| The Tax Publishers2020 TaxPub(DT) 5228 (Mum-Trib) INCOME TAX ACT, 1961
Section 254
Where CIT(A) made enhancement of income on account of valuation difference of securities by holding that the said valuation was not done in accordance with RBI guidelines and on appeal, said enhancement was not deleted by Tribunal by holding that no supporting documents were produced, order of Tribunal was liable to be rectified under section 254(2) because there was no need for the assessee to file any evidence before Tribunal to counter the said workings as admittedly the assessee only complied with the directions of CIT(A) by furnishing the requisite details in prescribed format.
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Appeal (Tribunal) - Rectification of mistake apparent from record under section 254 - Assessee complied with directions of CIT(A) by furnishing the requisite details in prescribed format - Tribunal not having deleted the enhancement of income made by CIT(A), whether constitutes mistake apparent on record
Assessee was a bank and had held its securities as 'stock-in-trade' both in Available For Sale category (AFS) and as well as in 'Held-to-Maturity' (HTM) category. Income derived from such securities was offered as 'business income'. During relevant year, assessee shifted its securities from AFS to HTM category. As per RBI Circular, dated 1-7-2011, the said shifting/conversion should be done at the lower of cost or market value as on the date of shifting. Since market value on the date of shifting was less than the cost of securities, the assessee debited the shifting loss in its profit and loss account and claimed the same as deduction for the first time before CIT(A), who allowed the said deduction. Thereafter, CIT(A) issued enhancement notice and asked workings of valuation on securities held in HTM category in the prescribed format. Assessee provided the information so asked but CIT(A) made enhancement of income on account of valuation difference of securities by holding that the said valuation was not done in accordance with RBI guidelines. On appeal, enhancement of income made by CIT(A) was not deleted by Tribunal and it was held that no supporting documents were produced for the same.Held: Enhancement made by CIT(A) should have been deleted by Tribunal, which was not done. Workings for valuation difference was furnished by assessee on without prejudice basis but complied with the directions of CIT(A) by filling up the data in the prescribed format given by CIT(A). Thus, there was no need for the assessee to file any evidence before Tribunal to counter the said workings as admittedly the assessee has only complied with the directions of CIT(A) by furnishing the requisite details. Thus, observation made by Tribunal (in para 6.3) of its order that assessee did not provide any evidence before Tribunal to counter the said workings given before CIT(A) was incorrect. That constituted mistake apparent on record within the meaning of section 254(2).
REFERRED : CIT v. HDFC Bank Ltd. (2014) 368 ITR 377 (Bom-HC) : 2014 TaxPub(DT) 3352 (Bom-HC), CIT v. Pruthvi Brokers & Shareholders (P) Ltd. (2012) 349 ITR 336 (Bom-HC) : 2012 TaxPub(DT) 2671 (Bom-HC) and Central Bank of India v. Dy. CIT [ITA No.3739/Mum/2018, ITA No.3673/Mum/2018, dt. 29-1-2020].
FAVOUR : In assessee's favour.
A.Y. :
IN THE ITAT, MUMBAI BENCH
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