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2015 (8) TMI 909 - AT - Income TaxRectification u/s 254(2) - disallowance of an amount of ₹ 17,99,74,343/- on account of marketing expenses incurred by the assessee for various reasons which was restricted to ₹ 10 crores by the Ld.CIT(A) - Held that - CIT(A) while sustaining the disallowance of ₹ 10 crores out of disallowance of ₹ 17,99,74,343/- made under the head marketing expenses by the Assessing Officer had categorised the disallowance on account of 4 items. While he had disallowed an amount of ₹ 4,42,81,637/- and ₹ 2,00,00,000/- under 2 specific heads he did not give the bifurcation for the balance amount under the remaining 2 heads being capital expenditure in the form of production TV, Cinema, Radio and posters development and disallowance on account of whole expenditure on marketing expenses and building equity and goodwill of TCCL Brands etc. We find the Tribunal while deciding the issue has taken the balancing figure of ₹ 3,37,18,863/- as against ₹ 3,57,18,363/-. Thus, there is an apparent mistake in the order of the Tribunal in the shape of arithmetical inaccuracy. We, therefore, direct that the figure of ₹ 3,37,18,863/- appearing at Para 34 to 37 of the order be read as ₹ 3,57,18,363/-. Further, Para 37 of the order be read as under To conclude, the addition of ₹ 10,00,00,000 sustained by the CIT(A), in respect of Marketing Expenses is reduced to ₹ 4,42,81,637/- (Rs.4,11,61,718 ₹ 31,19,319). In other words, the assessee gets relief of ₹ 5,57,18,363/- (Rs.2,00,00,000 ₹ 3,57,18,363) - Decided in favour of assessee. Disallowance of Service charges - Held that - Mere filing of vouchers in the box files in our opinion is not sufficient for allowability of the claim since the same has to be thoroughly verified by the Assessing Officer. We find the CIT(A) had given a finding that there are expenses which have been claimed by CCI Inc. under the garb of service charge but the same are not allowable as per law as business expenditure under different provisions of I.T. Act and has further observed that such expenditure contain foreign travel expenses of the spouse of the employees, capital expenditure and expenses incurred for other than business consideration including security deposit written off etc. Therefore, the Tribunal following the order for A.Y. 1998-99 had taken the conscious decision by restoring the issue to the file of the Assessing Officer with a direction to examine the genuineness as well as allowability of the expenditure. Therefore, there is no apparent mistake in the order of the Tribunal. The first issue raised by the assessee in the Miscellaneous Application is accordingly dismissed.- Decided against assessee. Disallowance of reimbursement of traveling expenses to CCI Inc - Held that - There is no apparent mistake in the order of the Tribunal by restoring the issue to the file of the Assessing Officer with a direction to give an opportunity to the assessee to substantiate the claim to his satisfaction. Since the assessee had failed before the CIT(A) to prove that the amount of ₹ 9,59,49,374/- was reimbursed in terms of the service agreement, therefore, the Tribunal in the interest of justice had restored the issue to the file of the Assessing Officer with a direction to give an opportunity to the assessee to substantiate the claim. There is no apparent mistake in the order of the Tribunal on this issue. The assessee through this Miscellaneous Application requests the Tribunal to rectify the order which amounts to review of its own order which in our opinion is not permissible under the law. We therefore find no merit in the above ground. Accordingly, the second issue in the Miscellaneous Application is dismissed. - Decided against assessee. Write-off of security deposit disallowed - Held that - Tribunal while deciding the issue has simply upheld the order of the CIT(A) holding that this is a capital loss and not an allowable expenditure. However, the various arguments including the decision of the jurisdictional High Court in the case of Richardson Hindustan Ltd. (1987 (3) TMI 44 - BOMBAY High Court ) which was relied upon by the Ld. Counsel for the assessee at the time of hearing have not been considered. Non-consideration of submission including decision of jurisdictional High Court cited at the time of hearing in the order passed by the Tribunal constitute apparent mistake. We, therefore, recall the order of the Tribunal for the limited purpose of adjudicating issue No.III of the Miscellaneous Application, i.e. disallowance of security deposit - Decided in favour of assessee. Depreciation on coolers disallowed - Held that - Tribunal while deciding the issue has upheld the order of the CIT(A) on the ground that for claiming depreciation the asset must be owned by the assessee and must be used for the business purposes and held that in the instant case although coolers are owned by the assessee but these are not used by the assessee but used by vendors or bottlers who sold the beverages manufactured by concerns other than assessee. However, the alternate contention that once an asset is part of the block, the user of the block has to be seen and not that of individual asset has not been considered. Therefore, to this extent a mistake apparent from record has crept in the order of the Tribunal which in our opinion requires rectification.- Decided in favour of assessee.
Issues Involved:
1. Rectification of apparent mistakes in the Tribunal's order regarding marketing expenses for A.Y. 1997-98. 2. Rectification of apparent mistakes in the Tribunal's order regarding service charges for A.Y. 1998-99 to 2004-05. 3. Rectification of apparent mistakes in the Tribunal's order regarding reimbursement of traveling expenses for A.Y. 1998-99. 4. Rectification of apparent mistakes in the Tribunal's order regarding write-off of security deposit for A.Y. 1998-99. 5. Rectification of apparent mistakes in the Tribunal's order regarding depreciation on coolers for A.Y. 2000-01 to 2004-05. 6. Rectification of apparent mistakes in the Tribunal's order regarding marketing expenses for A.Y. 2004-05. Issue-wise Detailed Analysis: 1. Rectification of Apparent Mistakes in Marketing Expenses for A.Y. 1997-98: The assessee requested rectification under Section 254(2) of the I.T. Act for an arithmetical inaccuracy in the Tribunal's order. The Tribunal acknowledged the mistake in the balancing figure of Rs. 3,37,18,863/- which should be Rs. 3,57,18,363/-. The Tribunal directed that the incorrect figure be corrected in the order, thereby allowing the assessee's application. 2. Rectification of Apparent Mistakes in Service Charges for A.Y. 1998-99 to 2004-05: The Tribunal had restored the issue of service charges to the Assessing Officer for verification of "genuineness." The assessee argued that the issue was not about genuineness but about the benefit to third parties. The Tribunal clarified that the word "allowability" was omitted inadvertently and modified its order to include both "genuineness and allowability." The Tribunal dismissed the assessee's application on this issue but modified the order to address the omitted word. 3. Rectification of Apparent Mistakes in Reimbursement of Traveling Expenses for A.Y. 1998-99: The assessee argued that the Tribunal failed to consider Clause (6) of the service agreement, which allowed reimbursement of out-of-pocket expenses. The Tribunal found no apparent mistake in its order and held that the issue was correctly restored to the Assessing Officer for fresh adjudication. The Tribunal dismissed the assessee's application on this issue. 4. Rectification of Apparent Mistakes in Write-off of Security Deposit for A.Y. 1998-99: The assessee contended that the Tribunal did not consider the decision of the Hon'ble Bombay High Court in the case of Richardson Hindustan Ltd. The Tribunal acknowledged the non-consideration of the jurisdictional High Court's decision as an apparent mistake and recalled the order for limited adjudication on this issue. The Tribunal allowed the assessee's application on this issue. 5. Rectification of Apparent Mistakes in Depreciation on Coolers for A.Y. 2000-01 to 2004-05: The assessee argued that the Tribunal did not consider the alternate submission that once an asset is part of the block, the user of the block has to be seen. The Tribunal found merit in this argument and acknowledged that the alternate contention was not considered. The Tribunal recalled the order for limited adjudication on this issue. The Tribunal allowed the assessee's application on this issue. 6. Rectification of Apparent Mistakes in Marketing Expenses for A.Y. 2004-05: The Tribunal noted that for earlier assessment years, the ground relating to marketing expenses was decided in favor of the assessee. However, for A.Y. 2004-05, the issue was erroneously restored to the Assessing Officer. The Tribunal modified its order to align with the decisions for earlier years, allowing the marketing expenses for A.Y. 2004-05. The Tribunal allowed the assessee's application on this issue. Conclusion: The Tribunal allowed the assessee's application for rectification on issues related to marketing expenses for A.Y. 1997-98, write-off of security deposit for A.Y. 1998-99, depreciation on coolers for A.Y. 2000-01 to 2004-05, and marketing expenses for A.Y. 2004-05. The Tribunal dismissed the application on issues related to service charges and reimbursement of traveling expenses for A.Y. 1998-99. The Tribunal acknowledged and corrected apparent mistakes in its order as per the detailed analysis above.
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