PALLAVI HOLDINGS P.LTD, MUMBAI V. DCIT CEI CIR 31 NOW DCIT CC 4(3), MUMBAI

ITA 1784/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8433 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2000-2001
• Appeal Filed On: 26-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Keywords: Capital asset; Business income; Depreciation; Opportunity of being heard
• Section: 142(1); 234B; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO. 1784/MUM/2015 (ASSESSMENT YEAR: 2000-01) M/S. PALLAVI HOLDINGS P. LTD. VS. DCIT, CENTRAL CIRCLE 31 32, MADHULI, 3 RD FLOOR A.B. ROAD, WORLI MUMBAI 400018 [NOW DCIT, CC - 4(3)] AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 PAN AAACP8031H APPELLANT RESPONDENT APPELLANT BY: SHRI DHARMESH SHAH RESPONDENT BY: DR. P. DANIEL DATE OF HEARING: 09.02.2017 DATE OF PRONOUNCEMENT: 01.03.2017 O R D E R PER JASON P. BOAZ, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- 52, MUMBAI DATED 14.01.2015 FOR A.Y. 2000-01 RAISIN G THE FOLLOWING GROUNDS: - 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) OU GHT TO HAVE APPRECIATED THAT AS PER THE DECISION OF HON'BLE SPE CIAL COURT DATED 30.04.2010 IN MP NO. 41 OF 1999, THE ASSETS U NDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO LATE SHRI HARSHAD S. MEHTA AND HENCE THE INCOME CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE BEEN TAXED IN THE HANDS OF LATE SHRI. HARSHAD S. ME HTA AND NOT IN THE HANDS OF THE APPELLANT. 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE PROFIT ON TRANSFER OF THE RESIDENTIAL FLAT AT NCPA AMOUNTING TO RS.1,45,80,69 1/- OUGHT TO HAVE BEEN ASSESSED AS LONG TERM CAPITAL GAIN AND NO T AS SHORT TERM CAPITAL GAIN. 3. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT ALLOWING THE DEDUCTION ON ACCOU NT OF INTEREST EXPENDITURE OF RS.2,80,50,000/-. ITA NO. 1784/MUM/2015 M/S. PALLAVI HOLDINGS P. LTD. 2 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THE INTEREST CHARG ED U/S 234A, 234B AND 234C OF THE ACT ARE INCORRECT. 5. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE INCOME AS SESSED IN THE HANDS OF THE APPELLANT WERE SUBJECTED TO THE PROVIS IONS OF TDS AND HENCE ON THE SAID AMOUNT OF TAX, NO INTEREST CA N BE COMPUTED U/S. 234B AND 234C OF THE ACT. 6. THE APPELLANT CRAVES LEAVE OF YOUR HONOUR TO ADD TO, ALTER, AMEND AND/OR DELETE ALL OR ANY OF THE FOREGOING GRO UNDS OF APPEAL. 2. GROUND NO. 1 2.1 AT THE OUTSET OF THE HEARING, THE LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT GROUND NO. 1 RAISED IN THIS APPEAL ( SUPRA) IS NOT BEING PRESSED BY THE ASSESSEE. SINCE GROUND NO. 1 IS NOT PRESSED, THE SAME IS RENDERED INFRUCTUOUS AND IS ACCORDINGLY DISMISSED. 3. GROUND NO. 2 PROFIT ON SALE OF RESIDENTIAL FLAT A T NCPA 3.1 IN THIS GROUND, THE ASSESSEE ASSAILS THE IMPUGN ED ORDER OF THE LEARNED CIT(A) IN BRINGING TO TAX THE PROFIT ON SAL E OF RESIDENTIAL FLAT AT NCPA AS SHORT TERM CAPITAL GAINS (STCG) INSTEAD OF AS LONG TERM CAPITAL GAINS (LTCG) AS CLAIMED BY THE ASSESSEE. ACCORDING TO THE LEARNED A.R. OF THE ASSESSEE THE DECISION RENDERED BY THE LEARNED C IT(A) THAT THE PROFIT ON SALE OF RESIDENTIAL APARTMENT IN NCPA, NARIMAN POIN T, MUMBAI WAS TO BE ASSESSED AS STCG INSTEAD OF AS BUSINESS INCOME AS H ELD BY THE ASSESSING OFFICER (AO) OR AS LTCG AS CLAIMED BY THE ASSESSEE, WAS BASED ON ERRONEOUS FACTS. IT IS CONTENDED THAT WHILE THE LEA RNED CIT(A) HELD THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON THE SAID FLAT IN NCPA, WHICH CLAIM WAS DISALLOWED BY THE AO, THE FACT IS THAT THE ASSE SSEE HAD NEVER CLAIMED DEPRECIATION THEREON, SO THERE WAS NO QUESTION OF D ISALLOWANCE BY THE AO ON THIS ISSUE. TO PRESS HOME THIS ARGUMENT, THE LEA RNED A.R. DREW THE ATTENTION OF THE BENCH TO THE PAPER BOOK (PGS 1 TO 25) CONTAINING COPIES OF COMPUTATION OF TOTAL INCOME, FINANCIAL STATEMENTS O F THE ASSESSEE FOR THE RELEVANT PERIOD, ORDERS OF ASSESSMENT FOR ASSESSMEN T YEARS 1998-99 TO 1999-2000. IT IS PRAYED THAT IN VIEW OF THE ABOVE T HE ASSESSEES CLAIM THAT THE PROFIT ON SALE OF THE FLAT AT NCPA BE TAXED AS LTCG. ITA NO. 1784/MUM/2015 M/S. PALLAVI HOLDINGS P. LTD. 3 3.2 PER CONTRA, THE LEARNED D.R. FOR REVENUE SUPPOR TED THE FINDING OF THE LEARNED CIT(A) IN HOLDING THAT THE PROFIT ON SALE O F FLAT IN NCPA WAS TO BE TAXED AS STCG. IT WAS, HOWEVER, SUBMITTED THAT IN V IEW OF THE AVERMENTS OF THE LEARNED A.R. OF THE ASSESSEE THAT THE ASSESSEE HAD NEVER CLAIMED DEPRECIATION ON THE SAID NCPA FLAT IN THE EARLIER A SSESSMENT YEARS 1998-99 TO 1999-2000, AS SEEN FROM THE DETAILS FILED IN THE PAPER BOOK (PGS 1 TO 25), THIS ISSUE MAY BE SET ASIDE TO THE FILE OF THE LEARNED CIT(A) FOR RE- EXAMINING THE FACTUAL POSITION IN THE MATTER AND FR ESH ADJUDICATION THEREON. 3.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. FROM THE DETAILS ON RECORD IT APPEARS THAT THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME FOR A.Y. 2000-01; I.E. THE YEAR UNDER CONSIDERATION, EITHER UNDER SECTION 139( 1) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') OR AS CALLED FOR UND ER SECTION 142(1) OF THE ACT AND CONSEQUENTLY THE ASSESSMENT WAS COMPLETED EX-PA RTE UNDER SECTION 144 OF THE ACT. 3.3.2 FROM THE ORDER OF ASSESSMENT, IT IS SEEN THAT IN THE ABSENCE OF RELEVANT DETAILS FROM THE ASSESSEE OF PURCHASE, SAL E, ETC. THE AO TREATED THE PROFIT ON SALE OF THE SAID NCPA FLAT AS BUSINESS IN COME. ON APPEAL BEFORE THE LEARNED CIT(A), THE ASSESSEE CLAIMED THAT THE S AID INCOME/PROFIT ON SALE OF THE SAID RESIDENTIAL FLAT AT NCPA, MUMBAI H AD ARISEN FROM SALE OF A CAPITAL ASSET AND THEREFORE THE INCOME OUGHT TO HAV E BEEN TAXED AS LTCG. THE LEARNED CIT(A) OBSERVES THAT IN REMAND PROCEEDI NGS, THE AO IN HIS REPORT WAS OF THE VIEW THAT THE INCOME ON SALE OF T HE SAID FLAT AT NCPA IS EXIGIBLE TO AS STCG ON SALE OF THIS ASSET. IN PARA 11 OF THE IMPUGNED ORDER, THE LEARNED CIT(A) ACCEPTED THE AOS VIEW THAT THE INCOME/PROFIT ON SALE OF THE SAID FLAT AT NCPA WAS TO BE TAXED AS STCG, INTE R ALIA, FOR THE REASONS THAT THE ASSESSEE WAS ALSO REGULARLY CLAIMING DEPRE CIATION ON THE SAID FLAT AT NCPA AND THE SAME HAS NOT BEEN DISALLOWED SUO MO TO EITHER IN THE COMPUTATION OF INCOME OF IN THE RETURN OF INCOME FI LED FOR EARLIER ASSESSMENT YEARS 1998-99 AND 1999-2000; WHICH CLAIM S WERE DISALLOWED BY THE AO. WE HAVE PERUSED THE ASSESSEES PAPER BOO K (PGS. 1 TO 25), ITA NO. 1784/MUM/2015 M/S. PALLAVI HOLDINGS P. LTD. 4 WHICH WAS ALSO BEFORE THE LEARNED CIT(A), AND FIND THAT AS ALSO AGREED TO BY THE COUNSELS FOR BOTH SIDES, THAT IN BOTH THE COMPU TATION OF INCOME AND ORDERS OF ASSESSMENT FOR BOTH ASSESSMENT YEARS 1998 -99 TO 2000-01 THE ASSESSEE HAS MADE SUO MOTO DISALLOWANCE OF THE DEPR ECIATION ON THE SAID FLAT AT NCPA AND THE AO HAS ADOPTED THE SAME IN COM PUTING THE ASSESSEES INCOME IN THE ORDERS OF ASSESSMENT FOR THESE YEARS. IN THIS FACTUAL MATRIX, AS NARRATED ABOVE, WE ARE OF THE OPINION THAT THERE ARE SOME INFIRMITIES ON PROPER APPRECIATION OF FACTS IN THE IMPUGNED ORDER OF THE LEARNED CIT(A) WHICH ARE NOT CLEAR AND LEAD TO CONFUSION; I.E. AS TO WHETHER OR NOT THE ASSESSEE CLAIMED DEPRECIATION ON THE SAID FLAT AT N CPA IN THESE YEARS AND WHETHER THE ASSESSEES CLAIM IN THIS REGARD, IF ANY , WAS CONSIDERED AND DISALLOWED BY THE AO. A PROPER APPRECIATION OF THE FACTS IN THIS ISSUE, IN OUR CONSIDERED VIEW, COULD HAVE A BEARING ON THE EX IGIBILITY TO TAX OF THE PROFIT ON SALE OF THE CAPITAL ASSET, I.E. THE SAID FLAT AT NCPA; WHETHER AS STCG AS HELD BY REVENUE OR AS LTCG AS CLAIMED BY TH E ASSESSEE. 3.3.3 IN THIS FACTUAL MATRIX OF THE CASE, AS DISCUS SED ABOVE, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE AND EQUITY, IT WOULD BE IN THE FITNESS OF THINGS, THAT THE FINDING OF THE LEARNED CIT(A) ON T HIS ISSUE BE SET ASIDE AND DO SO. WE DIRECT THAT THIS ISSUE BE RE-EXAMINED AND ADJUDICATED AFRESH BY THE LEARNED CIT(A) AFTER AFFORDING BOTH THE ASSESSE E AND AO ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS, SUB MISSIONS, REBUTTALS IN THIS REGARD. WE HOLD AND DIRECT ACCORDINGLY. CONSEQ UENTLY, GROUND NO. 2 OF ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATIST ICAL PURPOSES. 4. GROUND NO. 3 DISALLOWANCE OF INTEREST EXPENSES OF ` `` ` 2,80,50,000/- 4.1 IN RESPECT OF THIS GROUND, THE LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THIS ISSUE HAS BEEN RESTORED TO THE FILE OF TH E LEARNED CIT(A) BY DIFFERENT COORDINATE BENCH OF THE TRIBUNAL WITH A D IRECTION TO ADJUDICATE THE SAME AFRESH IN THE ASSESSEES OWN CASE IN ASSES SMENT YEARS 2004-05, 2005-06, 2007-08 AND 2010-11. IN THAT VIEW OF THE M ATTER, FOLLOWING THE SAME, IN THIS YEAR ALSO, THIS ISSUE SHOULD BE RESTO RED BACK TO THE FILE OF THE LEARNED CIT(A). IN THIS REGARD THE LEARNED A.R. PLA CED ON RECORD A COPY OF ITA NO. 1784/MUM/2015 M/S. PALLAVI HOLDINGS P. LTD. 5 THE DECISION OF THE COORDINATE BENCH IN THE ASSESSE ES OWN CASE FOR A.Y. 2010-11 IN ITA NO. 2898/MUM/2013 DATED 29.07.2015. 4.2 THE LEARNED D.R. FOR REVENUE ALSO ADMITTED THAT IN THE ASSESSMENT YEARS MENTIONED ABOVE, THIS ISSUE HAS BEEN RESTORED TO THE FILE OF THE LEARNED CIT(A) FOR FRESH ADJUDICATION. 4.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. WE FIND THAT THE ISSUE OF DISALLOWANCE OF INTEREST EXPENDITURE WAS RECENTLY CONSIDERED BY A C OORDINATE BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR A.Y. 2010-1 1 AND IN ITS ORDER IN ITA NO. 2898/MUM/2012 DATED 29.07.2015 HAS HELD AS UNDER AT PARA 5 THEREOF: - 5. AFTER CONSIDERING AFORESAID CONTENTION, WE FIND THAT THE ASSESSEE HAD BORROWED MONEY FROM BROKERAGE FIRMS FOR MAKING THE INVESTMENT IN SHARES AND SECURITIES PRIOR TO 08.06.1992. THE A SSESSEE HAD CLAIMED DEDUCTION ON ACCOUNT OF INTEREST PAYABLE TO THESE CREDITORS AND INTEREST AMOUNT OF RS. 9,80,50,000/- WAS SHOWN TO THESE BROKERAGE FIRM FOR THE YEAR UNDER CONSIDERATION. OU T OF THE SAID AMOUNT, ONLY RS. 9,852/- WAS CLAIMED AS DEDUCTION A ND NO CLAIM WAS MADE ON THE BALANCE AMOUNT. THE ASSESSING OFFIC ERS CASE WAS THAT THE SAID CLAIM OF INTEREST WAS MAINLY A CONTIN GENT LIABILITY AND THERE IS NO NEXUS OF INTEREST INCOME WITH THE INTER EST EXPENSE. THE LD. CIT(A) FOLLOWING THE EARLIER YEARS ORDER RIGHT FRO M THE AY 2004-05 TO AY 2009-10 HAS DECIDED THE ISSUE AGAINST THE ASSESS EE. WE FIND THAT IN 6 YEARS, THE TRIBUNAL AFTER FOLLOWING VARIOUS OT HER DECISIONS IN THE GROUP CONCERNS OF THE ASSESSEE HAS RESTORED THIS IS SUE TO THE FILE OF THE CIT(A) TO BE ADJUDICATED AFRESH. RESPECTFULLY F OLLOWING THE SAME, WE RESTORE THIS MATTER TO THE FILE OF THE CIT(A) TO DECIDE IN VIEW OF DIRECTION GIVEN BY THE TRIBUNAL IN THE EARLIER YEAR S. ACCORDINGLY, GROUND NO. 3 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 4.3.2 FOLLOWING THE AFORESAID ORDER OF THE COORDINA TE BENCH IN THE ASSESSEES OWN CASE FOR A.Y. 2010-11 (SUPRA), WE RE STORE THIS MATTER TO THE FILE OF THE LEARNED CIT(A) TO RE-EXAMINE AND ADJUDI CATE THE MATTER AFRESH IN LINE WITH THE DIRECTIONS RENDERED IN THOSE YEARS AF TER AFFORDING BOTH THE ASSESSEE AND THE AO ADEQUATE OPPORTUNITY OF BEING H EARD. WE HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY, GROUND NO. 3 OF A SSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1784/MUM/2015 M/S. PALLAVI HOLDINGS P. LTD. 6 5. GROUNDS 4 & 5 CHARGE OF INTEREST UNDER SECTION 23 4A, 234B & 234C OF THE ACT 5.1 THIS GROUND DEALS WITH THE ISSUE OF CHARGING OF INTEREST UNDER SECTION 234A, 234B AND 234C OF THE ACT FOR A.Y. 200 0-01. BOTH COUNSELS FOR THE ASSESSEE AND REVENUE AGREED THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SMT. PRATIMA H. MEHTA IN ITA NO. 1911/MUM/2 015 DATED 08.02.2017 FOR A.Y. 2004-05, WHEREIN IT FOLLOWED TH E DECISION OF THE COORDINATE BENCH IN THAT CASE FOR A.Y. 1996-97 IN I TA NO. 6632/MUM/ 2013 DATED 18.05.2016 AND FOR A.Y. 2009-10 IN ITA N O. 350/MUM/2013 DATED 11.05.2013 IN THAT CASE. IN THE CITED ORDERS FOR A.Y. 2004-05 (SUPRA) AT PARAS 4.1 AND 4.2 THEREOF IT HAS BEEN HELD AS UN DER: - 4.1 THESE GROUNDS DEAL WITH THE ISSUE OF THE CHARG ING OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT FOR A.Y. 200 4-05. COUNSELS FOR BOTH REVENUE AND THE ASSESSEE AGREED THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE COORDIN ATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR A.Y. 1996-9 7 WHEREIN IT FOLLOWED THE EARLIER DECISION OF THE COORDINATE BEN CH FOR A.Y. 2009-10 IN ITA NO. 350/MUM/2013 DATED 11.05.2013, WHEREIN I T WAS HELD AS UNDER AT PARA 4 THEREOF: - 4.GROUND NO.3 AND FOUR DEAL WITH LEVY OF INTEREST U /S. 23B AND 234C OF THE ACT. THE REPRESENTATIVES OF BOTH THE SI DES AGREED THAT THE ISSUE WAS DECIDED IN ASSESSEES OWN CASE, BY THE TRIBUNAL, WHILE ADJUDICATING THE APPEAL FOR THE AY. 2009- 10(ITA/350/MUM/2013 DTD. 11. 05.2015).WE WOULD LIKE TO REPRODUCE THE RELEVANT PORTION OF THE ORDER AND SAM E READS AS UNDER: THE NEXT GROUND OF APPEAL IS ABOUT LEVY OF INTERES T U/S.234 OF THE ACT. BEFORE US, THE AR STATED THAT THE ASSESSEE WAS A NOTIFIED ENTITY, THUS THE PROVISIONS OF S.234A,234B AND 234C OF THE ACT DEEMED TO HAVE COMPLIED WITH, THAT THE ASSE TS WERE ALREADY IN ATTACHMENT OF THE CUSTODIAN APPOINTED UN DER THE PROVISIONS OF SPECIAL COURTS ACT, THAT THE TRIBUNAL IN THE CASE OF THE APPELLANT AND SEVERAL OTHER ENTITIES HAD HELD T HE VIEW IN FAVOUR OF THE APPELLANT THAT THE HONBLE BOMBAY HIG H COURT IN THE CASE OF DIVINE HOLDINGS PVT. LTD. AND CASCADE H OLDINGS PVT. LTD. HAD HELD THE PROVISIONS OF SECTION 234A, 234B AND 234C OF THE ACT WERE MANDATORY AND WERE APPLICABLE TO THE N OTIFIED ENTITIES ALSO, THAT THE ASSESSEE WAS IN THE PROCESS OF FILING AN APPEAL AGAINST THEE SAID ORDER BEFORE THE HONBLE S UPREME COURT, THAT THE INCOME EARNED IN THE YEAR UNDER CON SIDERATION WAS SUBJECTED TO PROVISIONS OF TDS, THAT THE CHANGE ABILITY OF THE ITA NO. 1784/MUM/2015 M/S. PALLAVI HOLDINGS P. LTD. 7 SECTION 234A, 234B AND 234C OF THE ACT SHOULD BE AF TER CONSIDERING THE AMOUNT OF TAX DEDUCTIBLE AT SOURCE ON THE INCOME ASSESSED. THE APPELLANT RELIES IN THIS REGARD ON TH E FOLLOWING DECISIONS. HE RELIED UPON THE CASES OF MOTOROLA INC . V. DCIT [95 ITD 269 (DEL. (SB)], SEDCO FORES DRILLING CO. LTD. [264 ITR 320], NGC NETWORK ASIA LLC [313 ITR 187], SUMMIT BHATACHA RYS [300 ITR (AI) 347 (BOM) (SB), VIJAL GOPAL JINDAL [ITA NO . 4333/DEL/2009 & EMILLO RUIZ BERDEJO [320 ITR 190 (B OM). DR RELIED UPON THE CASES OF DEVINE HOLDINGS PVT. LTD. 3.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT IN THE FALSE OF DE VINE HOLDINGS PVT. LTD. HONBLE BOMBAY HIGH COURT HAS HELD THAT P ROVISIONS OF SECTION 234A, 234B AND 234C WERE APPLICABLE TO THE NOTIFIED PERSON ALSO. THEREFORE, UPHOLDING THE ORDER OF THE FAA TO THAT EXTENT, WE HOLD THAT PROVISIONS OF SECTION 234 OF T HE ACT ARE APPLICABLE. AS FAR AS CALCULATION PART IS CONCERNED , WE FIND MERITS IN THE SUBMISSION MADE BY THE ASSESSEE. THER EFORE, 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 ASS ESSED AND AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. AS A RESULT, APPEAL FILED BY THE ASSESSEE FOR THE A .Y. 2002-03 STANDS PARTLY ALLOWED. RESPECTFULLY, FOLLOWING THE ABOVE WE DIRECT THE AO TO HEAR THE ASSESSEE AND DECIDE THE ISSUE AFRESH. 4.2 FOLLOWING THE DECISION OF THE COORDINATE BENCH IN THE ASSESSEES OWN CASE FOR A.Y. 1996-97 IN ITA NO. 663 2/MUM/2013 DATED 18.05.2016 WE HOLD THAT THE PROVISIONS OF SEC TION 234 OF THE ACT ARE APPLICABLE TO THE CASE ON HAND AND RESTORE THIS ISSUE BACK TO THE FILE OF THE AO FOR DECIDING THE ISSUE AFRESH, I N ACCORDANCE WITH THE FINDINGS RENDERED BY THE COORDINATE BENCH (EXTRACTE D SUPRA AT PARA 4.1) AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUN ITY OF BEING HEARD. 5.2 FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SMT. PRATIMA H. MEHTA FOR A.Y. 1996-97 IN I TA NO. 6632/MUM/ 2013 DATED 18.05.2016 AND FOR A.Y. 2004-05 IN ITA N O. 1911/MUM/2015 DATED 08.021.2017, WE HOLD THAT THE PROVISIONS OF S ECTION 234 OF THE ACT ARE APPLICABLE TO THE CASE ON HAND AND RESTORE THIS ISSUE BACK TO THE FILE OF THE AO FOR DECIDING THE ISSUE AFRESH, IN ACCORDANCE WITH THE FINDINGS OF THE COORDINATE BENCH (EXTRACTED SUPRA AT PARA 5.1) AFTE R AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. ITA NO. 1784/MUM/2015 M/S. PALLAVI HOLDINGS P. LTD. 8 6. GROUND NO. 6 BEING GENERAL IN NATURE, NO ADJUDICATION IS CALLED FOR. WE, THEREFORE, DISMISS THIS GROUND AS INFRUCTUOUS. 7. IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y. 2004- 05 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST MARCH, 2017. SD/ - SD/ - (RAM LAL NEGI) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 1 ST MARCH, 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -52, MUMBAI 4. THE CIT, CENTRAL - II, MUMBAI 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.