DDIT(IT) 1(1), MUMBAI V. CREDIT SUISSE ( FORMERLY KNOWN AS CREDIT SUISEE FIRST BOSTON), MUMBAI

ITA 1132/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55399 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-07-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 11-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 154; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, MUMBAI. BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A NO.1132/ MUM/2010 ASSESSMENT YEAR: 2000-2001 DDIT (IT) 1(1) .. APPELLANT R.NO.117, SCINDIA HOUSE, 1 ST FLOOR, BALLARD ESTATE, N.M.ROAD, MUMBAI. VS CREDIT SUISSEE .. RESPONDEN T (FORMERLY KNOWN AS CREDIT SUISEE FIRST BOSTON) C/O. PRICEWATERHOUSE COOPERS PVT LTD., 8 TH FLOOR, TRADE WORLD C WING, KAMALA MILLS COMPOUND, SENAPATI BAPAT MARG,, MUMBAI. PA NO.AABCEE 9113 E APPEARANCES: G.P.TRIVEDI, FOR THE APPELLANT FARROKH V. IRANI , FOR THE RESPONDENT DATE OF HEARING : 28.7.2011 DATE OF PRONOUNCEMENT : 30 -09-2011 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CALLE D INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 26 TH NOVEMBER, 2009, IN THE MATTER OF ASSESSMENT I.T.A NO.1132/ MUM/2010 ASSESSMENT YEAR: 2000-2001 2 UNDER SECTION 154 OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2000-01 ON THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN HOLDING THAT INTEREST LEVIABLE U/S.234C WAS R S.8,92,017 AS AGAINST RS.35,61,456 DETERMINED BY THE AO WITHOUT APPRECIATI NG THAT THE PROVISO TO SECTION 234C IS NOT APPLICABLE TO THE ASSESSEE IN THE FA CTS OF THE CASE IN SO FAR AS THE ASSESSEE HAD TO PAY CORRESPONDING ADVANCE TAX ON T HE CAPITAL GAINS ALREADY EARNED THAT THE PROVISO TO SECTION 234C IS NOT APPLICABLE TO THE ASSESSEE IN THE FACTS OF THE CASE IN SO FAR AS THE SHORTFAL L IN THE PAYMENT OF TAX DUE ON THE RETURNED INCOME WAS NOT ON ACCOUNT OF UND ER-ESTIMATE OR FAILURE TO ESTIMATE INCOME FROM CAPITAL GAINS, BUT ON ACCOUN T OF FAILURE TO PAY THE CORRESPONDING ADVANCE TAX ON THE CAPITAL GAINS ALREA DY EARNED AND ON ACCOUNT OF DETERMINING ADVANCE TAX LIABILITY IN RESPECT OF A PORTION OF THE INCOME WHICH HAD ALREADY ACCRUED. 2. BRIEFLY STATED, THE MATERIAL FACTS ARE LIKE THIS. IN THE FIRST ROUND OF PROCEEDINGS, ASSESSEES GRIEVANCE AGAINST LEVY OF INTEREST UNDER SECTION 234C AT RS.35,61,456, AS AGAINST RS.8,92,017 COMPUTED BY THE ASSE SSEE, TRAVELED BEFORE A COORDINATE BENCH OF THIS TRIBUNAL. WHILE UPHOLDING T HIS GRIEVANCE IN PRINCIPLE, A COORDINATE BENCH REFERRED THE MATTER BACK TO THE CI T(A) BY OBSERVING AS FOLLOWS: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS ON RECORD. WE FIND THAT THE FIRST PROVISO TO SECTION 234 C READS AS UNDER: PROVIDED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY TO ANY SHORTFALL IN THE PAYMENT OF THE TAX DUE ON THE RETU RNED INCOME WHERE SUCH SHORTFALL IS ON ACCOUNT OF UNDER-ESTIMATE OR F AILURE TO ESTIMATE (A) THE AMOUNT OF CAPITAL GAINS; OR (B) INCOME OF THE NATURE REFERRED TO IN SUB-CLAUS E (IX) OF CLAUSE (24) OF SECTION 2, AND THE ASSESSEE HAS PAID THE WHOLE OF THE AMOUNT OF TAX PAYABLE IN RESPECT OF INCOME REFERRED TO IN CLAUSE (A) OR CLAU SE (B), AS THE CASE MAY BE, HAD SUCH INCOME BEEN A PART OF THE TOTAL INCOME, AS PART OF THE 58 [REMAINING INSTALMENTS OF ADVANCE TAX WHICH ARE DUE OR WHERE NO SUCH INSTALMENTS ARE DUE], BY THE 31ST DAY OF MARCH OF T HE FINANCIAL YEAR:] FROM THE ABOVE, IT CAN BE SEEN THAT AS PER THIS PRO VISO, PROVISIONS OF SUB-SECTION 910 OF SECTION 234C WILL NOT APPLY IF SHORTFALL IN PAYM ENT OF ADVANCE TAX IS ON ACCOUNT OF UNDER ESTIMATE OR FAILURE TO ESTIMATE OF THE AMOUNT OF THE CAPITAL GAIN AND THE ASSESSEE HAS PAID WHOLE OF THE AMOUNT OF TAX PAYABL E IN RESPECT OF THAT INCOME AS PART OF REMAINING INSTALLMENTS OF ADVANCE TAX, WHIC H ARE DUE. ADMITTEDLY, THE ASSESSEE HAS NOT PAID ENTIRE AMOUNT OF ADVANCE TAX IN THE REMAINING INSTALLMENTS OF ADVANCE TAX AND HENCE PROVISION OF SECTION 234C GET S ATTRACTED TO THE ASSESSEE; BUT THE QUESTION IS WHETHER INTEREST HAS TO BE CALCULAT ED AFTER CONSIDERING PAYMENTS MADE I.T.A NO.1132/ MUM/2010 ASSESSMENT YEAR: 2000-2001 3 BY THE ASSESSEE ON VARIOUS DATES AS PER THE CHART S UBMITTED BY THE ASSESSEE OR IT SHOULD BE CALCULATED WITHOUT CONSIDERING THIS PAYME NT. IN THIS REGARD, WE ARE OF THE CONSIDERED OPINION THAT AFTER CONSIDERING PROVISION S OF SECTION 234C IN TOTALITY, INTEREST IS TO BE LEVIED ON THE AMOUNT OF TAX, PAYM ENT OF WHICH HAS BEEN DEFERRED BY THE ASSESSEE; AND THEREFORE, CALCULATION OF INTERES T U/S.234C HAS TO BE MADE AFTER CONSIDERING VARIOUS PAYMENTS MADE BY THE ASSESSEE D URING THE QUARTER ENDED 15.12.99 AND 15.3.2000 BUT SINCE, THIS ASPECT WAS N OT EXAMINED BY LD CIT(A), WE ARE OF THE CONSIDERED OPINION THAT THIS MATTER SHOULD G O BACK TO THE FILE OF LEARNED CIT(A) FOR DECIDING THIS ISSUE AFRESH AND ACCORDINGLY, WE SET ASIDE THE ORDER LD CIT(A) ON THIS ISSUE AND RESTORE THE MATTER BACK TO HIS FILE WITH THE DIRECTION THAT HE SHOULD EXAMINE THE CLAIM OF THE ASSESSEE REGARDING VARIOUS PAYMENTS MADE BY THE ASSESSEE DURING THE QUARTER ENDED 15.12.99 AND 15.3.2000 AND INTEREST U/S.234C SHOULD BE CALCULATED AFTER CONSIDERING THESE PAYMENTS MADE BY THE ASSESSEE LD CIT(A) SHOULD PASS NECESSARY ORDER AS PER LAW IN THE LIGHT OF ABO VE DIRECTION AND AFTER VERIFYING FACTS AND AFTER PROVIDING ADEQUATE OPPORTUNITY OF B EING HEARD TO BOTH SIDES. 3. IN ACCORDANCE WITH THE ABOVE DIRECTIONS AND GIVIN G EFFECT TO THE SAME, LEARNED CIT(A), UPON VERIFICATION OF PAYMENTS OF AD VANCE TAX, REDUCED THE LEVY OF INTEREST U/S.234C TO RS.8,92,017 AND OBSERVED AS BELOW: I HAVE CONSIDERED THE FACTS AND SUBMISSIONS OF THE APPELLANT AND DIRECTION OF HONBLE ITAT. IT IS SEEN THAT THE HON BLE ITAT HAS RESTORED THE MATTER BACK TO THIS OFFICE FOR THE LIMITED PURP OSE TO EXAMINE THE VARIO0US PAYMENTS OF ADVANCE TAX MADE BY THE ASSESSE E DURING THE QUARTER ENDED 15.12.99 AND 15.3.2000 AND ALSO DIREC TED TO CALCULATE THE INTEREST U/S.234C, AFTER CONSIDERING THESE PAYMENTS MADE BY THE ASSESSEE. IT IS ALSO SEEN THAT HONBLE ITAT HAS HE LD THAT AS PER PROVISIONS OF SECTION 234C, INTEREST IS TO BE LEVIE D ON THE AMOUNT OF TAX, PAYMENT OF WHICH HAS BEEN DEFERRED BY THE ASSESSEE. THEREFORE, IN THE LIGHT OF DIRECTION OF ITAT, THE CALCULATION OF INTE REST U/S.234C AFTER CONSIDERING THE PAYMENT OF ADVANCE TAX AS WORKED OU T IN THE ABOVE TABLE APPEARS TO BE CORRECT. THEREFORE, RESPECTFULL Y FOLLOWING THE DIRECTION OF HONBLE ITAT, THE AO IS DIRECTED TO CH ARGE INTEREST U/S.234C AT RS.8,92,017 AS CALCULATED ABOVE,. WHICH IS SUBJE CT TO VERIFICATION BY AO FOR ARITHMETIC MISTAKE IF ANY. ACCORDINGLY, THI S GROUND OF APPEAL IS ALLOWED. 4. THE ASSESSING OFFICER IS AGGRIEVED AND IS IN APPEAL B EFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. I.T.A NO.1132/ MUM/2010 ASSESSMENT YEAR: 2000-2001 4 6. WE FIND THAT IN THE IMPUGNED ORDER BY THE CIT(A) , ALL THAT HAS BEEN DONE BY THE CIT(A) IS VERIFYING THE PAYMENTS OF ADVANCE TAX I N TERMS OF DIRECTIONS OF THE ITAT AND, ACCORDINGLY, GRANT RELIEF ON THE BASIS OF P RINCIPLES LAID DOWN IN THE ORDER DATED 25.5.2006 PASSED BY A COORDINATE BENCH OF THIS T RIBUNAL. HOWEVER, THE GRIEVANCE WHICH HAS BEEN RAISED BEFORE US BY THE ASSESSIN G OFFICER, DOES NOT RELATE TO THE MANNER IN WHICH THE APPEAL EFFECT HAS BEEN GI VEN BY THE CIT(A) BUT IT INDIRECTLY CHALLENGES THE VERY DIRECTION OF THE TRIB UNAL ON THE BASIS OF WHICH, THE CIT(A) HAS GRANTED THE IMPUGNED RELIEF. IN THIS VIE W OF THE MATTER, THE GRIEVANCE SOUGHT TO BE RAISED BEFORE US CLEARLY DO NOT EMERGE O UT OF THE IMPUGNED APPEAL EFFECT ORDER PASSED BY THE CIT(A). IF THE AO WAS AGGR IEVED OF THE DIRECTION OF THE COORDINATE BENCH, THE RIGHT COURSE OF ACTION WAS TO A PPEAL BEFORE THE HIGHER APPELLATE FORUM. IT CANNOT OBVIOUSLY BE OPENED TO TH E ASSESSING OFFICER TO CHALLENGE THE FINDINGS OF THE COORDINATE BENCH IN THE COURSE OF PROCEEDINGS GIVING EFFECT TO THOSE FINDINGS BY THE AUTHORITIES BELOW. THE GRIEVANC E OF THE ASSESSING OFFICER IS THEREFORE CLEARLY ILL CONCEIVED. WE, THEREFORE, DO NOT SEE ANY NEED TO INTERFERE IN THE MATTER AND UPHOLD THE IMPUGNED APPEAL EFFECT ORDER OF THE CIT(A). 7. IN THE RESULT, APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2011 SD/- (D.MANMOHAN) VICE PRESIDENT SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED 30 TH SEPTEMBER, 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),10, MUMBAI 4. DIRECTOR OF INCOME TAX, (IT), MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH C MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI