ZEST HOLDINGS P. LTD, MUMBAI V. DCIT CC 31, MUMBAI

ITA 3637/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7795 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 04-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Assessee Lawyers: NILESH MEHTA
• Section: 234B; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI D. K. AGARWAL, JM & SHRI R.K. PANDA, AM I.T.A. NO. 3637/MUM/2009 (ASSESSMENT YEAR 2006-07) M/S. ZEST HOLDINGS PVT. LTD. 32, MADHULI, DR. A.B. ROAD, WORLI, MUMBAI-400 018 PAN: AAACZ0443M VS. DY. CIT, CENTRAL CIRCLE 31, ASST. CIT, CENTRAL CIRCLE 31, MUMBAI APPELLANT RESPONDENT APPELLANT BY: MR. VIJAY MEHTA & MR. NILESH MEHTA RESPONDENT BY: DR. P. DANIEL O R D E R DATE OF HEARING: 02.02.2010 DATE OF ORDER: 03.02.2010 PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 20 TH MARCH, 2009 OF THE CIT(A), CENTRAL-IV, MUMBAI RELA TING TO ASSESSMENT YEAR 2006-07. 2. AT THE TIMER OF HEARING THE LEARNED DR DID NOT PRES S REVISED GROUNDS OF APPEAL NOS. 1 TO 3 AND 5 FOR WHICH THE L EARNED DR HAS NO OBJECTION. ACCORDINGLY THESE GROUND BY THE ASSESSE E ARE DISMISSED AS NOT PRESSED. REVISED GROUNDS OF APPEAL NO. 8 B EING GENERAL IN NATURE IS DISMISSED. 3. IN REVISED GROUNDS OF APPEAL NO. 4, THE ASSESSEE HA S CHALLENGED THE ORDER OF THE CIT(A) IN CONFIRMING TH E DISALLOWANCE ON ACCOUNT OF INTEREST EXPENDITURE AMOUNTING TO RS. 50,24,552. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET , DREW THE ATTENTION OF THE BENCH TO THE ORDER OF THE TRIBUNAL IN THE CASE OF SISTER CONCERN VIZ., M/S. ORION TRAVELS PVT. LTD. V S. DCIT VIDE I.T.A. I.T.A. NO. 3637/MUM/2009 M/S. ZEST HOLDINGS PVT. LTD. =================== 2 NOS. 6888 & 6889/MUM/08 FOR THE A.YS. 2004-05 AND 2 005-06 AND SUBMITTED THAT THE TRIBUNAL FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. AATUR HOLDINGS PVT. LTD. HAD RESTO RED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDIC ATION. THEREFORE, THIS GROUND SHOULD BE RESTORED TO THE FILE OF THE A SSESSING OFFICER FOR FRESH ADJUDICATION. 5. THE LEARNED DR, ON THE OTHER HAND, FAIRLY CONCEDED THE ABOVE FACTS AS STATED BY THE LEARNED COUNSEL FOR THE ASSE SSEE AND SUBMITTED THAT THE TRIBUNAL IN THE CASE OF GROUP CONCERNS HAS RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRE SH ADJUDICATION. 6. IN VIEW OF THE ABOVE SUBMISSION BY BOTH THE SIDES, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN THE LIGHT OF THE DECISION OF THE TRIBUNAL IN THE CA SE OF AATUR HOLDINGS PVT. LTD. (SUPRA) WHICH HAS SUBSEQUENTLY BEEN FOLLO WED BY THE TRIBUNAL IN THE CASE OF ORION TRAVELS PVT. LTD. (SU PRA). ACCORDINGLY THIS GROUND BY THE ASSESSEE IS ALLOWED FOR STATISTI CAL PURPOSES. 7. IN REVISED GROUNDS OF APPEAL NO. 6 THE ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT(A) IN CONFIRMING TH E CALCULATION OF BOOK PROFIT U/S. 115JB AMOUNTING TO RS.94,73,275. 8. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET , FAIRLY CONCEDED THAT THIS GROUND IS AGAINST THE ASSESSEE. HOWEVER, HE SUBMITTED THAT THE ASSESSEE SHOULD BE GIVEN A RIGHT TO RE-AGITATE THE ISSUE IF THE ASSESSED INCOME BECOMES LESS THAN THE BOOK PROFIT U/S. 115JB OF THE ACT AND THE ASSESSING OFFICER PROCEEDS TO ASSESS U/S. 115JB OF THE I.T. ACT. 9. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE OR DER OF THE CIT(A). I.T.A. NO. 3637/MUM/2009 M/S. ZEST HOLDINGS PVT. LTD. =================== 3 10. AFTER HEARING BOTH THE SIDES AND IN VIEW OF THE ADM ISSION BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THIS GROU ND IS AGAINST THE ASSESSEE, WE DISMISS THE GROUND BY THE ASSESSEE WIT H A RIDER THAT IN CASE THE REGULAR INCOME FINALLY ASSESSED IS LESS TH AN THE BOOK PROFIT U/S. 115JB OF THE ACT, THE ASSESSEE IS AT LIBERTY T O RE-AGITATE THE ISSUE. WE HOLD AND DIRECT ACCORDINGLY. THIS GROUND BY THE ASSESSEE IS ACCORDINGLY DISMISSED. 11. IN REVISED GROUNDS OF APPEAL NO. 7, THE ASSESSEE HA S CHALLENGED THE ORDER OF THE CIT(A) IN CONFIRMING TH E ACTION OF THE ASSESSING OFFICER IN LEVYING INTEREST U/S. 234A, 23 4B AND 234C OF THE ACT. 12. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET , SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSE E BY THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE O F M/S. DIVINE HOLDINGS PVT. LTD. VIDE I.T.A. NO. 6424/MUM/08 ORDE R DATED 3 RD NOVEMBER, 2009 FOR THE A.Y. 05-06 AND THE DECISION OF THE TRIBUNAL IN THE CASE OF ORION TRAVELS PVT. LTD. (SUPRA). 13. THE LEARNED DR, ON THE OTHER HAND, COULD NOT CONTRO VERT THE ABOVE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE AS SESSEE. 14. AFTER HEARING BOTH THE SIDES, WE FIND THE ASSESSEE IS A NOTIFIED PERSON UNDER THE SPECIAL COURT (TRIAL OF OFFENCE RE LATING TO TRANSACTION IN SECURITY) ACT, 1992 AND ALL ITS ASSE TS INCLUDING BANK ACCOUNTS WERE ATTACHED AND VESTED IN THE HANDS OF T HE CUSTODIAN APPOINTED UNDER THE SAID ACT. WE FIND THE FACTS OF THE CASE OF THE ASSESSEE ARE IDENTICAL TO THE FACTS OF THE GROUP CO NCERN VIZ., M/S. ORION TRAVELS PVT. LTD. (SUPRA) WHEREIN THE TRIBUNA L HAS HELD THAT INTEREST U/S. 234A, 234B AND 234C SHOULD NOT BE LEV IED IN THE CASE OF THE NOTIFIED PERSONS UNDER THE SPECIAL COURT (TR IAL OF OFFENCE RELATING TO TRANSACTION IN SECURITY) ACT, 1992. WE FIND THE TRIBUNAL IN THE CASE OF DIVINE HOLDINGS PVT. LTD. (SUPRA) FO LLOWING THE I.T.A. NO. 3637/MUM/2009 M/S. ZEST HOLDINGS PVT. LTD. =================== 4 DECISION IN THE CASE OF ORION TRAVELS PVT. LTD. HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND DIRECTED THAT INTERES T U/S. 234A, 234B AND 234C COULD NOT BE LEVIED ON THE ASSESSEE. RESP ECTFULLY FOLLOWING THE CONSISTENT DECISION OF THE CO-ORDINAT E BENCHES OF THE TRIBUNAL, WE HOLD THAT NO INTEREST U/S. 234A, 234B AND 234C OF THE ACT CAN BE CHARGED ON THE ASSESSEE WHO IS A NOTIFIE D PERSON UNDER THE SPECIAL COURT (TRIAL OF OFFENCE RELATING TO TRA NSACTION IN SECURITY) ACT, 1992. WE HOLD AND DIRECT ACCORDINGL Y. THIS GROUND BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 15. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 3 RD FEBRUARY, 2010 SD/- (D.K. AGARWAL) JUDICIAL MEMBER SD/- (R.K. PANDA) ACCOUNTANT MEMBER MUMBAI, DATED 3 RD FEBRUARY, 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, G BENCH, ITAT, MUMBAI. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI TPRAO