M/S. GROWMORE RESEARCH & ASSET MGT LTD., MUMBAI V. DCIT, CC 31, MUMBAI

ITA 1996/MUM/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2613 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2000-2001
• Appeal Filed On: 31-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DANIEL
• Assessee Lawyers: K A SHETTI
• Keywords: Additional evidence
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL G BENCH, MUM BAI. BEFORE SHRI R.V.EASWAR, SR.V.P. AND SHRI J.S UDHAKAR REDDY, AM S NO . ITA NOS. APPELLANTS RESPONDENT ASSTT. YEAR 1 1995/MUM/09 M/S. GROWMORE RESEARCH & ASSET MGT. LTD. 32, MADHULI,DR.A.B. ROAD, WORLI, MUMBAI 400 018. PAN: AAACG 4936 C DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-31, MUMBAI 1999-00 2 1996/MUM/09 M/S. GROWMORE RESEARCH & ASSET MGT. LTD. MUMBAI DCIT, CC- 31, MUMBAI 2000-01 3 1997/MUM/09 M/S. GROWMORE RESEARCH & ASSET MGT. LTD. MUMBAI DCIT, CC- 31, MUMBAI 1995-96 4 1998/MUM/09 M/S. GROWMORE RESEARCH & ASSET MGT. LTD. MUMBAI DCIT, CC- 31, MUMBAI 1997-98 5 1999/MUM/09 M/S. GROWMORE RESEARCH & ASSET MGT. LTD.MUMBAI DCIT, CC- 31, MUMBAI 1998-99 6 2000/MUM/09 M/S. GROWMORE RESEARCH & ASSET MGT. LTD.MUMBAI DCIT, CC- 31, MUMBAI 2003-04 7 2004/MUM/09 M/S. GROWMORE LEASING & INV. LTD.MUMBAI. PAN:AAACG 4937D DCIT, CC- 31, MUMBAI 2003-04 APPELLANTS BY : MR. VIJAY MEHTA & MR. K.A. SHETTI RESPONDENT BY : MR. P. DANIEL, DR O R D E R PER BENCH: ITA NOS. 1995 TO 2000/MUM/2009 RELATE TO M/S. GROWMORE RESEARCH & ASSETS MANAGEMENT LTD. AND ITA NO. 2004/MUM/2009 RELATES TO M/S. GROWMORE LEASING & IN VESTMENTS LTD. BOTH ARE GROUP COMPANIES. SINCE THE ISSUES IN VOLVED IN THE APPEALS ARE IDENTICAL AND SINCE ALL THE APPEALS WER E HEARD TOGETHER, THEY ARE DISPOSED OF BY A SINGLE ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.1995 TO 2000/M/09 & 2004/M/09 2 2. WE MAY TAKE UP THE APPEAL FOR THE ASSESSMENT YEA R 1995-96 IN ITA NO.1997/MUM/2009 AS REPRESENTATIVE OF ALL THE A PPEALS. THE APPEALS ARE DIRECTED AGAINST THE ORDERS PASSED BY T HE CIT(A) BY WHICH THE CIT(A) REFUSED TO ADMIT THE ADDITIONAL EV IDENCE ADDUCED BY THE ASSESSEE UNDER RULE 46A OF THE INCOME TAX RULES AND ALSO DISMISSED THE GROUNDS ON MERITS. ALL THE ASSESSMENT S IN ALL THE APPEALS WERE COMPLETED UNDER SECTION 144 OF THE INC OME TAX ACT. THE ASSESSEES ARE ALL NOTIFIED PERSONS UNDER THE SP ECIAL COURT (TRIAL OF OFFENCES RELATING TO TRANSACTION IN SECURITIES ) ACT, 1992 AND THEIR ASSETS INCLUDING THE BANK ACCOUNTS WERE ATTACHED AN D VESTED IN THE HANDS OF CUSTODIAN APPOINTED UNDER THE SAID ACT. AG AINST THE EX- PARTE ASSESSMENTS MADE BY THE ASSESSING OFFICER IN WHICH HUGE DEMANDS WERE RAISED AGAINST THE ASSESSEE, APPEALS W ERE FILED BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEES FILED AN APPLICATION UNDER RULE 46A OF THE INCOME TAX RULES AND SUBMITTED THAT THE BOOKS OF ACCOUNTS TOGETHER WITH THE COMPUTATION OF INCOME, W HICH WERE NOT FILED BEFORE THE ASSESSING OFFICER, SHOULD BE ADMIT TED AS ADDITIONAL EVIDENCE AND THE APPEALS BE DISPOSED OF ACCORDINGLY . IT WAS POINTED OUT THAT THE ASSESSEES COULD NOT ADDUCE THE EVIDENC E BEFORE THE ASSESSING OFFICER DUE TO VARIOUS CIRCUMSTANCES WHIC H WERE BEYOND THEIR CONTROL AND ALSO BECAUSE SUFFICIENT TIME WAS NOT GRANTED BY THE ASSESSING OFFICER TO PRODUCE THEM. THE CIT(A) HOWE VER, HELD THAT THE ASSESSEES WERE CHRONIC DEFAULTERS, THAT THERE WERE NO INSURMOUNTABLE DIFFICULTIES FACED BY THEM, THAT THE Y DID NOT RESPOND TO THE VARIOUS NOTICES ISSUED BY THE ASSESSING OFFI CER AND THUS THERE IS NO MERIT IN THE APPLICATION FILED FOR ADMISSION OF ADDITIONAL EVIDENCE. HE ACCORDINGLY REJECTED THE PLEA AND PROC EEDED TO EXAMINE THE GROUNDS RAISED BY THE ASSESSEES AND FINDING NO MERIT IN THEM, DISMISSED THEM. THUS ALL THE APPEALS FILED BY THE A SSESSEES WERE DISMISSED. ITA NOS.1995 TO 2000/M/09 & 2004/M/09 3 3. THE ASSESSEES HAVE FILED THE PRESENT APPEALS BEF ORE THE TRIBUNAL AND IN THE MEMORANDUM OF GROUNDS OF APPEAL THE ORDERS OF THE CIT(A) HAVE BEEN QUESTIONED ON SEVERAL GROUNDS. THE MAIN GROUND HOWEVER IS GROUND NO.3 IN WHICH THE ASSESSEE S HAVE CONTESTED THE DECISION OF THE CIT(A) NOT TO ADMIT T HE BOOKS OF ACCOUNTS AS ADDITIONAL EVIDENCE UNDER RULE 46A. THE OTHER GROUNDS RELATE TO THE VARIOUS ADDITIONS AND DISALLOWANCES M ADE IN THE ASSESSMENTS COMPLETED UNDER SECTION 144 AS ALSO TO THE LEVY OF INTEREST UNDER SECTIONS 234A TO 234C OF THE ACT. 4. AT THE TIME OF THE HEARING, THE LEARNED REPRESEN TATIVE FOR THE ASSESSEE DREW OUR ATTENTION TO THE ORDER OF THE MUM BAI BENCH K OF THE TRIBUNAL DATED 29.01.2008 IN A BATCH OF 41 APPE ALS IN THE CASE OF M/S.TREASURE HOLDINGS PVT. LTD. AND SEVERAL CONNECT ED CASES IN ITA NOS. 2968/MUM/2007 ETC. AND SUBMITTED THAT ALL THE 41 APPEALS WERE OF THE SAME GROUP AND THEY INCLUDED THE PRESEN T ASSESSEES ALSO NAMELY M/S.GROWMORE RESEARCH & ASSET MANAGEMENT LTD . (ITA NOS. 493 & 855/MUM/2007) (ASSESSMENT YEAR 2001-02) AND M /S. GROWMORE LEASING & INVESTMENT LTD. (ITA NOS. 486 & 857/MUM/2007) (ASSESSMENT YEAR 2001-02). COPIES OF THE ORDER WERE FILED AND IT WAS POINTED OUT THAT IN IDENTICAL CIRCUMSTANCES THE ASSESSING OFFICER HAD COMPLETED THE ASSESSMENTS OF THOSE ASSESSEES UNDER SECTION 144 OF THE ACT AND THE CIT(A) HAD REJ ECTED SEVERAL APPEALS ON THE GROUND THAT THE ADDITIONAL EVIDENCE NAMELY THE BOOKS OF ACCOUNT OF THE ASSESSEES SOUGHT TO BE ADDUCED BE FORE HIM CANNOT BE ENTERTAINED UNDER RULE 46A. ON FURTHER APPEALS B EFORE THE TRIBUNAL, THE TRIBUNAL HELD THAT THE ASSESSEES COUL D NOT LOCATE THE EXACT DETAILS IN ORDER TO EXPLAIN THEIR POSITION BE FORE THE ASSESSING OFFICER BECAUSE THE BUSINESS PREMISES HAD TO BE VAC ATED, BANK ACCOUNTS WERE ATTACHED, THE ASSETS WERE PUT UP FOR SALE, THE EMPLOYEES HAD LEFT THE ASSESSEES, PROFESSIONALS HAD REFUSED TO RENDER ITA NOS.1995 TO 2000/M/09 & 2004/M/09 4 SERVICES BECAUSE THEIR FEES WERE NOT PAID AND IN TH ESE CIRCUMSTANCES, THE ASSESSEES COULD NOT FURNISH THE REQUIRED DETAIL S OR PRODUCE THE BOOKS OF ACCOUNTS BEFORE THE ASSESSING OFFICER, WHI CH INVITED EX- PARTE ASSESSMENTS. HOWEVER, SUBSEQUENT TO THE ASSE SSMENT ORDERS THE ASSESSEES WERE ABLE TO LAY THEIR HANDS ON THE M ATERIAL AND PREPARE THE BOOKS OF ACCOUNTS WHICH WERE ADDUCED BE FORE THE CIT(A) AS ADDITIONAL EVIDENCE. THE TRIBUNAL HELD IN THESE CIRCUMSTANCES THAT THE ADDITIONAL EVIDENCE OUGHT TO HAVE BEEN ADM ITTED BY THE CIT(A) AND DIRECTED HIM TO CONSIDER THE BOOKS OF AC COUNTS AND OTHER MATERIAL PRODUCED BY THE ASSESSEES WHICH IS ESSENTI AL FOR DETERMINATION OF THE TRUE INCOME OR LOSS OF THE ASS ESSEES. IT IS SUBMITTED BEFORE US ON THE BASIS OF THE AFORESAID O RDER OF THE TRIBUNAL THAT SINCE THE PRESENT ASSESSEES ALSO BELO NG TO THE SAME GROUP AND ARE COVERED BY THE AFORESAID ORDER OF TH E TRIBUNAL FOR THE ASSESSMENT YEAR 2001-02 AND ALSO SINCE THE BOOKS OF ACCOUNTS COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER FOR TH E SAME REASONS, THE SAID ORDER OF THE TRIBUNAL SHOULD BE FOLLOWED A ND THE MATTER SHOULD BE RESTORED TO THE CIT(A) WITH SIMILAR DIREC TIONS. THE LEARNED SPECIAL COUNSEL APPEARING FOR THE DEPARTMENT DID NO T CONTEST THE SUBMISSION MADE ON BEHALF OF THE ASSESSEES SINCE TH E ISSUE WAS COVERED BY THE AFORESAID ORDER OF THE TRIBUNAL IN T HE BATCH OF 41 APPEALS WHICH INCLUDED THE PRESENT ASSESSEES ALSO. THEREFORE RESPECTFULLY FOLLOWING THE AFORESAID ORDER OF THE T RIBUNAL, WE DIRECT THE CIT(A) TO ADMIT THE ADDITIONAL EVIDENCE AND DIS POSE OF THE APPEALS IN ACCORDANCE WITH LAW. 5. IN THE LIGHT OF OUR ABOVE DIRECTION, IT IS NOT N ECESSARY OR PROPER TO DEAL WITH THE OTHER GROUNDS QUESTIONING THE VARI OUS ADDITIONS AND DISALLOWANCES MADE IN THE EX-PARTE ASSESSMENTS AND CONFIRMED BY THE CIT(A). THE LEARNED REPRESENTATIVE FOR THE ASSE SSEES HOWEVER SUBMITTED THAT SO FAR AS THE LEVY OF INTEREST UNDER SECTIONS 234A TO ITA NOS.1995 TO 2000/M/09 & 2004/M/09 5 234C IS CONCERNED, THE SAME SHOULD BE DELETED FOLLO WING THE ORDER OF THE TRIBUNAL DATED 9 TH OCTOBER, 2009 IN THE CASE OF M/S. ORION TRAVELS PVT. LTD. IN ITA NOS.6888 & 6889/MUM/2008 F OR THE ASSESSMENT YEARS 2004-05 & 2005-06. HE POINTED OUT THAT IN THIS ORDER IT HAS BEEN HELD THAT SINCE A NOTIFIED PERSON CANNOT PAY ADVANCE TAX IN LIEU OF THE PROVISIONS OF THE SPECIA L COURTS ACT WHICH TAKE PRECEDENCE OVER THE INCOME TAX ACT, THE ASSESS EES CANNOT BE TREATED AS DEFAULTING PARTIES AND INTEREST LEVIED O N THAT BASIS. THE LEARNED SPECIAL COUNSEL FOR THE DEPARTMENT HOWEVER SUBMITTED THAT SINCE ENTIRE APPEALS ARE TO BE DISPOSED OF BY THE C IT(A) AFRESH IN VIEW OF OUR DECISION TO ADMIT THE ADDITIONAL EVIDENCE, I T SHOULD BE LEFT TO THE CIT(A) TO CONSIDER THE GROUND RELATING TO LEVY OF INTEREST. WE ARE INCLINED TO AGREE WITH THE LEARNED SPECIAL COUNSEL FOR THE DEPARTMENT. THEREFORE NO DECISION RELATING TO THE LEVY OF INTER EST IS RENDERED. IT WILL BE FOR THE CIT(A) WHILE DISPOSING OF THE APPEA LS AFRESH AND IN ACCORDANCE WITH LAW TO DEAL WITH THE GROUND, IF ANY , TAKEN BEFORE HIM AGAINST THE LEVY OF INTEREST. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE ALLOWED BUT ONLY FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 30 TH DAY OF DECEMBER, 2009. SD/- (J.SUDHAKAR REDDY) SD/- ( R.V.EASWAR ) ACCOUNTANT MEMBER SENI OR VICE PRESIDENT MUMBAI, DATED 30 TH DECEMBER, 2009. SOMU ITA NOS.1995 TO 2000/M/09 & 2004/M/09 6 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT, CENT.II, MUMBAI. 4. THE CIT(A),CENT.IV, MUMBAI 5. THE DR G BENCH /TRUE COPY/ BY ORDE R ASSTT. REGISTRAR, I.T.A.T, MUMBAI