EMINENT HOLDINGS P.LTD, MUMBAI V. ASST CIT CEN CIR 31, MUMBAI

ITA 90/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4273 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 07-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 03-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Assessee Lawyers: DHARMESH SHAHAR
• Keywords: Opportunity of being heard
• Section: 115JB

Judgement Text

1 , INCOME TAX APPELLATE TRIBUNAL,MUMBAI E BENCH , ,, , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & SANDEEP GOSAIN,JUDICIAL MEMBER /.ITA NO.90/MUM/2013, ! /ASSESSMENT YEAR-2008-09. M/S. EMINENT HOLDINGS PVT. LTD. 32, MADHULI, 3 RD FLOOR, DR. ANNIE BESANT ROAD NEHRU CENTRE, WORLI,MUMBAI-18. PAN: AAACE 3115 N VS ACIT- CENTRAL CIRCLE-31 ROOM NO.409, AAYAKAR BHAVAN, M.K. ROAD MUMBAI. ( / APPELLANT) ( /RESPONDENT) '# /ASSESSEE BY : SHRI DHARMESH SHAH-AR / REVENUE BY : DR. P. DANIEL- (DR) / DATE OF HEARING : 04-11 -2015 / DATE OF PRONOUNCEMENT : 01.01.2016 , 1961 1961 1961 1961 254 254 254 254( (( (1 11 1) )) ) %&# ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DT.19.11.2012 OF CIT(A)-2012, THE ASSESSEE HAS FILED THE PRESENT APPEAL RAISING SEVEN GROUNDS OF APPEAL.VIDE ITS LETTER DT .15.2.2014 THE ASSESSEE HAS RAISED ONE ADDITIONAL GROUND ALSO. 2. DURING THE COURSE OF HEARING BEFORE US, THE AUTHORI SED REPRESENTATIVE (AR) STATED THAT THE ASSESSEE WAS NOT INTERESTED IN PURSUING GROUND NO.1 -3 AND THE ADDITIONAL GROUND NO.5 FOR THE YEAR UNDER CONSIDERATION.THEREFORE, SAME STANDS DIS MISSED AS NOT PRESSED.IT WAS ALSO STATED THAT GROUND NO.6 WAS CONSEQUENTIAL TO GROUND NO.5. 3. GROUND NO.4 DEALS WITH NOT GRANTING RELIEF TOWARD I NTEREST EXPENDITURE OF RS.5,14,455/-.DURING THE COURSE OF HEARING BEFORE US, REPRESENTATIVES O F BOTH THE SIDES AGREED THAT THE ISSUE HAS ARISEN IN THE HARSHAD S. MEHTA, (HSM) GROUP ON MANY OCCASI ONS AND THAT THE TRIBUNAL, HAD DECIDED THE IDENTICAL ISSUE IN THE CASE OF THE INDIVIDUAL OF TH E GROUP AS WELL AS THE CORPORATE ENTITIES OF THE GROUP.WE FIND THAT THE TRIBUNAL HAD RESTORED BACK T HE ISSUE TO THE FILE OF THE AO IN ALL SUCH CASES. 3.1. WE FIND THAT WHILE DECIDING THE APPEAL IN THE CASE OF ATUR HOLDING PVT. LTD.(ITA/8481/ MUM/2010 AY07-08 DT.23.9.2015) THE TRIBUNAL HAS DE CIDED THE ISSUE AS UNDER : 3.IT LEAVES US WITH GROUND NO.5 WHICH DEALS WITH DI SALLOWANCE OF INTEREST EXPENDITURE OF RS. 69.40 LAKHS.DURING THE COURSE OF HEARING BEFORE US, REPRESENTATIVES OF BOTH THE SIDES AGREED THAT THE ISSUE HAS ARISEN IN THE HARSHAD S. MEHTA(HSM) G ROUP ON MANY OCCASIONS AND THAT THE TRIBUNAL HAD DECIDED THE IDENTICAL ISSUE IN THE CAS ES OF THE INDIVIDUAL OF THE GROUP AS WELL AS THE CORPORATE ENTITIES OF THE GROUP.WE FIND THAT THE TR IBUNAL HAS RESTORED BACK THE ISSUE TO THE FILE OF THE AO IN ALL SUCH CASES. WE WOULD LIKE TO REPRODUC E THE RELEVANT PORTION OF THE CASE OF PRATIMA H MEHTA,ONE OF THE MEMBERS OF THE HSM GROUP,TO WHIC H ONE OF US WAS PARTY (ITA/350/ MUM/ 2013(AY-2009-10 DT. 11.5.2015).IN THAT MATTER THE T HIRD GROUND OF APPEAL READ AS UNDER : THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERR ED IN LAW AND IN FACTS IN NOT GRANTING ITA90/M/13 2 DEDUCTION OF LIABILITY AMOUNTING TO RS.9,3587628/- TOWARDS INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. THE TRIBUNAL DECIDED THE CASE AS UNDER : '2. ... GROUND NO.3 WAS STATED TO BE COVERED BY THE EARLIER DECISION OF THE TRIBUNAL IN GROUP CASE. REFERENCE WAS MADE TO THE DECISION DATED 5/3/2015 PASSED IN ITA NO. 5135& ITA/8481/M/1 0;8352/10 ,AATUR HOLDINGS P.LTD. 3 5136/MUM/2012 & ITA NOS.2151/MUM/2013 IN THE CASE O F GROWMORE LEASING & INV. LTD. AND REFERENCE WAS MADE TO THE FOLLOWING OBSERVATIONS: ' 3. GROUND NO. 4 RELATES TO THE DISALLOWANCE OF INTEREST EXPENSE. THE LD. COUNSEL FOR THE ASSESS EE BROUGHT TO OUR NOTICE THAT THE DECISION RELIED UPON BY THE LD. CIT(A) WHILE DISPOSING THIS GROUND HAS BEEN SET ASIDE BY THE TRIBUNAL TO THE FILE OF THE LD. CIT(A). 4. THE LD. DEPARTMENTAL REPRESEN TATIVE COULD NOT BRING ANY DISTINGUISHING DECISION IN FAVOUR OF THE REVENUE. 5. WE HAVE CAREF ULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WHILE DISPOSING THE GROUND RELATING TO THE D ISALLOWANCE OF INTEREST,WE FIND THAT THE LD. CIT(A) HAS FOLLOWED THE FINDINGS GIVEN IN THE CASE OF EMINENT HOLDINGS PVT. LTD. WE FIND THAT THE TRIBUNAL IN THE CASE OF EMINENT HOLDINGS IN ITA NOS . 2139, 2140 AND 2141/MUM/2013 HAVE FOLLOWED THE DECISION OF THE TRIBUNAL GIVEN IN COMM ON GROUP CASE OF HITESH S. MEHTA AT PARA 2.3 OF THE ORDER AND RESTORED THE MATTER TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION. RESPECTFULLY FOLLOWING THE FINDINGS OF THE CO ORDIN ATE BENCH, WE RESTORE THIS ISSUE TO THE FILES OF THE LD. CIT(A) FOR FRESH ADJUDICATION AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. BEFORE CLOSING THIS ISSUE, THE LD. COU NSEL FOR THE ASSESSEE POINTED OUT THAT THE LD. CIT(A) HAS HELD THAT THE ISSUE OF INTEREST EXPENDIT URE IS PENDING BEFORE THE HON'BLE SPECIAL COURT. IT IS THE SAY OF THE LD. COUNSEL THAT THE PR OCEEDINGS IN WHICH THE SAID ISSUE OF INTEREST WAS ISSUED BY THE CUSTODIAN HAVE BEEN ALREADY CONCLUDED WHICH FACT HAS ALREADY BEEN RECORDED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. WE, THEREFORE,DIR ECT THE LD. CIT(A) TO CONSIDER THIS FACT WHILE DECIDING THE ISSUE AFRESH. THE LD. CIT(A) MAY ALSO DIRECT FOR THE TAXING OF INCOME IN THE HANDS OF THE RECIPIENT (FAMILY MEMBERS) IN ACCORDANCE WITH T HE METHOD OF ACCOUNTING FOLLOWED BY THEM AND AS PER THE PROVISIONS OF THE LAW. GROUND NO. 4 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE.' 3. LD. SPECIAL COUNSEL DID NOT CONTROVERT TO SUCH C ONTENTION OF LD. AR THAT THE ISSUE IS COVERED BY THE AFOREMENTIONED DECISION. 4. IN VIEW OF THE SITU ATION, AFTER HEARING BOTH THE PARTIES, WE PASS SIMILAR ORDER AND THIS GROUND IS CONSIDERED TO BE A LLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID.' FOLLOWING THE ABOVE, WE PASS SIMILAR OR DER. GROUND NO.4 IS ALLOWED FOR STATISTICAL PURPOSES FOR BOTH THE YEARS. FOLLOWING THE ABOVE,W E ALLOW GROUND NO.5 FOR STATISTICAL PURPOSES FOR THE YEAR UNDER APPEAL. GROUND NO.6 CONSEQUENTIA L IN NATURE,HENCE IS NOT BEING ADJUDICATED. 4. IT LEAVES US WITH GROUND NO.5 WHICH DEALS WITH DISA LLOWANCE OF INTEREST EXPENDITURE OF RS. 69.40 LAKHS.DURING THE COURSE OF HEARING BEFORE US, REPRESENTATIVES OF BOTH THE SIDES AGREED THAT THE ISSUE HAS ARISEN IN THE HARSHAD S. MEHTA(HSM) G ROUP ON MANY OCCASIONS AND THAT THE TRIBUNAL HAD DECIDED THE IDENTICAL ISSUE IN THE CAS ES OF THE INDIVIDUAL OF THE GROUP AS WELL AS THE CORPORATE ENTITIES OF THE GROUP.WE FIND THAT THE TR IBUNAL HAS RESTORED BACK THE ISSUE TO THE FILE OF THE AO IN ALL SUCH CASES. WE WOULD LIKE TO REPRODUC E THE RELEVANT PORTION OF THE CASE OF PRATIMA H. MEHTA,ONE OF THE MEMBERS OF THE HSM GROUP,TO WHI CH ONE OF US WAS PARTY (ITA/350/ MUM/ 2013(AY-2009-10 DT. 11.5.2015).IN THAT MATTER THE T HIRD GROUND OF APPEAL READ AS UNDER : THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HA S ERRED IN LAW AND IN FACTS IN NOT GRANTING DEDUCTION OF LIABILITY AMOUNTING TO RS.9,3587628/- TOWARDS INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. THE TRIBUNAL DECIDED THE CASE AS UNDER : '2. ... GROUND NO.3 WAS STATED TO BE COVERED BY TH E EARLIER DECISION OF THE TRIBUNAL IN GROUP CASE. REFERENCE WAS MADE TO THE DECISION DATED 5/3/ 2015 PASSED IN ITA NO. 5135& 5136/MUM/2012 & ITA NOS.2151/MUM/2013 IN THE CASE O F GROWMORE LEASING & INV. LTD. AND REFERENCE WAS MADE TO THE FOLLOWING OBSERVATIONS: ' ITA90/M/13 3 3. GROUND NO. 4 RELATES TO THE DISALLOWANCE OF INTE REST EXPENSE. THE LD. COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THAT THE DECISION RELIED UPON BY THE LD. CIT(A) WHILE DISPOSING THIS GROUND HAS BEEN SET ASIDE BY THE TRIBUNAL TO THE FILE OF T HE LD. CIT(A). 4. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BRING ANY DISTINGUISHING D ECISION IN FAVOUR OF THE REVENUE. 5. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BEL OW. WHILE DISPOSING THE GROUND RELATING TO THE DISALLOWANCE OF INTEREST,WE FIND THAT THE LD. CIT(A ) HAS FOLLOWED THE FINDINGS GIVEN IN THE CASE OF EMINENT HOLDINGS PVT. LTD. WE FIND THAT THE TRIBUNA L IN THE CASE OF EMINENT HOLDINGS IN ITA NOS. 2139, 2140 AND 2141/MUM/2013 HAVE FOLLOWED THE DECI SION OF THE TRIBUNAL GIVEN IN COMMON GROUP CASE OF HITESH S. MEHTA AT PARA 2.3 OF THE OR DER AND RESTORED THE MATTER TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION. RESPECTFULLY FOL LOWING THE FINDINGS OF THE CO ORDINATE BENCH, WE RESTORE THIS ISSUE TO THE FILES OF THE LD. CIT(A ) FOR FRESH ADJUDICATION AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. BEFO RE CLOSING THIS ISSUE, THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE LD. CIT(A) HAS HELD T HAT THE ISSUE OF INTEREST EXPENDITURE IS PENDING BEFORE THE HON'BLE SPECIAL COURT. IT IS THE SAY OF THE LD. COUNSEL THAT THE PROCEEDINGS IN WHICH THE SAID ISSUE OF INTEREST WAS ISSUED BY THE CUSTOD IAN HAVE BEEN ALREADY CONCLUDED WHICH FACT HAS ALREADY BEEN RECORDED BY THE LD. CIT(A) IN THE IMPU GNED ORDER. WE, THEREFORE,DIRECT THE LD. CIT(A) TO CONSIDER THIS FACT WHILE DECIDING THE ISS UE AFRESH. THE LD. CIT(A) MAY ALSO DIRECT FOR THE TAXING OF INCOME IN THE HANDS OF THE RECIPIENT (FAMILY MEMBERS) IN ACCORDANCE WITH THE METHOD OF ACCOUNTING FOLLOWED BY THEM AND AS PER TH E PROVISIONS OF THE LAW. GROUND NO. 4 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE.' 3. LD. SPECIAL COUNSEL DID NOT CONTROVERT TO SUCH C ONTENTION OF LD. AR THAT THE ISSUE IS COVERED BY THE AFOREMENTIONED DECISION. 4. IN VIEW OF THE SITUATION, AFTER HEARING BOTH THE PARTIES, WE PASS SIMILAR ORDER AND THIS GROUND IS CONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES I N THE MANNER AFORESAID.' FOLLOWING THE ABOVE, WE PASS SIMILAR ORDER. GROUND NO.4 IS ALLOWED FOR STATISTICAL PURPOSES FOR BOTH THE YEARS. FOLLOWING THE ABOVE,WE ALLOW GROUND NO.5 FOR STATIS TICAL PURPOSES FOR THE YEAR UNDER APPEAL. GROUND NO.6 CONSEQUENTIAL IN NATURE,HENCE IS NOT BE ING ADJUDICATED. 5. NEXT GROUND OF APPEAL IS ABOUT CALCULATING BOOK PRO FIT AS PER 115JB OF THE ACT AMOUNTING TO RS. 26.34 LACS. BEFORE US, THE AR AND THE DR AGREED THAT IDENTICAL ISSUE FOR THE AY 07-08 (ITA 8200/M/2010 DT.12.2.14) WAS RESTORED BACK TO THE FI LE OF THE FIRST APPELLATE AUTHORITY (FAA) FOR FRESH ADJUDICATION. FOLLOWING THE ABOVE ORDER THE I SSUE IS SET ASIDE TO THE FILE OF THE FAA. AS STATED GROUND NO.6 IS CONSEQUENTIAL TO GROUND NO .5 AND HENCE IT IS NOT BEING ADJUDICATED SEPARATELY. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST JANUARY, 2016. 01 , 2016 SD/- SD/- ( / SANDEEP GOSAIN) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /MUMBAI, /DATE: 01.01.2016. . . . .. . JV.SR.PS. ITA90/M/13 4 (# )!# / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ #& '( , 4. THE CONCERNED CIT / #& '( 5. DR A BENCH, ITAT, MUMBAI / $* , , . . . 6. GUARD FILE/ - //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.