HARSH ESTATES P.LTD, MUMBAI V. ASST CIT CEN CIR 31, MUMBAI

ITA 5139/MUM/2012

• Counselvise Citation: 513919914 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2000-2001
• Appeal Filed On: 13-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Assessee Lawyers: DHARMESH SHAH
• Keywords: Depreciation
• Section: 144; 143(3); 234B; 115JB

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - H BENCH. . .. . ! ! ! ! , '#$% '#$% '#$% '#$% #&'() #&'() #&'() #&'() , '# *+ '# *+ '# *+ '# *+ BEFORE S/SH.D.MANMOHAN,VICE-PRESIDENT & RAJENDR A,ACCOUNTANT MEMBER ./ ././ ./ ITA NO.5139/MUM/2012 , ! # - ! # - ! # - ! # -/ // / ASSESSMENT YEAR-2000-01 HARSH ESTATES PVT. LTD. 32 MADHULI, 3 RD FLOOR, DR. A.B.ROAD, NEHRU CENTRE, WORLI, MUMBAI-400018 VS. ASST. CIT, CENTRAL CIRCLE 31 MUMBAI. PAN: AAACH3480L ( #./ / // / APPELLANT ) ( 01./ / RESPONDENT ) #./ 2 ' #./ 2 ' #./ 2 ' #./ 2 ' / / / / APPELLANT BY : SHRI DHARMESH SHAH 01./ 3 2 ' / RESPONDENT BY : DR. P. DANIEL !# 3 4# !# 3 4# !# 3 4# !# 3 4# / // / DATE OF HEARING : 03/10/2013 5- # 3 4# / DATE OF PRONOUNCEMENT : 06/11/2013 ! ! ! ! , 1961 1961 1961 1961 3 ## 3 ## 3 ## 3 ## 254 254 254 254( (( (1 11 1) )) )' (4>4 *'? ' (4>4 *'? ' (4>4 *'? ' (4>4 *'? ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M. CHALLENGING THE ORDER DATED 26.06.2012 OF THE CIT(A )-40, MUMBAI ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) HAS ERRED IN LAW AND IN FACTS IN PASSING THE ORDER U/S. 250 OF THE ACT AND CONFIRMING THE ORDER OF THE ASSESSING OFFICER. .2. THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ER RED IN LAW AND IN FACTS IN NOT APPRECIATING THAT NO INCOME FROM ATTACHED ASSETS CAN BE ASSESSED IN THE 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. 52,80,810/- ON ACCOUNT OF I NTEREST EXPENSE. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION ALLOWANCE AMOUNTIN G TO RS. 67,748/-. 5. 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. 42 ,77,286/-. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING INTEREST CHARGED U/S. 234A, 234B AND 234C OF THE AC T. 7. THE APPELLANT CRAVES LEAVE OF YOUR HONOUR TO ADD TO, ALTER, AMEND AND/ OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL WITH THE PERMISSION OF YOUR HONOUR. ASSESSEE HAS ALSO FILED ADDITIONAL GROUND FOR THE YEAR UNDER CONSIDERATION AND IT READS AS UNDER: 1.THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT AS PER THE DECISION OF HONBLE SPECIAL COURT DATED 30.04.2010 IN MP NO. 41 OF 1999, THE ASSETS UNDER C ONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEHTA AND HENCE THE INCO ME ASSESSED BY THE ASSESSING OFFICER OUGHT TO HAVE BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEH TA AND NOT IN THE HANDS OF THE APPELLANT. 2 ITA NO. 5139/MUM/2012 HARSH ESTATES PVT. LTD. VIDE ITS LETTER DATED 01.10.2013,ASSESSEE MADE A RE QUEST TO ADMIT THE ABOVE MENTIONED ADDITION GROUND.WE FIND THAT SIMILAR ADDITIONAL GROUND WAS R AISED IN THE CASE OF SH.HITESH S MEHTA FOR THE AY.1994-95,1995-96 AND 2001-02(ITA/5587TO5589/M UM/2011,5068/MUM/2011 AND 5867 - 68/MUM/2011.ONE OF US,WAS PARTY TO THAT ORDER.IN TH AT ORDER ADDITIONAL GROUND WAS DEALT AS UNDER: 4. THE ASSESSEE HAS ALSO FILED AN APPLICATION DATED 27 -5-2010 FOR ADMITTING THE FOLLOWING GROUND :- 1. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT AS PER THE DECISION OF HONBLE SPECIAL COURT DATED 30.04.2010 IN M.P. NO.4 1 OF 1999, THE ASSETS UNDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEH TA AND HENCE, THE INCOME ASSESSED BY THE ASSESSING OFFICER OUGHT TO HAVE BEEN TAXED IN THE H ANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE HANDS OF THE APPELLANT. 5. AFTER GOING THROUGH THE ADDITION GROUND FILED BY TH E ASSESSEE, WE NOTED THAT THE GROUND IS LEGAL GROUND, WHICH DOES NOT REQUIRE ANY NEW FACTS TO BE BROUGHT ON RECORD. IN VIEW OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT, REPORTED IN (1998) 229 ITR 383, THE LEGAL GROUND CAN BE ADMITTED, IF NO NEW FACTS A RE TO BE BROUGHT ON RECORD.HOWEVER, AFTER GOING THROUGH THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR ALL THE ASSESSMENT YEARS INVOLVED HERE BEFORE U S, WE FOUND THAT THE GROUND IS FULLY ACADEMIC IN NATURE FOR THE REASON THAT IF THE HONB LE SUPREME COURT DECIDES SOMETHING THAT HAS TO BE FOLLOWED WITHOUT ANY DISPUTE.THE DECISION OF THE HONBLE APEX COURT IS LAW OF LAND, WHICH HAS TO BE FOLLOWED BY EVERY AUTHORITY THEREFO RE IN OUR VIEW, NO DIRECTION IS TO BE REQUIRED TO BE GIVEN TO THE AO IN THIS RESPECT BECA USE IF THE HONBLE APEX COURT DECIDES THAT ALL THE INCOME BELONGS TO SHRI HARSHAD S. MEHTA, TH EN THE INCOME HAS TO BE ASSESSED IN THE HANDS OF SHRI HARSHAD S. MEHTA, NOT IN THE HANDS OF ANY OTHER PERSON.THEREFORE, IN OUR VIEW, THERE IS NO NEED TO ISSUE ANY DIRECTION AS THE DECI SION OF THE HONBLE SUPREME COURT HAS TO BE FOLLOWED IN ANY CASE,ACCORDINGLY BY ADMITTING THE G ROUNDS RAISED BY THE ASSESSEE FOR ALL THE YEARS,WE TREAT THE SAME AS ACADEMIC IN NATURE. FOLLOWING THE ABOVE WE ADMIT THE ADDITIONAL GROUND FOR THE YEAR UNDER CONSIDERATION-TREATING THE SAME AS ACADEMIC IN NATURE. BRIEF HISTORY 2. ASSESSEE-COMPANY ENGAGED IN THE BUSINESS OF TRADING AND INVESTMENT IN SHARES. ASSESSEE HAD NOT FILED ITS RETURN OF INCOME. SO, AO PASSED ORDER U/S 144 OF THE ACT DETERMINING THE INCOME AT RS. 50.51 LACS. MATTER TRAVELLED TO TRIBUNAL TWICE. IN PURSUANCE OF ORDER DATED 09.02.2010 OF THE TRIBUNAL. AO FINALISED THE ASSESSMENT ON 20.12.2010 U/S 143(3) R.W.S. 254 OF THE ACT DETERMINING THE INCOME AT RS. 41.82 LACS. DURING TH E ASSESSMENT PROCEEDINGS CERTAIN ADDITIONS WERE MADE BY THE AO AND SAME WERE CHALLENGED BEFORE THE FIRST APPELLATE AUTHORITY (FAA). ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE O RDER OF THE FAA,AS STATED EARLIER. 2.1. DURING THE COURSE OF HEARING BEFORE US,AUTHORISED R EPRESENTATIVE (AR) OF THE ASSESSEE DID NOT PRESS GROUND NO.4,HENCE SAME IS DISMISSED AS NO T PRESSED. 3. GROUND NO.3 IS ABOUT DISALLOWANCE OF INTEREST EXPEN DITURE OF RS.52,80,810/-.IT WAS BROUGHT TO OUR NOTICE THAT IDENTICAL ISSUE WAS DECIDED BY THE TRIBUNAL IN THE CASES OF SH.HITESH S MEHTA (AY. 1994-95 AND 2005-06.VIDE ORDER DATED.12.06.201 3-ITA/5587-89/MUM/2011 & ORDER DATED 26.04.2013-ITA/7726/MUM/2010) AND PRATIMA H MEHTA( ITAS NO. 1942-44 &5500/MUM/2012 -AYS.1998-99,2000-01,2001-02,2008-09 DATED 28.08.20 13).WHILE GOING THROUGH THE SAID ORDERS OF THE TRIBUNAL,WE FIND THAT THE ISSUE HAD BEEN SET ASIDE TO THE FILES OF THE FAA FOR FRESH ADJUDICATION. FOLLOWING THE SAME WE REMIT BACK THE MATTER TO THE FILE OF THE FAA. GROUND NO.3 IS ALLOWED IN FAVOUR OF THE ASSESSEE,IN PART. 3 ITA NO. 5139/MUM/2012 HARSH ESTATES PVT. LTD. 4. NEXT GROUND OF APPEAL IS ABOUT CALCULATION OF BOOK PROFIT U/S.115JB OF THE ACT.WE FIND THAT SIMILAR ISSUE HAD ARISEN IN THE CASE OF AATUR HOLDI NGS PVT.LTD.(ITA NO.5481/M/2011).WHILE DECIDING THE APPEAL ON 07.08.2013,A BENCH OF ITAT,M UMBAI HAD SET ASIDE THE MATTER TO THE FILE OF THE FAA.WE FIND THAT ISSUE BEFORE THE A BENCH WA S COMPUTATION OF INCOME U/S.115JA OF THE ACT.RESPECTFULLY,FOLLOWING THE ORDER OF THE COORDIN ATE BENCH,WE REMIT BACK THE MATTER TO THE FILE OF THE FAA.GROUND NO.4 IS ALLOWED,IN PART,IN FAVOUR OF THE ASSESSEE. 5. LAST EFFECTIVE GROUND OF APPEAL IS ABOUT CHARGING O F INTEREST U/S. 234A, 234B AND 234C OF THE ACT.AR OF THE ASSESSEE SUBMITTED THAT SIMILAR ISSUE WAS RESTORED BACK TO THE FILE OF THE FAA IN THE OTHER CASES OF HARSHAD MEHTA GROUP.AFTER CONSID ERING THE ORDERS PASSED BY THE MUMBAI TRIBUNAL IN THE CASE OF M/S.ORIENT TRAVEL PVT. LTD. (ITA NO. 6868/MUM/2008-AY 2004-05), HOLDING,TOPAZ HOLDING AND OTHER CASES OF HARSHAD ME HTA GROUP,WE ARE OF THE OPINION THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE F AA.GROUND NO.6 IS ALLOWED IN PART,IN FAVOUR OF THE ASSESSEE. AS A RESULT,APPEAL OF THE ASSES SEE STANDS PARTLY ALLOWED. @ #+A ! #@4 3 ? A ' &B 3 &# 4 C. ORDER PRONOUNCED IN THE OPEN C OURT ON 06 TH NOVEMBER,2013 . *'? 3 5- # ' (## D E*!# 6 UOA UOAUOA UOA , 2013 3 > F SD/- SD/- ( . .. . ! ! ! ! / D. MANMOHAN ) ( #&'() #&'() #&'() #&'() / RAJENDRA ) '#$% '#$% '#$% '#$% / VICE-PRESIDENT '# *+ '# *+ '# *+ '# *+ /ACCOUNTANT MEMBER / MUMBAI, E*!# /DATE: 06 .11 . 2013 *'? 3 04G H'G-4 *'? 3 04G H'G-4 *'? 3 04G H'G-4 *'? 3 04G H'G-4/ COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / #./ 2. RESPONDENT / 01./ 3. THE CONCERNED CIT (A) / I J 4. THE CONCERNED CIT / I J 5. DR H BENCH, ITAT, MUMBAI / GK#> 04! , . . (## . 6. GUARD FILE/ ># L# 1#G4 04 //TRUE COPY// *'?#!# / BY ORDER, '/ # &# DY./ASST. REGISTRAR , /ITAT, MUMBAI