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

ITA 7871/MUM/2010

• Counselvise Citation: 787119914 RSA 2010
• Duration Of Justice: 2 year(s) 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 15-04-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 15-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DHARMESH SHAH
• Assessee Lawyers: DR P DANIEL
• Section: 234B

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - C BENCH. . .. . . .. . , ,, , / !'# !'# !'# !'# , ' ' ' ' BEFORE S/SH. B.R. MITTAL, JUDICIAL MEMBER & RAJENDR A, ACCOUNTANT MEMBER ./ ITA NO.7871/MUM/2010, $ $ $ $ % % % % / ASSESSMENT YEAR-2005-06 PRATIMA H. MEHTA 32 MADHULI, DR. A.B.ROAD, WORLI, MUMBAI- 400018 DCIT CEN CIR 23 R.NO.464, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.MARG MUMBAI- 400020 PAN: ABNPM8226G ( &' / APPELLANT ) ( ()&' / RESPONDENT ) ./ ITA NO.7872 /MUM/2010, $ $ $ $ % % % % / ASSESSMENT YEAR-2006-07 PRATIMA H.MEHTA 32 MADHULI, DR. A.B.ROAD, WORLI, MUMBAI- 400018 DCIT CEN CIR 23 R.NO.464, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.MARG MUMBAI- 400020 PAN: ABNPM8226G ( &' / APPELLANT ) ( ()&' / RESPONDENT ) ./ ITA NO. 7873/MUM/2010, $ $ $ $ % % % % / ASSESSMENT YEAR-2007-08 PRATIMA H.MEHTA 32 MADHULI, DR. A.B.ROAD, WORLI, MUMBAI- 400018 DCIT CEN CIR 23 R.NO.464, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.MARG MUMBAI- 400020 PAN: ABNPM8226G ( &' / APPELLANT ) ( ()&' / RESPONDENT ) ./ ITA NO.7501/MUM/2010, $ $ $ $ % % % % / ASSESSMENT YEAR-2005-06 DCIT CEN CIR 23 R.NO.464, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.MARG MUMBAI- 400020 PRATIMA H.MEHTA 32 MADHULI, DR. A.B.ROAD, WORLI, MUMBAI- 400018 PAN: ABNPM8226G ( &' / APPELLANT ) ( ()&' / RESPONDENT ) ./ ITA NO.7497/MUM/2011, $ $$ $ % % % % / ASSESSMENT YEAR-2006-07 2 ITA NO. 7497/MUM/2010 PRATIMA H. MEHTA DCIT CEN CIR 23 R.NO.464, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.MARG MUMBAI- 400020 PRATIMA H.MEHTA 32 MADHULI, DR. A.B.ROAD, WORLI, MUMBAI- 400018 PAN: ABNPM8226G ( &' / APPELLANT ) ( ()&' / RESPONDENT ) ./ ITA NO.7499/MUM/2010, $ $ $ $ % % % % / ASSESSMENT YEAR-2007-08 DCIT CEN CIR 23 R.NO.464, 4 TH FLOOR, AAYAKAR BHAVAN, M.K.MARG MUMBAI- 400020 PRATIMA H.MEHTA 32 MADHULI, DR. A.B.ROAD, WORLI, MUMBAI- 400018 PAN: ABNPM8226G ( &' / APPELLANT) ( ()&' / RESPONDENT) $*+ $*+ $*+ $*+ , , , , ' ' ' ' / APPELLANT BY : SHRI DR. P. DANIEL ! - , ' / REVENUE BY : SHRI DHARMESH SHAH $ $ $ $ - -- - +. +. +. +. / DATE OF HEARING : 18-07-2013 /0% - +. / DATE OF PRONOUNCEMENT : 02-08-2013 $ $ $ $ , 1961 - -- - 254(1) ' '' ' +1+ +1+ +1+ +1+ '2 '2 '2 '2 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER BENCH CROSS APPEAL HAVE BEEN FILED BY THE ASSESSING OFFIC ER (AO) AND THE ASSESSEE FOR THE ASSESSMENT YEARS 2005-06 TO 2007-08.AS THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, SO,FOR THE SAKE OF CONVENIENCE, ALL THE CASES ARE BEING ADJUDICATED UP ON BY SINGLE COMMON ORDER. IDENTICAL GROUNDS OF APPEAL HAVE BEEN FILED BY THE AO FOR ABOVE MENTIONED THREE ASSESSMENT YEARS AND SAME READ AS UNDER: ITAS NO/MUM//-AY-2005-06, /MUM//- AY-2006-07, /MUM/ -AY-2007-08 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE TH AT LEGAL SANCTITY OF LAW, THE INTEREST CHARGEABLE U/S. 234A,234B & 234C IS NOT ONLY CONSEQUENTIAL BUT IS MANDATORY IN NATURE. 2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE TH AT THE SPECIAL COURT ACT, 1992 HAS NOT RULED OUT THE PROVI SIONS OF SECTION 234A, 234B & 234C BEING NOT APPLICABLE TO THE NOTIFIED PERSONS OR THEY ARE EXEM PT FROM THE LIABILITY OF PAYMENT OF INTEREST UNDER THESE SECTION OF INCOME-TAX ACT, 1961. 3.THE APPELLANT CRAVES TO LEAVE, TO ADD, TO AMEND A ND / OR TO ALTER ANY OF THE GROUNDS OF APPEAL, IF N EED BE. 4.THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROUN D STATED ABOVE, THE ORDER OF THE CIT(A)-40, MUMBAI MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER REST ORED. ITAS NO.7871/MUM/2010/-AY-2005-06, 7872/MUM/2010/- AY-2006-07, 7873/MUM/2010/-AY- 2007-08 ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL FOR THE AY.2005-06 1.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN PASSING THE ORDER U/S . 250 OF THE ACT. 2.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT ADJUDICATING T HE GROUND OF APPEAL RELATING TO THE REJECTION OF BOOKS OF ACCOUNT ON MERITS AND DISMISSING THE GROUND AS 3 ITA NO. 7497/MUM/2010 PRATIMA H. MEHTA ACADEMIC. 3.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING T HAT NO INCOME FROM ATTACHED ASSETS CAN BE ASSESSED IN T HE HANDS OF THE APPELLANT. 4.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT GRANTING RELIE F OF LIABILITY AMOUNTING TO RS.5,62,98,921/-, TOWARDS INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. 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. SIMILAR GROUNDS OF APPEALS HAVE BEEN FILED BY THE A SSESSEE FOR THE AYS.2006-07 AND 2007-08 ALSO- THE ONLY DIFFERENCE IS THE AMOUNT OF INTEREST(GROUN D NO.4).FOR THE AYS.2006-07 AND 2007-08 AMOUNT INVOLVED IS RS.6.37CRORES AND RS.7.13 CRORES RESPECTIVELY. ASSESSEE HAS ALSO FILED IDENTICAL ADDITIONAL GROUND FOR ALL THE THREE AYS.AND IT READS AS UNDER: 1.THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT AS PER THE DECISION OF HONBLE SPECIAL COURT DATED 30.04.2010 IN MP NO. 41 OF 1999, THE ASSETS UNDER C ONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS T O SHRI HARSHAD S. MEHTA AND HENCE THE INCOME ASSESSED BY THE ASSESSING OFFICER OUGHT TO HAVE BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE H ANDS OF THE APPELLANT. VIDE HER LETTERS DATED 15.07.2013 ASSESSEE MADE A R EQUEST TO ADMIT THE ABOVE MENTIONED ADDITION GROUND. WE FIND THAT SIMILAR ADDITIONAL GROUND WAS RAISED IN THE CASE OF SH.HITESH S MEHTA FOR THE AY.1994-95,1995-96 AND 2001-02(ITA/5587TO5589/MUM/2 011,5068/MUM/2011 AND 5867- 68/MUM/2011.ONE OF US,WAS PARTY TO THAT ORDER.IN TH AT ORDER ADDITIONAL GROUND WAS DEALT AS UNDER: 4. THE ASSESSEE HAS ALSO FILED AN APPLICATION DATED 27 -5-2010 FOR ADMITTING THE FOLLOWING GROUND :- 1. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT AS PER THE DECISION OF HONBLE SPECIAL COURT DATED 30.04.2010 IN M.P. NO.4 1 OF 1999, THE ASSETS UNDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEH TA 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 APPELLANT. 5. AFTER GOING THROUGH THE ADDITION GROUND FILED BY TH E ASSESSEE, WE NOTED THAT THE GROUND IS LEGAL GROUND, WHICH DOES NOT REQUIRE ANY NEW FACTS TO BE BROUGHT ON RECORD. IN VIEW OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT, REPORL:ED IN (1998) 229 ITR 383, THE LEGAL GROUND CAN BE ADMITTED, IF NO NEW FACTS A RE TO BE BROUGHT ON RECORD.HOWEVER, AFTER GOING THROUGH THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR ALL THE ASSESSMENT YEARS INVOLVED HERE BEFORE U S, WE FOUND THAT THE GROUND IS FULLY ACADEMIC IN NATURE FOR THE REASON THAT IF THE HONBTE SUPREM E COURT DECIDES SOMETHING THAT HAS TO BE FOLLOWED WITHOUT ANY DISPUTE.THE DECISION OF THE HO NBLE APEX COURT IS LAW OF LAND, WHICH HAS TO BE FOLLOWED BY EVERY AUTHORITY THEREFORE IN OUR VIEW, NO DIRECTION IS TO BE REQUIRED TO BE GIVEN TO THE AO IN THIS RESPECT BECAUSE IF THE HON BLE APEX COURT DECIDES THAT ALL THE INCOME BELONGS TO SHRI HARSHAD S. MEHTA, THEN THE INCOME H AS TO BE ASSESSED IN THE HANDS OF SHRI HARSHAD S. MEHTA, NOT IN THE HANDS OF ANY OTHER PER SON.THEREFORE, IN OUR VIEW, THERE IS NO NEED TO ISSUE ANY DIRECTION AS THE DECISION OF THE HONB LE SUPREME COURT HAS TO BE FOLLOWED IN ANY CASE,ACCORDINGLY BY ADMITTING THE GROUNDS RAISED BY THE ASSESSEE FOR ALL THE YEARS,WE TREAT THE SAME AS ACADEMIC IN NATURE. FOLLOWING THE ABOVE WE ADMIT THE ADDITIONAL GROUND FOR ALL THE YEARS-TREATING THE SAME AS ACADEMIC IN NATURE. DETAILS OF DATES OF FILING OF RETURNS,INCOMES RETUR NED,DATES OF ASSESSMENT,ASSESSED INCOMES, DATES OF ORDERS OF THE CIT(A)CAN BE SUMMARISED AS UNDER : 4 ITA NO. 7497/MUM/2010 PRATIMA H. MEHTA DT.OF FILING OF RETURN RETURNED INCOME (RS.) DATE OF ASSESSMENT ASSESSED INCOME DT. OF ORDERS OF CIT(A) AY2005-06 31.08.2005 (-)1,84,33,754 26.11.2007 3,78 ,65,170/- 31.08.2010 AY2006-07 29.07.2006 80,34,594 17.11.2008 7,91,57,6 10/- 31.08.2010 AY2007-08 31.07.2007 (-)1,02,30,808 16.12.2009 6,12 ,00,180/- 31.08.2010 ITAS NO.7501/MUM/2010/-AY2005-06,7497/MUM/2011-AY.2 006-07,7499/MUM/2011-AY-2007-08 2. FIRST WE WILL TAKE UP THE APPEALS FILED BY THE AO.T HE EFFECTIVE GROUND OF APPEAL IS ABOUT CHARGING OF INTEREST U/S 234A,234B AND 234C OF THE ACT.WHILE PASSING THE ASSESSMENT ORDER FOR THE AY.2005-06,THE AO HAD CHARGE INTEREST AS PER TH E PROVISIONS OF SECTION 234 OF THE ACT. 2.1. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY (FAA).BEFORE HIM ASSESSEE SUBMITTED THAT SHE WAS A NOTIFIED ENTITY UNDER THE PROVISIONS OF SPECIAL COURT ACT, THAT NO INTEREST U/S.234A, 234B & 234C OF THE ACT COULD BE CHARGED I N HER CASE,THAT THE BANK ACCOUNT OF THE ASSESSEE WERE OPERATED UNDER THE DIRECTIONS OF THE SPECIAL COURT,THAT THE PROVISIONS OF SPECIAL COURT HAD OVERRIDING EFFECT OVER THE INCOME TAX ACT , THAT ALL THE ASSETS WERE UNDER THE CONTROL OF THE CUSTODIAN,THAT THE APPELLANT COULD NOT HAVE PAI D THE ADVANCE TAX UNLESS DIRECTED BY THE SPECIAL COURT,THAT THE ASSESSEE DID NOT HAVE CONTROL OVER I TS INCOME/ASSETS,THAT SHE COULD NOT BE PENALISED FOR NON-PAYMENT OF ADVANCE TAX.AFTER CONSIDERING TH E SUBMISSIONS OF THE ASSESSEE AND THE ORDER PASSED BY THE MUMBAI TRIBUNAL IN THE CASE OF M/S.OR IENT TRAVEL PVT. LTD.(ITA NO. 6868/MUM/2008-AY 2004-05),PALLVI HOLDING,TOPAZ HOLD ING AND HARSH ESTATE PVT. LTD. AND OTHER CASES OF HARSHAD MEHTA GROUP, HE HELD THAT AS SESSEE DID NOT HAVE CONTROL OVER THE HER FUNDS/ASSETS,THAT SHE COULD NOT BE HELD AS DEFAULTE R FOR FAILURE IN PAYMENT OF ADVANCE TAX.ACCORDINGLY, HE DIRECTED THE AO TO DELETE THE I NTEREST LEVIED U/S 234 OF THE ACT. 2.2. BEFOREUS,DEPARTMENTAL REPRESENTATIVE(DR)RELIED UPON THE ORDER OF THEAO.AUTHORISED REPRESENTATIVE (AR)SUBMITTED THAT SAME ISSUE HAD AR ISEN IN THE CASE OF SH.HITESH MEHTA FOR THE AY 2005-06,THAT SAID GROUND WAS SET ASIDE TO THE FI LE OF THE FAA FOR RE-ADJUDICATION BY THE TRIBUNAL (ITA/ 772/ MUM/2000-01-ORDER DATED 26.04.2 013). 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT IDENTICAL ISSUE IN THE CASE OF SH.HITESH MEHTA,HUSBAND OF THE ASSESSEE,HAS BEEN REMANDED BACK TO THE FILE OF THE FAA FOR THE AY 2005-06.RESPECTFULLY FOLLOWING T HE SAME, WE REMIT BACK THE ISSUE TO THE FAA FOR RE-ADJUDICATION. APPEAL FILED BY THE AO STANDS PARTLY ALLOWED. 2.3.1. SIMILAR ISSUE OF DELETING THE INTEREST LEVIED U/S.2 34A,234B & 234C HAS BEEN AGITATED BY THE AO FOR THE AY 2006-07 AND 2007-08 ALSO.FOLLOWING TH E ORDER FOR THE AY 2005-06,MATTER IS REMITTED BACK TO THE FILE OF THE FAA FOR BOTH THE A YS. APPEALS OF THE AO, FOR AYS.2006-07 AND 2007-08, ARE ALLOWED IN PART. ITAS NO.7871/MUM/2010/-AY2005-06, 7872/MUM/2011-AY. 2006-07, 7873/MUM/2011-AY-2007-08 3. NOW WE WILL LIKE TO TAKE THE APPEALS FILED BY THE A SSESSEE.BEFORE US,AR OF THE ASSESSEE DID NOT PRESS GROUNDS 1TO3 FOR ALL THE THREE AYS.,HENCE SAM E STAND DISMISSED AS NOT PRESSED. 3. 1.GROUND NO.4 IS ABOUT DISALLOWANCE OF INTEREST OF RS.5.62 CRORES,RS 6.37CRORES AND RS.13 CRORES.IT WAS BROUGHT TO OUR NOTICE THAT IDENTICAL ISSUE WAS DECIDED BY THE TRIBUNAL IN THE CASE OF THE HUSBAND OF THE ASSESSEE,SH.HITESH S MEHTA FOR A Y.1994-95 AND 2005-06.VIDE ORDER 5 ITA NO. 7497/MUM/2010 PRATIMA H. MEHTA DATED.12.06.2013(ITA/5587-89/MUM/ 2011) AND ORDER D ATED 26.04.2013(ITA/7726/MUM/2010).WHILE GOING THROUGH T HE SAID ORDERS OF THE TRIBUNAL WE FIND THAT THE ISSUE HAD BEEN SET ASIDE TO THE FILES OF T HE FAA FOR FRESH ADJUDICATION. FOLLOWING THE SAME WE REMIT BACK THE MATTER TO THE FILE OF THE AO. APPEALS FILED BY THE ASSESSEE FOR ALL THE THREE AYS .ARE ALLOWED IN PART. AS A RESULT,APPEALS OF THE AO AND THE ASSESSEE STAN D PARTLY ALLOWED. * 3 $*+ . 4 $*+ - 5 2 3 ' !6 - !+ 78. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND AUGUST,2013 . '2 - /0% ' 5 9$ 2 VXLR , 2013 0 - 1 : SD/- SD/- ( . ; ; ; ; . . B.R.MITTAL ) ( !'# !'# !'# !'# / RAJENDRA ) / JUDICIAL MEMBER ' ' ' ' /ACCOUNTANT MEMBER / MUMBAI, 9$ /DATE: 2 ND AUGUST,2013 SK '2 '2 '2 '2 - -- - (+< (+< (+< (+< ='<%+ ='<%+ ='<%+ ='<%+ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / &' 2. RESPONDENT / ()&' 3. THE CONCERNED CIT (A) / > ? , 4. THE CONCERNED CIT / > ? 5. DR C BENCH, ITAT, MUMBAI / <@1 (+$ , . . . 6. GUARD FILE/ 1 A )<+ )<+ )<+ )<+ (+ (+(+ (+ //TRUE COPY// '2$ / BY ORDER, B / 7 ! DY./ASST. REGISTRAR , /ITAT, MUMBAI