JAGANNATH DISCRETIONARY FAMILY TRUST, MUMBAI V. ITO 12(2)(1), MUMBAI

ITA 6284/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92890 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 1984-1985
• Appeal Filed On: 29-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PAWAN KUMAR BIRLA
• Section: 244A; 154

Judgement Text

J IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ./ I.T.A. NO. 6284/MUM/ 2013 ( / ASSESSMENT YEAR : 1984-85 JAGANNATH DISCRETIONARY FAMILY TRUST, C/O SEVANTILAL N. SHAH & CO., 28, DALAMAL CHAMBERS, 2 ND FLOOR, 17, NEW MARINE LINES, MUMBAI 400 020. / VS. INCOME - TAX OFFICER 12(2(1), MUMBAI. ./ PAN : AABTJ6920B ( / APPELLANT ) .. ( / RESPONDENT ) ./ I.T.A. NO. 6297/MUM/ 2013 ( / ASSESSMENT YEAR : 1984-85 JAIMIN DISCRETIONARY FAMILY TRUST, C/O SEVANTILAL N. SHAH & CO., 28, DALAMAL CHAMBERS, 2 ND FLOOR, 17, NEW MARINE LINES, MUMBAI 400 020. / VS. INCOME - TAX OFFICER 12(2(1), MUMBAI. ./ PAN : AABTJ6919Q ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY NONE R E SPONDENT BY : SHRI PAW AN KUMAR BIRLA / DATE OF HEARING : 15-06-2015 / DATE OF PRONOUNCEMENT : 15-06-2015 [ ITA 6284/M/13 & ITA 6297/M/13 2 !' / O R D E R PER B.R. BASKARAN, A.M. BOTH THESE APPEALS FILED BY THE RESPECTIVE ASSESSEE S ARE DIRECTED AGAINST THE COMMON ORDER DATED 29-08-2013 PASSED BY THE LD. CIT(A) -23, MUMBAI AND BOTH THE APPEALS RELATE TO THE A.Y. 1984-85. 2. BOTH THE ASSESSEES ARE CHALLENGING THE DECISION OF LD. CIT(A) IN NOT GRANTING INTEREST ON THE AMOUNT OF TAX REFUNDED TO THEM. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE, EVEN TH OUGH BOTH THE APPEALS WERE ADJOURNED AT THE REQUEST OF THE ASSESSEE ON TH E PRECEDING DATE OF HEARING. THEREFORE, WE HAVE DECIDED TO DISPOSE OF T HE APPEALS EX-PARTE, AFTER HEARING THE LD. D.R. 4. WE HAVE HEARD THE LD. D.R. AND HE FAIRLY ADMITTE D THAT THE ISSUES UNDER CONSIDERATION ARE COVERED BY THE DECISION DATED 25- 3-2015 PASSED BY THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF VAIB HAVI DISCRETIONARY FAMILY TRUST & OTHERS IN ITA NO. 6298/MUM/2013 & OTHERS. 5. FACTS RELATING TO THE ISSUES UNDER CONSIDERATION ARE THAT BOTH THE ASSESSEES HEREIN ARE BENEFICIARIES OF K. KACHRADAS PATEL SPECIFIC FAMILY TRUST HAVING 0.5% PRESENT SHARE IN THE PARENT TRUST. TH EY DERIVED 0.5% OF DEFERRED SHARE ALSO. THEY FILED THE RETURN OF INC OME DECLARING TOTAL INCOME OF RS. 1,10,290 IN THEIR RESPECTIVE HANDS AND PAID TAX ES OF RS. 51,580/- ALSO. HOWEVER, THE A.O. ASSESSED THE INCOME IN THE HANDS OF BOTH THE ASSESSEES ON PROTECTIVE BASIS AND SUBSTANTIVE ASSESSMENT WAS MAD E IN THE HANDS OF THE MAIN TRUST I.E. K. KACHRADAS PATEL SPECIFIC FAMILY TRUST. SUBSEQUENTLY, THE MAIN TRUST SETTLED THE DISPUTE WITH THE DEPARTMENT BY MAKING A DECLARATION OF INCOME OF BENEFICIARIES UNDER K.V.S.S. ACCORDIN GLY, THE TOTAL INCOME IN THE CASE OF THESE ASSESSEES CAME TO BE COMPUTED AS NIL AND ACCORDINGLY THE ITA 6284/M/13 & ITA 6297/M/13 3 TAXES PAID BY THEM BECAME REFUNDABLE. THE A.O. REF UNDED INITIALLY A SUM OF RS. 40,442/- ON 29-02-88 AND THE BALANCE AMOUNT OF RS. 11,138/- WAS REFUNDED SUBSEQUENTLY IN THE MONTH OF NOVEMBER, 200 0. 6. THE A.O. DID NOT GRANT ANY INTEREST U/S 244A OF THE ACT ON BOTH THE AMOUNTS REFUNDED TO THE ASSESSEES AND HENCE BOTH TH E ASSESSEES MOVED A PETITION U/S 154 OF THE ACT SEEKING INTEREST U/S 24 4A OF THE ACT. HOWEVER, THE RECTIFICATION PETITIONS FILED BY THESE ASSESSEES WE RE REJECTED BY THE A.O. THE ASSESSEES FILED APPEALS BEFORE THE LD. CIT(A) BUT C OULD NOT SUCCEED. HENCE BOTH THE ASSESSEES ARE IN FURTHER APPEAL BEFORE US. 7. AS SUBMITTED BY THE LD. D.R., IDENTICAL ISSUE HA S BEEN CONSIDERED BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF V AIBHAVI DISCRETIONARY FAMILY TRUST & OTHERS (SUPRA) AND THE TRIBUNAL HAS HELD THAT THE ASSESSEE IS ENTITLED TO INTEREST U/S 244A OF THE ACT ON BOTH TH E REFUNDS REFERRED ABOVE, UPTO THE DATE OF GRANTING OF REFUND. IN THIS REGA RD, THE CO-ORDINATE BENCH HAD FOLLOWED THE DECISION RENDERED BY THE SPECIAL B ENCH OF THE TRIBUNAL IN ITS ORDER DATED 7-7-2006, WHICH HAS SINCE BEEN UPHELD B Y THE HONBLE GUJARAT HIGH COURT VIDE ITS ORDER DATED 26-6-2008 PASSED I N I.T. APPEALS NOS. PUNITBEN K. PATEL OSFDT AND OTHERS 284 CASES TAX AP PEAL NOS. 1514 TO 1797 OF 2006, MANJULABEN PRAMODBHAI PATEL AND OTHER S, 64 CASES, TAX APPEAL NOS. 573 TO 618 AND 1216 TO 1233 OF 2007 AND JANAK PRAMODBHAI PATEL AND OTHERS 6 CASES, TAX APPEAL NOS. 182 & 204 OF 2002 WITH TAX APPEAL NOS. 27 OF 30 OF 2004. 8. BY FOLLOWING THE ORDER OF THE CO-ORDINATE BENCH REFERRED ABOVE, WE DIRECT THE REVENUE TO GRANT INTEREST TO THE ASSESSE ES ON BOTH THE REFUNDS REFERRED ABOVE UPTO THE DATE OF REFUND AS PER THE P ROVISIONS OF SEC.244A OF THE ACT. ITA 6284/M/13 & ITA 6297/M/13 4 9. THE ASSESSEES HAVE ALSO CONTENDED THAT THEY ARE ELIGIBLE FOR INTEREST ON INTEREST. HOWEVER, THE ASSESSEES ARE NOT ENTITLED T HE INTEREST ON INTEREST AS PER THE DECISION OF HONBLE SUPREME COURT IN THE CA SE OF CIT VS. FLOURO CHEMICALS, 358 ITR 291 (SC). ACCORDINGLY, WE DECID E THIS ISSUE AGAINST THE ASSESSEES. 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEES ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 5 TH JUNE, 2015. !' # $% &! ' 15-06-2015 ( ) SD/- SD/- (I.P. BANSAL) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER $ 5 MUMBAI ; &! DATED 15-06-2015 [ .6../ RK RKRK RK , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 7 () / THE CIT, CONCERNED, MUMBAI 4. 7 / ADDL. CIT CONCERNED, ,MUMBAI 5. :;( 66<= , <= , $ 5 / DR, ITAT, MUMBAI J BENCH 6. (?@ A / GUARD FILE. ' / BY ORDER, : 6 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 5 / ITAT, MUMBAI