DCIT CC -4(1), CENTRAL RANGE-4, MUMBAI V. HITESH S. MEHTA, MUMBAI

ITA 6441/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2886 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 1991-1992
• Appeal Filed On: 02-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Keywords: Unexplained investment; Additional evidence; Set aside
• Section: 250; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H , MUMBAI BEFORE S HRI RAJESH KUMAR ( AM ) AND SHRI RAM LAL NEGI (JM) ITA NO. 6441 /MUM/2017 ASSESSMENT Y EAR: 1991 - 92 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 4(1), R. NO. 1916, 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUBMAI - 400021 VS. SHRI HITESH S MEHTA, 32, MADHULI, D.A.B. ROAD, WORLI, MUMBAI 400026 PAN: ABAPM4491J (APPELLANT) (RESPONDENT) REVENUE BY : DR. P. DANIEL (D R) ASSESSEE BY : SHRI DHARMESH SHAH & DHAVAL SHAH (A R) DATE OF HEARING: 07/01 /201 9 DATE OF PRONOUNCEMENT: 05 / 04 /201 9 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 28.07.2017 PASSE D BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 52 (FOR SHORT THE CIT (A) ) , MUMBAI, FOR THE ASSESSMENT YEAR 1991 - 92 , WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 147 OF THE INCOME TAX A CT, 1961 (FOR SHORT THE ACT). 2. THE REVENUE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE FOLLOWING EFFECTIVE GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WHILE DETERMINING THE INCOME OF THE ASSESSEE, ERRED IN AC CEPTING HIS BOOKS OF ACCOUNTS NOTWITHSTANDING THE FACT THAT 2 ITA NO. 6441 /MUM/2017 ASSESSMENT YEAR: 1991 - 92 DURING THE ASSESSMENT PROCEEDINGS IT WAS CONCLUSIVELY FOUND THAT THE ASSESSEE HAS NOT MAINTAINED HIS BOOKS OF ACCOUNTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERR ED IN REDUCING THE ASSESSED INCOME TO THE EXTENT OF RS. 64,46,156/ - BEING INTEREST EXPENDITURE WITHOUT ASSIGNING ANY REASON AS TO HOW BOOKS OF ACCOUNTS WERE RELIED UPON. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN ALL OWING INTEREST EXPENDITURE IN THE ABSENCE OF COMPLETE DETAILS AND FURTHER SUCH CLAIM REMAINED PAYABLE FOR THE YEAR UNDER CONSIDERATION. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WHILE DIRECTING THE AO TO QUANTIFY THE ALLOWABL E INTEREST EXPENSES ERRED IN COMPUTING THE INCOME OF THE ASSESSEE PRIOR TO ALLOWABLE CLAIM OF INTEREST AT RS. 1,22,36,772/ - AS INCOME CANNOT BE COMPUTED PARTLY. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE PRESENT CASE, THE O RIGINAL ASSESSMENT ORDER WAS PASSED U/S 144/143 (3) READ WITH SECTION 147 OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 4,58,41,900/ - . THE ASSESSMENT ORDER TRAVELLED UP TO THE ITAT. THE ITAT VIDE ORDER DATED 13.05.2004 SET ASIDE THE ISSUE TO THE FILE OF CIT (A) TO DECIDE THE SAME AFRESH. THE LD.CIT (A) AFTER CONSIDERING THE ENTIRE FACTS , BROUGHT ON RECORD BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND DURING THE COURSE OF APPELLATE PROCEEDINGS, AGREED WITH THE AO THAT THE A SSESSEE HAD NO BOOKS OF ACCOUNT TILL 2001. THE LD. CIT (A) FURTHER RELYING ON THE APPELLATE ORDER PASSED IN THE CASE OF HARSHAD S MEHTA FOR THE A.Y. 1992 - 93 HELD THAT THE BOOKS OF ACCOUNTS ARE LIABLE TO BE REJECTED . 4. THE ASSESSEE CHALLENGED THE IMPUGNE D ORDER BEFORE THE ITAT MUMBAI. THE TRIBUNAL AFTER HEARING THE ASSESSEE DIRECTED THE LD. CIT (A) TO COMPUTE THE INCOME OF THE ASSESSEE AS PER THE BOOKS OF ACCOUNT. THE REVENUE CHALLENGED 3 ITA NO. 6441 /MUM/2017 ASSESSMENT YEAR: 1991 - 92 THE ORDER PASSED BY THE TRIBUNAL BEFORE THE HONBLE HIGH COURT. THE H ONBLE HIGH COURT SENT THE APPEAL BACK TO THE ASSESSING OFFICER WITH CERTAIN DIRECTIONS TO PASS ASSESSMENT ORDER AFRESH. SINCE, THE HONBEL HIGH COURT HAS SENT THE APPEAL PERTAINING TO THE ASSESSMENT YEAR UNDER CONSIDERATION TO AO FOR FRESH DETERMINATION, THE ORDER PASSED BY THE LD. CIT (A) U/S 250 READ WITH SECTION 254 OF THE ACT PASSED IN ACCORDANCE WITH THE ORDER OF THE TRIBUNAL HAS BECOME INFRUCTUOUS. HENCE, THE APPEAL IS NOT MAINTAINABLE. 5. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) DID NOT CONTROVERT THE AFORESAID FACTS. 6. WE HAVE PERUSED THE ENTIRE MATERIAL ON RECORD INCLUDING THE ORDERS PASSED BY THE AUTHORITIES BELOW, THE ORDER PASSED BY THE COORDINATE BENCH AND THE ORDER PASSED BY THE HON BLE BOMBAY HIGH COURT. AS POINTED OUT BY THE LD. COUNSEL, THE TRIBUNAL HAS DIRECTED THE LD. CIT ( A ) TO COMPUTE THE INCOME OF THE ASSESSEE AS PER THE BOOKS OF ACCOUNT IN THE ASSESEES APPEAL ITA NO. 8023/MUM/2011. 7. WE FURTHER NOTICE THAT AGAINST THE SAID ORDER, THE REVENUE FILED INCOME TAX APPEAL NO. 1194 OF 2 014 BEFORE THE HONBLE BOMBAY HIGH COURT. THE HONBLE BOMBAY HIGH COURT HAS SENT THE APPEAL BACK TO THE AO WITH CERTAIN DIRECTIONS. THE PARA S CONTAINING DIRECTIONS ISSUED TO THE AO READ AS UNDER: - 8. IN LIGHT OF ABOVE, WE PASS THE FOLLOWING ORDER: - I) THE ORDER OF THE TRIBUNAL TO THE EXTENT OF ALLOWING THE PRODUCTION OF ADDITIONAL EVIDENCE, THAT IS, BOOKS OF ACCOUNT, IS MAINTAINED. HOWEVER, WE CLARIFY THAT IT WILL BE OPEN FOR THE ASSESSING OFFICER TO TEST THE GENUINENESS AND AUTHENTICITY OF THE ENTRIES IN THE BOOKS OF ACCOUNTS AND THEREAFTER PASS ASSESSMENT ORDER AFRESH. II) THE DIRECTIONS OF THE TRIBUNAL WITH REGARD TO DETERMINATION OF UNACCOUNTED INVESTMENTS, DISALLOWANCE OF DEDUCTION ON ACCOUNT OF INTEREST EXPENDITURE, DISALLOWANCE OF DEDUCTION O N ACCOUNT OF OTHER EXPENDITURE, TO HOLD THE SALE OF SHARES AS CAPITAL GAINS AND ALLOW DEDUCTION UNDER SECTION 48 OF THE INCOME TAX ACT, WILL ALL DEPEND 4 ITA NO. 6441 /MUM/2017 ASSESSMENT YEAR: 1991 - 92 UPON THE DECISION OF THE ASSESSING OFFICER WITH REGARD TO THE BOOKS OF ACCOUNTS AND ITS DECISION UPON TH E GENUINENESS OF THE ENTRIES THEREIN. III) THE ASSESSING OFFICER WILL BE ENTITLED TO TAKE DECISION AFRESH IN ALL ASPECTS OF THE MATTER. IV) IT IS ALSO MADE CLEAR THAT THE ASSESSING OFFICER WILL PROVIDE THE MATERIAL RELIED UPON BY IT TO THE ASSESSEE BEFORE PASSING A NY ORDER. V) THE APPEALS, AS SUCH ARE DISPOSED OF WITH AFORESAID OBSERVATIONS AND DIRECTIONS. 8 . SINCE, THE HONBLE HIGH COURT HAS SET ASIDE THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE TRIBUNAL AND SENT THE APPEAL BACK TO THE AO FOR PASS ING THE ASSESSMENT ORDER AFRESH, THE ORDER PASSED BY THE LD. CIT(A) U/S 250 READ WITH SECTION 254 OF THE ACT HAS BECOME INFRUCTUOUS. HENCE, WE DISMISS THE APPEAL OF THE REVENUE BEING NOT MAINTAINABLE . IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH APRIL , 2019 . SD/ - SD/ - ( RAJESH KUMAR ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 05 / 0 4 / 201 9 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CI T(A) - 4. / CIT 5. , , / 5 ITA NO. 6441 /MUM/2017 ASSESSMENT YEAR: 1991 - 92 DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI