2018 (7) TMI 934 - AT - Income Tax

ITAT Kolkata: Judgment on Borrowed Funds & Prior Period Expenses

The Appellate Tribunal ITAT Kolkata, in its judgment for assessment year 1999-00, addressed the issues raised by the assessee regarding remand of borrowed ... Rectification of mistake - Held that:- There is no mistake apparent on record requiring rectification. The facts as to whether the balances of the current year are substantially the same as that of the previous year except for minor negligent transactions, during that period is to be verified. We are sure that Assessing Officer would follow the decision of the Tribunal taken in the earlier assessment year after the remand from the Hon'ble jurisdictional high court of the facts after verification are found similar. The plea of the Learned counsel for the assessee for a direction in this regard, in our view cannot be issued in an Miscellaneous Application u/s. 254(2) of the Act. Hence, this ground of MA is dismissed. Prior period expense - Held that:- When the Assessing Officer has accepted the claim of the assessee to the extent of ₹ 1,55,44,332/- in the remand report, it is wrong on the part to the assessee to assume that AO would do otherwise, contradicting the himself in the remand report. In any event there is no mistake apparent on record. Hence, this ground is dismissed. MAs of the assessee are hereby dismissed Issues:1. Mistake apparent on record in Tribunal order regarding remand of issues related to borrowed funds and prior period expenses for assessment year 1999-00.Analysis:1. The assessee filed a Miscellaneous Application (MA) claiming a mistake apparent on record in the Tribunal's order for assessment year 1999-00. The issue pertained to the remand of borrowed funds and prior period expenses back to the Assessing Officer for fresh adjudication. The assessee argued that the Tribunal should have granted relief instead of remanding the matter based on a previous year's order. The Departmental Representative contended that the Tribunal's decision was in line with the High Court's directive after setting aside the earlier year's order. The Tribunal held that there was no mistake apparent on record, emphasizing the need for verification of current year balances compared to the previous year. The Tribunal dismissed the MA, stating that the Assessing Officer should follow the Tribunal's decision from the earlier assessment year if the facts are similar after verification.2. The second issue involved the claim of prior period expenses amounting to Rs. 2,58,27,278/- by the assessee. The Assessing Officer disallowed the claim initially, but on appeal, the First Appellate Authority sought a remand report. The AO accepted a portion of the claim in the remand report, which was further contested by the assessee. The Tribunal remanded the matter back to the AO for fresh adjudication, leading to a dispute regarding the extent of remand. The assessee argued that the remand should have been limited to the amount not accepted by the AO in the remand proceedings. The Tribunal rejected this argument, stating that there was no mistake apparent on record in the impugned order. It highlighted that the AO had accepted a specific amount in the remand report, and the assessee's assumption of a different outcome was unfounded. The Tribunal dismissed this ground, affirming that there was no mistake apparent on record.In conclusion, the Appellate Tribunal ITAT Kolkata, in its judgment for assessment year 1999-00, addressed the issues raised by the assessee regarding remand of borrowed funds and prior period expenses. The Tribunal found no mistake apparent on record in its orders and dismissed the Miscellaneous Applications filed by the assessee. The judgment emphasized the importance of verifying facts and following previous decisions in similar circumstances, providing a comprehensive analysis of the legal aspects involved in the case.