FORTUNE HOLDINGS P.LTD, MUMBAI V. DCIT CEN CIR 31, MUMBAI

ITA 8201/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75464 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 16-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 26-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Section: 234B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F B ENCH, MUMBAI , , !' #$% , !& ! ' BEFORE SHRI VIJAY PAL RAO , JM AND SHRI N.K. BIL LAIYA, AM ./ I.T.A. NO.8201/MUM/2010 ( ( ( ( ( / ASSESSMENT YEAR : 2007-08 M/S. FORTUNE HOLDINGS PVT. LTD., 32, MADHULI, 3 RD FLOOR, DR. A.B. ROAD, WORLI, MUMBAI-400 018 / VS. THE ACIT,CC-31 CENTRAL RANGE-7, AAYAKAR BHAVAN, MUMBAI-400 020 ./ I.T.A. NO.8347/MUM/2010 ( ( ( ( ( / ASSESSMENT YEAR : 2007-08 THE ACIT,C.C- 31 CENTRAL RANGE-7, AAYAKAR BHAVAN, MUMBAI-400 020 / VS. M/S. FORTUNE HOLDINGS PVT. LTD., 32, MADHULI, 3 RD FLOOR, DR. A.B. ROAD, WORLI, MUMBAI-400 018 ) !& ./ * ./ PAN/GIR NO. : AAACF 2166P ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . ! / REVENUE BY: SHRI DR. P. DANIEL ,-)+ / . ! / ASSESSEE BY: SHRI DHARMESH SHAH / 01& / DATE OF HEARING : 29.01.2014 23( / 01& / DATE OF PRONOUNCEMENT :29.01.2014 !4 / O R D E R PER BENCH: THESE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE VERY SAME ORDER OF THE LD. CIT(A)-40, M UMBAI DT.10.09.2010 ITA NOS.8201 & 8347/M/2010. 2 PERTAINING TO A.Y. 2007-08. BOTH THESE APPEALS WER E HEARD TOGETHER AND DISPOSE OF BY THIS COMMON ORDER FOR THE SAKE OF CON VENIENCE AND BREVITY. 2. AT THE VERY OUTSET, THE REPRESENTATIVES OF BOTH SIDES AGREED THAT THE GRIEVANCE RAISED IN THE APPEALS OF THE RESPECTIVE P ARTIES HAVE BEEN SETTLED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF SHR I HITESH S. MEHTA IN ITA NOS. 9158/M/20, 972/M/11, 207/M/11 & 9159/M/10 WHICH IS ALSO PART OF THE HARSHAD MEHTA GROUP OF CASES. 3. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE ORDER OF THE TRIBUNAL REFERRED TO BY BOTH PART IES. 4. SINCE THE LD. COUNSEL FOR THE ASSESSEE HAS NOT P RESSED GROUND NO. 1,2 & 3 IN ASSESSEES APPEAL, THE SAME ARE DISMISSE D AS NOT PRESSED. 5. GRIEVANCE RAISED VIDE GROUND NO. 4 & 5 AND THE A DDITIONAL GROUND ARE IDENTICAL TO THE GRIEVANCE RAISED IN ITA NO. 91 58/M/2010. WE FIND THAT THE TRIBUNAL HAS CONSIDERED THE SAME AT PARA-4 TO 10 ON PAGE-4 TO 6 OF ITS ORDER AND HAS ACCORDINGLY DECIDED AS UNDER: THIS ISSUE HAS BEEN CONSIDERED BY THE LD. CIT(A) A T PARA-9 ON PAGE-5 OF HIS ORDER AND AT PARA 9.3.2 THE LD. CI T(A) OBSERVED THAT THE FACTS ARE IDENTICAL TO THE FACTS IN THE P RESENT CASE OF THE ASSESSEE FOR A.Y. 2005-06. THE LD. CIT(A) WENT O N TO FOLLOW THE FINDINGS GIVEN BY HIS PREDECESSOR FOR A.Y. 2005-06. THE LD. COUNSEL SUBMITTED THAT IN A.Y. 2005-06, THE TRIBUNAL IN ITA NO. 7726 & 7727/M/2010 HAS RESTORED THIS ISSUE TO THE FILES OF THE LD. CIT(A) TO ADJUDICATE AFRESH ALONG WITH THE ADJUDICATION OF THE OTHER GROUNDS PERTAINING TO THE REJECTION/RELIABILITY OF THE BOOKS OF ACCOUNT. NO D ISTINGUISHING FACTS HAVE BEEN BROUGHT ON RECORD BY THE LD. DEPARTMENTAL REPRESENTATIVE. AFTER CAREFULLY PERUSING THE ORDER OF THE LD. CIT(A ), WE FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 IN ITA ITA NOS.8201 & 8347/M/2010. 3 NO. 7726 & 7727/M/10 AT PARA-5 ON PAGE-4 OF ITS ORD ER HAS HELD AS UNDER: GROUND NO. 4 RELATES TO THE ACTION OF THE LD.CIT(A ) IN CONFIRMING THE LIABILITIES AMOUNTING TO RS.11,24,9 9,052/- AND RS.12,61,36,245/- RESPECTIVELY FOR THE A.YS 2005-06 AND 2006- 07 TOWARDS INTEREST EXPENDITURE CLAIMED BY THE ASSE SSEE. 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 PROPOSED ADJUDICATION OF THE LD.CIT(A) IN VIEW OF T HE SAID DIRECTION MAY HAVE DIRECT IMPACT ON THE ISSUE OF TH E IMPUGNED LIABILITY, WE SET ASIDE THIS ISSUE ALSO TO THE FILE S OF THE LD.CIT(A) TO ADJUDICATE AFRESH ALONG WITH THE ADJUDICATION OF THE RESPECTIVE GROUND PERTAINING TO THE REJECTION/RELIA BILITY OF THE BOOKS OF ACCOUNTS. RESPECTFULLY FOLLOWING THE FINDINGS OF THE TRIBUNAL THIS ISSUE IS RESTORED BACK TO THE FILES OF THE AO TO FOLLOW T HE DIRECTIONS OF THE TRIBUNAL IN A.Y. 2005-06 AND 2006-07 AS MENTIONED HEREINABOVE. GROUND NO. 4 IS ALLOWED FOR STATISTICAL PURPOSES. . THE ADDITIONAL GROUND RAISED BY THE ASSESSEE READ S AS UNDER: THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT AS PER THE DECISION OF HONBLE SPECIAL COURT DT. 30.4.2010 IN MP. NO. 41 OF 1999, THE ASSETS UNDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEH TA AND HENCE THE INCOME ASSESSED BY THE AO OUGHT TO HAVE B EEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE HANDS OF THE APPELLANT. SIMILAR ISSUE CAME UP FOR CONSIDERATION IN ASSESSEE S OWN CASE FOR A.Y. 1994-05. WE FIND THAT THE TRIBUNAL IN ITA NO. 5587 TO 5589/M/2011 AT PARA-4 ON PAGE-4 OF ITS ORDER HAS CO NSIDERED A SIMILAR GROUND WHEREIN THE TRIBUNAL AT PARA-5 HAS H ELD AS UNDER: AFTER GOING THROUGH THE ADDITION GROUND FILED BY THE ASSESSEE, WE NOTED THAT THE GROUND IS LEGAL GRO UND, 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, REPORTED IN (1998) 229 ITR 383 , THE LEGAL GROUND CAN BE ADMITTED, IF NO NEW FACTS ARE TO BE BROUGHT ON RECORD. HOWEVER, AFTER GOING THROUGH THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR ALL THE ASSESSMEN T YEARS INVOLVED HERE BEFORE US, WE FOUND THAT THE GR OUND ITA NOS.8201 & 8347/M/2010. 4 IS FULLY ACADEMIC IN NATURE FOR THE REASON THAT IF THE HONBLE SUPREME COURT DECIDES SOMETHING THAT HAS TO BE FOLLOWED WITHOUT ANY DISPUTE. THE DECISION OF THE H ONBLE APEX COURT IS LAW OF LAND, WHICH HAS TO BE FOLLOWED BY EVERY AUTHORITY. THEREFORE, IN OUR VIEW, NO DIRECTI ON IS TO BE REQUIRED TO BE GIVEN TO THE AO IN THIS RESPECT B ECAUSE IF THE HONBLE APEX COURT DECIDES THAT ALL THE INCO ME BELONGS TO SHRI HARSHAD S. MEHTA, THEN THE INCOME H AS TO BE ASSESSED IN THE HANDS OF SHRI HARSHAD S. MEHT A, NOT IN THE HANDS OF ANY OTHER PERSON. THEREFORE, IN OUR VIEW, THERE IS NO NEED TO ISSUE ANY DIRECTION AS TH E DECISION OF THE HONBLE SUPREME COURT HAS TO BE FOLLOWED IN ANY CASE. ACCORDINGLY, BY ADMITTING THE GROUNDS RAISED BY THE ASSESSEE FOR ALL THESE YEARS, WE TREAT THE SAME AS ACADEMIC IN NATURE. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ACC ORDINGLY DISMISSED AS ACADEMIC IN NATURE FOLLOWING THE OBSER VATIONS OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 1994-05 (S UPRA). RESPECTFULLY FOLLOWING THE AFORESTATED DECISION OF THE TRIBUNAL, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. SIMILARLY GRIEVANCE OF THE REVENUE IS CONSIDERED BY THE TRIBUNAL IN ITA NO. 972/M/2011 VIDE PARA-15 & 16 ON PAGE-7 & 8 OF ITS ORDER WHEREIN THE TRIBUNAL HAS HELD AS UNDER: GROUND NO. 1 (D) AND 1(E) RELATE TO CHARGING OF INT EREST U/S. 234A, 234B & 234C OF THE ACT. THE LD. DR BROUGHT TO OUR NOTICE THAT THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS DIVINE HOLDING PVT. LTD. IN INCOME TAX APPEAL NO. 3 334 OF 2010 WHICH HAS BEEN FOLLOWED BY THE TRIBUNAL IN THE CASE OF TOPAZ HOLDING PVT. LTD IN ITA NO. 7295/M/2012. WE FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT THE CHARGEABILITY OF INTEREST U/S. 234A, 2324B AND 234C OF THE ACT DOES NOT FALL WITHIN THE DOMAIN OF THE SPECIAL COURT (CONTROL OF OFFENCES RELATING TO TRANSACTIONS IN SE CURITIES) AT 1992. SINCE LEVY OF INTEREST IS MANDATORY AND IS VERY MUCH APPLICABLE IN THE CASE OF NOTIFIED PERSONS, RESPEC TFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONA L HIGH ITA NOS.8201 & 8347/M/2010. 5 COURT (SUPRA), GROUND NO. 1 (D) AND 1 (E) ARE ALLOW ED. NEEDLESS TO MENTION THAT THE LEVY OF INTEREST WOULD BE CONSEQUENTIAL. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS P ARTLY ALLOWED. RESPECTFULLY FOLLOWING THE AFORESTATED FINDINGS OF THE TRIBUNAL, THE APPEAL FILED BY THE REVENUE IS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE AND THE CROSS APPEAL FILED BY T HE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.01.2014 . !4 / 3( & ! 5 6 7 29.1.2014 3 / 8 SD/- SD/- (VIJAY PAL RAO ) (N.K. BILLAIYA) /JUDICIAL MEMBER !& / ACCOUNTANT MEMBER MUMBAI; 6 DATED 29.1.2014 . . ./ RJ , SR. PS ITA NOS.8201 & 8347/M/2010. 6 !4 !4 !4 !4 / // / ,0 ,0 ,0 ,0 9!(0 9!(0 9!(0 9!(0 / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. : ( ) / THE CIT(A)- 4. : / CIT 5. ;8 ,0 , , / DR, ITAT, MUMBAI 6. 8< / GUARD FILE. !4 !4 !4 !4 / BY ORDER, -0 ,0 //TRUE COPY// = == = / > > > > (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI