ASST CEN CIR 23, MUMBAI V. PRATIMA MEHTA, MUMBAI

ITA 1948/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79047 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 1994-1995
• Appeal Filed On: 11-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DANIEL SPECIAL
• Keywords: Rejection of books of accounts; Opportunity of being heard
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ./I.T.A. NO.1957/M/2013 ( AY: 1994 - 1995 ) SMT. PRATIMA H. MEHTA, MADHULI, DR. A.B. ROAD, WORLI, MUMBAI - 400018. / VS. DCIT, CC - 23, MUMBAI. ./ PAN : ABNPM8226G ( / APPELLANT) .. ( / RESPONDENT ) ./I.T.A. NO.1948/M/2013 ( AY: 1994 - 1995 ) DCIT, CC - 23, MUMBAI. / VS. SMT. PRATIMA H. MEHTA, MADHULI, DR. A.B. ROAD, WORLI, MUMBAI - 400018. ./ PAN : ABNPM8226G ( / APPELLANT) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI DHARMESH SHAH / REVENUE BY : SHRI P. DANIEL, SPECIAL COUNSEL / DATE OF HEARING :10.6.2014 / DATE OF PRONOUNCEMENT :10.6.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION AND THEY ARE CROSS APPEALS. BOTH THESE APPEALS ARE FILED AGAINST THE COMMON ORDER OF CIT (A) - 37, MUMBAI DATED 31.12.2012 FOR THE ASSESSMENT YEAR 1994 - 1995. SINCE, THE ISSUES RAISED IN BOTH THE APPEALS ARE CONNECTED, THEREFORE, FOR THE SAKE OF CONVENIENCE, THESE TWO APPEALS ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE AND GROUND WISE ADJUDICATION IS GIVEN IN THE SUCCEEDING PARAGRAPHS. 2. FIRSTLY, WE SHALL TAKE UP THE GROUNDS RAISED IN I.T.A. NO.1957/M/2013 ( AY: 1994 - 1995 ) WHICH READ AS UNDER: 1. THE LD CIT (A) HAS ERRED IN LAW AND IN FACTS IN PASSING THE ORDER U/S 250 OF THE ACT AND PARTLY ALLOWING THE APPEAL FILED BY THE ASSESSEE. 2 2. THE LD CIT (A) HAS ERRED IN LAW AND IN FACTS AND IN NOT APPRECIATING THAT NO INCOME FROM ATTACHED ASSETS CAN BE AS SESS ED IN THE HANDS OF THE ASSESSEE . 3 . THE LD CIT (A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENSES. 4. THE LD CIT (A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPE NSES AMOUNTING TO RS.72,62,907/ - . 5 . THE LD CIT (A) HAS ERRED I N LAW AND IN CONFIRMING THE LEVY OF INTEREST U/S 234A AND 234B OF THE ACT. 3. AT THE OUTSET, SHRI DHARMESH SHAH, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT GROUND NOS. 1, 2 ARE NOT PRESSED . AFT ER HEARING THE LD DR, THE SAID GROUNDS ARE DISMISSED AS NOT PRESSED. 4. GROUND NO .3 & 4 ARE INTERCONNECTED AND RELATE TO THE DISALLOWANCE OF INTEREST EXPENDITURE OF RS. 72,62,907 / - . IN THIS REGARD, AT THE OUTSET, LD COUNSEL MENTIONED THAT AN IDENTICAL ISSUE CAME UP FOR ADJUDICATION BEFORE THE ITAT, MUMBAI IN THE CASE OF HITESH S. MEHTA VS. DCIT VIDE ITA NO.7726 & 7727/M/2010 DATED 26.4.2013, WHEREIN THE TRIBUNAL SET ASIDE THE ISSUE TO THE FILES OF CIT (A) FOR ADJUDICATION OF THE ISSUE AFRESH BY ADJUDICATING THE RESPECTIVE GROUND RELATING TO THE REJECTION / RELIABILITY OF THE BOOKS OF ACCOUNT. PARA 5 FROM THE SAID ORDER OF THE TRIBUNAL (SUPRA) IS RELEVANT IN THIS REGARD AND THE SAME REA DS AS UNDER: 5. GROUND NO.4 RELATES TO THE ACTION OF THE LD CIT (A) IN CONFIRMING THE LIABILITIES AMOUNTING TO RS. 11,24,99,052/ - AND RS. 12,61,36,245/ - RESPECTIVELY FOR THE AYS 2005 - 06 AND 2006 - 07 TOWARDS INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE . IT IS PERTINENT TO NOTE THAT THE FINDINGS GIVEN IN PARA 3.3 ABOVE IN RESPECT OF REJECTION / RELIABILITY OF THE BOOKS OF ACCOUNTS AND THE PROPOSE D ADJUDICATION OF THE LD CIT (A ) IN VIEW OF THE SAID DIRECTION MAY HAVE DIRECT IMPACT ON THE ISSUE OF THE IMPUGNED LIABILITY, WE SET ASIDE THIS ISSUE TO THE FILES OF THE CIT (A) TO ADJUDICATE AFRESH ALONG WITH THE ADJUDICATION OF THE RESPECTIVE GROUND PERTAINING TO THE REJECTION / RELIABILITY OF THE BOOKS OF ACCOUNTS. 5. ON THE OTHER HAND, LD DR DUTIFULLY RELIED ON T HE ORDER OF THE AO/CIT (A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE ORDER OF THE TRIBUNAL IN THE CASE OF HITESH S. MEHTA (SUPRA). WHETHER THE INTEREST LIABILITIES OF RS. 72,62,907 / - CONSTITUTES AS CERTAINED ONE OR NOT IS ALSO LINKED TO THE ISSUE OF REJECTION OF BOOKS OF ACCOUNTS AS THE BOOKS OF ACCOUNT IS THE BASIS FOR COMPUTATION OF BOOK PROFITS U/S 115JA OF THE ACT. THIS IS COMMON ISSUE QUA THE ISSUE ADJUDICATED IN THE CASE OF THE HITESH S. MEHTA ( SUPRA ) AND MATTER WAS SET ASIDE. RESPECTFULLY FOLLOWING THE SAID ORDER OF THE TRIBUNAL, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE RAISED IN GROUND NO.3 SHOULD BE SET ASIDE TO THE FILES OF THE CIT (A) FOR FRESH ADJUDICATION OF THE ISSUE AFTER 3 GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE DECISION IF ANY SHOULD BE TAKEN ONLY AFTER CONSIDERING THE DECISION IN THE CASE OF HITESH S MEHTA, ( SUPRA ) . ACCORDINGLY, GROUND NOS. 3 & 4 ARE SET ASIDE . 7. GROUND NO. 5 RELATES TO CHARGIN G OF INTEREST U/S 234A & 234B OF THE ACT. IN CONNECTION WITH THE CHARGE OF INTEREST U/S 234B OF THE ACT, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE BEING A NOTIFIED PERSON , THERE IS NO CHANGE OF INTEREST. IT IS HIS FURTHER SUBMISSION THAT THE RECEIPTS OF THE ASSESSEE ARE SUBJECTED TO TDS. ON THE CONTRARY, SPECIAL COUNSEL FOR THE REVENUE FILED VARIOUS DECISIONS OF THE TRIBUNAL IN SUPPORT OF THE CHANGE OF INTEREST. THE JUDGM ENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. DEVINE HOLDINGS PVT LTD WAS RELIED ON BY THE SPL. COUNSEL FOR THE REVENUE. DURING THE REBUTTAL TIME, LD COUNSEL SUBMITTED THAT THIS ISSUE SHOULD ALSO REVISIT THE FILE OF THE AO FOR REMOVAL OF CER TAIN INACCURACIES IN CALCULATING THE INTEREST. ACCORDINGLY, GROUND NO.4 IS ALLOWED FOR STATISTICAL PURPOSES. 8. IT DESERVES TO BE NOTICED THAT THE ASSESSEE FILED ADDITIONAL GROUND ALONG WITH LETTER DATED 9 TH JUNE, 2014, WHEREIN IT WAS CONTENDED THAT THE I NCOME ASSESSED BY THE AO OUGHT TO HAVE BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE HANDS OF THE ASSESSEE. HOWEVER, AT THE TIME OF HEARING THE LEARNED COUNSEL ADMITTED THAT THIS ADDITIONAL GROUND WAS WRONGLY RAISED AND IT HAS NO SUBSTANC E. UNDER THESE CIRCUMSTANCES WE REJECT THE ADDITIONAL GROUND . 9. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ./I.T.A. NO.1948/M/2013 ( AY: 1994 - 1995) (BY REVENUE) 10. THIS APPEAL FILED BY THE REVENUE ON 11.3.2013 IS AGAINST THE ORDER OF THE CIT (A) - 37, MUMBAI DATED 31.12.2012 FOR THE ASSESSMENT YEAR 1994 - 1995 . 11. IN THIS APPEAL ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AD IN LAW, WHETHER THE LD CIT (A) WAS RIGHT IN HOLDING THAT THE DEJURE OWNER OF THE SHARES ALONE IS ENTITLED TO THE DIVIDEND DECLARED BY A COMPANY, THOUGH THE ASSESSEE MIGHT BE THE DE FACTO OWNER OF SHARES BUT HAD NO RIGHT TO RECEIVE THE DIVIDEND FROM THE COMPANY UNLESS IT IS THE REGISTERED HOLDER OF THE COMPANY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD CIT (A) WAS RIGHT IN HOLDING THAT THE DIVIDEND OF RS. 1,18,72,076/ - HAS NOT ACCRUED TO THE ASSESSEE AND THEREBY HOLDING THAT SUCH DIVIDEND INCOME 4 COULD NOT FORM PART OF THE TOTAL INCOME OF THE ASSESSEE AND THAT THE DIVIDEND SHOULD BE REGISTERED TO RS. 61,38,881/ - AS RETURNED BY THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD CIT (A) WAS RIGHT IN ACCEPTING THE ASSESSEES SUBMISSION, THAT EVEN THOUGH THE AMOUNTS WERE PAID FOR ACQUIRING THE DIVIDEND, SUCH DIVIDEND HAVE NOT BEEN DELIVERED TO THE ASSESSEE COMPANY AND THE CHARGE IN OWNERSHIP OF THE DIVIDEND HAVE NOT BEEN REGISTERED AND NOTIFIED AND THER EFORE, THE ASSESSEES NAME DID NOT APPEAR IN THE DIVIDEND REGISTERS OF THE RESPECTIVE COMPANIES ON THE RECORD DATE AND THEREFORE, IT COULD NOT HAVE REC EI VED AND DIVIDEND AT ALL. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE L D CIT (A) WAS RIGHT IN HOLDING THAT THE DEJURE OWNER OF THE DEBENTURES ALONE IS ENTITLED TO THE INTEREST DECLARED BY A COMPANY, THOUGH THE ASSESSEE MIGHT BE THE DE FACT CO OWNER OF SHARES BUT HAD NO RIGHT TO RECEIVE THE INTEREST FROM THE COMPANY UNLESS IT IS THE REGISTERED HOLDING OF THE COMPANY. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD CIT (A) WAS RIGHT IN HOLDING THAT THE DEBENTURE INTEREST OF RS. 16,34,999/ - HAS NOT ACCRUED TO THE ASSESSE E AND THEREBY HOLDING THAT S UCH INTEREST INCOME COULD NOT FORM PART OF THE TOTAL INCOME OF THE ASSESSEE AND THAT THE DEBENTURE INTEREST SHOULD BE RESTRICTED TO RS. 7,88,560/ - AS RETURNED BY THE ASSESSEE. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD CIT (A) WAS RIGHT IN ACCEPTING THE ASSESSEES SUBMISSION, THAT EVEN THOUGH THE AMOUNTS WERE PAID FOR ACQUIRING THE DEBENTURES, SUCH DEBENTURES HAVE NOT BEEN DELIVERED TO THE ASSESSEE COMPANY AND THE CHANGE IN OWNERSHIP OF THE DEBENTURES HAVE NOT BEEN REGISTERED A ND NOTIFIED AND THEREFORE, THE ASSESSEES NAME DID NOT APPEAR IN THE DEBENTURE REGISTERS OF THE RESPECTIVE COMPANIES ON THE RECORD DATE AND THEREFORE, IT COULD NOT HAVE RECEIVED THE INTEREST AT ALL. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD CIT (A) WAS RIGHT IN DELETING THE ADDITION OF RS. 27,42,868/ - MADE ON ACCOUNT OF INTEREST ON TERM DEPOSITS WHICH WAS ESTIMATED ON THE BASIS DETAILS AVAILABLE AND FINDINGS MADE BY THE APEX COURT IN THE SUBSEQUENT YEAR. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD CIT (A) WAS RIGHT IN HOLDING THAT THE TERM DEPOSIT INTEREST OF RS. 27,42,868/ - HAS NOT ACCRUED TO THE ASSESSEE AND THEREBY HOLDING THAT SUCH INTER E ST INCOME COULD NOT FORM PART OF THE TOTAL INCOME OF THE ASSESSEE AND THAT THE TERM DEPOSIT INTEREST SHOULD BE RESTRICTED TO RS. 3,0 0 ,096/ - AS RETURNED BY THE ASSESSEE. 12. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE 2 ISSUES RAISED IN GROUND NOS. 1 TO 6 RELATING TO THE ADDITION ON ESTIMATION OF DIVIDEND INCOME AND DEBENTURE INTEREST INCOME ARE COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF HITESH S. MEHTA VS. DCIT VIDE ITA NO.5587 TO 5589/M/2011 AND OTHERS DATED 12.6.2013 FOR AY 1994 - 95 AND OTHERS. IN THIS REGARD, LD COUNSEL BROUGHT OUR ATTENTION TO THE CONTENTS OF PARA NOS. 7.1 TO 7.6 OF THE SAID TRIBUNALS ORDER AND DEMONSTRATED THE FACT THAT THE ISSUES ADJUDICATED BY THE TRIBUNAL ARE IDENTICA L AND THE TRIBUNAL HAS ALLOWED THE CLAIMS OF THE ASSESSEE IN HIS FAVOUR. FOR THE SAKE OF COMPLETENESS OF THE THIS ORDER, WE REPRODUCE THE SAID PARA NOS. 7.1 TO 7.6 OF THE TRIBUNALS ORDER (SUPRA) WHICH READ AS UNDER: 5 7.1. FOR THE ASSESSMENT YEAR 1994 - 95, GROUND NOS. A, B & C OF GROUND NO.1 AND FOR ASSESSMENT YEAR 1995 - 96, GROUND NOS.1 TO 3 ARE COMMON, WHICH ARE AGAINST IN HOLDING THAT THE DEJURE OWNER OF THE SHARE ALONE IS ENTITLED TO THE DIVIDEND DECLARED BY A COMPANY, THOUGH THE ASSESSEE COMPANY MIGHT BE DEFACTO OWNER OF SHARE BUT HAS NO RIGHT TO RECEIVE THE DIVIDEND FROM THE COMPANY UNLESS IT IS THE REGISTERED SHAREHOLDER OF THE COMPANY. 7.2. THE SUCCINCT FACTS OF THE CASE ARE THAT THE AO MADE ADDITION OF RS. 1,60,64,916/ - FOR ASSESSMENT YEAR 1994 - 95 O N ACCOUNT OF ESTIMATION OF DIVIDEND INCOME. THE AO OBSERVED THAT THE DIVIDEND IS CALCULATED ON THE BASIS OF THE PUBLISHED RATES OF DIVIDEND / INTEREST OF THE RELEVANT COMPANIES, THE INCOME SHOWN AS PER THE TDS CERTIFICATES AVAILABLE ON RECORD, OR THE CRED IT IN THE BANK ACCOUNT. THE HIGHER OF THE THREE ARE TAKEN AS DIVIDEND INCOME. IN DEFENSE, THE ASSESSEE SUBMITTED THAT THE ADDITION MADE BY THE AO IS PURELY ON ESTIMATION BASIS. THE ASSESSEE FILED THE DETAILED SUBMISSION EXPLAINING THE INCORRECTNESS IN T HE DETERMINATION OF THE INCOME BY THE AO. THE ASSESSEE ALSO FILED DETAILED SCRIP WISE BREAKU P OF THE DIVIDEND DETERMINED BY THE AO AND EXPLAINED THE FALLACY IN THE SAID WORKING OF THE AO IT WAS ALSO ARGUED THAT THE ESTIMATION OF DIVIDEND INCOME WAS PUREL Y ARBITRARY AND BUSINESS. RELIANCE WAS PLACED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S. AATUR HOLDINGS PVT. LTD REPORTED IN 302 ITR 190, WHEREIN ON IDENTICAL FACTS, IT WAS HELD THAT THE DIVIDEND INCOME CANNOT BE ASSESSED ON ESTI MATION BASIS AND THE INCOME CAN BE TAXED ONLY IN THE HANDS OF THE REGISTERED HOLDERS. 7.3. AFTER CONSIDERING THE ORDER OF THE AO AND THE SUBMISSION MADE BY THE ASSESSEE , LD CIT (AS) NOTICED THAT THE ISSUE OF DIVIDEND AND DEBENTURE INTEREST WAS REMANDED TO THE FILE OF THE AO FOR VERIFICATION, TO PROVIDE THE BREAKUP OF DIVIDEND AND DEBENTURE INTEREST INCOME UPON NECESSARY VERIFICATION IN THIS REGARD. IN THE REMAND PORT DATED 14.6.2011, THE AO HAS STATED THAT THE INCOME WAS DETERMINED BY THE AO SINCE THE ASS ESSEE HAD NOT FILED THE EVIDENCES DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN THE REJOINDER, THE ASSESSEE SUBMITTED THAT THE ADDITION CANNOT BE LEGALLY MADE ON ESTIMATION BASIS IN THE LIGHT OF THE DECISION OF THE BOMBAY HIGH COT IN THE CASE OF AATUR H OLDINGS PVT LTD (SUPRA) AND, HENCE, THE ADDITION IS INCORRECT ON THE FACT OF IT. FURTHER, DETAILED SUBMISSIONS WERE ALSO FILED. THEREAFTER, CONSIDERING THE SUBMISSION AND THE REJOINDER, LD CIT (A) FOUND THAT THE ISSUE IS SQUARELY COVERED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF AATUR HOLDINGS PVT LTD (SUPRA). THE RATIO OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IS ALSO REPRODUCED IN THE ORDER OF THE LD CIT (A) AT PAGES 3 & 4. AFTER CONSIDERING THE RATIO OF THE DECISION OF TH E HONBLE BOMBAY HIGH COURT, LD CIT (A) NOTICED THAT THE HONBLE HIGH COURT HAS DISAGREED WITH THE FINDINGS OF THE AO THAT IN RESPECT OF THE CATEGORIES OF THE OWNERSHIP OF THE SHARES VIZ; NON - DELIVERY OF SHARES, SHARES NOT REGISTERED, SHARES HELD IN BENAMI AND SHARES WHICH ARE LOST OR STOLEN; THE OWNERSHIP OF THE SHARES ALWAYS BELONGS TO THE ASSESSEE AND HENCE THE ASSESSEE WAS LIABLE TO TAX ON DIVIDEND DECLARED BY THE COMPANIES. IT WAS ALSO OBSERVED BY THE HONBLE HIGH COURT THAT MERELY BECAUSE THE ASSESSE E HAS PURCHASED THE SHARES OR HE IS FOUND TO HAVE BEEN HOLDING SHARES IN SOME COMPANIES, IT CANNOT BE SAID THAT THE DIVIDEND INCOME ACCRUED TO THE SAID ASSESSEE, IF THE ASSESSEE IS NOT RIGHTFUL OWNER OF THE