ACIT 11(3), MUMBAI V. P.C. HANSOTIA & CO, MUMBAI

ITA 2152/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93096 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 23-03-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 18-03-2013
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: K K VED; V J ASRANI
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C MUMBAI. BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER ITA NO 2152 /MUM/2013 ASSESSMENT YEAR: - 2006 - 07 ASSISTANT COMMISSIONER OF INCOME TAX 11(3), ROOM NO. 446, 4 TH FLOOR, AAYKAR BHAVAN, MUMBAI 400 020. VS.` P.C. HANSOTIA & CO. 12, DR. ANNIE BESANT ROAD, OPP. SHIV SAGAR ESTATE WORLI, MUMBAI 400 018 PAN/GIR NO. AAAFP 4371 M APPELLANT RESPONDENT ITA NO 2153/MUM/2013 ASSESSMENT YEAR: - 2007 - 08 ASSISTANT COMMISSIONER OF INCOME TAX 11(3), ROOM NO. 446, 4 TH FLOOR, AAYKAR BHAVAN, MUMBAI 400 020. VS.` P.C. HANSOTIA & CO. 12, DR. ANNIE BESANT ROAD, OPP. SHIV SAGAR ESTATE WORLI, MUMBAI 400 018 PAN/GIR NO. AAAFP 4371 M APPELLANT RESPONDENT ITA NO 2648/MUM/2013 ASSESSMENT YEAR: - 2007 - 08 P.C. HANSOTIA & CO. 12, DR. ANNIE BESANT ROAD, OPP. SHIV SAGAR ESTATE WORLI, MUMBAI 400 018 VS.` ADDITIONAL COMMISSIONER OF INCOME TAX 11(3) AAYKAR BHAVAN, MAHARISHI KARVE MARG, MUMBAI 400 020. PAN/GIR NO. AAAFP 4371 M APPELLANT RESPONDENT REVENUE BY SHRI PREMANAND J. ASSESSEE BY SHRI. K.K. VED AND SHRI V.J. ASRANI DATE OF HEARING 30.06.2015 DATE OF PRONOUNCEMENT 30.06.2015 2 P.C. HANSOTIA & CO. PAGE 2 OF 6 ORDER PER G.S. PANNU, AM THE CAPTIONED THREE APPEALS RELATE TO THE SAME ASSESSEE INVO LVING CERTAIN COMMON ISSUES, THEREFORE, THEY HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. FIRST , WE SHALL TAKE UP THE APPEAL OF THE REVENUE DIRECTED AGAINST THE ORDER OF THE COMMIS SI ONER OF INCOME TAX (APPEALS) [ HEREINAFTER REFERRED TO AS THE CIT(A) ] DATED 29.11.2012, WHICH IN - TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) (II) OF THE INCOME TAX ACT, 1961( HEREINAFTER REFERRED TO AS THE ACT) DATED 27.12.200 8 PERTAINING TO ASSESSMENT YEAR 2006 - 07. 3. IN THIS APPEAL, THE ONLY GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF THE CIT(A) IN DELETING THE ADDITION OF RS. 22,13,721/ - MADE BY THE ASSESSING OFFICER. 4. IN BRIEF, THE RELEVANT FACTS ARE THAT THE ASSE SSEE IS PARTNERSHIP FIRM OF CHARTERED ACCOUNTANTS. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD MADE A PAYMENT OF RS. 22,13,721/ - TO RETIRED PARTNERS ON THE STRENGTH OF CLAUSE - 23 OF THE PARTNERSHIP DEED. ON BEIN G ASKED TO JUSTIFY THE SAME, ASSESSEE CONTENDED THAT THE SAID PAYMENT WAS A DIVERSION BY OVERRIDING TITLE AND WAS THUS DEDUCTIBLE 3 P.C. HANSOTIA & CO. PAGE 3 OF 6 WHILE COMPUTING THE GROSS RECEIPTS FOR COMPUTING THE BUSINESS INCOME. THE ASSESSING OFFICER DISAGREED WITH THE ASSESSEE AND FO LLOWING THE STAND OF HIS PREDECESSOR FOR EARLIER ASSESSMENT YEAR S , HE DISALLOWED THE SAME. THE CIT(A) HAS SINCE DELETED THE ADDITION BY NOTICING THAT HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE VIDE ITA NO. 6879/2010 DATED 20.10.2011 HAS AFFIRMED THE STAND OF THE ASSESSEE. AGAINST SUCH A DECISION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 5. BEFORE US, IT WAS A COMMON GROUND BETWEEN THE PARTIES THAT THE JUDGMENT OF HONBLE BOMBAY HIGH COURT RELIED UPON BY THE CIT(A) CONTINUES TO HOLD THE FIELD AN D, THEREFORE, WE HEREBY AFFIRM THE ORDER OF CIT(A). THUS ON THIS ASPECT REVENUE FAILS. IN THE RESULT APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2006 - 07 IS HEREBY DISMISSED. 6. NOW WE TAKE UP THE CROSS APPEALS FOR ASSESSMENT YEAR 2007 - 08, WHICH ARE DIRECTED AGAINST THE ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS) [ HEREINAFTER REFERRED TO AS THE CIT(A) ] DATED 29.11.2012, WHICH IN - TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) (II) OF THE INCOME TAX ACT, 1961( HEREINAFT ER REFERRED TO AS THE ACT) DATED 30.12.2009 PERTAINING TO ASSESSMENT YEAR 2007 - 08. 7. INSOFAR AS THE APPEAL OF REVENUE IS CONCERNED, THE SOLITARY ISSUE RELATES TO THE DEDUCTABILITY OF AN AMOUNT OF RS. 28,12,285/ - PAID TO RETIRED/DECEASED PARTNERS OR THEIR SPOUSES. THE SAID ISSUE STANDS DECIDED IN FAVOUR OF THE ASSESSE E IN ASSESSMENT YEAR 2006 - 07 ON THE STRENGTH OF THE JUDGMENT OF 4 P.C. HANSOTIA & CO. PAGE 4 OF 6 HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE DATED 20.10.2011(SUPRA). AS A CONSEQUENCE, THE ORDER OF THE CIT(A) ON THIS ASPE CT IS AFFIRMED AND THE APPEAL OF THE REVENUE IS DISMISSED. 8. NOW, INSOFAR AS THE APPEAL OF ASSESSEE IS CONCERNED, THE SAME RELATES TO A DISALLOWANCE OF RS. 3,77,121/ - . THE SAID AMOUNT REPRESENTED SERVICE TAX PAID BY THE ASSESSEE WHICH WAS OTHERWISE NOT R ECOVERABLE FROM CLIENTS. THE LD. REPRESENTATIVE POINTED OUT THAT THE EXPLANATION OF ASSESSEE WAS THAT DURING THE YEAR UNDER CONSIDERATION AN AMOUNT OF RS. 1,25,38,970/ - WAS COLLECTED BY THE ASSESSEE FIRM AS SERVICE TAX FROM ITS CLIENTS WHEREAS THE TOTAL SE RVICE TAX PAYMENT FOR THE YEAR UNDER CONSIDERATION AGGREGATED TO RS. 1,29,16,091/ - . ASSESSEE EXPLAINED THAT THE ADDITIONAL SERVICE TAX I.E. RS. 3,77,121/ - BORNE BY THE ASSESSEE FIRM WAS DEBITED TO THE PROFIT & LOSS ACCOUNT AND CLAIMED AS A DEDUCTION BECAUS E THE SAME WAS NOT RECOVERED FROM CLIENTS. THE SAID POSITION HAS NOT BEEN ACCEPTED BY THE ASSESSING OFFICER OR BY THE CIT(A) . 9. IN THIS BACKGROUND, THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED AT THE TIME OF HEARING THAT THE REQUISITE DETAILS WERE F URNISHED BEFORE THE CIT(A), COPIES OF WHICH HAVE ALSO BEEN FURNISHED IN THE PAPER BOOK FILED BEFORE THE TRIBUNAL. BY ADVERTING TO SUCH DETAILS, IT IS POINTED OUT THAT THE SAME HAVE BEEN OVERLOOKED BY THE CIT(A) AND THAT THE ASSESSEE WILL BE SATISFIED IF T HE MATTER IS REMANDED BACK TO THE FILE OF ASSESSING OFFICER FOR AN APPRAISAL AFRESH IN THE LIGHT OF AFORESAID DETAILS BEING ON RECORD. 5 P.C. HANSOTIA & CO. PAGE 5 OF 6 10. THE LD. DR APPEARING FOR THE REVENUE HAD NOT OPPOSED THE AFORESAID PLEA OF ASSESSEE. 11. ACCORDINGLY, WE DEEM IT F IT AND PROPER TO RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER, WHO SHALL RE - EXAMINE THE PLEA OF ASSESSEE IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION, THE ASSESSING OFFICER, SHALL ALLOW AN APPROPRIATE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD B EFORE PASSING AN ORDER AFRESH ON THIS LIMITED ASPECT AS PER LAW. THUS , THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, APPEAL S OF THE REVENUE FOR ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 ARE DISMISSED WHEREAS THAT BY THE ASSESSEE FOR ASSESSMENT YEAR 2007 - 08 IS ALLOWED FOR STATISTICAL PURPOSES. ABOVE DECISION WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF HEARING ON 30.06.2015. SD/ - SD/ - ( AMIT SHUKLA) (G.S. PANNU) (JUDICIAL MEMBER/ U;KF;D LNL; ) (ACCOUNTANT MEMBER/ YS[KK LNL; ) MUMBAI DATED 30 - 06 - 2015 SKS SR. P.S, 6 P.C. HANSOTIA & CO. PAGE 6 OF 6 COPY TO: THE APPELLANT THE RESPONDENT THE CONCERNED CIT(A) THE CONCERNED CIT THE DR, C BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI