DCIT-CC.3(3), CENTRAL RANGE-3 MUMBAI, MUMBAI V. M/s. ORICON ENTERPRISES LTD. , MUMBAI

ITA 6094/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0005 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2020
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Appeal Filed On: 26-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Keywords: Proportionate interest; TDS
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , ! BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 6094 / / 2019 (%. .2014-15 ) ITA NO. 6094/MUM/2019 (A.Y.2014-15) DEEPIKA A. MEHTA, 32, MADHULI APARTMENT, DR. A.B.ROAD, WORLI, MUMBAI 400 018. PAN:ABNPM 8231D / VS. : / APPELLANT THE DCIT, CC-4(1) 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI 400 021 : / RESPONDENT ASSESSEE BY : MS. MITALI GOPANI REVENUE BY : SHRI AJAY PRATAP SINGH / DATE OF HEARING : 12/10/2020 / DATE OF PRONOUNCEMENT : 17/12/2020 / ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-52, MUMBAI (IN SHORT THE CIT(A)) DATED 06/08/2018 FOR THE ASSESSMENT YEAR 2014-15. 2. MS.MITALI GOPANI, APPEARING ON BEHALF OF THE AS SESSEE SUBMITTED THAT THE ASSESSEE HAD FILED HER RETURN OF INCOME FOR TH E IMPUGNED ASSESSMENT YEAR ON 31/03/2015. IN SCRUTINY ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER 2 ITA NO. 6094/MUM/2019 (A.Y.2014-15) MADE DISALLOWANCE IN RESPECT OF INTEREST EXPENSES A MOUNTING TO RS.16,50,121/- AND MADE FURTHER ADDITION ON ACCOUNT OF PERSONAL HOUSEHOLD EXPENSES RS.12,00,000/-. THE ASSESSMENT IN THE CAS E OF ASSESSEE WAS COMPLETED BY THE ASSESSING OFFICER VIDE ORDER DATED 15/12/2016 DETERMINING TOTAL TAXABLE INCOME AT RS.28,50,120/-. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) ASSAILI NG THE ADDITION/DISALLWOANCES. THE CIT(A) DIRECTED THE A SSESSING OFFICER TO RECOMPUTED THE INTEREST ATTRIBUTABLE TO INCOME TA X AFTER CONSIDERING THE INTEREST FREE LOAN GIVEN TO HARSHAD MEHTA, ETC. IN RESPECT OF ADDITION ON ACCOUNT OF PERSONAL HOUSEHOLD EXPENSES, THE CIT(A) RESTRICTED THE ADDITION TO RS.6,00,000/- BY ESTIMATING MONTHLY HOUSEHOLD EXPEN SES TO RS.50,000/- PER MONTH. THE LD. AUTHORIZED REPRESENTATIVE FOR THE A SSESSEE SUBMITTED THAT SIMILAR ADDITIONS/ DISALLOWANCES WERE MADE IN THE P RECEDING ASSESSMENT YEARS I.E. ASSESSMENT YEARS 2011-12 AND 2012-13. THE ASS ESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE TRIBUNAL IN ITA NO. 418/MUM/2016 AND 2736/MUM/2017 FOR THE RESPECTIVE ASSESSMENT YEARS. THE TRIBUNAL DIRE CTED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION OF INTEREST AFTER REDUCING P ROPORTIONAL INTEREST OUT OF THE INTEREST EARNED ON DEPOSITS. THUS, THIS ISSUE IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT SIMILAR VIEW HAS BEEN T AKEN BY THE TRIBUNAL IN RESPECT OF OTHER SIMILARLY SITUATED ASSESSES FROM T HE SAME GROUP. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURNISHE D THE COPIES OF TRIBUNAL ORDER IN THE CASE OF : (1) PRATIMA H. MEHTRA V. DCIT AND VICE-VERSA [ITA NOS.5839/MUM/2018 & 6228/MUM/2018]DT.27 /11/2019. (2) HARSH ESTATES PVT. LTD V. DCIT & VICE-VERSA [I TA NOS.6957-6959/ 3 ITA NO. 6094/MUM/2019 (A.Y.2014-15) MUM/2018 & 6765-6767/MUM/2018] 15/ 09/2020. (3) CASCADE HOLDINGS PVT. LTD. VS. DCIT & VICE-VER SA[ITA NOS.6965-6966 & 6968/MUM/2018 & 6768-6769 & 6771/MUM/2018] DT.16/ 03/2020] 3. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE SUBMITTED THAT IN GROUND NO.3 & 4 OF THE APPEAL, THE ASSESSEE HAS ASS AILED CHARGING OF INTEREST UNDER SECTION 234A AND 234B OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). THE AUTHORITIES BELOW HAS FAILED TO APPRECIATE THE FACT THAT THE INCOME ASSESSED IN THE HANDS OF THE ASSESSEE WERE SUBJECT TO PROVISIONS OF TDS AND, HENCE, NO INTEREST ON TAX COMPUTED ON INTEREST IN COME WAS REQUIRED TO BE CHARGED UNDER SECTION 234A AND 234B OF THE ACT. TH E LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT GROU ND NO.3 AND 4 CAN BE RESTORED TO THE ASSESSING OFFICER FOR RECOMPUTATIO N AFTER EXAMINING THE FACTS. 4. PER CONTRA, SHRI AJAY PRATAP SINGH, REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DE PARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT THE ISSUES RAIS ED BY THE ASSESSEE IN GROUND NO.1 AND 2 HAVE BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN THE PRECEDING ASSESSMENT YEAR. THE LD. DEPARTMENTAL RE PRESENTATIVE SUBMITTED THAT THE TRIBUNAL HAS RESTRICTED THE ADDITION ON A CCOUNT OF PERSONAL HOUSEHOLD EXPENSES TO 50%. THE CIT(A) IN THE PRESENT CASE HA S RESTRICTED THE ADDITION TO RS.6,00,000/- AS AGAINST ADDITION OF RS.12,00,000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PERSONAL HOUSEHOLD EXPENSES. THUS, THE ORDER OF THE CIT(A) IS IN LINE WITH THE ORDER OF TRIBUNAL IN ASS ESSEES OWN CASE IN THE PRECEDING ASSESSMENT YEAR. 5. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. THE ASSESSEE IS A NOTIFIED PERSON IN TERMS OF SECTION 3(2) OF THE S PECIAL COURT ( R TRIAL OF 4 ITA NO. 6094/MUM/2019 (A.Y.2014-15) OFFENCES RELATING TO TRANSACTIONS IN SECURITIES) AC T 1992. ALL HER ASSETS INCLUDING BANK ACCOUNTS WERE ATTACHED AND ARE VES TED IN THE HANDS OF CUSTODIAN APPOINTED UNDER THE SAID ACT. 6. THE ASSESSEE IN GROUND NO.1 OF THE APPEAL HAS A SSAILED DISALLOWANCE OF INTEREST EXPENDITURE RS.16,50,121/-. I FIND THAT S IMILAR DISALLOWANCE WAS MADE IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2011-12 A ND 2012-13. THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.418/MUM/2016 (SUPR A) DECIDED THE ISSUE AS UNDER:- 38. SO FAR AS THE GROUND RELATING TO THE CLAIM OF INTEREST AFTER DISALLOWING PROPORTIONATE INTEREST IS CONCERNED IN BOTH THE ASS ESSMENT YEARS, BOTH THE PARTIES AGREED THAT SIMILAR ISSUE HAS ARISING IN GROUND 1 I N ITA NO. 5799/MUM/2015 IN THE CASE OF SHRI SUDHIR S. MEHTA AND WHATEVER VIEW THIS TRIBUNAL MAY TAKE IN THE CASE OF SHRI SUDHIR S. MEHTA SAME MAY BE TAKEN IN THE CASE OF THE ASSESSEE. WHILE DISPOSING OF THE APPEAL FOR A.Y. 2009-10 ITA NO. 5799/MUM/201 5 IN THE CASE OF SHRI SUDHIR S. MEHTA RELATING TO DISALLOWANCE OF INTEREST WE HAVE DELETED THE SAID DISALLOWANCE AND DIRECTED THE AO TO ALLOW THE DEDUCTION OF INTEREST AFTER REDUCING PROPORTIONATE INTEREST OUT OF THE INTEREST EARNED ON DEPOSITS. RE SPECTFULLY FOLLOWING THE SAID DECISION IN THE PRECEDING PARAGRAPH WE ALLOW THE GR OUND ON SIMILAR TERMS RELATING TO THE CLAIM OF INTEREST TAKEN BY THE ASSESSEE. THE GROUND NO.1 OF THE APPEAL IS RESTORED TO TO THE FILE OF ASSESSING OFFICER TO DECIDE THE SAME IN LINE WITH AFORESAID DIRECTION S OF THE TRIBUNAL. THE GROUND NO.1 OF THE APPEAL IS ALLOWED FOR STATISTICA L PURPOSE, ACCORDINGLY. 7. IN GROUND NO.2 OF THE APPEAL, THE ASSESSEE HAS A SSAILED ADDITION ON ACCOUNT OF PERSONAL HOUSEHOLD EXPENSES. THE ASSESS ING OFFICER MADE ADDITION OF RS.12,00,000/-. THE CIT(A) RESTRICTED THE ADDIT ION TO 50% BY ESTIMATING THE HOUSEHOLD MONTHLY EXPENSES TO RS.50,000/-. I FIND THAT IN ASSESSEES OWN CASE IN ITA NO. 5487/MUM/2011 FOR ASSESSMENT YEAR 2006-0 7 AND IN ITA NO.6335/MUM/2013 FOR ASSESSMENT YEAR 2008-09 DECIDE D ON 31/05/2016 BY 5 ITA NO. 6094/MUM/2019 (A.Y.2014-15) COMMON ORDER, THE TRIBUNAL HAS UPHELD THE FINDINGS OF CIT(A) IN RESTRICTING THE ADDITION TO 50%. IN THE IMPUGNED ASSESSMENT Y EAR THE CIT(A) MAINTAINING CONSISTENCY HAS RESTRICTED THE HOUSEHOLD EXPENSES TO 50% OF THE EXPENSES ESTIMATED BY ASSESSING OFFICER. I FIND NO REASON TO INTERFERE WITH THE FINDINGS OF CIT(A) ON THE ISSUE, ACCORDINGLY, THE SAME ARE UPHELD. THE GROUND NO.2 OF APPEAL IS DISMISSED. 8. IN GROUND NO.3 AND 4 OF THE APPEAL, THE ASSESSE E HAS ASSAILED CHARGING OF INTEREST UNDER SECTION 234A AND 234B OF THE ACT, I INTEREST UNDER SECTION 234A AND 234B IS MANDATORY AND CONSEQUENTIAL. HOW EVER, IN VIEW OF THE STATEMENT MADE BY LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE INCOME ASSESSED TO TAX IN THE HANDS OF THE ASSESSEE IS SUBJECT TO THE PROVISIONS OF TDS, THE ISSUE HAS BEEN RESTORED TO A SSESSING OFFICER. SINCE THIS ISSUE IS CONNECTED TO PRIMARY ISSUE, I DEEM IT APPR OPRIATE TO RESTORE THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER AS WELL, FOR RE-EXAMINATION. ACCORDINGLY GROUND NO.3 & 4 OF THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSE. 8. THE GROUND NO.5 OF THE APPEAL IS GENERAL IN NATU RE, HENCE, REQUIRES NO ADJUDICATION. 9. IN THE RESULT, APPEAL BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE IN THE TERMS AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY THE 17 TH DAY OF DECEMBER, 2020. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 17 /12/2020 VM , SR. PS(O/S)