SHARES. IT WAS ALSO HELD BY THE HONBLE JURISDIC TIONAL HIGH COURT TH A T THE DIVIDEND CAN BE TAXED ONLY IN THE HANDS OF THE REGISTERED SHAREHOLDER AND HENCE, IF THE ASSESSEE IS NOT THE REGISTERED SHAREHOLDER, NO INCOME CAN BE TAXED IN RESPECT OF THE DIVIDEND DECLARED ON THESE SHARES. AFTER ANALYZING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT AND THE FACTS OF THE PRESENT CASE, LD CIT (A) FOUND THAT THE ISSUE IS SQUARELY COVERED BY THE RATIO OF DECISION IN THE CASE OF AATUR HOLDINGS PVT LTD (SUPRA). ACCORDINGLY, HE DELETED THE ADDITION. LD CIT (A) BY FURTHER OBSERVING THAT SINCE THE ASSESSEE HAS OFFERED DIVIDEND INCOME ON HIS REGISTERED HOLDINGS AT RS. 1,00,98,386/ - , THEREFORE, THE AO WAS DIRECTED TO ASSESS THE INCOME FROM DIVIDEND AT RS. 1,0,98,380/ - AFTER MAKING DUE VERIFICATION IN THIS REGARD . 7.4. LD DR PLACED RELIANCE ON THE ORDER OF THE AO ON THIS ISSUE. 6 7.5. ON THE OTHER HAND, LD COUNSEL OF THE ASSESSEE PLACED RELIANCE ON THE ORDER OF THE CIT (A). IT WAS SUBMITTED THAT THE HONBLE JURISDICTIONAL HIGH COURT IN ANOTHER CASE RELATING TO THE SAME GROUP OF ASSESSEE I.E., IN THE CASE OF M/S. PALLAVI HOLDING PVT LTD IN APPEAL NO.520/2007 IN NOM NO.1290/2007, DATED 12.3.2008, HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE FOLLOWING THE DECISION OF THE SAME HIGH COURT I.E., IN THE CASE OF AATUR HO LDINGS PVT LTD (SUPRA). IT WAS FURTHER SUBMITTED THAT THIS DECISION OF THE HONBLE BOMBAY HIGH COURT HAS BEEN CONFIRMED BY THE HONBLE SUPREME COURT VIDE ORDER DATED 1.8.2011 IN SPECIAL LEAVE TO APPEAL (CIVIL) NO(S). 2922/2008. COPIES OF THESE ORDERS WER E ALSO FILED. ACCORDINGLY, IT WAS SUBMITTED THAT THE ISSUE IS NOW SQUARELY COVERED BY THE DECISION OF THE HONBLE BOMBAY HIGH COURT. 7.6. AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, WE FOUND NO INFIRMITY IN THE FINDINGS OF THE LD CIT (A), WHO ALLOWED THE ISSUE INFAVOURU OF THE ASSESSEE FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF AATUR HOLDINGS PVT LTD (SUPRA). THIS DECISION HAS ALSO BEEN CONFIRMED AGAIN BY THE HON BLE JURISDICTIONAL HIGH COURT IN THE CA SE OF M/S. PALLAVI HOLDING PVT. LTD (SUPRA), WHICH HAS BEEN CONFIRMED BY THE HONBLE SUPREME COURT. THE FINDING OF THE LD CIT (A) REMAINED UNCONTROVERTED AS NO OTHER MATERIAL WAS BROUGHT ON RECORD TO HOLD THAT THE FINDING OF THE LD CIT (A) IS NOT CORRECT. ACCORDINGLY, WITHOUT GOING INTO DETAIL FURTHER, WE CONFIRM THE ORDER OF THE CIT (A) ON THIS ISSUE. 13. FROM THE ABOVE, IT IS EVIDENT THAT THE ESTIMATION OF DIVIDEND INCOME AND DEBENTURE INTEREST INCOME ARE THE ISSUES UNDER CONSIDERATION BEFORE THE TRIBU NAL AND THE SAID ORDER OF THE TRIBUNAL (SUPRA) DATED 12.6.2013 WAS RELIED ON BY THE AO FOR MAKING ADDITIONS IN THE ASSESSEES CASE. RELYING ON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PALLAVI HOLDINGS PVT LTD VS. DCIT VIDE ITA NO.8599/M/2010, DATED 17.7.2013 AND M/S. AATUR HOLDINGS PVT LTD, 302 ITR 190 (SUPRA), THE TRIBUNAL HELD THAT SUCH ESTIMATIONS ARE UNSUSTAINABLE IN LAW ON THE GIVEN FACTS OF THE CASE. ON PERUSAL OF THE SAME, WE FIND THE SAID DECISION IS RIGHTLY A PPLICABLE TO THE ISSUES RAISED IN THE PRESENT CASE VIDE GROUND NOS.1 TO 6. CONSIDERING THE SAME, WE ARE OF THE OPINION THAT THE CIT (A) HAS RIGHTLY GRANTED THE RELIEF AND THEREFORE, THE SAME DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NOS. 1 TO 6 ARE RAISED BY THE BY THE REVENUE ARE DISMISSED . 14. THIRD ISSUE RAISED IN GROUND NOS. 7 AND 8 ARE ALSO FOUND ADJUDICATED ON IDENTICAL FACTS IN THE CASE OF HITESH S. MEHTA. PARA 8.4 OF THE SAID ORDER OF THE TRIBUNAL DATED 12.6.2013 (SUPRA) IS RELEVANT IN THIS REGARD. CONSIDERING THE IMPORTANCE OF THE SAID PARA 8.4, THE SAME IS REPRODUCED HERE WHICH READ AS UNDER: 8.4. AFTER CONSIDERING THE ORDER OF THE AO AND CIT (A), WE FOUND NO REASON TO INTERFERE IN THE FINDINGS OF THE LD CIT (A), WHICH ARE FINDIN GS OF FACT. NEITHER ANY MATERIAL WAS BROUGHT ON RECORD NO ANY OTHER EVIDENCE WAS FILED TO HOLD THAT THE FINDINGS OF THE LD CIT (A) ARE CONTRARY TO THE FACTS. A CLEAR CUT FINDING HAS BEEN GIVEN BY THE LD CIT (A) THAT WHATEVER THE FDRS ARE MADE IN ASSESSME NT YEAR 1996 - 97, THEY WERE MADE BY THE CUSTODIAN APPOINTED UNDER THE ORDER OF THE HONBLE SPECIAL COURT AND NOT BY THE ASSESSEE. WHATEVER, THE INTEREST CREDITED ON THE FDRS, THEY WERE NOT RELATING TO THESE TWO YEARS I.E, 1994 - 95 & 1995 - 96. THEREFORE, THE RE WAS NO QUESTION 7 OF MAKING ANY ESTIMATING INTEREST INCOME ON ACCOUNT OF FDRS MADE DURING THE ASSESSMENT YEAR 1996 - 97 FOR THE YEAR UNDER CONSIDERATION. WHATEVER THE INCOME WAS EARNED DURING THESE TWO YEARS, THE ASSESSEE HAS ALREADY OFFERED THE SAME FOR T AX HIMSELF. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE CONFIRM THE ORDER OF THE LD CIT (A) FOR THE AFORESAID ISSUE INVOLVED IN BOTH OF THE YEARS. 15. FROM THE ABOVE, IT IS EVIDENT THAT THE INTEREST ON FDRS IS NOT TO BE CHARGED FOR THE Y EARS 1994 - 1995 AND 1995 - 1996. ON THE OTHER HAND, LD DR HAS NOT BROUGHT ANY CONTRARY MATERIAL TO CONTROVERT THE SAME. THEREFORE, IN OUR CONSIDERED VIEW THE CIT (A) HAS RIGHTLY ADJUDICATED THE ISSUE AND GRANTED RELIEF TO THE ASSESSEE. ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT (A) AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY , GROUND NOS.7 & 8 RAISED BY THE REVENUE ARE DISMISSED. 16. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2014. S D / - S D / - (AMIT SHUKLA) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 10.6 .2014 . . ./ 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