M/s. MAFATLAL INDUSTRIES LTD., MUMBAI V. ITO CIR. - 6(3)(2), MUMBAI

ITA 1986/MUM/2006

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8633 (ITAT-MUMBAI)
• Duration Of Justice: 10 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 10-02-2017
• Assessment Year: 1997-1998
• Appeal Filed On: 28-03-2006
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Keywords: Reopening of assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI RAVISH SOOD , JM ITA NO. 1986 / MUM/20 06 ( ASSESSMENT YEAR : 1997 - 98 ) M/S. MAFATLAL INDUSTRIES LIMITED MAFATLAL HOUSE, 1 ST FLOOR, BACKBAY RECLAMATION, MUMBAI 4 00 020 VS. ITO 6 (3)(2), MUMBAI PAN/GIR NO. AAACM2813L APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI GIRISH DAVE WITH MS. KADAMBARI DAVE REVENUE BY SHRI SAURABH KUMAR DATE OF HEARING 10 / 02 /201 7 DATE OF PRONOUNCEME NT 10 / 02 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) FOR THE A.Y.1997 - 98, IN THE MATTER OF ORDER PASSED U/S.143 (3) R.W.S.147 OF THE IT ACT. 2. IN THIS APPEAL, ASSESSEE IS AGGRIEVED FOR REOPENING OF ASSESSMENT AS WELL AS DISALLOWANCE OF RS.1,96,95,515 / - IN RESPECT OF LEASE RENT PAID TO UNION BANK OF INDIA. 3. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE MATERIAL PLACED BEFORE US. THE ASSESSMENT WAS REOPENED ON THE B ASIS OF INFORMATION RECEIVED BY THE AO REGARDING LEASE RENT PAID TO UNION BANK OF INDIA. AFTER GOING THROUGH THE REASONS RECORDED FOR REOPENING AND THE ITA NO. 1986/MUM/2006 M/S. MAFATLAL INDUSTRIES LTD., 2 FINDINGS RECORDED BY AO AND CIT(A), WE ARE SATISFIED THAT REOPENING WAS WELL FOUNDED. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) UPHOLDING REOPENING OF THE ASSESSMENT. 4. WITH REGARD TO THE DISALLOWANCE OF LEASE RENT PAID TO UNION BANK OF INDIA , AO OBSERVED THAT THIS WAS THE AMOUNT SHOWN IN THE BOOKS OF UNION BANK OF INDIA AS RECEIVABLE ON ACCOUNT OF LEASE RENT SHOWN FROM THE ASSESSEE COMPANY M/S. MAFATLAL INDUSTRIES LTD., DURING THE YEAR. THEREFORE, UNLESS AND UNTIL THE ASSESSEE COMES UP WITH ITS OWN FIGURE, IT WOULD BE REASONABLY WISE AND CORRECT TO ADOPT THE FIGURE AS EARLIER ARRIVED IN THE BOOKS OF THE RECEIVER I.E., UNION BANK OF INDIA. THEREFORE, IN VIEW OF THESE FINDINGS, AO DISALLOWED LEASE RENT OF RS.196.95 LAKHS OUT OF TOTAL LEASE RENTS DEBITED IN THE P & L ACCOUNT. 5. CONTENTION OF LEARNED AR WAS THAT NO LEASE RENT WA S PAID TO THE UNION BANK OF INDIA DURING THE YEAR UNDER CONSIDERATION THEREFORE NO DISALLOWANCE OUT OF LEASE RENT PAID TO OTHER PARTIES ARISES. OUR ATTENTION WAS INVITED TO A CHART INDICATING LEASE RENT PAID TO THE VARIOUS CONCERNS W AS PLACED BEFORE US WHICH I NDICATE D THAT PAYMENT OF RS. 1,96,95,515/ - TO UNION BANK OF INDIA WAS TOWARDS COST OF ASSET, THE TOTAL LEASE RENTAL WORKS OUT TO BE RS.3,23,86,130/ - . HOWEVER, NO LEASE RENT WAS PAID DURING THE YEAR IN SO FAR AS ASSET WAS TAKEN ON LEASE FROM 01/04/1997 ONLY . OUR ATTENTION WAS ALSO INVITED TO VARIOUS CLAUSES OF LEASE RENT AGREEMENT DATED 02/09/1996. 6 . CONSIDERING ENTIRE MATERIAL FACTS AS E MERGED OUT OF THE ORDER OF THE LOWER AUTHORITIES VIS - - VIS LEASE AGREEMENT, IT APPEARS THAT THERE IS A ITA NO. 1986/MUM/2006 M/S. MAFATLAL INDUSTRIES LTD., 3 CONTRADICTION IN THE FINDING SO RECORDED. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THE MATTER BACK TO THE FILE OF AO FOR VERIFYING AND DECIDING AFRESH AS PER LAW. HOWEVER, LEARNED DR HAS NOT OBJECTED FOR SUCH RESTORATION. 8. IN THE RESULT, APPEAL OF THE ASSESSE E IS ALLOWED IN PART FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 10 / 02 /2017 S D/ - ( RAVISH SOOD ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUM BAI ; DATED 10 / 02 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//