RADIAL TELE SOLUTIONS P. LTD, MUMBAI V. ACIT (OSD) 2(3), MUMBAI

ITA 38/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8126 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-10-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 04-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: DR K SHIVARAM
• Keywords: Search and seizure
• Section: 132

Judgement Text

, ( ), IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI . . , , . . , '# $ BEFORE SHRI H L KARWA, PRESIDENT, & SHRI B R BASKAR AN, AM ./ITA NO.38/MUM/2011 ( % & / ASSESSMENT YEAR : 2007-08) RADIAL TELE SOLUTIONS P LTD. A/1, GR. FLOOR, RAMDEV PARK, CHANDAVARKAR ROAD, BORIVALI, MUMBAI- 400 013 PAN AABCR5295A VS. THE ACIT (OSD) 2(3), MUMBAI ( '( /APPELLANT) ( )*'( / RESPONDENT) APPELLANT BY : DR. K SHIVARAM RESPONDENT BY : SHRI NEIL PHILIP DATE OF HEARING : 30.10.2014 DATE OF PRONOUNCEME NT : 30.10.2014 $'+ / O R D E R PER H L KARWA, PRESIDENT : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A)-6, MUMBAI, DATED 16.11.2010, FOR THE ASSESSMENT YEAR 2 007-08. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N CONFIRMING THE ADDITION OF RS. 67,36,309/- U/S. 40(A)(IA) OF THE I NCOME TAX ACT, 1961, MADE BY THE ASSESSING OFFICER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N CONFIRMING DISALLOWING INTEREST EXPENDITURE OF RS.93,32,011/- 2 ITA NO.38/MUM/2011 AY:2007-08 SHRI UMESH KANTHARIA, DIRECTOR OF THE ASSESSEE COMP ANY, VIDE HIS LETTER DATED 29.10.2014 SUBMITTED A BRIEF NOTE, WHICH READS AS U NDER: 1. A SEARCH AND SEIZURE ACTION U/S. 132 OF THE INC OME TAX ACT, 1961 WAS CARRIED OUT IN THE CASE OF M/S. GLOBAL TEL ESYSTEM LIMITED GROUP, ITS GROUP CONCERNS ETC ON 28/09/2010. DURING THE COURSE OF SEARCH ACTION, DOCUMENTS BELONGING TO ASSESSEE COMP ANY WERE FOUND AND SEIZED AND AS SUCH THE CASE WAS COVERED UNDER T HE PROVISIONS OF SECTION 153C OF THE ACT AND NOTICES WERE ISSUED AND RETURNS WERE FILED PURSUANT THERETO. 2. THE ASSESSMENT YEARS COVERED UNDER THE PROVISION S OF S 153C 01 THE ACT ARE FROM A.Y. 2005-06 TO A.Y. 2010-2011 AND A.Y. 2011- 2012 BEING THE ASSESSMENT RELEVANT TO THE SEARCH YE AR. 3. ASSESSEE FILED THE SETTLEMENT APPLICATION FOR A. Y. 2005-06 TO A.Y. 2012-2013 ON 26/3/2013. BESIDES THE ASSESSEE, 5 OTHER COMPANIES RELATED TO GTL HAD ALSO FILED SETTLEMENT APPLICATION. 4. VIDE ORDER DATED 8/4/2013 PASSED U/S. 245D(1), A SSESSEES SETTLEMENT APPLICATION WAS ADMITTED AND ALLOWED TO BE PROCEEDED FURTHER. VIDE ORDER DATED 23/5/2013 PASSED U/S. 245 B(2C) IT WAS HELD THAT THE SETTLEMENT APPLICATION OF THE ASSESSEE WAS NOT INVALID AND THE APPLICATION WAS ALLOWED TO BE PROCEEDED FURTHER. 5. THE MATTER WITH RESPECT TO FINANCIAL EXPENSES NA MELY DISCOUNTING CHARGES, PROCESSING CHARGES AND INTERES T WAS RAISED BY THE COMMISSIONER IN HIS REPORT UNDER RULE 9. ASSESSEE H AD RESPONDED TO THE OBJECTIONS OF THE COMMISSIONER IN ITS REPLY UND ER RULE 9A GIVING DETAILS OF THE FINANCIAL EXPENSES. HERETO ENCLOSED AS ANNEXURE A IS THE COPY OF REPORT OF THE COMMISSIONER UNDER ORDER RULE 9 AND ANNEXURE B IS THE COPY OF REPLY OF ASSES SEE ORDE R RULE 9A. 6. UNDER SECTION 245D(4) OF THE INCOME TAX THE SETT LEMENT COMMISSION PASSES FINAL ORDER ON THE MATTERS COVERE D BY THE APPLICATION AS WELL AS ANY OTHER MATTER RELATING TO THE CASE RIOT COVERED BY THE APPLICATION BUT REFERRED TO IN THE REPORT OF THE COMMISSIONER 7. THE SETTLEMENT COMMISSION IN ITS FINAL ORDER U/S . 245D(4) AFTER CONSIDERING THE REPORT OF COMMISSIONER AND REPLY OF THE ASSESSEE ACCEPTED THE INCOME RETURNED BY ASSESSEE FOR A.Y. 2 007-08 IN ITS SETTLEMENT APPLICATION. HERETO ENCLOSED AS ANNEXURE C IS THE COPY OF TILE ORDER OF SETTLEMENT COMMISSIONER PASSED U/S. 2 45D(4). 8. AS PER SECTION 245-1 OF THE INCOME TAX ACT, THE ORDER OF THE SETTLEMENT COMMISSION PASSED U/S. 245D(4) SHALL BE CONCLUSIVE AS TO THE MATTERS STATED THEREIN. FURTHER AS PER SECTION 245F(4) ONLY MATTERS NOT BEFORE SETTLEMENT COMMISSION REMAIN UNAFFECTED BY THE FINAL ORDER 3 ITA NO.38/MUM/2011 AY:2007-08 OF SETTLEMENT COMMISSION PASSED U/S. 245D(4). 9. IN THE FACTS OF THE PRESENT CASE, THE ISSUE OF F INANCIAL EXPENSES WERE RAISED BY THE COMMISSIONER IN ITS REPORT UNDER RULE 9 AND HENCE, THE INCOME ASSESSED BY THE SETTLEMENT COMMISSION FO R THE A.Y. 2007- 08 IS FINAL. THE A.O. HAS ALSO ACCEPTED THE SAME BY PASSING ORDER GIVING EFFECT U/S. 245D(6). HERETO ENCLOSED AS ANNE XURE D IS THE COPY OF THE ORDER PASSED U/S. 245D(6). THE LEARNED CIT(A) HAD PASSED THE ORDER ON 16/11/2010 I.E., BEFORE THE ORDER OF T HE SETTLEMENT COMMISSION AND HENCE THE LEARNED CIT(A) HAD NO OCCA SION TO GO THROUGH THE SAME. GROUND NO. 1 & 2 RAISED IN THE PR ESENT APPEAL IS THUS COVERED BY THE ORDER OF THE SETTLEMENT COMMISS ION. HENCE, FOR A.Y. 2007-08 THE IMPUGNED ORDER OF CIT(A) AND A.O. HAS BECOME A NULLITY IN VIEW OF THE FINAL ORDER OF THE SETTLEMEN T COMMISSION AND THE CONSEQUENTIAL ORDER OF A.O. PASSED U/S. 245D(6). 3. IN VIEW OF THE ABOVE SUBMISSIONS AND ALSO AFTER HEARING THE LEARNED DR AT LENGTH, WE HOLD THAT THE ISSUES RAISED VIDE GROUND NOS. 1 & 2 OF THE PRESENT APPEAL ARE COVERED BY THE ORDER OF THE SETTLEMENT COMMISSI ON. HENCE, THE IMPUGNED ORDER FOR A.Y. 2007-08 WILL NOT SURVIVE. 4. THE APPEAL IS DISPOSED OF IN THE MANNER STATED H EREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF OCTOBER, 2014. SD/- SD/- (B R BASKARAN) (H L KARWA) ACCOUNTANT MEMBER PRESIDENT MUMBAI, DT : 30 TH OCTOBER, 2014 SA COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T, CONCERNED 4. THE CIT (A)-CONCERNED 5. THE DR, MUMBAI D BENCH BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI 4 ITA NO.38/MUM/2011 AY:2007-08 , ( ), IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI . . , , . . , '# $ BEFORE SHRI H L KARWA, PRESIDENT, & SHRI B R BASKAR AN, AM ./ITA NO.38/MUM/2011 ( % & / ASSESSMENT YEAR : 2007-08) RADIAL TELE SOLUTIONS PRIVATE LTD. FLAT NO.5, 2 ND FLOOR, ASTER CHS LTD.,RAM MANDIR ROAD, OPP ZUNKA BHAKAR BORIVALI (WEST), MUMBAI- 400 092 PAN AABCR5295A VS. THE ACIT (OSD) 2(3), MUMBAI ( '( /APPELLANT) ( )*'( / RESPONDENT) CORRIGENDUM IN OUR ORDER DATED 30.10.2014 PASSED IN THE ABOVE C ASE, A MISTAKE HAS OCCURRED IN MENTIONING THE APPELLANTS ADDRESS. THE ADDRESS HAS BEEN WRONGLY MENTIONED AS - RADIAL TELE SOLUTIONS P LTD. A/1, GR. FLOOR, RAMDEV PARK, CHANDAVARKAR ROAD, BORIVALI, MUMBAI- 400 013 THE SAME IS NOW RECTIFIED AND MAY BE READ AS - RADIAL TELE SOLUTIONS PRIVATE LTD. FLAT NO.5, 2 ND FLOOR, ASTER CHS LTD.,RAM MANDIR ROAD, OPP ZUNKA BHAKAR BORIVALI (WEST), MUMBAI- 400 092 THE AFORESAID ORDER IS MODIFIED TO THIS EXTENT ONLY SD/- SD/- (B R BASKARAN) (H L KARWA) ACCOUNTANT MEMBER PRESIDENT MUMBAI, DT : 17 TH NOVEMBER, 2014 5 ITA NO.38/MUM/2011 AY:2007-08 SA COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T, CONCERNED 4. THE CIT (A)-CONCERNED 5. THE DR, MUMBAI D BENCH BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI