Sushil Gupta v. The Pr. Commissioner Of Income Tax – 17,Mumbai

R.M. AMBERKAR(Private Secretary) IN THE HIGH COURT OF JUDICATURE AT BOMBAYO.O.C.J.REVIEW PETITION NO. 10 OF 2019 ININCOME TAX APPEAL NO. 51 OF 2016 Sushil Gupta Versus ..Petitioner The Pr. Commissioner of Income Tax – 17,Mumbai...Respondent ................... Mr. Vikram Nankani, Sr. Advocate a/w Mr. Shishir S. Manjrekari/by M/s. Shah Legal for the PetitionerMr. Vikram Nankani, Sr. Advocate a/w Mr. Shishir S. Manjrekari/by M/s. Shah Legal for the Petitioner Mr. P.C. Chhotaray for the Respondent Mr. P.C. Chhotaray for the Respondent ................... CORAM : AKIL KURESHI & B.P. COLABAWALLA, JJ. DATE : OCTOBER 11, 2019 at 3.00 IN CHAMBER P.C.: 1.This review petition is filed by the original respondent -assessee requesting us to review / recall our judgment dated22.2.2019 passed in Income Tax Appeal No. 51 of 2016. By the said judgment, we had allowed the Revenue's appeal. The question of law considered by the Court was as under:- “Whether on the facts and in the circumstances of the case and inlaw, the Tribunal was justified in holding that the redemption fine ofRs. 75,00,000/- is allowable as business expenditure under Section37 of the Income Tax Act?” 2. After detail consideration of facts on record and thelaw canvassed by the respective parties, the Court had cometo conclusion that :- “20. In the present case, the Tribunal, without proper justification ordetailed examination of material on record, followed the line of logicadopted by this Court in the case of Pannalal (supra) whereas thefacts as we have noticed squarely fall within the parameters of thedecision of the Supreme Court in the case of Hazi Aziz (supra). TheAssessing Officer had summoned the import licence holder M/s.Rajnikant Brothers whose representative had stated before theAssessing Officer that M.P. Gupta, the present assessee hadimported almond by using the licence and that redemption fine of Rs.75 lacs paid to the Madras Custom House was done by M.P. Gupta.All transactions were made by him and he was responsible for thefine. He stated clearly that as per the agreement, M/s. RajnikantBrothers were only entitled to the service charges. Thus, there wasample evidence on record suggesting that the assessee had madeimports through his direct involvement by using the import licence ofM/s. Rajnikant Brothers and that M/s. Rajnikant Brothers merelyreceived an agreed commission. The assessee cannot disassociateor divest himself from the irregularities or illegalities committed in theprocess of importing the goods. Thus, the penalty was for theinfraction of law committed by the assessee. Under thesecircumstances, the question is answered in the negative i.e in favourof the Revenue and against the assessee. The impugned judgmentof the Tribunal is set aside. Accordingly, the appeal is disposed of. 3.This review petition is argued principally on the groundthat the additions made by the assessing officer in the handsof the assessee were under Section 69C of the Income Tax Act, 1961 ("the Act" for short). It was at the appellate stagethat the assessee had taken an alternative contention that inany case the expenditure would be allowable under Section37 of the Act. The evidence necessary to examine thisalternative contention was on record. However, the Tribunalhad not carried out proper fact finding inquiries andtherefore, the entire issue should be placed before theTribunal for fresh consideration. It is also argued that theratio of the decision in the case of Haji Aziz & AbdulShakoor Bros. Vs. CIT[1]would dilute in view of the additionof explanation to Section 37(1) of the Act. Act, 1961 ("the Act" for short). It was at the appellate stagethat the assessee had taken an alternative contention that inany case the expenditure would be allowable under Section37 of the Act. The evidence necessary to examine thisalternative contention was on record. However, the Tribunalhad not carried out proper fact finding inquiries andtherefore, the entire issue should be placed before theTribunal for fresh consideration. It is also argued that theratio of the decision in the case of Haji Aziz & AbdulShakoor Bros. Vs. CIT[1]would dilute in view of the additionof explanation to Section 37(1) of the Act. 4.We do not find any reason to entertain this reviewpetition. Firstly, it is always open for an assessee to raise analternate contention and if such contention is purely one oflaw, also at appellate stage. However, the assessee musteither rely on the facts already brought on record or withinthe permissible limits, request the appellate Commissioneror the Tribunal to permit additional evidence to be broughton record. Thus, in the judgment in question havingexamined all aspects of the matter, there is no need to 141 ITR 350 (SC) remand the appeal before the Tribunal. Further, theimplications of the judgment of the Supreme Court in case ofHaji Aziz (supra) in the light of further development of lawhas been examined in the said decision before arriving atfinal conclusions. This has not come for review. In theresult, review petition is dismissed. [ B.P. COLABAWALLA, J. ] [ AKIL KURESHI, J ]