EMINENT HOLDING P.LTD, MUMBAI V. ASST CIT CEN CIR 31, MUMBAI

ITA 558/MUM/2013

• Counselvise Citation: 55819914 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 22-10-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 21-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Assessee Lawyers: DHARMESH SHAH
• Keywords: Principle of natural justice
• Section: 234B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI . . , . . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI R.C.SHARMA , ACCOUNTANT MEMBER ITA NO.558/MUM/2013(A.Y. 2001-02) ITA NO.559/MUM/2013(A.Y. 2003-04) M/S.EMINENT HOLDINGS PVT. LTD., 32, MADHULI, 3 RD FLOOR, DR.ANNIE BESANT ROAD, NEHRU CENTRE, WORLI, MUMBAI 400 018 PAN: AAACE 3115H (APPELLANT ) VS. THE ACIT, CC-31, ROOM NO.409, AAYKAR BHAVAN, MK ROAD MUMBAI 400 020 (RESPONDENT) APPELLANT BY : SHRI DHARMESH SHAH RESPONDENT BY : DR. P. DANIEL DATE OF HEARING : 22/10/2014 DATE OF PRONOUNCEMENT : 22 /10/2014 ORDER PER I.P.BANSAL, J.M: BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND THEY ARE DIRECTED AGAINST CONSOLIDATED ORDER PASSED BY LD. CIT(A)-37 MUMBAI D ATED 22/11/2012 FOR ASSESSMENT YEAR 2001-02 AND 2003-04. GROUNDS OF AP PEAL IN BOTH THE APPEALS ARE IDENTICAL EXCEPT DIFFERENCE IN FIGURES. GROUNDS O F APPEAL FOR A.Y 2001-02 READ AS UNDER: 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 PASSING THE ORDER WITHOUT COMPLYING WITH THE PRINCI PLES OF NATURAL JUSTICE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT NO INCOME FROM ATTACHED ASSET S CAN BE ASSESSED IN THE HANDS OF THE APPELLANT. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT GRANTING RELIEF OF LIABILITY AMOUNTING TO RS.51 4,455/-, TOWARDS INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. ITA NO.558/MUM/2013(A.Y. 2001-02) ITA NO.559/MUM/2013(A.Y. 2003-04) 2 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING INTEREST CHARGED U/S. 234A, 234B AND 234 C 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. 2. THE FIGURE AS MENTIONED IN GROUND NO.4 OF THE AP PEAL FOR ASSESSMENT YEAR 2003-04 IS RS.19,25,475/-. 3. GROUND NO.1 TO 3 WERE NOT PRESSED BY LD. AR, THE REFORE, THEY ARE DISMISSED AS NOT PRESSED. 4. APROPOS GROUND NO.4 FOR BOTH THE YEARS, IT WAS SUBMITTED BY LD. AR THAT WHILE DECIDING THIS APPEAL LD. CIT(A) HAS RELIED UPON HIS DECISION IN THE CASE OF SHRI HITESH MEHTA FOR A.Y.2005-06 WHICH WAS DECIDED BY HIM VID E ORDER DATED 31/8/2010. IT WAS FURTHER SUBMITTED BY LD. AR THAT THE SAID DECI SION OF LD. CIT(A) WAS CONSIDERED IN THE CROSS APPEALS FILED BY SHRI HITESH S. MEHTA AND DEPARTMENT AND VIDE ORDER DATED 26/04/2013 IN ITA NO.7726& 7727/MUM/2010 (ASS ESSEES APPEAL) FOR A.Y 2005-06 AND 2006-07 AND ITA NO.7498 & 7732/MUM/2010 (DEPARTMENTAL APPEALS) FOR A.Y 2005-06 AND 2006-07, COPY OF THE SAID ORDE R WAS PLACED ON OUR RECORD AND WAS GIVEN TO LD. DR, THE SAID ISSUE WAS SET ASID E BY THE TRIBUNAL AND MATTER WAS RESTORED BACK TO THE FILE OF LD. CIT(A) FOR ADJUDIC ATION AFRESH. REFERENCE WAS MADE TO THE FOLLOWING OBSERVATIONS OF THE TRIBUNAL FROM THE SAID ORDER. 5.GROUND NO.4 RELATES TO ACTION OF THE LD. CIT(A) IN CONFIRMING THE LIABILITIES AMOUNTING TO RS.11,24,99,052/- AND RS.12,61,36,245/- RESPECTI VELY FOR THE A.YS 2005-06 AND 2006-07TOWARDS INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT THE FINDINGS GIVEN IN PARA 3.3 ABOVE IN RESPEC T OF REJECTION/RELIABILITY OF THE BOOKS OF ACCOUNTS AND THE PROPOSED ADJUDICATION OF THE L D. CIT(A) IN VIEW OF THE SAID DIRECTION MAY HAVE DIRECT IMPACT ON THE ISSUE OF THE IMPUGNED LIABILITY, WE SET ASIDE THIS ISSUE TO THE FILES OF THE LD. CIT(A) TO ADJUDICATE AFRESH AL ONG WITH THE ADJUDICATION OF THE RESPECTIVE GROUND PERTAINING TO THE REJECTION/RELIA BILITY OF THE BOOKS OF ACCOUNTS . 4.1 IT WAS SUBMITTED BY LD. AR THAT SINCE THE DECIS ION ON THE BASIS OF WHICH LD. CIT(A) HAS DECIDED THIS ISSUE HAS BEEN SET ASIDE BY THE TRIBUNAL FOR RE-ADJUDICATION BEFORE LD. CIT(A), THEREFORE, THIS GROUND FOR BOTH THE YEARS SHOULD ALSO BE SET ASIDE ITA NO.558/MUM/2013(A.Y. 2001-02) ITA NO.559/MUM/2013(A.Y. 2003-04) 3 TO THE FILE OF LD. CIT(A) WITH A DIRECTION TO RE-AD JUDICATE THE SAME IN THE LIGHT OF DIRECTIONS GIVEN BY THE TRIBUNAL IN THE CASE OF HI TESH S. MEHTA. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER PASSED BY LD. CIT(A). 6. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES, AS THE DECISION UPON WHICH LD. CIT(A) HAS RELIED UPON HAS BEEN SET ASIDE BY THE TRIBUNAL IN THE CASE OF SHRI HITESH S. MEHTA, THEREFORE, RESPECTFULLY FOLLO WING THE SAID ORDER WE SET ASIDE THE ORDER PASSED BY LD. CIT(A) ON THIS ISSUE AND DIRECT LD. CIT(A) TO RE-ADJUDICATE THE ISSUE IN THE LIGHT OF DIRECTIONS GIVEN IN THE CASE OF SHRI HITESH S. MEHTA. 7. APROPOS GROUND NO.5 FOR BOTH THE YEARS IT WAS SU BMITTED THAT THIS ISSUE IS COVERED BY THE EARLIER ORDER OF THE TRIBUNAL IN ASS ESSEES OWN CASE AND REFERENCE WAS MADE TO THE DECISION OF THE TRIBUNAL DATED 18/6/201 4 IN RESPECT OF ASSESSMENT YEARS 2002-03, 2005-06 AND 2006-07 IN ITA NO.2139, 2140 & 2141/MUM/2013 AND REFERENCE WAS INVITED TO THE FOLLOWING OBSERVATION OF THE TRIBUNAL. 3. NEXT GROUND OF APPEAL ABOUT LEVY OF INTEREST U/ S.234 OF THE ACT. BEFORE US, AR STATED THAT THE ASSESSEE WAS A NOTICED ENTITY, THAT THE PR OVISIONS OF S. 234A, 234B AND 234C OF THE ACT WERE DEEMED TO HAVE COMPLIED WITH, THAT THE ASSETS WERE ALREADY IN ATTACHMENT OF THE CUSTODIAN APPOINTED UNDER THE PROVISIONS OF THE SPECIAL COURTS ACT, THAT THE TRIBUNAL IN THE CASE OF THE APPELLANT AND SEVERAL O THER ENTITIES HAD HELD THE VIEW IN FAVOUR OF THE APPELLANT, THAT THE HONBLE BOMBAY HI GH COURT IN THE CASE OF DIVINE HOLDINGS PVT. LTD. AND CASCADE HOLDINGS PVT. LTD. H AD HELD THAT THE PROVISIONS OF SECTIONS 234A, 234B AND 234C OF THE ACT WERE MANDA TORY AND WERE APPLICABLE TO THE NOTIFIED ENTITIES ALSO,THAT THE ASSESSEE WAS IN TH E PROCESS OF FILING AN APPEAL AGAINST THE SAID ORDER BEFORE THE HONBLE SUPREME COURT,THA T THE INCOME EARNED IN THE YEAR UNDER CONSIDERATION WAS SUBJECTED TO PROVISIONS OF TDS,THAT THE CHANGEABILITY OF THE SECTION 234A, 234B AND 234C OF THE ACT SHOULD BE AF TER CONSIDERING THE AMOUNT OF TAX DEDUCTIBLE AT SOURCE ON THE INCOME ASSESSED. THE AP PELLANT RELIES IN THIS REGARD ON THE FOLLOWING DECISIONS. HE RELIED UPON THE CASES OF MO TOROLA INC. V. DCIT [95 LTD 269 DEL.(SB)], SEDCO FORES DRILLING CO. LTD. [264 ITR 3 20],NGC NETWORK ASIA LLC [313 ITR 187] ,SUMMIT BHATACHARYA [ 300 ITR (AT) 347 (BOM)(S B)], VIJAL GOPAL JINDAL [ITA NO. 4333/DE112009] & EMILLO RUIZ BERDEJO [320 ITR 190 R ELIED UPON THE CASES OF DEVINE HOLDINGS PVT. LTD. 3.1.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT IN THE CASE OF DEVINE HOLDINGS PVT. LTD. HONB LE BOMBAY HIGH COURT HAS HELD THAT PROVISIONS OF SECTION 234A, 234B AND 234C WERE APPL ICABLE TO THE NOTIFIED PERSON ALSO. THEREFORE, UPHOLDING THE ORDER OF THE FAA TO THAT E XTENT, WE HOLD THAT PROVISIONS OF ITA NO.558/MUM/2013(A.Y. 2001-02) ITA NO.559/MUM/2013(A.Y. 2003-04) 4 SECTION 234 OF THE ACT ARE APPLICABLE. AS FAR AS CA LCULATION PART IS CONCERNED, WE FIND MERITS IN THE SUBMISSION MADE BY THE ASSESSEE. THER EFORE, WE ARE RESTORING BACK THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION WHO WOULD DECIDE THE ISSUE AFTER CONSIDERING THE AMOUNT TAXED DEDUCTIBLE AT SOURCE O N THE INCOME ASSESSED AND AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO TH E ASSESSEE. GROUND NO.5 IS ALLOWED IN PART IN FAVOUR OF THE ASSESSEE. 8. IN THIS VIEW OF THE SITUATION AFTER HEARING BOTH THE PARTIES WE PASS SIMILAR ORDER AND RESTORE THE ISSUE TO THE FILE OF A.O WITH SIMILAR DIRECTIONS. THIS GROUND IS ALLOWED IN PART IN FAVOUR OF THE ASSESSEE AS PER AF OREMENTIONED ORDER OF THE TRIBUNAL. 9. IN THE RESULT, BOTH THE APPEALS ARE CONSIDERED T O BE PARTLY ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 22/10/20 14 !' # $%& 22/10/2014 ! ' SD/- SD/- ( . . /R.C.SHARMA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; $% DATED 22/10/2014 ()* ()* ()* ()* +*') +*') +*') +*') / COPY OF THE ORDER FORWARDED TO : 1. ,- / THE APPELLANT 2. (.,- / THE RESPONDENT. 3. / ( ) / THE CIT(A)- 4. / / CIT 5. *0' ()% , , / DR, ITAT, MUMBAI 6. '1 2 / GUARD FILE. % % % % / BY ORDER, .*) () //TRUE COPY// 3 33 3 / 4 4 4 4 5 5 5 5 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . % . ./ VM , SR. PS