Smt. Hina Nitin Parikh, Ahmedabad V. The Dy.CIT.,Cent.Circle-2(1), Ahmedabad

CO 190/AHD/2008

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8408 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 9 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-05-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-04-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 28-07-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ROLEE AGARUAL
• Assessee Lawyers: P M MEHTA; S N SOPARKAR SRAR
• Section: 153A; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI, A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.1800/AHD/2008 ASSESSMENT YEAR :2004-05 HINA NITIN PARIKH 21/22 DHANNJAY BUNGALOW, B/H SHYAMAL 3-B, ROW HOUSE, SATELLITE, AHMEDABAD [ PAN NO.ACVPP 7923N ] V/S . ACIT, CENTRAL CIRCLE- 2(1), 333, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD /APPELLANT .. /RESPONDENT) ITA NO.2449/AHD/2008 ASSESSMENT YEAR:2006-07 DCIT, CENTRAL CIRCLE- 2(1), 306, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD V/S . HINA NITIN PARIKH 21/22 DHANNJAY BUNGALOW, B/H SHYAMAL 3-B, ROW HOUSE, SATELLITE, AHMEDABAD [ PAN NO.ACVPP 7923N ] /APPELLANT .. /RESPONDENT) C.O. NO.190-193/AHD/2008 (A/O ITA NO.2445-2446/AHD/2008 AND ITA NO.2448-2449/AHD/2008) ASSESSMENT YEARS: 2002-03 TO 2003- 04 AND 2005-06 TO 2006-07 HINA NITIN PARIKH 21/22 DHANNJAY BUNGALOW, B/H SHYAMAL 3-B, ROW HOUSE, SATELLITE, AHMEDABAD [ PAN NO.ACVPP 7923N ] V/S . DCIT, CENTRAL CIRCLE- 2(1), 306, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD /APPELLANT .. /RESPONDENT) HINA N PARIKH, NITIN B PARIKH & PRUDENT FINANCE PVT . LTD. V. DCIT CC-2(1) ABD PAGE 2 ITA NO.2450-2451/AHD/2008 ASSESSMENT YEARS:2000-01 TO 2001-02 DCIT, CENTRAL CIRCLE- 2(1), 306, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD V/S . PRUDENT FINANCE PVT. LTD., 101, AKASH GANGA BUILDING, GUJARAT COLLEGE ROAD. ELLESBRIDGE, AHMEDABAD [ PAN NO.AABCP 1836F ] /APPELLANT .. /RESPONDENT) C.O. NO. 194-199/AHD/2008 (A/O ITA NO.2450 TO 2455/AHD/2008) ASSESSMENT YEARS: 2000-01 TO 2005-06 PRUDENT FINANCE PVT., LTD., 101, AKASH GANGA BUILDING, GUJARAT COLLEGE ROAD, ELLESBRIDGE, AHMEDABAD V/S . DCIT, CENTRAL CIRCLE- 2(1), 306, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD /APPELLANT .. /RESPONDENT) ITA NO.2549-2550 & 2554/AHD/2008 ASSESSMENT YEARS:2000-01,2002-03 & 2006-07 DCIT, CENTRAL CIRCLE- 2(1), 306, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD V/S . NITIN B PARIKH 21/22 DHANNJAY BUNGALOW, B/H SHYAMAL ROW, 3-B, ROW HOUSE, SATELLITE, AHMEDABAD [ PAN NO.ACVPP 7923N ] /APPELLANT .. /RESPONDENT) C.O. NO. 213-218/AHD/2008 (A/O ITA NO. 2549-2554/AHD/2008) ASSESSMENT YEARS: 2000-01. 2002-03 TO 2006-07 HINA N PARIKH, NITIN B PARIKH & PRUDENT FINANCE PVT . LTD. V. DCIT CC-2(1) ABD PAGE 3 NITIN B PARIKH 21/22 DHANNJAY BUNGALOW, B/H SHYAMAL ROW, 3-B, ROW HOUSE, SATELLITE, AHMEDABAD [ PAN NO.ACVPP 7923N ] V/S . DCIT, CENTRAL CIRCLE- 2(1), 306, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD /APPELLANT .. /RESPONDENT) /BY ASSESSEE SHRI S.N. SOPARKAR, SR-AR & SHRI P.M. MEHTA, AR /BY REVENUE SMT. ROLEE AGARUAL, CIT-DR /DATE OF HEARING 10-04-2013 /DATE OF PRONOUNCEMENT 17-05-2013 ! ! ! ! /O R D E R PER BENCH:- OUT OF THIS BUNCH OF VARIOUS APPEALS AND CROSS OBJ ECTIONS (COS), ONE APPEAL IN THE CASE OF HINA N PARIKH IS FILED BY THE ASSESSEE WHICH IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (AP PEALS)-III, AHMEDABAD DATED 31-03-2008 FOR ASSESSMENT YEAR (AY) 2004-05. THE REMAINING APPEALS, ONE IN THE CASE OF HINA N PARIKH , AND THREE IN THE CASE OF NITIN B PARIKH AND TWO IN THE CASE OF PRUDENT FINANCE PVT. LTD., TOTAL SIX APPEALS ARE FILED BY THE REVENUE AND ALL SIXTEEN COS ARE FILED BY THESE THRE E ASSESSEES. ALL THESE APPEALS AND COS WERE HEARD TOGETHER AND ARE BEING D ISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE TAKE UP APPEAL FILED BY THE ASSESSEE I. E., IN ITA NO. 1800/AHD/2008 IN THE CASE OF HINA N PARIKH . THE GROUNDS RAISED BY ASSESSEE ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN NOT GIVING ANY FINDING RELATING TO THE VAL IDITY OF THE ASSESSMENT FRAMED U/S. 153A OF THE I.T. ACT. IT IS SUBMITTED T HAT THE ASSESSMENTS HINA N PARIKH, NITIN B PARIKH & PRUDENT FINANCE PVT . LTD. V. DCIT CC-2(1) ABD PAGE 4 FRAMED BY THE ASSESSING OFFICER U/S. 153A ARE BAD I N LAW, AND HENCE, LIABLE TO BE QUASHED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO ALL OW INTEREST EXPENDITURE OF RS.42,82,834/- AGAINST THE INCOME FROM BUSINESS AND PROFESSION SHOWN IN THE RETURN OF INCOME. THE LD. ASSESSING OF FICER MAY BE DIRECTED TO ALLOW SUCH EXPENDITURE. 3. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE, THE CIT(A) ERRED IN NOT GIVING ANY FINDING IN RESPE CT OF FOLLOWING GROUND OF APPEAL RAISED BEFORE HIM: 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSING OFFICER MAY BE DIRECTED TO ALLOW INTEREST EXPENDITU RE OF RS.42,82,834/- AGAINST THE INCOME FROM BUSINESS AND PROFESSION SHOWN IN RETURN OF INCOME. 3. GROUND NO.1 WAS NOT PRESSED BY LD. AR OF THE ASS ESSEE AND ACCORDINGLY REJECTED AS NOT PRESSED. 4. REGARDING GROUND NO.2 AND 3, IT WAS SUBMITTED BY LD. AR OF THE ASSESSEE THAT GROUND NO.4 RAISED BY ASSESSEE BEFORE LD. CIT(A) WAS NOT DECIDED BY LD. CIT(A) AND HENCE, THE ISSUE SHOULD B E RESTORED BACK TO THE FILE OF LD. CIT(A) FOR DECIDING THIS GROUND OF ASSESSEE. LD. CIT-DR OF THE REVENUE SUPPORTED THE ORDER OF LD. CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. WE FIND THAT GROUND NO.4 RAISED BY ASSESSEE BEFORE LD. CIT(A) WAS, IN FACT NOT, DECIDED BY HIM. HENCE, THIS ISSUE IS R ESTORED BACK TO HIS FILE AND LD. CIT(A) IS DIRECTED TO DECIDE THIS GROUND RAISED BY ASSESSEE BEFORE HIM AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEA RD TO BOTH SIDES. THESE TWO GROUNDS OF ASSESSEES APPEAL STAND ALLOWED FOR STAT ISTICAL PURPOSES. 6. IN THE RESULT, ASSESSEES APPEAL STANDS PARTLY A LLOWED FOR STATISTICAL PURPOSES. HINA N PARIKH, NITIN B PARIKH & PRUDENT FINANCE PVT . LTD. V. DCIT CC-2(1) ABD PAGE 5 7. NOW, WE HAVE TAKEN UP THE APPEAL FILED BY THE RE VENUE IN THE CASE OF HINA N PARIKH I.E., ITA NO.2449/AHD/2008 FOR AY 2006-07. GROUND RAISED BY REVENUE IS AS UNDER:- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE DISALLOWANCE OF INTEREST EXPENSES U/S. 14A OF THE A CT. 8. LD. CIT-DR OF THE REVENUE SUPPORTED THE ORDER OF ASSESSING OFFICER AND RELIANCE WAS PLACED ON THE DECISION OF SPECIAL BENCH RENDERED IN THE CASE OF ITO V. DAGA CAPITALS INVESTMENT PVT. LTD. (2006) 119 TTJ (MUM) (SB). RELIANCE WAS ALSO PLACED ON SOME OTHER DECISI ONS OF VARIOUS DIVISION BENCH OF THIS TRIBUNAL BUT WE ARE NOT DISCUSSING TH E SAME HERE BECAUSE THIS ISSUE IS NOW COVERED BY THE JUDGMENT OF HONBLE KAR NATAKA HIGH COURT RENDERED IN THE CASE OF CCI LTD. V. JCIT (2012) 20 TAXMANN.COM. 196 (KAR), RELIANCE HAS BEEN PLACED BY LD. AR OF THE ASSESSEE. HE ALSO PLACED RELIANCE ON THE DECISION RENDERED BY MUMBAI BENCH IN THE CAS E OF GANAJAM TRADING CO. (P) LTD. V. DCIT (2012) 25 TAXMANN.COM 181 (MUM). RELIANCE WAS ALSO PLACED ON ANOTHER TRIBUNALS DECISION RENDERED IN T HE CASE OF DCIT V. M/S. INDIA ADVANTAGE SECURITIES LTD. IN ITA NO.6711/MUM/2011 DATED 14-09-2012. HE ALSO RELIED ON ONE MORE TRIBUNALS DECISION OF A HMEDABAD BENCH RENDERED IN THE CASE OF ETHIO PLASTICS PVT. LTD. V. DCIT IN ITA NO.848/AHD/2012 DATED 10-12-2012. HE SUBMITTED A COPY OF ALL THOSE TRIBUNALS DECISIONS AND HONBLE HIGH COURTS DECIS ION CITED BY HIM. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW AND THE JUDGMENTS CITED BY BOTH THE SIDES. SINCE THIS ISSUE IS NOW TO BE DECIDED AS PER THE ONLY DECISION AVAILABLE OF HONBLE HIGH COURT I.E., OF K ARNATAKA HIGH COURT, THE TRIBUNALS DECISIONS CITED BY BOTH THE SIDES ARE NO T BEING DISCUSSED BY US. IN THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT RENDER ED IN THE CASE OF CCI LTD. (SUPRA) IT WAS HELD THAT IF THE ASSESSEE IS A DEAL ER OF SHARES AND SECURITIES THEN IT CANNOT BE SAID THAT SUCH PURCHAS ES OF SHARES AND HOLDING OF SHARES WERE FOR THE PURPOSE OF EARNING OF DIVIDEND INCOME AND HENCE, HINA N PARIKH, NITIN B PARIKH & PRUDENT FINANCE PVT . LTD. V. DCIT CC-2(1) ABD PAGE 6 EXPENDITURE INCURRED IN ACQUIRING THESE SHARES CANN OT BE DISALLOWED U/S. 14A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT). IN THE PRESENT CASE, THIS IS ADMITTED POSITION OF FACT THAT ASSESS EE IS A DEALER IN SHARES AND SECURITIES AND THIS FACT IS NOTED BY ASSESSING OFFI CER ALSO IN HIS ASSESSMENT ORDER AND INSPITE OF THIS CONTENTION RAISED BY LD. AR OF THE ASSESSEE BEFORE US, NOTHING HAS BEEN BROUGHT ON RECORD BY LD. CIT-D R OF THE REVENUE TO SHOW OTHERWISE. SINCE ASSESSEE IS DEALING IN SHARES , WE HOLD BY FOLLOWING THIS JUDGMENT OF HONBLE KARNATAKA HIGH COURT THAT DISAL LOWANCE MADE BY AO U/S. 14A OF THE ACT ON ACCOUNT OF INTEREST EXPENDITURE O N PROPORTIONATE BASIS CANNOT BE SUSTAINED. WE THEREFORE DO NOT FIND ANY R EASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE. ACCORDINGLY, THI S GROUND OF REVENUES APPEAL IS REJECTED. 10. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 11. NOW, WE TAKE UP VARIOUS COS FILED BY THE ASSESS EE. LD. AR OF THE ASSESSEE DID NOT PRESS THESE COS AND HENCE, ALL THE COS ARE DISMISSED AS NOT PRESSED. 12. NOW, WE TAKE UP THE VARIOUS APPEALS FILED BY TH E REVENUE IN THE CASE OF SHRI NITIL B PARIKH I.E., IN ITA NO. 2549-2550/AHD/2008 AND 2554/AHD/2 008. IN ALL THESE APPEALS, THE ONLY GROUND RAISED BY REV ENUE IS REGARDING DELETION OF DISALLOWANCE OF INTEREST EXPENDITURE MADE BY ASS ESSING OFFICER U/S. 14A OF THE ACT. 13. AT THE TIME OF HEARING, BOTH SIDES AGREED THAT FACTS IN THE PRESENT APPEALS ARE SIMILAR WITH THE FACTS IN THE CASE OF HINA N PARIKH BECAUSE THIS ASSESSEE IS ALSO DEALING IN SHARES AND THEREFORE, T HIS ISSUE CAN BE DECIDED ON HINA N PARIKH, NITIN B PARIKH & PRUDENT FINANCE PVT . LTD. V. DCIT CC-2(1) ABD PAGE 7 SIMILAR LINE IN THE PRESENT CASE ALSO. WHILE DECIDI NG THIS ISSUE, IN THE CASE OF HINA N PARIKH , WE HAVE DECIDED THIS ISSUE IN FAVOUR OF ASSESSEE BY FOLLOWING THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT RENDER ED IN THE CASE OF CCI LTD. (SUPRA). ACCORDINGLY, IN THE PRESENT CASE ALSO, AL L THESE THREE APPEALS OF REVENUE ARE DECIDED IN FAVOUR OF ASSESSEE AND THESE APPEALS OF REVENUE ARE DISMISSED. 14. NOW, WE TAKE UP THE COS FILED BY ASSESSEE IN CO NO.213- 218/AHD/2008. LD. AR OF THE ASSESSEE SUBMITTED THAT THESE COS ARE NOT PRESSED AND ACCORDINGLY ALL THESE COS ARE DISMISSED AS NOT PRESSED. 15. NOW, WE TAKE UP TWO APPEALS FILED BY THE REVENU E IN THE CASE OF PRUDENT FINANCE PVT. LTD. IN ITA NO.2450-2451/AHD/2008. THE ONLY ISSUE RAISED BY REVENUE IN THESE TWO APPEALS IS REGARDING DELETION OF DISALLOWANCE OF INTEREST EXPENDITURE U/S. 14A OF THE ACT MADE BY ASSESSING OFFICER. 16. BOTH SIDES AGREED REGARDING THAT THIS ASSESSEE ALSO I.E., THE COMPANY ALSO, IS DEALING IN SHARES AND SECURITIES. HENCE, T HIS ISSUE CAN ALSO BE DECIDED ON SIMILAR LINE AS IN THE CASE OF HINA N.PARIKH. IN THE CASE OF HINA N PARIKH AND NITIN B PARIKH, WE HAVE DECIDED THIS ISSUE IN FAVOUR OF ASSESSEE B Y FOLLOWING THE JUDGMENT OF HONBLE KARNATAKA HIGH CO URT RENDERED IN THE CASE OF CCI LTD. (SUPRA) AND SINCE IN THE CASE OF COMPANY ALSO, LD. CIT-DR OF THE REVENUE COULD NOT ESTABLISH THAT ASSESSEE IS NOT DE ALER IN SHARE, WE FIND NO REASON TO INTERFERE INTO THE ORDER OF LD. CIT(A) ON THIS ISSUE. ACCORDINGLY, BOTH THE APPEALS OF REVENUE ARE DISMISSED. 17. NOW, WE TAKE UP THE COS FILED BY ASSESSEE BEING CO NO. 194- 199/AHD/2008. AT THE TIME OF HEARING, IT WAS SUBMIT TED BY LD. AR OF ASSESSEE THAT THESE COS ARE NOT PRESSED AND ACCORDINGLY, ALL THESE COS ARE DISMISSED AS NOT PRESSED. HINA N PARIKH, NITIN B PARIKH & PRUDENT FINANCE PVT . LTD. V. DCIT CC-2(1) ABD PAGE 8 18. IN THE RESULT, APPEALS OF REVENUE AS WELL AS CO S OF ASSESSEE ARE DISMISSED. 19. IN COMBINED RESULT, ONE APPEAL OF ASSESSEE IN ITA N O. 1800/AHD/2008 IS PARTLY ALLOWED FOR STATISTICAL PUR POSES AND THE REMAINING SIX APPEALS OF REVENUE IN THE CASE OF THR EE ASSESSEES ARE DISMISSED AND ALL 16 COS OF THE THREE ASSESSEES ARE ALSO DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (KUL BHARAT) (A.K.GARODIA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, *DKP '#$- 17/05/2013 -./ 0 ! ! ! ! 112 112 112 112 3 2 3 2 3 2 3 2 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. #/#15 6 / CONCERNED CIT 4. 6- / CIT (A) 5. 2 89 1115, 15 , -./ / DR, ITAT, AHMEDABAD 6. 9<= >? / GUARD FILE. BY ORDER/ ! , /TRUE COPY/ @/- # 15 , -./ 0 STRENGTHEN PREPARATION & DELIVERY O F ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 14/05 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE NO 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 14/05, 15/05 4) DATE OF CORRECTION 15/05 5) DATE OF FURTHER CORRECTION - - 6) DATE OF INITIAL SIGN BY MEMBERS 15/05 7) ORDER UPLOADED ON 17/05 8) ORIGINAL DICTATION PAD-PART HAS BEEN ENCLOSED IN THE FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 17/05