LATE SHRI HARSHAD S. METHA THROUGH L.H SMT. JYOTI H MEHTA, MUMBAI V. DCIT CC 23, MUMBAI

ITA 1036/MUM/2013

• Counselvise Citation: 103619914 RSA 2013
• Duration Of Justice: 2 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 02-03-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 06-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Keywords: Opportunity of being heard; Corroborative evidences
• Section: 143(3); 234B; 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI . . , , BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER . / ITA NO.1036 & 1037/MUM/2013 / ASSESSMENT YEAR 2004-05 &2005-06 LATE SHRI HARSHAD S. MEHTA, THROUGH L/H. SMT. JYOTI H. MEHTA, 32, MADHULI, DR. ANNIE BESANT ROAD, WORLI, MUMBAI 400 018 / VS. THE DCIT, CEN. CIR.23, 4 TH FLOOR, AAYKAR BHAVAN, MUMBAI 400 020 ./ ./ PAN/GIR NO. : ABAPM 1848F ( / APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY SHRI DHARMESH SHAH RESPONDENT BY DR. P. DANIEL ' #$ / DATE OF HEARING : 10/06/2015 ' #$ / DATE OF PRONOUNCEMENT : 14/08/2015 / O R D E R PER G.S.PANNU, A.M: THE CAPTIONED APPEALS RELATE TO THE SAME ASSESSEE INVOLVING IDENTICAL ISSUES, THEREFORE, HAVING BEEN HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. THE APPEAL FOR THE ASSESSMENT YEAR 2005-06 VIDE ITA NO.1037/MUM/2013 IS CONSIDERE D AS LEAD CASE, WHICH IS DIRECTED AGAINST ORDER OF CIT(A)-40, MUMBAI DATE D 24/12/2012 WHICH IN TURN HAS ARISEN FROM AN ASSESSMENT ORDER DATED 15/1 2/2008 PASSED BY THE ASSESSING OFFICER IN TERMS OF SECTION 143(3) R.W.S . 147 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). . / ITA NO.1036 & 1037/MUM/2013 / ASSESSMENT YEAR 2004-05 &2005-06 2 2. THE CAPTIONED ASSESSEE IS A NOTIFIED PERSON UNDE R THE SPECIAL COURT (TRIAL OF OFFENCES RELATING TO TRANSACTIONS IN SECURITIES) ACT, 1992 AND ALL THE ASSETS INCLUDING BANK ACCOUNTS WERE ATTACHED AND VESTED IN THE HANDS OF THE CUSTODIAN APPOINTED UNDER THE SAID ACT. 3. THE FIRST ISSUE IS WITH REGARD TO THE ACTION OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE ON ACCOUNT OF D-MAT CHARGES OF RS.3,96 ,216/- AND ADVERTISEMENT/BUSINESS PROMOTION EXPENSES OF RS.19, 570/-. IN THIS CONTEXT, THE RELEVANT FACTS ARE THAT THAT THE ASSESSEE HAS EARNED A DIVIDEND INCOME OF RS.1,09,21,854/-, WHICH WAS CLAIMED TO BE EXEMPT AN D ALSO INTEREST INCOME OF RS.3,68,84,818/- ON TERM DEPOSITS. THE ASSESSEE H AD CLAIMED D-MAT CHARGES OF RS.3,96,212/- AND ADVERTISEMENT /BUSINESS PROMO TION EXPENSES OF RS.19,570/-, WHICH WERE DISALLOWED BY THE AO BY IN VOKING PROVISIONS OF SECTION 14A OF THE ACT, AS HAVING BEEN INCURRED IN RELATION TO THE EXEMPT DIVIDEND INCOME. 4. BEFORE THE CIT(A,) ASSESSEE CANVASSED THAT D- MAT CHARGES WERE PAID BY THE OFFICE OF CUSTODIAN FOLLOWING THE ORDER OF T HE HONBLE SPECIAL COURT AND THAT ALL THE RELEVANT MATERIAL INCLUDING LETTER RE CEIVED FROM THE OFFICE OF THE CUSTODIAN WAS FURNISHED DURING THE COURSE OF ASSESS MENT PROCEEDINGS. REGARDING THE ADVERTISEMENT/BUSINESS PROMOTION EXPE NSES, IT WAS CANVASSED THAT THE SAME DID NOT RELATE TO ANY BUSINESS PROMO TION BUT THE SAME RELATED TO THE SALE OF PROPERTIES AND THAT THE NECESSARY E VIDENCE INCLUDING LETTER RECEIVED FROM THE OFFICE OF THE CUSTODIAN FURNISH ED BEFORE THE AO. THE CIT(A) HAS CONSIDERED THE SUBMISSIONS PUT FORTH BY THE ASS ESSEE BUT HE HAS SUSTAINED THE DISALLOWANCE ON THE GROUND THAT NO SUPPORTING EVIDENCE HAS BEEN FILED BEFORE ME, AND, HENCE, THE CONTENTION OF THE APPELL ANT IS NOT VERIFIABLE APART FROM THE AFORESAID, THE CIT(A) ALSO UPHELD THE DISA LLOWANCE ON THE GROUND THAT DISALLOWANCE UNDER SECTION 14A OF THE ACT WAS REQUI RED TO BE MADE. AGAINST SUCH DECISION OF CIT(A), ASSESSEE IS FURTHER APP EAL BEFORE US. . / ITA NO.1036 & 1037/MUM/2013 / ASSESSMENT YEAR 2004-05 &2005-06 3 5. BEFORE US THE LD. REPRESENTATIVE FOR THE ASSESSE E HAS PRIMARILY ASSAILED THE ACTION OF THE INCOME TAX AUTHORITIES IN MAKING THE DISALLOWANCE BY INVOKING SECTION 14A OF THE ACT. HOWEVER, WE FIND THAT THER E IS NO COGENT SUBMISSIONS PUT FORTH BY THE ASSESSEE WITH REGARD TO THE FINDIN G OF CIT(A) THAT THE PLEAS RAISED BY THE ASSESSEE WERE NOT VERIFIABLE. ON A CCOUNT OF AFORESAID, WE HEREBY AFFIRM THE DISALLOWANCE MADE BY THE LOWER AU THORITIES. THUS, ON THIS ASPECT THE ASSESSEE FAILS. 6. THE ONLY OTHER ISSUE IN THIS APPEAL IS WITH REGA RD TO THE CHARGEABILITY OF INTEREST UNDER SECTION 234A, 234B & 234C OF THE ACT . ON THIS ASPECT, PLEAS OF THE ASSESSEE ARE TWO FOLD. FIRST, THE PLEA IS TO THE EFFECT THAT THE PROVISIONS OF SECTION 234A, 234B AND 234C ARE NOT APPLICABLE TO NOTIFIED ENTITY. THIS ASPECT OF THE MATTER IS REQUIRED TO BE HELD AGAINST THE ASSESSEE FOLLOWING THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF DIVINE HOLDINGS PVT. LTD( ITA NO.3334 OF 2010 DATED 7/3/2012), AS DECID ED BY OUR CO-ORDINATE BENCH IN THE CASE EMINENT HOLDINGS PVT. LTD. IN IT A NO.2139/MUM/2013 DATED 18/6/2014, WHICH ALSO WAS A CASE OF NOTIFIED ENTITY UNDER THE SPECIAL COURT (TRIAL OF OFFENCES RELATING TO TRANSACTIONS I N SECURITIES) ACT, 1992. AT THE TIME OF HEARING THIS ASPECT OF THE MATTER WAS FAIRL Y CONCEDED BY THE LD. REPRESENTATIVE OF THE ASSESSEE. 6.1 THE SECOND PLEA OF THE ASSESSEE IS WITH REGARD TO THE QUANTUM OF INTEREST CHARGEABLE UNDER SECTION 234A, 234B & 234C OF THE A CT WHICH IS TO THE EFFECT THAT THE INTEREST SHOULD BE CHARGED AFTER CONSIDERI NG THE AMOUNT OF TAX DEDUCTIBLE AT SOURCE ON THE INCOME ASSESSED. SIMI LAR PLEA OF THE ASSESSEE WAS UPHELD BY OUR CO-ORDINATE BENCH IN THE CASE OF EMI NENT HOLDINGS PVT. LTD. (SUPRA). FOLLOWING THE SAME, WE DEEM IT FIT AND PR OPER TO RESTORE THE MATTER BACK TO THE FILE OF AO WHO SHALL RECOMPUTE THE INTE REST CHARGEABLE UNDER SECTION 234A, 234B & 234C OF THE ACT AFTER CONSIDER ING THE AMOUNT OF TAX DEDUCTIBLE AT SOURCE ON THE INCOME ASSESSED. NEEDL ESS TO MENTION, THE AO . / ITA NO.1036 & 1037/MUM/2013 / ASSESSMENT YEAR 2004-05 &2005-06 4 SHALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD AND THEREAFTER, RECOMPUTE THE INTEREST CHARGEABLE UNDE R SECTION 234A, 234B & 234C OF THE ACT, AS PER LAW. THUS, ON THIS ASPECT , THE ASSESSEE PARTLY SUCCEEDS. 7. SINCE THE ISSUES INVOLVED ARE SIMILAR IN ITA N O.1036/MUM/2013, OUR DECISION IN THE APPEAL OF THE ASSESSEE FOR 2005-06 (SUPRA) SHALL APPLY MUTANTIS-MUTANDIS IN THE OTHER CAPTIONED APPEAL ALSO. 8. RESULTANTLY, THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 14/08/2015 ' *+ ,- 14/08/2015 ' SD/- SD/- ( / SANJAY GARG ) ( . . / G.S.PANNU ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER * MUMBAI; , DATED 14/08/2015 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 0# ( ) / THE CIT(A)- 4. 0# / CIT 5. 12 #34 , $ 34 , * / DR, ITAT, MUMBAI 6. 5 / GUARD FILE. / BY ORDER, 1# # //TRUE COPY// / (DY./ASSTT. REGISTRAR) , * / ITAT, MUMBAI . . ./ VM , SR. PS