DEEPIKA A. MEHTA, MUMBAI V. DCIT CC 23, MUMBAI

ITA 264/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5019 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 19-09-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 11-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Section: 143(3)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - D BENCH. . .. . . .. . , ,, , !'# !'# !'# !'# , ' ' ' ' BEFORE S/SH. I.P. BANSAL,JUDICIAL MEMBER & RAJENDRA ,ACCOUNTANT MEMBER ./ ITA NO.263/MUM/2011, $ $ $ $ % % % % / ASSESSMENT YEAR-2004-05 DEEPIKA A. MEHTA 32 MADHULI, DR. A.B.ROAD, WORLI, MUMBAI- 400018 VS DCIT CEN CIR 23 409, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI- 400020 PAN: ABNPM8231D ( &' / APPELLANT ) ( ()&' / RESPONDENT ) ./ ITA NO.264/MUM/2011, $ $ $ $ % % % % / ASSESSMENT YEAR-2005-06 DEEPIKA A. MEHTA 32 MADHULI, DR. A.B.ROAD, WORLI, MUMBAI- 400018 VS DCIT CEN CIR 23 409, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI- 400020 PAN: ABNPM8231D ( &' / APPELLANT ) ( ()&' / RESPONDENT ) ./ ITA NO.851/MUM/2011, $ $ $ $ % % % % / ASSESSMENT YEAR-2004-05 DCIT CEN CIR 23 409, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI- 400020 VS DEEPIKA A. MEHTA 32 MADHULI, DR. A.B.ROAD, WORLI, MUMBAI- 400018 ( &' / APPELLANT ) ( ()&' / RESPONDENT ) ./ ITA NO. 852/MUM/2011, $ $ $ $ % % % % / ASSESSMENT YEAR-2005-06 DCIT CEN CIR 23 409 4 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI- 400020 VS DEEPIKA A. MEHTA 32 MADHULI, DR. A.B.ROAD, WORLI, MUMBAI- 400018 ( &' / APPELLANT ) ( ()&' / RESPONDENT ) $ $$ $*+ *+ *+ *+ , , , , ' '' ' / APPELLANT BY : SHRI DHARMESH SHAH 2 ! - , ' / REVENUE BY : SHRI DR. P. DANIEL $ $ $ $ - -- - + + + + / DATE OF HEARING : 19-09-2013 ./% - + / DATE OF PRONOUNCEMENT : 19-09-2013 $ $ $ $ , 1961 - -- - 254(1) ' '' ' +0+ +0+ +0+ +0+ '1 '1 '1 '1 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM: CROSS-APPEALS HAVE BEEN FILED BY THE ASSESSING OFFI CER(AO) AND THE ASSESSEE FOR ABOVE REFERRED TWO ASSESSMENT YEARS(AYS.).AS THE ISSUES INVOLVED I N THESE APPEALS ARE COMMON,SO,FOR THE SAKE OF CONVENIENCE,ALL THE FOUR APPEALS ARE BEING ADJUD ICATED UPON BY A SINGLE COMMON ORDER. ITA.NO.851/MUM/2011/,AY-2004-05 AND ITA NO. 852/MUM /2011/,AY- 2005-06 FOR THE AY.2004-05 & 2005-06 AO HAS FILED FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT LEGAL SANCTITY OF LAW, THE INTEREST CHARGEABLE U/S. 234A,234B & 234C IS NOT ONLY CONSEQUENTIAL BUT IS MANDATORY IN NATURE. 2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE SPECIAL COURT ACT, 1992 HAS NOT RULED OUT THE PROVISIONS OF SECTION 234A,234B & 234C BEING NOT APPLICABLE TO THE NOTIFIED PERSONS OR THE Y ARE EXEMPT FROM THE LIABILITY OF PAYMENT OF INTEREST UNDER THESE SECTION OF INCOME-TAX ACT, 196 1. 3.THE APPELLANT CRAVES TO LEAVE, TO ADD, TO AMEND A ND / OR TO ALTER ANY OF THE GROUNDS OF APPEAL, IF NEED BE. 4.THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROUN D STATED ABOVE, THE ORDER OF THE CIT(A)-40, MUMBAI MAY BE SET ASIDE AND THAT OF THE ASSESSING O FFICER RESTORED. ITA NO.263/MUM/2011,AY 2004-05 AND ITA NO.264/MUM/2 011,AY 2005-06 ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL FOR AY 2004-05: 1.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN PASSING THE ORDER U/S. 250 OF THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE NOTICES ISSUED BY THE ASSESSING OFFICER ARE INVALID AND HEN CE THE ASSESSMENT ORDER U/S. 143(3) OF THE ACT WAS ALSO VOID AB INITIO. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT NO INCOME FROM ATTACHED ASSETS CA N BE ASSESSED IN THE HANDS OF THE APPELLANT. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT GRANTING RELIEF OF LIABILITY AMOUNTING TO RS. 1,34, 74,380/-, TOWARDS INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. 5. THE APPELLANT CRAVES LEAVE OF YOUR HONOUR TO ADD TO, ALTER, AMEND AND/OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL WITH THE PERMISSION OF YOUR HONOUR. SIMILAR GROUNDS OF APPEAL HAVE BEEN FILED FOR THE N EXT AY ALSO.THE ONLY DIFFERENCE IS AMOUNT OF INTEREST-FOR THE AY.2005-06, INTEREST AMOUNT IS INV OLVED IS RS. 1,53,41,567/-. ASSESSEE HAS ALSO FILED IDENTICAL ADDITIONAL GROUND FOR BOTH THE AYS.AND IT READS AS UNDER: 3 1.THE LD. (A) OUGHT TO HAVE APPRECIATED THAT AS PER THE DECISION OF HONBLE SPECIAL COURT DATED 30.04.2010 IN MP NO.41 OF 1999, THE ASSETS UNDER CO NSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEHTA AND HENCE THE INCO ME ASSESSED BY THE ASSESSING OFFICER OUGHT TO HAVE BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE HANDS OF THE APPELLANT. VIDE HER LETTERS DATED 18.09.2013,ASSESSEE MADE A R EQUEST TO ADMIT THE ADDITIONAL GROUND.WE FIND THAT SIMILAR ADDITIONAL GROUND WAS RAISED IN T HE CASE OF HITESH MEHTA FOR THE AY.1994-95, 1995-96,2001-02 AND 2008-09 (ITA NO. 5587 TO 5589/M UM/2011 AND 5068/MUM/2011)AND IN THE CASE OF PRATIMA H. MEHTA FOR THE AYS.2005-06 TO 2007-08(ITA NO.7871 TO 7873/MUM/ 2010).BOTH ARE THE FAMILY-MEMBERS OF THE ASSESSEE.O NE OF US,WAS PARTY TO THE ORDERS OF HITESH MEHTA AND PRATIMA H. MEHTA.WHILE DECIDING THE APPEA L OF SHRI HITESH MEHTA THE ADDITIONAL GROUND FILED BY HIM WAS DEALT AS UNDER: 4. THE ASSESSEE HAS ALSO FILED AN APPLICATION DATED 27 -5-2010 FOR ADMITTING THE FOLLOWING GROUND- 1. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT AS PER THE DECISION OF HONBLE SPECIAL COURT DATED 30.04.2010 IN M.P. NO.4 1 OF 1 999, THE ASSETS UNDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEHTA AND HENCE, THE INCOME ASSESSED BY THE ASSESSING OFFICER OUGHT TO HAVE BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE H ANDS OF THE APPELLANT. 5. AFTER GOING THROUGH THE ADDITION GROUND FILED BY TH E ASSESSEE, WE NOTED THAT THE GROUND IS LEGAL GROUND, WHICH DOES NOT REQUIRE ANY NEW FACTS TO BE BROUGHT ON RECORD. IN VIEW OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT, REPORTED IN (1998) 229 ITR 383, THE LEGAL GROUND CAN BE ADMITTED, IF NO NEW FACTS A RE TO BE BROUGHT ON RECORD.HOWEVER, AFTER GOING THROUGH THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR ALL THE ASSESSMENT YEARS INVOLVED HERE BEFORE US, WE FOUND THAT THE GROUND IS FULLY ACADEMIC IN NATURE FOR THE REASON THAT IF THE HONBTE SUPREME COURT DE CIDES SOMETHING THAT HAS TO BE FOLLOWED WITHOUT ANY DISPUTE.THE DECISION OF THE HONBLE APE X COURT IS LAW OF LAND, WHICH HAS TO BE FOLLOWED BY EVERY AUTHORITY THEREFORE IN OUR VIEW, NO DIRECTION IS TO BE REQUIRED TO BE GIVEN TO THE AO IN THIS RESPECT BECAUSE IF THE HONBLE APEX COUR T DECIDES THAT ALL THE INCOME BELONGS TO SHRI HARSHAD S. MEHTA, THEN THE INCOME HAS TO BE ASSESSE D IN THE HANDS OF SHRI HARSHAD S. MEHTA, NOT IN THE HANDS OF ANY OTHER PERSON.THEREFORE, IN OUR VIEW, THERE IS NO NEED TO ISSUE ANY DIRECTION AS THE DECISION OF THE HONBLE SUPREME COURT HAS TO BE FOLLOWED IN ANY CASE,ACCORDINGLY BY ADMITTING THE GROUNDS RAISED BY THE ASSESSEE FOR AL L THE YEARS,WE TREAT THE SAME AS ACADEMIC IN NATURE. FOLLOWING THE ABOVE,WE ADMIT THE ADDITIONAL GROUND FOR BOTH THE AYS.-TREATING THE SAME AS ACADEMIC IN NATURE. DETAILS OF DATES OF FILING OF RETURNS,INCOMES RETUR NED,DATES OF ASSESSMENT,ASSESSED INCOMES, DATES OF ORDERS OF THE CIT(A)CAN BE SUMMARISED AS U NDER : DT.OF FILING OF RETURN RETURNED INCOME (RS.) DATE OF ASSESSMENT ASSESSED INCOME DT. OF ORDERS OF CIT(A) AY2004-05 27.08.2007 3,99,74,155/- 17.11.2008 6,70 ,31,680/- 22.10.2010 AY2005-06 27.08.2007 73,49,902/- 17.11.2008 2,55 ,75,750/- 22.10.2010 4 ITAS NO. 851/MUM/2011 AY 2004-05, & ITA NO. 852/MUM /2011 AY 2005-06 2. FIRST,WE WILL TAKE UP THE APPEALS FILED BY THE AO.E FFECTIVE GROUND OF APPEAL,FOR BOTH THE AYS., IS ABOUT CHARGING OF INTEREST U/S 234A,234B AND 234 COF THE ACT.WHILE PASSING THE ASSESSMENT ORDERS FOR AY.2004-05 AND 2005-06,AO HAD CHARGED IN TEREST AS PER THE PROVISIONS OF SECTION 234 OF THE ACT. 2.1. ASSESSEE PREFERRED APPEALS BEFORE THE FIRST APPELLA TE AUTHORITY(FAA).BEFORE HIM ASSESSEE SUBMITTED THAT SHE WAS A NOTIFIED ENTITY UNDER THE PROVISIONS OF SPECIAL COURT ACT,THAT NO INTEREST U/S.234A,234B &234C OF THE ACT COULD BE CHARGED IN HER CASE,THAT HER BANK ACCOUNT WERE OPERAT -ED UNDER THE DIRECTIONS OF THE SPECIAL COURT,THAT THE PROVISIONS OF SPECIAL COURT HAD OVERRIDING EFFECT OVER THE ACT,THAT ALL THE ASSETS WERE UNDER THE CONTROL OF THE CUSTODIAN,THAT THE APPELLANT COULD NOT HAVE PAID THE ADVANCE TAX UNLESS DIRECTED BY THE SPECIAL COURT,THAT THE ASSESSEE DID NOT HAVE CONTROL OVER ITS INCOME/ASSETS,THAT SHE COULD NOT BE PENALISED FOR NON-PAYMENT OF ADVANCE TAX.AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE AND THE ORDER PASSED BY THE MUMBAI TRIBUNAL IN THE CASE OF M/S.ORIENT TRAVEL PVT. LTD. (ITA NO.6868/MUM/2008-AY 2004-05),PALLVI HOLDING,TOPAZ HOLDING AND HARSH ESTATE PVT. LTD.AND OTHER CASES OF HARSHAD MEHTA GROUP, HE HELD THAT ASSESSEE DID NOT HAVE CONTROL OVER THE HE R FUNDS/ASSETS,THAT SHE COULD NOT BE HELD AS DEFAULTER FOR FAILURE IN PAYMENT OF ADVANCE TAX.ACC ORDINGLY,HE DIRECTED THE AO TO DELETE THE INTEREST LEVIED U/S 234 OF THE ACT. 2.2. BEFOREUS,DEPARTMENTAL REPRESENTATIVE (DR) RELIED UP ON THE ORDER OF THEAO.AUTHORISED REPRESENTATIVE(AR)SUBMITTED THAT SAME ISSUE HAD ARI SEN IN THE CASES OF HITESH MEHTA AND PRATIMA MEHTA FOR DIFFERENT AYS.,THAT SAID GROUND W AS SET ASIDE TO THE FILE OF THE FAA FOR RE- ADJUDICATION BY THE TRIBUNAL. 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT IDENTICAL ISSUE HAS BEEN REMANDED BACK TO THE FILE OF THE FAA IN THE CASE OF PRATIMA MEHTA FOR THE AYS.2005-06, 2006-07 AND 2007-08.(ITA.NO.7871-7 3/MUM/2010).FOLLOWING THE SAME, WE REMIT BACK THE ISSUE TO THE FAA FOR RE-ADJUDICATION . APPEALS FILED BY THE AO,FOR AYS.2004-05 A ND 2005-06,ARE ALLOWED IN PART. ITA NO.263/MUM/2011,AY 2004-05 AND ITA NO.264/MUM/2 011,AY 2005-06 AS STATED EARLIER,ASSESSEE HAS FILED IDENTICAL GROU NDS OF APPEAL FOR BOTH THE YEARS.DURING THE COURSE OF HEARING BEFORE US,AUTHORISED REPRESENTATI VE(AR)OF THE ASSESSEE DID NOT PRESS GROUNDS OF APPEAL NO.1 TO 3 FOR THE AY.2004-05 AND AY.2005- 06.THEREFORE, GROUNDS NO.1-3STAND DISMISSED AS NOT PRESSED FOR THE SAID AYS.. 3 .GROUND NO.4 IS ABOUT DISALLOWANCE OF INTEREST EXPE NSE AMOUNTING TO RS. 1.34 CRORES AND RS. 1.53 CRORES FOR THE AY.2004-05 AND AY.2005-06 RESPE CTIVELY.DURING THE COURSE OF HEARING IT WAS BROUGHT TO OUR NOTICE THAT ISSUE OF DISALLOWANC E OF INTEREST WAS DECIDED BY THE TRIBUANL,IN THE CASE OF THE PRATIMA METHA ON 2 ND AUGUST 2013,WHILE DECIDING THE APPEALS FILED HER F OR THE AYS.2005-06,2006-07 AND 2007-08 (ITA NOS.7871-73/MU M/2010). 3.1. WE FIND THAT TRIBUNAL HAS SET ASIDE THE ISSUE OF DI SALLOWANCE OF INTEREST IN THE CASE OF PRATIMA MEHTA TO THE FILE OF THE AO,WHILE DECIDING THE APPEALS FILED BY HER FOR THE AYS.2005-06 TO 2007-08.FOLLOWING THE SAID ORDERS,WE RESTORE THE ISSUE OF DISALLOWANCE OF INTEREST TO THE FILE OF 5 THE AO FOR FRESH ADJUDICATION.HE IS DIRECTED TO AFF ORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. APPEALS FILED BY THE ASSESSEE FOR THE AY.2004-05 AN D 2005-06 ARE ALLOWED IN PART IN FAVOUR OF THE ASSESSEE. AS A RESULT,APPEALS FILED BY THE AO AND THE ASS ESSEE FOR BOTH THE AYS.STAND PARTLY ALLOWED. * +2$*+ 3 $*+ 4 5 - /$6 $ %7 - 8 1 9 ' !: - !+ ;<. ORDER PRONOUNCED IN THE OPEN COURT ON 19TH,SEPTEMBER,2013 . '1 - ./% ' 8 =$ 19 +. 2013 / - 0 > SD/- SD/- ( . .. . . . . . . I.P. BANSAL ) ( !'# !'# !'# !'# / RAJENDRA ) / JUDICIAL MEMBER ' ' ' ' /ACCOUNTANT MEMBER / MUMBAI, =$ /DATE: 19TH ,SEPTEMBER,2013 SK '1 '1 '1 '1 - -- - (+? (+? (+? (+? @'?%+ @'?%+ @'?%+ @'?%+ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / &' 2. RESPONDENT / ()&' 3. THE CONCERNED CIT (A) / A B , 4. THE CONCERNED CIT / A B 5. DR D BENCH, ITAT, MUMBAI / ?C0 (+$ , . . . 6. GUARD FILE/ 0 D )?+ )?+ )?+ )?+ (+ (+(+ (+ //TRUE COPY// '1$ / BY ORDER, E / ; ! DY./ASST. REGISTRAR , /ITAT, MUMBAI