M/s. QUESTAR INVESTMENTS LTD., MUMBAI V. ACIT - 10(1), MUMBAI

ITA 1663/MUM/2007

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7988 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 28-12-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 22-02-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUM EET KUMAR
• Assessee Lawyers: JIGNESH R SHAH
• Keywords: Principle of natural justice
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1663/MUM/2007 (ASSESSMENT YEAR: 2002-03) M/S. QUESTAR INVESTMENTS LIMITED, METROPOLITAN, 9 TH FLOOR, C-26/27, BANDRA KURLA COMPLEX, BANDRA EAST, MUMBAI-400 061 ASSESSEE VS THE ASSTT. COMMISSIONER OF INCOME-TAX -10(1), ROOM NO.455, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI -400 020 .. REVENUE PAN: AAACQ 0240 P ASSESSEE BY: SHRI JIGNESH R. SHAH REVENUE BY: SHRI SUMEET KUMAR O R D E R PER R.S. PADVEKAR, JM THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING TH E IMPUGNED ORDER OF THE LD. CIT (A) X, MUMBAI DATED 7.12.2006 FOR T HE A.Y. 2002-03. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS IN THE APP EAL:- 1. THAT THE IMPUGNED APPELLATE ORDER OF THE LEARN ED COMMISSIONER (APPEALS) IS CONTRARY TO THE RELEVANT FACTS AND ITA 1663/M/2007 M/S. QUESTAR INVESTMENTS LIMITED 2 THE APPLICABLE LAW. 2. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED COMMISSIONER (APPEALS) ERRED IN HOLDING THA T THE LEARNED ASSESSING OFFICER WAS JUSTIFIED IN LEVYING THE IMPUGNED PENALTY INVOKING THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT. 3. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED COMMISSIONER (APPEALS) ERRED IN HOLDING THA T THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS OF I TS INCOME. 4. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED COMMISSIONER (APPEALS) ERRED IN HOLDING THA T THE IMPUGNED ORDER HAD NOT BEEN PASSED IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. 2. WE HAVE HEARD THE PARTIES. THE ASSESSEE FILED T HE RETURN OF INCOME DECLARING TOTAL LOSS OF ` 1,30,77,168/- FOR THE A.Y. 2002-03 ON 28.10.2002 AND THE SAME WAS PROCESSED U/S.143(1). THERE WAS NO REGULAR ASSESSMENT U/S.143(3) OF THE ACT. SUBSEQUE NTLY, THE A.O. ISSUED THE NOTICE U/S.148 AND ASSESSMENT WAS COMPLETED U/S .143(3) R.W.S. 147. THE ASSESSEE-COMPANY IS AN INVESTMENT COMPANY, WHIC H IS A PART OF TATA GROUP OF COMPANIES. THE ASSESSEE CARRIES INVESTMEN T ACTIVITY OF THE GROUP COMPANIES I.E. TITAN INDUSTRIES LTD, SAMARTH HOLDING LTD., RDI PRINTING PUBLISHING PVT. LTD., TITAN HOLDING LTD. A ND TANISHQ INDIA LTD. THE ASSESSEE DECLARED THE DIVIDEND INCOME OF ` 1,34,69,175/- ON THE INVESTMENT IN SHARES AND THE ENTIRE DIVIDEND INCOME HAS BEEN CLAIMED AS EXEMPT U/S.10(33) OF THE ACT. THE ASSESSEE-COMPANY ALSO CLAIMED INTEREST EXPENDITURE ON FIXED PERIOD LOANS AT ` 1,39,02,976/-, WHICH HAS ITA 1663/M/2007 M/S. QUESTAR INVESTMENTS LIMITED 3 BEEN UTILIZED FOR INVESTMENT IN SHARES. THE A.O. M ADE DISALLOWANCE U/S.14A OF THE ACT, WHICH WAS WORKED OUT BY HIM AT ` 1,30,99,813/-. THE ADDITION MADE BY THE A.O. WAS CONFIRMED BY THE CIT (A) AND THE ISSUE WAS CARRIED BY THE ASSESSEE TO THE TRIBUNAL. THE TRIBUNAL RESTORED THE MATTER TO THE FILE OF THE A.O. WITH THE DIRECTI ON THAT THE A.O. SHOULD CONSIDER THE DECISION OF THE BOMBAY HIGH COURT IN T HE CASE OF GODREJ BOYCE MFG. CO. LTD. VS. JCIT 328 ITR 81 (BOM). THE LD. COUNSEL FILED THE COPY OF THE ORDER OF THE TRIBUNAL. HE PLEADED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD 322 ITR 158 (SC) AND HE NCE NO PENALTY CAN BE LEVIED IN RESPECT OF THE DISALLOWANCE MADE BY TH E A.O. U/S.14A. IN OUR OPINION, AS THE QUANTUM ITSELF IS RESTORED TO T HE FILE OF THE A.O., WE, THEREFORE, CONSIDER IT FIT TO RESTORE THE MATTER OF THE PENALTY ALSO TO THE FILE OF THE A.O. TO DECIDE THE SAME AFRESH AFTER PA SSING QUANTUM ORDER IN COMPLIANCE WITH THE DIRECTIONS OF THE TRIBUNAL. TH E A.O. IS ALSO DIRECTED TO CONSIDER THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD. (SUPRA.) WE MAKE IT C LEAR THAT THE MATTER IS KEPT OPEN AND WE HAVE NOT EXPRESSED ANYTHING ON MER IT. NEEDLESS TO SAY THAT THE A.O. IS DIRECTED TO GIVE REASONABLE OPPORT UNITY OF BEING HEARD. 3. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR THE STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 3RD MARCH 2011. SD/- SD/- ( P.M. JAGTAP ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 23RD MARCH 2011 ITA 1663/M/2007 M/S. QUESTAR INVESTMENTS LIMITED 4 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) X, MUMBAI. 4) THE MC X, MUMBAI. 5) THE D.R. D BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN