APURVA NATVAR PARIKH & CO. PVT. LTD., MUMBAI V. ACIT CENT. CIR. - 7(1), MUMBAI

ITA 4689/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7368 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 11-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Assessee Lawyers: MADHUR AGARWAL A R
• Section: 143(3); 263

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -CBENCH MUMBAI , , , BEFORE S/SHRI RAJENDRA,ACCOUNTANT MEMBER AND RAM LAL NEGI,JUDICIAL MEMBER ./I.T.A./4689/MUM/2016, /ASSESSMENT YEAR: 2009-10 APURVA NATVAR PARIKH & CO.PVT.LTD. 96, CHEMBUR MANKHURD LINK ROAD SHIVAJI NAGAR, MUMBAI-400 043. PAN:AAACN 2937 Q VS. ACIT-CENTRAL CIRCLE-7(1) ROOM NO.653, 6TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI RAJAT MITTAL-CIT-DR ASSESSEE BY: SHRI MADHUR AGARWAL-AR / DATE OF HEARING: 01.02.2018 / DATE OF PRONOUNCEMENT: 27.04.2018 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , - PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 10/05/2016 OF THE CIT ( A) -49,MUMBAI, THE ASSESSEE HAS FILED THE PRESENT APPEAL.ASSESSEE-COMPANY ENGAGED IN THE BUSINESS OF WAREHOUSING,CONSTRUCTION ACTIVITIES AND RUNNING A CLUB,FILED ITS RETURN OF I NCOME ON 30/09/2009, DECLARING TOTAL INCOME AT RS. 7.06 CRORES.THE ASSESSING OFFICER (AO) COMPL ETED THE ASSESSMENT U/S.143(3)OF THE ACT,ON 30/12 / 2011,ASSESSING ITS INCOME AT RS. 9.8 7 CRORES. BRIEF FACTS 2. A REVISIONARY ORDER,AS PER THE PROVISIONS OF SECTIO N 263 OF THE ACT, WAS PASSED BY THIS CIT, CENTRAL-IV,ON 19/11/2013,WHEREIN THE ASSESSMENT COM PLETED BY THE AO WAS HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E WITH REGARD TO THE ISSUE RELATING TO TREATMENT OF RECEIPT OF ONE-TIME MEMBERSHIP ENTRANC E FEE OF RS. 2.51 CRORES. THE ASSESSEE HAD CLAIMED THAT THE ENTRANCE FEE WAS A CAPITAL REC EIPT AND THE THEN AO HAD ACCEPTED THE CLAIM MADE BY THE ASSESSEE WHILE PASSING THE ORIGIN AL ORDER.IN HIS REVISIONARY ORDER, THE CIT SET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO THE AO TO TAX THE ENTRANCE FEE AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING.IN PU RSUANCE OF REVISIONARY ORDER, THE AO COMPLETED THE ASSESSMENT, U/S. 143 (3) R.W.S.263 OF THE ACT, ON 24/02/2015, DETERMINING THE INCOME OF THE ASSESSEE AT RS .12.39 CRORES. 4689/M/16 APURVA NATVAR PARIKH & CO.PVT.LTD. 2 3. AGGRIEVED BY THE ABOVE ORDER OF THE AO, THE ASSESSE E PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).AFTER CONSIDERING THE AVA ILABLE MATERIAL,HE REFERRED TO THE ORDER OF THE TRIBUNAL FOR THE AY.S 2006-07 TO 2008-09 (IT A/2146 AND 2147/MUM/2009 AND ITA 2283/ MUM/2011,DATED 20/11/2015)AND DIRECTED THE AO TO TAX 1/25 TH PART OF ONE-TIME MEMBER -SHIP FEES IN EACH YEAR, OVER THE PERIOD OF 25 YEARS, RATHER THAN TAXING THE ENTIRE AMOUNT IN THE AY. 2009-10. 4. IN THE MEANWHILE THE ASSESSEE FILED AN APPEAL BEFOR E THE TRIBUNAL CHALLENGING THE REVISIONARY ORDER OF THE CIT,DATED 19/11/2013.IT WA S BROUGHT TO OUR NOTICE THAT THE ORDER PASSED BY THE HIM,U/S. 263 OF THE ACT,WAS QUASHED B Y THE TRIBUNAL VIDE ITS ORDER DATED 24/10/2017 (ITA/ 444/ MUM/2014,AY.2009-10).WE ARE R EPRODUCING THE OPERATIVE PART OF THE ORDER OF THE TRIBUNAL AND THAT READS AS UNDER: 8. A PERUSAL OF THE ORDER PASSED BY THE CIT INDICA TED THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS CANCELLED ON TH E GROUND THAT THE ASSESSING OFFICER HAS NOT MADE PROPER ENQUIRY AND VERIFICATIO N IN RESPECT OF THE ISSUE AS DISCUSSED ABOVE. THIS, IN OUR CONSIDERED OPINION, C ANNOT BE SUFFICIENT GROUND FOR CANCELLING THE ASSESSMENT. WHILE MAKING THE ASSESSM ENT ORDER, IT IS THE SATISFACTION OF THE ASSESSING OFFICER WHO MADE THE ENQUIRY AND IT S HOULD BE TOUCHSTONE OF ASSESSMENT ORDER PASSED BY HIM. NO COGENT MATERIAL OR EVIDENCE WAS BROUGHT TO OUR KNOWLEDGE BY THE LD. DR WHICH MAY PROVE THAT VIEW TAKEN BY TH E ASSESSING OFFICER IN THE CASE OF THE ASSESSEE WAS UNSUSTAINABLE IN LAW. THEREFORE, W E ARE OF THE VIEW THAT THE ORDER PASSED BY THE CIT IS ILLEGAL AND WITHOUT JURISDICTI ON. IF THE ORDER PASSED BY THE CIT IS SUSTAINED THEN THIS WILL PERMIT THE ILLEGALITY TO C ONTINUE AND THE SUBSEQUENT ACTION IS CARRIED OUT ON THE ILLEGAL ORDER IS ALSO ILLEGAL PE R SE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. AS THE REVISIONARY ORDER OF THE CIT HAS BEEN DECLAR ED ILLEGAL,SO,THE CONSEQUENTIAL ORDER OF THE AO PASSED U/S. 143(3) R.W.S 263,DTD.,WOULD NOT SURV IVE.THEREFORE,REVERSING THE ORDER OF THE FAA,WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAV OUR OF THE ASSESSEE. AS A RESULT,APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH APRIL, 2018. 27 , 2018 SD/- SD/- ( / RAM LAL NEGI ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 27.04.2018. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 4689/M/16 APURVA NATVAR PARIKH & CO.PVT.LTD. 3 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR C BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.