LATE HARSHAD S.METHA, MUMBAI V. DCIT CEN CIR 23, MUMBAI

ITA 1731/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8531 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: H
• Assessment Year: 2002-2003
• Appeal Filed On: 25-03-2015
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Keywords: Corroborative evidences
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI BEFORE SHRI AMIT SHUKLA (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTANT MEMBER) I.T.A. NO.1731/MUM/2015 (ASSESSMENT YEAR: 2002-03) LATE HARSHAD S MEHTA THROUGH L/H JYOTI H MEHTA 32, MADHULI, DR ANNIE BESANT ROAD WORLI, MUMBAI 18 VS THE ACIT, CENT.CIR.4(1), MUMBAI PAN : AABAT4497N (APPELLANT) (RESPONDENT) APPELLANT BY SHRI DHARMESH SHAH RESPONDENT BY DR P DANIEL DATE OF HEARING : 17-01-2017 DATE OF ORDER : 07 -02-2017 O R D E R PER ASHWANI TANEJA, AM: THIS APPEAL HAS BEEN FILED AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME-TAX (APPEALS)-52, MUMBAI [HEREINAFTER CALLED CIT(A)] DATED 28-01- 2015 PASSED AGAINST THE ASSESSMENT ORDER U/S 143(3) R.W.S. 147 OF THE ACT DATED 30-1-2006 FOR A.Y. 2002-03 ON THE FOLLOWING G ROUNDS:- GROUNDS OF APPEAL AGAINST THE ORDER DATED 28.01.201 5 U/S 250 OF THE ACT PASSED BY THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS) -52, MUMBAI. FOLLOWING GROUNDS OF APPEAL ARE WITHOUT PREJUDICE T O EACH OTHER. 1. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION TO THE TUNE OF RS.2,09,77,8 27/- ON ACCOUNT OF UNEXPLAINED ENTRIES IN THE BANK ACCOUNT OF THE 2 I.T.A. NO.1731/MUM/2015 APPELLANT. 2. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN DIR ECTING THE ASSESSING OFFICER THAT THE DIVIDEND INCOME OF RS.7,02,45,3661- (RS.6,39,42,574/- + RS.63,92,792/- ) IS LIABLE TO TAX IN THE HANDS OF THE APPELLANT WITHOUT APPRECIATING THAT THE DIVIDEND INCOME IN THE YEAR U NDER APPEAL WAS EXEMPT U/S. 10(33) OF THE ACT. 3. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS THAT IN CONFIRMING THE LE VY OF INTEREST U/S. 234A, 234B AND 234C OF THE ACT. 4. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE INCOME ASSESSED IN THE HANDS OF THE APPELLANT WERE SUBJECT ED TO THE PROVISIONS OF TDS AND HENCE ON THE SAID AMOUNT OF T AX NO INTEREST CAN BE COMPUTED U/S 234A, 234B AND 234C OF THE ACT. 2. GROUND 1 : IN THIS GROUND, THE ASSESSEE IS AGGRIEVED WITH THE ACTION OF THE LOWER AUTHORITIES IN MAKING ADDITION TO THE TUNE OF RS.2,09,77,827 ON ACCOUNT OF UNEXPLAINED ENTRIES IN THE BANK ACCOU NT OF THE ASSESSEE. 3. IN THIS CASE, THE LD. COUNSEL SUBMITTED AT THE VERY OUTSET DURING THE COURSE OF HEARING THAT ON THIS ISSUE ADDITION WAS M ADE BECAUSE OF WANT OF REQUISITE DETAILS AND SUPPORTING EVIDENCES WHICH CO ULD NOT BE FURNISHED FOR THE REASON THAT ALL THE BOOKS OF ACCOUNT AND DO CUMENTS WERE KEPT IN THE CUSTODY OF THE CUSTODIAN AS PER ORDER OF CIVIL COURT. ADMITTEDLY, PRIMARY RESPONSIBILITY OF PROVIDING THE DOCUMENTS A ND EVIDENCES IS UPON THE SHOULDERS OF THE ASSESSEE, BUT IN THE PECULIAR FACTS OF THIS CASE, THIS OBLIGATION COULD NOT BE DISCHARGED AS THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS WERE HELD IN THE CUSTODY OF THE CUSTODIAN . THEREFORE, IF AN OPPORTUNITY IS GIVEN, THEN THESE DETAILS CAN BE BRO UGHT ON RECORD BEFORE 3 I.T.A. NO.1731/MUM/2015 THE AO. HE PLACED RELIANCE ON THE ORDER OF THE TRI BUNAL IN THE CASE OF HITESH S MEHTA & PRATIMA H MEHTA, WHO ARE FAMILY ME MBERS OF THE ASSESSEE WHEREIN IDENTICAL ISSUE WAS SENT BACK TO T HE FILE OF THE LD. CIT(A) UNDER IDENTICAL CIRCUMSTANCES. IT WAS REQUESTED TH AT THIS ISSUE IS ALSO REQUIRED TO BE SENT BACK TO THE FILE OF THE LOWER A UTHORITIES. 4. PER CONTRA, LD. SPECIAL COUNSEL SUBMITTED THAT THOU GH THIS CASE MAY BE SENT BACK TO THE FILE OF THE LD. CIT(A), BUT THE PRIMARY RESPONSIBILITY OF BRINGING EVIDENCES SHOULD BE ON THE SHOULDERS OF TH E ASSESSEE. 5. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE LOWER AUTHORITIES. IT IS NOTED THAT DURING THE COURSE OF ASSESSMENT PR OCEEDINGS, ASSESSEE WAS REQUIRED BY THE AO TO FURNISH DETAILS AND EVIDENCES WITH RESPECT TO CREDIT ENTRIES IN THE BANK ACCOUNT. BUT SINCE ASSESSEE CO ULD NOT FURNISH REQUISITE DETAILS AND DOCUMENTARY EVIDENCES, THEREFORE AO MAD E AN ADDITION OF RS.108,79,67,118 UNDER THE HEAD SUSPENSE ACCOUNT BEING AGGREGATE OF THE CREDIT ENTRIES APPEARING IN BANK ACCOUNTS OF TH E ASSESSEE. DURING THE COURSE OF HEARING BEFORE THE LD.CIT(A), ASSESSEE GA VE DETAILS AND EVIDENCES WITH RESPECT TO VARIOUS ENTRIES IN THE BA NK ACCOUNTS. THE LD. CIT(A) CALLED FOR REMAND REPORT FROM THE AO WITH RE SPECT TO EACH AND EVERY ENTRY. IN RESPONSE, THE AO SUBMITTED REMAND REPORT WHEREIN IT WAS OBSERVED BY HIM THAT ALL THE ENTRIES WERE STOOD EXP LAINED BY THE ASSESSEE EXCEPT ENTRIES TO THE EXTENT OF RS.2,09,77,827. TH E BREAK-UP OF THE SAME HAS BEEN PROVIDED BY LD. CIT(A) ON PAGE 10 OF HIS O RDER. ACCORDINGLY, LD. CIT(A) SUSTAINED THE ADDITION TO THIS EXTENT AND DE LETED THE BALANCE ADDITION MADE BY THE AO. IT HAS BEEN STATED BEFORE US THAT THESE ENTRIES ARE ALSO DULY EXPLAINED AND THESE AMOUNTS DO NOT RE PRESENT UNDISCLOSED INCOME OF THE ASSESSEE. BUT SINCE ALL THE DOCUMENT S WERE IN THE CUSTODY 4 I.T.A. NO.1731/MUM/2015 OF THE CUSTODIAN, THEREFORE, DESIRED DETAILS AND DO CUMENTS ETC. COULD NOT BE FURNISHED TO THE AO. 6. IT IS BROUGHT TO OUR NOTICE THAT SIMILAR SITUATION AROSE IN THE CASE OF OTHER FAMILY MEMBERS. IT IS NOTED THAT IN THE CASE OF HITESH S MEHTA VS DCIT, THE ITAT, VIDE ITS ORDER DATED 12-06-2013 DIS POSED OF SIMILAR ISSUE AS UNDER:- 6. THERE IS NO OTHER GROUND IN THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEARS 1994-95, 1995-96 AND 2008-09. HOWEVER, THERE ARE TWO MORE GROUNDS IN APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2001-02 I.E. GROUNDS NO.3 & 4, WHICH RELATE TO CONFIRMING T HE ADDITION OF INTEREST INCOME AND CONFIRMING THE ADDI TION ON ACCOUNT OF SUSPENSE ENTRIES AT RS.15,67,491/- AN D RS,2,79,396/-, RESPECTIVELY. 6.1 IN RESPECT TO THESE GROUNDS, THE LEARNED COUNS EL OF THE ASSESSEE STATED THAT THE AO AS WELL AS LEARNED CIT(A) HAS MADE AND CONFIRMED THESE ADDITIONS BY OBSERVING THAT ONUS LAY UPON THE ASSESSEE REMAINED UNDISCHARGED. IT WAS SUBMITTED THAT ALL THE DETAILS ARE LYING WITH THE CUSTODIAN AND THIS IS NOT POSSIBLE T O THE ASSESSEE TO GET THE DETAILS FROM CUSTODIAN. THE ASSESSEE WRITTEN VARIOUS LETTERS TO THE CUSTODIANS ALSO, COPIES OF WHICH ARE PLACED IN COMPILATION AT PAGES 1 TO 5. IT WAS STATED THAT TIME AND AGAIN THE ASSESSEE T RIED TO GET THE DETAILS FROM THE CUSTODIAN BUT COULD NOT GET THE DETAILS. ACCORDINGLY, IT WAS REQUESTED THAT THE MATTER SHOULD BE SENT BACK TO THE FILE OF THE CIT(A ) AND TO COLLECT THE DETAILS FROM CUSTODIAN AND THEREAFTE R THE ISSUE SHOULD BE DECIDED ACCORDINGLY. 6.2 ON THE OTHER HAND, LEARNED DR STATED THAT AMPLE OPPORTUNITIES HAVE ALREADY BEEN GIVEN AND SINCE NO DETAILS COULD BE FILED ON BEHALF OF THE ASSESSEE, THEREFORE, THIS WILL BE A FUTILE EXERCISE IF THE AP PEAL IS SENT TO THE FILE OF CIT(A) ONCE AGAIN. 6.3 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND CONSIDE RING THE MATERIAL ON RECORD, WE FOUND THAT THIS ISSUE NE EDS 5 I.T.A. NO.1731/MUM/2015 READJUDICATION AT THE END OF THE LEARNED CIT(A). LE ARNED CIT(A) HAS DISMISSED THE GROUND OF THE ASSESSEE BY OBSERVI NG IN PARA 8.2(III) AT PAGE 6, WHICH ARE AS UNDER :- '(III) IN RESPECT OF THE ITEM AT SR. NO-2 TO 4, THE APPELLANT HAS MERELY CLAIMED THAT THE SAME REPRESENTS DIVIDEND INCOME OF THE APPELLANT. HE HAS HOWEVER, PLEADED BEFORE THE ASSESSING OFFICER THAT THE SAID EVIDENCE IS NOT IN HIS POSSESSION AND HENCE THE SAME MAY BE OBTAINED FROM THE CUSTODIAN. / FIND THAT THE ONUS TO EXPLAIN THE DEPOSIT ENTRY IS ON THE APPELLANT AND HENCE UNLESS THE BURDEN OF PROVING THE DEPOSIT IS DISCHARGED, THE ONUS DOES NOT SHIFT ON THE ASSESSING OFFICER IT IS SEEN THAT NO EVIDENCE IS FILED IN RESPECT OF THE CLAIM OF THE APPELLANT THAT THE AMOUNT OF RS.37, 715/-, RS.2,54,500/- AND RS 6,80,500/- DOES NOT REPRESENT INTEREST INCOME. IN THE LIGHT OF THE , SAME, THE SAID ADDITION OF THE '' SAID AMOUNTS AS INTEREST INCOME IS CONFIRMED.' AFTER GOING THROUGH THE FINDING OF THE LEARNED CIT( A),'WE FOUND THAT THE LEARNED CIT(A) SHOULD HAVE OBTAINED THE DETAILS FROM CUSTODIAN AS THE CUSTODIAN APPOINTED BY THE SPECIAL COURT,. IS N OT OBLIGED TO ASSESSEE BY PROVIDING NECESSARY DETAILS IN SPITE OF VARIOUS REQUESTS MADE ON BEHALF OF THE ASSESSEE. COPIES OF REQUESTS ARE PLACED ON RECORD. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCE S OF THE CASE, WE SET ASIDE THIS ISSUE TO THE FILE OF THE CIT(A) T O DECIDE THE ISSUE AFRESH AFTER OBTAINING NECESSARY DETAILS FROM THE CUSTODIAN AND AFTER AFFORDING OPPORTUNITY OF HEARING TO THE A SSESSEE. WE ORDER ACCORDINGLY. SIMILARLY, IN THE CASE OF MRS PRATIMA H MEHTA ALSO, THE TRIBUNAL VIDE ITS ORDER DATED 28-08-2013 FOLLOWING THE ORDER OF NITES H S MEHTA, SUPRA, REMITTED THIS MATTER TO THE FILE OF THE LD. CIT(A). WE FIND THAT FACTS CIRCUMSTANCES OF THE CASE BEFORE US ARE IDENTICAL T O THE ONE AS HAS BEEN ALREADY DEALT BY THE TRIBUNAL IN AFORESAID CASES. THEREFORE, FOLLOWING THESE ORDERS AND IN THE INTEREST OF JUSTICE AND FAI RNESS, WE REMIT THIS 6 I.T.A. NO.1731/MUM/2015 GROUND BACK TO THE FILE OF THE LD. CIT(A) WITH THE SAME DIRECTIONS AS HAS BEEN GIVEN IN THESE CASES. WE ORDER ACCORDINGLY. GROUND 1 MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 7. GROUND 2 : IN THIS GROUND, THE ASSESSEE IS AGGRIEVED WITH THE ACTION OF LD.CIT(A) IN HOLDING THAT DIVIDEND INCOME OF RS. 7,02,45,366 WAS LIABLE TO BE TAXED IN THE HANDS OF THE ASSESSEE NOTWITHSTA NDING THE CLAIM OF THE ASSESSEE THAT DIVIDEND INCOME IN THE IMPUGNED ORDER WAS EXEMPT U/S 10(33) OF THE ACT. IT IS NOTED THAT LD. CIT(A) IN HIS ORDER AT PARAGRAPH 18 ON PAGE 11 HAS MERELY MENTIONED THAT DIVIDEND INCOM E OF AGGREGATE AMOUNT OF RS.6,39,42,574 + 63,02,272 IS ALSO LIABLE TO BE TAXED IN THE HANDS OF THE ASSESSEE. NO REASONING HAS BEEN GIVEN BY LD. CIT(A) AS TO HOW AND WHY DIVIDEND INCOME WAS TAXABLE DURING THE YEAR. IT IS BROUGHT TO OUR NOTICE THAT ASSESSEE HAS FILED RECTIFICATION APPLICATION DATED 26-02- 2015 TO LD. CIT(A) POINTING OUT THE MISTAKE APPAREN T ON RECORD AND REQUESTING THAT DIVIDEND INCOME WAS NOT LIABLE TO B E TAXED AND WAS EXEMPT U/S 10(33) IN THE IMPUGNED YEAR, THEREFORE, ADDITION MADE BY THE AO SHOULD BE DELETED. IT IS INFORMED THAT RECTIFIC ATION APPLICATION HAS STILL NOT BEEN DISPOSED OF. IT IS FURTHER BROUGHT TO OUR NOTICE THAT THE LD. AO IN HIS REMAND REPORT DATED 02-12-2013 CONFIRMED THIS F ACT THAT THE IMPUGNED AMOUNTS ARE ACTUALLY DIVIDEND INCOME OF TH E ASSESSEE. THUS, THE ADDITION CONFIRMED BY LD. CIT(A) WAS CONTRARY T O LAW AND FACTS ONCE THE FACT THAT THESE AMOUNTS ARE ACTUALLY DIVIDEND I NCOME OF THE ASSESSEE WAS BROUGHT ON RECORD BY THE AO BY WAY OF THE REMAN D REPORT. 8. PER CONTRA, THE LD. SPECIAL COUNSEL FAIRLY SUBMITTE D THAT THIS ISSUE MAY BE SENT BACK TO THE FILE OF LD. CIT(A) FOR PROP ER EXAMINATION. 7 I.T.A. NO.1731/MUM/2015 9. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHOR ITIES AND ALSO SUBMISSIONS MADE BEFORE US. IT IS NOTED THAT THE L D. AO HAS MENTIONED IN THE ASSESSMENT ORDER THAT THE IMPUGNED AMOUNTS REPR ESENT DIVIDEND INCOME. UNDER THESE CIRCUMSTANCES, LD. CIT(A) OUGH T TO HAVE DEALT WITH THIS ISSUE WITH PROPER REASONING. WHEREAS, NO REAS ONING AT ALL HAS BEEN GIVEN BY LD. CIT(A) WHILE CONFIRMING ADDITION OF TH ESE AMOUNTS. THEREFORE, WE SEND THIS ISSUE BACK TO THE FILE OF L D. CIT(A) WITH THE DIRECTION TO CONSIDER THE DETAILS AND DOCUMENTARY E VIDENCES AS MAY BE BROUGHT ON RECORD BY THE ASSESSEE AND ADJUDICATE TH IS GROUND AFRESH AFTER AFFORDING OPPORTUNITY OF HEARING TO THE ASSESSEE. WITH THESE DIRECTIONS, THIS ISSUE IS SENT BACK TO THE FILE OF CIT(A). THU S, GROUND 2 MAY BE TREATED AS ALLOWED, FOR STATISTICAL PURPOSES. 10. GROUNDS 3 & 4 DEAL WITH LEVY OF INTEREST U/S 234A, 234B AND 234C. DURING THE COURSE OF HEARING, THE LD. COUNSEL STATE D AT THE VERY OUTSET THAT THIS ISSUE IS COVERED BY THE DECISION OF THE T RIBUNAL GIVEN IN CASE OF GROUP COMPANY OF THE ASSESSEE, BIZ. M/S GROWMORE EX PORTS LTD VS DCIT (ITA NO.4358/MUM/2013) DATED 08-02-2016 AND THEREFO RE THIS ORDER SHOULD BE FOLLOWED. THE LD. SPECIAL COUNSEL DID NO T POINT OUT ANY DISTINCTION IN FACTS OR LEGAL POSITION. 11. WE HAVE GONE THROUGH THE ORDERS PASSED BY LOWER AUT HORITIES AND FIND THAT IDENTICAL ISSUE HAS BEEN DECIDED BY THE T RIBUNAL IN THE CASE OF M/S GROWMORE EXPORTS LTD (SUPRA). RELEVANT PART OF ORDER OF THE TRIBUNAL IS REPRODUCED BELOW:- 11. GROUND NO 6 RELATES TO LEVY OF INTEREST U/S 234 A, 234B AND 234C OF THE ACT. THE ID. COUNSEL FOR THE ASSESS EE COMPANY SUBMITTED THAT INTEREST U/S 234A, 234B AND 234C IS MANDATORY BUT THE INTEREST LIABILITY IS TO BE CA LCULATED AFTER 8 I.T.A. NO.1731/MUM/2015 TAKING INTO ACCOUNT TAX DEDUCTED AT SOURCE. THE LD. COUNSEL FOR THE ASSESSEE COMPANY RELIED UPON DECISIONS OF T HE TRIBUNAL IN THE CASE OF DCIT V. SMT RASILA S. MEHTA IN ITA NO. 5870/MUM/2011 VIDE ORDERS DATED 21. 10.201.5, DIVINE HOLDING PVT. LTD. V. ACIT IN ITA NO. 560/MUM /20 1.3 DATED 21.10.2015 AND AATUR HOLDINGS PRIVATE LIMITED V. DC IT IN ITA NO. 846, 1032 & 147/ MUM/ 20 1 0 DATED 23-09-2015, WHER EBY TRIBUNAL HAS RESTORED THE ISSUE TO THE FILE OF THE LEARNED ASSESSING OFFICER WHO WOULD LEVY THE INTEREST AS PE R PROVISIONS OF SECTION 234 AFTER REDUCING THE AMOUNT OF TAX DED UCTIBLE AT SOURCE AND DECIDE AS PER THE PROVISION OF LAW. THE TRIBUNALS DECISION IN ITA NO. 846,1032,2147/MUM/ 2010 DATED 2 3.09. . 2015 IS REPRODUCED BELOW:- 6. LAST GROUND OF APPEAL FOR ALL THE THREE ASSESSM ENT YEARS PERTAIN, TO LEVY OF INTEREST U/S 234A, 234B AND 234 C OF THE ACT. BEFORE US, THE REPRESENTATIVE OF BOTH THE SIDES AGR EED THAT IDENTICAL ISSUE WAS DECIDED IN THE CASES OF TOPAZ HOLDINGS PV T. LIMITED ( ITA/21461/MUM/2013, A. Y. 2002 -02 DT. 78.06.2014) AND EMINENT HOLDINGS PVT. LTD. (ITA/2139/MUM/2013 A.Y.2002-03, DATED 18.06.2014) THAT THE TRIBUNAL HA D UPHELD THE LEVY OF INTEREST IN PRINCIPAL, THAT IT H AD SET ASIDE THE ISSUE FOR CALCULATING THE INTEREST TO THE FILE OF T HE AO) WITH DIRECTION THAT THE TAX DEDUCTED AT SOURCE SHOULD BE REDUCED WHILE CALCULATING THE INTEREST. WE FIND THAT THE ISSUE WA S DISCUSSED IN THE CASE OF EMINENT HOLDINGS PVT. LTD. (SUPRA) AS U NDER: 5. NEXT GROUND OF APPEAL IS ABOUT LEVY OF INTEREST U/S. 234 OF THE ACT. BEFORE US, AR STATED THAT THE ASSES SEE WAS A NOTIFIED ENTITY, THAT THE PROVISIONS OF S. 234A234.B AND 234 C OF THE ACT WERE DEEMED TO HAVE COMPLIED WITH, THAT THE ASSETS WERE ALREADY IN ATTACHMENT OF THE CUSTODIAN APPOINT ED UNDER THE PROVISIONS OF THE .3'ECIAL COURTS ACT, THAT THE TRIBUNAL IN THE CASE OF THE APPELLANT AND SEVERAL OTHER ENTITIE S HAD HELD THE VIEW IN FAVOUR OF THE APPELLANT THAT THE H ONBLE BOMBAY HIGH, COURT IN THE CASE OF DIVINE HOLDINGS P VT. LID. AND CASCADE HOLDINGS PVT. LTD, HAD HELD THAT THE PR OVISIONS OF SECTIONS 234A, 234.8 AND 234C OF THE ACT WERE MANDA TORY AND WERE APPLICABLE TO THE NOTIFIED ENTITIES ALSO THAT THE ASSESSEE WAS IN THE PROCESS OF FILING AN APPEAL AGAINST THE SAID ORDER BEFORE THE HONBLE SUPREME COURT , THAT THE INCOME EARNED IN THE YEAR UNDER CONSIDERATION WAS SUBJECTED TO THE P ROVISIONS OF 9 I.T.A. NO.1731/MUM/2015 TDS, THAT THE CHARGEABILITY OF SECTION 234A, 234B A ND 234C OF THE ACT SHOULD BE AFTER CONSIDERING THE AMOUNT OF TAX D EDUCTIBLE AT SOURCE ON THE INCOME ASSESSED. THE APPELLANT RELIES IN THIS REGARD ON THE FOLLOWING DECISIONS. HE RELIED UPON T HE CASES OF MOTOROLA INC. VS DCIT (95 LTD 269(DEL)( SB). SEDCO PORES DRILLING CO. LTD. (264 ITR 320), NGC NETWORK ASIA LLC (313 I TR 187). SUMMIT BHATACHARYA (300 ITR (AT) 347 (BOM)(SB), VI JAY GOPAL JINDAL (ITA NO. 4333/DEL/2009) & EMILLO RUIZ BERDEJ O (320 ITR 190(BOM). DR RELIED UPON THE CASES OF DIVINE HOLDIN GS PVT. LTD. 3.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT IN THE CASE OF DIV INE HOLDINGS PUT. LTD..HONBLE BOMBAY HIGH COURT HAS HE LD THAT PROVISIONS OF SECTION 234A, 234B AND 234C WERE APPLICABLE TO THE NOTIFIED PERSON ALSO. THEREFORE, UPHOLDING THE ORDER OF THE FAA TO THAT EXTENT, WE H OLD THAT- PROVISIONS OF SECTION 234 OF THE ACT ARE APPL ICABLE. AS FAR AS CALCULATION PART IS CONCERNED, WE FIND ME RITS IN THE SUBMISSION MADE BY THE ASSESSEE. THEREFORE, WE ARE RESTORING BACK THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION WHO WOULD DECIDE THE ISSUE AFTER CONSI DERING THE AMOUNT TAXED DEDUCTIBLE AT SOURCE ON THE INCOME ASSESSED AND AFTER AFFORDING A REASONABLE OPPORTUNI TY OF HEARING TO THE ASSESSEE. GROUND NO. 5 IS ALLOWED IN PART IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE ABOVE ORDER WE RESTORE B ACK THE ISSUE TO THE FILE OF THE AO WHO WOULD LEVY THE INTE REST AS PER THE PROVISIONS OF SECTION 234 OF THE ACT AND GIVE C REDIT FOR THE TDS AMOUNTS. GROUND NO, 6 FOR ALL THE THREE A. Y S STANDS PARTLY ALLOWED. THE LD. COUNSEL FOR THE ASSESSEE COMPANY SUBMITTED THAT THE TRIBUNAL HAS IN THE ASSESSEE COMPANY'S OWN CASE HAS ADJUDICATED THE ISSUE IN ITA NO. 5203 1 /MUM/2013 FOR ASSESSMENT YEAR 2003-04, VIDE ORDERS DATED 18. 12.2 014 AS UNDER: 9. GROUND NO.5 RELATES TO CHARGING OF INTEREST U/S 234A AND 234B OF THE ACT. IN CONNECTION WITH THE CHARGE OF INTEREST U/S 234B OF THE ACT, LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ASSESSEE BEING A 'NOTIFIED PERSO N THERE IS NO CHARGE OF INTEREST. IT IS HIS FURTHER SUBMISS IONS THAT THE RECEIPTS- OF THE ASSESSEE ARE SUBJECTED T O TDS. 10 I.T.A. NO.1731/MUM/2015 ON THE CONTRARY, SPECIAL COUNSEL FOR THE REVENUE FL IED VARIOUS DECISIONS OF THE TRIBUNAL IN SUPPORT OF CHA RGE OF INTEREST. THE JUDGMENT OF THE JURISDICTIONAL HIGH C OURT IN THE CASE OF CIT VS. DIVINE HOLDING POT, LTD. WAS RELIED ON BY THE SPL. COUNSEL FOR THE REVENUE. DURING THE REB UTTAL TIME, LD. COUNSEL SUBMITTED THAT THIS ISSUE SHOULD ALSO REVISIT THE FILE OF THE AO FOR REMOVAL OF CERTAIN INACCURACIES IN CALCULATING THE INTEREST. WE ORDER ACCORDINGLY. THUS, GROUND NO. 6 IS ALLOWED FOR STAT ISTICAL PURPOSES. 10. IN THE RESULT, ASSESSES'S APPEAL IS PARTLY ALLO WED FOR STATISTICAL PURPOSES.' LD. SPECIAL COUNSEL OF THE REVENUE SUBMITTED THAT T HE LEVIABILITY OF INTEREST U/S 234A 234B AND 234C OF T HE ACT IS MANDATORY. HE RELIED UPON DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE EASE OF DIVINE HOL DINGS PRIVATE LIMITED IN ITA NO.3334 OF 2010, WHEREBY HONBLE BOM BAY HIGH COURT HAS HELD THAT IN CASE OF NOTIFIED PARTIE S UNDER THE SPECIAL COURT ACT INTEREST U/S 234A, 234B AND 234C OF THE ACT HAS TO BE LEVIED, AND CONTENDED THAT THE INTEREST U /S 234 IS MANDATORY. AFTER HEARING BOTH THE PARTIES AND CAREFULLY CONSIDERING THE MATERIAL ON RECORDS INCLUDING RELIE D UPON CASE, RESPECTFULLY FOLLOWING THE ABOVE ORDER'S OF THE TRIBUNAL WE RESTORE THE ISSUE BACK TO THE FILE OF L EARNED, ASSESSING OFFICER WHO WOULD LEVY INTEREST AS PER PROVISIONS OF SECTION 234 OF THE ACT AND GIVE CREDI T FOR THE TDS AMOUNT. WE ORDER ACCORDINGLY. BOTH THE PARTIES JOINTLY STATED THAT AFORESAID ORDE R IS APPLICABLE ON THE FACTS OF THE CASE BEFORE US. THEREFORE, FOLLOWING THE ORDER, WE SEND THIS ISSUE BACK TO THE FILE OF THE AO WITH THE SAME DIRE CTIONS AS HAVE BEEN GIVEN IN THE AFORESAID ORDER. THE AO IS DIRECTED T O FOLLOW THE ORDER AND DECIDE THE SAME AFRESH AFTER GIVING ADEQUATE OPPORT UNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE SHALL ALSO BE FREE TO R AISE ALL LEGAL AND FACTUAL ISSUES IN THIS REGARD. THIS GROUND MAY BE TREATED AS ALLOWED FOR STATISTICAL 11 I.T.A. NO.1731/MUM/2015 PURPOSES. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATE D AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE CONCL USION OF THE HEARING. SD/- SD/- (AMIT SHUKLA) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT: 7 TH FEBRUARY, 2017 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , H-BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES