The ACIT, Central Circle-1, RAJKOT-GUJARAT V. M/s Indo Brine Industries Ltd., RAJKOT-GUJARAT

ITA 431/RJT/2007

• Counselvise Citation: 43124914 RSA 2007
• Duration Of Justice: 3 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-05-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 28-06-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAI RAJ KUMAR
• Assessee Lawyers: PRABHAT JAIN
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.431/RJT/2007 (ASSESSMENT YEARS 2001-02) ACIT, CENT.CIR.1 VS M/S INDO BRINE INDUSTRIES LT D RAJKOT AGARWAL HOUSE, PLOT NO.356 GOKUL PARK, 12-B, TAGORE ROAD GANDHIDHAM PAN : AAACI4654H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JAI RAJ KUMAR RESPONDENT BY: SHRI PRABHAT JAIN O R D E R PER N.R.S. GANESAN, JM THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-IV, AHMEDABAD DATED 17-02-2007 AND PERTAINS TO ASSESSME NT YEAR 2001-02. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS TAXAT ION OF DEEMED DIVIDEND U/S 2(22)(E) OF THE I.T. ACT. THIS IS THE SECOND ROUND OF LITIGATION BEFORE THIS TRIBUNAL. IN THE FIRST ROUND OF LITIGATION, THIS TRIBUNAL REM ANDED BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO RE-CONSIDER THE ISSUE. TH E ASSESSING OFFICER, HOWEVER, FOUND THAT THE DEPARTMENT RECOMMENDED FOR AN APPEAL BEFORE THE HIGH COURT AGAINST THE ORDER OF THE TRIBUNAL IN THE CASE OF AT UL D SHETH FOR ASSESSMENT YEAR 98-99. IN THE ASSESSEES OWN CASE ALSO FOR THE ASS ESSMENT YEAR 2001-02 AN APPEAL WAS RECOMMENDED BY THE DEPARTMENT. THEREFOR E, THE ASSESSING OFFICER WITHOUT MAKING ANY FURTHER ENQUIRY AS DIRECTED BY T HE TRIBUNAL HAS MADE THE ADDITION OF RS.15 LAKHS AS DEEMED DIVIDEND U/S 2(22 )(E) OF THE ACT. ON APPEAL BY THE ASSESSEE, THE CIT(A) FOUND THAT THE ASSESSIN G OFFICER HAS NOT EXAMINED THE ISSUE AS DIRECTED BY THE TRIBUNAL. ACCORDINGLY , WITHOUT ANY FURTHER DISCUSSION, HE DELETED THE ADDITION MADE BY THE ASS ESSING OFFICER. THE FACT REMAINS IS THAT BOTH THE AUTHORITIES BELOW HAVE NOT EXAMINED THE ISSUE IN THE ITA NO.431/RJT/2007 2 RIGHT PERSPECTIVE AS DIRECTED BY THE TRIBUNAL. WIT HOUT EXAMINING THE FACTUAL ASPECT, THE ASSESSING OFFICER, ON TECHNICAL GROUND THAT AN APPEAL WAS RECOMMENDED, HAS REPEATED THE ADDITION; HOWEVER, TH E CIT(A) DELETED THE SAME ON THE GROUND THAT THE DIRECTION OF THE TRIBUNAL WA S NOT FOLLOWED. IT IS NOT KNOWN WHETHER AN APPEAL WAS FILED BEFORE THE HIGH COURT A GAINST THE ORDER OF ITAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02 . A MERE RECOMMENDATION FOR FILING APPEAL BEFORE THE HIGH CO URT AND THAT APPEAL HAS BEEN FILED BEFORE THE HIGH COURT IN ANOTHER CASE, VIZ. A TUL D SHETH FOR THE ASSESSMENT YEAR 1998-99 CANNOT BE A REASON TO DISOBEY THE ORDE R OF THIS TRIBUNAL. JUDICIAL DISCIPLINE REQUIRES TO FOLLOW THE DIRECTION OF THE TRIBUNAL. THEREFORE, THE ASSESSING OFFICER IS NOT RIGHT IN NOT CARRYING OUT THE DIRECTION OF THE TRIBUNAL. THE CIT(A) IS ALSO EQUALLY NOT CORRECT IN NOT EXAMINING THE FACTUAL ASPECT AS DIRECTED BY THE TRIBUNAL AND SIMPLY DELETING THE ADDITION ON THE GROUND THAT THE DIRECTION OF THE TRIBUNAL WAS NOT FOLLOWED. 3. THE LD.DR BROUGHT TO THE NOTICE OF THE BENCH THE JUDGMENT OF THE APEX COURT IN CIT VS URMILA RAMESH (1998) 230 ITR 422 (S C) AND SUBMITTED THAT THIS JUDGMENT OF THE SUPREME COURT WAS NOT CONSIDERED BY THE TRIBUNAL WHILE REMANDING BACK THE MATTER, AT THE FIRST INSTANCE. 4. HOWEVER, THE LD.REPRESENTATIVE FOR THE ASSESSEE, SHRI PRABHAT JAIN SUBMITTED THAT THIS TRIBUNAL DIRECTED THE ASSESSING OFFICER TO CONSIDER ITS EARLIER DECISION AND DECIDE THE ISSUE. THEREFORE, THE ASSE SSING OFFICER CANNOT GO BEYOND THAT DIRECTION. MOREOVER, THE CHENNAI BENCH OF THIS TRIBUNAL IN ACIT VS YASIN HOTELS (P) LTD 2000-(121)-TTJ-0713-TMAD CONSI DERED THIS ISSUE ELABORATELY AND AFTER CONSIDERING THE JUDGMENT OF T HE APEX COURT IN URMILA RAMESH (SUPRA) HAS DECIDED THE MATTER IN FAVOUR OF THE ASSESSEE. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, THE CIT(A)HAS RIGHTLY DELETED THE ADDITION. 5. AFTER CONSIDERING THE ARGUMENT OF BOTH THE LD.DR AND THE LD.REPRESENTATIVE FOR THE ASSESSEE, WE FIND THAT THE ACTION OF THE AS SESSING OFFICER IN REPEATING THE ITA NO.431/RJT/2007 3 VERY SAME ADDITION WITHOUT ANY EXAMINATION OF FACTS AS DIRECTED BY THE TRIBUNAL IS NOT CORRECT POSITION OF LAW. A MERE RECOMMENDATION OF THE DEPARTMENT TO FILE AN APPEAL AGAINST THE ORDER OF THE TRIBUNAL CANNOT BE A REASON NOT TO OBEY THE ORDER OF THIS TRIBUNAL. IF AT ALL, THE ASSESSING OFFICER FOUND THAT THE IDENTICAL ISSUE WAS PENDING BEFORE THE HIGH COURT / SUPREME COURT, THEN HE HAS TO FOLLOW THE PRESCRIPTION LAID OUT BY THE LEGISLATURE IN SECTION 158A OF THE ACT. WITHOUT FOLLOWING THE PRESCRIPTION PROVIDED IN SECTION 158A THE ASSESSING OFFICER CANNOT REFUSE TO FOLLOW THE DIRECTION OF THIS TRIBUNAL. 6. BE THAT AS IT MAY, SINCE THE LOWER AUTHORITY HAS NOT EXAMINED THE FACTUAL ASPECT IN SPITE OF THE DIRECTION OF THE TRIBUNAL, I N OUR OPINION, THE MATTER NEEDS TO BE EXAMINED BY THE ASSESSING OFFICER, AT THE FIRST INSTANCE. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND DIRECT THE ASSESSING OFFICER TO EXAMINE ALL THE FACTUAL ASPECT AND DECIDE THE ISSUE AFRESH AFTER CONSIDERING THE JUDGMENT OF THE APEX COURT IN URMILA RAMESH (SUPRA) AND THE DECISION OF THE CHENNAI BENCH OF THE TRIBUNAL IN ACIT VS YASIN HOTE LS (P) LTD (SUPRA) AND ALSO THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CAS E FOR THE EARLIER ASSESSMENT YEAR AND IN THE CASE OF ATUL D SHETH FOR THE ASSESS MENT YEAR 1998-99 AS ALSO THE JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF NAVNITLAL C JHAVERI VS CIT 80 ITR 582 (BOM) AND THEREAFTER DECIDE THE ISSUE AF RESH IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING T O THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 27-05-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 27 TH MAY, 2011 PK/- ITA NO.431/RJT/2007 4 COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-IV, AHMEDABAD 4. THE CIT, CENTRAL-II, AHMEDABAD 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT