VASANT INVESTMENT CORPORATION LTD, MUMBAI V. ITO 3(3)(4), MUMBAI

ITA 1221/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2730 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 24-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 234B; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER I.T.A NO.1221/MUM/2014 (AY 2010-11) VASANT INVESTMENT CORPORATION LTD., 1017, RAHEJA CHAMBERS, 213, NARIMAN POINT, MUMBAI-400021 PAN: AABCV3823A VS. ITO 3(3)(4), 672, 6 TH FLOOR, AAYAKAR BHAVAN, MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRADIP KAPAS I REVENUE BY : SHRI PRAMOD NIKALJ E (DR) DATE OF HEARING : 03.11.2015 DATE OF PRONOUNCEMENT : 06.11.2015 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER DATED 16.12.2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-7, MUMBAI (CIT(A) FOR SHORT) IN RESPECT OF ASSESSME NT YEARS 2010-11 ON THE FOLLOWING GROUNDS OF APPEAL: 1. ADDITION OF IRRECOVERABLE INTEREST OF RS.27,97,0 00 (PARA NO. 5.8, PG NO. 6 OF THE ASSESSMENT ORDER) A. THE LD. CIT(A) ERRED IN LAW AND IN FACTS (I) IN CONFIRMING THE ADDITION MADE BY THE LD. A.O. OF IRRECOVERABLE INTEREST ASSU MED BY LD. A.O. TO BE RS.27,97,000 WITHOUT ANY BASIS (II) IN TOTALLY IGNO RING THE DECISION AND ORDER DATED 16.08.2012 OF HIS PREDECESSOR DELIVERED ON IDENTICAL FACTS IN DECIDING APPEAL FOR IMMEDIATELY PRECEDING YEAR I.E. A.Y.2009-10 (III) IN IGNORING THAT THE COMPANY ON ITS OWN ON RECEIPT OF THE INTEREST INCOME HAS OFFERED IT FOR TAXATION IN SUBSEQUENT ASSESSMEN T YEARS AND IN TAXING THE SAME INCOME IN THE YEAR UNDER CONSIDERATION THA T HAD AMOUNTED TO DOUBLE TAXATION. B. YOUR APPELLANT SUBMITS THAT IT HAD NOT RECOGNISE D INTEREST INCOME FOR MANY YEARS IN PAST IN RESPECT OF FOLLOWING PARTIES AS NO AMOUNT WAS FORTHCOMING FROM THEM SINCE PAST MANY YEARS AND REC OVERY OF EVEN PRINCIPAL WAS IN DOUBT. 2 ITA NO.1221/MUM/2014- VASANT INVESTMENT CORPORATION LTD. AMOUNT ADDED BY A.O. I) SHARADA STEEL CORPORATION RS. 16,34,000 II) FALAK HOME DEVELOPERS PVT. LTD. RS. 10,43,00 0 III) MRS. BHARATI SATYAJ IT DALI RS. 1,20,000 RS. 27,97,000 C. YOUR APPELLANT PLEADS THAT THE ADDITION OFRS.27, 97,000/- BE DELETED IN FULL. 2. LEVY OF INTEREST U/S. 234B OF RS.68,937 A. THE LD. AO ERRED IN LEVYING INTEREST U/S 234B OF RS.68,937/- WITHOUT GIVING ANY OPPORTUNITY OF HEARING AND IN NOT PASSIN G ANY SPEAKING ORDER FOR LEVY OF INTEREST AND IN LEVYING INTEREST WITHOU T APPLYING THE MIND TO THE FACTS OF THE CASE AND FURTHER ERRED IN CHARGING INTEREST IN EXCESS OF THAT IS PERMITTED IN LAW. B. YOUR APPELLANT DENIES ANY LIABILITY TO PAYMENT O F INTEREST AND FURTHER SUBMIT THAT THE TAX WAS PAID AS PER THE PROVISIONS OF THE LAW AND THAT THE INTEREST WAS CHARGED IN VIOLATION OF THE PROVISIONS OF THE NATURAL JUSTICE IN AS MUCH AS NO OPPORTUNITY FOR HEARING WAS GIVEN. C. YOUR APPELLANT PRAYS THAT THE INTEREST U/S 234B OF RS.68,937/- BE DELETED. 2. THE BRIEF FACTS OF THE CASE AS GATHERED FROM THE MA TERIAL AVAILABLE ON RECORD ARE THAT ASSESSEE IS A PUBLIC L IMITED COMPANY, ENGAGED IN THE BUSINESS OF LENDING AND ADV ANCING MONEY, ACQUIRED BY PURCHASE, SALES, EXCHANGE AND IN VESTMENT IN MOVABLE AND IMMOVABLE PROPERTY BESIDES OTHER DEA LING IN SHARE ETC., FILED HIS RETURN OF INCOME FOR AY 2010- 2011, ON 09.10.2010 DECLARING TOTAL LOSS OF RS. 17,68,498/-. THE RETURN WAS SELECTED FOR SCRUTINY AND AFTER GIVING AN OPPOR TUNITY OF HEARING TO THE ASSESSEE, THE ASSESSING OFFICER (AO) MADE AN ADDITION OF RS.294,540/- IN RESPECT OF ALIBAUG PROP ERTY , AND INITIATED PENALTY PROCEEDING U/S 271(1) OF THE AC T , A SUM OF RS. 12077/- U/S 14A,READ WITH RULE 8D , AND FU RTHER A SUM OF RS. 27.97 LAKHS IN RESPECT OF UNREALIZED IN TEREST ON STICKY LOANS, VIDE ORDER DATED 26.12.2010. 3. AGAINST THE ORDER OF AO, THE ASSESSEE FILED AN APPE AL BEFORE THE CIT(A). THE CIT(A) DELETED THE ADDITION IN RESPECT OF EXPEN SES OF RS. 2,94,540/- AND DISALLOWANCE OF RS. 12,077/- U/S 14A OF THE ACT , HOWEVER, THE ADDITION IN RESPECT OF UNREALIZED INTEREST ON STICK Y LOAN WAS UPHELD IN THE 3 ITA NO.1221/MUM/2014- VASANT INVESTMENT CORPORATION LTD. IMPUGNED ORDER DATED 28.01.2013 AGAINST WHICH THE P RESENT APPEAL IS FILED BEFORE US. 4. WE HAVE HEARD THE REPRESENTATIVE OF THE ASSESSEE AN D THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AR OF THE ASSESSEE ARGUED THAT IN RESPECT OF PREVIOUS YEAR SIMILAR IDENTICAL ADDITION WERE MADE BY THE AO WHICH ARE DELETED BY THE CIT(A) AGAINST WHIC H AN APPEAL FILED BY THE REVENUE BEING ITA NO. 7338/MUM/2002 AND THE ASS ESSEE FILED CROSS OBJECTION IN THE SAID APPEAL VIDE C.O.NO. 33/MUM/20 14. THE APPEAL OF THE REVENUE IN THE IDENTICAL FACTS WERE DISMISSED A ND THE ASSESSEE HAS NOT PRESSED HIS OBJECTION AS THE APPEAL FILED BY THE RE VENUE WAS DISMISSED VIDE JUDGMENT AND ORDER DATED 17.10.2015. 5. WE RESPECTFULLY FOLLOWING THE JUDGMENT OF CO-ORDINA TE BENCH, WE FIND THAT ASSESSEE INVOLVED IN THE PRESENT APPEAL ARE SQ UARELY COVERED BY THE JUDGMENT IN ITA NO. 7338/MUM/2012 IN THE ASSESSEE O WN CASE, HENCE THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. NEXT GROUND FOR OUR CONSIDERATION IS THE LEVY OF IN TEREST UNDER SECTION 234B, WHICH IS CONSEQUENTIAL IN NATURE DOES NOT REQ UIRE FURTHER DISCUSSION AS THE GROUND NO. 1 OF THE APPEAL IS ACC EPTED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/1 1/ 2015 SD/- SD/- (B. R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED : 06.11.2015 SK PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT- CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, 4 ITA NO.1221/MUM/2014- VASANT INVESTMENT CORPORATION LTD. (DY./ASSTT. REGISTRAR) ITAT, MUMBAI