ITO 5(2)(2), MUMBAI V. JANUS INVESTMENT P.LTD, MUMBAI

ITA 2218/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2901 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Department
• Bench Allotted: J
• Next Hearing Date: 25-05-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 02-04-2014
• Court: TRIBUNAL
• Department Lawyers: R C JAIN; SANDEEP MAHESHWARI
• Assessee Lawyers: ASGHAR ZAIN V P
• Section: 143(3)

Judgement Text

, , J , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI , , , BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.4273/MUM/2014 ASSESSMENT YEAR: 2006-07 JANUS INVESTMENTS P. LTD., 3 RD FLOOR, JAIN TOWER, 17 TH MATHEW RD. OPERA HOUSE MUMBAI-400004 / VS. D CIT, 5 (2) (2) 567, AAYAKAR BHAVAN, M.K. RD MUMBAI-400020 (ASSESSEE ) (REVE NUE) P.A. NO. AAACJ1252E ITA NO.2218/MUM/2014 ASSESSMENT YEAR: 2006-07 ITO, 5(2)(2) 567, AAYAKAR BHAVAN, M.K. RD MUMBAI-400020 / VS. JANUS INVESTMENTS P. LTD., 3 RD FLOOR, JAIN TOWER, 17 TH MATHEW RD. OPERA HOUSE MUMBAI-400004 ( REVENUE ) ( RESPO NDENT ) P.A. NO. AAACJ1252E ITA NO.2164/MUM/2014 ASSESSMENT YEAR: 2009-10 ITO, 5(2)(2) 567, AAYAKAR BHAVAN, M.K. RD MUMBAI-400020 / VS. JANUS INVESTMENTS P. LTD., 3 RD FLOOR, JAIN TOWER, 17 TH MATHEW RD. OPERA HOUSE MUMBAI-400004 (REVENUE ) (RESPONDENT) P.A. NO. AAACJ1252E JANUS INVESTMENTS PVT. LTD. 2 ITA NO.2165/MUM/2014 ASSESSMENT YEAR: 2010-11 ITO, 5(2)(2) 567, AAYAKAR BHAVAN, M.K. RD MUMBAI-400020 / VS. JANUS INVESTME NTS P. LTD., 3 RD FLOOR, JAIN TOWER, 17 TH MATHEW RD. OPERA HOUSE MUMBAI-400004 (REVENUE ) (RESPONDENT) P.A. NO. AAACJ1252E APPELLANT BY SHRI R.C. JAIN & SANDEEP MAHESHWARI (AR) RESPONDENT BY SHRI ASGHA R ZAIN V.P. (D R) / DATE OF HEARING: 02/06/2016 / DATE OF ORDER: 24/06/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THESE APPEALS ARE FILED BY THE ASSESSEE AND REVENUE PERTAINING TO SAME ASSESSEE AND FILED AGAINST SEPAR ATE ORDERS OF LD. ORDER OF LD. COMMISSIONER OF INCOME TAX (APP EALS), {(IN SHORT CIT(A)}, PASSED AGAINST ASSESSMENT ORDER U/ S 143(3) R.W.S. 147 OF THE ACT BY THE AO. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI SHRI R.C. JAIN & SANDEEP MAHESHWARI, AUTHORISE D REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND B Y SHRI ASGHAR ZAIN V.P., DEPARTMENTAL REPRESENTATIVE (DR) ON BEHALF OF THE REVENUE. JANUS INVESTMENTS PVT. LTD. 3 FIRST WE SHALL TAKE UP APPEAL OF THE REVENUE IN ITA NO.2218/MUM/2014 FOR A.Y. 2006-07: THE REVENUE HAS FILED FOLLOWING GROUNDS OF APPEAL: 1.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS.63,86,544/- (1/5TH DEDUCTION U/S.24(B) OF THE I.T. ACT) BEING ACCUMULA TED INTEREST OF CONSTRUCTION PERIOD?' '2.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT WHEN THE PROPERTY WAS UNDER CONSTRUCTION, THE ASSESSEE TREATED THE SAME A S BUSINESS ASSETS AND THE INTEREST ON LOAN WAS ALREAD Y CAPITALIZED?' 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CI T(A) BE SET ASIDE AND THE ORDER OF THE AO BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD ANY OTHER GROUNDS WHICH MAY BE NECESSARY. 3. THE SOLITARY ISSUE RAISED IN THIS APPEAL BY THE RE VENUE IS FOR CONTESTING THE ACTION OF LD. CIT(A) IN DELETING THE DISALLOWANCE OF RS.63,86,544/- MADE BY THE AO BEING 1/5 OF THE A MOUNT OF ACCUMULATED INTEREST OF CONSTRUCTION PERIOD CLAIME D BY THE ASSESSEE U/S 24(B) OF THE ACT. 3.1. DURING THE COURSE OF HEARING IT WAS BROUGHT TO THE NOTICE BY THE LD. COUNSEL THAT IDENTICAL ISSUE WAS INVOLVE D IN A.Y. 2007-08 WHEREIN IT WAS FOUND BY THE TRIBUNAL VIDE I TS ORDER DATED 09.04.2014 IN ITA NO.5057/MUM/2010 THAT THIS AMOUNT WAS PRINCIPALLY ALLOWABLE TO THE ASSESSEE BU T FOR THE LIMITED PURPOSE OF VERIFICATION OF THE FACT THAT TH E ASSESSEE HAD NOT CLAIMED DEDUCTION OF THE SAME AMOUNT UNDER SOME OTHER PROVISION OF LAW, THIS ISSUE WAS SENT BACK TO THE F ILE OF THE AO. JANUS INVESTMENTS PVT. LTD. 4 IT WAS SUBMITTED THAT AO HAD VERIFIED THE FACT AND ALLOWED THE SAME. IT WAS FURTHER SUBMITTED THAT DURING THE APPE AL BEFORE THE LD. CIT(A) FOR THE IMPUGNED YEAR I.E. A.Y. 2006 -07 ALSO THIS FACT WAS VERIFIED BY THE AO DURING THE REMAND PROCE EDINGS AS REMAND REPORT WAS CALLED FOR BY THE LD. CIT(A). THE AO FOUND THE SUBMISSIONS OF THE ASSESSEE AS CORRECT DURING T HE REMAND PROCEEDINGS AND ACCORDINGLY REMAND REPORT WAS SENT BY HIM. LD. CIT(A) AFTER CONSIDERING REMAND REPORT ALLOWED THE RELIEF TO THE ASSESSEE AND THEREFORE, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE AND HAS BEEN FILED WITHOUT ANY BAS IS AND CONTRADICTING OWN STAND OF THE AO. 3.2. PER CONTRA, LD. DR WAS NOT ABLE TO REBUT FACTUAL SUBMISSIONS MADE BY THE ASSESSEE. IN RESPONSE TO SP ECIFIC QUERY FROM THE BENCH THAT WHY THIS APPEAL WAS FILED WHEN THE AO HAD HIMSELF GIVEN THE REMAND REPORT AFTER VERIFY ING THE FACTS OF THIS CASE IN FAVOUR OF THE ASSESSEE. IT WA S FURTHER NOTED THAT THE AO WHO HAD SENT REMAND REPORT AND THE AO W HO HAS SIGNED THE GROUNDS FOR FILING OF APPEAL BEFORE US I S SAME. LD. DR HAD NO REPLY, WHATSOEVER. 3.3. WE HAVE GONE THROUGH THE FACTS OF THIS CASE, ORDER S PASSED BY BOTH THE AUTHORITIES AS WELL AS REMAND RE PORT ISSUED BY THE AO. IT IS NOTED BY US THAT ASSESSEE HAD CLAI MED 1/5 TH OF THE ACCUMULATED INTEREST OF THE CONSTRUCTION PERIOD AGAINST THE AMOUNT OF RENT RECEIVED FOR COMPUTING THE CORRE CT AMOUNT TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PRO PERTY. THE SAME WAS DISALLOWED BY THE AO FOR WANT OF PROPE R JANUS INVESTMENTS PVT. LTD. 5 VERIFICATION OF FACTS AND UNDER SOME MISCONCEPTION OF LAW. IN A.Y. 2007-08, THE TRIBUNAL FOUND THIS CLAIM TO BE A LLOWABLE AS PER LAW AND SENT THE MATTER BACK FOR THE LIMITED VE RIFICATION OF FACTS. THE AO VERIFIED THE CLAIM AND ALLOWED THE SA ME IN A.Y. 2007-08 IN THE APPEAL EFFECT ORDER PASSED BY HIM. SUBSEQUENTLY, DURING THE COURSE OF HEARING OF APPEA L FOR IMPUGNED ASSESSMENT YEAR I.E. AY 2006-07 BEFORE THE LD. CIT(A) ALSO, THE AO SUBMITTED A REMAND REPORT DATED 18.11.2013 WHEREIN IT HAS BEEN CLEARLY ADMITTED BY HIM THAT THE IMPUGNED HOUSE PROPERTY WAS NOT SHOWN AS STOCK IN TRADE AND WAS SHOWN AS PART OF FIXED ASSETS. ON FACTS ALS O NOTHING WRONG HAS BEEN FOUND BY THE LD. AO WITH REGARD TO C LAIM OF INTEREST. AFTER CONSIDERING THE SAID REMAND REPORT LD. CIT(A) HAD NO OTHER CHOICE BUT TO GIVE THE RELIEF TO THE A SSESSEE AND RIGHTLY SO. ACCORDINGLY, LD. CIT(A) CORRECTLY ALLOW ED THE RELIEF TO THE ASSESSEE AND DELETED THE DISALLOWANCE MADE BY T HE AO. WE FIND THAT LD. CIT(A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. THE ORDER OF THE LD. CIT(A) IS BASED UPON REMAND REPORT OF THE AO AND IT IS ALSO IN ACCORDANCE WITH THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y. 20 07-08. THE CLAIM OF ASSESSEE IS CORRECT AS PER LAW AND FACTS. ONE-FIFTH OF THE INTEREST OF THE CONSTRUCTION PERIOD IS ALLOWABL E TO THE ASSESSEE U/S 24(B) OF THE ACT. 3.4. BUT, STILL BEING AGGRIEVED, THE REVENUE FILED APPE AL BEFORE THE TRIBUNAL. WE ARE SURPRISED TO NOTE THAT SAME AO HAS FILED AN APPEAL BEFORE THE TRIBUNAL. THE GROUNDS BEFORE U S HAVE BEEN SIGNED BY THE SAME AO WHO HAD PREPARED THE REM AND JANUS INVESTMENTS PVT. LTD. 6 REPORT DATED 18.11.2013. IN THE GROUNDS FILED BEFOR E THE TRIBUNAL, THE AO IS CONTRADICTING HIS OWN STAND AND THAT TOO WITHOUT ANY BASIS. THIS KIND OF APPROACH HAS LED TO MISUSE OF PROCESS OF LAW, AND HAS WASTED THE PRODUCTIVE TIME OF THE GOVERNMENT MACHINERY AS WELL AS THE TAXPAYERS. SUCH KIND OF APPROACH SHOULD BE DISCOURAGED. VARIOUS COURTS OF O UR COUNTRY HAVE TIME TO TIME GIVEN STRICT INSTRUCTIONS TO THE REVENUE OFFICIALS TO BE MORE CAREFUL WHILE FILING T HE APPEALS AND AVOID THE PRACTICE OF FILING OF FRIVOLOUS APPEA LS AS THIS PRACTICE NOT ONLY CAUSES UNDUE HARDSHIPS TO THE TAX PAYERS BUT ALSO MAKES MISUSE OF PRODUCTIVE TIME AND MACHINERY OF THE GOVERNMENT. HONBLE BOMBAY HIGH COURT HAS ALSO ISSU ED SUCH INSTRUCTIONS IN MANY JUDGMENTS. IN ONE SUCH JUDGMEN T, HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS M/S. LARSEN AND TOUBRO LTD (VIDE ORDER DT 31 ST JULY, 2014 IN ITA NO. 424 OF 2012, 425 OF 2012, 483 OF 2012) OBSERVED AS UNDE R: 6. TIME AND AGAIN WE HAVE TO DEAL WITH SUCH APPEALS . MERELY BECAUSE THEY ARE FILED THAT THEY GET LISTED ON THE DAILY ADMISSION BOARD. THE ADVOCATES FILING THEM AN D ROUTINELY, SO ALSO THOSE INSTRUCTING THEM DO NOT HA VE AUTHORITY TO WITHDRAW THEM. CONSEQUENTLY, THEY ARE PRESSED AND ARGUED RESULTING IN A HEARING, MAY BE B RIEF AND AN ORDER OF THIS COURT DISMISSING THEM. SOMETIM ES THERE ARE AT LEAST 35 SUCH CASES ON OUR DAILY BOARD . WE DO NOT UNDERSTAND WHY HIGHER OFFICIALS DO NOT HA VE THE COURAGE TO TAKE BOLD DECISIONS PARTICULARLY OF NOT PURSUING SUCH MATTERS UPTO THIS COURT OR HIGHER. BECAUSE THE ASSESSEE IS A LEADING PUBLIC LIMITED COMPANY SHOULD NOT JANUS INVESTMENTS PVT. LTD. 7 ACT AS A DETERRENT FOR THEM TO TAKE AN INFORMED, RA TIONAL DECISION AND SUB-SERVING LARGER PUBLIC INTEREST. A REALIZATION OF THIS NATURE IS A NEED OF THE HOUR AS HIGHER COURTS DO NOT HAVE TO DEAL WITH TAX AND REVENUE MAT TERS ONLY BUT ALL THOSE INVOLVING LIFE AND LIBERTY OF CI TIZENS, THEIR PROPERTY RIGHTS, RIGHTS OF CHILDREN, WOMEN AND SENI OR CITIZENS. THESE RIGHTS ARE ALSO PRECIOUS AND THE LE GITIMATE EXPECTATIONS OF SUCH PERSONS OR GROUPS OF EASY AND EXPEDITIOUS JUSTICE ALSO HAVE TO BE FULFILLED BY TH E HIGHER JUDICIARY. THE BIGGEST LITIGANT, NAMELY, THE STATE OUGHT TO BE AWARE OF THE PENDENCY OF CASES IN HIGH COURTS OF BOMBAY, MADRAS, CALCUTTA AND ALLAHABAD FOR EXAMPLE. IF THEIR POLICIES PARTICULARLY ON LITIGATIONS ARE NOT AIMED AT REDUCING FRIVOLOUS AND SPECULATIVE LITIGATIONS, THE N, THE LEAST THAT CAN BE SAID IS THAT THE STATE HAS FAILED TO ACT FOR PUBLIC GOOD AND IN PUBLIC INTEREST. THE STATE IS EX PECTED TO ACT AS A MODEL LITIGANT. IT MUST SET AN EXAMPLE FOR THE PUBLIC TO FOLLOW AND WE HOPE THAT THIS ORDER ACTS A S A REMINDER FOR ALL CONCERNED TO AT LEAST NOW TAKE REM EDIAL STEPS AND MEASURES. IT IS THEREFORE THAT DESPITE TH E PERSUASIVE SKILLS OF MR. SURESH KUMAR, WHO FERVENTL Y PLEADED NOT TO PASS ANY ORDER IMPOSING COSTS, THAT WE ARE CONSTRAINED TO IMPOSE COSTS. 7. THE REVENUE OFFICERS MUST REALIZE THAT JUST LIKE OTHER POWERS AN EXECUTIVE POWER CONFERRED IN THEM IS IN T HE NATURE OF A TRUST. THEY HOLD OFFICE AS TRUSTEES OF THE PUBLIC AT LARGE. THEY DEAL WITH PUBLIC REVENUE AND PUBLIC MONEY AND THAT CANNOT BE WASTED IN SUCH FRIVOLOUS LITIGAT ION. WE, JANUS INVESTMENTS PVT. LTD. 8 THEREFORE, DISMISS THESE APPEALS WITH COSTS QUANTIF IED AT RS.1,00,000/ EACH. COSTS SHALL BE PAID TO THE MAHARASHTRA STATE LEGAL SERVICES AUTHORITY, MUMBAI WITHIN A PERIOD OF FOUR WEEKS FROM TODAY. 3.5. IT IS NOTED THAT VARIOUS COURTS HAVE TIME TO TIME PASS ED SEVERE STRICTURES UPON REVENUE OFFICERS FOR FILING FRIVOLOUS APPEALS. IT WAS INFORMED THAT SOME INTERNAL INSTRUC TIONS WERE ALSO ISSUED BY THE BOARD IN THE PAST. BUT, THESE AR E NOT SINCERELY COMPLIED WITH WHILE FILING REVENUE APPEAL S. 3.6. WHEN WE FURTHER ANALYSED THIS SITUATION WITH MORE D EPTH, WE FOUND THAT IN FACT THERE ARE NO CLEAR GUIDELINES AVAILABLE WITH THE OFFICERS FOR FILING OF REVENUES APPEALS. THUS, ASSESSING OFFICERS ALONE CANNOT BE HELD RESPONSIBLE FOR SUCH FALLACIES. IN OUR OPINION, THERE IS AN URGENT NEED OF GUIDELINES FROM THE BOARD IN THIS REGARD. THEREFORE WE SUGGEST THAT CEN TRAL BOARD OF DIRECT TAXES SHOULD FORMULATE A SET OF APPROPRIA TE GUIDELINES FOR ITS OFFICERS SO THAT SUCH KINDS OF S ITUATIONS ARE AVOIDED AND PROPER APPEALS ARE FILED BY THE OFFICER S RAISING VALID ISSUES. THE REGISTRY OF THE TRIBUNAL IS DIRECTED TO SEND ONE COPY OF OUR ORDER TO THE CHAIRPERSON, CENTRAL B OARD OF DIRECT TAXES, NEW DELHI AS WELL THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, MUMBAI FOR REQUISITE FO LLOW UP ACTIONS IN THIS REGARD AND FOR SETTING UP A MECHANI SM TO ENSURE THAT APPEALS BY THE REVENUE ARE FILED AS PER GIVEN PARAMETERS. JANUS INVESTMENTS PVT. LTD. 9 3.7. NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A) AND THE THEREFORE SAME IS HEREBY UPHELD. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. NOW WE SHALL TAKE UP APPEAL FILED BY THE ASSESSEE I N ITA NO.4173/MUM/2014 FOR A.Y. 2006-07: 5. IT IS NOTED THAT THE ASSESSEE HAS FILED AN APPEAL CHALLENGING THE VALIDITY OF REOPENING OF THIS CASE U/S 147 OF T HE ACT BY THE AO. SINCE, WE HAVE ALLOWED THE RELIEF ON MERITS, WE DO NOT FIND IT NECESSARY TO GO INTO THIS ASPECT ON THIS STAGE A ND WE DISMISS THE APPEAL BY TREATING THE SAME AS INFRUCTUOUS. NOW, WE SHALL TAKE UP APPEAL FILED BY THE REVENUE I N ITA NO.2164 & 65/M/2014 FOR THE A.YS. 2009-10 AND 2010- 11: 6. IT IS NOTED BY US THAT APPEAL FOR THESE TWO YEARS HAVE ALSO BEEN FILED ON THE SAME GROUND BY THE REVENUE AS IN A.Y. 2006- 07. IT IS NOTED THAT THE ISSUES INVOLVED ARE IDENTI CAL. THE FACTS ARE SAME; NO DISTINCTION HAS BEEN MADE BY ANY PARTY BEFORE US AND THE SAME HAS BEEN CLAIMED TO BE COVERED BY THE EARLIER YEAR ORDER, AND THEREFORE FOLLOWING OUR ORDER OF EA RLIER YEARS WE DISMISS THESE APPEALS FILED BY THE REVENUE. JANUS INVESTMENTS PVT. LTD. 10 7. AS A RESULT ALL THE THREE APPEAL FILED BY THE REVE NUE AND ONE APPEAL FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JUNE, 2016. SD/- (AMIT SHUKLA ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER MUMBAI; # DATED : 24/06/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. % &' / THE APPELLANT 2. / THE RESPONDENT. 3. ( ( ( ) / THE CIT, MUMBAI. 4. ( ( / CIT(A)- , MUMBAI 5. , , / DR, ITAT, MUMBAI. 6. + ,- . / GUARD FILE. 7. THE CHAIRPERSON, CENTRAL BOARD OF DIRECT TAXES, MIN ISTRY OF FINANCE, NORTH BLOCK, SECRETARIAT BUILDING NEW DELH I (FOR IMPLEMENTING SUGGESTIONS GIVEN IN PARAS 3.4. TO 3. 6 OF THE ORDER) 8. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, ROOM NO. 321, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 (FOR IMPLEMENTING SUGGESTIONS GIVEN IN PARAS 3.4. TO 3.6 OF THE ORDER) / BY ORDER, / 0 1 //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI