DCIT CIR 6(1), MUMBAI V. ASK INVESTMENT MANAGERS P.LTD, MUMBAI

CO 111/MUM/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0269 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 11-11-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 19-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY
• Assessee Lawyers: J D MISTRY
• Keywords: Source of fund
• Section: 143(3); 148; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, M UMBAI BEFORE HONBLE S/SHRI VIJAY PAL RAO (JM) , AND B.R.BASKARAN (AM) , . . , ./I.T.A. NO.2394/MUM/2014 ( / ASSESSMENT YEAR : 2009-10) ASK INVESTMENT MANAGERS PVT.LTD., 1 ST FLOOR, BANDBOX HOUSE, 254-D, DR.ANNIE BESANT ROAD, WORLI, MUMBAI-400030 / VS. ASSTT. COMMISSIONER OF INCOME TAX - 6(1), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( / APPELLANT) .. ( / RESPONDENT) CROSS-OBJECTION NO.111/MUM/2014 ARISING OUT OF ./I.T.A. NO.2394/MUM/2014 ( / ASSESSMENT YEAR : 2009-10) ASSTT. COMMISSIONER OF INCOME TAX -6(1), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / VS. ASK INVESTMENT MANAGERS PVT.LTD., 1 ST FLOOR, BANDBOX HOUSE, 254-D, DR.ANNIE BESANT ROAD, WORLI, MUMBAI-400030 ( / APPELLANT) .. ( / RESPONDENT) ./I.T.A. NO.4816/MUM/2014 ( / ASSESSMENT YEAR : 2009-10) ASK INVESTMENT MANAGERS PVT.LTD., MUMBAI-400030 / VS. ASSTT. COMMISSIONER OF INCOME TAX - 6(1), MUMBAI-400020 ( / APPELLANT) .. ( / RESPONDENT) ./ ./PAN/GIR NO. :AAFCA2302P ! / ASSESSEE BY : SHRI J D MISTRY ' ! / REVENUE BY: SHRI MANJUNATHA SWAMY # ' $% / DATE OF HEARING : 11.11.2014 &' ' $% /DATE OF PRONOUNCEMENT : 9. 1.2015 ITA NO.2394/M/2014 AND CO NO.111/M/2014 2 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: BOTH THE PARTIES HAVE FILED THE CROSS APPEALS CHALL ENGING THE ORDER DATED 27-02-2014 PASSED BY LD CIT(A)-14, MUMBAI IN QUANTU M ASSESSMENT PROCEEDINGS AND THEY RELATE TO THE ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS ALSO FILED APPEAL CHALLENGING THE PENALTY ORDER DAT ED 14.05.2014 PASSED BY LD CIT(A) FOR THE ABOVE SAID ASSESSMENT YEAR. ALL THE SE APPEALS WERE HEARD TOGETHER AND HENCE THEY ARE BEING DISPOSED OF BY TH IS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. THE FACTS RELATING TO THE CASE ARE STATED IN BRI EF. THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS COMPLETED BY THE ASSES SING OFFICER U/S 143(3) OF THE ACT ON 29.12.2011. THE ASSESSEE PREFERRED APPE AL BEFORE LD CIT(A) CHALLENGING THE ASSESSMENT ORDER. IN THE APPELLATE PROCEEDINGS, THE FIRST APPELLATE AUTHORITY NOTICED FROM THE ANNUAL REPORT (NOTE NO.16) THAT THE ASSESSEE HAS NOT OFFERED THE INCOME (INVESTMENT ADVISORY FEE S) DUE FROM M/S INDIA VALUE INVESTMENT LTD ON THE REASONING THAT THERE EXISTS A DISPUTE BETWEEN THE ASSESSEE AND THE ABOVE SAID PARTY AND HENCE NO CRED IT HAS BEEN TAKEN FOR THE FEES. THE NOTE NO.16 STATED THAT THE AGGREGATE AMO UNT DUE FOR THE FINANCIAL YEARS 2005-06 TO 2008-09 WAS GBP 14,78,484. THE LD CIT(A) NOTICED THAT THE ASSESSING OFFICER DID NOT EXAMINE THIS INCOME AT TH E TIME OF COMPLETING THE ASSESSMENT, WHICH HAS RESULTED IN UNDER ASSESSMENT. HENCE THE LD CIT(A), VIDE HIS ORDER SHEET NOTING DATED 06.11.2013, ASKED THE ASSESSEE TO PROVIDE THE DETAILS RELATING TO THIS INVESTMENT ADVISORY FEES R ECEIVABLE, THE COMPLETE BREAK- UP AND WHY IT SHOULD NOT BE ADDED TO ITS INCOME. T HOUGH THE ASSESSEE STATED THAT THE ABOVE SAID AMOUNT OF GBP 14,78,484 RELATES TO THE ASSESSMENT YEARS 2006-07 TO 2009-10, YET IT FAILED TO FURNISH THE BR EAK UP DETAILS. THE LD CIT(A) ALSO ASKED THE AO TO PRODUCE THE RETURN OF INCOME F ILED BY THE ASSESSEE FOR AY 2007-08 TO 2008-09. BUT THE AO EXPRESSED HIS INABI LITY TO PRODUCE THE SAME, AS THE ASSESSEE HAD FILED THE RETURNS OF INCOME THROUG H E-FILING METHOD AND FURTHER THEY HAVE BEEN WERE PROCESSED U/S 143(1) OF THE ACT THROUGH AUTOMATED SYSTEM. UNDER THESE SET OF FACTS, THE LD CIT(A) CONCLUDED T HAT THE ENTIRE AMOUNT OF GBP 14,78,484 SHOULD BE ASSESSED AS THE INCOME OF THE Y EAR UNDER CONSIDERATION. ITA NO.2394/M/2014 AND CO NO.111/M/2014 3 BY ADOPTING THE CONVERSION OF RS.68.1531 PER GBP, T HE LD CIT(A) ENHANCED TOTAL INCOME BY RS.10.07 CRORES. AGGRIEVED BY THE ENHANCEMENT OF INCOME ORDERED BY LD CIT(A), THE ASSESSEE HAS FILED THIS A PPEAL CHALLENGING THE SAME ON VARIOUS GROUNDS. THE REVENUE IS AGGRIEVED BY TH E DECISION OF LD CIT(A) IN HOLDING THAT THE ENTIRE AMOUNT IS ASSESSABLE AS THE INCOME OF AY 2009-10. ACCORDING TO THE REVENUE, THE LD CIT(A) SHOULD HAVE DIRECTED THE AO TO ASSESS THE INCOME IN THE RESPECTIVE YEAR FROM AY 2005-06 T O 2009-10 ON THE BASIS OF ACCRUAL. 3. THE LD A.R FIRST CONTENDED THAT THE LD CIT(A) DID NOT GIVE ANY NOTICE OF ENHANCEMENT TO THE ASSESSEE. WE NOTICE THAT THE AS SESSEE HAS NOT RAISED THIS GROUND IN THE GROUNDS OF APPEAL. IN ANY CASE, WE N OTICE THAT THE LD CIT(A) HAS PROPOSED THE ENHANCEMENT BY WAY OF ORDER SHEET NOTI NG DATED 06.11.2003 BY ASKING VARIOUS DETAILS. FURTHER IT IS NOT THE CASE OF THE ASSESSEE THAT THE LD CIT(A) HAS NOT GIVEN REASONABLE OPPORTUNITY OF BEIN G HEARD OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT AS CONTEMPLATED IN SEC. 25 1(2) OF THE ACT. HENCE, WE DO NOT FIND ANY MERIT IN THE SAID CONTENTION AND AC CORDINGLY REJECT THE SAME. 4. THE LD A.R FURTHER SUBMITTED THAT THE ASSESSME NT OF THE AMOUNT DUE FROM M/S INDIA VALUE INVESTMENT LTD WAS NOT EXAMINED B Y THE ASSESSING OFFICER, EVEN THOUGH THE FACT OF NOT RECOGNIZING THE SAME AS INCOME OF THE ASSESSEE WAS DULY DISCLOSED IN THE NOTES FORMING PART OF ANNUAL ACCOUNTS. THE LD A.R SUBMITTED THAT THE POWER OF ENHANCEMENT OF LD CIT(A ) PROVIDED IN SEC. 251 OF THE ACT CAN ONLY EXTEND ONLY ON THOSE ITEMS WHICH H AD BEEN EXAMINED OR CONSIDERED BY THE ASSESSING OFFICER. HE SUBMITTED T HAT THE LD CIT(A) CANNOT ASSESS A NEW SOURCE OF INCOME, WHICH WAS NOT SUBJEC T MATTER OF CONSIDERATION OF THE ASSESSING OFFICER, UNDER THE GARB OF ENHANCEMEN T. HE SUBMITTED THERE ARE OTHER PROVISIONS LIKE SEC. 148 OR SEC. 263 TO TAKE CARE OF OMISSION OF ASSESSMENT OF ANY NEW SOURCE OF INCOME. FOR THIS PROPOSITION, THE LD A.R PLACED RELIANCE ON THE FOLLOWING CASE LAW:- (A) CIT VS. RAJ BAHADUR HARDUTROTY MOTILAL CHAMARIA (1967)(66 ITR 443)(SC) (B) CIT VS. SARDARI LAL & CO. (IT REF. NO.227 OF 19 79 DT. SEP. 7, 2001)(DELHI).(251 ITR 864) ITA NO.2394/M/2014 AND CO NO.111/M/2014 4 THE LD A.R SUBMITTED THAT THE INCOME DUE FROM M/S I NDIA VALUE INVESTMENT LTD IS A NEW SOURCE OF INCOME OF THE ASSESSEE, WHICH WA S NOT SUBJECT MATTER OF CONSIDERATION BY THE ASSESSING OFFICER. ACCORDINGL Y HE SUBMITTED THAT THE LD CIT(A) WAS NOT ENTITLED TO ENHANCE INCOME BY CONSID ERING A NEW SOURCE OF INCOME. ACCORDINGLY HE CONTENDED THAT THE ENHANCEM ENT MADE BY LD CIT(A) IS NOT IN ACCORDANCE WITH THE LAW AND THE SAME IS LIAB LE TO BE DELETED. 5. IN RESPONSE TO THIS CONTENTION, THE LD D.R SUB MITTED THAT THE LD CIT(A) HAS PLACED RELIANCE ON THE FOLLOWING CASE LAWS IN O RDER TO SUPPORT HIS ACTION OF ENHANCEMENT:- (A) CIT VS. NIRBHERAM DALURAM (224 ITR 610)(SC) (B) JUTE CORPORATION OF INDIA VS. CIT (187 ITR 68 8)(SC) (C) CIT VS. KANPUR COAL SYNDICATE (53 ITR 229)(SC ). 6. WE HAVE CAREFULLY CONSIDERED THE DECISION RENDE RED BY HONBLE SUPREME COURT IN THE CASE OF RAJ BAHADUR HARDUTROTY MOTILA L CHAMARIA (SUPRA). FOLLOWING OBSERVATIONS MADE BY HONBLE APEX COURT A RE RELEVANT:- AS WE HAVE ALREADY STATED, IT IS NOT OPEN TO THE A PPELLATE ASSISTANT COMMISSIONER TO TRAVEL OUTSIDE THE RECORD , I.E., THE RETURN MADE BY THE ASSESSEE OR THE ASSESSMENT ORDER OF THE INCOME TAX OFFICER WITH A VIEW TO FIND OUT NEW SOURCES OF INCOME AND THE POWER OF ENH ANCEMENT UNDER SECTION 31(3) OF THE ACT IS RESTRICTED TO THE SOURCES OF INCOME WHICH HAVE BEEN THE SUBJECT MATTER OF CONSIDERATION BY TH E INCOME TAX OFFICER FROM THE POINT OF VIEW OF TAXABILITY . IN THIS CONTEXT CONSIDERATION DOES NOT MEAN INCIDENTAL OR COL LATERAL EXAMINATION OF ANY MATTER BY THE INCOME TAX OFFICER IN THE PROCESS OF ASSESSMENT. THERE MUST BE SOMETHING IN THE ASSESSMENT ORDER TO SHOW T HAT THE INCOME TAX OFFICER APPLIED HIS MIND TO THE PARTICULAR SUBJECT- MATTER OR THE PARTICULAR SOURCE OF INCOME WITH A VIEW TO ITS TAXABILITY OR T O ITS NON-TAXABILITY AND NOT TO ANY INCIDENTAL CONNECTION IN THE INSTANT CASE, THERE CANNOT BE ANY DISPUTE TH AT THE LD CIT(A) DID NOT TRAVEL OUTSIDE THE RECORD, I.E., BEYOND THE RETURN OF INCO ME FURNISHED BY THE ASSESSEE. WE HAVE ALREADY NOTICED THAT THE LD CIT(A) HAS NOTI CED THE FACT OF NON-OFFERING OF INCOME ONLY FROM THE NOTES TO THE ACCOUNT ATTACH ED TO THE FINANCIAL STATEMENTS. 7. IT IS THE CONTENTION OF THE LD A.R THAT, AS PER THE APEX COURTS DECISION REFERRED ABOVE, THE POWER OF LD CIT(A) IS RESTRICTE D TO THE SOURCES OF INCOME WHICH HAVE BEEN SUBJECT MATTER OF CONSIDERATION BY THE INCOME TAX OFFICER. ACCORDINGLY IT WAS SUBMITTED THAT, IN THE INSTANT C ASE, SINCE THE ASSESSING OFFICER ITA NO.2394/M/2014 AND CO NO.111/M/2014 5 DID NOT CONSIDER THE INCOME DUE FROM M/S INDIA VALU E INVESTMENT LTD, THE LD CIT(A) SHOULD NOT HAVE ENHANCED THE INCOME DUE FROM THE ABOVE SAID FUND. 8. NOW THE QUESTION THAT ARISES BEFORE US IS WHET HER THE INCOME DUE FROM M/S INDIA VALUE INVESTMENT LTD IS A SEPARATE SOURC E OF INCOME WHICH WAS NOT THE SUBJECT MATTER OF CONSIDERATION OF THE ASSESSIN G OFFICER. A PERUSAL OF THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE FOR THE YEA R UNDER CONSIDERATION WOULD SHOW THAT THE ASSESSEES INCOME CONSISTED OF FOLLOW ING SOURCES OF INCOME:- (A) PORTFOLIO MANAGEMENT FEES (B) INVESTMENT ADVISORY FEES (C) OTHER INCOME. THUS, IT IS SEEN THAT THE SOURCES OF THE INCOME OF THE ASSESSEE INCLUDED INVESTMENT ADVISORY FEES ALSO. SINCE THE ASSESSI NG OFFICER HAS ASSESSED THE INCOME DECLARED BY THE ASSESSEE UNDER THE HEAD INV ESTMENT ADVISORY FEES, IN OUR VIEW, IT CAN BE SAID THAT THE ASSESSING OFFICER HAS CONSIDERED THE SOURCE OF INCOME RELATING TO INVESTMENT ADVISORY FEES. 9. WE HAVE ALREADY NOTICED THAT THE LD CIT(A) NOT ICED ABOUT THE NON-OFFERING OF INCOME OF THE INCOME RECEIVABLE FROM M/S INDIA V ALUE INVESTMENT LTD FROM THE NOTES ATTACHED TO THE ANNUAL ACCOUNTS. FOR THE SAK E OF CONVENIENCE, WE EXTRACT BELOW THE NOTE NO.16 ATTACHED TO THE ANNUAL ACCOUNT S OF THE YEAR UNDER CONSIDERATION:- 16. INVESTMENT ADVISORY FEES OF GBP 14,78,484 F OR THE FINANCIAL YEAR 2005-06 TO 2008-09 IS RECEIVABLE FROM ONE OF THE OF FSHORE FUND INDIA VALUE INVESTMENT LIMITED (INVIL) AS PER THE INVEST MENT ADVISORY MANDATE OF THE COMPANY. THIS AMOUNT HAS BEEN DISPU TED BY THE FUND & MATTER IS UNDER DISCUSSION, ACCORDINGLY NO CREDIT H AS BEEN TAKEN FOR THE FEES. THUS, IT CAN BE SEEN THAT THE INCOME DUE FROM M/S I NDIA VALUE INVESTMENT FUND ALSO RELATES TO INVESTMENT ADVISORY FEES, WHICH S OURCE HAS BEEN CONSIDERED BY THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSME NT OF THE YEAR UNDER CONSIDERATION. 10. AT THIS JUNCTURE, WE PREFER TO GIVE AN ILLUST RATION IN ORDER TO UNDERSTAND THE ISSUE RELATING TO SOURCE OF INCOME. LET US PRESU ME THAT AN ASSESSEE, SAY M/S XYZ SELLS GOODS TO FIVE PARTIES VIZ., A, B, C, D AN D E. THERE SHOULD NOT BE ANY ITA NO.2394/M/2014 AND CO NO.111/M/2014 6 DISPUTE THAT THE SOURCE OF INCOME OF M/S XYZ IS THE INCOME DERIVED ON SELLING OF GOODS. LET US FURTHER PRESUME THAT A DISPUTE ARISE S BETWEEN M/S XYZ AND E, CONSEQUENT THERETO M/S XYZ DID NOT RECOGNIZE THE I NCOME ARISING FROM THE SALE MADE TO E. LET US ASSUME THAT THE ASSESSING OFFI CER DID NOT CONSIDER THE SAME AND LD CIT(A) PROPOSES ENHANCEMENT FOR CONSIDERING THE INCOME ARISING FROM THE SALE MADE TO E. CAN IT BE SAID THAT THE SALE MADE TO E SHOULD BE CONSIDERED AS A SEPARATE SOURCE OF INCOME?. SINCE THE SOURCE OF INCOME OF THE ASSESSEE IS SELLING OF GOODS AND FURTHER SINCE THE ASSESSEE HAS OFFERED THE INCOME ARISING FROM THE SALES MADE TO A, B, C AND D , IN OUR VIEW, THE INCOME ARISING FROM SALE MADE TO E CANNOT BE CONSIDERED AS SEPARATE SOURCE OF INCOME, SINCE THE SAME WAS SIMPLY ONE OF THE LEAFS OF SAME SOURCE OF INCOME ARISING FROM SALE OF GOODS. IN OUR VIEW, THE SAME PRINCIPL E SHALL APPLY TO THE CASE UNDER CONSIDERATION ALSO. THE BUSINESS OF THE ASSESSEE, INTER ALIA, CONSISTED OF INVESTMENT ADVISORY SERVICES AND THE ASSESSEE HAS A LSO OFFERED THE INCOME ARISING FROM THE ACTIVITY OF INVESTMENT ADVISORY SE RVICES RENDERED TO ITS CLIENTS. M/S INDIA VALUE INVESTMENT LTD IS ALSO ONE OF THE V ARIOUS CLIENTS OF THE ASSESSEE, WHO HAVE AVAILED INVESTMENT ADVISORY SERVICES FROM THE ASSESSEE. HENCE THE INCOME DUE FROM M/S INDIA VALUE INVESTMENT LTD SHAL L FORM PART OF THE SOURCE OF INCOME RELATING TO INVESTMENT ADVISORY FEES, WHIC H HAS ALREADY BEEN CONSIDERED BY THE ASSESSING OFFICER AND HENCE, IT C ANNOT HELD THAT THE SAME CONSTITUTES SEPARATE OR DIFFERENT SOURCE OF INCOME AS CONTENDED BY LD A.R. SINCE THE INVESTMENT ADVISORY FEES WAS ONE OF THE SOURCES OF INCOME OFFERED BY THE ASSESSEE AND SINCE THE ASSESSING OFFICER HAS ASSESSED THE SAID INCOME, IN OUR VIEW, THE LD CIT(A) WAS WELL WITHIN HIS POWE R TO ENHANCE THE SAID INCOME BY CONSIDERING THE NOTE DISCLOSED BY THE ASSESSEE I N THE ANNUAL ACCOUNTS. SINCE THE ASSESSEE HAS ATTACHED THE ANNUAL ACCOUNTS WITH THE RETURN OF INCOME, IT CANNOT BE SAID THAT THE LD CIT(A) HAS TRAVELLED BEYOND THE RETURN OF INCOME. ACCORDINGLY WE REJECT THE CONTENTIONS OF THE LD A.R IN THIS REGARD. 11. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS REA CHED SETTLEMENT WITH M/S INDIA VALUE INVESTMENT LTD ON 09.4.2009 AND THE AMO UNT DUE FROM THE ABOVE SAID PARTY WAS SETTLED AT A REDUCED AMOUNT OF GBP 1 2,14,022. THE LD A.R FURTHER SUBMITTED THAT THE ASSESSEE HAS DULY OFFERE D THE RUPEE EQUIVALENT OF GBP 12,14,022 AS ITS INCOME IN ASSESSMENT YEAR 2010-11. THE LD A.R FURTHER ITA NO.2394/M/2014 AND CO NO.111/M/2014 7 SUBMITTED THAT THE ASSESSEE HAS REACHED THE SETTLEM ENT WITH M/S INDIA VALUE INVESTMENT LTD ONLY ON 09.04.2009 AND HENCE THE REL EVANT INCOME HAS ACCRUED TO THE ASSESSEE ONLY ON THE ABOVE SAID DATE AND HEN CE IT IS ASSESSABLE ONLY IN ASSESSMENT YEAR 2010-11. ACCORDINGLY THE LD A.R SU BMITTED THAT THE ACTION OF THE LD CIT(A) IN ENHANCING THE INCOME BY THE RUPEE EQUIVALENT OF GBP 14,78,484/- IN AY 2009-10, NOT ONLY RESULTS IN DOUB LE ASSESSMENT OF SAME INCOME BUT ALSO RESULTS IN ASSESSMENT OF INCOME NOT ACCRUED TO THE ASSESSEE. IN THE ALTERNATIVE, THE LD A.R SUBMITTED THAT THE ASS ESSEE HAS DULY OFFERED THE SAME IN ASSESSMENT YEAR 2010-11 AND HENCE THE LD CI T(A) WAS NOT JUSTIFIED IN ASSESSING THE SAME IN ASSESSMENT YEAR 2009-10. ACC ORDINGLY HE SUBMITTED THAT THE ADDITION MADE BY LD CIT(A) IS LIABLE TO BE DELE TED. THE LD A.R FURTHER SUBMITTED THAT THE ASSESSEE HAS BEEN DISCLOSING THE AMOUNT DUE FROM M/S INDIA VALUE INVESTMENT LTD IN ITS ANNUAL ACCOUNTS EVERY Y EAR SINCE THE ASSESSMENT YEARS 2006-07 ONWARDS AND HENCE THE LD CIT(A) WAS N OT CORRECT IN LAW IN PRESUMING THAT THE AGGREGATE AMOUNT DUE WAS ASSESSA BLE FULLY IN THE YEAR UNDER CONSIDERATION, I.E., AY 2009-10. 12. THE LD D.R SUBMITTED THAT THE ASSESSEE HAS NO T ONLY FAILED TO FURNISH THE YEAR WISE BREAK-UP DETAILS OF THE INCOME DUE FROM M /S INDIA VALUE INVESTMENT LTD, BUT ALSO FAILED TO INFORM THE LD CIT(A) ABOUT THE SETTLEMENT REACHED ON 09.04.2009 AND ALSO ABOUT THE INCOME OFFERED IN AY 2010-11. 13. WE HAVE HEARD THE PARTIES ON THIS ISSUE AND PE RUSED THE RECORD. ACCORDING TO LD A.R, THE ASSESSEE HAS REACHED SETTL EMENT WITH M/S INDIA VALUE INVESTMENT LTD WITH REGARD TO THE INVESTMENT ADVISO RY FEE RECEIVED FROM THEM ON 09-04-2009 AND THE AMOUNT DUE FROM THEM WAS SETTLED AT GBP 12,14,022. ACCORDING TO LD A.R, THE ASSESSEE HAS OFFERED THE R UPEE EQUIVALENT OF THE ABOVE SAID AMOUNT IN AY 2010-11. SINCE THE ASSESSEE HAS SETTLED THE AMOUNT AT GBP 12,14,022, WE ARE OF THE VIEW, OF COURSE SUBJECT TO VERIFICATION, THAT THE INCOME THAT SHOULD BE CONSIDERED IN THE HANDS OF THE ASSES SEE SHOULD NOT EXCEED THE RUPEE EQUIVALENT OF GBP 12,14,022 AS PER THE SETTLE MENT AGREEMENT. 14. THE NEXT QUESTION THAT ARISES IS THE YEAR IN WHICH THE RUPEE EQUIVALENT OF GBP 12,14,022 (SUBJECT TO VERIFICATION) IS REQUIRED TO BE ASSESSED, I.E., IN AY 2009-10 (AS PER LD CIT(A) OR IN AY 2010-11 (AS PER THE ASSESSEE) OR IN RESPECTIVE YEAR OF ACCRUAL (AS PER THE REVENUE). W E HAVE ALREADY NOTICED THAT ITA NO.2394/M/2014 AND CO NO.111/M/2014 8 THE LD CIT(A) TOOK THE VIEW TO ASSESS THE ENTIRE AM OUNT OF INCOME IN AY 2009-10 ONLY FOR THE REASON THAT THE ASSESSEE HAS FAILED TO FURNISH THE DETAILS. THE SUBMISSIONS OF THE ASSESSEE THAT THE SETTLEMENT WAS REACHED ON 09-04-2009 AND IT HAS OFFERED THE ENTIRE AMOUNT OF RUPEE EQUIVALEN T OF GBP 12,14,022 IN AY 2010-11 ARE NEW FACTS THAT WERE NOT AVAILABLE BEFOR E LD CIT(A). HENCE, IN OUR VIEW, THE QUESTIONS OF YEAR OF ACCRUAL AND/OR YE AR OF ASSESSMENT ARE TO BE CONSIDERED AFRESH AT THE END OF THE LD CIT(A) IN TH E LIGHT OF NEW FACTS BROUGHT ON RECORD BY THE ASSESSEE. 15. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT( A) WITH REGARD TO THE ASSESSMENT OF GBP 14,78,484 OR AS THE CASE MAY BE G BP 12,14,022 AND RESTORE THE SAME TO HIS FILE WITH THE DIRECTION TO EXAMINE ABOUT THE ASSESSABILITY OF THE SAME AFRESH, I.E., YEAR OF ACCRUAL AND/OR YE AR OF ASSESSMENT, IN THE LIGHT OF THE FACTS SURROUNDING THE SAME AND ACCORDINGLY DECI DE THE ISSUE IN ACCORDANCE WITH THE LAW. THE ASSESSEE IS ALSO DIRECTED TO FUL LY CO-OPERATE WITH THE LD CIT(A) BY FURNISHING ALL THE DETAILS THAT MAY BE REQUIRED TO ADJUDICATE THIS ISSUE AND THAT MAY BE CALLED FOR BY LD CIT(A). 16. SINCE WE HAVE RESTORED THE ISSUE RELATING TO THE YEAR OF ASSESSABILITY OF INCOME DUE FROM M/S INDIA VALUE INVESTMENT LTD TO T HE FILE OF THE LD CIT(A), THE GROUNDS URGED IN THE APPEAL FILED BY THE REVENUE SH ALL ALSO BE SET ASIDE TO THE FILE OF THE LD CIT(A). 17. WITH REGARD TO THE PENALTY IMPOSED BY LD CIT( A) U/S 271(1)(C) OF THE ACT, THE LD A.R CONTENDED THAT THE SAID PENALTY IS LIABL E TO BE DELETED SINCE THE ASSESSEE (A) HAS NOT CONCEALED ANY PARTICULARS OF INCOME OR (B) HAS NOT FURNISHED ANY INACCURATE PARTICULARS O F INCOME (C) HAD BONAFIDE REASONS FOR NOT OFFERING THE INCO ME (D) HAS, IN ANY CASE, OFFERED THE INCOME IN AY 201 0-11 THE LD A.R ALSO PLACED RELIANCE ON THE ORDER DATED 21.08.2013 PASSED BY THE CO-ORDINATE MUMBAI BENCH OF TRIBUNAL IN THE CASE O F DCIT VS. OTIS ELEVATOR CO. (I) LTD IN ITA NO.4509/MUM/2012 TO SUPPORT HIS CONT ENTIONS. HOWEVER, IN THE EARLIER PARAGRAPHS, WE HAVE RESTORED THE MATTERS RE LATING TO THE YEAR OF ACCRUAL AND/OR ASSESSMENT OF THE INCOME DUE FROM M/S INDIA VALUE INVESTMENT LTD TO THE FILE OF THE LD CIT(A). HENCE WE ARE OF THE VIEW TH AT THE ISSUE RELATING TO THE ITA NO.2394/M/2014 AND CO NO.111/M/2014 9 PENALTY ALSO REQUIRES TO BE SET ASIDE TO HIS FILE. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) IMPOSING PENALTY U/S 271( 1)(C) OF THE ACT AND RESTORE THE SAME TO HIS FILE WITH THE DIRECTION TO CONSIDER THE SAME AFRESH IN THE LIGHT OF SUBMISSIONS THAT MAY BE MADE AND CASE LAW THAT MAY BE RELIED UPON BY THE ASSESSEE BEFORE HIM AND TAKE APPROPRIATE DECISION I N ACCORDANCE WITH THE LAW. 18. IN THE RESULT, ALL THE APPEALS ARE TREATED A S ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 9TH JAN, 2015 . &' # () * + 9TH JAN, 2015 ' ' , - SD SD ( / VIJAY PAL RAO ) ( . . ,/ B.R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ( # MUMBAI: 9TH JAN,2015. . . ./ SRL , SR. PS !'# $#%! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. # 0$ ( ) / THE CIT(A)- CONCERNED 4. # 0$ / CIT CONCERNED 5. 6. 1, $ 2 , % 2 , ( # / DR, ITAT, MUMBAI CONCERNED ,3 4 / GUARD FILE. 5 # / BY ORDER, TRUE COPY 6 (ASSTT. REGISTRAR) % 2 , ( # /ITAT, MUMBAI