DCIT(IT)-3(2)(1), MUMBAI V. MAUSMI SA INVESTMENTS LLC (UNDER LIQUIDATION)FOR AND ON BEHALF O LIQUIDATED SUBSIDIARY MAUSMI VENTURES LIMITED, MUMBAI

MA 572/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1995 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2014-2015
• Appeal Filed On: 31-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Liquidation
• Section: 143(3); 144C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (V I RTUAL COURT) , I BENCH MUMBAI BEFORE SHRI M.BALAGANESH, AM & SHRI AMARJIT SINGH , JM MA NO.572/MUM/2019 (ARISING OUT OF ITA NO. 7026 /MUM/ 20 18 ( ASSESSMENT YEAR : 2014 - 15 ) DCIT(IT) - 3(2)(1) 16 T H FLOOR, ROOM NO.1607 AIR INDIA BUILDING NARIMAN POINT MUMBAI 400 021 VS. M/S. MAUSMI SA INVESTMENTS LLC (UNDER LIQUIDATION) (FOR AND ON BEHALF OF LIQUIDATED SUBSIDIARY MAUSMI VENTURES LIMITED), 1 ST FLOOR, WING A, CYBER TOWER 1, CYBERCITY, EBENE MAURITIU S - 72201 C/O. DELOITTE HASKINS & SELLS LLF, 28 TH FLOOR , INDIABULLS FINANCE CENTRE TOWER 3, SENAPATI BAPAT MARG, ELPHINSTONE (W) , MUMBAI - 400013 PAN/GIR NO. AAGCM0928G (APPELLANT ) .. (RESPONDENT ) REVENUE BY MS. SHREEKALA PARDESI ASSESSEE BY SHRI PARAS SAVLA DATE OF HEARING 04 / 12 /2020 DATE OF PRONOUNCEMENT 04 / 12 /2020 / O R D E R PER M. BALAGANESH (A.M) : BY VIRTUE OF THIS MISCELLANEOUS APPLICATION, THE REVENUE HAD SOUGHT TO RECALL THE ORDER PASSED BY THIS TRIBUNAL IN ITA NO.7026/MUM/2018 DATED 10/04/2019 FOR THE A.Y.2014 - 15 ON THE FOLLOWING GROUNDS: - M A NO . 572/MUM/2019 M/S.MAUSMI SA INVESTMENTS LLC 2 THE FOL LOWING SUBMISSIONS ARE PLACED BEFORE THE HONBLE TRIBUNAL FOR KIND CONSIDERATION. 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE ITAT HAS ERRED IN QUASHING THE DRAFT ASSESSMENT ORDER PASSED BY THE AO U/S. 143(3) R.W.S. 144C (1) OF THE IT. ACT WITHOUT APPRECIATING THE FACT THAT EVEN AS PER SECTION 143(3) OF THE IT. ACT, THE AO SHALL, BY AN ORDER IN WRITING, MAKE AN ASSESSMENT OF THE TOTAL INCOME OR LOSS OF THE ASSESSEE AND DETERMINE THE SUM PAYABLE BY HIM ON THE BASIS OF SUCH ASSESSMENT. THUS EVEN THE NET RESULT OF AN ASSESSMENT U/S. 143(3) IS TO DETERMINE THE EXACT TAX LIABILITY OF THE ASSESSEE WHICH MAY ARISE EITHER BY ADDITION TO ITS INCOME OR BY VARYING THE TAX RATES ON THE RETURNED INCOME' 2. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, HON'BLE ITAT HAS ERRED IN QUASHING THE ASSESSMENT ORDER PASSED BY THE3 AO U/S. 143.(3) R.W.S. 144C(13), WHEN THE ORDER PASSED BY THE AO ENHANCING THE TAX LIABILITY OF THE ASSESSEE BY FOUR TIMES WAS CLEARLY PREJUDIC IAL TO THE INTEREST OF THE ASSESSEE.' 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT PRAYS THAT THE HON'BLE ITAT OUGHT TO HAVE DECIDED THE ISSU E OF 'BENEFICIAL OWNERSHIP OF INTEREST' IN THE HANDS OF THE ASSESSEE ON MERITS. 5. 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE ITAT COULD HAVE SET ASIDE THE ORDER OF THE AO AND DIRECTED HIM TO FOLLOW THE DUE PROCEDURE U/S. 143(3) O F THE I.T. ACT AS THE DRAFT ASSESSMENT ORDER PASSED BY THE AO WAS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THE ACT, BEING PREJUDICIAL TO THE ASSESSEE, AND SUCH MISTAKE OR DEFECT WAS CURABLE U/S.292B OF THE I.T. A CT.' 6. 'THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY.' 2. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THIS TRIBUNAL IN PARA 8 OF ITS ORDER HAD OBSERVED THAT AS PER THE FACTS PREVAILING IN THIS CASE, THE RETURN ED INCOME WAS NOT VARIED BY THE LD. AO TO GET HIGHER TAX RATE APPLIED ON THE TOTAL M A NO . 572/MUM/2019 M/S.MAUSMI SA INVESTMENTS LLC 3 INCOME, HENCE, THE DISPUTE WAS ONLY ON THE APPLICATION OF HIGHER TAX RATE. THIS TRIBUNAL IN PARA 11 OF ITS ORDER HA D OBSERVED THAT ASSESSEE HEREIN IS AN ELIGIBLE ASSESSEE. HOWEVER, THERE WAS NO VARIATION IN THE INCOME OR LOSS RETURN ED WHICH IS PREJUDICIAL TO THE INTEREST OF THE ASSESSEE. ACCORDINGLY, THIS TRIBUNAL HELD THAT THE SECOND CONDITION PRESCRIBED IN SECTION 14 4C(1) OF THE ACT WAS NOT SATISFIED. THIS TRIBUNAL HAD ALSO HELD THAT IN VIEW OF NON - SATISFACTION OF THE SECOND CONDITION PRESCRIBED IN SECTION 144C(1) OF THE ACT, THE APPROACH OF THE LD. AO IN ADOPTING THE PROCEDURE PRESCRIBED IN SECTION 144C(1) OF THE ACT WAS NOT IN ACCORDANCE WITH THE MANDATE OF LAW AND ALSO BY PLACING RELIANCE ON THE DECISION OF CHENNAI TRIBUNAL IN THE CASE OF MOSBACHER INDIA LLC VS ADDL. CIT REPORTED IN 76 TAXMANN.COM 31 AND DECISION OF PUNE TRIBUNAL IN THE CASE OF DCIT VS. MAGNA INTERN ATIONAL INC IN ITA NO.2098/PUN/2016 DATED 21/01/2019 HELD THAT THE ASSESSMENT ORDER PASSED BY THE LD. AO GETS VITIATED AND QUASHED THE SAME. THIS TRIBUNAL HAD ALSO OBSERVED THAT SINCE THE LEGAL ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY QUASHING THE AS SESSMENT, THE OTHER GROUNDS RAISED BY THE ASSESSEE WOULD BE ACADEMIC IN NATURE AND ACCORDINGLY , NOT ADJUDICATED. IN THIS BACKDROP OF THESE FACTS, THE REVENUES MISCELLANEOUS APPLICATION NEED S TO BE LOOKED INTO. 3. THE LD. DR PLEADED BEFORE US THAT THE RE VENUE HAD PREFERRED AN APPEAL BEFORE THE HONBLE BOMBAY HIGH COURT AGAINST THE ORDER PASSED BY THIS TRIBUNAL AND THE SAME IS PENDING. 4. WE FIND THAT THIS TRIBUNAL HAD DECIDED ONLY THE LEGAL ISSUE BY QUASHING THE ASSESSMENT FRAMED BY THE LD. AO WHICH IS THE SUBJECT MATTER OF APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT AND THE MATTER IS NOW SUBJUDICE. HENCE, THE ADJUDICATION OF OTHER GROUNDS RAISED BY THE ASSESSEE BEFORE US WOULD BE PURELY ACADEMIC IN NATURE AS RIGHTLY M A NO . 572/MUM/2019 M/S.MAUSMI SA INVESTMENTS LLC 4 OBSERVED BY THIS TRIBUNAL WHI LE DISPOSING OFF THE ORDER ON 10/04/2019. THE REVENUE CANNOT INSIST ON THE ADJUDICATION OF THE OTHER GROUNDS RAISED BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION PROCEEDINGS AS THE ADJUDICATION OF THE SAME WOULD BE ONLY ACADEMIC IN NATURE. ACCORDINGLY, MISCELLANEOUS APPLICATION PREFERRED BY THE REVENUE DESERVES TO BE DISMISSED. 5. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 / 12 /2020 . SD/ - ( AMARJIT SINGH ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 04 / 12 / 2020 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//