M.A.No.347/Mum/2011.
During the course of the hearing, the attention of the Hon. Bench was drawn to Page No. 13 of the Paper Book, wherein working of the total capital gain on sale of shares is given, which gives the details of name of the company, date of purchase, number of shares purchased, rate at which sold, total sale price and net gain/(loss) and this statement is not considered by the Hon. Bench.
3. The Hon. Tribunal has further held in said para 7 of the order as under-
"Whether a transaction of purchase and sale of shares has resulted in short term or long term capital gain would depend on the corresponding dates of purchase and sale of shares and if such dates are not furnished by the assessee along with the corresponding transaction of purchase and sale of shares, it cannot be said that the assessee has furnished full and true particulars relating to its claim for exemption u/s 10(38) in respect of long term capital gain."
During the course of the hearing, it was specifically argued that the return of income for this year was filed electronically and in the said e-return form, there was no column for giving such details. It was also argued that in the said return filed electronically, the assessee could not delete or add any columns or rows. In other words, there was no provision in the e-return form to fill up the details relating to dates of purchase and sale of shares. During the course of assessment proceedings, when the details of long term capital gains was asked for by the AO, the Manager (Taxation) of the assessee company had furnished all the details in the submissions filed before the AO and at that time, it was found that a sum of Rs.71,14,710/- was short term capital gain.
4.Further, at the time of the hearing, the attention of the Hon. Bench was also drawn to the finding given by the AO in the assessment order, which reads as under -
"Income from capital gains - For the year under consideration, the assessee has derived long term capital gains at Rs.52,66,68,726/-, which it has claimed as exempt from tax u/s. 10(38) of the ITA. During the course of the assessment proceeding, the assessee has pointed out that through over sight, in the Computation of Long Term Capital Gains claimed to be exempt, inadvertently the assessee has included, short term capital gain of Rs.71,14,710/- arising out the sale of shares of Indusind Bank Ltd. The 4 M.A.No.347/Mum/2011.
assessee has furnished brokers note in the context of sale of shares and proofs in respect of holding of shares of more than one year. A scrutiny of the brokers note in the context of sale of shares and proofs in respect of holding of shares of more than one year. A scrutiny of the brokers notes submitted will reveal that security transaction tax has been paid in respect of all the sale of shares effected during the year. Considering the above, the income from capital gains for the year under consideration is comsputed as follows:
Sr Particulars Amount in Rs.
No.
1. Long Term Capital gain as per 52,66,68,726/-
return of income.
2. Short Term Capital gains on sale 71,14,710/-
of IBL shares.
Long Term Capital gain exempt 51,95,54,016/-
u/s. 10(38) of the ITA.
3. Short term capital gain 71,14,710/-
The Hon. Tribunal has not considered this finding of the AO in the assessment order at all.
5. Again, in the said para 7, the Hon. Tribunal further has held that -
"Moreover, there is nothing brought on record by the assessee to show as to how the mistake committed by it in misclassifying short term capital gains as long term capital gains was a bonafide one."
In this respect, we rely on the submissions given in para 5.1 above.
6. In para 8 of the order, the Hon. Tribunal has considered only two decisions out of the various decisions relied upon by the assessee company and held that they are distinguishable on facts
3. We have heard the arguments of both the sides and also perused the relevant material on record. As regards Mistake No.1, it is observed that the explanation of the assessee attributing the mistake in misclassifying the short term capital gain as long term capital gain to inadvertent human error was not accepted by the Tribunal 5 M.A.No.347/Mum/2011.
on the ground that there was nothing brought on record to support and substantiate the same. It is not very clear from the submission made on behalf of the assessee as to what exactly is the mistake in the order of the Tribunal in this regard. It is submitted that the Manager who prepared the return in the absence of Taxation Manager and Accounts Manager had taken the total profit on sale of investments as long term capital gain without preparing the statement of capital gain. This submission of the assessee does not point out as to how the mistake in misclassification of capital gain was attributable to inadvertent human error. On the contrary, when the entire profit on sale of investments was declared as long term capital gain in the return of income without making the statement of capital gain, it is very difficult to say that the misclassification was attributable to any inadvertent human error. In any case, the submission made by the assessee on this aspect of the matter was considered and rejected by the Tribunal taking a definite view and it is not permissible to review the same u/s 254(2).
