DDIT (IT) 3(1), MUMBAI V. GALLEON INTERNATIONAL MASTER FUND SPC LTD, MUMBAI

ITA 2359/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3589 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 08-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H N SINGH
• Assessee Lawyers: CHETAN A KARIA
• Keywords: Opportunity of being heard; Additional evidence
• Section: 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER / I .T A NO. 2359/MUM/2014 ( / ASSESSMENT YEAR : 2009 - 10 THE DY. DIRECTOR OF INCOME - TAX (INTERNATIONAL TAXATION)3(1) , SCINDIA HOUSE, N.M. ROAD, BALLARD ESTATE, MUMBAI - 40 038 V/S M/S. GALLEON INTERNATIONAL MASTER FUND SPC LTD., GALLEON MULTI STRATEGU SEGREGATED PORTFOLIO, C/O P.R. GANDHI & CO., CHARTERED ACCOUNTANTS, 56/57, MITTAL CHAMBERS, 228, NARIMAN POINT, MUMBAI - 400 021 ./ ./ PAN/GIR NO. AADCG 3594P ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI H.N. SINGH / RESPONDENT BY: SHRI CHETAN A KARIA / DATE OF HEARING : 09 . 0 2 . 201 6 / DATE OF PRONOUNCEMENT : 02 . 0 3 .201 6 / O R D E R PER C.N. PRASAD, JM : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) - 10 , MUMBAI DATED 28.11.2013 PERTAINING TO ASSESSMENT YEAR 200 9 - 1 0. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN ITS APPEAL. ITA NO. 2359/M/2014 2 '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) GROSSLY ERRED IN ADMITTING ADDITIONAL EVIDENCE FILED BY THE ASSESSEE U/ R 46A WHICH WERE NEITHER PLACED BEFORE AO DURING THE ASSESSMENT NOR DURING THE REMAND PROCEEDINGS, THER EBY DEPRIVING THE REVENUE OF THE OPPORTUNITY TO JUSTIFY THE AO'S ACTION. 2. BY SO ADMITTING THE ADDITIONAL EVIDENCE, THE ID. CIT(A) ERRED IN NOT FORMING A HOLISTIC VIEW OF THE MATTER THEREBY FAILING TO APPRECIATE THE FACT THAT WITHOUT APPRECIATING THE FA CT THAT GALLEON INTERNATIONAL MASTER FUND SPC LTD. - GALLEON NEW SILK ROUTE PIPE SEGREGATED PORTFOLIO (A GROUP COMPANY) HAS NOT FILED ITS RETU RN OF INCOME AND ASSESSEE CLAIMED REFUND OF GALLEON INTERNATIONAL MASTER FUND SPC LTD. - GALLEON MULTI STRATEGY SE GREGATED PORTFOLIO WHICH IS NOT CORRECT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE ID. CIT(A) ERRED IN DELETING THE ADDITIONS MADE BY AO O F RS. 15,37,00,000 WITHOUT VERIFYING THE TRANSACTION IN RESPECT OF WHICH THE ASSESSEE CLA IMED THE TDS AND ITS RELATION WITH SALE OF 53, 00, 000 SHARES OF TEK SOLUTION LTD. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE ID. CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 3. THE LD. DEPARTMENTAL REPRESENTATIVE AT THE VERY OUTSET SUBMITS THAT THE ASSESSMENT MADE BY THE ASSESSING OFFICER WAS U/S. 144 OF THE ACT AND NO DETAILS WERE FURNISHED BY THE ASSESSEE. THE LD. DR SUBMITS THAT THE LD. CIT(A) ADMITTED ADDITIONAL EVIDENCES FILED BY THE ASSESSEE U NDER RULE 46A OF THE ACT AND SUCH DETAILS WERE NEITHER PLACED BEFORE THE AO DURING THE ASSESSMENT NOR DURING REMAND PROCEEDINGS THEREBY DEPRIVING THE REVENUE OF THE OPPORTUNITY TO JUSTIFY THE A.OS ACTION. THE LD. DR SPECIFICALLY REFERS TO THE ORDER OF T HE LD. CIT(A) AT PAGE - 11 AT PARA - 9, WHICH IS THE ASSESSEES ITA NO. 2359/M/2014 3 SUBMISSION BEFORE THE LD. CIT(A) ALONGWITH ITS ENCLOSURES 1 TO 7. LD. DR SUBMITS THAT THE ENCLOSURES WHICH FORM PART OF THIS LETTER I.E. COPY OF INVESTMENT AGREEMENT FOR PURCHASE OF SHARES AND D EAL, REPORT FROM HSBC FOR SALE OF SHARES, PAN CARD OF GALLEON NSRP TO SHOW THAT THIS ENTITY IS DIFFERENT FROM THAT OF ASSESSEE ETC. THE LD. DR SUBMITS THAT THESE PRIMARY DOCUMENTS WERE NOT FURNISHED BY THE ASSESSEE EVEN IN THE REMAND PROCEEDINGS AND THEY WERE SUBMITTED ONLY TO THE LD. CIT(A) AND NO FURTHER REMAND WAS CALLED FOR BY THE LD. CIT(A). 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE TRANSACTION IN RESPECT OF CAPITAL GAIN ASSESSED IN THE HANDS OF THE ASSESSEE AMOUNTING TO RS. 15,37,00,000 / - HAS ALREADY BEEN ASSESSED IN THE GROUP CONCERNS CASE. THE LD. COUNSEL FURTHER SUBMITS THAT WHEN THE TRANSACTION DOES NOT PERTAIN TO THE APPELLANT, THERE IS NO QUESTION OF ASSESSING THE CAPITAL GAIN ARISING OUT OF SUCH TRANSACTION IN THE ASSESSEES CASE . ON A QUERY FROM THE BENCH AS TO WHETHER THESE DOCUMENTS WERE FURNISHED IN THE COURSE OF REMAND PROCEEDINGS OR WHETHER THEY WERE PRODUCED FOR THE FIRST TIME BEFORE THE LD. CIT(A) , T HE LD. COUNSEL SUBMITS THAT THESE DOCUMENTS APPEARS TO HAVE FILED BEFORE THE LD. CIT(A) ONLY . 5. HEARD BOTH SIDES, PERUSED THE ORDERS OF LOWER AUTHORITIES. W E FIND THAT THE ASSESSMENT WAS MADE U/S. 144C(3) R.W.S.144 OF THE ACT AND NO COMPLIANCE WAS MADE BY THE ASSESSEE TO THE NOTICE ISSUED BY THE AO. NO DETAILS WERE FURNI SHED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS. WE ALSO FIND THAT ADDITIONAL EVIDENCES WERE FURNISHED FOR THE FIRST TIME BEFORE CIT(A) EVEN AFTER CALLING FOR THE REMAND REPORT. TAKING THE ABOVE FACTS AND CIRCUMSTANCES INTO ITA NO. 2359/M/2014 4 CONSIDERATION, WE ARE OF THE VIEW THAT THE MATTER HAS TO BE EXAMINED IN DETAIL WITH REFERENCE TO THE SUBMISSIONS OF ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE BEFORE THE LD. CIT(A). THUS, WE RESTORE THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO EXAMINE THE WHOLE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND MARCH , 201 6 . SD/ - SD/ - ( RAJESH KUMAR ) ( C.N. PRASAD ) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI ; DATED : 2 ND MARCH, 201 6 . . ./ RJ , 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 . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI