Paliwal Jewellers v. Income Tax Officer .

5. That However the Honble ITAT at the same time has stated and held At the same time, the provisions of Sec. 115BBE need to be examined in the instant case. And also held that these two grounds are also set-aside to the file of the AO for Limited purpose of determining the quantum of remuneration allowable u/s 40(b) of the Act taking into consideration the provisions of Sec. 115BBE of the Act. 6.1 That there is a mistake because the Honble Bench has added a new provision or issue in the order which is neither the part of the assessment order nor the part of CIT(A) order nor any grounds or plea by the Revenue regarding the provision of Sec. 115BBE. 6.2 Further the case of the assessee is for AY 2013-14 and the judgments of M/s Bagrang Traders is also for same AY 2013-14 and in such judgment neither the Honble ITAT nor the Honble Raj. High Court has directed to the ld. AO to examine the issue with reference to the provisions of Sec. 115BBE. 6.3 That it is the settled law that the Honble ITAT has to decide the only issue which is before them and cannot decide the issue which is not before them and as per all the record the issue of provision of Sec. 115BBE was not before the Honble ITAT nor in the orders of the lower authorities. M.A. No. 128/JP/2018 M/s Paliwal Jewellers, Jaipur Vs. ITO, Jaipur 6.4 That the issue was only to be decided that the excess closing stock is to be brought to be taxed under the head income from business or income from other sources and the same has been decided by the Honble Raj. High Court and accepted by your honor. Hence in our view the same is not required to be set aside because there is no dispute regarding the quantum of Remuneration. And once if it is held that excess closing stock is to be brought to be taxed under the head income from business. Then the addition is liable to be deleted.

7. Thus it is submitted that the above mistakes are apparent on the record and may kindly be rectified u/s 254(2) of the I.T. Act by passing a suitable rectification order.

8. It is submitted that consideration of a new issues which are not part of neither assessment order nor of the CIT(A) or not a grounds or plea of the respondent party, constitute a mistake, rectifiable u/s 254(2) of the Act. Hence suitable rectification may kindly be called for by rectifying this part of the subjected ITAT order and oblige.

2. The ld. AR further relied on the decision of Honble Delhi High Court in case of Marubeni India (P) Ltd. vs. Jt. CIT (2006) 104 TTJ (Del)

911. M.A. No. 128/JP/2018 M/s Paliwal Jewellers, Jaipur Vs. ITO, Jaipur

3. In this regard, we refer to the findings of the Co-ordinate Bench which is reproduced as under:-

9. In the present case, the assessee is in the business of manufacturing and trading of Gold/Diamond jewellery and the excess stock so found during the course of survey is of gold and diamond jewellery. Therefore, the investment in procurement of such stock of gold and diamond jewellery is clearly identifiable and related to the regular business stock of the assessee. The investment in the excess stock has therefore to be brought to tax under the head business income and not under the head income from other sources following the decision of the Honble Rajasthan High Court in case of Bajargan Traders (supra). Further, the decision of the Co-ordinate Bench in case of SP Equipment & Services (supra) supports the case of the assessee where there is no distinction in book profits regarding the head of income for the purposes of computation of partners remuneration. At the same time, the provisions of section 115BBE need to be examined in the instant case. Given that the ground no. 1 of the assessees appeal regarding the quantum of the excess stock is set aside to the file of the AO, these two grounds are also set aside to the file of the AO for the limited purposes of determining the quantum of remuneration allowable u/s 40(b) of the Act taking into consideration the provisions of section 115BBE of the Act.

4. We find that the issue before the Co-ordinate Bench was the head of income under which the investment in the excess stock so found during the course of survey can be brought to tax. The Co-ordinate Bench, following the decision of Rajasthan High Court in case of Pr. CIT, M.A. No. 128/JP/2018 M/s Paliwal Jewellers, Jaipur Vs. ITO, Jaipur Alwar vs. Bajrang Traders in DBIT No. 258/2017 dt. 12.09.2017 has held that investment in the excess stock of gold and diamond jewellery has to be brought to tax under the head business income. A related issue relating to taxability of the said investment under the head business income was the applicability of provisions of section 115BBE of the Act. Given that the said provisions were very much on the statute book and applicable for the impugned assessment year, the Co-ordinate Bench has set aside the matter to the file of the Assessing Officer to determine the applicability of the said provisions. Therefore, we find that the Co- ordinate Bench has not given any specific finding as to whether the provisions of Section 115BBE of the Act are applicable in the instant case or not, rather it had set aside the matter to the file by the Assessing Officer to examine the same. A direction to examine a particular provision and its applicability to the impunged transaction is well within the purview of the powers of the Tribunal even though the said provision has not been specifically invoked by the Assessing officer. Once the taxability of a particular transaction is subject matter of appeal before the Tribunal, where the Tribunal has directed to examine a particular taxing provision which has not been examined by the Assessing officer besides determining the head of income and has thus, allowed an opportunity to the assessee to present its case before the Assessing officer, it cannot be said that the Tribunal has exceeded its jurisdiction under section 254 where it is provided that the Tribunal can pass such orders hereon as it thinks fit. Further, we have gone through the order of the Honble Delhi High Court in case of Marubeni India (supra) and find that the same doesnt support the case of the assessee. In that case, the Honble High Court has held that the Tribunal cannot give a finding in respect of another assessment year which is not the subject matter of appeal before M.A. No. 128/JP/2018 M/s Paliwal Jewellers, Jaipur Vs. ITO, Jaipur it. In light of the same, we do not find that there is any infirmity in the order of the Co-ordinate Bench which calls for any interference in terms of section 254(2) of the Act. In the result, Misc. Application filed by the assessee is hereby dismissed. Pronounced in the Open Court on 18/01/2019. Sd/- Sd/- f ot; iky jko f o e f lag ;k no (Vijay Pal Rao) (Vikram Singh Yadav) U ;kf ;d ln L; @Judicial Member y s[kk lnL;@Accountant Member Tk; i qj@Jaipur f nu kad @Dated:- 18/01/2019. *Ganesh Kr. v kns'k d h iz fr fyf i vx zsf k r@Copy of the order forwarded to:

1. v ihy kFkh Z @The Appellant- M/s Paliwal Jewellers, Tonk Road, Jaipur

2. iz R; FkhZ @ The Respondent- ITO, Ward 6(3), Jaipur

3. v k;d j v k ;q Dr@ CIT

4. v k;d j v k ;q Dr@ CIT(A)

5. f oHk kx h; i zf rf uf /k] v k;d j v i hy h ; vf / kd j.k] t ; iq j@DR, ITAT, Jaipur.

6. x kMZ Qk bZy @ Guard File {M.A No. 128/JP/2018} v kns'kk uq lk j@ By order, lg k; d i at hd k j@Asst. Registrar