PRATIMA H. MEHTA, MUMBAI V. DCIT CC 23, MUMBAI

ITA 6632/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3443 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 1996-1997
• Appeal Filed On: 13-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Assessee Lawyers: ASHWIN KAHSINATH
• Keywords: Opportunity of being heard
• Section: 234B

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL G BENC H MUMBAI , , BEFORE S/SHJOGINDER SINGH,JUDICIAL MEMBER & RAJEND RA,ACCOUNTANT MEMBER ./ITA/6632/MUM/2013, /ASSESSMENT YEAR: 1996-97 SMT. PRATIMA H. MEHTA 44A, MADHULI, DR. A.B. ROAD WORLI, MUMBAI 400018 PANABNPM8226G VS. DCIT, CENTRAL CRICLE-23 AYAKAR BHAVAN. M.K. ROAD MUMBAI 400020 ( /APPELLANT ) ( / RESPONDENT ) ./ITA/6633/MUM/2013, /ASSESSMENT YEAR: 1997-98 SMT. PRATIMA H. MEHTA WORLI, MUMBAI 400018 VS. DCIT, CENTRAL CRICLE-23 AYAKAR BHAVAN. M.K. ROAD,MUMBAI 20 REVENUE BY: DR.P DANIEL ASSESSEE BY:SH .ASHWIN KAHSINATH -AR / DATE OF HEARING: 18 .05.2016 / DATE OF PRONOUNCEMENT: 18.05.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-40,MUMBAI DATED 19.08.2013 FOR A.Y. 1996-97.ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) OUG HT TO HAVE APPRECIATED THAT AS PER THE DECISION OF HON'BLE SPECIAL COURT DATED 30.04.2010 IN MP NO. 41 OF 1999, THE ASSETS UNDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEHTA AND HENCE THE INCOME ASSESSED BY THE ASSESSING OFFICER OUGHT TO H AVE BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE HANDS OF THE APPELLANT. 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENDITURE AMOUNTING TO ` 2,03,11,9551-. 3. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS THAT IN CONFIRMING THE LEVY OF INTEREST U/S. 234B AND 234C OF THE ACT. 4. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE INCOME ASSESSED IN THE HANDS OF THE APPELL ANT WERE SUBJECTED TO THE PROVISIONS OF TDS AND HENCE ON THE SAID AMOUNT OF TAX NO INTEREST CAN BE COMPUTED U/S. 234B AND 234C OF THE ACT. 5. THE APPELLANT CRAVES LEAVE OF YOUR HONOUR TO ADD TO, ALTER, AMEND AND/ OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL. AT THE TIME OF HEARING THE LEARNED A.R. FOR THE ASS ESSEE SUBMITTED THAT THE ASSESSEE IS NOT INTERESTED IN PRESSING GROUND NO.1.HENCE,SAME STAND S DISMISSED. 2.GROUND NOS. 3 & 4 ARE WITH REGARD TO CONFIRMING T HE LEVY OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT. THE LEARNED A.R. FOR THE ASSES SEE SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF THE COORDINATE BENCH IN ITA NO.S. 2 139, 2140 & 2141/MUM2013 DATED 18.06.204 AND FOLLOWED IN ASSESSEES OWN CASE IN IT A NO. 350/MUM/2013 DATED 11.05.2015 WHEREIN IT WAS HELD AS UNDER: - 6632 /M/1 3 PHM 2 3. GROUND NO. 4 RELATES TO THE DISALLOWANCE OF INT EREST EXPENSE. THE LD. COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THAT THE DECISION RE LIED UPON BY THE LD. CIT(A) WHILE DISPOSING THIS GROUND HAS BEEN SET ASIDE BY THE TRI BUNAL TO THE FILE OF THE LD. CIT(A). 4. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BRING ANY DISTINGUISHING DECISION IN FAVOUR OF THE REVENUE. 5. WE HAVE CAREFULLY PERUSED THE ORDER S OF THE AUTHORITIES BELOW. WHILE DISPOSING THE GROUND RELATING TO THE DISALLOWANCE O F INTEREST, WE FIND THAT THE LD. CIT(A) HAS FOLLOWED THE FINDINGS GIVEN IN THE CASE OF EMIN ENT HOLDINGS PVT. LTD. WE FIND THAT THE TRIBUNAL IN THE CASE OF EMINENT HOLDINGS IN ITA NOS . 2139, 2140 AND 2141/MUM/2013 HAVE FOLLOWED THE DECISION OF THE TRIBUNAL GIVEN IN COMMON GROUP CASE OF HITESH S. MEHTA AT PARA 2.3 OF THE ORDER AND RESTORED THE MATTER TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION. RESPECTFULLY FOLLOWING THE FINDINGS O F THE CO ORDINATE BENCH, WE RESTORE THIS ISSUE TO THE FILES OF THE LD. CIT(A) FOR FRESH ADJU DICATION AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. BEFO RE CLOSING THIS ISSUE, THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE LD. CIT(A) HAS HE LD 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 SAID ISSUE OF INTEREST WAS ISSUED BY THE CUSTODIAN HAVE BEEN ALREADY CONCLUDED WHICH FACT HAS ALREADY BEEN RECOR DED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. WE, THEREFORE, DIRECT THE LD. CIT(A) TO CONS IDER THIS FACT WHILE DECIDING THE ISSUE AFRESH. THE LD. CIT(A) MAY ALSO DIRECT FOR THE TAXI NG OF INCOME IN THE HANDS OF THE RECIPIENT (FAMILY MEMBERS) IN ACCORDANCE WITH THE METHOD OF A CCOUNTING FOLLOWED BY THEM AND AS PER THE PROVISIONS OF THE LAW. GROUND NO. 4 IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSE. 3 .THE LEARNED D.R. DID NOT CONTROVERT THE CONTENTION OF THE LEARNED A.R. FOR THE ASSESSEE. IN THESE CIRCUMSTANCES WE DO NOT FIND ANY REASON TO IN TERFERE WITH THE ORDER OF THE CIT(A). ACCORDINGLY WE RESTORE THE ISSUE BACK TO THE FILE O F THE AO FOR FRESH ADJUDICATION AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. GROUND NO.3 AND FOUR DEAL WITH LEVY OF INTEREST U/S . 23B AND 234C OF THE ACT.THE REPRESENTATIVES OF BOTH THE SIDES AGREED THAT THE I SSUE WAS DECIDED IN ASSESSEES OWN CASE,BY THE TRIBUNAL,WHILE AJDUDICATING THE APPEAL FOR THE AY.2009-10(ITA/350/MUM/2013 DTD. 11. 05.2015).WE WOULD LIKE TO REPRODUCE THE RELEVANT PO RTION OF THE ORDER AND SAME READS AS UNDER: THE NEXT GROUND OF APPEAL IS ABOUT LEVY OF INTERES T U/S.234 OF THE ACT.BEFORE US,THE AR STATED THAT THE ASSESSEE WAS A NOTIFIED ENTITY,THUS THE PR OVISIONS OF S.234A,234B AND 234C OF THE ACT DEEMED TO HAVE COMPLIED WITH,THAT THE ASSETS WERE ALREADY IN ATTACHMENT OF THE CUSTODIAN APPOINTED UNDER THE PROVISIONS OF SPECIAL COURTS ACT, THAT THE TRIB UNAL IN THE CASE OF THE APPELLANT AND SEVERAL OTHER ENTITIES HAD HELD THE VIEW IN FAVOUR OF THE APPELLA NT THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF DIVINE HOLDINGS PVT. LTD. AND CASCADE HOLDINGS P VT. LTD. HAD HELD THE PROVISIONS OF SECTION 234A, 234B AND 234C OF THE ACT WERE MANDATORY AND WERE AP PLICABLE TO THE NOTIFIED ENTITIES ALSO, THAT THE ASSESSEE WAS IN THE PROCESS OF FILING AN APPEAL AGA INST THEE SAID ORDER BEFORE THE HONBLE SUPREME COURT, THAT THE INCOME EEARNED IN THE YEAR UNDER CO NSIDERATION WAS SUBJECTED TO PROVISIONS OF TDS, THAT THE CHANGEABILITY OF THE SECTION 234A, 234B AN D 234C OF THE ACT SHOULD BE AFTER CONSIDERING THE AMOUNT OF TAX DEDUCTIBLE AT SOURCE ON THE INCOME AS SESSED. THE APPELLANT RELIES IN THIS REGARD ON THE FOLLOWING DECISIONS. HE RELIED UPON THE CASES OF MO TOROLA INC. V. DCIT [95 ITD 269 (DEL. (SB)], SEDCO FORES DRILLING CO. LTD. [264 ITR 320], NGC NE TWORK ASIA LLC [313 ITR 187], SUMMIT BHATACHARYS [300 ITR (AI) 347 (BOM) (SB), VIJAL GOP AL JINDAL [ITA NO. 4333/DEL/2009 & EMILLO RUIZ BERDEJO [320 ITR 190 (BOM). DR RELIED UPON THE CASES OF DEVINE HOLDINGS PVT. LTD. 3.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THT IIN THE FASE OF DEVINE HOLDINGS PVT. LTD. HONBLE BOMBAY HI GH COURT HAS HELD THAT PROVISIONS OF SECTION 234A, 234B AND 234C WERE APPLICABLE TO THE NOTIFIED PERSON ALSO. THEREFORE, UPHOLDING THE ORDER OF THE FAA TO THAT EXTENT, WE HOLD THAT PROVISIONS OF SECTION 234 OF THE ACT ARE APPLICABLE. AS FAR AS CALCULATION PART IS CONCERNED, WE FIND MERITS IN TH E SUBMISSION MADE BY THE ASSESSEE. THEREFORE, 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 SO URCE ON THE INCOME ASSESSED AND AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 6632 /M/1 3 PHM 3 AS A RESULT, APPEAL FILED BY THE ASSESSEE FOR THE A .Y. 2002-03 STANDS PARTLY ALLOWED. RESPECFULLY,FOLLOWING THE ABOVE WE DIRECT THE AO TO HEAR THE ASSESSEE AND DECIDE THE ISSUE AFRESH. ITA/6633/MUM/2013,AY.1997-98: THE AR OF THE ASSESSEE DID NOT PRESS FIRST TWO GROU NDS.THEREFORE,SAME STAND DISMISSED. GROUND NO.3 DEALS WITH INTEREST EXPENDITURE OF RS.2 .26 CRORES AND FOURTH GROUND IS ABOUT LEVEY OF INTEREST U/S.234 B AND 234C OF THE ACT. FOLLOWING OUR ORDER FOR THE EARLIER YEARS,WE ARE RE STORING BACK BOTH THE GROUNDS TO THE FILE OF THE AO FOR FRESH ADJUDICATION.HE WILL DECIDE THE ISSUES AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. AS A RESULT, APPEALS FILED BY THE ASSESSEE STAND PA RTLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MAY,2016. 18 , 2016 SD/- SD/- /JOGINDER SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 18.05.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR G BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.