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TMI Blog2021 (10) TMI 1318X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs is thus vitiated. When we had asked the Ld. DR regarding the basis for enhancement of disallowance at 40% from 25% of service charges as evident from the impugned order of the Tribunal vide Para 128 and to this query, DR fairly conceded that there has been no basis given for such enhancement of disallowance at 40% of the service charges. On this count also, a mistake apparent from record has crept in the findings of the Tribunal on the issue of service charges expenses. We are of the considered view that there is a mistake apparent from record which has crept in the impugned order of the Tribunal while deciding the issue of service charges expenses and hence, the grounds only pertaining to service charges expenses for the relevant assessment years involved is recalled for fresh adjudication. Depreciation on coolers - Tribunal suo-moto had gone into establishing whether the assessee was owner of the coolers or not and asking the assessee to justify their ownership over the coolers which as a matter of fact was never a point of dispute for adjudication. The other part of the discussion whether the said assets i.e. coolers were used for the purpose of business of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /PUN/2004, ITA No.1103/PUN/2005, ITA No.256/PUN/2007, ITA No.144/PUN/2007 and ITA No.896/PUN/2008 dated 22.08.2019 for the respective assessment years accordingly. 2. The assessee through these Miscellaneous Applications has invited the jurisdiction of Tribunal as envisaged u/s.254(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) and submitted that in the above referred order of the Tribunal dated 22.08.2019, there has crept in mistake apparent from record which needs to be rectified in these Miscellaneous Applications. 3. The Ld. Counsel for the assessee also submitted that since the disputed issues are common in all these Miscellaneous Applications in respect of mistake apparent from record which has crept in, he would like to take up MA No.75/PUN/2019 for the assessment year 1998-99 as the lead case. 4. That opening his arguments, the Ld. Counsel for the assessee submitted that the Tribunal in the impugned order dated 22.08.2019 had recorded that the Ld. CIT(Appeals) has disallowed service charges for want of vouchers and also that through the nature of transactions the benefit has accrued to the third parties/bottlers when, in fact, the Ld. CIT(App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee further submitted that this finding of fact that the Ld. CIT(Appeals) had disallowed service charges also for want of filing of details/vouchers by the assessee is an erroneous finding of facts. That in fact, the Ld. CIT(Appeals) from Para 8 onwards of his order for the assessment year 1998-99 in the case of the assessee has specifically analyzed the facts after examination of vouchers submitted by the assessee company with regard to claim of service charges which is very much evident from the said Paras of the Ld. CIT(Appeals) s order on record. Thereafter, the Ld. CIT(Appeals) at Para 10 of his order commented that A close examination of the information gathered as a result of appellant s enquiry during the appellate proceedings .. . Therefore, such close examination was conducted by the Ld. CIT(Appeals) in view of the detailed vouchers in respect of service charges payment which was placed before him. 7. Thereafter, the Ld. CIT(Appeals) at Para 10.1 of his order stated, it is correct that service charges expenditures were incurred by the assessee but wholly it cannot be allowed since benefit also accrued to the bottlers/third parties also. At Para 10.11, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntary evidences and after establishing that services are not entirely for the purpose of the business of assessee. Thereafter, the Ld. Counsel for the assesse submitted that non furnishing of details/vouchers for determination of the service charges expenses in respect of the assessee was not at all the subject matter of dispute at all from the very first found of litigation and that as was demonstrated, the Ld. CIT(Appeals) has disallowed 25% of service charges for the assessment year 1998-99 not for want of vouchers/details but for the fact that benefit accrued to the third parties/bottlers in respect of the transaction related to service charges expenses. But on the contrary, the Tribunal vide Para 68 of the impugned order (supra.) has observed and held as follows: 68. In such scenario, both the Assessing Officer and CIT(A) had repeatedly asked the assessee to justify its claim of service charges by producing supporting vouchers but except the vouchers for two months in each of the years, wherein in assessment year 1998-99 the said vouchers were produced before the CIT(A) and in assessment year 1999- 2000 it was produced before both the Assessing Officer and CIT(A), no ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime, the Ld. Counsel for the assessee also reiterated his submission stating that in the first round of litigation after the matter was restored to the file of the Assessing Officer, when the assessee had gone before the Hon ble Jurisdictional High Court in Writ Petition No.2650 of 2014 dated 14th August, 2014 in respect of the assessment year 1998-99 to 2004- 05, in that order, the Hon ble Jurisdictional High Court has taken a note on the dispute in relation to disallowance of service charges expenses wherein the assessee/petitioner had submitted before the Tribunal in that first round that the matter may be decided on the basis of available materials on record and submissions made by the assessee before the Bench. However, the assessee/ petitioner received final order from the Tribunal and therein, the Tribunal has observed that there was no record and factual data before the Assessing Officer and therefore, without making any reference to the record before the Ld. CIT(Appeals), the Tribunal had remanded the matter back to the file of Assessing Officer. Thereafter, the assessee filed Miscellaneous Applications wherein the assessee contended that the Tribunal should have decided t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om record has crept in the impugned order of the Tribunal (supra.). 16. That on the other part of the decision of the Tribunal (supra.) that benefit has accrued to the third parties, the assessee has not disputed. 17. Thereafter, the Ld. Counsel for the assessee stated, it is settled position of law that the findings of judgment has to be read in totality whether it is erroneous or not, has to be viewed from entirety of the judgment and since, the finding of the Tribunal in respect of the issue of the disallowance of service charges expenses for want of vouchers/details is not a correct observation and therefore, the said issue has to be recalled. For this proposition, the Ld. Counsel for the assessee has relied on the decision of the Hon ble Supreme Court in the case of CIT Vs. Daulat Ram Rawatmull (1973) 87 ITR 349 (SC) wherein it has been held that when a Court of fact acts on material partly relevant and partly irrelevant, it is impossible to say to what extent the mind of the Court was affected by the irrelevant material used by it in arriving at its finding. Such a finding is vitiated because of the use of inadmissible material . The said decision was referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground is in effect that the Tribunal has not confined itself to the subject matter of appeal i.e. grounds of appeal. The Ld. Counsel for the assessee relied on the judgment of the Hon ble Bombay High Court in the case of Pokhraj Hirachand Vs. CIT, 49 ITR 293 (Bom.) wherein it was laid down that the ITAT has to confine itself to the subject matter of appeal i.e. grounds of appeal. Unfortunately, the Tribunal while passing the impugned order (supra.) had completely lost sight of this judgment and it has instead relied on a judgment of the Hon ble Karnataka High Court in Fidelty Business Services Vs. ACIT, 257 Taxman 266 (Kar.) where a view contrary view has been taken as compared to the view of the Hon ble Bombay, Gujarat and Calcutta High Courts. The said judgment of the Hon ble Karnataka High Court (supra.) was never put to the assessee to explain or distinguish it. 22. The Ld. Counsel for the assessee further submitted that the decision of Pokhraj Hirachand Vs. CIT (supra.) was also not dealt with or discussed at all by the Tribunal in the impugned order (supra.) and the assessee relied on the judgments in the case of Honda Siel Vs. CIT, 165 Taxman 307 (SC), Reliance Inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rship was already accepted by the Department and the subject matter of dispute before the Tribunal was only to adjudicate the issue of depreciation. He relied on the decision of the Hon ble Jurisdictional High Court in the case of Pokhraj Hirachand Vs. CIT (supra.) where the law laid down was that the ITAT has to confine itself to the subject matter of the appeal i.e. grounds of appeal and in this case, the Tribunal in its order has refused to accept the ownership of the coolers in the hands of the assessee which really goes beyond the scope of the subject matter of dispute which is not allowable as per the said decision of the Hon ble Jurisdictional High Court (supra.), hence, also mistake apparent from record has crept in on this count as well. 26. Per contra, the Ld. DR supported the impugned order of the Tribunal and submitted that it is a well-reasoned order and that there is no mistake apparent from record in the findings of the Tribunal. The Ld. DR further submitted that what the assessee trying to do is to review the Tribunal s order in the grab of filing these Miscellaneous Applications contending mistake apparent from record . The Ld. DR has also filed detailed writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d parties, therefore it was not wholly and exclusively for the purpose of the business of the assessee. 29. The Ld. DR also conceded that the enhancement of addition on service charges @ 40% from 25% which was upheld for the assessment year 1998- 99, there was no basis given for such enhancement of addition in the impugned order of the Tribunal. Barring these deficiencies, the Ld. DR submitted that it is a well-reasoned order rendered by the Tribunal wherein the Tribunal has examined the scope and extent of benefit that accrued to the third parties in the transaction of service charges expenses made by the assessee. That as regards depreciation on coolers the Tribunal had upheld the order of the Ld. CIT(Appeal) with a categorical finding that the coolers (assets) were not used for purposes of business of the assessee and that the twin conditions of Section 32 of the Act were not fulfilled. Therefore, there is no mistake apparent from record in the impugned order of the Tribunal. 30. We have heard the rival contentions, analyzed the facts and circumstances and considered the judicial pronouncements placed on record. We have also considered the submissions of the parties herein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... servation of the Ld. CIT(Appeal) that he has given categorical findings that CCI Inc. does provide services to the assessee i.e. Coca Cola India Pvt. Ltd. as the assessee company does not have human resources and administrative infrastructure and these services were actually provided by CCI Inc., Indian Branch. Thereafter, the Ld. CIT(Appeal) opined that however, it is not true that the entire expenditure of Indian Branch of CCI Inc. is for the business of the assessee and therefore, amounts paid by the assessee to CCI Inc. by way of reimbursement of the said expenditure does not deserve to be allowed in full in the hands of the assessee. Thereafter, the Ld. CIT(Appeal) vide Para 10.11 has held as follows: 10.11 I have considered all these facts and issues along with break up of expenses given by the appellant as per letter dated 21.02.2002. Looking into all these orders and the evidence collected after enquiry with the appellant during the appellate proceedings, I have to hold that 25% of service charges are not of allowable nature as services have been rendered to other than the appellant and mainly to the Coca Cola entities as per service agreements with them and to the bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the third parties and hence the disallowance, though it is correct but because of wrong finding of fact on the issue of non-filing of documentary evidences/vouchers, mistake apparent from record has crept in while deciding this issue which makes the entire findings on this issue as incorrect and such findings is thus vitiated. When we had asked the Ld. DR regarding the basis for enhancement of disallowance at 40% from 25% of service charges as evident from the impugned order of the Tribunal vide Para 128 and to this query, the Ld. DR fairly conceded that there has been no basis given for such enhancement of disallowance at 40% of the service charges. On this count also, a mistake apparent from record has crept in the findings of the Tribunal on the issue of service charges expenses. 37. Therefore, we are of the considered view that there is a mistake apparent from record which has crept in the impugned order of the Tribunal while deciding the issue of service charges expenses and hence, the grounds only pertaining to service charges expenses for the relevant assessment years involved is recalled for fresh adjudication. 38. That on the other issue of depreciation on c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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