MANJULA M. GANDHI, MUMBAI V. ADDL. C.I.T. RANGE 19(2), MUMBAI

ITA 1605/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100809 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 04-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 24-02-2011
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: H N MOTIWALLA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO. 1605/M/2011 (AY:2007 - 2008 ) MRS. MANJULA M. GANDHI, (THROUGH SON & LEGAL HEIR SHRI NILESH M. GANDHI), C/O. H.N. MOTIWALLA & CO., 508, SHARDA CHAMBERS, 33, NEW MARINE LINES, MUMBAI 400 020. / VS. ADDL. CIT, RANGE 19(2), 318, 3 RD FLOOR, PIRAMAL CHAMBERS, MORARJI MILLS COMPOUND, NEXT TO BHARATMATA CINEMA HALL, LOWER PAREL, MUMBAI - 13. ./ PAN : AAMPG2517Q ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI H.N. MOTIWALLA, AR / RESPONDENT BY : SHRI NEIL PHILIP, DR / DATE OF HEARING : 04.08.2015 / DATE OF PRONOUNCEMENT : 19 .08.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (A) - 30, MUMBAI DATED 27.12.2010 FOR THE ASSESSMENT YEAR 2007 - 2008. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (A) ERRED IN CONFIRMING THE ORDER U/S 143(3) OF THE ACT AS VALID, PARTICULARLY WHEN, THE APPELLANT HAD FILED HER RETURN OF INCOME ON JULY 31, 2007, AND NOTICE U/S 143(2) WAS ISSUED ONLY ON SEPTEMBER 02, 2008, AND WHICH WAS SERVED ON SEPTEMBER 29, 2008, WITHOUT APPRECIATING THAT THE PROVISO TO SECTION 143(2)(II) AS SUBSTITUTED BY THE FINANCE ACT, 2008 IS EFFECTIVE FROM THE AS SESSMENT YEAR 2008 - 09, WHICH HAS BEEN APPROVED BY THE SPECIAL BENCH IN KUBER TOBACCO PRODUCTS PTV LTD VS. DCIT [28 SOT 292 (SB) (DEL)]. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE SAID LD CIT (A) HAS ALSO ERRED IN AFFIRMING THE ORDER OF THE A SSESSING OFFICER THAT ACCOUNTING STANDARDS ARE APPLICABLE EVEN TO CASH SYSTEM OF ACCOUNTING PARTICULARLY WHEN, NOTIFICATION NO.9949 (F.NO.132/7/95 - TPL) DATED JANUARY 25, 1996 STATES THAT, THE CENTRAL GOVERNMENT HEREBY NOTIFIES THE FOLLOWING ACCOUNTING STA NDARDS TO BE FOLLOWED BY ALL ASSESSEES FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE SAID LD CIT (A) HAS ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN TAXING A SUM OF RS. 58,24,275/ - AS INC OME, IN RESPECT OF ADVANCE RECEIVED FOR ASSIGNING RIGHT TO M/S. SHEMAROO VIDEO PVT LTD OF SUHAAG FILM FROM JUNE 01, 2007. 2 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE SAID LD CIT (A) HAS ALSO ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OF FICER IN NOT ALLOWING DEDUCTION OF RS. 15,00,000/ - IN RESPECT OF ADVANCE PAID FOR PURCHASE OF FILM FROM M/S. SUBHASH ENTERPRISES PVT LTD WITH EFFECT FROM JUNE 01, 2007. 2. IN THE ABOVE MENTIONED GROUNDS, ASSESSEE RAISED LEGAL ISSUE RELATING TO THE ISSUE OF NOTICE U/S 143(2) OF THE ACT AND THE LIMITATION OF TIME THEREOF. BRIEFLY STATED RELEVANT FACTS OF THE CASE NECESSARY FOR ADJUDICATION OF THE LEGAL ISSUE INCLUDES THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 31.7.2007 U/S 139(1) OF THE ACT FOR THE A SSESSMENT YEAR 2007 - 2008 DECLARING THE TOTAL INCOME OF RS. 25,24,198/ - . NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 2.9.2008 IE AFTER LAPSE OF ONE YEAR. THE SAID NOTICE WAS SERVED ON THE ASSESSEE ON 29.9.2008. AS PER THE ASSESSEE, THE DUE DATE FOR ISSUE / SERVICE OF NOTICE IS 31.7.2008 IE 12 MONTHS FROM THE END OF THE MONTH IN WHICH RETURN WAS FILED. HOWEVER, THE CASE OF THE REVENUE IS THAT IN VIEW OF THE AMENDMENT BY THE FINANCE ACT, 2008 W.E.F. 1.4.2008, THE DUE DATE FOR SERVICE OF NOTICE IS 30.9.2008 IE 6 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RETURN WAS FURNISHED. AS PER THE ASSESSING OFFICER, THE ABOVE REFERRED AMENDMENT BY THE FINANCE ACT, 2008 APPLIES TO THE ASSESSMENT YEAR 2007 - 08 RETROSPECTIVELY. IN THIS REGARD, ASSESSEE RELIED ON THE DECISION OF THE SPECIAL BENCH IN THE CASE OF KUBER TOBACC O PRODUCTS P. LTD [28 SOT 292 (DEL) (SB)]. THE SAID SPECIAL BENCH DECISION WAS APPROVED BY THE HONBLE DELHI HIGH COURT VIDE ITA NO.116/2010, DATED 5.3.2010. THE CIT (A) DID NOT APPRECIATE T HE CONTENTION OF THE ASSESSSEE DESPITE THE ASSESSEES RELIANCE ON THE SAID JUDGMENT. OF COURSE, THIS JUDGMENT WAS DELIVERED IN THE CONTEXT OF THE PROVISIONS OF SECTION 292 - BB OF THE ACT. IN THE SAID JUDGMENT, IT WAS HELD THAT THE AMENDED PROVISIONS DO NO T APPLY TO THE ASSESSMENT YEAR 2007 - 2008, AND THE SAME APPLY PROSPECTIVELY FROM THE ASSESSMENT YEAR 2008 - 2009 ONWARDS. IGNORING THE SAID JUDGMENT OF THE HIGH COURT (SUPRA), CIT (A) DISMISSED THE ASSESSEES LEGAL ROUND. CONTENTS OF PARAS 2.5 AND 2.6 OF TH E IMPUGNED ORDER ARE RELEVANT IN THIS REGARD. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE FILED A COPY OF THE SAID JUDGMENT OF THE HONBLE DEL HI HIGH COURT IN THE CASE OF KUBER TOBACCO PRODUCTS P. LTD (SUPRA) AND SUBMITTED THAT THE AMENDMENT AIMED TO THE PROVISO TO 3 SECTION 143(2) IS PROSPECTIVE IN NATURE, AND IT APPLIES FROM THE ASSESSMENT YEAR 2008 - 2009 ONWARDS AND NOT TO THE ASSESSMENT YEAR 20 07 - 2008 UNDER CONSIDERATION. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS CITED PRECEDENTS AND ALSO THE RELEVANT MATERIAL PLACED BEFORE US. AFTER HEARING BOTH THE PARTIES, WE FIND MERIT IN THE ARGUMENT OF THE LD COUNSEL THAT THE AMENDED PROVISIONS OF SECTION 143(2) OF THE ACT APPLY PROSPECTIVELY IE FROM THE AY 2008 - 2009 ONWARDS ONLY. THEREFORE, THIS PART OF THE LEGAL GROUND , GROUND NO.1, RAISED BY THE ASSESSEE IS ALLOWED IN HER FAVOUR. 5. IN CONNECTION WITH THE OTHER GROUNDS, IN OUR OPINION, CONSIDERING OUR DECISION ON THE LEGAL ISSUE, THE ADJUDICATION OF THE OTHER GROUNDS MERELY BECOMES AN ACADEMIC EXERCISE. THEREFORE, GROUND NOS. 2,3 AND 4 ARE DISMISSED AS ACADEMIC. 6. IN THE RESULT, APPEAL OF THE ASS ESSEE IS PARTLY ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 1 9 T H AUGUST, 2015. S D / - S D / - (AMIT SHUKLA) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 1 9 .8. 2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI