M/S J V GOKAL & COMPANY PVT LTD.,MUMBAI vs. CIT (A)-2, MUMBAI, MUMBAI

Briefly stated, the assessee company which is engaged in the business of export of tea & other traditional/non-traditional items had e-filed its return of income for A.Y 2010-11 on 24.09.2010, declaring an income of Rs. Nil. Subsequently, the case of the assessee was selected for scrutiny assessment u/s 143(2) of the Act.

Original assessment was framed by the A.O vide his order passed u/s 143(3) r.w.s 92C, dated 05.12.2013, wherein he had after inter alia, viz. (i). disallowing the expenses that were M/s J.V Gokal & Company Pvt. Ltd. Vs. CIT- A.Y 2010-11 2 incurred by the assessee as regards its liasion office at Moscow amounting to Rs. 29,91,324/-; and (ii). capping the assessee’s claim for exemption u/s 10AA at Rs. 3,92,84,237/- (as against its claim of exemption of Rs. 7,54,73,966/-), therein assessed the income of the assessee company at Rs. 3,91,81,050/- under the normal provisions of the Act.

Aggrieved, the assessee assailed the assessment order before the CIT(A) on both the aforesaid issues, viz. (i). disallowance of its claim for deduction of expenses incurred as regards its liasion office at Moscow amounting to Rs. 29,91,324/-; and (ii). capping of its exemption u/s 10AA at Rs. 3,92,84,237/- (as against its claim of exemption of Rs. 7,54,73,966/- ). The CIT(A) while disposing off the appeal vide his order dated 29.03.2016 found favour with the assessee’s claim for deduction of the expenditure that were incurred w.r.t the Moscow Liasion Office, and directed the A.O to allocate the said expenses in the ratio of exports of the assessee’s units (10AA units and non 10AA units). However, the CIT(A) failed to address the assessee’s grievance that the A.O had erred in capping its claim for exemption at an amount of Rs. 3,92,84,237/- as against Rs. 7,54,73,966/- so claimed by it.

Seeking rectification of the aforesaid mistake, the assessee filed an application dated 13.03.2019 with the CIT(A), wherein it was stated that the assessee’s specific grievance as regards the capping of its exemption u/s 10AA at Rs. 3,92,84,237/- as against its claim of Rs. 7,54,73,966/- had remained omitted to be addressed while disposing off the appeal. However, the CIT(A) holding a conviction that the ground on deduction u/s 10AA had already been decided while disposing off the appeal, thus, vide his impugned order dated 30.07.2019 rejected the aforesaid application of the assessee.

Aggrieved, the assessee has assailed the rejection of its application filed u/s 154 in appeal before us. Ld. A.R took us through the genesis of the controversy in question. It was submitted by the ld. A.R that though the CIT(A) while disposing off the appeal had addressed the assessee’s grievance as regards the disallowance of the expenses that were incurred w.r.t its Moscow Liasion Office, however, he had omitted to address the specific grievance that was raised by the assessee as regards capping of its exemption u/s 10AA of the Act. It was submitted by the ld. A.R that the failure on the part of the CIT(A) to dispose off the aforesaid specific ground of appeal that was raised by the assessee, was beyond any doubt, a mistake, that was glaring, patent, obvious and apparent from record, which, thus, rendered the same M/s J.V Gokal & Company Pvt. Ltd. Vs. CIT- A.Y 2010-11 3 amenable for rectification u/s 154 of the Act. It was, thus, submitted by the ld. A.R that the CIT(A) had erred in declining to rectify his aforesaid mistake and had wrongly rejected the assessee’s application.

We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record. As is discernible from the order that was passed by the CIT(A) while disposing off the assessee’s appeal, we find, that though the assessee had specifically vide ‘Ground No. ii’ assailed the capping of its exemption u/s 10AA at Rs. 3,92,84,237/- as against its claim of Rs. 7,54,73,966/-, however, the same had not been addressed and therein adjudicated upon by the first appellate authority. In our considered view, the failure or omission on the part of the CIT(A) to dispose off a specific ground of appeal