4. As regards mistake No. 2, it is observed that the details furnished by the assessee along with its return of income while making the claim for exemption of long term capital gain as placed at page No. 39 of the assessee's paper book were found to be insufficient and incomplete by the Tribunal as the same did not include very material and relevant details in the form of corresponding dates of purchase and sale of shares. The submission of the assessee is that the said details were given in the form prescribed under the Companies Act whereas all the relevant details were given separately during the course of assessment proceedings as available on page No. 13 of the paper book to which attention was drawn during the course of hearing. It is observed that the said details as placed on page No. 13 of the assessee's paper book were given during the course of assessment proceedings as per the requirement of the AO which revealed the fact that short 6 M.A.No.347/Mum/2011.
term capital gain was claimed to be exempt by the assessee treating the same as long term capital gain. Furnishing of the said details as per the requirement of the AO during the course of assessment proceedings cannot be taken as basis to claim that all the details were fully and truly furnished by the assessee since it is well settled that concealment has to be inferred from the return of income filed by the assessee.
5. As regards mistake No. 3 allegedly pointed out by the assessee in the order of the Tribunal in non consideration of his submission based on the requirements of filing e-return, it is observed from the relevant notings made in the log book that no such submission was actually made on behalf of the assessee at the time of hearing of the appeal. It, therefore, cannot be said that there was any mistake in the order of the Tribunal on this count as alleged by the assessee.
6. As regards mistake No. 4 allegedly pointed out by the assessee in the order of the Tribunal in non consideration of a particular finding of the AO given in the assessment order, it is observed that the decision was rendered by the Tribunal after having perused the relevant material on record as mentioned clearly in paragraph No. 7 of its order which included the assessment order passed by the AO as well. In any case, we fail to understand how this particular finding given by the AO was so material to absolve the assessee from imposition of penalty u/s 271(1)(c). Even the assessee has not thrown any light on this aspect of the matter.
7. As regards mistake No. 5 allegedly pointed out by the assessee in the order of the Tribunal in not accepting its contention that the mistake committed in misclassifying the short term capital gain as long term capital gain was a bonafide one, the submission of the assessee is similar to the one made while pointing out 7 M.A.No.347/Mum/2011.
mistake No.1 which has already been considered and rejected by us in the foregoing portion of this order.
8. As regards mistake No. 6 allegedly pointed out by the assessee in the order of the Tribunal in considering only two decisions out of the various decisions cited at the time of hearing, it is observed that all the judicial pronouncements cited on behalf of the assessee were found to be of no help to the assessee's case by the Tribunal as specifically mentioned in paragraph No. 8 of its order on the ground that the same were clearly distinguishable on facts. The two decisions out of these various judicial pronouncements were discussed by the Tribunal just to point out some instances to show as to how the various decisions cited on behalf of the assessee were not applicable in the facts of the assessee's case. It, therefore, cannot be said that the various decisions cited on behalf of the assessee were not considered by the Tribunal and there was any mistake in the order of the Tribunal on this count.
9. For the reasons given above, we are of the view that there is no mistake much less any mistake apparent from record in the order of the Tribunal dated 13th April, 2011 (supra) as sought to be pointed out by the assessee in the present application calling for any rectification u/s 254(2). It is well settled that the scope of rectification permissible u/s 254(2) is very limited and what can be rectified under the said provision is only the mistake of fact or law, which is patent and glaring and which is clearly apparent from record. The power conferred on the Tribunal u/s 254(2) to rectify an error apparent from the record has a limited application and the revision or review of the order is not permissible u/s 254(2). As already discussed, there is no mistake much less a mistake apparent from record in the order of the Tribunal dated 13th April, 2011 (supra) as sought to be pointed out by the assessee in the present application. By the said application, the assessee is 8 M.A.No.347/Mum/2011.
seeking reappreciation of facts and material available on record by the Tribunal to review its decision which has already been rendered on appreciation of the said facts and material. At the time of hearing, this position clearly manifest from the application of the assessee was confronted to the learned counsel for the assessee. He, however, still proceeded to make state and sterile submissions in an attempt to somehow support and justify the miscellaneous application filed by the assessee. This attempt, in our opinion, clearly amounts to misuse of process of Law. The filing of this frivolous miscellaneous application by the assessee seeking rectification of the order of the Tribunal which is clearly beyond the scope of section 254(2) and the state and sterile submissions made by the learned counsel for the assessee in support thereof thus has resulted in wastage of the precious time of the Tribunal which, in our opinion, justify imposition of cost on the assessee. We, therefore, dismiss this miscellaneous application filed by the assessee being devoid of any merit and impose a cost of Rs.10,000/- on the assessee.
10. In the result, the Miscellaneous Application of the assessee is dismissed.
Order pronounced on this 9th day of December, 2011.
Sd/- Sd/-
(Vijay Pal Rao) (P.M. Jagtap)
Judicial Member Accountant Member
Mumbai,
Dated : 9th December., 2011.
Wakode
9
M.A.No.347/Mum/2011.
Copy to :
1. Applicant.
2. Respondent
3. C.I.T.
4. CIT(A)
5. DR, A-Bench.
(True copy)
By Order
Asstt. Registrar,
ITAT, Mumbai Benches,
Mumbai,