BIRLA SUNLIFE ASSET MANAGEMENT COMPANY LTD, MUMBAI V. DCIT RG 8(1), MUMBAI

ITA 1269/MUM/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3636 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 23-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVANI B GHODE
• Assessee Lawyers: RONAK G DOSHI; MANTNAM SHAH
• Keywords: Recovery proceedings

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV , JM AND SHRI RAJESH KUMAR, AM ./ I.T.A. NO. 1269 /MUM/ 201 2 ( / ASSESSMENT YEAR : 2008 - 09 ) M/S B IRLA SUNLIFE ASSET MANAGEMENT CO.LTD., ONE INDIA BULLS CENTRE, TOWER, 1, 17 TH FLOOR, JUPITER MILL COMPOUND, 841 SENAPATI BAPAT MARG, ELPHINSTONE ROAD, MUMBAI - 400013 / VS. DY . COMMISSIONER OF INCOME TAX 8(1), MUMBAI ./ I.T.A. NO. 1474 /MUM/201 2 ( / ASSESSMENT YEAR : 2008 - 09 ) DY. COMMISSIONER OF INCOME TAX 8(1), MUMBAI / VS. M/S BIRLA SUNLIFE ASSET MANAGEMENT CO.LTD., ONE INDIA BULLS CENTRE, TOWER, 1, 17 TH FLOOR, JUPITER MILL COMP OUND, 841 SENAPATI BAPAT MARG, ELPHINSTONE ROAD, MUMBAI - 400013 ./ PAN : AABCB6134D / ASSESSEE BY S/ S HRI RONAK G DOSHI AND MANTNAM SHAH / REVENUE BY SHIVANI B GHODE / DATE OF HEARING : 4 .8 . 2016 / DATE OF PRONOUNCEMENT : 18. 8. 2016 / O R D E R PER RAJESH KUMAR, A. M: THE SE CROSS - APPEALS ARE FILED AGAINST THE ORDER PASSED BY THE LD.CIT(A) - 16 , MUMBAI DATED 1.12 .2011 FOR THE ASSESSMENT YEAR 200 8 - 09 . 2 1269 / MUM/201 2 1474/MUM/2012 . 2. FIRST WE SHALL TAKE THE APPEAL IN ITA NO. 1269/MUM/2012. 3. ONLY ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPEAL IS AGAINST CONFIRMATION OF DISALLOWANCE OF RS.21,67,547/ - BY THE CIT(A) AS MADE BY THE AO FOR PROVISIONS OF LEAVE ENCASHMENT . 4. THE FACTS IN BRIEF ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT ASSESSEE HAS NOT PAID RS. 21,67,547/ - PROVIDED ON ACCOUNT OF LEAVE ENCASHMENT IN RESPECT OF LEAVE AT THE CREDIT OF EMPLOYE ES WHICH WERE NOT ALLOWABLE AS NOT PAID BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME AND DISALLOWED THE SAME AS PER THE PROVISIONS OF SECTION 43B(F) OF THE ACT.THE LD CIT(A) ALSO UPHELD THE ORDER OF CIT(A) ON THE GROUND THAT SLP HAS BEEN ADMITTED IN THE APEX COURT ON THE ISSUE OF ALLOWABILITY OF LEAVE ENCASHMENT. 5 . AT THE OUTSET, THE LD.AR SUBMITTED BEFORE US THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE AO AND KEEP THE MATTER ALIVE IN VIEW OF THE DECISION RENDERED BY THE TRIBUNAL IN ITS OWN CASE IN ITA NO.5457/MUM/2013 (AY - 2010 - 11) ORDER DATED 30.6.2015 IN WHICH THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO - ORDINATE BENCH OF THE TRIBUNAL BY RELYING ON THE DECISION OF HONBLE SUPREME COURT RENDERED IN THE SPECIAL LEAVE PETITION (CIV IL NO.22889/2008) VIDE ORDER DATED 8.5.2009 DIRECTING THE REVENUE NOT TO RECOVER THE PENALTY AND INTEREST WHICH MAY 3 1269 / MUM/201 2 1474/MUM/2012 ACCRUE TILL THE DECISION OF THE APPEAL BY THE HONBLE SUPREME COURT IN THE CASE OF EXIDE INDUSTRIES LTD AND IT WOULD BE OPEN TO THE DEP ARTMENT TO RECOVER OUTSTANDING INTEREST DEMAND IN CASE CIVIL APPEAL IS ALLOWED BY THE HONBLE SUPREME COURT. THE LD. DR FAIRLY AGREED WITH THE SUBMISSION OF LD.AR. 6 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDER IN THE CASE O F ASSESSEE. WE FIND THAT IN THE CASE OF EXIDE INDUSTRIES LTD THE HONBLE SUPREME COURT HA S ADMITTED THE SPECIAL LEAVE PETITION ON THE IDENTICAL ISSUE VIDE ITS ORDER DATED 8.5.2009 IN SLP (CIVIL NO.22889/2008) ALLOWING TO FILE APPEAL BY THE REVENUE. WE FURTHER FIND THAT THE CO - ORDINATE BENCH OF THE TRIBUNAL IN ITA NO.5457/MUM/2013 (SUPRA) FOLLOWING THE DECISION OF THE HONBLE APEX COURT DIRECTED THE AO TO KEEP RECOVERY OF TAX AND INTEREST IN ABEYANCE TILL THE DECISION OF THE SUPREME COURT IN SLP ( CIVIL NO.22889/2008) OF THE DEPARTMENT IN THE CASE OF EXIDE INDUSTRIES LTD AND IT WAS FURTHER RULED BY THE CO - ORDINATE BENCH THAT IT WOULD BE OPEN TO THE DEPARTMENT TO RECOVER THE OUTSTANDING DEMANDS IN CASE THE APPEAL OF THE DEPARTMENT IS ALLOWED BY T H E APEX COURT. THE OPERATIVE PART OF THE DECISION IS REPRODUCED BELOW : 9. IN VIEW OF THE OBSERVATIONS OF THE HONBLE SUPREME COURT, IN OUR VIEW, IT WILL BE PROPER TO DISPOSE OF THIS APPEAL IN THE LIGHT OF THE ORDER OF THE HONBLE SUPREME COURT DATED 08.0 5.2009 PASSED IN THE CASE OF CIT VS. EXIDE INDUSTRIES LTD. (SUPRA). WE THEREFORE DISPOSE OF THE PRESENT APPEAL WITH A DIRECTION THAT THE ASSESSEE WILL PAY THE TAX AS IF SECTION 43B(F) IS ON THE STATUTE BOOK, HOWEVER, TILL THE 4 1269 / MUM/201 2 1474/MUM/2012 DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF CIT VS. EXIDE INDUSTRIES LTD. (SUPRA), THE REVENUE WILL NOT RECOVER THE PENALTY AND INTEREST WHICH MAY ACCRUE TILL THE DECISION OF THE APPEAL BY THE HONBLE SUPREME COURT IN THE CASE OF EXIDE INDUSTRIES LTD. IT WOULD BE OPEN TO THE DEPARTMENT TO RECOVER THE OUTSTANDING INTEREST DEMAND IN CASE THE CIVIL APPEAL OF THE DEPARTMENT IN THE CASE OF EXIDE INDUSTRIES LTD. (SUPRA) IS ALLOWED BY THE HONBLE SUPREME COURT. SUBJECT TO OUR ABOVE OBSERVATIONS, THE MATTER IS RESTORED TO THE F ILE OF THE AO TO BE ADJUDICATED AFRESH AS PER THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF EXIDE INDUSTRIES LTD. (SUPRA) WE FIND THAT THE FACTS OF THE CASE BEFORE US IS IDENTIAL AS DECIDED BY THE COORDINATE BENCH IN THE DECISIONS(SUPRA) AND THEREFORE BY FOLLWING THE DECISION OF THE BENCH RESPECFULLY , WE RESTORE THE MATTER BACK TO THE FILE OF THE AO BY SETTING ASIDE THE ORDER OF CIT(A) AND DECIDE THE ISSUE ACCORDINGLY. THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7 . NOW WE SHALL TAKE UP THE APPEAL IN ITA 1474 /MUM/201 2 8 . THE ISSUE RAISED BY THE REVENUE IN THE APPEAL IS AGAINST THE DELETION OF DISALLOWANCE OF RS.36,21,660 / - BY THE LD.CIT(A) AS MADE BY THE AO IN RESPECT OF COMPENSATION PAID TO THE INVESTOR BY THE ASSESSEE. 9 . FACTS IN BRIEF ARE THAT THE ASSESSEE - COMPANY IS AN ASSET MANAGEMENT COMPANY AND IS ENGAGED IN THE BUSINESS OF ASSET , PORTFOLIO MANAGEMENT AND ADVISORY SERVICES. DURING THE COURSE OF SCRUTINY PROCEEDINGS THE AO OBSERVED THAT THE ASSESSEE HAS DEBITED A SUM OF RS.36,21,660/ - ON ACCOUNT OF COMPENSATION PAID TO INVESTORS THE DETAILS 5 1269 / MUM/201 2 1474/MUM/2012 WHEREOF IS GIVEN IN PARA 4 OF THE ASSESSMENT ORDER. THE ASSESSEE FILED ITEM WISE CLIENT AND INVESTOR WISE DETAILS OF COMPENSATION CHARGED TO THE PROFIT AND LO SS ACCOUNT AND FROM THE SAID DETAILS IT IS APPARENT THAT COMPENSATION WERE PAID FOR WRONG PROCESSING OF INVESTMENT PLAN TO DIVIDEND REINVESTMENT INSTEAD OF DIVIDEND PAYOUT , FOR NON FOLLOWING OF INSTRUCTION OF INVESTOR OF SWITCH FROM BCP RETAILS DIVID END AND SO ON AND SO FORTH. THE AO DID NOT AGREE WITH THE PROPOSITION OF THE ASSESSEE AND OBSERVED THAT THE ASSESSEE WAS AN ASSET MANAGEMENT COMPANY FOR BIRLA SUNLIGHT MUTUAL FUNDS FOR WHICH THE ASSESSEE HAS AP POINTED A REGISTERED AND TRANSFER A GENT AND IT WAS NOWHERE AGREED THAT THE COMPENSATION WOULD BE PAID BY THE FUND MANAGER AND ACCORDINGLY DISALLOWED THE SAID COMPENSATION AS PAID TO THE VARIOUS CUSTOMERS FOR DEFICIENCY IN RENDERING SERVICES . THE LD.CIT(A) ALLOWED THE APPEAL OF THE ASSESS EE BY FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.1912/MUM/2007 (AY - 2002 - 03) DATED 26.9.2007, WHEREIN IT HAS BEEN HELD THAT THE CONTRACTUALLY AND STATUTORILY AND ASSESSEE WAS DUTY BOUND TO MAKE THE P AYMENT SO AS TO KEEP ASSESSEES BUSINESS INTEREST AND ACCORDINGLY T HE COMPENSATION PAID BY THE APPELLANT WAS ALLOWED AS DEDUCTION BY DIRECTING THE AO . 10 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE BEFORE US INCLUDING THE ORDERS RELIED UPON BY THE PARTIES AND ALSO 6 1269 / MUM/201 2 1474/MUM/2012 THE DECISION RENDERED IN ITA NO.1912/MUM/2007, WHEREIN THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE DECISION (SUPRA), WE UPHOLD THE ORDER OF LD.CIT(A) AND DISMISS THE APPEAL OF THE REVENUE . 11 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 . 0 8 . 2016. SD SD ( SHAILENDRA KUMAR YADAV ) (RAJESH KUMAR) / JUDICIAL MEMBER / AC COUNTANT MEMBER MUMBAI ; DATED : 16. 8 .2016 SR.PS:SRL: / 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 F ILE / BY ORDER, TRUE CO PY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI