HARSH ESTATESH P.LTD, MUMBAI V. DCIT CEN CIR 31, MUMBAI

ITA 4021/MUM/2011

• Counselvise Citation: 402119914 RSA 2011
• Duration Of Justice: 3 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 02-02-2015
• Assessment Year: 1999-2000
• Appeal Filed On: 16-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL SPL
• Assessee Lawyers: DHARMESH SHAH
• Keywords: Opportunity of being heard
• Section: 234B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI . . , . . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI R.C.SHARMA , ACCOUNTANT MEMBER ITA NO. 4021/MUM/2011(A.Y.1999-2000) ITA NO.5482/MUM/2011(A.Y. 2004-05) ITA NO.4022/MUM/2011(A.Y. 2005-06) ITA NO.8480/MUM/2010(A.Y. 2007-08) M/S. HARSH ESTATES PVT.LTD., 32, MADHULI, 3 RD FLOOR, DR.ANNIE BESANT ROAD, NEHRU CENTRE, WORLI, MUMBAI 400018 PAN: AAACH 3480L (APPELLANT ) VS. THE DCIT, CC-31, RANGE- 7, ROOM NO.409, 4 TH FLOOR, AAYKAR BHAVAN, MK MARG, MUMBAI 400020 (RESPONDENT) ITA NO.8349/MUM/2010(A.Y. 2007-08) THE DCIT, CC-31, RANGE- 7, ROOM NO.409, 4 TH FLOOR, AAYKAR BHAVAN, MK MARG, MUMBAI 400020 (APPELLANT ) VS. M/S. HARSH ESTATES PVT.LTD., 32, MADHULI, 3 RD FLOOR, DR.ANNIE BESANT ROAD, NEHRU CENTRE, WORLI, MUMBAI 400018 (RESPONDENT) ASSESSEE BY : SHRI DHARMESH SHAH REVENUE BY : SHRI DR.P. DANIEL, SPL.COUNSEL. DATE OF HEARING : 02/02/2015 DATE OF PRONOUNCEMENT : 02 /02/2015 M/S. HARSH ESTATES PVT.LTD., 2 ORDER PER BENCH: ITA NO.4021/MUM/2011 IS DIRECTED AGAINST ORDER PA SSED BY LD. CIT(A), C.IV, MUMBAI DATED 17/11/2008 FOR ASSESSMENT YEAR 1999-2000. ITA NO.5482/MUM/2011 IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-40, MUMBAI DATED 27/05/2011 FOR ASSESSMENT YEAR 2004-05. ITA NO. 4022/MUM/2011 IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-40, MUM BAI DATED 28/02/2011 FOR ASSESSMENT YEAR 2005-06. ITA NO.8349/MUM/2010 AND 8480/MUM/2010 ARE CROSS APPEALS AND ARE DIRECTED AGAINST ORDER PASSED BY LD . CIT(A)-40, MUMBAI DATED 10/09/2010 FOR ASSESSMENT YEAR 2007-08. 2. GROUNDS OF APPEAL IN ALL THE ASSESSEES APPEALS ARE COMMON AND THESE APPEALS WERE ALSO ARGUED TOGETHER BY BOTH THE PARTI ES. IT MAY BE MENTIONED HERE THAT THE ADDITIONAL GROUNDS FILED BY THE ASSESSEE I N EACH OF ITS APPEAL WAS NOT PRESSED BY LD. AR. LD. AR ALSO DID NOT PRESS SEVER AL OTHER GROUNDS WHICH FACT IS ENDORSED ON THE GROUNDS OF APPEAL AS NOT PRESSED. THEREFORE, THE ADDITIONAL GROUNDS FILED BY THE ASSESSEE FOR ALL THE YEARS AND OTHER GROUNDS WHICH ARE MARKED AS NOT PRESSED IN EACH OF THE APPEAL ARE DISMISSED BEING NOT PRESSED. 2.1 SINCE THE ISSUE INVOLVED IN ALL THESE APPEALS A RE COMMON THESE APPEALS ARE DISPOSED OF BY THIS CONSOLIDATED ORDER. 2.2 IT MAY ALSO BE MENTIONED HERE THAT GROUNDS WHIC H ARE NOT PRESSED BY THE ASSESSEE AS WELL AS ADDITIONAL GROUNDS WHICH ARE NO T PRESSED ARE NOT REPRODUCED FOR THE SAKE OF BREVITY. THE GROUNDS OF APPEAL WHICH A RE PRESSED AND ARGUED READ AS UNDER: M/S. HARSH ESTATES PVT.LTD., 3 GROUNDS OF ASSESSEES APPEAL IN ITA NO.4021/MUM/201 1,A.Y.1999-2000: 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN NOT GRANTING RELIEF OF LIABILITY AMOUNTING TO RS.3, 27,95,923/-, TOWARDS INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. GROUNDS OF ASSESSEES APPEAL IN ITA NO.5482/MUM/201 1,A.Y.2004-05: 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN NOT GRANTING RELIEF OF LIABILITY AMOUNTING TO RS.8, 37,526/-, TOWARDS INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. 4.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING CALCULATION OF BOOK PROFIT U/S.115JB AMO UNTING TO RS. (-) 1,09,41,876/-. GROUNDS OF ASSESSEES APPEAL IN ITA NO.4022/MUM/201 1,A.Y.2005-06: 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN NOT GRANTING RELIEF OF LIABILITY AMOUNTING TO RS.90 ,63,127/-, TOWARDS INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. GROUNDS OF ASSESSEES APPEAL IN ITA NO.8480/MUM/201 0,A.Y.2007-08: 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN NOT GRANTING RELIEF OF LIABILITY AMOUNTING TO RS.74 ,95,209/- TOWARDS INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING CALCULATION OF BOOK PROFIT U/S.115JB AMO UNTING TO RS.74,95,209/- GROUNDS OF REVENUES APPEAL IN ITA NO.8349/MUM/201 0,A.Y.2007-08: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN HOLDING THAT THE ASSESSEE BEING A NOTIFIED PERSON U NDER THE SPECIAL COURT (TRIAL OF OFFENCES RELATING TO TRANSACTIONS IN SECURITIES) AC T 1992 IS NOT LIABLE TO PAY INTEREST ULS.234A, 234B AND 234C OF THE I.T.ACT, 1961, IGNOR ING THE LEGAL SANCTITY OF LAW THAT THE INTEREST CHARGEABLE UNDER THESE SECTIONS IS NOT ONL Y CONSEQUENTIAL BUT IS MANDATORY IN NATURE. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) WAS ERRED IN HOLDING THAT INTEREST U/S.234A, 234B AND 2340 OF TH E I.T.ACT, 1961 IS NOT CHARGEABLE IN M/S. HARSH ESTATES PVT.LTD., 4 THE ASSESSEES CASE BEING NOTIFIED PERSON UNDER THE SPECIAL COURT (TRIAL OF OFFENCES RELATING TO TRANSACTIONS IN SECURITIES) ACT 1992 WI THOUT APPRECIATING THAT THE SAID ACT HAS NOT RULED THAT THE PROVISIONS OF SECTIONS 234A, 234B & 2340 ARE NOT APPLICABLE TO THE NOTIFIED PERSONS OR THEY ARE EXEMPT FROM THE LIABIL ITY OF PAYMENT OF INTEREST UNDER THESE SECTIONS OF INCOME TAX ACT, 1961 3. AS IT CAN BE SEEN FROM THE ABOVE GROUNDS OF APP EAL, THE COMMON ISSUE INVOLVED IN ALL THE APPEALS FILED BY THE ASSESSEE I S REGARDING THE LIABILITY TOWARDS INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE. THIS ISSUE WAS STATED TO BE COVERED BY THE EARLIER DECISION OF THE TRIBUNAL, AS WHILE DECIDING THIS GROUND LD. CIT(A) HAS RELIED UPON THE DECISION IN THE CASE OF HITESH S. MEHTA IN ITA NO.7726/MUM/2010, A.Y. 2005-06 ORDER DATED 26/04/2 013 AND IT IS THE CASE OF THE ASSESSEE THAT IN THE CASE OF HITESH S. MEHTA THE TRIBUNAL HAS RESTORED BACK THE ISSUE TO THE FILE OF AO AND IT IS ALSO THE CASE OF THE ASSESSEE THAT IN ASSESSEES OWN CASE IN RESPECT OF ASSESSMENT YEARS 2002-03, 2008- 09, 2000-01, 2001-02, SIMILAR ISSUE HAS BEEN RESTORED BACK TO THE FILE OF AO. RE FERENCE WAS MADE TO THE FOLLOWING DECISIONS OF TRIBUNAL IN ASSESSEES OWN CASE: (1) ASSESSEES OWN CASE IN ITA NO.1035/MUM/2013, A. Y.2002-03 ORDER DATED 08/10/2014. (2) ASSESSEES OWN CASE IN ITA NO.363/MUM/2013, A. Y. 2008-09 ORDER DATED 07/10/2014. (3)IN THE CASE OF SMT.RASILA MEHTA IN ITA NOS. 36 83 & 3684/MUM/2011 FOR A.Y 2000-01 AND 2001-02 ORDER DATED 28/11/2014. COPY OF ALL THESE ORDERS HAVE BEEN PLACED IN THE PA PER BOOK. M/S. HARSH ESTATES PVT.LTD., 5 4. FOR THE SAKE OF COMPLETENESS THE RELEVANT OBSE RVATION OF TRIBUNAL IN THE OWN CASE OF ASSESSEE IN RESPECT OF ASSESSMENT YEARS 2002-03, 2009-10 AND 2010-11 VIDE ORDER DATED 8/10/2014 ARE REPRODUCED BELOW: 4. GROUND NO. 4 PERTAINS TO NOT GRANTING RELIEF OF LIABILITY AMOUNTING TO RS. 52,01,922/- (A.Y. 2002-03), RS.1,08,03,167/-(A.Y. 2009-10) AND RS.1,13,23540/ -(A.Y. 2010-11) RESPECTIVELY TOWARDS INTEREST EXPENDITURE CLAIMED B Y THE ASSESSEE. IT WAS CONTENDED THAT IDENTICAL ISSUE WAS DECIDED FOR A.Y. 2000-01 IN THE CASE OF ASSESSEE ITSELF (ITA NO.5139/M/2012) ORDER DATED 06/11/2013, WHEREIN THE ISSUE WAS SET ASIDE TO THE FILE OF THE ID. CIT(A) FOR WHICH OUR ATTENTION WAS INVITED TO PAGES 1 TO 3 OF THE PAPER-BOOK. IT WAS ALSO POINTED OUT THAT IDENTICALLY THE ISSUE WAS DECIDED IN THE CASE OF ZEST HOLDINGS PVT. LTD., RELATED CONCERNS, FOR A.Y. 2009-10 (ITA NO.5216/M/2012) ORDER DATED 18/08/2014 FOR WHICH OUR ATTENTION WAS INVITED TO P AGES 4 TO 6 OF THE PAPER-BOOK. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE LD. SPEC IAL COUNSEL BEING MATTER OF RECORD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. AS CANVASSED BY THE ID. COUNSEL , WE FIND T HAT IDENTICAL ISSUE AROSE BEFORE THE BENCH FOR A.Y. 2000-0 1 AND FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S EMINENT HOLDINGS PVT. LTD. (ITA NO. 8200/M/2010 & 8 353/M/2010), WHEREIN THE DECISION OF THE COORDINATE BENCH IN THE CASE OF HIT ESH S. MEHTA (ITA NOS.7726 & 7727/M/2010) WAS FOLLOWED AND FINALLY THE ISSUE WAS SET-ASIDE TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION WITH A DIRECTION TO GRANT A REASONABLE OPPORTUNITY OF BEING HEARD ON THE ISSUE AND THUS WAS ALLOWED FOR STATISTICAL P URPOSES. FOLLOWING THE REASONING CONTAINED IN THE AFORESAID ORDERS, BEING IDENTICAL FACTS/ISSUE BEFORE US, WE REMAND THIS ISSUE TO THE FILE OF THE ID. CIT(A) FOR FRESH ADJUD ICATION. NEEDLES TO MENTION HERE THAT DUE OPPORTUNITY OF BEING HEARD BE PROVIDED TO THE ASSES SEE WITH FURTHER LIBERTY TO FURNISH EVIDENCE, IF ANY, IN SUPPORT OF ITS CLAIM. THUS, TH IS GROUND OF THE ASSESSEE IS ALSO ALLOWED FOR STATISTICAL PURPOSES ONLY. 4.1 ACCORDINGLY, AFTER HEARING BOTH THE PARTIES, RE SPECTFULLY FOLLOWING THE AFOREMENTIONED DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE WE RESTORE THIS GROUND FOR ALL THE YEARS TO THE FILE OF AO WITH SIM ILAR DIRECTIONS AND THIS GROUND FOR ALL THE YEARS IS CONSIDERED TO BE ALLOWED FOR STAT ISTICAL PURPOSES. 5. ANOTHER ISSUE RAISED IN THE APPEALS FILED BY TH E ASSESSEE IS REGARDING CALCULATION OF BOOK PROFIT UNDER SECTION 115JB. TH IS GROUND WAS ALSO STATED TO BE COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR A.Y 2008-09 IN ITA NO.363/MUM/2013 ORDER DATED 7/10/2014, COPY OF WHICH IS FILED AT PAGES 16 M/S. HARSH ESTATES PVT.LTD., 6 TO 20 OF THE PAPER BOOK. THE RELEVANT OBSERVATION OF THE TRIBUNAL ARE FOUND IN PARA-4 AND ARE REPRODUCED BELOW: 4. THE NEXT GROUND PERTAINS TO CONFIRMING CALCULAT ION OF BOOK PROFIT U/S.115JB OF THE ACT AMOUNTING TO RS.1,25,46,114/-. SINCE, WE HAVE REMANDED THE AFORESAID GROUND I.E. NO.4 TO THE FILE OF THE LD. CIT(A), THEREFORE, THE GRIEVANCE OF THE ASSESSEE WILL DEPEND UPON THE OUTCOME OF THE DECISION TO BE TAKEN WITH R ESPECT OF AFORESAID GROUND NO.4. CONSEQUENTLY, THIS GROUND IS CONSEQUENTIAL TO THE A BOVE, THERE IS ALSO ALLOWED FOR STATISTICAL PURPOSES WITH A DIRECTION TO DECIDE IT AFRESH AS PER THE PROVISIONS OF LAW AFTER GIVING FINDING ON THE CLAIM OF INTEREST THUS THIS G ROUND IS ALLOWED FOR STATISTICAL PURPOSES. 5.1 IN THIS VIEW OF THE SITUATION, AFTER HEARING BO TH THE PARTIES , FOLLOWING THE AFOREMENTIONED DECISION OF TRIBUNAL IN ASSESSEES O WN CASE GROUND NO.4 FOR ASSESSMENT YEAR 2004-05 AND GROUND NO.6 FOR A.Y 200 7-08 ARE CONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES. 6. NOW WE ARE LEFT WITH DEPARTMENTAL APPEAL FOR A.Y 2007-08. THIS WAS ALSO STATED TO BE COVERED BY THE AFOREMENTIONED DECISION OF TRIBUNAL IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2008-09 (SUPRA) AND TH E RELEVANT OBSERVATIONS OF TRIBUNAL ARE FOUND IN PARA -6, WHICH IS REPRODUCED BELOW: 5. SO FAR AS, CHARGING OF INTEREST U/S 234A, 234B AND 234C IS CONCERNED THE ID. COUNSEL FOR THE ASSESSEE CONTENDED THAT IT MAY BE SENT TO T HE FILE OF THE LD. ASSESSING OFFICER. HOWEVER, THE LD. SPECIAL COUNSEL CONTENDED THAT THE LEVY OF INTEREST IS MANDATORY THEREFORE IT SHOULD BE DECIDED AGAINST THE ASSESSEE . HOWEVER THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT IT MAY BE SENT TO THE ASSES SING OFFICER FOR ACTUAL CALCULATION PURPOSES ONLY. AGREED, LEVY OF INTEREST IS MANDATOR Y AND SOMETIMES CONSEQUENTIAL DEPENDING UPON THE FACTS OF EACH CASE. WE NOTE THAT IDENTICAL ISSUE AROSE BEFORE THE TRIBUNAL IN THE AFORESAID CASES THEREFORE FOLLOWING THE REASONING CONTAINED THEREIN WE DIRECT THE ASSESSING OFFICER TO RECOMPUTED THE INTE REST LIABILITY AFTER REDUCING THE AMOUNT OF TAX DEDUCTABLE AT SOURCE. WE DIRECT ACCORDINGLY, THUS, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. THE LD. AO IS TO DECIDE AS PE R THE PROVISIONS OF THE LAW. 6.1 ACCORDINGLY, AFTER HEARING BOTH THE PARTIES WE PASS SIMILAR ORDER WITH SIMILAR DIRECTIONS AS HAVE BEEN GIVEN BY THE TRIBUNAL IN RE SPECT OF ASSESSMENT YEAR 2008- M/S. HARSH ESTATES PVT.LTD., 7 09 AND FOR STATISTICAL PURPOSES THE APPEAL FILED BY THE REVENUE IS CONSIDERED TO BE ALLOWED IN THE MANNER AFORESAID. 7. IN THE RESULT, SINCE GROUNDS WHICH HAVE NOT BEEN PRESSED ARE DISMISSED, THE APPEALS FILED BY THE ASSESSEE ARE CONSIDERED TO BE PARTLY ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID AND APPEAL FILED B Y THE REVENUE IS CONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER A FORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 02/02/2015 ! ' #$% 02/02/2015 & ' SD/- SD/- ( . . /R.C.SHARMA ) ( . . / I.P. BANSAL ) /ACCOUNTANT MEMBER / JUDICIAL EMBER MUMBAI; #$ DATED 02/02/2015 ()* ()* ()* ()* +*!) +*!) +*!) +*!) / COPY OF THE ORDER FORWARDED TO : 1. ,- / THE APPELLANT 2. (.,- / THE RESPONDENT. 3. / ( ) / THE CIT(A)- 4. / / CIT 5. *0& ()$ , , / DR, ITAT, MUMBAI 6. &1 2 / GUARD FILE. $ $ $ $ / BY ORDER, .*) () //TRUE COPY// 3 33 3 / 4 4 4 4 5 5 5 5 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . $ . ./ VM , SR. PS M/S. HARSH ESTATES PVT.LTD., 8 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 02/02/2015 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 03/02/2015 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER