HITESH S MEHTA, MUMBAI V. ACIT CEN CIR 23, MUMBAI

ITA 349/MUM/2013

• Counselvise Citation: 34919914 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 21-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 11-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 349/MUM/2013 ASSESSMENT YEAR: 2009-10 HITESH S. MEHTA 32, MADHULI DR. A. B. ROAD WORLI, MUMBAI- 400 018 VS. ACIT CEN CIR- 23 409, AAYAKAR BHAVAN M.K. ROAD MUMBAI 400 020 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :- ABAPM 4491 J ASSESSEE BY : SHRI DHARMESH SHAH REVENUE BY : DR. P. DANIEL DATE OF HEARING : 22.04.2014 DATE OF PRONOUNCEMENT : 22.04.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A)-40, MUMBAI DATED 19.11.2012 FOR THE ASSES SMENT YEAR 2009-10. 2. GROUNDS NO. 1 & 2 OF THE APPEAL ARE NOT PRESSED BY THE ASSESSEE AND HENCE THE SAME DO NOT REQUIRE ADJUDICATION. 3. GROUND NO.3 RELATE TO THE DECISION OF THE LD.CIT (A) CONFIRMING THE LIABILITY AMOUNTING TO RS.18,18,34,196/- FOR THE AYS 2009-10 TOWARDS INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE. IT IS PERTINENT TO MENTION THAT THE TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NOS. 5587 TO 5589 & 5608 /MUM/2011 FOR THE AYS 1994- 95, 1995-95, 2001-02 AND 2008-09, WHILE DECIDING A SIMILAR ISSUE HAS FOLLOWED THE DECISIONS OF THE TRIBUNAL IN THE ASSESSEES CASES F OR THE AYS 2005-06 AND 2006-07 WHEREIN IT HAS BEEN HELD BY AS FOLLOWS: IT IS PERTINENT TO NOTE THAT THE FINDINGS GIVEN IN PARA 3.3 ABOVE IN RESPECT OF REJECTION/RELIABILITY OF THE BOOKS OF ACCOUNTS AND THE PROPOSED ADJUDICA TION OF THE LD.CIT(A) IN VIEW OF THE SAID DIRECTION MAY HAV E DIRECT IMPACT ON THE ISSUE OF THE IMPUGNED LIABILITY, WE SET ASIDE THIS ISSUE ALSO TO THE FILES OF THE ITA NO. 349/MUM/2013 HITESH S. MEHTA ASSESSMENT YEAR: 2009-10 2 LD.CIT(A) TO ADJUDICATE AFRESH ALONG WITH THE ADJUD ICATION OF THE RESPECTIVE GROUND PERTAINING TO THE REJECTION/RELIABILITY OF THE BOOKS OF ACCOUNTS. BY FOLLOWING THE ABOVE SAID DECISION, THE TRIBUNAL IN THE ASSESSEES FOR THE AYS 1994-95, 1995-95, 2001-02 AND 2008-09 (SUPRA), SET ASIDE THE ISSUE TO THE FILE OF THE LD.CIT(A) TO PASS A FRESH ORDER IN THE VIEW OF THE DIRECTION GIVEN FOR THE AYS 2005-06 AND 2006-07. IN VIEW OF THAT MATTER, WE, BY FOLLOWING THE FINDINGS OF THE TRIBUNAL IN THE AFOREMENTIONED CASES, SET ASIDE THE ISSUES TO THE FILE OF THE LD.CIT(A) TO ADJUDICATE AFRESH IN THE LINE OF SIMIL AR DIRECTION GIVEN BY THE ITAT AS AFOREMENTIONED. ACCORDINGLY, GROUND NO. 3 IS ALLOWE D FOR STATISTICAL PURPOSE. 4. THE ISSUE RAISED IN GROUND NO 4 OF APPEAL RELATE S TO THE DECISION OF THE LD.CIT(A) CONFIRMING LEVY OF INTEREST CHARGED BY TH E AO U/SS 234A, 234B & 234C OF THE INCOME TAX ACT. AS REGARDS THIS ISSUE, IT IS PE RTINENT TO MENTION THAT THE TRIBUNAL IN THE ASSESSEES OWN FOR THE AYS 1994-95, 1995-95 , 2001-02 AND 2008-09 (SUPRA), WHILE DECIDING A SIMILAR ISSUE, BY FOLLOWING THE EA RLIER DECISION OF THE TRIBUNAL IN THE ASSESSEES CASE FOR THE AYS 2005-06 & 2006-07, SET ASIDE THE GROUND TO THE FILE OF THE AO FOR RE-ADJUDICATION. 4.1 HOWEVER, THE TRIBUNAL IN ITA NO. 6810/MUM/2008 IN M/S. VELVET HOLDINGS PVT. LTD, A GROUP CASE, WHILE DECIDING A SIMILAR IS SUE, HAS HELD AS FOLLOWS: IN OTHER GROUP CASES, THE ITAT HELD THAT INTEREST U/S. 234B, 234C AND 234D CANNOT BE LEVIED AS THE ASSESSEE IS A NOTIFIED PERS ON AND THE PROVISIONS OF THE SPECIAL COURT (TRIAL OF OFFENCES RELATING TO TRANSA CTIONS IN SECURITIES) ACT 1992 WILL PREVAIL. REVENUE HAS CARRIED THE MATTER TO HON 'BLE HIGH COURT WHICH UPHELD THE REVENUE CONTENTION. IT HELD VIDE PARA 14 IN THE CASE OF CIT VS. DIVINE HOLDINGS PVT. LTD. IN ITA NO.3334 OF 2010 DA TED 07-03-2012 AS UNDER : 14. IN PARAGRAPH 14 OF THE JUDGMENT, EXTRACTED ABO VE, THE SUPREME COURT HAS HELD THAT THE PROVISIONS OF THE SPECIAL COURT A CT, WHEREVER THEY ARE APPLICABLE SHALL PREVAIL OVER THE PROVISIONS OF THE INCOME TAX ACT, 1961. THE WORDS WHEREVER THEY ARE APPLICABLE ARE CRUCIAL. T HE SPECIAL COURT ACT MAKES NO PROVISION IN REGARD TO THE DETERMINATION OF LIAB ILITY TO PAY INTEREST UNDER THE INCOME TAX ACT, 1961. THAT LIABILITY IS CLEARLY REF ERABLE TO THE PROVISIONS EMBODIED IN SECTIONS 234A, 234B AND 234C. IN THE CI RCUMSTANCES, THE TRIBUNAL, IN OUR VIEW, WAS IN ERROR IN COMING TO TH E CONCLUSION THAT INTEREST UNDER SECTIONS 234A, 234B AND 234C CAN NOT BE LEVIE D ON AN ASSESSEE WHO IS A NOTIFIED PARTY UNDER THE SPECIAL COURT ACT. BY T HE CIRCULAR WHICH HAS BEEN ISSUED BY THE BOARD, THE POWER TO GRANT SUCH A WAIV ER OR REMISSION HAS BEEN VESTED WITH THE CHIEF COMMISSIONER. IN TERMS OF THE JUDGMENT OF THE SUPREME COURT IN HARSHAD SHANTILAL MEHTA (SUPRA), THE NOTIF IED PERSON, THE ASSESSEE IN THE PRESENT CASE, IS NOT WITHOUT REMEDY SINCE IT IS OPEN TO THE ASSESSEE TO TAKE RECOURSE TO THE REMEDY AVAILABLE UNDER THE DIRECTIO N DATED 26 JUNE 2006.WE ACCORDINGLY ANSWER THE QUESTIONS OF LAW AS FRAMED I N THE NEGATIVE. HOWEVER, ITA NO. 349/MUM/2013 HITESH S. MEHTA ASSESSMENT YEAR: 2009-10 3 WE CLARIFY THAT IT WOULD BE OPEN TO THE NOTIFIED PE RSON TO SEEK A WAIVER OR REDUCTION BY MAKING AN APPLICATION TO THE CHIEF COM MISSIONER OF INCOME TAX IN TERMS OF THE ORDER DATED 26 JUNE 2006 OF THE CENTRA L BOARD OF DIRECT TAXES. THE APPEAL IS ACCORDINGLY DISPOSED OF. 12.2 THE LD. COUNSEL POINTED OUT THAT THE MATTER IS REFERRED TO THE SAME BENCH FOR RECONSIDERATION IN THE CASE OF CIT VS. CASCADE HOLD INGS PVT. LTD. IN ITA NO.3365 OF 2010 DATED 02/07/2013. AS SEEN FROM THE COPY OF THE ORDER PLACED ON RECORD, THE ABOVE ORDER WAS NOT STAYED. ONLY THE APPEAL WAS TRA NSFERRED TO THE SAME BENCH FOR HEARING. IN THESE CIRCUMSTANCES, WE DO NOT SEE ANY REASON TO DIFFER FROM THE JUDGMENT OF THE HON'BLE HIGH COURT IN THE CASE OF C IT VS. DIVINE HOLDINGS PVT. LTD. ACCORDINGLY, IT WAS HELD THAT LEVY OF INTEREST U/S. 234A, 234B AND 234C IS MANDATORY. THE GROUNDS ARE ACCORDINGLY ALLOWED. IT APPEARS THAT THE DECISION OF THE HON'BLE HIGH CO URT IN THE CASE OF CIT VS. DIVINE HOLDINGS PVT. LTD HAS NOT BEEN BROUGHT TO THE NOTIC E OF THE TRIBUNAL WHILE DECIDING THE ASSESSEES OWN CASES REFERRED IN PARA 4 ABOVE. WHEN THE FACTS BEING SO, WE DO NOT FIND ANY REASON TO DIFFER FROM THE JUDGMENT OF THE HON'BLE HIGH COURT IN THE CASE OF CIT VS. DIVINE HOLDINGS PVT. LTD. ACCORDING LY, WE HOLD THAT LEVY OF INTEREST U/S. 234A, 234B AND 234C IS MANDATORY. GROUND NO 4 IS DISMISSED. 5 . VIDE LETTER DATED 21.04.2014, THE ASSESSEE HAS RAIS ED THE FOLLOWING ADDITIONAL GROUNDS WHICH READS AS UNDER: THE LD.CIT(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 CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEHTA AND HENCE THE INCOME ASSESSED BY THE ASSESSING OFFI CER OUGHT TO HAVE BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE HANDS OF THE APPELLANT. IT IS PERTINENT TO MENTION THAT THE TRIBUNAL, IN TH E ASSESSEES OWN CASE FOR THE AYS 1994-95, 1995-95, 2001-02 AND 2008-09 (SUPRA), HAS DECIDED A SIMILAR ADDITIONAL GROUND, THE ADJUDICATION OF WHICH READS AS UNDER: 4. THE ASSESSEE HAS ALSO FILED AN APPLICATION DATE D 27.05.2010 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. N O. 41 OF 1999, THE ASSETS UNDER CONSIDERATION AND THE CONSEQUENTIAL IN COME BELONGS TO SHRI HARSHAD S. MEHTA AND HENCE, THE INCOME ASSESSE D BY THE ASSESSING OFFICER OUGHT TO HAVE BEEN TAXED IN THE H ANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE HANDS OF THE APPELL ANT. 5. AFTER GOING THROUGH THE ADDITION GROUND FILE D BY THE ASSESSEE, WE NOTED THAT THE GROUND IS LEGAL GROUND, WHICH DOES N OT REQUIRE ANY NEW FACTS TO BE BROUGHT ON RECORD. IN VIEW OF THE DECIS ION OF THE HONBLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD . VS. CIT, REPORTED IN ITA NO. 349/MUM/2013 HITESH S. MEHTA ASSESSMENT YEAR: 2009-10 4 (1998) 229 ITR 383, THE LEGAL GROUND CAN BE ADMITTE D, IF NO NEW FACTS ARE TO BE BROUGHT ON RECORD. HOWEVER, AFTER GOING THROU GH THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR ALL THE ASSESSMEN T YEARS INVOLVED HERE BEFORE US, WE FOUND THAT THE GROUND IS FULLY ACADEM IC IN NATURE FOR THE REASON THAT IF THE HONBLE SUPREME COURT DECIDES SO METHING THAT HAS TO BE FOLLOWED WITHOUT ANY DISPUTE. THE DECISION OF THE H ONBLE APEX COURT IS LAW OF LAND, WHICH HAS TO BE FOLLOWED BY EVERY AUTH ORITY. THEREFORE, IN OUR VIEW, NO DIRECTION IS TO BE REQUIRED TO BE GIVEN TO THE AO IN THIS RESPECT BECAUSE IF THE HONBLE APEX COURT DECIDES THAT ALL THE INCOME BELONGS TO SHRI HARSHAD S. MEHTA, THEN THE INCOME HAS TO BE AS SESSED IN THE HANDS OF SHRI HARSHAD S. MEHTA, NOT IN THE HANDS OF ANY O THER PERSON. THEREFORE, IN OUR VIEW, THERE IS NO NEED TO ISSUE ANY DIRECTIO N AS THE DECISION OF THE HONBLE SUPREME COURT HAS TO BE FOLLOWED IN ANY CAS E. ACCORDINGLY, BY ADMITTING THE GROUNDS RAISED BY THE ASSESSEE FOR AL L THESE YEARS, WE TREAT THE SAME AS ACADEMIC IN NATURE. IN THE ABSENCE OF ANY DISTINGUISHING FACT BROUGHT O N RECORD BY THE PARTIES FOR THE YEAR UNDER CONSIDERATION, WE, FOLLOWING THE SAID DE CISION OF THE TRIBUNAL, DECIDE THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IN THIS AP PEAL IN SAME MANNER AS AFOREMENTIONED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 2 ND DAY OF APRIL, 2014. SD/- SD/- (RAJENDRA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 22.04.2014 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR H BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.