RASILA S . MEHTA, MUMBAI V. DCIT CEN CIR 23, MUMBAI

ITA 6600/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3561 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 12-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 11-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Keywords: Opportunity of being heard
• Section: 143(3); 234B; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI B.R.BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO 6598 /MUM/2013 ASSESSMENT YEAR: 2007-08 SMT. DEEPIKA A . MEHTA . 32, MADHULI, DR. A.B.ROAD, WORLI, MUMBAI- 400018. PAN:- ABNPM8231D VS. THE DCIT, CENTRAL CIRCLE - 23 , AAYAKAR BHAVAN, M.K.RAOD, MUMBAI - 400020. (APPELLANT) (RESPONDENT) ITA NO 6600 /MUM/2013 ASSESSMENT YEAR: 2007-08 SMT. RASILA S. MEHTA. 32, MADHULI, DR. A.B.ROAD, WORLI, MUMBAI- 400018. PAN:- ABNPM8219R VS. THE DCIT, CENTRAL CIRCLE - 23, AAYAKAR BHAVAN, M.K.RAOD, MUMBAI - 400020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. DHARMESH SHAH RESPONDENT BY : SHRI. DR. P. DANIEL. DATE OF HEARING: 0 2 /03/2016 DATE OF PRONOUNCEMENT: 31/05/20 16 O R D E R PER RAM LAL NEGI, JM THESE TWO APPEALS HAVE BEEN FILED BY TWO DIFF ERENT ASSESSEES AGAINST ORDERS DATED 12/09/13 PASSED BY THE CIT(A) MUMBAI, FOR THE ASSESSMENT YEAR 2006- 07. SINCE, THE ISSUES INVOLVED IN BOTH THE APPEALS ARE IDENTICAL, THE LD. COUNSEL FOR BOTH THE ASSESSEES SOUGHT PERMISSION TO ARGUE BOTH THE APPEALS 2 ITA NO 6598 & 6600/MUM/2013 ASSESSMENT YEAR: 2007-08 TOGETHER. ACCORDINGLY, BOTH THE APPEALS WERE CLUBBE D AND HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.6598/M/2013 (A.Y- 2007-08) 2. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT/ ASSESSEE IS NOTIFIED PERSON UNDER THE SPECIAL COURT (TRIAL OF OFFENCES RELATING TO TRANSACTIONS IN SECURITIES) ACT, 1992 AND ALL HER ASSETS INCLUDING BANK ACCOUNT S HAD BEEN ATTACHED AND VESTED IN THE HANDS OF THE CUSTODIAN APPOINTED UNDE R THE SAID ACT. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 WAS FILED ON 31/03/2009, DECLARING TOTAL INCOME OF RS. 1,67,77,470/- THE ASSESSEE SUBM ITTED THE DETAILS IN RESPONSE TO NOTICES ISSUED U/S 143(2) AND U/S142(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT.). ON THE BASIS OF INFORMATI ON FURNISHED AND SUBMISSIONS MADE BY THE ASSESSEE, THE ASSESSING OF FICER PASSED ASSESSMENT ORDER U/S 143(3) OF THE ACT, DETERMINING THE TOTAL INCOME OF RS. 3,28,96,030/- 3. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BY FILING FIRST APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) AFTER HEARING THE AS SESSEE, PARTLY ALLOWED THE APPEAL, HOWEVER, CONFIRMED CERTAIN ACTIONS OF THE A O, INCLUDING DISALLOWANCE OF INTEREST EXPENDITURE AMOUNTING TO RS 1,55,00,564-/ -, ADDITION OF PERSONAL HOUSE HOLD EXPENSES OF RS. 3,00,000/- AND LEVY OF I NTEREST U/S 234A, 234B & 234C OF THE ACT. 4. STILL AGGRIEVED BY THE IMPUGNED ORDER, THE ASSE SSEE IN APPEAL BEFORE THE TRIBUNAL. THE ASSESSEE HAS RAISED THE FOLLOWING EFF ECTIVE GROUNDS OF APPEAL; 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) OUGHT TO HAVE APPRECIATED THAT AS PER THE DECISION OF HONBL E SPECIAL COURT DATED. 30/04/2010 IN MP NO.41 OF 1999, THE AS SETS UNDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI.HARSHAD S.MEHTA 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 APPELLA NT. 3 ITA NO 6598 & 6600/MUM/2013 ASSESSMENT YEAR: 2007-08 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE REJEC TION OF BOOKS OF ACCOUNTS OF THE APPELLANT WAS INCORRECT AND UNJUSTI FIED. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENDITURE AMOUNTING TO RS. 1,55,00,564/- 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION ON ACCO UNT OF PERSONAL HOUSEHOLD EXPENSES OF RS. 3,00,000/-. 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE LEVY OF INTEREST U/S 234A, 234B AND 234C OF THE ACT. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE INCOM E ASSESSED IN THE HANDS OF THE APPELLANT WERE SUBJECTED TO THE PR OVISIONS OF TDS AND HENCE ON THE SAID AMOUNT OF TAX NO INTEREST CAN BE COMPUTED U/S 234B AND 234C OF THE ACT. 5. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE (AR ) SUBMITTED THAT THE ASSESSEE DOES NOT WANT TO CONTEST GROUND NO. 1 & 2. ACCORDINGLY, BOTH THE GROUNDS OF THE PRESENT APPEAL ARE DISMISSED AS NOT PRESSED. THE LD. AR FURTHER SUBMITTED THAT THE GROUND NO.3 AND 4 ARE COVERED BY THE DECISION DATED 21/10/2015 RENDERED BY THE MUMBAI TRIBUNAL IN RASIL A MEHTA VS. DCIT, ITA 6198/M/2011 FOR THE A.Y. 2003-04 AND IDENTICAL ISSU ES HAVE BEEN CONSIDERED IN THE SAID CASE. HENCE, THESE GROUNDS ARE REQUIRED TO BE DECIDED ACCORDINGLY. ON THE OTHER HAND DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON FINDINGS OF THE AUTHORITIES BELOW SUBMITTED THAT THE IMPUGNED ORDER DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. THE LD. DR FURTHER SUBMITTED THAT GROUND NO. 5&6 WHICH PERTAIN TO LEVY OF INTEREST U/S 234A, 234B AND 234C OF THE ACT, HAS BEEN DECIDED IN FAVOUR OF THE REVENUE AND AGAINST THE AS SESSEE BY THE HONBLE 4 ITA NO 6598 & 6600/MUM/2013 ASSESSMENT YEAR: 2007-08 JURISDICTIONAL HIGH COURT, THEREFORE, THESE GROUNDS OF APPEAL ARE LIABLE TO BE DISMISSED. 6. WE HAVE HEARD THE PARTIES AND PERUSED THE MATE RIAL PLACED BEFORE US IN THE LIGHT OF THE RESPECTIVE SUBMISSIONS OF THE PART IES. GROUND 3 PERTAINS TO ADDITION ON ACCOUNT OF INTEREST EXPENSES. WE NOTICE THAT THE COORDINATE BENCH HAD AN OCCASION TO CONSIDER AN IDENTICAL ISSUE IN T HE CASE OF M/S GROWMORE RESEARCH & ASSETS MGT. LTD., ITA NOS.5137&5138 AND ITA NO. 2150/M/13 . THE RELEVANT PARAS OF THE ORDER READ AS UNDER:- WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHOR ITIES BELOW. WHILE DISPOSING THE GROUND RELATING TO DISALLOWANCE OF INTEREST, WE FIND THAT THE LD. CIT(A) HAS FOLLOWED THE FINDINGS GIVEN IN THE CASE OF EMINENT HOLDINGS PVT.LTD. WE FIND THAT THE TRIBUNAL IN THE CASE OF EMINENT HOLDINGS IN ITA NO. 2139,2140 AND 2141/MUM/2013 HAV E FOLLOWED THE DECISION OF THE MUMBAI TRIBUNAL GIVEN IN COMMON GRO UP CASES OF HITESH MEHTA AT PARA 2.3 OF THE ORDER AND RESTORED THE MAT TER TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION. RESPECTFULLY FOL LOWING THE FINDINGS OF THE CO-ORDINATE BENCH, WE RESTORE THIS ISSUE TO THE FIL E OF THE LD. CIT(A) FOR FRESH ADJUDICATION AFTER GIVING REASONABLE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEE. BEFORE CLOSING THIS ISSUE, THE LD.COUNSEL FOR THE A SSESSEE POINTED OUT THAT THE LD. CIT(A) HAS HELD THAT THE ISSUE OF INTEREST EXPENDITURE IS PENDING BEFORE THE HONBLE SPECIAL COURT. IT IS THE SAY OF THE LD. COUNSEL THAT THE PROCEEDINGS IN WHICH THE THE SAID ISSUE OF INTEREST WAS ISSUED BY THE CUSTODIAN HAVE BEEN ALREADY CONCLUDED WHICH FAC T HAS ALREADY BEEN RECORDED BY THE LD.CIT(A) IN THE IMPUGNED ORDER. WE , THEREFORE, DIRECT THE LD. CIT(A) TO CONSIDER THE FACTS WHILE DECIDING THE ISSUE AFRESH. LD. CIT(A) MAY ALSO DIRECT FOR THE TAXING OF INCOME IN THE HANDS OF THE RECIPIENT (FAMILY MEMBERS) IN ACCORDANCE WITH THE M ETHOD OF ACCOUNTING 5 ITA NO 6598 & 6600/MUM/2013 ASSESSMENT YEAR: 2007-08 FOLLOWED BY THEM AS PER THE PROVISIONS OF THE LAW. GROUND NO. 4 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE 7. THE AFORESAID FINDINGS WERE FOLLOWED BY THE COOR DINATE BENCH IN SMT. RASILA MEHTA VS DCIT MUMBAI (SUPRA). RESPECTFULLY F OLLOWING THE VIEW TAKEN BY THE COORDINATE BENCHES IN THE AFORESAID CASES, WE R ESTORE THIS ISSUE TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION AFTER GIVI NG REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THIS GROU ND OF APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 8. GROUND NO 4 PERTAINS TO ADDITION ON ACCOUNT OF P ERSONAL DRAWINGS. WE NOTICE THAT THE COORDINATE BENCH HAS DEALT WITH THE IDENTICAL ISSUE IN SMT. RASILA MEHTA VS DCIT MUMBAI (SUPRA) AND RESTRICTED THE ADDITION TO 50% OF THE ADDITION SUSTAINED BY THE CIT(A), HOLDING AS UNDER: - WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE FACT S BROUGHT ON THE RECORD BEFORE US. WE FIND THAT IN THE GROUP CASES, THE ADDITION ON ACCOUNT OF LOW WITHDRAWALS MADE BY THE AO AMOUNTING TO RS. 6O,60,000/-HAVE BEEN RESTRICTED BY THE LD. CIT(A) AT RS. 37,80,000/ -WHICH ALSO INCLUDES THE PRESENT ADDITION OF RS. 3,00,000/-. CONSIDERING THE FACTUAL MATRIX OF THE ENTIRE FAMILY, IN OUR CONSIDERED OPINION, AN AD DITION OF RS. 1,50,000/- SHOULD MEET THE ENDS OF JUSTICE. WE, MODIFY THE FIN DINGS OF THE LD. CIT(A) AND DIRECT THE AO TO MAKE DISALLOWANCE OF RS. 1.50, 000/-. THIS GROUND OF ASSESSEE IS PARTLY ALLOWED. 9. SINCE THE IDENTICAL ISSUE HAS BEEN DECIDED BY TH E COORDINATE BENCH, IN THE AFORESAID CASE, WE RESPECTFULLY FOLLOW THE SAME AND RESTRICT THE ADDITION SUSTAINED BY THE LD.CIT(A) TO 50% AND DIRECT THE AO TO MAKE DISALLOWANCE OF RS.1,50,000/-. ACCORDINGLY, THIS GROUND OF APPEAL I S PARTLY ALLOWED. 6 ITA NO 6598 & 6600/MUM/2013 ASSESSMENT YEAR: 2007-08 10. GROUND NO 5 AND 6 PERTAIN TO LEVY OF INTEREST U NDER SECTION 234A, 234B AND 234C OF THE ACT. THE LD. DR BROUGHT TO OUR NOTI CE THAT THIS ISSUE HAS BEEN DECIDED BY THE HONBLE JURISDICTIONAL HIGH COURT IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE TO WHICH THE LD. AR FAIRLY CON CEDED. WE NOTICE THAT THIS ISSUE HAS ALSO COME UP BEFORE THE ITAT MUMBAI IN ON E OF THE GROUP CASES VIZ., M/S HARSH ESTATE PVT. LTD. IN ITA NO. 1035,1033 AND 3464/M/2013 AND THE TRIBUNAL ALLOWED THE ISSUE IN FAVOUR OF THE REVENUE , HOWEVER, DIRECTED THE ASSESSING OFFICER TO RECOMPUTED THE INTEREST LIABIL ITY AFTER REDUCING THE AMOUNT OF TAX DEDUCTIBLE AT SOURCE AND DECIDE AS PER THE P ROVISIONS OF LAW. 11. RESPECTFULLY FOLLOWING THE FINDINGS OF THE COOR DINATE BENCH, IN M/S HARSH ESTATE PVT. LTD.(SUPRA), FOLLOWED IN THE DCIT VS. S MT. RASILA S. MEHTA, ITA NO. 5870/M/2011, WE DISMISS THE APPEAL OF THE ASSESSEE, HOWEVER, DIRECT THE AO TO RE-COMPUTE THE INTEREST LIABILITY AFTER REDUCIN G THE AMOUNT OF TAX DEDUCTIBLE AT SOURCE AND DECIDE AS PER THE PROVISIONS OF LAW. ACCORDINGLY APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO 6600 /MUM/2013(A. Y. 2007-08) BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT/ASSE SSEE IS NOTIFIED PERSON UNDER THE SPECIAL COURT (TRIAL OF OFFENCES RELATING TO TRANSACTIONS IN SECURITIES) ACT, 1992 AND ALL HER ASSETS INCLUDING BANK ACCOUNT S HAD BEEN ATTACHED AND VESTED IN THE HANDS OF THE CUSTODIAN APPOINTED UNDE R THE SAID ACT. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 WAS FILED ON 31/03/2009, DECLARING TOTAL INCOME OF RS. 1,55,38,610/- THE ASSESSEE SUBM ITTED THE DETAILS IN RESPONSE TO NOTICES ISSUED U/S 143(2) AND U/S142(1) OF THE ACT. ON THE BASIS OF INFORMATION FURNISHED AND SUBMISSIONS MADE BY THE A SSESSEE, THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER U/S 143(3) OF T HE ACT, DETERMINING THE TOTAL INCOME OF RS. 2,61,07, 860/- 7 ITA NO 6598 & 6600/MUM/2013 ASSESSMENT YEAR: 2007-08 2. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BY FILING FIRST APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) AFTER HEARING THE AS SESSEE, PARTLY ALLOWED THE APPEAL, HOWEVER CONFIRMED CERTAIN ACTIONS INCLUDING THE DISALLOWANCE OF INTEREST EXPENDITURE AMOUNTING TO RS 97,40,757/-, ADDITION ON ACCOUNT OF PERSONAL HOUSE HOLD EXPENSES OF RS. 3,00,000/- DISA LLOWANCE OF RS. 2,00,000/- AND BANK CHARGE OF RS. 11,932/- AND LEVY OF INTERES T U/S 234A, 234B & 234C OF THE ACT. 3. STILL AGGRIEVED BY THE IMPUGNED ORDER, THE ASSE SSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL. 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) OUGHT TO HAVE APPRECIATED THAT AS PER THE DECISION OF HONBL E SPECIAL COURT DATED. 30/04/2010 IN MP NO.41 OF 1999, THE AS SETS UNDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI.HARSHAD S.MEHTA 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 APPELLA NT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE REJEC TION OF BOOKS OF ACCOUNTS OF THE APPELLANT WAS INCORRECT AND UNJUSTI FIED. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENDITURE AMOUNTING TO RS. 97, 40, 757/- 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION ON ACCO UNT OF PERSONAL HOUSEHOLD EXPENSES OF RS. 3,00,000/-. 5. THE LD. COMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE IN RESP ECT OF PROFESSIONAL CHARGES OF RS. 2,00,000/- AND BANK CH ARGES OF RS. 11,932/-. 8 ITA NO 6598 & 6600/MUM/2013 ASSESSMENT YEAR: 2007-08 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE LEVY OF INTEREST U/S 234A, 234B AND 234C OF THE ACT. 7. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE INCOM E ASSESSED IN THE HANDS OF THE APPELLANT WERE SUBJECTED TO THE PR OVISIONS OF TDS AND HENCE ON THE SAID AMOUNT OF TAX NO INTEREST CAN BE COMPUTED U/S 234B AND 234C OF THE ACT. 4. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE (AR ) SUBMITTED THAT THE ASSESSEE DOES NOT WANT TO CONTEST GROUND NO. 1 & 2. ACCORDINGLY, BOTH THE GROUNDS OF THE PRESENT APPEAL ARE DISMISSED AS NOT PRESSED. THE LD. AR FURTHER SUBMITTED THAT THE GROUND NO.3 AND 4 ARE COVERED BY THE DECISION DATED 21/10/2015 RENDERED BY THE MUMBAI TRIBUNAL IN ASSES SEES OWN CASE, RASILA MEHTA VS. DCIT, ITA 6198/M/2011 FOR THE A.Y. 2003-0 4. HENCE THESE GROUNDS ARE REQUIRED TO BE DECIDED ACCORDINGLY. AS REGARDS GROUND NO 5 OF THE APPEAL THE LD. AR SUBMITTED THAT THE ASSESSEE HAS ALREADY DETERMINED THE DISALLOWANCE UNDER SECTION 14A OF THE ACT. THEREFOR E, THE LD. CIT HAS WRONGLY CONFIRMED THE DISALLOWANCES MADE BY THE AO. ON THE OTHER HAND DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON FINDING S OF THE AUTHORITIES BELOW SUBMITTED THAT THE IMPUGNED ORDER DOES NOT SUFFER F ROM ANY LEGAL INFIRMITY. THE LD. DR FURTHER SUBMITTED THAT GROUND NO. 6&7 WH ICH PERTAIN TO LEVY OF INTEREST U/S 234A, 234B AND 234C OF THE ACT, HAS BE EN DECIDED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE BY THE HONBLE JUR ISDICTIONAL HIGH COURT, THEREFORE, THIS GROUND OF APPEAL IS LIABLE TO BE DI SMISSED. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE MATE RIAL PLACED BEFORE US IN THE LIGHT OF THEIR RESPECTIVE SUBMISSIONS. GROUND 3 PERTAINS TO ADDITION ON ACCOUNT OF INTEREST EXPENSES. WE NOTICE THAT THE CO ORDINATE BENCH HAD AN OCCASION TO CONSIDER IDENTICAL ISSUE IN THE CASE OF M/S GROWMORE RESEARCH & ASSETS MGT. LTD., ITA NOS.5137&5138 AND ITA NO. 2150/M/13 . THE RELEVANT PARAS OF THE ORDER READ AS UNDER:- 9 ITA NO 6598 & 6600/MUM/2013 ASSESSMENT YEAR: 2007-08 WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHOR ITIES BELOW. WHILE DISPOSING THE GROUND RELATING TO DISALLOWANCE OF INTEREST, WE FIND THAT THE LD. CIT(A) HAS FOLLOWED THE FINDINGS GIVEN IN THE CASE OF EMINENT HOLDINGS PVT.LTD. WE FIND THAT THE TRIBUNAL IN THE CASE OF EMINENT HOLDINGS IN ITA NO. 2139,2140 AND 2141/MUM/2013 HAV E FOLLOWED THE DECISION OF THE MUMBAI TRIBUNAL GIVEN IN COMMON GRO UP CASES OF HITESH MEHTA AT PARA 2.3 OF THE ORDER AND RESTORED THE MAT TER TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION. RESPECTFULLY FOL LOWING THE FINDINGS OF THE CO-ORDINATE BENCH, WE RESTORE THIS ISSUE TO THE FIL E OF THE LD. CIT(A) FOR FRESH ADJUDICATION AFTER GIVING REASONABLE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEE. BEFORE CLOSING THIS ISSUE, THE LD.COUNSEL FOR THE A SSESSEE POINTED OUT THAT THE LD. CIT(A) HAS HELD THAT THE ISSUE OF INTEREST EXPENDITURE IS PENDING BEFORE THE HONBLE SPECIAL COURT. IT IS THE SAY OF THE LD. COUNSEL THAT THE PROCEEDINGS IN WHICH THE THE SAID ISSUE OF INTEREST WAS ISSUED BY THE CUSTODIAN HAVE BEEN ALREADY CONCLUDED WHICH FAC T HAS ALREADY BEEN RECORDED BY THE LD.CIT(A) IN THE IMPUGNED ORDER. WE , THEREFORE, DIRECT THE LD. CIT(A) TO CONSIDER THE FACTS WHILE DECIDING THE ISSUE AFRESH. LD. CIT(A) MAY ALSO DIRECT FOR THE TAXING OF INCOME IN THE HANDS OF THE RECIPIENT (FAMILY MEMBERS) IN ACCORDANCE WITH THE M ETHOD OF ACCOUNTING FOLLOWED BY THEM AS PER THE PROVISIONS OF THE LAW. GROUND NO. 4 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE 6. THE AFORESAID FINDINGS WERE FOLLOWED BY THE COOR DINATE BENCH IN ASSESSEES OWN CASE, SMT. RASILA MEHTA VS DCIT MUMB AI (SUPRA). RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THE COORDINATE BENCHES IN THE AFORESAID CASES, WE RESTORE THIS ISSUE TO THE FILE OF THE LD. CIT(A) FO R FRESH ADJUDICATION AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. ACCORDINGLY, THIS GROUND OF APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PUR POSE. 10 ITA NO 6598 & 6600/MUM/2013 ASSESSMENT YEAR: 2007-08 7. GROUND NO 4 PERTAINS TO ADDITION ON ACCOUNT OF P ERSONAL DRAWINGS. WE NOTICE THAT THE COORDINATE BENCH HAS DEALT WITH THE IDENTICAL ISSUE IN ASSESSEES OWN CASE, SMT. RASILA MEHTA VS DCIT MUMB AI (SUPRA) AND RESTRICTED THE ADDITION TO 50% OF THE ADDITION SUSTAINED BY TH E CIT(A), HOLDING AS UNDER:- WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE FACT S BROUGHT ON THE RECORD BEFORE US. WE FIND THAT IN THE GROUP CASES, THE ADDITION ON ACCOUNT OF LOW WITHDRAWALS MADE BY THE AO AMOUNTING TO RS. 6O,60,000/-HAVE BEEN RESTRICTED BY THE LD. CIT(A) AT RS. 37,80,000/ -WHICH ALSO INCLUDES THE PRESENT ADDITION OF RS. 3,00,000/-. CONSIDERING THE FACTUAL MATRIX OF THE ENTIRE FAMILY, IN OUR CONSIDERED OPINION, AN AD DITION OF RS. 1,50,000/- SHOULD MEET THE ENDS OF JUSTICE. WE, MODIFY THE FIN DINGS OF THE LD. CIT(A) AND DIRECT THE AO TO MAKE DISALLOWANCE OF RS. 1.50, 000/-. THIS GROUND OF ASSESSEE IS PARTLY ALLOWED. 8. SINCE THE IDENTICAL ISSUE HAS BEEN DECIDED BY TH E COORDINATE BENCH, IN ASSESSEES OWN CASE AFORESAID, WE RESPECTFULLY FOLL OW THE SAME AND RESTRICT THE ADDITION SUSTAINED BY THE LD.CIT(A) TO 50% AND DIRE CT THE AO TO MAKE DISALLOWANCE OF RS.1,50,000/-. ACCORDINGLY, THIS GR OUND OF APPEAL IS PARTLY ALLOWED. 9. GROUND NO. 5 PERTAINS TO CONFIRMING THE DISALL OWANCE IN RESPECT OF PROFESSIONAL CHARGES OF RS. 2,00,000/- AND BANK CHA RGES OF RS. 11,932/- UNDER SECTION 14A OF THE ACT. SINCE RULE 8D OF THE INCOM E TAX RULE IS APPLICABLE FROM ASSESSMENT YEAR 2008-09 ONWARDS, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION. ACCORDINGLY, WE SET ASI DE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE TO THE FILE OF AO FOR FRESH ADJUDICATION AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 11 ITA NO 6598 & 6600/MUM/2013 ASSESSMENT YEAR: 2007-08 10. GROUND NO 6 AND 7 PERTAIN TO LEVY OF INTEREST UNDER SECTION 234A, 234B AND 234C OF THE ACT. WE NOTICE THAT THIS ISSUE HAS ALSO COME UP BEFORE THE ITAT MUMBAI IN ONE OF THE GROUP CASES VIZ., M/S HAR SH ESTATE PVT. LTD. IN ITA NO. 1035,1033 AND 3464/M/2013 AND THE TRIBUNAL ALLO WED THE ISSUE IN FAVOUR OF THE REVENUE, HOWEVER, DIRECTED THE ASSESSING OFF ICER TO RECOMPUTED THE INTEREST LIABILITY AFTER REDUCING THE AMOUNT OF TAX DEDUCTIBLE AT SOURCE AND DECIDE AS PER THE PROVISIONS OF LAW. 11. RESPECTFULLY FOLLOWING THE FINDINGS OF THE COOR DINATE BENCH, IN M/S HARSH ESTATE PVT. LTD.(SUPRA) AND FOLLOWED IN THE DCIT VS . SMT. RASILA S. MEHTA, ITA NO. 5870/M/2011, WE DISMISS THESE GROUNDS OF THE AP PEAL, HOWEVER, DIRECT THE AO TO RE-COMPUTE THE INTEREST LIABILITY AFTER REDU CING THE AMOUNT OF TAX DEDUCTIBLE AT SOURCE AND DECIDE AS PER THE PROVISIO NS OF LAW. 12. IN THE RESULT, BOTH THE APPEALS FOR THE ASS ESSMENT YEAR 2007-08 ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY, 2016 SD/- SD/- ( B.R.BASKARAN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED:31/05/2016 12 ITA NO 6598 & 6600/MUM/2013 ASSESSMENT YEAR: 2007-08 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA