DCIT CC 23, MUMBAI V. JYOTI MEHTA, MUMBAI

ITA 4134/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75708 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 06-03-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 12-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Section: 234B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL J B ENCH, MUMBAI , , ! '#$ , % & BEFORE SHRI VIJAY PALO RAO AND SHRI N.K. BILLAIY A, AM ./ I.T.A. NO.3212/MUM/2012 ( ' ' ' ' / ASSESSMENT YEAR :2002-03 SM.T. JYOTI H. MEHTA, 32, MADHULI, DR. A.B. ROAD,WORLI, MUMBAI-400 018 / VS. THE ACIT CC-23, AAYAKAR BHAVAN, MUMBAI-400 020 ./ I.T.A. NO.4134/MUM/2012 ( ' ' ' ' / ASSESSMENT YEAR :2002-03 THE ACIT CC-23, AAYAKAR BHAVAN, MUMBAI-400 020 / VS. SMT. JYOTI H. MEHTA, 32, MADHULI, DR. A.B. ROAD,WORLI, MUMBAI-400 018 ( % ./ ) ./ PAN/GIR NO. : ABNPM 8233B ( (* / APPELLANT ) .. ( +,(* / RESPONDENT ) (* - / ASSESSEE BY: SHRI DHARMESH SHAH +,(* . - / REVENUE BY: DR. P. DANIEL . /0% / DATE OF HEARING :06.03.2014 12' . /0% / DATE OF PRONOUNCEMENT :06.03.2014 3 / O R D E R PER N.K. BILLAIYA, AM: THESE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE VERY SAME ORDER OF THE LD. CIT(A)-37, M UMBAI DT.12.03.2012 PERTAINING TO A.Y. 2002-03. AS BOTH THESE APPEALS WERE HEARD TOGETHER, ITA NOS. 3212 & 4134/M/12 2 THEY ARE DISPOSED OF BY THIS COMMON ORDER FOR THE S AKE OF CONVENIENCE AND BREVITY. ITA NO. 3212/M/2012 ASSESSEES APPEAL 2. THE ASSESSEE HAS RAISED TWO SUBSTANTIVE GROUNDS OF APPEAL AND ONE ADDITIONAL GROUND. AT THE VERY OUTSET, THE LD. COU NSEL FOR THE ASSESSEE SUBMITTED THAT UNDER THE INSTRUCTION, HE IS NOT PRE SSING GROUND NO.1 WHICH IS ACCORDINGLY DISMISSED AS NOT PRESSED. 3. GROUND NO. 2 RELATES TO THE CLAIM OF DEDUCTION O N ACCOUNT OF INTEREST EXPENDITURE. 4. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE TRIBUNAL IN ITA NOS. 7726, 7727, 7498 & 7732/M/2010 IN THE CASE OF HITESH S. MEHTA WHICH IS ALSO ONE OF THE PARTIES OF SHRI HARSHAD ME HTA GROUP. 5. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY CONCE DED TO THIS. 6. A PERUSAL OF THE ORDER OF THE LD. CIT(A) SHOWS T HAT ON PAGE-26 VIDE PARA 2.9.1, THE LD. CIT(A) HAS CONSIDERED THE ORDER OF SHRI HITESH METHA FOR A.Y. 2005-06 AND FOLLOWING THE FINDINGS I N THAT CASE THE LD. CIT(A) HAS DISMISSED THE CLAIM OF THE ASSESSEE. 7. WE HAVE ALSO THE BENEFIT OF THE ORDER OF THE TRI BUNAL IN THE CASE OF SHRI HITESH METHA FOR A.Y. 2005-06. WE FIND THAT T HE TRIBUNAL AT PARA-5 ON PAGE-4 OF ITS ORDER HAS HELD AS UNDER: GROUND NO. 4 RELATES TO THE ACTION OF THE LD. CIT( A) IN CONFIRMING THE LIABILITIES AMOUNTING TO RS. 11,24,99,052/- AND RS. 12,61,36,245/- RESPECTIVELY FOR THE A.YS 20 05-06 AND ITA NOS. 3212 & 4134/M/12 3 2006-07 TOWARDS INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT THE FINDING S GIVEN IN PARA 3.3 ABOVE IN RESPECT OF REJECTION/RELIABILITY OF THE BOOKS OF ACCOUNTS AND THE PROPOSED ADJUDICATION OF THE LD . CIT(A) IN VIEW OF THE SAID DIRECTION MAY HAVE DIRECT IMPAC T ON THE ISSUE OF THE IMPUGNED LIABILITY, WE SET ASIDE THIS ISSUE ALSO TO THE FILES OF THE LD. CIT(A) TO ADJUDICATE AFRESH AL ONG WITH THE ADJUDICATION OF THE RESPECTIVE GROUND PERTAINING TO THE REJECTION RELIABILITY OF THE BOOKS OF ACCOUNTS. FACTS BEING IDENTICAL, RESPECTFULLY FOLLOWING THE FINDINGS OF THE TRIBUNAL, WE SET ASIDE THIS ISSUE TO THE FILES OF T HE LD. CIT(A) TO ADJUDICATE AFRESH IN LINE WITH THE DIRECTIONS FOR A .Y. 2005-06 BY THE TRIBUNAL IN THE CASE OF HITESH MEHTA . GROUND NO. 2 IS ALLOWED FOR STATISTICAL PURPOSE. 8. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE REA DS AS UNDER: THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT AS P ER THE DECISION OF HONBLE SPECIAL COURT DT. 30.4.2010 IN MP NO. 41 OF 1999, THE ASSETS UNDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEH TA AND HENCE THE INCOME ASSESSED BY THE AO OUGHT TO HAVE B EEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE HANDS OF THE APPELLANT. 9. IT IS THE SAY OF THE LD. COUNSEL THAT THE ADDITI ONAL GROUND HAS ALSO BEEN DECIDED BY THE TRIBUNAL IN THE CASE OF HITESH S. MEHTA VIDE ITA NOS. 5587 TO 5589/M/2011 AND 5068/M/2011. 10. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY CONC EDED TO THIS. 11. WE HAVE THE BENEFIT OF THE ORDER OF THE TRIBUNA L IN THE CASE OF HITESH S. MEHTA (SUPRA). WE FIND THAT A SIMILAR AD DITIONAL GROUND WAS RAISED WHICH HAS BEEN CONSIDERED BY THE TRIBUNAL AT PARA-4 ON PAGE-4 OF ITS ORDER AND AT PARA-5, THE TRIBUNAL HAS HELD THAT THIS ADDITIONAL GROUND IS ITA NOS. 3212 & 4134/M/12 4 FULLY ACADEMIC IN NATURE FOR THE REASON THAT IF THE HONBLE SUPREME COURT DECIDES SOMETHING THAT HAS TO BE FOLLOWED WITHOUT A NY DISPUTE. THE DECISION OF THE HONBLE SUPREME COURT BECOMES THE L AW OF THE LAND WHICH HAS TO BE FOLLOWED BY EVERY AUTHORITY. THE T RIBUNAL FURTHER OBSERVED THAT NO DIRECTION IS REQUIRED TO BE GIVEN TO THE AO IN THIS RESPECT BECAUSE IF THE HONBLE APEX COURT DECIDES THAT ALL THE INCOME BELONGS TO SHRI HARSHAD S MEHTA, THEN THE INCOME HAS TO BE ASS ESSED IN THE HANDS OF SHRI HARSHAD S MEHTA NOT IN THE HANDS OF ANY OTHER PERSON. RESPECTFULLY FOLLOWING THE AFORE STATED FINDINGS, WE TREAT THE A DDITIONAL GROUND AS ACADEMIC IN NATURE. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 4134/MUM/2012 REVENUES APPEAL 13. THE GRIEVANCE OF THE REVENUE RELATES TO THE DEL ETION OF THE INTEREST CHARGED U/S. 234A, 234B AND 234C OF THE ACT. 14. IT IS THE CLAIM OF THE REVENUE THAT THE LD. CIT (A) FAILED TO APPRECIATE THAT THE SPECIAL COURT ACT, 1992 DOES NO T OVERRULE THE PROVISIONS OF SECTIONS 234A, 234B AND 234C MAKING T HE NOTIFIED PERSON EXEMPT FROM THE LIABILITY OF PAYMENT OF INTEREST UN DER SECTIONS OF THE I.T. ACT, 1961. 15. THE LD. DR AT THE VERY OUTSET STATED THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE REVENUE BY THE TRIBUNAL. 16. THE LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDE D TO THIS. ITA NOS. 3212 & 4134/M/12 5 17. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOW ER AUTHORITIES. THE CHARGING OF INTEREST U/S. 234A, 234B AND 234C SQUAR ELY DEPENDS ON THE ADJUDICATION OF THE LD. CIT(A) AND SINCE WE HAVE RE STORED ONE ISSUE BACK TO THE FILES OF THE LD. CIT(A) IN ASSESSEES APPEAL , WE THEREFORE RESTORE THIS ISSUE BACK TO THE FILES OF THE AO TO RECOMPUTE THE INTEREST AFTER GIVING APPEAL EFFECT. 18. IN SO FAR AS LEVY OF INTEREST IN THE CASE OF N OTIFIED PERSON IS CONCERNED, THIS ISSUE HAS BEEN DECIDED BY THE HONB LE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS DIVINE HOLDING PVT. LTD . IN INCOME TAX APPEAL NO. 3334 OF 2010 WHICH HAS BEEN FOLLOWED BY THE TRIBUNAL IN THE CASE OF TOPAZ HOLDING PVT. LTD IN ITA NO. 7295/M/20 12. WE FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT THE CHARGEABILITY OF INTEREST U/S. 234A, 234B AND 234C OF THE ACT DOES N OT FALL WITHIN THE DOMAIN OF THE SPECIAL COURT (CONTROL OF OFFENCES RE LATING TO TRANSACTIONS IN SECURITIES) AT 1992. SINCE LEVY OF INTEREST IS MANDATORY AND IS VERY MUCH APPLICABLE IN THE CASE OF NOTIFIED PERSONS, R ESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT (SUPRA), THE GROUND RAISED BY THE REVENUE IS ALLOWED. NEEDLESS TO MENTI ON THAT, THE LEVY OF INTEREST WOULD BE CONSEQUENTIAL. 19. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE AND THE CROSS APPEAL FILED BY THE REVENUE ARE PARTLY ALLOWED FOR STATIST ICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 06.03.2014 . SD/- SD/ (VIJAY PAL RAO ) (N.K. BILLAIYA) /JUDICIAL MEMBER % / ACCOUNTANT MEMBER MUMBAI; 4 DATED :06.03.2014 . . ./ RJ , SR. PS ITA NOS. 3212 & 4134/M/12 6 3 . +/ 5'/ 3 . +/ 5'/ 3 . +/ 5'/ 3 . +/ 5'/ / COPY OF THE ORDER FORWARDED TO : 1. (* / THE APPELLANT 2. +,(* / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 78 +/ , , / DR, ITAT, MUMBAI 6. 89 : / GUARD FILE. 3 3 3 3 / BY ORDER, ,/ +/ //TRUE COPY// ; ;; ; / < < < < (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI