TOPAZ HOLDINGS P. LTD, MUMBAI V. DCIT CEN CIR, MUMBAI

ITA 8669/MUM/2010

• Counselvise Citation: 866919914 RSA 2010
• Duration Of Justice: 3 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 22-10-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 13-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Keywords: Rejection of books of accounts; Principle of natural justice
• Section: 143(3); 115JB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI . . , . . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI R.C.SHARMA , ACCOUNTANT MEMBER ITA NO.8669/MUM/2010 (A.Y.2007-08) M/S.TOPAZ HOLDINGS PVT. LTD. 32, MADHULI, 3 RD FLOOR, DR. ANNIE BESANT ROAD, NEHRU CENTRE, WORLI, MUMBAI 400018 PAN:AAACT 5152F (APPELLANT ) VS. THE DCIT, CC-31, MUMBAI. (RESPONDENT) APPELLANT BY : SHRI DHARMESH SHAH RESPONDENT BY : DR.P.DAN IEL DATE OF HEARING : 22/10/2014 DATE OF PRONOUNCEMENT : 22 /10/2014 ORDER PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS D IRECTED AGAINST ORDER PASSED BY LD. CIT(A)-40 MUMBAI DATED 16/09/2010 FO R ASSESSMENT YEAR 2007-08. GROUNDS OF APPEAL READ AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN LAW AND IN FACTS IN PASSING THE ORDER U/S.250 OF THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE NOTICES ISSUED BY THE ASSESSING OFFICER AR E INVALID AND HENCE THE ASSESSMENT ORDER U/S. 143(3) OF THE ACT WAS ALSO VO ID AB INITIO. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN PASSING THE ORDER WITHOUT COMPLYING WITH T HE PRINCIPLES OF NATURAL JUSTICE. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT NO INCOME FROM ATTAC HED ASSETS CAN BE ASSESSED IN THE HANDS OF THE APPELLANT. ITA NO.8669/MUM/2010 (A.Y.2007-08) 2 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT GRANTING RELIEF OF LIABILITY AMOUNTING TO RS.2,39,101/-, TOWARDS INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING CALCULATION OF BOOK PROFIT U/S. 115JB AMOUNTING TO RS. 59,145/-. 2. GROUND NO.1 TO 4 WERE NOT PRESSED, HENCE, THEY ARE DISMISSED AS NOT PRESSED. 3. APROPOS GROUND NO.5 & 6 IT MAY BE MENTIONED THAT THIS ISSUE WAS DECIDED BY US VIDE ORDER DATED 21/10/2014 PASSED IN THE CASE OF ASSESSEE IN RESPECT OF ASSESSMENT YEAR 2008-09 AND 2009-10 IN I TA NO.5131 & 5132/MUM/2012 AND REFERENCE CAN BE MADE TO THE FOL LOWING OBSERVATION: 6. APROPOS GROUND NO.3 & 4 IN BOTH THE APPEALS, IT WAS SUBMITTED BY LD. AR THAT WHILE DECIDING THESE GROUNDS LD. CIT(A) HAS P LACED RELIANCE ON THE DECISION IN THE GROUP CASE OF THE ASSESSEE NAMELY M/S.EMINEN T HOLDINGS P. LTD. IN RESPECT OF ASSESSMENT YEAR 2007-08 AND FOLLOWING THE SAME H E HAS DISMISSED THESE GROUNDS. REFERENCE WAS INVITED TO PARAS 7, 7.2 AN D 8 OF THE IMPUGNED ORDER PASSED BY LD. CIT(A). IT WAS FURTHER SUBMITTED THA T THE TRIBUNAL IN THE CASE OF M/S. EMINENT HOLDINGS P. LTD. HAS RESTORED BACK THE ISSUE TO THE FILE OF LD. CIT(A). REFERENCE IN THIS REGARD WAS MADE TO THE O RDER PASSED BY THE TRIBUNAL WHICH IS DATED 12/02/2014 PASSED IN CROSS APPEALS I N ITA NO.8200/MUM/2010 AND 8353/MUM/2010 IN THE CASE OF M/S. EMINENT HOLDI NGS P. LTD. AND VICE VERSA . COPY OF THE ORDER WAS PLACED ON OUR RECOR D AND WAS ALSO GIVEN TO LD. DR. REFERENCE WAS MADE TO THE FOLLOWING PORTION OF THE SAID ORDER: 4. GROUND NO.4 & 5 ARE INTER-CONNECTED RELATING T O THE DISALLOWANCE OF INTER-CONNECTED RELATING TO THE DISALLOWANCE OF INT EREST EXPENDITURE OF RS.5,14,455/-. 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 26.04.2013, WHEREIN THE TRIBUNAL SET ASIDE THE ISSU E TO THE FILES OF CIT(A) FOR ADJUDICATION OF THE ISSUE AFRESH BY ADJUDICATIN G THE RESPECTIVE GROUND RELATING TO THE REJECTION RELIABILITY OF THE BOOKS OF ACCOUNT. PARA 5 FROM THE SAID ORDER OF THE TRIBUNAL (SUPRA) ISRELEVANT IN TH IS REGARD AND THE SAME READS AS UNDER: ITA NO.8669/MUM/2010 (A.Y.2007-08) 3 5. GROUND NO.4 RELATES TO THE ACTION OF THE LD CI T (A) IN CONFIRMING THE LIABILITIES AMOUNTING TO RS.11,24,99,052/- AND RS. 12,61,36,245/- RESPECTIVELY FOR THE AYS 2005- 06 AN D 2006-07 TOWARDS INTEREST EXPENDITURE CLAIMED BY THE ASSESSE E. 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) III VIEW OF THE SAID DIRECTION MAY HAVE DIRECT IMPACT ON THE ISSUE OF THE IMPUGNED LIABILIT Y, WE SET ASIDE THIS ISSUE TO THE FILES OF THE CIT (A) TO ADJUDICAT E AFRESH ALONG WITH THE ADJUDICATION OF THE RESPECTIVE GROUND PERTAININ G TO THE REJECTION / RELIABILITY OF THE BOOKS OF ACCOUNTS. 5. ON THE OTHER HAND, LD DR DUTIFULLY RELIED ON THE ORDER OF THE AO/CIT (A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS 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.5,14,455/- CONSTITUTES ASCERTAINED ONE OR NOT IS ALSO LINKED TO THE ISSU E OF REJECTION OF BOOKS OF ACCOUNTS AS THE BOOKS OF ACCOUNT IS THE BASIS FOR C OMPUTATION 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 (SUP RA) 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.4 SHOULD BE SET ASIDE TO THE FILES OF THE CIT (A) FOR FRESH ADJUDIC ATION OF THE ISSUE AFTER GRANTING A REASONABLE OPPORTUNITY. OF BEING HEARD T O THE ASSESSEE. THE DECISION IF ANY SHOULD BE TAKEN ONLY AFTER CONSIDER ING THE DECISION IN THE CASE OF HITESH S MEHTA, (SUPRA). ACCORDINGLY, GROUN D NOS.4 & 5 ARE SET ASIDE. 6.1 REFERRING TO ABOVE OBSERVATION IT WAS SUBMITTED BY LD. AR THAT SIMILAR ORDER MAY BE PASSED IN THE PRESENT APPEALS ALSO. 6.2 LD. DR DID NOT OBJECT TO THE SUCH SUBMISSIONS O F LD. A.R. 7. IN VIEW OF THE SITUATION AFTER HEARING BOTH THE PARTIES, RESPECTFULLY FOLLOWING THE AFOREMENTIONED DECISION OF TRIBUNAL, WE RESTORE THIS ISSUE TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION AS PER DIRECT IONS GIVEN IN THE AFOREMENTIONED ORDER. WE DIRECT ACCORDINGLY. THESE GROUNDS FOR B OTH THE YEARS ARE CONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES. IN THE MANNER AFORESAID. FOLLOWING THE AFOREMENTIONED DECISION WE PASS SIMIL AR ORDER FOR THE PRESENT APPEAL AND THESE GROUNDS ARE CONSIDERED TO BE ALLO WED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ITA NO.8669/MUM/2010 (A.Y.2007-08) 4 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED IN MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 22/10/2 014 !' # $%& 22/10/2014 ! ' SD/- SD/- ( . . /R.C.SHARMA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; $% DATED 22/10/2014 ()* ()* ()* ()* +*') +*') +*') +*') / COPY OF THE ORDER FORWARDED TO : 1. ,- / THE APPELLANT 2. (.,- / THE RESPONDENT. 3. / ( ) / THE CIT(A)- 4. / / CIT 5. *0' ()% , , / DR, ITAT, MUMBAI 6. '1 2 / GUARD FILE. % % % % / BY ORDER, .*) () //TRUE COPY// 3 33 3 / 4 4 4 4 5 5 5 5 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . % . ./ VM , SR. PS