HARSH ESTATES P. LTD, MUMBAI V. DCIT CC 31, MUMBAI

ITA 3537/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1739 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 03-06-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 29-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Assessee Lawyers: DHAMESH SHAH
• Keywords: Opportunity of being heard
• Section: 234B; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI R.K. PANDA, AM & SMT. ASHA VIJAYARAGHAV AN, JM I.T.A. NO. 3537/MUM/2009 (ASSESSMENT YEAR 2004-05) I.T.A. NO. 3739/MUM/2009 (ASSESSMENT YEAR 2006-07) M/S. HARSH ESTATES PVT. LTD. 32, MADHULI, 3 RD FLOOR, DR. ANNIE BESANT ROAD, NEHRU CENTRE, WORLI, MUMBAI-400 018 PAN: AAACH3480L VS. DY. CIT, CENTRAL CIRCLE-31 MUMBAI APPELLANT RESPONDENT APPELLANT BY: MR. DHAMESH SHAH RESPONDENT BY: DR. P. DANIEL O R D E R DATE OF HEARING: 03.06.2010 DATE OF ORDER: 11.06.2010 PER R.K. PANDA, AM: THE ABOVE TWO APPEALS FILED BY THE ASSESSEE ARE D IRECTED AGAINST THE SEPARATE ORDERS DATED 5 TH MARCH, 2009 AND 13 TH APRIL, 2009 OF THE CIT(A), CENTRAL-IV, MUMBAI RELATING TO ASSESSMENT Y EARS 2004-05 AND 2006-07, RESPECTIVELY. SINCE COMMON GROUNDS ARE IN VOLVED IN BOTH THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND A RE BEING DISPOSED OF BY THIS COMMON ORDER. I.T.A. NO. 3537/MUM/09 (A.Y. 2004-05) 2. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING FILED A CHART AND DID NOT PRESS GROUNDS OF APPEAL NOS. 1, 2 , 3, 5 AND 6 FOR WHICH THE LEARNED DR HAS NO OBJECTION. ACCORDINGLY THE A BOVE GROUNDS ARE DISMISSED AS NOT PRESSED. GROUNDS OF APPEAL NO. 9 BEING GENERAL IN NATURE IS DISMISSED. I.T.A. NOS. 3537& 3739/MUM/2009 M/S. HARSH ESTATES PVT. LTD. ======================== 2 3. GROUNDS OF APPEAL NO. 4 BY THE ASSESSEE READS AS UN DER: THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) H AS ERRED IN LAW AND IN FACTS IN CONFIRMING DISALLOWANC E ON ACCOUNT OF INTEREST EXPENSE AMOUNTING TO RS.8,37,52 6/-. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET , REFERRED TO THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE VIDE I .T.A. NO. 6890/MUM/08 FOR THE A.Y. 2005-06 DATED 15 TH JANUARY, 2010 AND SUBMITTED THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE ISSUE HAS BEE N RESTORED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. THE LEARNED DR ALSO FAIRLY CONCEDED THAT THE ISSUE HAS BEEN SET ASIDE TO THE FILE OF TH E CIT(A). 5. IN VIEW OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06, WE DEEM IT PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. THE CIT(A) SHALL GIVE DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECIDE THE ISSUE AS PER L AW. WE HOLD AND DIRECT ACCORDINGLY. THIS GROUND BY THE ASSESSEE IS ACCORD INGLY ALLOWED FOR STATISTICAL PURPOSES. 6. GROUNDS OF APPEAL NO. 7 BY THE ASSESSEE READS AS UN DER: THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) H AS ERRED IN LAW AND IN FACTS IN CONFIRMING CALCULATION OF BOOK PROFIT U/S. 115JB AMOUNTING TO RS.(-)1,09,41,877/-. 7. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRING TO T HE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 VI DE I.T.A. NO. 6890/MUM/08 ORDER DATED 15 TH JANUARY, 2010 SUBMITTED THAT THIS ISSUE MAY BE SET ASIDE TO THE FILE OF THE CIT(A) FOR FRES H ADJUDICATION IN THE LIGHT OF THE DECISION OF THE TRIBUNAL. THE LEARNED DR FA IRLY CONCEDED THAT HE HAS NO OBJECTION IF THE MATTER IS RESTORED BACK TO THE CIT(A) FOR FRESH ADJUDICATION. 8. IN VIEW OF THE ABOVE SUBMISSION BY BOTH THE SIDES, WE RESTORE THE MATTER TO THE FILE OF CIT(A) FOR FRESH ADJUDICATION IN THE LIGHT OF THE DIRECTION OF THE TRIBUNAL. THE CIT(A) SHALL GIVE D UE OPPORTUNITY OF BEING I.T.A. NOS. 3537& 3739/MUM/2009 M/S. HARSH ESTATES PVT. LTD. ======================== 3 HEARD TO THE ASSESSEE AND DECIDE THE ISSUE AS PER L AW. THIS GROUND BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PUR POSES. 9. GROUNDS OF APPEAL NO. 8 BY THE ASSESSEE READS AS UN DER: THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) H AS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE INTEREST CHARGED U/S. 234A, 234B AND 234C OF THE ACT ARE INC ORRECT. 10. AFTER HEARING BOTH THE SIDES, WE FIND IDENTICAL ISS UE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE VIDE I.T .A. NO. 6890/MUM/08 FOR A.Y. 2005-06. WE FIND THE TRIBUNAL AT PARA 5 O F THE ORDER HAS DISCUSSED THE ISSUE AND HELD THAT THE ASSESSEE IS N OT LIABLE TO INTEREST U/S. 234A, 234B AND 234C OF THE ACT. THE RELEVANT OBSER VATION OF THE TRIBUNAL IS AS UNDER: THE FOURTH DISPUTE IS REGARDING CHARGE OF INTEREST UNDER SECTION 234A, 234B AND 234C. THE LEARNED DR FAIRLY CONCEDED THAT THIS ISSUE WAS ALSO COVERED BY THE DE CISION OF TRIBUNAL IN CASE OF M/S. ORION TRAVELS PVT. LTD. (S UPRA). THE TRIBUNAL IN THE SAID CASE NOTED THAT FROM THE DATE OF FUNCTIONING OF THE SPECIAL COURT W.E.F. 1.6.1992 TH E DISTRIBUTION OF MONIES IN CASE OF NOTIFIED PERSONS HAD TO BE DECIDED BY THE SPECIAL COURT. EVEN IF THE NOTIFIED PERSON WANTED TO PAY ADVANCE TAX IT WAS NOT WITHIN HIS CON TROL TO DO SO. THE TRIBUNAL REFERRED TO A RULING OF THE SPECI AL COURT IN WHICH IT WAS HELD THAT NO PENALTY OR INTEREST SHOUL D BE IMPOSED FOR NON FULFILMENT OF ANY PROVISIONS OF THE ACT WHICH A NOTIFIED PARTY WAS PREVENTED FROM DOING BY REASON OF THE SPECIAL COURT THE PROVISIONS OF WHICH WOULD PREVAIL OVER THE PROVISIONS OF OTHER ACTS. THE SPECIAL COURT IN THE SAID CASE ALSO OBSERVED THAT THE MONEY FOR PAYMENT OF TAX COU LD BE RELEASED ONLY AFTER ENTIRE DISTRIBUTION HAD TAKEN P LACE AND THEREFORE EVEN IF A NOTIFIED PARTY WAS TO MAKE AN A PPLICATION FOR PAYMENT OF ADVANCE TAX, THE COURT SHOULD REFUSE . THE TRIBUNAL THEREFORE OBSERVED THAT THE ASSESSEE COULD NOT BE EXPECTED TO DO THE IMPOSSIBLE AND ACCORDINGLY HELD THAT A NOTIFIED PERSON WOULD NOT BE LIABLE TO PAY INTEREST UNDER SECTION 234B AND 234C AND EVEN UNDER SECTION 234A A S QUANTIFICATION OF INTEREST UNDER SECTION 234A DEPEN DED UPON THE PAYMENT OF ADVANCE TAX. RESPECTFULLY FOLLOWING THE DECISION OF TRIBUNAL (SUPRA) WE HOLD THAT THE ASSES SEE IS NOT LIABLE TO PAY INTEREST UNDER SECTION 234A, 234B AND 234C. I.T.A. NOS. 3537& 3739/MUM/2009 M/S. HARSH ESTATES PVT. LTD. ======================== 4 11. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 AND IN ABSENCE OF ANY CON TRARY MATERIAL BROUGHT TO OUR NOTICE, THIS GROUND BY THE ASSESSEE IS ALLOWED. I.T.A. NO. 3739/MUM/09 (A.Y. 2006-07) : 12. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET DID NOT PRESS GROUNDS OF APPEAL NOS. 1, 2, 3, 4, AND 6 FOR WHICH THE LEARNED DR HAS NO OBJECTION. ACCORDINGLY, THE ABOVE GROUNDS ARE DISM ISSED AS NOT PRESSED. GROUNDS OF APPEAL NO. 9 BEING GENERAL IN NATURE IS DISMISSED. 13. GROUNDS OF APPEAL NOS. 5 AND 7 BY THE ASSESSEE READ AS UNDER: 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING DISALLO WANCE ON ACCOUNT OF INTEREST EXPENSE AMOUNTING TO RS.93,92,4 69/-. 7. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING CALCULA TION OF BOOK PROFIT U/S. 115JB AMOUNTING TO RS.51,40,164/-. 14. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE TW O GROUNDS ARE IDENTICAL TO GROUNDS OF APPEAL NOS. 4 AND 7 RESPECT IVELY OF I.T.A. NO. 3537/MUM/09. WE HAVE ALREADY DISCUSSED THE ISSUES AND RESTORED THE ISSUE TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICAT ION. FOLLOWING THE SAME RATIO, THE ABOVE TWO GROUNDS BY THE ASSESSEE ARE AL SO RESTORED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION IN THE LIGHT O F THE DIRECTION GIVEN THEREIN. THE ABOVE TWO GROUNDS ARE ACCORDINGLY ALL OWED FOR STATISTICAL PURPOSES. 15. GROUNDS OF APPEAL NO. 8 BY THE ASSESSEE READS AS UN DER: 8. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING T HAT THE INTEREST CHARGED U/S. 234A, 234B AND 234C OF THE AC T ARE INCORRECT. 16. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GRO UND IS IDENTICAL TO GROUNDS OF APPEAL NO. 8 IN I.T.A. NO. 3537/MUM/2 009. WE HAVE I.T.A. NOS. 3537& 3739/MUM/2009 M/S. HARSH ESTATES PVT. LTD. ======================== 5 ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE ASSESSEE HAS BEEN UPHELD. FOLLOWING THE SAME RATIO THIS GROUND BY TH E ASSESSEE IS ALLOWED. 17. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESS EE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 11 TH JUNE, 2010. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (R.K. PANDA) ACCOUNTANT MEMBER MUMBAI, DATED 11 TH JUNE, 2010 COPY TO: (1) THE APPELLANT, (2) THE RESPONDENT, (3) THE CIT(A), CENTRAL-IV, MUMBAI, (4) THE CIT, CENTRAL-II, MUMBAI, (5) THE DR, H BENCH, ITAT, MUMBAI. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI TPRAO