KANISHTAHA FINANCE AND INVESTMENT P.LTD, MUMBAI V. PR CIT 2, MUMBAI

ITA 3249/MUM/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100881 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 28-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: L K S DEHIYA
• Assessee Lawyers: R C JAIN
• Keywords: Opportunity of being heard
• Section: 143(3); 14A; 263

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.3249/MUM/2015 ASSESSMENT YEAR: 2010-11 KANISHTHA FINANCE & INVESTMENT PVT. LTD., 212, TV INDUSTRIAL AREA, 2 ND FLOOR, 52, S.K. AHIRE MARG WORLI, MUMBAI-400030 / VS. THE PRINCIPAL CIT-2, 384, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( !'# $ /ASSESSEE) ( % / REVENUE) P.A. NO. AAACK4280D !'# $ / ASSESSEE BY SHRI R.C.JAIN % / REVENUE BY SHRI L.K.S. DEHIYA-CIT-DR %& ' $ ( / DATE OF HEARING : 15/09/2015 ' $ ( / DATE OF ORDER: 28/09/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 30/03/2015 OF THE LD. PRINCIPAL COMMISSIONER OF INC OME TAX, MUMBAI, INVOKING REVISIONS JURISDICTION U/S 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). KANISHTHA FINANCE & INVESTMENT PVT. LTD. ITA NO.3249/MUM/2015 2 2. DURING HEARING OF THIS APPEAL, THE CRUX OF ARGU MENT ADVANCED BY SHRI R.C. JAIN, LD. COUNSEL FOR THE ASS ESSEE, IS IDENTICAL TO THE GROUND RAISED BY CONTENDING THAT A SSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 21/11/2012 A ND NO APPEAL WAS FILED BY THE ASSESSEE AGAINST THE DISALL OWANCES MADE U/S 14A OF THE ACT R.W.R. 8D OF THE RULES. IT WAS CONTENDED THAT ASSESSMENT WAS FRAMED AFTER DUE APPL ICATION OF MIND BY THE ASSESSING OFFICER AND 6 DAYS IS NOT A REASONABLE TIME AS THE ASSESSEE MADE SUBMISSION ON 26/03/2015 BY ESTABLISHING DIRECT NEXUS, THEREFORE, THE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICI AL TO THE INTEREST OF THE REVENUE. RELIANCE WAS PLACED UPON THE DECISION IN GREEN WORLD CORPORATION 314 ITR 81 (SC) AND GOKUL DAS EXPORTS (333 ITR 214) (KARNATKA). 2.1. ON THE OTHER HAND, SHRI L.K.S DAHIYA, LD. CI T-DR, STRONGLY DEFENDED THE IMPUGNED ORDER BY CONTENDING THAT THE LD. COMMISSIONER JUSTIFIABLY INVOKED REVISIONAL JUR ISDICTION U/S 263 OF THE ACT, MORE SPECIFICALLY, WHEN THE ASS ESSING OFFICER HAS NOT DISTURBED THE DISALLOWANCES UNDER R ULE 8D (1), PREPARED BY THE ASSESSEE AND FURTHER THERE IS NO APPLICATION OF MIND BY THE ASSESSING OFFICER AS INT EREST FOR DISALLOWANCE SHOULD HAVE BEEN RS.1,02,11,955/- AND EVEN BEFORE THE TRIBUNAL, THE ASSESSEE HAS NOT CLAIMED T HAT THIS FIGURE IS INCORRECT. IT WAS POINTED OUT THAT EVEN T HE LD. COMMISSIONER PROVIDED THIS CALCULATION TO THE ASSES SEE AND HAS PROPERLY POINTED OUT AS TO HOW THE ASSESSMENT O RDER IS ERRONEOUS. FURTHER, THE LD. COMMISSIONER HAS NOT DE CIDED KANISHTHA FINANCE & INVESTMENT PVT. LTD. ITA NO.3249/MUM/2015 3 THE MATTER AND SIMPLY SENT TO THE ASSESSING OFFICER WITH APPROPRIATE DIRECTION, SO, NO PREJUDICE IS CAUSED T O THE ASSESSEE. RELIANCE WAS PLACED UPON THE DECISION IN MALABAR INDUSTRIAL CORPORATION LTD. (243 ITR 83) (SC), PT. LASHKARI RAM VS CIT 272 ITR 309 (ALL.) AND ASHOK LEYLAND VS CIT 260 ITR 599. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE A LSO PERUSED THE ASSESSMENT ORDER, WHICH IS A SUBJECT MA TTER OF REVISIONAL JURISDICTION U/S 263 AND THE IMPUGNED OR DER PASSED BY THE LD. COMMISSIONER. WE NOTE THAT WHILE FRAMING THE ASSESSMENT VIDE ORDER DATED 21/11/2012, THE LD. ASSESSING OFFICER SIMPLY FOLLOWED THE WORKING OF DI SALLOWANCE MADE BY THE ASSESSEE, WITHOUT ANALYZING THE FACTUAL POSITION AND HUGE INTEREST EXPENSES, CLAIMED BY THE ASSESSEE . THE ASSESSING OFFICER WAS EXPECTED TO GIVE ITS REASONIN G FOR ACCEPTING THE CLAIM OF THE ASSESSEE. IT IS FURTHER NOTED THE ASSESSING OFFICER HAS NOT APPLIED THE PROVISIONS OF RULE 8D CORRECTLY AS THE ASSESSMENT YEAR IS INVOLVED IN 201 0-11 AND THERE IS CLEAR FAILURE ON THE PART OF THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE AND TO COMPUTE TH E DISALLOWANCE U/S 14A READ WITH RULE 8D, THUS, THE ASSESSMENT ORDER IS ERRONEOUS AS WELL AS PREJUDICIA L TO THE INTEREST OF THE REVENUE. IT IS ALSO NOTED WHILE PAS SING THE ORDER U/S 263 OF THE ACT, OPPORTUNITY WAS GRANTED T O THE ASSESSEE AND ALSO TO STATE THE OBJECTIONS TO THE PR OPOSED REVISIONAL ACTION. IN ITS SUBMISSIONS, THE ASSESSEE RESPONDED KANISHTHA FINANCE & INVESTMENT PVT. LTD. ITA NO.3249/MUM/2015 4 THAT REASONABLE OPPORTUNITY WAS NOT PROVIDED TO THE ASSESSEE TO MAKE SUBMISSION TO THE PROPOSED REVISIONAL ACTIO N AND FURTHER RULE 8D ARE NOT APPLICABLE TO THE UNSECURED LOANS INVESTED IN CONVERTIBLE BONDS AND SHARES OF SUBSIDI ARY COMPANIES. TOTALITY OF FACTS, CLEARLY INDICATES THA T EVEN IN THE IMPUGNED ORDER, THE ISSUES WERE SET ASIDE TO THE FI LE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER CONDUCTING APPROPRIATE ENQUIRIES AND ON EXAMINING THE DETAILS AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD BEFORE FIN ALIZING THE ASSESSMENT, THUS, NO GRIEVANCE IS CAUSED TO THE ASS ESSEE. OUR VIEW IS FORTIFIED BY THE DECISION IN INDIAN TEX TILE VS CIT (157 ITR 112) (MAD.), GEE VEE ENTERPRISES VS ADDL. CIT (99 ITR 375)(DEL.), THALIBAI F JAIN VS ITO 101 ITR 1 (K ARN.) AND CIT VS HPFC 186 TAXMAN 105 (HP), CIT VS PUSHPA DEVI 164 ITR 639 (PATNA). WE ARE AWARE THAT BEFORE THE COMM ISSIONER INVOKES THE REVISIONAL JURISDICTION U/S 263 , HE SH OULD GET SATISFIED THAT THE ORDER PASSED BY THE ASSESSING OF FICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. HONBLE GUJARAT HIGH COURT IN CIT VS M. M.KHAMBATBA LA 198 ITR 144 (GUJ.) EVEN WENT TO THE EXTENT THAT REVISIO NAL POWERS CAN BE EXERCISED EVEN IF THE ISSUE IS DEBATABLE. TO TALITY OF FACTS, CLEARLY INDICATES THAT THE LD. COMMISSIONER JUSTIFIABLY INVOKED REVISIONAL JURISDICTION AS IS OOZING OUT FR OM THE FACTS AVAILABLE ON RECORD. WE AFFIRM THE STAND OF THE LD. COMMISSIONER AS WE FIND NO INFIRMITY IN THE DIRECTI ONS TO THE ASSESSING OFFICER CONTAINED IN THE REVISIONAL ORDER . THE APPEAL OF THE ASSESSEE IS THEREFORE HAVING NO MERIT , CONSEQUENTLY, DISMISSED. KANISHTHA FINANCE & INVESTMENT PVT. LTD. ITA NO.3249/MUM/2015 5 FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 15/09/2015. SD/ - (RAJESH KUMAR) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER & MUMBAI; * DATED : 28/09/2015 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. 2 2 3$ ( ,- ) / THE CIT, MUMBAI. 4. 2 2 3$ / CIT(A)- , MUMBAI 5. 5%6 0$ ! , 2 ,-( ,! 7 , & / DR, ITAT, MUMBAI 6. 8' 9& / GUARD FILE. / BY ORDER, 15-$ 0$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & / ITAT, MUMBAI