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Income Tax Appellate Tribunal, PANAJI BENCH : PANAJI
Before: SHRI SATBEER SINGH GODARA & SHRI INTURI RAMA RAO
BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA.No.301/PAN./2019 Assessment Year 2014-2015 M/s. Navratna Jewellers & The ACIT, Circle-1, Co. CTS No.2688, Raviwar- Feroz Khimjibhai Peth, Gokak. Karnataka. vs., Commercial Complex, Dr. PIN – 591 307 B.R. Ambedkar Road, PAN AAHFN2414IN Belgaum. Karnataka. TAN BLRN054576 PIN – 590 001 (Appellant) (Respondent) For Assessee : Shri A.S. Patil For Revenue : Shri N. Shrikanth Date of Hearing : 14.07.2023 Date of Pronouncement : 18.07.2023 ORDER PER SATBEER SINGH GODARA, J.M. : This assessee’s appeal for assessment year 2014- 2015, arise against the CIT(A), Belagavi’s Order ITA.No. CIT(A)/BGM/10483/2018-19, dated 29.11.2019, involving proceedings u/s. 154 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties. Case file perused.
The assessee pleads the following substantive grounds in the instant appeal :
2 ITA.No.301/PAN./2019 “1] ORDER IS AGAINST LAW AND FACTS OF THE CASE
[A] That the Order of the Learned Commissioner [Appeals] confirming additions made by A.O. in rectification Order U/S 154 is against Law and facts of the case, because DEBATABLE and ARGUABLE Issues are outside the jurisdiction of Section 154. Hence, Order requires to be quashed.
2] DISALLOWANCE OF INTEREST Rs.2,36,126/- BY A.O. CONFIRMED BY CIT [APPEALS] :-
[A] On the facts brought on record the Learned Commissioner[Appeals] ought to have held that disallowance of Interest of Rs.2,36,126/- claimed in Assessment Year 2014-2015 is a DEBATABLE and ARGUABLE Issue which is outside the purview of Section 154. Therefore, there is no justification in disallowing Interest of Rs.2,36,126/-. Instead Commissioner [Appeals] confirmed the disallowance which is unjustified and requires to be deleted.
[B] Learned Commissioner [Appeals] failed to appreciate that the appellant had not Revised the Income for the Assessment Year 2013-2014 claiming the Interest of Rs.2,36,126/-. Interest paid by appellant to the Society is 3 ITA.No.301/PAN./2019 already admitted as income in the hands of Society, hence there is no Loss of Revenue.
[C] The disallowance of Interest of Rs.2,36,126/- amounts to double taxation once in the hands of Society and again in the hands of appellant which is not permissible under Income-Tax Act. Hence, disallowance confirmed by Commissioner [Appeals] requires to be deleted.
3] INTEREST LEVIED U/S.234B AMOUNTING TO Rs.2.15.760/-.
The Learned CIT[A] erred in confirming the levy of Interest U/S. 234B as the delay of 5 Years in completing assessment which is not attributable to appellant. Hence, Rs.2,15,760/- interest charged & confirmed by CIT[A] requires to be deleted.
4] The appellant craves leave to amend, alter or delete any of the above grounds of appeal.”
The appellant Prays that the appeal be allowed.”
We next note that the CIT(A)'s detailed discussion affirming the Assessing Officer’s action initiating sec.154 rectification reads as under :
4 ITA.No.301/PAN./2019
We have given our thoughtful consideration to the vehement rival stands and find no merit in Revenue’s arguments supporting both the lower authorities action taking recourse to sec.154 rectification for the purpose of disallowing the assessee’s alleged prior period interest expenditure.
5 ITA.No.301/PAN./2019 4.1. We first of all wish to quote hon’ble apex court’s landmark decision in T.S. Balram vs. Volkart Bros. [1971] 82 ITR 50 (SC) that the purpose of sec.154 rectification is not to make roving enquiries in the given case but to deal with only apparent mistakes emanating from the records. We keep in mind this settled legal proposition and advert to facts of the instant case wherein, the issue of sec.154 rectification pertaining to the alleged prior period expenditure is highly debatable one only since the same involves crystallization issue in the earlier assessment year; on mercantile basis and in the year of payment is liable to be paid, after crystallization. This is indeed coupled with the various judicial pronouncements i.e., PCIT vs. Adani Enterprises ITA.No.566 of 2016 dated 20.07.2016 holding that such a claim is indeed a tax neutral case in case the concerned assessee is assessed at uniform rate throughout. We hold these peculiar facts and circumstances that both the learned lower authorities have erred in law and on facts in initiating sec.154 rectification proceedings against the assessee. Ordered accordingly.
This assessee’s appeal is allowed in above terms.
Order pronounced in the Open Court on 18.07.2023.