PRATIMA H MEHTA, MUMBAI V. ACIT CEN CIR 23, MUMBAI

ITA 350/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92477 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 04-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Keywords: Opportunity of being heard
• Section: 234B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI . . , . , BEFORE SHRI I.P. BANSAL, JM AND RAJENDRA, AM ./ I.T.A. NO.350/MUM/2013 ( / ASSESSMENT YEAR : 2009-10 PRATIMA H. MEHTA, MADHULI, DR. A.B.ROAD, WORLI, MUMBAI 400 018. / VS. THE ACIT, CENTRAL CIRCLE - 23, 409, AAYKAR BHAVAN, MK ROAD, MUMBAI 400020 ./ ./ PAN/GIR NO. : ABNPM 8226G ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI DHARMESH SHAH RESPONDENT BY DR. P.DANIEL ' #$ / DATE OF HEARING : 11/05/2015 ' #$ / DATE OF PRONOUNCEMENT : 11/05/2015 / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-40, MUMBAI DATED 19/11/2012 FO R ASSESSMENT YEAR 2009-10. GROUNDS OF APPEAL READ AS UNDER: 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) H AS ERRED IN LAW AND FACTS IN PASTING THE ORDER U/S.250 OF THE ACT. 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND FACTS IN NOT APPRECIATING THAT NO INCOME FROM ATTACHED ASSET S CAN BE ASSESSED IN THE HANDS OF THE APPELLANT. 3. THE LD. COMMISSIONER OF INCOME TAX(APPEALS ) HA S ERRED IN LAW AND IN FACTS IN NOT GRANTING DEDUCTION OF LIABILITY AMOUN TING TO RS.9,35,87,628/- TOWARDS INTEREST EXPENDITURE CLAIMED BY THE APPELLA NT. 4. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN NOT APPRECIATING THAT NO INTEREST U/S. 234B AND 234 C CAN BE LEVIED ON THE FACTS OF THE PRESENT CASE ./ I.T.A. NO.350/MUM/2013 ( / ASSESSMENT YEAR : 2009-10 2 2. GROUND NO.1 & 2WERE NOT PRESSED. GROUND NO.3 WA S STATED TO BE COVERED BY THE EARLIER DECISION OF THE TRIBUNAL IN GROUP CASE. REFERENCE WAS MADE TO THE DECISION DATED 5/3/2015 PASSED IN ITA NO. 5135& 5136/MUM/2012 & ITA NOS.2151/MUM/2013 IN THE CASE O F GROWMORE LEASING & INV. LTD. AND REFERENCE WAS MADE TO THE F OLLOWING OBSERVATIONS: 3. GROUND NO. 4 RELATES TO THE DISALLOWANCE OF INT EREST EXPENSE. THE LD. COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THAT THE DECISION RELIED UPON BY THE LD. CIT(A) WHILE DISPOSING THIS GROUND HAS BEEN SET ASIDE BY THE TRIBUNAL TO THE FILE OF THE LD. CIT(A). 4. THE LD. DEPARTMEN TAL REPRESENTATIVE COULD NOT BRING ANY DISTINGUISHING DECISION IN FAVOUR OF THE REVENUE. 5. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BEL OW. WHILE DISPOSING THE GROUND RELATING TO THE DISALLOWANCE OF INTEREST, WE FIND THAT THE LD. CIT(A) HAS FOLLOWED THE FINDINGS GIVEN IN THE CASE OF EMINENT HOLDINGS PVT. LTD. WE FIND THAT THE TRIBUNAL IN THE CASE OF EMINENT HOLDINGS I N ITA NOS. 2139, 2140 AND 2141/MUM/2013 HAVE FOLLOWED THE DECISION OF THE TRI BUNAL GIVEN IN COMMON GROUP CASE OF HITESH S. MEHTA AT PARA 2.3 OF THE OR DER AND RESTORED THE MATTER TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATIO N. RESPECTFULLY FOLLOWING THE FINDINGS OF THE CO ORDINATE BENCH, WE RESTORE THIS ISSUE TO THE FILES OF THE LD. CIT(A) FOR FRESH ADJUDICATION AFTER GIVING REASONAB LE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. BEFORE CLOSING THIS ISSUE, THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE LD. CIT(A) HAS HELD THAT THE I SSUE OF INTEREST EXPENDITURE IS PENDING BEFORE THE HONBLE SPECIAL COURT. IT IS THE SAY OF THE LD. COUNSEL THAT THE PROCEEDINGS IN WHICH THE SAID ISSUE OF INT EREST WAS ISSUED BY THE CUSTODIAN HAVE BEEN ALREADY CONCLUDED WHICH FACT HA S ALREADY BEEN RECORDED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. WE, THEREF ORE, DIRECT THE LD. CIT(A) TO CONSIDER THIS FACT WHILE DECIDING THE ISSUE AFRESH. THE LD. CIT(A) MAY ALSO DIRECT FOR THE TAXING OF INCOME IN THE HANDS OF THE RECIPIENT (FAMILY MEMBERS) IN ACCORDANCE WITH THE METHOD OF ACCOUNTING FOLLOWED B Y THEM AND AS PER THE PROVISIONS OF THE LAW. GROUND NO. 4 IS TREATED AS A LLOWED FOR STATISTICAL PURPOSE. 3. LD. SPECIAL COUNSEL DID NOT CONTROVERT TO SUCH C ONTENTION OF LD. AR THAT THE ISSUE IS COVERED BY THE AFOREMENTIONED DEC ISION. 4. IN VIEW OF THE SITUATION, AFTER HEARING BOTH THE PARTIES, WE PASS SIMILAR ORDER AND THIS GROUND IS CONSIDERED TO BE ALLOWED F OR STATISTICAL PURPOSES IN THE MANNER AFORESAID. 5. APROPOS GROUND NO.4, IT WAS STATED TO BE COVERED BY THE DECISION OF TRIBUNAL DATED 18/6/2014 IN ITA NOS. 2139,2140 & 21 41/MUM/2013 VIDE ORDER DATED 18/6/2014. REFERENCE WAS INVITED TO TH E FOLLOWING OBSERVATIONS: ./ I.T.A. NO.350/MUM/2013 ( / ASSESSMENT YEAR : 2009-10 3 3. THE NEXT GROUND OF APPEAL IS ABOUT LEVY OF INTE REST U/S. 234 OF THE ACT. BEFORE US, AR STATED THAT THE ASSESSEE WAS A NOTIFI ED ENTITY, THAT THE PROVISIONS OF S.234A,234B AND 234C OF THE ACT WERE DEEMED TO HAVE COMPLIED WITH, THAT THE ASSETS WERE ALREADY IN ATTA CHMENT OF THE CUSTODIAN APPOINTED UNDER THE PROVISIONS OF THE SPECIAL COURT S ACT, THAT THE TRIBUNAL IN THE CASE OF THE APPELLANT AND SEVERAL OTHER ENTITIE S HAD HELD THE VIEW IN FAVOUR OF THE APPELLANT THAT THE HONBLE BOMBAY HIG H COURT IN THE CASE OF DIVINE HOLDINGS PVT. LTD. AND CASCADE HOLDINGS PVT. LTD. HAD HELD THE PROVISIONS OF SECTION SECTIONS 234A, 234B AND 234C OF THE ACT WERE MANDATORY AND WERE APPLICABLE TO THE NOTIFIED EN TITIES ALSO, THAT THE ASSESSEE WAS IN THE PROCESS OF FILING AN APPEAL AGA INST THEE SAID ORDER BEFORE THE HON'BLE SUPREME COURT, THAT THE INCOME EARNED I N THE YEAR UNDER CONSIDERATION WAS SUBJECTED TO PROVISIONS OF TDS,TH AT THE CHANGEABILITY OF THE SECTION 234A, 234B AND 234C OF THE ACT SHOULD BE AF TER CONSIDERING THE AMOUNT OF TAX DEDUCTIBLE AT SOURCE ON THE INCOME AS SESSED. THE APPELLANT RELIES IN THIS REGARD ON THE FOLLOWING DECISIONS. H E RELIED UPON THE CASES OF MOTOROLA INC. V. DCIT [95 LID 269 (DEL.(SB)], SEDCO FORES DRILLING CO. LTD. [264 ITR 320],NGC NETWORK ASIA LLC [313 ITR 187] ,SUMMIT BHATACHARYA [ 300 ITR (AI) 347 (BOM)(SB)], VIJAL GOPAL JINDAL [ITA NO. 43 33/DEL/2009] & EMILLO RUIZ BERDEJO [320 ITR 190 (BOM)].DR RELIED UPON THE CASE S OF DEVINE HOLDINGS PVT. LTD. 3.1.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT IN THE CASE OF DEVINE HOLDINGS PVT. LTD. HON'BLE BOMBAY HIGH COURT HAS HELD THAT PROVISIONS OF SECTION 234A, 234 B AND 234C WERE APPLICABLE TO THE NOTIFIED PERSON ALSO. THEREFORE, UPHOLDING THE ORDER OF THE FAA TO THAT EXTENT, WE HOLD THAT PROVISIONS OF SECT ION 234 OF THE ACT ARE APPLICABLE. AS FAR AS CALCULATION PART IS CONCERNED . WE FIND MERITS IN THE SUBMISSION MADE BY THE ASSESSEE. THEREFORE, WE ARE RESTORING BACK THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION WHO WO ULD DECIDE THE ISSUE AFTER CONSIDERING THE AMOUNT TAXED DEDUCTIBLE AT SOURCE O N THE INCOME ASSESSED AND AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEA RING TO THE ASSESSEE. GROUND NO.5 IS ALLOWED IN PART IN FAVOUR OF THE' AS SESSEE. AS A RESULT, APPEAL FILED BY THE ASSESSEE FOR THE A .Y 2002-03 STANDS PARTLY ALLOWED. 6. LD. SPECIAL COUNSEL DID NOT CONTROVERT SUCH CONT ENTION OF LD.AR THAT THE ISSUE IS COVERED BY THE AFOREMENTIONED OBSERVAT IONS. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOTH THE PARTIES, WE PASS SIMILAR ORDER AND THIS GROUND IS CONSIDERED TO BE PARTLY ALLOWED. ./ I.T.A. NO.350/MUM/2013 ( / ASSESSMENT YEAR : 2009-10 4 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED IN T HE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 11/05/2015 ' * +, 11/05/2015 ' SD/- SD/- (RAJENDRA) . . (I.P.BANSAL) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; + DATED 11/05/2015 !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. /# ( ) / THE CIT(A)- 4. /# / CIT 5. 01 #23 , $ 23 , / DR, ITAT, MUMBAI 6. 4 / GUARD FILE. / BY ORDER, 0# # //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . .VM , SR. PS