PATEL HYDRO POWER PRIVATE LIMITED, MUMBAI v. DCIT 10(3)(2), MUMBAI

ITA 5072/MUM/2019 | 2015-2016
Pronouncement Date: 19-03-2021 | Result: Partly Allowed

Appeal Details

RSA Number 507219914 RSA 2019
Assessee PAN AAFCP8046F
Bench Mumbai
Appeal Number ITA 5072/MUM/2019
Duration Of Justice 1 year(s) 7 month(s) 16 day(s)
Appellant PATEL HYDRO POWER PRIVATE LIMITED, MUMBAI
Respondent DCIT 10(3)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 19-03-2021
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 19-03-2021
Last Hearing Date 22-02-2021
First Hearing Date 22-02-2021
Assessment Year 2015-2016
Appeal Filed On 02-08-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 5072/MUM/2019 ASSESSMENT YEAR: 2015-16 PATEL HYDRO POWER PVT. LTD. PATEL ESTATE OFF SV ROAD JOGESHWARI WEST MUMBAI-400102. VS. DCIT 10(3)(2) 217 2 ND FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400020. PAN NO. AAFCP 8046 F APPELLANT RESPONDENT ASSESSEE BY : MS. RADHAKANT SARAT AR REVENUE BY : MR. SANJAY J. SETHI DR DATE OF HEARING : 25/02/2021 DATE OF PRONOUNCEMENT : 19/03/2021 ORDER PER N.K. PRADHAN A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2015-16. THE APPEAL IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-I MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX A CT 1961 (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) IS BAD IN LAW. PATEL HYDRO POWER ITA NO. 5072/M/2019 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE GROUNDS OF APPEAL FILED BEFORE THE LD. CIT(A) HAS NOT BEEN ADJUDICATE D. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) ERRED IN ADJUDICATING THE ORDER AND THE GROUNDS WHICH WERE N OT TAKEN BY THE APPELLANT AND WHICH WERE NOT BEFORE HIM. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE ALLEGATION OF THE LD. CIT(A) THAT THE APPELLANT HAS NOT PAID THE APPEAL F ILING FEES NOT UPLOADED THE PENALTY ORDER AND THE DEMAND NOTICE ARE FACTUALLY INCORRECT AND NOT RELEVANT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2015-16 ON 30.0 9.2015 DECLARING LOSS OF RS.6 74 47 480/-. THE NATURE OF BUSINESS OF THE ASS ESSEE IS FINANCING/CONSULTING SERVICES FOR HYDRO ELECTRIC POWER PROJECTS. IN THE ORDER PASSED U/S 143(3) DATED 16.11.2017 THE ASSESSING OFFICER (AO) OBSERV ED THAT THE ONLY ACTIVITY OF THE ASSESSEE IS TO OBTAIN LOAN ON INTEREST AND ADVA NCE IT TO OTHER COMPANIES (CLAIMED TO BE SUBSIDIARIES) WITHOUT INTEREST. DURI NG THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD PAID INTEREST OF RS .14 42 33 218/- TO ITS LENDERS BUT INTEREST OF ONLY RS.7 62 12 711/- WAS RECOVERED BY IT FROM THE BORROWING SUBSIDIARIES BY TRANSFERRING THE SAME TO THEM. REMAINING INTEREST OF RS.6 80 20 507/- WAS DEBITED BY THE ASSESSEE-COMPAN Y TO ITS PROFIT AND LOSS ACCOUNT AND CLAIMED AS EXPENDITURE. HOWEVER THE AO NOTED THAT IN ITEM NO. 43 OF PART A-P&L OF THE ITR THE ASSESSEE HAS CLAIMED TOTAL INTEREST AT RS.6 86 58 949/- ON THIS ACCOUNT AND THIS FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE FOR EXPLANATION. THE AO FURTHER NOTICED TH AT THE ASSESSEE COULD FILE EXPLANATION ONLY FOR THE AMOUNT OF RS.6 80 20 507/- . THEREFORE THE AO ARRIVED AT A FINDING THAT THE ASSESSEE HAS WRONGLY CLAIMED SUCH INTEREST OF RS.6 86 58 949/-. FURTHER OBSERVING THAT THE ASSESS EE HAD NOT CHARGED ANY PATEL HYDRO POWER ITA NO. 5072/M/2019 3 INTEREST ON THE LOANS GIVEN BY IT TO ITS VARIOUS SU BSIDIARIES TO THE EXTENT OF RS.6 80 20 507/- AND SINCE THE LOAN TAKEN IS NOT FO R THE BUSINESS OF THE ASSESSEE BUT FOR SOME OTHER CONCERN THE AO HELD THAT THE IN TEREST ATTRIBUTABLE TO THAT LOAN CANNOT BE TAKEN TO HAVE BEEN INCURRED ONLY AND EXCLUSIVELY FOR THE BUSINESS CARRIED OUT BY THE ASSESSEE. ACCORDINGLY THE AO MADE A DISALLOWANCE OF THE INTEREST EXPENDITURE OF RS.6 86 58 949/-. 4. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE F ILED AN APPEAL BEFORE THE LD. CIT(A). WE FIND THAT VIDE ORDER DATED 31.08.2018 THE LD. CIT(A) OBSERVED INTER ALIA THAT THE SIGNATURE OF THE APPELLANT (PARWINDER KA UR) ON THE LETTER DATED 24.08.2018 AND THE SIGNATURE OF THE SAME APPE LLANT ON THE LETTER DATED 28.08.2018 ARE CLEARLY BY TWO DIFFERENT PERSONS. IT IS OBVIOUS THAT SOME PERSON HAS BEEN CLAIMED MISCHIEF TO TAKE UNDUE AND UNDESER VED ADVANTAGE. ON MERITS THE LD. CIT(A) HELD THAT : 17. EVEN ON THE MERITS THE APPELLANT HAS BROUGHT NOTHING ON RECORD TO DISCHARGE THE ONUS UPON IT THAT ITS CLAIM THAT THE IMPUGNED P ENALTY ORDER WAS BAD IN LAW WAS CORRECT AND MAINTAINABLE IN THE EYES OF THE LAW. NO EVIDENCE HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE TURNOVER OF THE APPELLANT O F ITS BUSINESS WAS BELOW THE MINIMUM LIMIT PRESCRIBED IN LAW. 18. THE FIRST GROUND TAKEN BY THE APPELLANT IS THAT THE LD. AO WAS NOT JUSTIFIED IN NOT ALLOWING THE DEDUCTION OF LAND COST OF RS.47 72 896/- OUT OF THE SALE PROCEEDS OF THE PLOT FOR CALCULATING THE LONG TERM CAPITAL GAIN S IS MERELY THE CLAIM OF THE APPELLANT. NO MATERIAL HAS BEEN BROUGHT ON RECORD OR ENCLOSED WITH THE FORM 35 TO CORROBORATE THE CLAIM OF THE APPELLANT AND IN THE ABSENCE OF TH E SAME IT REMAINS EXACTLY THAT I.E. MERELY A CLAIM. THE SAME HAS NO FORCE AND IS REJECT ED. PATEL HYDRO POWER ITA NO. 5072/M/2019 4 19. THE SECOND GROUND TAKEN BY THE APPELLANT IS THA T THE LD. AO WAS NOT JUSTIFIED IN NOT ALLOWING THE COST OF IMPROVEMENT OF RS.15 13 127/- OUT OF THE SALE PROCEEDS OF THE PLOT OF LAND FOR CALCULATING LONG TERM CAPIT AL GAINS IS ALSO NOT MAINTAINABLE THAT BEING MERELY A CLAIM AND ONLY AN ISSUE OF FACT THE SAME NEEDS TO BE CORROBORATED BY THE PERSON MAKING THE CLAIM AND SIN CE THE APPELLANT IS MAKING SUCH CLAIM IT IS FOR THE APPELLANT TO PROVE THE SAME AND AS THAT HAS NOT BEEN DONE THIS GROUND ALSO CANNOT BE ADMITTED. THE SAME IS REJECTE D. 20. THE THIRD GROUND TAKEN BY THE APPELLANT IS THAT THE LD. AO WAS NOT JUSTIFIED IN MAKING ADDITION OF RS.3 30 492/- AS RENTAL INCOME I S ALSO REQUIRED TO BE PROVED BY THE APPELLANT ONLY AND AS IT HAS NOT BEEN PROVED TH E SAME CANNOT BE ADMITTED. THE SAME IS REJECTED. 21. THE FOURTH GROUND TAKEN BY THE APPELLANT IS THAT THE LD. AO WAS NOT JUSTIFIED IN PASSING THE ORDER WITHOUT GIVING PROPER OPPORTUNITY OF HEARING WHICH WAS NECESSARY IN THE INTEREST OF NATURAL JUSTICE HAS NO FORCE AS THE IMPUGNED ASSESSMENT ORDER WAS PASSED U/S 143(3) OF IT. ACT 1961 AND NO THING HAS BEEN BROUGHT ON RECORD THAT THE APPELLANT DID NOT RECEIVE THE ADEQU ATE OPPORTUNITY TO DEFEND ITS CASE. IN ANY CASE THE APPELLANT HAS BEEN PROVIDED REASO NABLE OPPORTUNITY OF BEING HEARD BY THIS OFFICE BUT THE APPELLANT HAS AVOIDED APPEARING BEFORE THIS OFFICE BY MAKING FALSE AND FRIVOLOUS EXCUSES. THEREFORE THER E IS NO MERIT IN THIS GROUND ALSO. THE SAME IS REJECTED. 22. THE FIFTH GROUND TAKEN BY THE APPELLANT DOES NOT REQUIRE ADJUDICATION AT THIS STAGE. THE SIXTH GROUND IS PRE-MATURE AT THIS STAGE . 5. BEFORE US THE COUNSEL FOR THE ASSESSEE SUBMITS THAT THE LD. CIT(A) HAS PASSED AN ORDER AND DECIDED THE CASE ON THE GROUNDS OF APPEAL WHICH ARE NOT AT ALL RELATED TO THE PRESENT ASSESSEE. IT IS STATED B Y HIM THAT THE GROUNDS OF APPEAL DECIDED BY THE LD. CIT(A) PROBABLY RELATE TO SOME O THER ASSESSEE. PATEL HYDRO POWER ITA NO. 5072/M/2019 5 ON THE OTHER HAND THE LD. DR SUBMITS THAT THERE W AS NO COMPLIANCE BY THE ASSESSEE BEFORE THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. AS PER FORM NO. 35 DATED 15.12.2017 FILE D BY THE ASSESSEE BEFORE THE LD. CIT(A) THE GROUNDS OF APPEAL ARE AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE AO ERRED IN DISALLOWING SUM OF RS.6 86 58 949/- ON ACCOUNT OF I NTEREST PAID. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE AO ERRED IN DISALLOWING A SUM OF RS.6 38 442/- ON ACCOUNT OF IN TEREST PAID ON DELAYED DEPOSIT OF TDS. 3. THE APPELLANT CRAVES LEAVE TO ADD ALTER AMEND DE LETE OR MODIFY ANY OR ALL OF THE ABOVE REFERRED GROUND OF APPEAL. 6.1 WE HAVE MENTIONED AT PARA 4 HEREINABOVE THAT GR OUNDS OF APPEAL ADJUDICATED BY THE LD. CIT(A). THERE IS AN APPARENT MISTAKE IN THE ORDER OF THE LD. CIT(A) AS HE HAS ADJUDICATED THE GROUNDS OF APP EAL NOT AT ALL RELATED TO THE GROUNDS RAISED BY THE ASSESSEE IN FORM NO. 35. ANOT HER ASPECT IS THAT IN THE FORM OF VERIFICATION THE APPELLANTS NAME IS RUP EN PATEL WHEREAS THE LD. CIT(A) HAS MENTIONED PARWINDER KAUR AS THE APPELLAN T AS PER SIGNATURE. THIS IS A CLEAR CASE WHERE THE 1 ST PARA OF THE IMPUGNED ORDER RELATES TO THE PRESENT ASSESSEE. THE SUBSEQUENT PARAS RELATE T O SOME OTHER ASSESSEE. THE ISSUES DECIDED ON MERIT BY THE LD. CIT(A) RELATE TO SOME OTHER ASSESSEE. BECAUSE OF THIS UNFORTUNATE SITUATION WE SET ASID E THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIM TO PASS A DE NOVO ORDER AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. WE DIRECT THE ASSESSEE PATEL HYDRO POWER ITA NO. 5072/M/2019 6 TO FILE THE RELEVANT DOCUMENTS/EVIDENCE BEFORE THE LD. CIT(A) ON THE DATE OF HEARING. 7. IN THE RESULT THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19/03/2021. SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 19/03/2021 RAHUL SHARMA SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSISTANT REGISTRAR) ITAT MUMBAI