Triumph Securities Ltd., V. DCIT Central Circle 40,

ITA 4913/MUM/2004

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1552 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 27-02-2017
• Assessment Year: 1999-2000
• Appeal Filed On: 14-06-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Assessee Lawyers: SATYENDRA
• Keywords: Block assessment; Set aside
• Section: 142(2A)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI. BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER I.T.A. NO. 4913 /MUM/2004. ASSESSMENT YEARS : 1999-2000 TRIUMPH SECURITIES LTD., DY. COMMISSIONER OF RADHA BHAVAN, 1 ST FLOOR, VS. INCOME TAX, 121. NAGINDAS MASTER ROAD, CENTRAL CIRLE-40, FORT, MUMBAI 400 023. MUMBAI. PAN : AAACT2152P. APPELLANT RESPONDENT APPELLANT BY : SHRI SATYENDRA. RESPONDENT BY : DR. P. DANIEL. O R D E R PER J. SUDHAKAR REDDY, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE CIT(APPEALS)-VII, MUMBAI, DATED 29-03- 2004 FOR ASSESSMENT YEAR 1999-2000. 2. WHEN THE CASE CAME UP FOR HEARING, THE ASSESSEE FILED AN APPLICATION FOR ADJOURNMENT, STATING THAT THE ISSUE S INVOLVED IN APPEAL FOR THIS YEAR ARE SIMILAR TO THE ISSUES INVOLVED IN THE APPEAL OF THE VERY SAME CLIENT FOR THE BLOCK PERIOD ENDED ON 23 RD MARCH, 2001 AND THAT THE ASSESSEE HAD RECEIVED THE ORDER OF THE SPECIAL BENC H IN THE CASE OF BLOCK ASSESSMENT AND THAT THE ASSESSEE IS CONTEMPLATING T O FILE MISCELLANEOUS APPLICATION AGAINST THAT ORDER AND IN SUCH A SITUAT ION, THE CASE MAY BE ADJOURNED. 2 3. THE LEARNED SPECIAL COUNSEL FOR THE REVENUE, DR. P. DANIEL, OPPOSED THE PETITION FOR ADJOURNMENT. HE SU BMITTED THAT THE ISSUES ARE COVERED BY THE DECISION OF THE SPECIAL B ENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE BLOCK ASSESSMENT AN D CONTEMPLATION OF THE ASSESSEE TO FILE A MISCELLANEOUS APPLICATION AG AINST THE SPECIAL BENCH ORDER, IS NO GROUND FOR SEEKING ADJOURNMENT. WE FUL LY AGREE WITH THESE SUBMISSIONS AND REJECT THE REQUEST FOR ADJOURNMENT. 4. WE HAVE HEARD DR. P. DANAIEL, LEARNED SPECIAL COUNSEL FOR THE REVENUE. ON A CAREFUL CONSIDERATION OF THE FAC TS AND CIRCUMSTANCES OF THE CASE AND ON A PERUSAL OF THE PAPERS ON RECOR D AND THE ORDERS OF THE AUTHORITIES BELOW, WE HOLD AS FOLLOWS. 5. GROUND NO. 1 IS ON AUDIT U/S 142(2A) OF THE AC T. THE ASSESSEE IN THE PAPER BOOK HAS STATED THAT HE IS NO T PRESSING THIS GROUND. THUS WE DISMISS THIS GROUND AS NOT PRESSED. 6. GROUND NO. 2 IS ON THE ISSUE OF GRANT OF DEPREC IATION OF MEMBERSHIP CARD OF A STOCK EXCHANGE. THIS ISSUE IS COVERED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE BY THE DECISI ON OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF TECHNO SHARES & S TOCK LTD. 184 TAXMAN 103. RESPECTFULLY FOLLOWING THE SAME, WE DIS MISS THIS GROUND OF THE ASSESSEE. 7. GROUND NO. 3(A) AND 3(B) ARE ON THE ISSUE OF AD DITIONS FOR CLIENTS INVESTMENTS/PURCHASES AND POSITIVE DIFFERE NCE BETWEEN SALES AND PURCHASES. THIS IS AGAINST THE ADDITION FOR DIFFER ENCE IN TURNOVER. THIS ISSUE IS ALSO BEFORE THE SPECIAL BENCH. THE ASSESSE E RELIED ON THE DECISION OF HONBLE SUPREME COURT REPORTED IN 159 ITR 78 AND PLEADED THAT THE 3 AO WAS DUTY BOUND TO ISSUE SUMMONS U/S 131, WHEN TH E AO WAS REQUESTED TO DO SO. THESE ISSUES ARE SIMILAR TO THE ISSUES THAT HAVE COME UP BEFORE THE SPECIAL BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE IN THE BLOCK ASSESSMENT PROCEEDINGS. AS THE AO HAS TO HAVE THE BENEFIT OF THIS DECISION AND AS CERTAIN CLIENTS HAVE FURNISHED CONFIRMATIONS SUBSEQUENT TO THE ORDER OF THE CIT(APPEALS) AND AS CERTAIN CONFIRMATIONS WERE ALSO SUBMITTED BEFORE THE CIT(APPEALS) AND THE RE CONFIRMATION REQUIRE VERIFICATION, WE SET ASIDE THIS ISSUE TO TH E FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW 8. IN THE RESULT, GROUND NO. 3(A) AND 3(B) ARE ALL OWED FOR STATISTICAL PURPOSES. 9. COMING TO GROUND NO. 4, THE ADDITION IS MADE ON ACCOUNT OF DIFFERENCE IN TURNOVER. THE ASSESSEE FURNISHES BEFO RE US COPY OF THE APPELLANTS LEDGER ACCOUNT IN THE BOOKS OF PSS AND BSCS LEDGER ACCOUNT IN THE BOOKS OF THE ASSESSEE. AS THE RECONCILEMENT HAS TO BE MADE AFRESH, WE DEEM IT PROPER TO SET ASIDE THE SAME TO THE FIL E OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. 10. GROUND NO. 5 IS AGAINST THE DISALLOWANCE OF PR OFESSIONAL FEES. THE ASSESSEE FURNISHES COPY OF THE AGREEMENT FOR AVAILING RESEARCH FACILITIES AND CLAIMS THAT THE EXPENDITURE SHOULD B E ALLOWED. THE REVENUE RELIES UPON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SHATRUNJAY DIAMONDS 261 ITR 258 AND ARGUES THAT THE AMOUNT IS PAID TO THE SISTER CONCERN AND WHEN IT IS EXCESSIVE , THE SAME SHOULD BE DISALLOWED. 4 11. AS THE AMOUNT IN QUESTION HAS BEEN PAID TO A S ISTER CONCERN AND AS THE AO HAS FOUND THAT FOR SIMILAR KIND OF SE RVICES, ANOTHER ASSOCIATE CONCERN WAS PAID A NOMINAL AMOUNT OF RS.2 .5 LAKHS, WE UPHOLD THE FINDING OF THE FIRST APPELLATE AUTHORITY AT PAR A 8.11 AND 8.12 AT PAGE 25 OF THE ORDER AND DISMISS THIS GROUND. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED IN PART. ORDER PRONOUNCED ON THIS 4 TH JUNE, 2010. SD/- SD/- (D. MANMOHAN) (J. SUDHAKAR REDDY) VICE PRESIDENT. ACCOUNTANT MEMBER. MUMBAI, DATED : 4 TH JUNE, 2010. WAKODE COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, B-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI BENCHES, MUMBAI.