M/S. GROWMORE EXPORTS PVT. LTD, MUMBAI V. THE DCIT C.C.-31, MUMBAI

ITA 6891/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7299 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 07-01-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 03-12-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Keywords: Depreciation; Business expenditure; Opportunity of being heard; Principle of natural justice; Additional evidence; Set aside
• Section: 143(3); 234B; 115JB; 250; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI. BEFORE SHRI N.V.VASUDEVAN, J.M. AND SHRI J. SUDHAK AR REDDY, A.M. S. NO. I.T.A. NO. ASSTT. YEAR APPELLANT RESPONDENT 1. 6891/MUM/2008 2004-05 M/S GROWMORE EXPORT P. LTD. 32, MADHULI, DR. A.B. ROAD, WORLI, MUMBAI-400 018. PAN AAACG4939P DY. COMMISSIONER OF INCOME TAX CC 31, MUMBAI. 2. 6892/MUM/2008 2005-06 -DO- -DO- 3. 940/MUM/2003 2002-03 M/S GROWMORE LEASING & INV. LTD. PAN AAACG4937D -DO- 4. 2447/MUM/2009 2000-01 M/S GROWMORE EXPORTS LTD., MUMBAI. PAN : AAACG4939P ASSTT. COMMR. OF INCOME-TAX, CC-31, MUMBAI. 5. 2448/MUM/2009 2002-03 -DO- -DO- 6. 2449/MUM/2009 2002-03 M/S GROWMORE RESEARCH & ASSETS MGT. LTD., MUMBAI PAN AAACG 4936C DY. COMMR. OF INCOME-TAX, CC-31, MUMBAI. 7. 6812/MUM/2008 2004-05 M/S ZEST HOLDINGS PVT. LTD., MUMBAI. PAN AAACZ 0443M -DO- 8. 6813/MUM/2008 2005-06 -DO- -DO- APPELLANT BY : SHRI VIJAY MEHTA. RESPONDENT BY : DR. P. DANIEL. 2 O R D E R PER J. SUDHAKAR REDDY, A.M. ALL THESE APPEALS ARE FILED BY THE ASSESSEE DIRECT ED AGAINST THE SEPARATE BUT IDENTICAL ORDERS OF THE CIT(APPEAL S), CENTRAL-IV, MUMBAI PASSED ON DIFFERENT DATES FOR DIFFERENT ASSE SSMENT YEARS. AS THE ISSUES ARISING IN ALL THESE APPEALS ARE COMMON, FOR THE SAKE OF CONVENIENCE, THEY ARE HEARD TOGETHER AND DISPOSED O F BY WAY OF THIS COMMON ORDER. 2. FACTS IN BRIEF : THE ASSESSEES IN THESE CASES ARE COMPANIES AND EN GAGED IN THE BUSINESS OF TRADING AND INVESTMENT IN SECURITIE S. IT IS A NOTIFIED PERSON UNDER THE SPECIAL CODE (TRIAL OF OFFENCES RELATING TO RELATING TO TRANSACTIONS IN SECURITIES) ACT, 1992 AND ALL ITS A SSETS INCLUDING BANK ACCOUNTS WERE ATTACHED AND VESTED IN THE HANDS OF T HE CUSTODIAN APPOINTED UNDER THE SAID ACT. 3. WE HAVE HEARD MR. VIJAY MEHTA, LEARNED COUNSEL FOR THE ASSESSEE, WHO HAS ALSO FILED A PAPER BOOK RUNNING I NTO 46 PAGES AND WE HAVE ALSO HEARD DR. P. DANIEL, LEARNED SPECIAL COU NSEL, ON BEHALF OF THE REVENUE. 4. AFTER HEARING THE RIVAL CONTENTIONS, PERUSING T HE PAPERS ON RECORD AS WELL AS THE ORDERS OF COORDINATE BENCHES AS SUBMITTED BY THE PARTIES, WE HOLD AS FOLLOWS : 5. ITA NO. 6891/MUM/2008. THE GROUNDS OF APPEAL READ AS FOLLOWS : 3 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN PASSING THE ORDER U/S 250 OF THE ACT AND CONFIRMING THE ORDER O F THE ASSESSING OFFICER. 2. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN NOT APPRECIATING THAT THE ASSESSMENT ORDER PASSED BY TH E ASSESSING OFFICER U/S 143(3) RWS 147 OF THE ACT WAS BAD IN LAW AND IN VALID. 3. THE LEARNED CIT(APPEALS) OUGHT TO HAVE APPRECIATED THAT THE NOTICES ISSUED BY THE ASSESSING OFFICER ARE INVALID AND HE NCE THE ASSESSMENT ORDER U/S 143(3) RWS 147 OF THE ACT WAS ALSO VOID A B INITIO. 4. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN F ACTS IN PASSING THE ORDER WITHOUT COMPLYING WITH THE PRINCIPLES OF NATU RAL JUSTICE. 5. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN CONFIRMING DISALLOWANCE ON ACCOUNT OF INTEREST EXPENSE AMOUNTI NG TO RS.1,33,44,564/-. 6. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN CONFIRMING DISALLOWANCE ON ACCOUNT OF AUDIT FEES AMOUNTING TO RS.15,000/- 7. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN CONFIRMING CALCULATION OF BOOK PROFIT U/S. 115JB AMOUNTING TO RS.5,90,26,021/-. 8. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN NOT APPRECIATING THAT THE INTEREST CHARGED U/S 234A, 23 4B AND 234C OF THE ACT ARE INCORRECT. 9. THE APPELLANT CRAVE LEAVES OF YOUR HONOUR TO ADD TO , ALTER, AMEND AND/OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS O F APPEAL. 6. GROUND NOS. 1 TO 4 AND 6 ARE DISMISSED AS NOT PRESSED. 7. GROUND NOS. 5 AND 7 ARE SET ASIDE TO THE FILE O F THE CIT(APPEALS) BY RESPECTFULLY FOLLOWING THE COORDINA TE BENCH ORDER IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006-07 IN ITA NO. 3732/MUM/2009, G-BENCH, ORDER DATED 12-02-2010 WHER E AT PARA 6 AND 8 IT WAS HELD AS FOLLOWS : 6. GROUND NO.4, 6 AND 7 READ AS UNDER : 4. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING DISALLOWANCE ON ACCOUNT OF INTE REST EXPENSE AMOUNTING TO RS.1,43,57,933/-. 6. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING CALCULATION OF BOOK PROFIT U/S. 115JB AMOUNTING TO RS.1,29,50,477/-. 4 7. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE INTEREST CHARGED U/S.234A, 234B AND 234C OF THE ACT ARE INCORRECT. 7. AT THE TIME OF HEARING BOTH PARTIES HAVE AGREED THAT THE ISSUE PERTAINING TO THE ABOVE GROUNDS ARE SIMILAR T O THE ISSUE DECIDED BY THE TRIBUNAL IN THIS GROUP OF CASE NAMEL Y M/S. ORION TRAVELS PVT. LTD. VS. DCIT IN ITA NO.6888 & 6889/MUM/08 FOR ASSESSMENT YEARS 2004-05 AND 2005-0 6 ORDER DATED 9 TH OCTOBER, 2009 WHEREIN THE TRIBUNAL VIDE PARA- 21 HAS RESTORED THE MATTER OF DISALLOWANCE OF INTER EST TO THE FILE OF THE LEARNED CIT(A) , THE ISSUE REGARDING C OMPUTATION OF BOOK PROFIT U/S.115JB HAS BEEN DECIDED AS INFRUCTU OUS WITH A DIRECTION THAT IN CASE THE ASSESSEE AT A LATER STAG E IS ASSESSED ON THEIR BOOK PROFIT U/S.115JB IT WILL BE OPEN FOR THE ASSESSEE TO RAISE THESE CONTENTIONS AT THAT TIME AND WITH RE GARD TO LEVY OF INTEREST THE TRIBUNAL DIRECTED THAT THE SAME SHO ULD NOT BE LEVIED ON THE ASSESSEE FOR THE YEAR UNDER APPEAL. T HE LD. COUNSEL FOR THE ASSESSEE HAS ALSO PLACED ON RECORD THE SAID COPY OF THE ORDER OF THE TRIBUNAL. IT WAS THEREFOR E SUBMITTED THAT THE ISSUES BEING SIMILAR THE SAME MAY BE DECID ED ACCORDINGLY. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THERE IS NO DISPUTE THAT THE ISSUES ARE S IMILAR TO THE ISSUES RAISED BEFORE THE TRIBUNAL IN THE APPEAL IN ORION TRAVELS PVT. LTD. (SUPRA). WITH REGARD TO THE SUST ENANCE OF DISALLOWANCE OF INTEREST THE TRIBUNAL SUPRA, WHILE FOLLOWING THE ORDER OF THE TRIBUNAL IN M/S. AATUR HOLDINGS PVT. LTD. VS. DCIT IN ITA NO.147/MUM/2008 FOR ASSESSMENT YEAR 200 0-01 DATED 13.6.2008 HAS OBSERVED AND HELD VIDE PARA 20 AND 21 OF ITS ORDER DATED 9 TH OCT. 2009 AS UNDER : 20. AGGRIEVED ON THE ABOVE ISSUES THE APPELLANT IS IN APPEAL BEFORE US AND REITERATED THE CONTENTIONS SUBMITTED BEFORE THE LOWER AUTHORITIES. WE FIND THAT SIMILAR ISSUES WERE BEFORE THE HONBLE TRIBUNAL IN ITA NO.147/MUM/2008 FOR ASST. YEAR 2000 - 2001 IN THE CASE OF GROUP CONCERN NAMELY M/S AATUR HOLDINGS PVT. LTD V DCIT. IN THAT CASE ALSO THE ASSESSEE WHO WAS A S A NOTIFIED PERSON UNDER THE SPECIAL COURT (TRIAL OF OFFENCES RELATING TO TRANSA CTIONS IN SECURITIES) ACT, 1992 AND ALL ITS ASSETS INCLUDI NG BANK ACCOUNTS WERE ATTACHED AND VESTED IN THE HANDS OF THE CUSTODIAN APPOINTED UNDER THE SAID ACT. IN T HAT CASE ALSO THE ASSESSEE HAD CLAIMED DEDUCTION OF 5 INTEREST, DEPRECIATION AND OTHER ADMINISTRATIVE EXPENSES. THE TRIBUNAL IN THAT CASE HELD: AS FAR AS CLAIM OF AUDIT FEES AND DEPRECIATION IS CONCERNED WE DO NOT FIND THE BASIS ON WHICH THE CLA IM HAS BEEN MADE. SIMILARLY IN RESPECT OF INTEREST PAY ABLE ON LOANS BORROWED FOR THE PURPOSE OF BUSINESS LEARN ED COUNSEL HAS FILED BEFORE US A COPY OF THE MISCELLAN EOUS PETITION NO 41 OF 1999 FILED BY THE CUSTODIAN BEFOR E THE SPECIAL COURT IN WHICH, ACCORDING TO THE ASSESS EE, CLAIM FOR INTEREST EXPENSES AGAINST THE ASSESSEE HA S BEEN MADE BY THE CUSTODIAN. IN THE ABSENCE OF THE REQUIRED DETAILS WE ARE NOT IN A POSITION TO APPREC IATE THE ADMISSIBILITY OF THESE CLAIMS. THEREFORE, IN TH E INTEREST OF JUSTICE WE REMAND THIS MATTER TO THE CI T(A) FOR FRESH CONSIDERATION AFTER PROVIDING THE ASSESSE E OPPORTUNITY TO SUBSTANTIATE ITS CLAIM THAT THE AFOR ESAID EXPENSES OF AUDIT FEE AND DEPRECIATION ACCRUED TO T HE ASSESSEE DURING THE PREVIOUS YEAR AND THAT THE INTEREST EXPENSES CLAIM RELATES TO THE FINANCIAL YE AR IN QUESTION AND IS A LEGITIMATE BUSINESS EXPENSES. 21. THE FACTUAL POSITION IN THIS CASE IS ALSO IDENT ICAL WITH THE CASE OF M/S. AATUR HOLDINGS PVT. LTD. (SUPRA). FOLLOWING THE RATIO OF THE DECISION OF THE CO-ORDIN ATE BENCH IN THE CASE OF M/S AATUR HOLDINGS PVT. LTD. U NDER IDENTICAL CIRCUMSTANCES, WE DEEM IT FIT TO REMAND T HE CLAIM OF EXPENDITURE BY THE ASSESSEE BY WAY OF INTEREST, AUDIT FEES AND DEPRECIATION IN GROUNDS 5, 6,7, BACK TO C.I.T (A) FOR FRESH CONSIDERATION. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGH T ON RECORD BY THE REVENUE WE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA),SET ASIDE THE ISSUE T O THE FILE OF THE LEARNED CIT(A) WHO SHALL DECIDE THE SAM E AFRESH IN THE LIGHT OF THE DIRECTIONS CONTAINED THE REIN AND ACCORDING TO LAW AFTER ALLOWING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ACCORDINGLY THE GROUND TAKEN BY THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. 8. RESPECTFULLY FOLLOWING THE SAME, WE SET SIDE TH ESE GROUNDS TO THE CIT(APPEALS) FOR FRESH ADJUDICATION. 6 9. COMING TO GROUND NO. 8, THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ASSESSEES OWN CASE FOR THE AS SESSMENT YEAR 2006-07 WHEREIN AT PARA 10 IT IS HELD AS FOLLOWS : 10. WITH REGARD TO LEVY OF INTEREST U/S.234A, 234B AND 234C WE FIND THAT THE TRIBUNAL IN THE CASE OF ORION TRAV ELS PVT. LTD. (SUPRA), HAS DISCUSSED THE ISSUE IN DETAIL AND, OBSERVED AND HELD IN PARA-23,24, 25 AND 26 AS UNDER : 23. AS REGARDS THE LAST GROUND NO 9, REGARDING THE LEVY OF INTEREST UNDER SEC 234A, 234B AND 234C, THE ASSESSEE IS A NOTIFIED PERSON UNDER THE SPECIAL COU RT (TRIAL OF OFFENCES RELATING TO TRANSACTIONS IN SECU RITIES) ACT, 1992 AND ALL ITS ASSETS INCLUDING BANK ACCOUNT S WERE ATTACHED AND VESTED IN THE HANDS OF THE CUSTODIAN APPOINTED UNDER THE SAID ACT. FROM THE DA TE OF FUNCTIONING OF THE COURT I.E., 1.6.1992, THE DISTRIBUTION OF MONIES IN CASE OF NOTIFIED PERSONS WILL BE DECIDED BY THE SPECIAL COURT. THE TAXES DO NOT HAVE THE PRIORITY IN SETTLEMENT. EVEN IF A NOTIFIED PERSON HAD WANTED TO PAY THE ADVANCE TAX IT WAS NOT WITHIN HIS CONTROL TO DO SO. HE HAS TO MAKE AN APPLICATION TO THE CUSTODIAN AND ONLY HE CAN PERMIT PAYMENT OF ADVANCE TAX AFTER OBTAINING APPROVAL FRO M THE SPECIAL COURT. THE SPECIAL COURT IN ITS RULING HAS OBSERVED AS UNDER: WHERE A NOTIFIED PARTY IS PREVENTED BY REASON OF NOTIFICATION, FROM DOING THINGS WHICH ARE REQUIRED TO BE DONE BY HIM UNDER OTHER ACTS OR CONTRACTS. IN SUCH CASES, IF THE PROVISION OF THE SPECIAL COURTS ACT PREVENTS A NOTIFIED PARTY FROM DOING THAT THING, THEN BY REASON OF THIS LEGAL DISABILITY, NO PENALTY OR INTEREST CAN BE LEVIED ON THAT PARTY. THUS NO PENALTY OR INTEREST CAN BE IMPOSED FOR NON-FULFILLMENT OF AN ACT WHICH A NOTIFIED PARTY IS PREVENTED FROM DOING BY REASON OF THE SPECIAL COURT ACT. IN SUCH CASES EVEN THOUGH THE PROVISIONS OF SOME OTHER ACT OR CONTRACT LAY DOWN CONSEQUENCES FOR NON- PERFORMANCE, THE PROVISIONS OF THE SPECIAL COURTS ACT WILL PREVAIL. THIS IS BECAUSE IN SUCH CASES THERE WOULD BE A CONFLICT BETWEEN THE PROVISIONS OF THE SPECIAL COURTS ACT AND THAT OTHER LAW AND/OR CONTRACT. IN CASES OF SUCH CONFLICT, THE PROVISIONS OF THE SPECIAL COURT ACT MUST PREVAIL. TO TAKE AN EXAMPLE, UNDER SECTION 234B OF THE INCOME TAX ACT, EVERY ASSESSEE IS LIABLE TO PAY ADVANCE TAX. ALL PARTIES WERE NOTIFIED BETWEEN JUNE 1992 TO AUGUST 1992. ALL OF THEM WOULD BE LIABLE TO 7 ADVANCE TAXES FOR THE FINANCIAL YEAR ENDING MARCH 1993 AND FOR THE SUBSEQUENT YEARS, HOWEVER AS SEEN EARLIER, TAXES ONLY UPTO ASSESSMENT YEAR 1992-93 CAN BE PAID IN PRIORITY. THESE WOULD HAVE TO RANK AS ORDINARY DEBTS UNDER SECTION 11(2)(C ). THIS THEREFORE CAN ONLY BE RELEASED AFTER THE ENTIRE DISTRIBUTION HAS TAKEN PLACE. EVEN IF THE NOTIFIED PARTY WERE TO MAKE AN APPLICATION TO THIS COURT TO PAY THE ADVANCE TAX, THE COURT WOULD REFUSE IT. THUS MONIES FOR PAYMENT OF ADVANCE TAX HAVE NOT BEEN RELEASED. THUS A NOTIFIED PARTY HAS BEEN PREVENTED FROM PAYING ADVANCE TAX. THUS, UNDER THE SPECIAL COURTS ACT, THERE IS A LEGAL DISABILITY TO PAY ADVANCE TAX. YET UNDER THE INCOME TAX ACT THERE IS A COMPULSION TO PAY ADVANCE TAX. THERE IS A CONFLICT BETWEEN THE PROVISIONS OF THE SPECIAL COURTS ACT AND THE INCOME TAX ACT. THE PROVISIONS OF THE SPECIAL COURTS ACT MUST PREVAIL. UNDER THE INCOME TAX ACT IF ADVANCE TAX IS NOT PAID, FOR SUCH NON- PAYMENT INTEREST CAN BE LEVIED. THIS OBVIOUSLY ON THE FOOTING THAT THE ASSESSEE IS IN DEFAULT. HOWEVER A NOTIFIED PARTY, HAS BEEN PREVENTED BY LAW FROM PAYING ADVANCE TAX. HE IS NOT A DEFAULTING PARTY. HE NEITHER HAS NOT PAID ADVANCE TAX BECAUSE OF LEGAL RESTRAINT ON HIM. THE LAW HAS PREVENTED HIM FROM PAYING ADVANCE TAX. IN MY VIEW, IN SUCH CASES, I.E. WHERE THERE IS A CONFLICT BETWEEN THE PROVISIONS OF THE SPECIAL COURTS ACT AND SOME OTHER ACT/CONTRACT, THE CONTRARY PROVISIONS MUST NECESSARILY GIVE WAY. IF THERE IS THIS LEGAL DISABILITY, THEN THERE IS NO THE QUESTION OF THE NOTIFIED PARTY BEING FOISTED WITH THE LIABILITY TO PAY INTEREST AND/OR PENALTY. 24. IN THE BACKDROP OF THE ABOVE, IT WAS IMPOSSIBLE FOR THE ASSESSEE TO HAVE PAID THE ADVANCE TAX EVEN IF HE HAD WANTED TO. IT IS A WELL KNOWN LEGAL DICTUM LEX NON COGITAD IMOSSIBILIA (LAW CANNOT COMPEL YOU TO DO THE IMPOSSIBLE). ASSESSEE CANNOT THEREFORE BE FOISTED WITH INTEREST LIABILITY U/S 234A, 234B AND 234C. INTEREST U/S 234B AND 234C ARE DIRECTLY RELATED TO PAYMENT OF ADVANCE TAX AND HENCE IS NOT LEVIABLE ON NOTIFIED PERSONS. EVEN THOUGH LEVY OF INTEREST U/S 234A IS REALLY ON THE DELAY IN FILING THE RETURN WHICH I S A DEFAULT COMMITTED BY THE ASSESSEE, THE QUANTIFICATI ON OF THE SAME DEPENDS ON THE ADVANCE TAX PAID WHICH, IN THIS CASE, IS NOT WITHIN THE CONTROL OF THE ASSESSE E. HENCE INTEREST U/S 234A CANNOT ALSO BE LEVIED IN TH E 8 CASE OF A PERSON A NOTIFIED PERSON UNDER THE SPECIA L COURT (TRIAL OF OFFENCES RELATING TO TRANSACTIONS I N SECURITIES) ACT, 1992 AND ALL ITS ASSETS INCLUDING BANK ACCOUNTS WERE ATTACHED AND VESTED IN THE HANDS OF T HE CUSTODIAN APPOINTED UNDER THE SAID ACT. 25. THE CO-ORDINATE BENCH IN THE CASE OF DIVINE HOLDINGS PVT. LTD V DCIT IN ITA NO180/M/2000 DT. 26.6.2001 HAS HELD THAT CIT(A) IS RIGHT IN ADMITTIN G THE APPEAL OF A NOTIFIED PERSON EVEN THOUGH THE TAX ON THE RETURNED INCOME HAS NOT BEEN PAID BY HIM. IN COMING TO THIS CONCLUSION THEY HAD RELIED ON THE AB OVE PASSAGE OF THE SPECIAL COURT. 26. IN THE CIRCUMSTANCES, WE DIRECT THAT INTEREST U /S 234A, 234B AND 234C SHOULD NOT BE LEVIED ON THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER APPEAL. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGH T ON RECORD BY THE REVENUE WE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL (SUPRA), HOLD AND ORDER ACCORDINGLY. T HE GROUND TAKEN BY THE ASSESSEE IS THEREFORE ALLOWED. 10. RESPECTFULLY FOLLOWING THE SAME, WE ALLOW THIS GROUND OF THE ASSESSEE. 11. GROUND NO. 9 IS GENERAL IN NATURE. 12. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS ALLOWED IN PART. 13. ITA NO. 6892/MUM/2008: THE GROUNDS OF APPEAL READ AS FOLLOWS : 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN PASSING THE ORDER U/S 250 OF THE ACT AND CONFIRMING THE ORDER OF THE ASSESSING OFFICER. 2. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN NOT APPRECIATING THAT THE ASSESSMENT ORDER PASSED BY TH E ASSESSING OFFICER U/S 143(3) OF THE ACT WAS BAD IN LAW AND IN VALID. 3. THE LEARNED CIT(APPEALS) OUGHT TO HAVE APPRECIATED THAT THE NOTICES ISSUED BY THE ASSESSING OFFICER ARE INVALID AND HENCE THE ASSESSMENT ORDER U/S 143(3) OF THE ACT WAS ALSO VOID AB INITIO. 9 4. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN PASSING THE ORDER WITHOUT COMPLYING WITH THE PRINCI PLES OF NATURAL JUSTICE. 5. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN CONFIRMING DISALLOWANCE ON ACCOUNT OF INTEREST EXPE NSE AMOUNTING TO RS.1,39,83,947/-. 6. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN CONFIRMING DISALLOWANCE ON ACCOUNT OF AUDIT FEES AM OUNTING TO RS.15,000/-. 7. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN CONFIRMING CALCULATION OF BOOK PROFIT U/S 115JB AMO UNTING TO RS.1,78,03,150/-. 8. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN NOT APPRECIATING THAT THE INTEREST CHARGED U/S 234A, 23 4B AND 234C OF THE ACT ARE INCORRECT. 9. THE APPELLANT CRAVES LEAVE OF YOUR HONOUR TO ADD TO , ALTER, AMEND AND/OR DELETE ALL OR ANY OF THE FOREGOING GRO UNDS OF APPEAL. 14. GROUND NOS. 1 TO 4 AND 6 ARE DISMISSED AS NOT PRESSED. 15. GROUND NO. 5 IS THE SAME AS IN ITA NO. 6891/MU M/2008. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASID E THE MATTER TO THE FILE OF THE CIT(APPEALS) FOR FRESH ADJUDICATION. 16. COMING TO GROUND NO. 7, THE ISSUE IS COVERED B Y THE DECISION OF THE C-BENCH OF THE TRIBUNAL IN ITA NO. 6888/MUM/ 2008 FOR THE ASSESSMENT YEAR 2004-05 AND ITA NO. 6889/MUM/2008 FOR THE ASSESSMENT YEAR 2005-06 IN THE CASE OF M/S ORIENT T RAVEL P. LTD. VS. DCIT, ORDER DATED 9 TH OCT., 2009 WHERE AT PARA 22 PAGE 8, THE TRIBUNAL HELD AS UNDER : AS REGARDS GROUND NO. 8, REGARDING COMPUTATION OF BOOK PROFITS U/S 115JB, WE FIND THAT THE ASSESSEE HAS BE EN TAXED UNDER THE NORMAL PROVISIONS OF THE ACT AND NOT ON THE BO OK PROFITS U/S 115JB. IN THE CIRCUMSTANCES WE ARE NOT CONSIDERING THIS ISSUE AND DISMISS THE APPEAL ON THIS ISSUE AS INFRUCTUOUS WIT H A DIRECTION THAT IN CASE THE ASSESSEE AT A LATER STAGE IS ASSESSED O N THEIR BOOK PROFITS 10 U/S 115JB, IT WILL BE OPEN FOR THE ASSESSEE TO RAIS E THESE CONTENTIONS AT THAT TIME. 17. RESPECTFULLY FOLLOWING THE SAME, AS THERE ARE NO DISTINGUISHING FEATURES BROUGHT TO OUR NOTICE, WE D ISMISS THIS GROUND AS INFRUCTUOUS WITH A DIRECTION THAT IN CASE THE ASSES SEE AT A LATER DATE IS ASSESSED ON THEIR BOOK PROFITS U/S 115JB, IT WILL B E OPEN FOR THE ASSESSEE TO RAISE THE CONTENTIONS AT THAT TIME. 18. IN THE RESULT, GROUND NO. 7 IS DISMISSED. 19. GROUND NO. 8 IS SIMILAR TO GROUND NO. 8 IN ITA NO. 6891/MUM/2008. CONSISTENT WITH THE VIEW TAKEN THERE IN, WE ALLOW THIS GROUND OF THE ASSESSEE IN THIS CASE ALSO. 20. GROUND NO. 9 IS GENERAL IN NATURE. 21. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS ALLOWED IN PART. 22. ITA NO. 2447/MUM/2009. THOUGH THE ASSESSEE HAS RAISED 11 GROUNDS OF APPE AL HE HAS TAKEN UP ONLY GROUND NO. 5 WHICH READS AS FOLLOWS : THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FACTS IN DISREGARDING ADDITIONAL EVIDENCES PRODUCED BY THE A PPELLANT AND NOT ADMITTING THE SAME UNDER RULE 46A OF THE IT RUL ES. 23. THIS BENCH OF THE TRIBUNAL ON THE SIMILAR CIRC UMSTANCES IN ITA NO. 3538/MUM/2009 IN ASSESSEES OWN CASE HELD A S FOLLOWS : WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF A.O. AND CIT(A) AND TH E PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSI DERED THE VARIOUS DECISIONS CITED BEFORE US IN THE CASE OF TH E SISTER CONCERNS. WE FIND THAT THE LD. CIT(A) DID NOT ACCEPT THE ADDI TIONAL EVIDENCES FILED BEFORE HIM AND PASSED THE ORDER. WE FIND UNDE R IDENTICAL FACTS 11 AND CIRCUMSTANCES THE CO-ORDINATE BENCHES OF THE TR IBUNAL IN THE CASE OF SISTER CONCERNS OF THE ASSESSEE HAVE CONSID ERED THE ISSUE AND HAVE DIRECTED HE CIT(A) TO ADMIT ADDITIONAL EVI DENCES FILED BEFORE HIM AND DECIDE THE ISSUE ON MERIT. RESPECTFU LLY FOLLOWING THE DECISIONS OF THE CO-ORDINATE BENCHES OF THE TRI BUNAL WE RESTORE THE MATTER TO THE FILE OF THE CIT(A) WITH DIRECTION TO ADMIT THE ADDITIONAL EVIDENCES FILED BEFORE HIM AND DECIDE TH E ISSUE ON MERIT. WE HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE CIT( APPEALS) TO ADMIT ADDITIONAL EVIDENCES FILED BEFORE HIM AND DECIDE TH E ISSUE ON MERITS. 24. ALL OTHER GROUNDS ARE NOT ADJUDICATED IN VIEW OF OUR ABOVE DECISION. 25. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATI STICAL PURPOSES. 26. ITA NO. 2448/MUM/2009. THE FACTS AND CIRCUMSTANCES IN THIS CASE ARE SIMI LAR TO ITA NO. 2447/MUM/2009. CONSISTENT WITH THE VIEW TAKEN T HEREIN, THIS APPEAL IS ALSO ALLOWED FOR STATISTICAL WITH THE SAME DIREC TIONS TO THE CIT(APPEALS) AS GIVEN ABOVE IN ITA NO. 2447/MUM/200 9. 27. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATI STICAL PURPOSES. 28. ITA NO. 2449/MUM/2009. AS DECIDED IN GROUND NO. 5 IN ITA NOS. 2447 & 2448/MUM/2009, WE DISPOSE OF THIS APPEAL IN THE SAM E MANNER AND DECIDE GROUND NO. 3 IN THIS APPEAL IN CONSISTENT WI TH THE VIEW TAKEN THEREIN. 29. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATI STICAL PURPOSES. 12 30. ITA NO. 940/MUM/2009. THOUGH THE ASSESSEE HAS RAISED 16 GROUNDS OF APPE AL HE HAS FILED ADDITIONAL GROUND WHICH READS AS FOLLOWS : THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FACTS IN DISREGARDING ADDITIONAL EVIDENCES PRODUCED BY THE A PPELLANT AND NOT ADMITTING THE SAME UNDER RULE 46A OF THE IT RUL ES. 31. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS MERELY A LEGAL ISS UE WHICH GOES INTO THE ROOT OF THE MATTER AND THE SAME HAS TO BE ADMITTED BY FOLLOWING THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F NATIONAL THERMAL POWER CORPORATION VS. CIT 229 ITR 383. THUS WE ADMI T THE SAME. 32. THOUGH THE NUMBER OF ORIGINAL GROUNDS HAVE BEE N RAISED, THE ADDITIONAL GROUND ADMITTED NOW IS THE SAME AS ADMIT TED AS GROUND NO. 5 IN ITA NO. 2447/MUM2009 ABOVE. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THIS APPEAL TO THE FILE OF TH E CIT(APPEALS) WITH A DIRECTION TO ADMIT THE ADDITIONAL EVIDENCES PRODUCE D BEFORE HIM AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. 33. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATI STICAL PURPOSES. 34. ITA NO. 6812 & 6813/MUM/2008. IN BOTH THESE APPEALS THE GROUNDS OF APPEAL ARE I DENTICAL WHICH READ AS FOLLOWS : 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN PASSING THE ORDER U/S 250 OF THE ACT AND CONFIRMING THE ORDER O F THE ASSESSING OFFICER. 2. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN NOT APPRECIATING THAT THE ASSESSMENT ORDER PASSED BY TH E ASSESSING OFFICER U/S 143(3) RWS 147 OF THE ACT WAS BAD IN LA W AND INVALID. 13 3. THE LEARNED CIT(APPEALS) OUGHT TO HAVE APPRECIATED THAT THE NOTICES ISSUED BY THE ASSESSING OFFICER ARE INVALID AND HEN CE THE ASSESSMENT ORDER U/S 143(3) RWS 147 OF THE ACT WAS ALSO VOID A B INITIO. 4. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN PASSING THE ORDER WITHOUT COMPLYING WITH THE PRINCIPLES OF NATU RAL JUSTICE. 5. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN CONFIRMING DISALLOWANCE ON ACCOUNT OF INTEREST EXPENSE AMOUNTI NG TO RS.50,24,552/-. 6. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN NOT DELETING THE ADDITION OF RS.15,000/- MADE BY THE AS SESSING OFFICER ON ACCOUNT OF AUDIT FEES. 7. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN CONFIRMING CALCULATION OF BOOK PROFIT U/S 115JB AMOUNTING TO RS.90,82,084/RS.87,69,411. 8. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND IN FA CTS IN NOT APPRECIATING THAT THE INTEREST CHARGED U/S 234A, 23 4B AND 234C OF THE ACT ARE INCORRECT. 9. THE APPELLANT CRAVES LEAVE OF YOUR HONOUR TO ADD TO , ALTER, AMEND AND/OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS O F APPEAL WITH THE PERMISSION OF YOUR HONOUR. 35. GROUND NOS. 1 TO 4 OF BOTH THESE APPEALS ARE D ISMISSED AS NOT PRESSED. 36. GROUND NO. 5 IS SAME AS GROUND NO. 5 IN ITA NO . 6891/MUM/2008. CONSISTENT WITH OUR DECISION TAKEN T HEREIN, WE SET ASIDE THE MATTER TO THE FILE OF THE CIT(APPEALS) FOR FRES H ADJUDICATION. 37. GROUND NO. 6 IS DISMISSED AS NOT PRESSED. 38. GROUND NO. 7 IS ALSO DISPOSED OF IN LINE WITH OUR DECISION IN ITA NO. 6891 AND 6892/MUM/2008. 39. GROUND NO. 8 IS AGAINST THE LEVY OF INTEREST U /S 234A, 234B AND 234C. ON THE VERY SAME ISSUE WHILE DISPOSING OF ITA NO. 6891/MUM/2008, WE ALLOW THIS GROUND BY FOLLOWING TH E DECISION OF CO- ORDINATE BENCH AS BROUGHT OUT IN PARA NO. 9 AND 10 ABOVE OF THIS ORDER. 14 RESPECTFULLY FOLLOWING THE SAME, WE ALLOW THIS GROU ND OF THE ASSESSEE IN BOTH THE APPEALS. 40. IN THE RESULT, BOTH THE APPEALS OF THE ASSESS EE ARE ALLOWED IN PART. 41. IN THE RESULT, ALL THE APPEALS ARE DISPOSED OF AS INDICATED ABOVE. ORDER PRONOUNCED ON THIS 25 TH DAY OF MARCH, 2010. SD/- SD/- (N.V.VASUDEVAN) (J. SUDHAKAR REDDY) JUDICIAL MEMBER. ACCOUNTANT MEMBER. MUMBAI, DATED : 25 TH MARCH, 2010. WAKODE COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, G-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI.