VALVET HOLDINGS P. LTD, MUMBAI V. DCIT CEN CIR 31, MUMBAI

ITA 2802/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84630 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 10-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Section: 234B; 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI . . , . , , . , ! BEFORE SHRI N K BILLAIYA, AM & SHRI VIVEK VARMA, JM ./ ITA NO.2802, 2804, 2805 & 2806/MUM/2013 ' / ASSESSMENT YEARS 2010-11, 2001-02, 2002-03, 2003 -04 M/S. VELVET HOLDING PVT. LTD. 32, MADHULI, DR. A B ROAD, WORLI, MUMBAI 400 018 PAN AAACV445R VS. THE DCIT CEN CIR 31, MUMBAI ( #$ /APPELLANT) ( %&#$ /RESPONDENT) ' ()* / DATE OF HEARING :24.12.2014. +,' ' ()* / DATE OF PRONOUNCEMENT : 24.12.2014 APPELLANT BY : MR DHARMESH SHAH RESPONDENT BY : DR P DANIEL O R D E R PER N K BILLAIYA, ACCOUNTANT MEMBER THESE ARE APPEALS BY THE ASSESSEE FOR THE ASSESSME NT YEARS 2010-11, 2001- 02, 2002-03 & 2003-04 2. THE FIRST THREE GROUNDS IN ALL THE APPEALS ARE C OMMON. AT THE OUTSET, THE COUNSEL FOR THE ASSESSEE STATED THAT HE IS NOT INCL INED TO PRESS THESE GROUNDS. GROUND NOS. 1, 2 AND 3 OF ALL THE APPEALS UNDER CON SIDERATION ARE DISMISSED AS NOT PRESSED. 3. GROUND NO.4 IS ALSO COMMON IS ALL THE APPEALS, W HICH RELATES TO NON GRANTING RELIEF OF LIABILITY TOWARDS INTEREST EXPENDITURE CL AIMED BY THE ASSESSEE. WE HAVE CONSIDERED APPEAL FOR A.Y. 2010-11 QUA ITA NO. 2802 /MUM/2013. THE CIT(A) AT VELVET HOLDINGS PVT. LTD. 2 PARA 7.4 ON PAGE 6 OF HIS ORDER HAS OBSERVED THAT I DENTICAL ISSUE HAD COME UP FOR BEFORE HIS LEARNED PREDECESSOR IN THE ASSESSEES OW N CASE, WHERE AFTER MAKING DETAILED OBSERVATIONS, THIS GROUND OF APPEAL WAS DI SMISSED. WE FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2007-08 IN ITA NO. 8204/MUM/2010 HAS CONSIDERED THIS ISSUE AT PARA 5 ON PAGE 2 OF ITS OR DER AND HELD AS UNDER: 5. GRIEVANCE RAISED VIDE GROUND NO. 4 & 5 ARE IDEN TICAL TO THE GRIEVANCE RAISED IN ITA NO. 9158/M/2010. WE FIND TH AT THE TRIBUNAL HAS CONSIDERED THE SAME AT PARA-4 TO 10 ON PAGE-4 T O 6 OF ITS ORDER AND HAS ACCORDINGLY DECIDED AS UNDER: THIS ISSUE HAS BEEN CONSIDERED BY THE LD. CIT(A) A T PARA-9 ON PAGE-5 OF HIS ORDER AND AT PARA 9.3.2 THE LD. CIT(A) OBSER VED THAT THE FACTS ARE IDENTICAL TO THE FACTS IN THE PRESENT CASE OF T HE ASSESSEE FOR A.Y. 2005-06. THE LD. CIT(A) WENT ON TO FOLLOW THE FINDI NGS GIVEN BY HIS PREDECESSOR FOR A.Y. 2005-06. THE LD. COUNSEL SUBMITTED THAT IN A.Y. 2005-06, THE TRIBUNAL IN ITA NO. 7726 & 7727/M/2010 HAS RESTORED THIS ISSUE TO T HE FILES OF THE LD. CIT(A) TO ADJUDICATE AFRESH ALONG WITH THE ADJUDICA TION OF THE OTHER GROUNDS PERTAINING TO THE REJECTION/RELIABILITY OF THE BOOKS OF ACCOUNT. NO DISTINGUISHING FACTS HAVE BEEN BROUGHT ON RECORD BY THE LD. DEPARTMENTAL REPRESENTATIVE. AFTER CAREFULLY PERUSING THE ORDER OF THE LD. CIT(A ), WE FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 IN ITA NO. 7726 & 7727/M/10 AT PARA-5 ON PAGE-4 OF ITS ORDER HAS HELD AS UNDER: GROUND NO. 4 RELATES TO THE ACTION OF THE LD.CIT(A ) IN CONFIRMING THE LIABILITIES AMOUNTING TO RS.11,24,99 ,052/- AND RS.12,61,36,245/- RESPECTIVELY FOR THE A.YS 2005-06 AND 2006- 07 TOWARDS INTEREST EXPENDITURE CLAIMED BY THE ASSE SSEE. IT IS PERTINENT TO NOTE THAT THE FINDINGS GIVEN IN PARA 3 .3 ABOVE IN RESPECT OF REJECTION/RELIABILITY OF THE BOOKS OF AC COUNTS AND THE PROPOSED ADJUDICATION OF THE LD.CIT(A) IN VIEW OF T HE SAID DIRECTION MAY HAVE DIRECT IMPACT ON THE ISSUE OF TH E IMPUGNED LIABILITY, WE SET ASIDE THIS ISSUE ALSO TO THE FILE S OF THE LD.CIT(A) TO ADJUDICATE AFRESH ALONG WITH THE ADJUDICATION OF THE RESPECTIVE GROUND PERTAINING TO THE REJECTION/RELIA BILITY OF THE BOOKS OF ACCOUNTS. RESPECTFULLY FOLLOWING THE FINDINGS OF THE TRIBUNAL THIS ISSUE IS RESTORED BACK TO THE FILES OF THE AO TO FOLLOW THE DIRECTION S OF THE TRIBUNAL IN A.Y. 2005-06 AND 2006-07 AS MENTIONED HEREINABOVE. GROUND NO. 4 IS ALLOWED FOR STATISTICAL PURPOSES. VELVET HOLDINGS PVT. LTD. 3 RESPECTFULLY FOLLOWING THE AFORESTATED DECISION OF THE TRIBUNAL, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PU RPOSE. AS NO DISTINGUISHING FACT HAS BEEN BROUGHT ON RECOR D BEFORE US, RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH, TH IS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4. AS MENTIONED ABOVE, WE ARE CONSIDERING THE FACTS OF A.Y. 2010-11, WE FIND THAT IN A.Y. 2010-11 VIDE GROUND NO.5, THE ASSESSEE HAS DISPUTED THE CALCULATION OF BOOK PROFIT U/S. 115JB OF THE ACT. IN OUR CONSIDER ED OPINION, THE FACTS IN ISSUE RAISED VIDE THIS GROUND ARE DIRECTLY RELATED TO THE FACTS IN ISSUE RAISED IN GROUND NO.4. THEREFORE, IN LINE WITH OUR FINDINGS FOR GRO UND NO.4, THIS GROUND BECOMES CONSEQUENTIAL AND ACCORDINGLY DECIDED. 5. THE NEXT GROUND RELATES TO LEVY OF INTEREST CHAR GED U/S. 234A, 234B AND 234C OF THE ACT. AN IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE IN A.Y. 2007-08 IN ITA NO. 8204/MUM2010, W HEREIN THE ISSUE HAS BEEN DISCUSSED A PARA 6 ON PAGE 3 OF THE ITS ORDER AND R EADS AS UNDER: 6. SIMILARLY GRIEVANCE OF THE REVENUE IS CONSIDERE D BY THE TRIBUNAL IN ITA NO. 972/M/2011 VIDE PARA-15 & 16 ON PAGE-7 & 8 OF ITS ORDER WHEREIN THE TRIBUNAL HAS HELD AS UNDER: GROUND NO. 1 (D) AND 1(E) RELATE TO CHARGING OF INT EREST U/S.234A, 234B & 234C OF THE ACT. THE LD. DR BROUGHT TO OUR NOTICE THAT THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS DIVINE HOLDING PVT. LTD. IN INCOME TAX APPEAL NO. 3334 OF 2010 WHICH HAS BEEN FOLLOWED BY THE TRIBUNAL IN THE CASE OF TO PAZ HOLDING PVT. LTD IN ITA NO. 7295/M/2012. WE FIND THAT THE H ONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT THE CHARGEA BILITY OF INTEREST U/S. 234A, 2324B AND 234C OF THE ACT DOES NOT FALL WITHIN THE DOMAIN OF THE SPECIAL COURT (CONTROL OF OFFENCES RELATING TO TRANSACTIONS IN SECURITIES) AT 1992. SI NCE LEVY OF INTEREST IS MANDATORY AND IS VERY MUCH APPLICABLE I N THE CASE OF NOTIFIED PERSONS, RESPECTFULLY FOLLOWING THE DECISI ON OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA), GROUND N O. 1 (D) AND 1 (E) ARE ALLOWED. NEEDLESS TO MENTION THAT THE LEV Y OF INTEREST WOULD BE CONSEQUENTIAL. VELVET HOLDINGS PVT. LTD. 4 RESPECTFULLY FOLLOWING THE FINDINGS OF THE CO-ORDIN ATE BENCH, IN OUR CONSIDERED OPINION, THE LEVY OF INTEREST WOULD BE CONSEQUENTIA L. WE DIRECT THE AO ACCORDINGLY. 6. BEFORE PARTING, WE FIND THAT THE ASSESSEE HAS MO VED AN APPLICATION U/S. 158A OF THE ACT STATING THAT THE ISSUE RELATING TO THE L EVY OF INTEREST U/S. 234A, 234B AND 234C IS PENDING BEFORE HE HONBLE HIGH COURT OF BOM BAY. THE AO IS THEREFORE, DIRECTED TO CONSIDER THE LEVY OF INTEREST AFTER REC EIVING THE DECISION FROM THE HONBLE BOMBAY HIGH COURT AS FAR AS POSSIBLE. 7. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF DECEMBER, 2014. SD/- SD/- (VIVEK VARMA) (N K BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEM BER MUMBAI; -. DATED : 24 TH DECEMBER, 2014. SA ./ ' %( 0'( / COPY OF THE ORDER FORWARDED TO : 1. #$ /THE APPELLANT. 2. %&#$ / THE RESPONDENT. 3. 1 ( ) / THE CIT(A), MUMBAI. 4. 1 / CIT 5. 23 %( , , / DR, F BENCH, ITAT, MUMBAI ./ / BY ORDER, &( %( //TRUE COPY// / 4 5 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI