Harsiddh Specific Family Trust, Ahmedabad V. The Dy.CIT.,Circle-10, Ahmedabad

ITA 1613/AHD/2009

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68058 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 12-11-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 19-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA SRDR
• Section: 143(3)

Judgement Text

, , , , A, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, A BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ %& %& %& %& , , , , &' &' &' &' ( & ' ( & ' ( & ' ( & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND TEJ RAM MEENA, ACCOUNTANT MEMBER) ITA NO.1613/AHD/2009 [ASSTT.YEAR : 2004-2005] HARSIDDH SPECIFIC FAMILY TRUST NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD. PAN : AAATH 1941 D /VS. DCIT, CIR.10 AHMEDABAD. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) .% / 0 &/ ASSESSEE BY : SHRI S.N. SOPARKAR ( / 0 &/ REVENUE BY : SHRI O.P. BATHEJA, SR-DR 2 / %3'/ DATE OF HEARING : 12 TH NOVEMBER, 2013. 456 / %3'/ DATE OF PRONOUNCEMENT : 13-12-2013 &7 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-2005 IS DIREC TED AGAINST THE ORDER OF THE CIT(A)-XVI, AHMEDABAD. 2. THE GROUND NO.1 OF THE ASSESSEES APPEAL IS AS U NDER: 1. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LD.CIT(A) HAS GROSSLY ERRED IN POINTS OF LAW AND FACTS. ITA NO.1613/AHD/2009 -2 THIS GROUND IS GENERAL IN NATURE, AND HENCE, REQUIR ES NO ADJUDICATION. 3. THE GROUND NO.2.1 OF THE ASSESSEES APPEAL IS AS UNDER: (I) THE CIT(A) ERRED IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD.AO HA S GROSSLY ERRED IN DETERMINING THE STATUS OF THE APPELLANT AS THAT OF TRUST IS NULL AND VOID. THE CORRECT STATUS OF THE APPELL ANT IS THAT OF INDIVIDUAL. 4. THE LEARNED COUNSEL OR THE ASSESSEE SUBMITTED TH AT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN DEEPAK FAMILY TRUST, 2 11 ITR 575 (GUJ) AND ALSO IN THE CASE OF HARSIDDH SPECIFIC FAMILY TR UST, 258 ITR 785 (GUJ) AGAINST WHICH SLP FILED BY THE DEPARTMENT WAS REJECTED BY THE HONBLE SUPREME COURT. THE LEARNED DR HAS RELIED O N THE ORDER OF THE AO AND THE CIT(A). 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). IN VIEW OF THE DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT RELIED UPON BY THE LEARNE D COUNSEL FOR THE ASSESSEE, THE ISSUE IS DECIDED IN FAVOUR OF THE ASS ESSEE AND IT IS HELD THAT STATUS OF THE ASSESSEE-TRUST SHALL BE THAT OF INDIVIDUAL AND THE GROUND NO.2.1 IS ALLOWED. 6. THE GROUND NO.2.2 OF THE ASSESSEES APPEAL IS AS UNDER: (II) CIT(A) ERRED IN LAW AND IN THE FACTS AND CIRC UMSTANCES OF THE APPELLANTS CASE, THE LD.AO HAS GROSSLY ERRED I N HOLDING THAT APPELLANT TRUST IS FOLLOWING MERCANTILE METHOD OF A CCOUNTING WHEREAS IN FACT APPELLANT TRUST IS FOLLOWING CASH M ETHOD OF ACCOUNTING. ITA NO.1613/AHD/2009 -3 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE ITAT, AHMEDABAD BENCH IN ASSESSEES OWN CASE FOR THE EARL IER ASSESSMENT YEARS 2002-2002 AND 2003-2004 AND ALSO LATER ASSESS MENT YEAR 2005- 2006. THE LEARNED DR HAS RELIED ON THE ORDERS OF T HE AO AND THE CIT(A). 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND WE FIND THAT THE ISSUE OF METHOD OF ACCOUNTING CLAIMED AS CASH METH OD OF ACCOUNTING BY THE ASSESSEE HAS BEEN ADJUDICATED BY THE ITAT, AHMEDABAD BENCH IN ASSESSEES OWN CASE FOR THE EARL IER ASSESSMENT YEARS 2002-2003 AND 2003-2004 AND THE SUBSEQUENT AS SESSMENT YEAR 2005-2006, WHEREIN THE ISSUE WAS RESTORED TO THE FI LE OF THE AO. THE AO HAS IN THE FRESH ASSESSMENT PROCEEDINGS VIDE ORD ER UNDER SECTION 143(3) R.W.S. 254 OF THE ACT HAS HELD THAT THE METH OD OF ACCOUNTING IS CASH METHOD OF ACCOUNTING. IN THESE FACTS OF THE CASE, SINCE THE REVENUE HAS ACCEPTED THE CASH METHOD OF ACCOUNTING IN ASSESSEES OWN CASE FOR THE EARLIER AS WELL AS SUCCEEDING ASSE SSMENT YEAR, THE GROUND NO.2.2 IS ALLOWED SUBJECT TO OUTCOME OF REVE NUES APPEAL IN HONBLE JURISDICTIONAL HIGH COURT IN ANY OF THE EAR LIER YEAR ON THIS ISSUE. 9. THE GROUND NO.3 IS AS UNDER: (II) IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD.AO HAS GROSSLY ERRED IN CO NFIRMING DISALLOWANCE OF ACCOUNTING AND SERVICE CHARGES RS 4 ,00,000/-. LEARNED CIT(A) HAS FURTHER ERRED IN DIRECTING TO IN CREASE THE DISALLOWANCE OF ACCOUNTING AND SERVICE CHARGES FROM RS. 4,00,000/- TO RS. 12,67,324/- 10. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS IDENTICAL WITH THE ISSUE IN GROUP CASE OF THE ASSES SEE IN DCIT VS. ITA NO.1613/AHD/2009 -4 KISAN DISCRETIONARY FAMILY TRUST, ITA NO.1966/AHD/2 007 DATED 12.10.2007 FOR THE ASSTT.YEAR 2003-2004 WHEREIN THE EXPENSES WERE PARTLY ALLOWED BY THE TRIBUNAL. THE LEARNED DR CO ULD NOT CONTROVERT THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSE SSEE. 11. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND THAT THE FACTS OF THE ISSUE BEING SIMILAR TO THE FACTS OF THE ISSU E BEFORE THE TRIBUNAL IN DCIT VS. KISAN DISCRETIONARY FAMILY TRUST (SUPRA ), WE ARE OF THE VIEW THAT IT SHALL BE IN THE INTEREST OF JUSTICE TO RESTORE THIS ISSUE TO THE FILE OF THE AO WITH DIRECTION TO DECIDE THE SAME DE NOVO IN ACCORDANCE WITH LAW, AFTER CONSIDERING THE RATIO OF THE DECISI ON OF THE ITAT, AHMEDABAD IN THE GROUP CASE OF THE ASSESSEE CITED A BOVE, AND AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE A SSESSEE. WE DIRECT ACCORDINGLY. 12. THE GROUND NO.4 AND 5 ARE AS UNDER: 4. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LD.CIT(A) HAS GROSSLY ERRED IN HOLDING TH AT CHARGING OF INTEREST U/S.234B AND 234D IS CONSEQUENTIAL. 13. THIS GROUND OF THE APPEAL REGARDING CHARGING OF INTEREST IS CONSEQUENTIAL IN NATURE, AND WE DIRECT ACCORDINGLY. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %& %& %& %& / TEJ RAM MEENA) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT