ORION TRAVELS PVT. LTD., MUMBAI V. A.C.I.T. C.C. 31, MUMBAI

ITA 7294/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79042 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 07-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P DANIEL SPECIAL
• Keywords: Rejection of books of accounts; Opportunity of being heard
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ./I.T.A. NO.7293/M/2012 ( AY: 2001 - 2002 ) ./I.T.A. NO.7294/M/2012 ( AY: 2003 - 2004 ) M/S. ORION TRAVELS PVT LTD., 32, MADHULI, 3 RD FLOOR, A.B. ROAD,WORLI, MUMBAI 400018. / VS. ACIT, CC - 31, MUMBAI. ./ PAN : AAACO1591K ( / APPELLANT) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI DHARMESH SHAH / REVENUE BY : SHRI P. DANIEL, SPECIAL COUNSEL / DATE OF HEARING :10 .6 .2014 / DATE OF PRONOUNCEMENT :10 .6 .2014 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION. BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE COMMON ORDER OF CIT (A) - 37, MUMBAI DATED 20.9.2010 FOR THE ASSESSMENT YEARS 2001 - 02 & 2003 - 04. SINCE, THE ISSUES RAISED IN BOTH THE APPEALS ARE IDENTICAL, THERE FORE, FOR THE SAKE OF CONVENIENCE, THESE TWO APPEALS ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE AND GROUND WISE ADJUDICATION IS GIVEN IN THE SUCCEEDING PARAGRAPHS. 2. SINCE, THE GROUNDS RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE IDENTICAL, THEREFORE, FOR THE SAKE OF REFERE N C E, WE SHALL TAKE UP THE GROUNDS RAISED IN ITA NO.7293/M/2012 (AY 2001 - 2002 ) WHICH READ AS UNDER: 1. THE LD CIT (A) HAS ERRED IN LAW AND IN FACT S IN PASSING THE ORDER U/S 250 OF THE ACT AND PARTLY ALLOWING THE APPEAL FILED BY THE ASSESSEE. 2. THE LD CIT (A) HAS ERRED IN LAW AND IN FACTS AND IN NOT APPRECIATING THAT NO INCOME FROM ATTACHED ASSETS CAN BE ASSESS ED IN THE HANDS OF THE ASSESSEE . 3 . THE LD CIT (A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPE NSES AMOUNTING TO RS.26,67,555/ - . 4 . THE LD CIT (A) HAS ERRED I N LAW AND IN CONFIRMING THE LEVY OF INTEREST U/S 234A AND 234B OF THE ACT. 2 3. AT THE OUTSET, SHRI DHARMESH SHAH, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT GROUND NOS. 1, 2 ARE NOT PRESSED . AFTER HEARING THE LD DR, THE SAID GROUNDS ARE DISMISSED AS NOT PRESSED. 4. GROUND NO .3 RELATES TO THE DISALLOWANCE OF INTEREST EXPENDITURE OF RS. 26,67,555 / - . IN THIS REGARD, AT THE OUTSET, LD COUNSEL MENTIONED THAT AN IDENTICAL ISSUE CAME UP FOR ADJUDICATION BEFORE THE ITAT, MUMBAI IN THE CASE OF HITESH S. MEHTA VS. DCIT VIDE ITA NO.7726 & 7727/M/2010 DATED 26.4.2013, WHEREIN THE TRIBUNAL SET ASIDE THE ISSUE TO THE FILES OF CIT (A) FOR ADJUDICATION OF THE ISSUE AFRESH BY ADJUDICATING THE RESPECTIVE GROUND RELATING TO THE REJECTION / RELIABILITY OF THE BOOKS OF ACCOUNT. PARA 5 FROM THE SAID ORDER OF THE TRIBUNAL (SUPRA) IS RELEVANT IN THIS REGARD AND THE SAME REA DS AS UNDER: 5. GROUND NO.4 RELATES TO THE ACTION OF THE LD CIT (A) IN CONFIRMING THE LIABILITIES AMOUNTING TO RS. 11,24,99,052/ - AND RS. 12,61,36,245/ - RESPECTIVELY FOR THE AYS 2005 - 06 AND 2006 - 07 TOWARDS INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE . IT IS PERTINENT TO NOTE THAT THE FINDINGS GIVEN IN PARA 3.3 ABOVE IN RESPECT OF REJECTION / RELIABILITY OF THE BOOKS OF ACCOUNTS AND THE PROPOSE D ADJUDICATION OF THE LD CIT (A ) IN VIEW OF THE SAID DIRECTION MAY HAVE DIRECT IMPACT ON THE ISSUE OF THE IMPUGNED LIABILITY, WE SET ASIDE THIS ISSUE TO THE FILES OF THE CIT (A) TO ADJUDICATE AFRESH ALONG WITH THE ADJUDICATION OF THE RESPECTIVE GROUND PERTAINING TO THE REJECTION / RELIABILITY OF THE BOOKS OF ACCOUNTS. 5. ON THE OTHER HAND, LD DR DUTI FULLY RELIED ON THE ORDER OF THE AO/CIT (A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE ORDER OF THE TRIBUNAL IN THE CASE OF HITESH S. MEHTA (SUPRA). WHETHER THE INTEREST LIABILITIES OF RS. 26,67,555 / - CONSTITUTES ASCERTAINED ONE OR NOT IS ALSO LINKED TO THE ISSUE OF REJECTION OF BOOKS OF ACCOUNTS AS THE BOOKS OF ACCOUNT IS THE BASIS FOR COMPUTATION OF BOOK PROFITS U/S 115JA OF THE ACT. THIS IS COMMON ISSUE QUA THE ISSUE ADJUDICATED IN THE CASE OF THE HITESH S. MEHTA ( SUPRA ) AND MATTER WAS SET ASIDE. RESPECTFULLY FOLLOWING THE SAID ORDER OF THE TRIBUNAL, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE RAISED IN GROUND NO.3 SHOULD BE SET ASIDE TO THE FILES OF THE CIT (A) FOR FRESH ADJUDICATION OF THE ISSUE AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE DECISION IF ANY SHOULD BE TAKEN ONLY AFTER CONSIDERING THE DECISION IN THE CASE OF HITESH S MEH TA, ( SUPRA ) . ACCORDINGLY, GROUND NOS. 3 IS SET ASIDE . 7. GROUND NO.4 RELATES TO CHARGING OF INTEREST U/S 234A & 234B OF THE ACT. IN CONNECTION WITH THE CHARGE OF INTEREST U/S 234B OF THE ACT, LD COUNSEL FOR THE 3 ASSESSEE SUBMITTED THAT THE ASSESSEE BEING A NOTIFIED PERSON , THERE IS NO CHANGE OF INTEREST. IT IS HIS FURTHER SUBMISSION THAT THE RECEIPTS OF THE ASSESSEE ARE SUBJECTED TO TDS. ON THE CONTRARY, SPECIAL COUNSEL FOR THE REVENUE FILED VARIOUS DECISIONS OF THE TRIBUNAL IN SUPPORT OF THE CHANGE OF INTEREST. THE JUDGMENT OF TH E JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. DEVINE HOLDINGS PVT LTD WAS RELIED ON BY THE SPL. COUNSEL FOR THE REVENUE. DURING THE REBUTTAL TIME, LD COUNSEL SUBMITTED THAT THIS ISSUE SHOULD ALSO REVISIT THE FILE OF THE AO FOR REMOVAL OF CERTAIN INAC CURACIES IN CALCULATING THE INTEREST. ACCORDINGLY, GROUND NO.4 IS ALLOWED FOR STATISTICAL PURPOSES. 8 . IT DESERVES TO BE NOTICED THAT THE ASSESSEE FILED ADDITIONAL GROUND ALONG WITH LETTER DATED 5 TH JUNE , 2014, WHEREIN IT WAS CONTENDED THAT THE INCOME ASS ESSED BY THE AO OUGHT TO HAVE BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE HANDS OF THE ASSESSEE. HOWEVER, AT THE TIME OF HEARING THE LEARNED COUNSEL ADMITTED THAT THIS ADDITIONAL GROUND WAS WRONGLY RAISED AND IT HAS NO SUBSTANCE. UNDER THESE CIRCUMSTANCES WE REJECT THE ADDITIONAL GROUND . 9 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ./I.T.A. NO.7294/M/2012 ( AY: 2003 - 2004) 10 . THIS APPEAL FILED BY THE ASSESSEE ON 7.12.2012 IS AGAINST THE ORDER OF THE CIT (A) - 37, MUMBAI DATED 20.9.2012 FOR THE ASSESSMENT YEAR 2003 - 2004. 11 . IN THIS APPEAL ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE LD CIT (A) HAS ERRED IN LAW AND IN FACTS IN PASSING THE ORDER U/S 250 OF THE ACT AND PARTLY ALLOWING THE APPEAL FILED BY THE ASSESSEE. 2. THE LD CIT (A) HAS ERRED IN LAW AND IN FACTS AND IN NOT APPRECIATING THAT NO INCOME FROM ATTACHED ASSETS CAN BE ASSESS ED IN THE HANDS OF THE ASSESSEE . 3 . THE LD CIT (A) HAS ERRED IN LAW A ND IN FACTS IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPE NSES AMOUNTING TO RS.26,67,555/ - . 4 . THE LD CIT (A) HAS ERRED I N LAW AND IN CONFIRMING THE LEVY OF INTEREST U/S 234A AND 234B OF THE ACT. 12 . THE ABOVE GROUNDS RAISED IN THIS APPEAL ARE EXACTL Y IDENTICAL TO THAT OF THE GROUNDS RAISED BY THE ASSESSEE VIDE ITA NO.7293/M/2012 (AY 2001 - 2002 ) . THEREFORE, OUR ADJUDICATION AND DECISION GIVEN FOR THE AY 2001 - 02 SQUARELY APPLIES TO THE INSTANT APPEAL TOO. CONSIDERING THE SAME, THE GROUND NOS. 1 & 2 ARE DISMISSED AS NOT PRESSED AND GROUND NOS. 3 & 4 ARE SET ASIDE TO THE FILE OF THE CIT 4 (A). AS WELL, CONSIDERING THE ADMITTED POSITION OF THE LD COUNSEL ON THE ADDITIONAL GROUND, WE REJECT THE SAME. ACCORDINGLY, APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. 13 . IN THE RESULT, APPEAL OF THE ASSESSEE PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2014. S D / - S D / - (AMIT SHUKLA) (D. KARUNAKARA RAO) JUDICIAL ME MBER ACCOUNTANT MEMBER MUMBAI ; 10.6 .2014 . . ./ OKK , SR. PS / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI