The ITO, Ward-1(1)(4),, Ahmedabad v. Shri Mehul Pratap Asnani,, Ahmedabad

ITA 3133/AHD/2015 | 2012-2013
Pronouncement Date: 29-11-2019 | Result: Dismissed

Appeal Details

RSA Number 313320514 RSA 2015
Assessee PAN ACMPA6996R
Bench Ahmedabad
Appeal Number ITA 3133/AHD/2015
Duration Of Justice 4 year(s) 23 day(s)
Appellant The ITO, Ward-1(1)(4),, Ahmedabad
Respondent Shri Mehul Pratap Asnani,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2019
Appeal Filed By Department
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 29-11-2019
Assessment Year 2012-2013
Appeal Filed On 05-11-2015
Judgment Text
B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA ACCOUNTANT MEMBER & SMT. MADHUMITA ROY JUDICIAL MEMBER . / I.T.A. NOS. 3133/AHD/2015 & 1659/AHD/14 ( ASSESSMENT YEARS : 2012-13 & 2010-11) DCIT CIRCLE 1(1)(1) AHMEDABAD & ITO WARD 1(2) AHMEDABAD / VS. SHRI MEHUL PRATAP ASNANI 4 GARDEN ENCLAVE LAW GARDEN ELLIS BRIDGE AHMEDABAD 380006 ./ . / PAN/GIR NO. : ACMPA6996R ( APPELLANT ) .. ( / RESPONDENT ) & CROSS OBJECTION NO. 205/AHD/2015 (IN I.T.A. NO. 3133/AHD/2015) ( ASSESSMENT YEAR : 2012-13) SHRI MEHUL PRATAP ASNANI 4 GARDEN ENCLAVE LAW GARDEN ELLIS BRIDGE AHMEDABAD 380006 / VS. ITO WARD 1(1)(4) AHMEDABAD ( APPELLANT ) .. ( / RESPONDENT ) / REVENUE BY : SHRI VIDHYUT TRIVEDI SR.D.R. / ASSESSEE BY : SHRI BANDISH SOPARKAR A.R. DATE OF HEARING 29/11/2019 !'# / DATE OF PRONOUNCEMENT 29/11/2019 ITA NO. 3133/AHD/15 A/W CO NO. 205/AHD/15 & ITA NO. 1659/AHD/14 [SHRI MEHUL P. ASNANI] - 2 - / O R D E R PER BENCH: THE CAPTIONED APPEALS AND CROSS OBJECTION HAVE BEEN FILED AT THE INSTANCE OF THE REVENUE AND ASSESSEE AGAINST THE RE SPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1 & VI AHMEDA BAD (CIT(A) IN SHORT) DATED 26.08.2015 & 28.03.2014 ARISING IN TH E ASSESSMENT ORDERS DATED 13.02.2015 & 01.03.2014 PASSED BY THE ASSESSI NG OFFICER (AO) UNDER S. 143(3) OF THE INCOME TAX ACT 1961 (THE ACT) CON CERNING AYS. 2012-13 & 2010-11. 2. THE GRIEVANCES RAISED BEING COMMON BOTH THE CAS ES WERE HEARD TOGETHER AND DISPOSED OF BY COMMON ORDER. 3. THE SUBSTANTIVE GROUND OF APPEAL RAISED BY THE REVENUE IN ITA NO. 3133/AHD/2015 READS AS UNDER:- (1) THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FA CTS IN DELETING THE ADDITION OF RS.1 47 89 965/- BEING DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT DESPITE THE FACT THAT THE ASSESSEE HAD AVAILED A LOAN FROM BIO-TECH VISIO N CARE PVT. LTD. IN WHICH ONE OF ITS SHAREHOLDER HAD 94.92% SHARE HOLDING. 4. THE SUBSTANTIVE GROUND OF APPEAL RAISED BY THE REVENUE IN ITA NO. 1659/AHD/2014 READS AS UNDER:- (1) THE CIT(A) HAS ERRED IN LAW AND ON FACTS BY D ELETING THE ADDITION OF RS.1.41 CRORES TOWARDS DEEMED DIVIDEND U/S 2(22)(E) DESPITE THE FA CT THAT THE ASSESSEE HAD AVAILED HUGE ADVANCES FROM BVCPL IN WHICH THE ASSESSEE HAD SUBST ANTIAL INTEREST (SHARE HOLDING OF 94.92%). (2) THE CIT(A) HAS NOT APPRECIATED THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER AND ALSO THE FACT THAT AS PER THE PROVISIONS OF SECTION 2(22)(E) ANY ADVANCE TO A PERSON WHO IS A BENEFICIAL OWNER OF MORE THAN 10% OF SHARES IS REQU IRED TO BE TREATED AS DEEMED DIVIDEND. 5. AT THE TIME OF HEARING IT WAS SUBMITTED BY THE LD.AR FOR THE ASSESSEE THAT BOTH APPEALS FILED BY THE REVENUE ARE HIT BY RECENTLY ISSUED CBDT CIRCULAR NO.17 OF 2019 DATED 08/08/2019 REVISI NG THE PREVIOUS ITA NO. 3133/AHD/15 A/W CO NO. 205/AHD/15 & ITA NO. 1659/AHD/14 [SHRI MEHUL P. ASNANI] - 3 - THRESHOLDS PERTAINING TO TAX EFFECTS. IT IS INTER ALIA NOTICED THAT THE CBDT VIDE INSTRUCTION NO. F. NO. 279/MISC/M-93/2018-ITJ DT. 20/08/2019 HAS OBSERVED THAT CIRCULAR NO.17/2019 DATED 08/08/2019 RELATING TO ENHANCEMENT OF MONETARY LIMITS IS ALSO APPLICABLE T O ALL PENDING APPEALS. AS PER AFORESAID CIRCULAR READ WITH INSTRUCTION AL L PENDING APPEALS FILED BY REVENUE ARE LIABLE TO BE DISMISSED AS A MEASURE FOR REDUCING LITIGATION WHERE THE TAX EFFECT DOES NOT EXCEED THE PRESCRIBED MONETARY LIMIT WHICH IS NOW REVISED AT RS.50 LAKHS. IN THE INSTANT BOTH CA SES THE TAX EFFECT ON THE DISPUTED ISSUES RAISED BY THE REVENUE IS STATED TO BE NOT EXCEEDING RS.50 LAKHS AND THEREFORE BOTH APPEALS OF THE REVENUE ARE REQUIRED TO BE DISMISSED IN LIMINE . 6. THE LEARNED DR FOR THE REVENUE FAIRLY ADMITTED T HE APPLICABILITY OF THE CBDT CIRCULAR NO. 17 OF 2019. ACCORDINGLY BOT H APPEALS OF THE REVENUE ARE DISMISSED AS NOT MAINTAINABLE. HOWEVER IT WILL BE OPEN TO THE REVENUE TO SEEK RESTORATION OF ITS APPEALS ON SHOWI NG INAPPLICABILITY OF THE AFORESAID CBDT CIRCULAR IN ANY MANNER. 7. IN THE RESULT BOTH APPEALS OF THE REVENUE ARE D ISMISSED. CROSS OBJECTION NO. 205/AHD/2015 (IN ITA NO.3133/AH D/2015) - AY 2012-13) 8. THE SUBSTANTIVE GROUND OF APPEAL RAISED BY THE ASS ESSEE IN CO NO. 205/AHD/2015 READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO COMPUTE AND LEVY INTEREST U/S. 201(1A) OF THE I.T. ACT IN THE CASE OF BIOTECH VISION PVT. LTD. 9. WHEN THE MATTER WAS CALLED FOR HEARING THE LEAR NED AR FOR THE ASSESSEE REFERRED PARA 4.6 OF THE ORDER OF THE CIT( A) AND SUBMITTED THAT WHILE DEALING WITH THE ISSUE OF APPLICABILITY OF PR OVISIONS OF SECTION 2(22)(E) OF THE ACT IN THE GIVEN FACTS OF THE CASE THE CIT(A) EXCEEDED ITS MANDATE AND OBSERVED THAT INTEREST LIABILITY UNDER S.201(1A) OF THE ACT IS REQUIRED TO BE COMPUTED IN THE HANDS OF THE THIRD P ARTY I.E. BIOTECH VISION ITA NO. 3133/AHD/15 A/W CO NO. 205/AHD/15 & ITA NO. 1659/AHD/14 [SHRI MEHUL P. ASNANI] - 4 - PVT. LTD. THE LEARNED AR POINTED OUT THAT WHILE CO NCLUDING THE APPEAL OF THE ASSESSEE THE CIT(A) COULD NOT HAVE GIVEN DIREC TION FOR LEVY OF INTEREST IN THE HANDS OF THIRD PARTY EITHER UNDER S.250(6) O R UNDER S. 150(1) R.W.S. 153(6) OF THE ACT. 10. FOR THIS PROPOSITION THE LEARNED AR RELIED UPO N THE DECISION OF THE CO-ORDINATE BENCH IN ITO VS. BIOTECH OPHTHALMIC PVT. LTD. ITA NO. 443/AHD/2011 ORDER DATED 31.08.2014. 11. THE LEARNED DR FOR THE REVENUE ON THE OTHER HA ND RELIED UPON THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE ASSESSEE IS NOT AGGRIEVED AGAINST THESE DIRECTIONS AGAINST THE THIRD PARTY AN D THEREFORE THE CROSS OBJECTION SHOULD NOT LIE. 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE SOLITARY ISSUE IN THE CROSS OBJECTION IS ON THE SCOPE OF AUT HORITY OF THE CIT(A) TO GIVE FINDING OR DIRECTIONS FOR ACTION AGAINST THE T HIRD PARTY WHILE ADJUDICATING THE APPEAL OF THE PRESENT ASSESSEE. W E FIND THAT IDENTICAL ISSUE HAS BEEN EXAMINED BY THE CO-ORDINATE BENCH IN BIOTECH OPHTHALMIC PVT. LTD. (SUPRA). THE RELEVANT PORTION THEREOF IS REPRODUCED HEREUNDE R: 12. WE HAVE HEARD THE RIVAL CONTENTIONS PERU SED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 13. IN OUR CONSIDERED VIEW IT IS IMPORTANT TO FIRS T UNDERSTAND THE ROLE PLAYED BY THE FINDINGS OR DIRECTIONS OF THIS NATURE . WE ARE DEALING WITH THE ASSESSMENT YEAR 2006-07 AND THE ORDER OF THE CI T(A) WAS SERVED ON THE ASSESSING OFFICER ON 5TH JANUARY 2011. OBVIOUSL Y THE ASSESSMENT MUST HAVE ATTAINED FINALITY BY THE TIME THE ASSESS ING OFFICER CAME TO KNOW OF THESE DIRECTIONS SINCE IN TERMS OF SECTION 153(1] 'NO ORDER OF ASSESSMENT SHALL BE MADE UNDER SECTION 143 OR SECTI ON 144 AT ANY TIME AFTER THE EXPIRY OF(A) TWO YEARS FROM THE END OF T HE ASSESSMENT YEAR IN WHICH THE INCOME WAS FIRST ASSESSABLE; OR (B) ONE Y EAR FROM THE END OF THE FINANCIAL YEAR IN WHICH A RETURN OR A REVISED R ETURN RELATING TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL 1988 OR ANY EARLIER ASSESSMENT YEAR IS FILED UNDER SUB-SECTION (4) OR SUBSECTION (5) OF SECTION 139 WHICHEVER IS LATER'. NO DOUBT UNDER SECTION 153 (2A) WHEN AN ASSESSMENT IS SET ASIDE OR CANCELLED UNDER SECTI ON 250 254 263 OR 264 A FRESH ASSESSMENT AS A RESULT OF SUCH A CANCELLAT ION CAN BE FRAMED WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER UNDER SECTION 250 OR SECTION 254 IS RECEIVED BY THE COMMISSIONER OR THE ITA NO. 3133/AHD/15 A/W CO NO. 205/AHD/15 & ITA NO. 1659/AHD/14 [SHRI MEHUL P. ASNANI] - 5 - ORDER UNDER SECTION 263 OR SECTION 264 IS PASSED BY THE COMMISSIONER. HOWEVER THIS PROVISION COMES INTO PLAY ONLY WHEN T HE ORDER PASSED UNDER SECTION 250 254 263 OR 264 IN THE CASE OF THE ASS ESSE HIMSELF. THAT IS NOT THE SITUATION THAT WE ARE DEALING WITH AT PRESENT. 14. SECTION 153 (3) DEALING WITH THE IMPACT OF THE FINDINGS OR DIRECTION GIVEN BY THE REVISIONARY APPELLATE OR JUDICIAL AUT HORITIES PRESCRIBES THAT 'THE PROVISIONS OF' INTER ALIA SECTION 151(1) 'SHALL NOT APPLY TO THE ..... ASSESSMENTS REASSESSMENTS AND RECOMPUTATIONS WHICH MAY SUBJECT TO THE PROVISIONS OF SUB-SECTION (2A) BE COMPLETED AT ANY TIME WHERE THE ASSESSMENT REASSESSMENT OR RE-COMPUTATION IS MADE ON THE ASSESSE OR ANY PERSON IN CONSEQUENCE OF OR TO GIVE EFFECT TO A NY FINDING OR DIRECTION CONTAINED IN AN ORDER UNDER SECTIONS 250 254 260 262 263 OR 264 1535 OR IN AN ORDER OF ANY COURT IN A PROCEEDING OT HERWISE THAN BY WAY OF APPEAL OR REFERENCE UNDER THIS ACT'. IN OTHER WORDS WHEN EFFECT OF A FINDING OR DIRECTION OF AN REVISIONARY APPELLATE O R JUDICIAL AUTHORITY IS TO BE GIVEN THAT EXERCISE CAN BE CARRIED OUT ANY POIN T OF TIME DE HORS THE TIME LIMITS SPECIFIED IN SECTION 153(1). HOWEVER E VEN THIS RELAXATION OF TIME LIMITS IS SUBJECT TO CERTAIN RIDERS INCLUDING RIDER CONTAINED IN EXPLANATION 3 TO SECTION 153(3) WHICH PROVIDES THAT WHERE BY A REVISIONARY APPELLATE OR JUDICIAL ORDER OF THE ABO VE NATURE AN INCOME IS EXCLUDED FROM THE INCOME OF ONE ASSESSE AND HELD TO BE INCOME OF THE OTHER ASSESSES THE ASSESSMENT OF SUCH AN INCOME IN THE HANDS OF ANOTHER ASSESSE 'BE DEEMED TO BE ONE MADE IN CONSEQUENCE OF OR TO G IVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN THE SAID ORDE R PROVIDED SUCH OTHEJ PERSON WAS GIVEN AN OPPORTUNITY OF BEING HEARD BEFO RE THE SAID ORDER WAS PASSED (EMPHASIS BY UNDERLING SUPPLIED BY US).' CLEARLY THEREFORE UNLESS THE PERSON IN WHOSE HAND INCOME IS DIRECTED TO BE ADDED HAS BEEN HEARD BEFORE SUCH DIRECTIONS ARE ISSUED THE DIRECT IONS ISSUED BY THE REVISIONARY APPELLATE OR JUDICIAL AUTHORITY ARE AN EXERCISE IN FUTILITY. THIS RIDER IS EQUALLY RELEVANT IN RESPECT OF REOPEN ING OF AN ASSESSMENT UNDER SECTION 154 AS A RESULT OF THE FINDINGS OR D IRECT IONS OF THE REVISIONARY APPELLATE OR JUDICIAL AUTHORITIES. 15. IT IS AN UNDISPUTED POSITION ON THE FACTS OF T HIS CASE THAT SHRI MEHUL P ASNANI IN WHOSE HANDS CIT(A) HAS DIRECTED THIS INCOME TO HE ADDED HAS NOT BEEN PANTED AN OPPORTUNITY OF HEARIN G BY THE CIT[A) BEFORE THESE DIRECTIONS WERE ISSUED. SUCH BEING THE ADMITTED FACTS ITS BEYOND DOUBT THAT A COMPLETED ASSESSMENT CANNOT HE DISTURBED OR REOPENED TO GIVE EFFECT TO SUCH FINDINGS OR DIRECTI ONS. 16. THERE IS HOWEVER AN EVEN MORE FUNDAMENTAL ISS UE AND THAT ISSUE IS WHETHER THE DIRECTION THAT THE DEEMED DIVIDEND I NCOME BEING BROUGHT TO TAX IN THE HANDS OF SHRI ASNANI IS A DIRECTION NECE SSARY FOR THE DISPOSAL OF CASE. THIS ISSUE ASSUMES SIGNIFICANCE IN VIEW OF TH E LEGAL POSITION THAT AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF CIT VS RAJINDER NATH [(1979) 120 ITR 14 (SC)] 'AS REGARDS THE EXPRESSIO N 'DIRECTION' IN S. 153(3)(II) OF THE ACT IT IS NOW WELL SETTLED THAT IT MUST BE AN EXPRESS DIRECTION NECESSARY FOR THE DISPOSAL OF THE CASE BE FORE THE AUTHORITY OR COURT. IT MUST ALSO BE A DIRECTION WHICH THE AUTHOR ITY OR COURT IS EMPOWERED TO GIVE WHILE DECIDING THE CASE BEFORE IT .' THEIR LORDSHIPS THEN ADDED THAT 'THE EXPRESSIONS 'FINDING' AND 'DIRECTION' IN S. 153(3)(II) OF THE ACT MUST BE ACCORDINGLY CONFINED' AND THAT ' SEC. 153(3)(II) IS NOT A PROVISION ENLARGING THE JURISDI CTION OF THE AUTHORITY OR COURT.' ITA NO. 3133/AHD/15 A/W CO NO. 205/AHD/15 & ITA NO. 1659/AHD/14 [SHRI MEHUL P. ASNANI] - 6 - 17. AS TO WHAT CONSTITUTES ' AN EXPRESS DIRECTION NECESSARY FOR DISPOSAL OF A CASE ' WE FIND THE FOLLOWING GUIDANCE FROM THEIR LORDSH IPS: TO BE A NECESSARY FINDING IT MUST BE DIRECTLY INVO LVED IN THE DISPOSAL OF THE CASE. IT IS POSSIBLE IN CERTAIN CAS ES THAT IN ORDER TO RENDER A FINDING IN RES PEEL OF A A FINDING IN RES PECT OF B MAY BE CALLED FOR. FOR INSTANCE WHERE THE FACTS SHOW THAT THE INCOME CAN BELTING EITHER TO A OR B AND NO ONE ELSE A FINDING THAT IT BELONGS TO B OR DOES NOT BELONG TO B WOULD BE DETERMINATIVE OF THE ISSUE WHETHER IT CAN BE TAXED AS A'S INCOME. A FINDING RE SPECTING B IS INTIMATELY INVOLVED AS A STEP IN THE PROCESS OF REA CHING THE ULTIMATE FINDING RESPECTING A. IF HOWEVER THE FIN DING AS TO A'S LIABILITY CAN BE DIRECTLY ARRIVED AT WITHOUT NECESS ITATING A FINDING IN RESPECT OF B. THEN A FINDING MADE IN RESPECT OF B IS AN INCIDENTAL FINDING ONLY. IT IS NOT A FINDING NECESS ARY FOR THE DISPOSAL OF THE CASE PERTAINING TO A. THE SAME PRIN CIPLES SEEM TO APPLY WHEN THE QUESTION IS WHETHER THE INCOME UNDER ENQUIRY IS TAXABLE IN THE ASSESSMENT YEAR UNDER CONSIDERATION OR ANY OTHER ASSESSMENT YEAR. AS REGARDS THE EXPRESSION 'DIRECTI ON' IN S. 153(3)(II) LIT THE ACT IT IS NOW WELL SETTLED THAT IT MUST HE AN EXPRESS DIRECTION NECESSARY FOR THE DISPOSAL OF THE CASE BEFORE THE AUTHORITY OR COURT. IT MUST ALSO BE A DIRECTION WHI CH THE AUTHORITY OR COURT IS EMPOWERED TO GIVE WHILE DECIDING THE CA SE BEFORE IT. 18. LET US NOW IN THE ABOVE LIGHT REVERT TO THE F ACTS OF THE CASE BEFORE US. THE AUTHORITIES BELOW WERE DEALING WITH A DEEMI NG FICTION I.E. DEEMED DIVIDEND ABOUT AN INCOME. THE CASE OF THE ASSESSE WAS THAT THIS DEEMING FICTION OF DEEMED DIVIDEND COULD NOT BE INVOKED IN THE PRESENT CASE BECAUSE THE ASSESSE DID NOT HOLD THE SHAREHOLDINGS IN THE COM PUNY WHICH HAD EXTENDED LOAN TO THE ASSESSE. THIS PLEA HAS BEE N ACCEPTED BY THE CIT(A) BUT FOR ACCEPTING SUCH A PLEA IT IS NOT A CONDITION PRECEDENT THAT THIS DEEMING FICTION MUST COME INTO PLAY IN THE HAN DS OF SOME OTHER ASSESSE OTHER THAN THIS ASSESSE. WHETHER THE LOAN R ECEIVED BY THE ASSESSE IS HELD TO BE DEEMED DIVIDEND IN THE CASE OF SOME O THER PERSON OR NOT IS WHOLLY IRRELEVANT FOR DECIDING WHETHER OR NOT THIS IS DEEMED DIVIDEND IN THE HANDS OF THIS ASSESSE OR NOT. LEARNED CIT(A) HO LDS THAT SINCE MEHUL P ASANAI IS A SHAREHOLDER IN THE SAID COMPANY THE RE CEIPT CAN BE ADDED AS DEEMED DIVIDEND IN THE HANDS OF MEHUL P ASNANI BUT THEN WHAT HE OVERLOOKS IS THAT ALL THE CONDITIONS PRECEDENT FOR TAXING A RECEIPT AS DEEMED DIVIDEND ARE TO BE SATISFIED QUA THE ASSESSE IN WHOSE INCOME IS TO BE TAXED AND BEING A SHAREHOLDER IS ONLY ONE SUCH PRECONDITION. LEARNED CIT(A) HAS AS NOTED EARLIER IN THIS ORDER OBSERVE D THAT 'IF THE RECIPIENT OF LOAN IS NOT A SHAREHOLDER AND THE TRANSACTION IS COVERED BY THIS PROVISION THE ADDITION IS TO BE MADE IN THE HANDS OF THE SHAREHOLDER' BUT THEN IT IS DIFFICULT TO COMPREHEND AS TO HOW ON E CAN COME TO A CONCLUSION THAT A TRANSACTION IS COVERED BY THIS PR OVISION I.E. DEEMING FICTION OF THE DEEMED DIVIDEND WITHOUT EXAMINING T HE TRANSACTION BETWEEN THE SHAREHOLDER OF THE COMPANY AND THE COMPANY IN W HICH SUCH SHARES ARE HELD. WITHOUT EVEN GIVING A FINDING ABOUT SATISFACT ION OF ALL THESE CONDITIONS LEARNED CIT(A) PROCEEDS TO HOLD THAT IT IS AN INCOME TO BE TAXED IN THE HANDS OF THE SHAREHOLDER I.E. MEHUL P ASNANI. 11 IS A CLASSIC CASE OF PUTTING CARL BEFORE THE HORSE AND IS WHOLLY BASED ON FALLACIOUS LOGIC. THE DIRECTION IS THUS NOT ONLY UNNECESSARY B UT PATENTLY INCORRECT. VIEWED THUS THE DIRECTION GIVEN BY THE CIT(A) FOR TAXABILITY OF THIS DEEMED DIVIDEND IN THE HANDS OF SHRI ASNANI DOES N OT CONSTITUTE 'AN ITA NO. 3133/AHD/15 A/W CO NO. 205/AHD/15 & ITA NO. 1659/AHD/14 [SHRI MEHUL P. ASNANI] - 7 - EXPRESS DIRECTION NECESSARY FOR DISPOSAL OF A CASE' . NOTHING REALLY TURNS ON HIS DIRECTION AS SUCH. EVEN IF THIS DIRECTION W AS CORRECT LEARNED CIT(A) HAD NO BUSINESS TO GIVE SUCH A DIRECTION WIT HOUT AFFORDING AN OPPORTUNITY OF HEARING TO THE AFFECTED PARTY AND TH AT TOO WHEN IT WAS ABSOLUTELY NECESSARY TO DECIDE THE ISSUE IN APPEAL BEFORE HIM. THERE IS A CERTAIN DEGREE OF RESTRAINT THAT IS EXPECTED OF THE APPELLATE AUTHORITIES IN DISCHARGE OF THEIR JUDICIAL FUNCTIONING. 19. AS WE PART WITH OUR ADJUDICATION ON THIS ISSUE WE MAY ALSO TAKE NOTE OF LEARNED DEPARTMENTAL REPRESENTATIVE'S CONTENTION THAT THE ASSESSE HAS NO LOCUS STANDI TO RAISE ANY GRIEVANCE AGAINST THES E DIRECTIONS AS HE IS NOT THE AGGRIEVED PARTY VIS-A-VIS THESE DIRECTIONS. WE ARE UNABLE TO SEE ANY MERITS IN THIS PLEA EITHER. THE MANNER IN WHICH THE APPEAL HAS BEEN DECIDED BY THE CIT(A) GIVES AN IMPRESSION WHICH IS A WHOLLY INAPPROPRIATE IMPRESSION AND WHICH HAS ALSO BEEN RE ITERATED BEFORE US BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE I MPUGNED ADDITIONS HAVE BEEN DELETED IN THE HANDS OF THE ASSESSE AS TH ESE ADDITIONS ARE REQUIRED TO BE MADE IN THE HANDS OF SOMEONE ELSE. T HE DELETION OF THE IMPUGNED ADDITION IN THE HANDS OF THE ASSESSE COMPA NY HAS BEEN THUS PROJECTED TO BE THOUGH PERHAPS AT A SOMEWHAT SUBLI MINAL LEVEL DEPENDENT OF THE ADDITION BEING CONFIRMED IN THE HANDS OF THE DIRECTOR. THE DIRECTIONS GIVEN BY THE CIT(A) DO PREJUDICE INTERES TS OF THE ASSESSE INASMUCH AS THESE DIRECTIONS NOT BEING IMPLEMENTED MAY BE VIEWED AS DETRIMENTAL TO THE INTERESTS OF THE ASSESSE BUT THE N THE DIRECTIONS SUFFER FROM LEGAL INFIRMITIES FROM GLARING PROCEDURAL FLA WS AND ARE INCAPABLE OF BEING IMPLEMENTED ANYWAY. IN ANY CASE SINCE THE SE DIRECTIONS ARE GIVEN IN THE CASE OF THIS ASSESSE AND THE APPELLATE ORDER BY THE CIT[A) IN THE CASE OF THIS ASSESSE CANNOT BE CHALLENGED IN A PPEAL BEFORE US BY A THIRD PARTY THE ONLY WAY TO PREVENT THESE DIRECTIO NS REACHING THE FINALITY IS A CHALLENGE BY THIS ASSESSE HIMSELF PARTICULARL Y BECAUSE AS IS THE SETTLED LEGAL POSITION THE STATUTORY PROVISIONS AR E TO BE CONSTRUED UT RES MAGIS VALEAT QUAM PEREAT I.E. IN SUCH A MANNER AS TO MAKE IT WORKABLE RATHER THAN REDUNDANT. THE ASSESSE BEFORE US THERE FORE HAS IN OUR CONSIDERED VIEW LOCUS STANDI TO CHALLENGE LEGALITY OF THESE DIRECTIONS. 12.1 AS CAN BE NOTED THE CO-ORDINATE BENCH HAS EXA MINED THE SCOPE OF POWER FOR GIVING ANY FINDING OR DIRECTION IN RELATI ON TO THIRD PARTY WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE. AFTER TAK ING NOTE OF THE DECISION OF THE HONBLE SUPREME COURT THE CO-ORDINATE BENCH HELD THAT THE CIT(A) CANNOT HAVE GIVEN SUCH DIRECTIONS CONCERNING THIRD PARTY WHILE ADJUDICATING THE CASE OF THE ASSESSEE. 12.2 IT IS WELL SETTLED THAT A DIRECTION OR FINDING CONTEMPLATED BY SECTION 153(6) OF THE ACT MUST BE A FINDING NECESSARY FOR D ISPOSAL OF A PARTICULAR CASE THAT IS TO SAY IN RESPECT OF PARTICULAR ASSES SEE AND IN REFERENCE TO A PARTICULAR ASSESSMENT YEAR. TO BE A NECESSARY FIND ING IT MUST BE DIRECTLY INVOLVED IN THE DISPOSAL OF THE CASE. THE ACTION O F THE CIT(A) IS THUS ITA NO. 3133/AHD/15 A/W CO NO. 205/AHD/15 & ITA NO. 1659/AHD/14 [SHRI MEHUL P. ASNANI] - 8 - CONTRARY TO THE POSITION OF LAW ENUNCIATED IN JUDIC IAL PRECEDENTS AND CANNOT BE SUSTAINED. 12.3 IN VIEW OF THE ABOVE DISCUSSIONS WE VACATE TH E FINDING/DIRECTION IN QUESTION. THE CROSS OBJECTION OF ASSESSEE IS THUS ALLOWED. 13. IN THE COMBINED RESULT REVENUES BOTH APPEALS ARE DISMISSED AND ASSESSEES CROSS OBJECTION IS ALLOWED. SD/- SD/- (MADHUMITA ROY) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 29/11/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ / CONCERNED CIT 4. - / CIT (A) /. 012 33*+4 *+#4 56) / DR ITAT AHMEDABAD 7. 289 / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 29/11/2 019