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TMI Blog2008 (5) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Tribunal while adjudicating the issue. He further contended that the Assessing Officer while determining the annual letting value either by applying the principle of standard rent or other comparable test, has taken into consideration the entire amount shown as business receipt by the assessee. He has thus taken the gross receipt of Rs. 62,80,828. But, by mistake he has also included therein the amount on telephone, electricity and other charges amounting to Rs. 12,87,728 which are reimbursed by the clients to the assessee. These amounts cannot form a part of ALV. The same mistake is perpetuated by the CIT(A) and by the Tribunal. He has also contended that along with the occupation of the premises, assessee has also given to the clients storage, fixtures, fittings, motor car facilities, parking place, telephone operator, office assistance, delivery boys etc., which are also included in the gross receipt. While determining the actual rent received, the charges for the above mentioned services should be deducted from the gross receipt and only the net amount should be considered for arriving at annual letting value and the balance amount should be brought to tax as income fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al has given a specific finding on the basis of evidence placed before him and this finding of the Tribunal, cannot be reviewed under the garb of rectification. The scope of section 254(2) have been repeatedly explained by the Apex Court and various High Courts through following judgments: ( i ) CIT v. Vardhman Spinning [1997] 226 ITR 296 (Punj. Har.). ( ii ) CIT v. Suman Tea Plywood Industries (P.) Ltd. [1997] 226 ITR 34 (Cal.). ( iii ) CIT v. Gokul Chand Agarwal [1993] 202 ITR 14 (Cal.). ( iv ) CIT v. ITAT [1997] 93 Taxman 123 (All.). ( v ) Prakash Chand Mehta v. CIT [1996] 220 ITR 277 (MP). ( vi ) T.S. Balram, ITO v. Volkart Bros. [1971] 82 ITR 50 (SC). ( vii ) CIT v. Hero Cycles (P.) Ltd. [1997] 228 ITR 463 (SC). ( viii ) ITO v. ITAT [1998] 229 ITR 651 (Pat.). ( ix ) Ms. Deeksha Suri v. ITAT [1998] 232 ITR 395 (Delhi). ( x ) CIT v. Prahlad Rai Todi [2001] 251 ITR 833 (Gau.). 5. We have heard the rival submissions and carefully perused the miscellaneous application vis-a-vis the Order of the Tribunal and we find that arguments raised by the assessee through the miscellaneous application have already been consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural Polymers Ltd., Halycon Labs (P.) Ltd. and Zyg Pharma Ltd. to whom the premises were let out on 1-12-1998 and the monthly rent with these parties were fixed at Rs. 97,600 each excluding other expenses. Similar is the position with regard to the 4th party Arm-strong World Industries Pvt. Ltd. to whom the premises was let out on 23-4-2002. The right to use of the premises was to be terminated on violation of certain terms and conditions. It is not a case where the table space or a common space was given to different parties for a short period and the occupants or the licensees are frequently changed and the assessee is required to provide different type of services to the occupants. It is a case where the premises were let out against a particular rent after taking a substantial amount of interest-free security deposit for an unlimited period. It has not been mentioned anywhere in this agreement as to how much amount is required to be paid by the customers/tenants for the use of other facilities provided by the assessees. It is a case where the assessee has tried to give a colour of service centre, whereas, total area was let out to 4 persons and they remain in possession till da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g out the property is a secondary one. There is no separate agreement for furniture and fixtures or for providing security and other amenities. The only intention was to let out the portion of the premises to the respective occupants. Hence, the intention in making such agreement is to allow the occupants to enjoy the table space together with the furniture and fixtures. From a plain reading of the agreement it appears that the intention of the parties to the said agreement are clear and unambiguous by which the first party has allowed the second party to enjoy the said table space upon payment of the comprehensive monthly rent. As discussed hereinbefore it is composite table space let out to various occupants, the amenities granted to those occupants including the user of the furniture and fixtures are attached to such letting out. By the said agreement the parties have intended that such letting out would be an inseparable one. Hence, the prime object of the assessee under the said agreement was to let out the portion of the said property to various occupants by giving them additional right of using the furniture and fixtures and other common facilities for which rent was being p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m business. If the facts of the case are viewed in the light of aforesaid judgments, we would find that, in the instant case, the premises were let out only to four tenants. Premises to 3 tenants were let out on 1-12-1998 and till then they are still in possession of the same property. Though the assessee has mentioned in the agreement that various services were to be provided by the assessee, but, in other clauses, it has been made clear that the rent is Rs. 97,600 per month exclusive other essential amenities like electricity, telephone, telex, photocopies etc. No evidences are placed before us that assessee has been providing the other services to the tenants. It is not a case that assessee has provided a common space to all the tenants for their use and the respective tenanted portion was not demarcated. In the instant case, different portion was let out to different tenants with its exclusive use against a substantial amount of interest-free security deposit and monthly payment of rent. The nature of the activities of the assessee can only be decided with respect to the intention of the parties and one should not go to the nomenclature used in the agreement. If the documents p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an error apparent on the face of the record." 7. In the case of Suman Tea Plywood Industries (P.) Ltd. ( supra ), their Lordships of Calcutta High Court have expressed similar observations after holding that "under section 254(2) of the Income-tax Act, an order, which has been passed by the Tribunal reaches finality the moment the same is passed; cannot be touched thereafter. By section 254(2) of the Act, the Tribunal, however, has been authorized to rectify mistakes in its orders, which are apparent on the face of records. The expression mistake apparent on the record means a mistake either clerical or grammatical or arithmetical or of like nature, which can be detected without there being any necessity to re-argue the matter or to re-appraise the fact as appearing from the records." In another case Gokul Chand Agarwal ( supra ) their Lordships of Calcutta High Court have also held that section 254(2) of the Income-tax Act, 1961 empowers the Tribunal to amend its order passed under section 254(1) to rectify any mistake apparent from the record either suo motu or on an application. If in its order, there is no mistake which is patent and obvious on the basis of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly two opinions. A decision on a debatable point of law is not a mistake apparent from record. Their Lordships have further held that if a statement of any person has been recorded without producing him in the witness box, the authorities should not act upon that statement without affording the assessee an opportunity to cross-examine the witness, but that is a matter not for rectification but it is a matter relating to the merits of the case as to whether the Tribunal has gone wrong in not considering the affidavit of a particular person and has acted upon the statement of the same person which was recorded by the ITO without being permitted to cross examine by the assessee. This is not a matter in which the apparent error is involved but it is a matter more of merit and cannot be rectified within the scope of rectification. The powers of the Tribunal while making a rectification were again examined by the Apex Court in the case of Hero Cycles (P.) Ltd. ( supra ) in which their Lordships have held that rectification can only be made when a glaring mistake of fact or law committed by the Officer passing the order becomes apparent from record. Rectification is not possible if the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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