PALLAVI HOLDINGS P.LTD, MUMBAI V. ASST CIT CEN CIR 31, MUMBAI

ITA 5134/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75634 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 09-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 13-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P DANIEL
• Section: 234B; 115JB

Judgement Text

, , ,, , INCOME TAX APPELLATE TRIBUNAL MUMBAI - C BENCH MUMBAI , , / ! ! ! ! , BEFORE S/SH. VIJAY PAL RAO, JUDICIAL MEMB ER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 5133/M/2012, ' ' ' ' # # # # / ASSESSMENT YEAR 2008-09 PALLAVI HOLDINGS PVT. LTD. 32, MADHULI, 3 RD FLOOR, DR. ANNIE BESANT ROAD, NEHRU CENTRE, WORLI, MUMBAI- 400018 VS. ACIT CEN CIR-31 MUMBAI. PAN: AAAC P8031H ( $% / ASSESSEE ) ( &'$% / RESPONDENT) /. ITA NO. 5134/M/2012, ' ' ' ' # # # # / ASSESSMENT YEAR 2009-10 PALLAVI HOLDINGS PVT. LTD. 32, MADHULI, 3 RD FLOOR, DR. ANNIE BESANT ROAD, NEHRU CENTRE, WORLI, MUMBAI- 400018 VS. ACIT CEN CIR-31 MUMBAI. PAN: AAAC P8031H ( $% / ASSESSEE ) ( &'$% / RESPONDENT) $% $% $% $% ( ( ( ( / ASSESSEE BY : SHRI DHARMESH SHAH &'$% ) ( / RESPONDENT BY : P. DANIEL ' ' ' ' ) )) ) *+ *+ *+ *+ / DATE OF HEARING : 09-01-2014 ,-# ) *+ / DATE OF PRONOUNCEMENT : 21 - 02- 2014 ' ' ' ' , 1961 ) )) ) 254 )1( *.* *.* *.* *.* / / / / ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,A.M: CHALLENGING THE ORDERS OF THE CIT(A)-40,MUMBAI,ASSE SSEE HAS FILED FOLLOWING GROUNDS OF APPEAL FOR ASSESSMENT YEARS 2008-09 AND 2009-10 : 1.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN PASSING THE ORDER U/S.250 OF THE ACT. 2.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING T HAT NO INCOME FROM ATTACHED ASSETS CAN BE ASSESSED IN T HE HANDS OF THE APPELLANT. 3.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE OF RS.5,51,863/- ON ACCOUNT OF INTERES T EXPENSE. 4.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE CALCULATION OF BOOK PROFIT U/S.115JB AT RS. 4,25,96 0/-. 6.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING INTERES T CHARGED U/S. 234A, 234B AND 234C OF THE ACT. 6.THE APPELLANT CRAVES LEAVE OF YOUR HONOUR TO ADD TO, ALTER, AMEND AND/OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL. ITA NO. 5134/MUM/2012 AY- 2009-10 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) H AS ERRED IN LAW AND IN FACTS IN PASSING THE ORDER U /S. 250 OF THE ACT. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THA T NO INCOME FROM ATTACHED ASSETS CAN BE ASSESSED IN T HE HANDS OF THE APPELLANT. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE OF RS. 9,106/- ON ACCOUNT OF INTEREST EXPENSE. 2 ITA NO. 5133 & 5134/MUM/2012 PALLAVI HOLDINGS PVT. LTD. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN CONFIRMING THE CALCULATION OF BOOK PROFIT U/S. 115JB AT RS. 37,301 /-. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN CONFIRMING INTEREST CHARGED U/S. 234A, 234B AND 234C OF THE ACT. THE APPELLANT CRAVES LEAVE OF YOUR HONOUR TO ADD TO , ALTER, AMEND AND/OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL. ASSESSEE HAS,VIDE ITS LETTER DATED 01.10.2013,ALSO FILED FOLLOWING ADDITIONAL GROUND OF APPEAL FOR BOTH THE AYS.: THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT AS P ER THE DECISION OF HONBLE SPECIAL COURT DATED 30. 04.2010 IN MP NO. 41 OF 1999, THE ASSETS UNDER CONS IDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEHTA AND HENCE THE INCOME ASSESSED BY THE ASSESSING OFFICER OUGHT TO HAVE BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN TH E HANDS OF THE APPELLANT. WE FIND THAT IN THE CASE OF HITESH S MEHTA HE HAD A LSO RAISED SIMILAR ADDITIONAL GROUND OF APPEAL FOR THE AYS.1994-95,1995-96AND2001-02(ITA/5587TO558 9/MUM/2011,5068/MUM/2011AND 5867 - 68/MUM/2011.)ONE OF US,WAS PARTY TO THE ORDER OF HI TESH MEHTA,WHERE ISSUE OF ADDITIONAL GROUND WAS RAISED.IN THAT ORDER ADDITIONAL GROUND WAS ADMI TTED.FOLLOWING THE SAME,WE ADMIT THE ADDITIONAL GROUND,FILED BY THE ASSESSEE,FOR BOTH TH E AYS. 2. ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF TRAD ING AND INVESTMENT IN SECURITIES.DETAILS OF DATES OF FILING OF RETURNS,INCOMES RETURNED,DATES O F ASSESSMENT,ASSESSED INCOMES,DATES OF ORDERS OF THE CIT(A)CAN BE SUMMARISED AS UNDER : AY. DT.OF FILING OF RETURN RETURNED INCOME (RS.) DATE OF ASSESSMENT ASSESSED INCOME DT. OF ORDERS OF CIT(A) AY.2008-09 30.09.2008 NIL 25.11.2010 4,25,716/- 26.06.2012 AY.2009-10 11.02.2011 26,695/- 25.11.2010 54,060 /- 26.06.2012 ITA NO. 5133/MUM/2012 AY- 2008-09: DURING THE COURSE OF HEARING BEFORE US,AUTHORISED R EPRESENTATIVE(AR)OF THE ASSESSEE DID NOT PRESS GROUNDS OF APPEAL NO.1 AND 2.THEREFORE, BOTH THE GROUNDS STAND DISMISSED AS NOT PRESSED. 3. HE FURTHER STATED THAT GROUND NO.4 WAS CONSEQUENTIA L TO GROUND NO.3.SO,FIRST,WE WOULD LIKE TO TAKE UP GROUND NO.3 AND SAME DEALS WITH DISALLOWANC E OF RS.5,51,863/- ON ACCOUNT OF INTEREST EXPENSE.IT WAS BROUGHT TO OUR NOTICE THAT SIMILAR I SSUE HAD ARISEN IN THE APPEAL FILED BY THE ASSESSEE FOR THE AY.2007-08 AND THE MATTER WAS SET ASIDE TO THE FILE OF THE FIRST APPELLATE AUTHORITY(FAA).WE FIND THAT WHILE DECIDING THE APPE AL OF THE ASSESSEE FOR THE IMMEDIATE PRECED - ING YEAR (ITA/ 8599/MUM/2010 DATED 17.07.2013),TRIB UNAL HAS DECIDED THE ISSUE AS UNDER: 3.IN RESPECT OF GROUND NO.5 OF THE APPEAL LD.AR SUB MITTED THAT ON SIMILAR FACTS, AN IDENTICAL ISSUE WAS CONSIDERED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HITESH S MEHTA V/S DCIT IN ITA NOS7726 AND 7727/MUM/2010 (AY-2005-06 AND 2006-07)D ATED 26.4.2013 IN PARA 5 AND THE TRIBUNAL RESTORED THE ISSUE TO THE FILE OF LD.CIT(A ) TO ADJUDICATE IT AFRESH.LD.AR FILED A COPY OF THE ORDER OF LD.CIT(A) IN RESPECT OF THE CASE OF SHRI H ITESH S MEHTA AND SUBMITTED THAT THE REASONING GIVEN BY THE LD.CIT(A)IN NOT GRANTING RELIEF OF LIA BILITY OF INTEREST EXPENDITURE ARE THE SAME AS IS I N THE CASE OF THE ASSESSEE.THE ABOVE FACTS WERE NOT D ISPUTED BY THE LD. DR. 4.WE HAVE ALSO CONSIDERED THE ORDER OF THE LD. C1T( A) DATED 31.8.2010 IN THE CASE OF SHRI HITESH S MEHTA AND OBSERVE THAT THE SAID ISSUE HAS BEEN DEAL T WITH IN PARAS 7.4 AND 7.5 THEREOF. WE ALSO OBSERVE THAT SIMILAR REASONING HAVE BEEN GIVEN BY T HE LD.CIT(A) IN THE CASE OF THE ASSESSEE BEFORE US IN PARA 7.8. WE OBSERVE THAT THE TRIBUNAL IN THE CA SE OF HITESH S MEHTA VIDE ITS ORDER DATED 26.4.2013 VIDE PARA 5 HAS RESTORED THE MATTER TOWAR DS INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE TO LD. CIT(A) WITH A DIRECTION TO ADJUDICATE THE IS SUE AFRESH.RESPECTFULLY FOLLOWING THE DECISION OF T HE CO-ORDINATE BENCH OF THE TRIBUNAL AND ALSO AS AGREE D TO BY THE LD. REPRESENTATIVES OF BOTH THE 3 ITA NO. 5133 & 5134/MUM/2012 PALLAVI HOLDINGS PVT. LTD. PARTIES,WE SET ASIDE THE MATTER TO THE FILE OF LD.C IT(A) WITH A DIRECTION TO ADJUDICATE THE SAME AFRES H AFTER CONSIDERING THE FINDINGS TO BE CONSIDERED IN RESPECT OF REJECTION/RELIABILITY OF BOOKS OF ACCOUNT.HENCE,GROUND NO.5 OF THE APPEAL TAKEN BY TH E ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. RESPECTFULLY,FOLLOWING THE ORDER FOR THE AY.2007-08 ,WE SET ASIDE THE MATTER TO THE FILE OF THE FAA FOR FRESH ADJUDICATION.HE IS DIRECTED TO AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE.AS A RESULT,WE ALLOW GROUND NO.3 OF THE AS SESSEE FOR STATISTICAL PURPOSES. 4. AS MENTIONED EARLIER,GROUND NO.4 IS CONSEQUENTIAL T O GROUND NO.3.THEREFORE,WE DIRECT THE FAA TO DECIDE THE ISSUE OF CALCULATION OF INCOME,AS PE R THE MAT PROVISIONS,AFRESH AFTER HEARING THE ASSESSEE.GROUND NO.4 IS ALSO ALLOWED FOR STATISTICA L PURPOSES. 5. GROUND NO. 5 IS ABOUT INTEREST CHARGED U/S.234 A,23 4 B AND 234C OF THE ACT.DURING THE COURSE OF HEARING BEFORE US,IT WAS BROUGHT TO OUR NOTICE T HAT SIMILAR ISSUE HAD ARISEN IN THE CASE OF HITESH MEHTA,ONE OF THE MEMBERS OF HARSHAD MEHTA GROUP,THA T IN THAT MATTER APPEAL WAS FILED BY THE AO AGAINST THE ORDER OF THE FAA,THAT FAA HAD HELD T HAT INTEREST U/S.234 A,234B AND 234C COULD NOT BE CHARGED,THAT MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSEE.WE FIND THAT ISSUE OF CHARGING OF INTEREST U/S.234A,234B AND 234C OF THE ACT WAS DISCUSSED BY THE TRIBUNAL IN THE CASE OF HITESH MEHTA(ITA NOS.5587-89,5068,5867-68,6030,5 226/MUM/2011-DATED12.06. 2013)AS UNDER : 9.REMAINING GROUNDS OF THE APPEALS FILED BY THE DE PARTMENT ARE AGAINST CHARGEABILITY UNDER SECTIONS234A,234B & 234C,AS THE LEARNED CIT(A)HAS H ELD THAT NO INTEREST CAN BE CHARGED UNDER SECTIONS 234A 2348 & 2340. 9.1.LEARNED COUNSEL OF THE ASSESSEE FAIRLY STATED T HAT THIS ISSUE CAN BE SENT BACK TO THE FILE OF FILE CIT(A.) AS SIMILAR ISSUE CAME BEFORE THE TRIBUNAL F OR THE ASSESSMENT YEAR 2035-05 AND 2006-07 WHEREIN THE TRIBUNAL HAS SET ASIDE THE GROUNDS RAIS ED BY THE DEPARTMENT IN THIS REGARD.FINDING OF THE TRIBUNAL HAS BEEN RECORDED IN PARA 6 IN THE APP EAL OF THE DEPARTMENT FOR THE ASSESSMENT YEARS 2005-06 & 2006-07, COPY OF WHICH HAS ALSO BEEN PLAC ED ON RECORD. 9.2 LEARNED DR ALSO STATED THAT THIS ISSUE NEEDS RE -ADJUDICATION THEREFORE THE SAME CAN BE SENT BACK TO THE FILE OF THE LEARNED CIT(A). 9.3. AFTER CONSIDERING THE ORDER OF THE AO, CIT(A) AND THE ORDER OF THE TRIBUNAL PASSED IN ITA NO 7498 & 77321M/2010 FOR ASSESSMENT YEAR 2005-06.& 20 06-07 DATED 26-4-201,WE FOUND THAT THE GROUNDS RAISED BY THE REVENUE WERE ALLOWED FOR STAT ISTICAL PURPOSES THE TRIBUNAL IN THE AFORESAID APPEAL, IN PARA 6, HAS OBSERVED THAT THE LIABILITY OF THE ASSESSEE AS SUCH UNDER INTEREST UNDER SECTION 234A,2343 & 234C SQUARELY DEPENDS ON THE PR OPOSED ADJUDICATION OF THE LEARNED CIT(A) AND, ACCORDINGLY THESE GROUNDS WERE SET ASIDE TO TH E FILE OF THE CIT(A) AND THE APPEAL OF THE DEPARTMENT WERE ALLOWED FOR STATISTICAL PURPOSES 9.4.IN OUR VIEW ALSO THE CHARGEABILITY OF INTEREST UNDER SECTIONS234A, 234B & 234C OF THE ACT, DEPENDS UPON THE VARIOUS FACTORS AS IN THE CASE OF TDS, THERE MAY NOT BE APPLICABILITY OF INTEREST UNDER SECTION 2343. HOWEVER, SINCE THE TRIBUNAL HAS ALREADY RESTORED THIS ISSUE TO THE FILE OF THE LEARNED CIT(A) FOR PASSING A FRESH ORDER AFTER AFFO RDING REASONABLE OPPORTUNITY TO BOTH THE PARITIES THEREFORE, WE ALSO SET ASIDE THIS ISSUE TO THE FILE OF THE LEARNED CFT(A) TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE DECISION OF THE TRIBUNAL GIVEN FOR ASSESSMENT YEAR 2005-OS & 2006-07.WE ORDER ACCORDINGLY RESPECTFULLY,FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF HITESH MEHTA,WE SET ASIDE THE MATTER TO THE FILE OF THE FAA FOR PASSING A FRESH A DJUDICATION ORDER.HE WILL AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE.GROUND NO.5 IS ALLOWED FOR STATISTICAL PURPOSES. 6. NOW,WE WOULD TAKE UP THE ADDITIONAL GROUND RAISED B Y THE ASSESSEE-COMPANY.IT WAS BROUGHT TO OUR NOTICE THAT IDENTICAL ADDITIONAL GROUND FILED B Y THE ASSESSEE FOR THE EARLIER AY.WAS REJECTED BY THE TRIBUNAL.WE FIND THAT,WHILE ADJUDICATING THE AP PEAL FOR THE AY.2007-08(SUPRA),TRIBUNAL HAD HELD AS UNDER: 6.IN RESPECT OF ADDITIONAL GROUND TAKEN BY ASSESSE E, THE LD. REPRESENTATIVES OF BOTH THE PARTIES CONCEDED THAT THE SIMILAR GROUND WAS ALSO TAKEN BY THE ASSESSEE IN THE CASE OF HITESH S MEHTA (SUPRA) AND THE TRIBUNAL HAS HELD THAT NO DIRECTION IS REQUIRED TO BE GIVEN TO THE AO IN RESPECT OF 4 ITA NO. 5133 & 5134/MUM/2012 PALLAVI HOLDINGS PVT. LTD. ABOVE GROUND BECAUSE IF THE HONBLE APEX COURT DECI DES THAT ALL THE INCOME BELONGS TO SHRI HARSHAD S MEHTA THEN INCOME HAS TO BE ASSESSED IN T HE HANDS OF HARSHAD S MEHTA AND NOT IN THE HANDS OF OTHER PERSONS. THE TRIBUNAL HAS HELD THAT THE SAID GROUND TAKEN BY THE ASSESSEE IS ACADEMIC IN NATURE AND DISMISSED THE SAME. THE LD. AR DID NOT DISPUTE THE ABOVE FACTS. 7. IN VIEW OF ABOVE, WE DISMISS THE ADDITIONAL GROUND TAKEN BY ASSESSEE. FOLLOWING THE SAME,WE DISMISS THE ADDITIONAL GROUND FILED BY THE ASSESSEE. AS RESULT,APPEAL FILED BY THE ASSESSEE STANDS ALLOW ED IN PART. ITA NO. 5134/MUM/2012 AY- 2009-10: 7. GROUNDS OF APPEAL FILED BY THE ASSESSEE-COMPANY ARE IDENTICAL TO THE GROUNDS FILED FOR AY.2008-09- THE ONLY DIFFERENCE IS ABOUT THE AMOUNT INVOLVED.FOLLOWING OUR ORDER FOR THE EARLIER AY.WE DISMISS GROUND NO.1-2 AS NOT PRESSED.GROUND N O.3-5 ARE RESTORED BACK TO THE FILE OF THE FAA FOR FRESH ADJUDICATION.HE IS DIRECTED TO AFFORD A SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE.ALL THE THREE GROUNDS ARE ALLOWED FOR STAT ISTICAL PURPOSES. 7.1. ADDITIONAL GROUND FILED BY THE ASSESSEE IS DISMISS ED,FOLLOWING THE ORDER OF THE HITESH MEHTA (SURPRA). AS A RESULT,APPEALS OF THE ASSESSEE,FOR THE AY.2008 -09 AND 2009-10 STAND PARTLY ALLOWED. 1*2 '3* 4 '.. 2008-09 *$ 2009-10 6 ) . 7 /*2 8* ) * 9: . ORDER PRONOUNCED IN THE OPEN COURT ON 2 1 ST FEBRUARY,2014. / ) ,-# 7 ;' 21 1+, 2014 - ) . < SD/- SD/- ( / VIJAY PAL RAO ) ( ! / RAJENDRA ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, ;' /DATE: 21.02.2014 SK / / / / ) )) ) &* &* &* &* = #* = #* = #* = #* / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / $% 2. RESPONDENT / &'$% 3. THE CONCERNED CIT (A) / > ? , 4. THE CONCERNED CIT / > ? 5. DR C BENCH, ITAT, MUMBAI / @. &*' , . . . 6. GUARD FILE/ . 1 '* '* '* '* &* &*&* &* //TRUE COPY// /' / BY ORDER, A / 9 DY./ASST. REGISTRAR , /ITAT, MUMBAI