DCIT CC 23, MUMBAI v. JYOTI H. MEHTA, MUMBAI

ITA 5229/MUM/2011 | 2004-2005
Pronouncement Date: 14-10-2013 | Result: Allowed

Appeal Details

RSA Number 522919914 RSA 2011
Assessee PAN ABNPM8233B
Bench Mumbai
Appeal Number ITA 5229/MUM/2011
Duration Of Justice 2 year(s) 3 month(s) 6 day(s)
Appellant DCIT CC 23, MUMBAI
Respondent JYOTI H. MEHTA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-10-2013
Appeal Filed By Department
Order Result Allowed
Bench Allotted J
Tribunal Order Date 14-10-2013
Date Of Final Hearing 14-10-2013
Next Hearing Date 14-10-2013
Assessment Year 2004-2005
Appeal Filed On 08-07-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH MUM BAI BEFORE SHRI SANJAY ARORA AM AND SHRI VIJAY PAL RA O JM ./I.T.A. NOS. 5484 & 5485/MUM/2011 ( / ASSESSMENT YEARS: 2004-05 & 2005-06) JYOTI H. MEHTA 32 MADHULI DR. A. B. ROAD WORLI MUMBAI-400 018 / VS. DY. CIT CENTRAL CIRCLE 23 MUMBAI ./ ./PAN/GIR NO. ABNPM 8233 B ( ! / ASSESSEE ) : ( /REVENUE ) & ./I.T.A. NOS. 5229 & 5230/MUM/2011 ( / ASSESSMENT YEARS: 2004-05 & 2005-06) DY. CIT CENTRAL CIRCLE 23 MUMBAI / VS. JYOTI H. MEHTA MADHULI ANNIE BESANT ROAD OPP. NEHRU CENTRE WORLI MUMBAI-400 018 ./ ./PAN/GIR NO. ABNPM 8233 B ( /REVENUE ) : ( ! / ASSESSEE ) ! ' # / ASSESSEE BY : SHRI DHARMESH SHAH ' # / REVENUE BY : DR. P. DANIEL $ % ' ! & / DATE OF HEARING : 14.10.2013 '() ' ! & / DATE OF PRONOUNCEMENT : 14.10.2013 2 ITA NOS. 5484 5485 5229 & 5230/MUM/2011 JYOTI H. MEHTA (A.YS. 2004-05 & 2005-06) * / O R D E R PER BENCH: THIS IS A SET OF FOUR APPEALS BEING CROSS APPEALS IN THE ASSESSEES CASE FOR TWO CONSECUTIVE YEARS BEING ASSESSMENT YEARS (A.YS.) 2 004-05 AND 2005-06 ARISING OUT OF THE SEPARATE ORDERS BY THE COMMISSIONER OF INCOME T AX (APPEALS)-40 MUMBAI (CIT(A) FOR SHORT) OF EVEN DATE I.E. 27.05.2011 PARTLY ALLOWING THE ASSESSEES APPEALS CONTESTING ITS ASSESSMENTS U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961 (THE ACT HEREINAFTER) BOTH DATED 12.12.2008 FOR THE SAID Y EARS. THE ISSUE ARISING BEING COMMON THE APPEALS WERE POSTED FOR AND HEARD TOGETHER AN D ARE ACCORDINGLY BEING DISPOSED OF VIDE A COMMON CONSOLIDATED ORDER FOR THE SAKE OF C ONVENIENCE. ASSESSEES APPEALS (ITA NOS. 5484 & 5485/MUM/2011) 2.1 AT THE VERY OUTSET IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR) THE ASSESSEES COUNSEL THAT IT IS NOT PRESSING THE FIR ST TWO GROUNDS ASSUMED BY THE ASSESSEE IN BOTH THE APPEALS WHICH ARE IDENTICAL MAKING AN EN DORSEMENT TO THAT EFFECT ON THE MEMORANDA OF APPEAL ON RECORD. AS REGARDS THE ONLY SURVIVING GROUND NUMBER 3 THE SAME STANDS COVERED BY THE ORDER BY THE TRIBUNAL IN THE CASE OF HITESH S. MEHTA FOR A.YS. 2005-06 AND 2006-07 (IN ITA NOS. 7726 & 7727/MUM/20 10 DATED 26.04.2013). THIS IS AS THE LD. CIT(A) HAS DECIDED THIS ISSUE FOLLOWING THE DECISION BY THE FIRST APPELLATE AUTHORITY DATED 31/8/2010 IN THE CASE OF HITESH S. MEHTA FOR A.Y. 2005-06 TAKING US THROUGH THE RELEVANT PART OF HIS ORDER (I.E. PARAS 4.1 AND 4.2) WHICH IS IDENTICALLY WORDED FOR BOTH THE YEARS. THE TRIBUNAL IN THE SAID CASE AFTER NOTING THE RIVAL CONTENTION S RESTORED THE MATTER BACK TO THE FILE OF THE FIRST A PPELLATE AUTHORITY FOR AN ADJUDICATION AFRESH. A LIKE RESTORATION; THE FACTS BEING THE SAM E WAS ACCORDINGLY PRAYED FOR. 2.2 THE LD. DEPARTMENTAL REPRESENTATIVE (DR) COULD NOT BRING ANY DIFFERENCE IN FACTS OR OTHERWISE ANY INFIRMITY IN THE ORDER OF THE TRIB UNAL TO OUR NOTICE. 3. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD. THE LD. CIT(A) HAS DECIDED THE MATTER FOLLOWING HIS OWN DECISION DATED 31.08.2010 IN THE CASE OF HITESH S. 3 ITA NOS. 5484 5485 5229 & 5230/MUM/2011 JYOTI H. MEHTA (A.YS. 2004-05 & 2005-06) MEHTA (SUPRA) FOR A.Y. 2005-06 REPRODUCING THE SAME AT 4.1 OF HIS ORDER VIDE PARA 4.2 THEREOF CLAIMING THE FACTS AND CIRCUMSTANCES TO BE IDENTICAL. IN FURTHER APPEAL THE TRIBUNAL DISPOSED OF THE RELEVANT GROUND IN THE CAS E OF HITESH S. MEHTA (SUPRA) FOR A.YS. 2005-06 AND 2006-07 WHICH RELATES TO THE DISALLOWA NCE OF INTEREST EXPENDITURE BY RESTORING THE ISSUE BACK TO THE FILE OF THE FIRST A PPELLATE AUTHORITY FOR ADJUDICATION AFRESH INASMUCH AS IT FOUND NO PROPER ADJUDICATION ON THE ASPECT OF THE REJECTION/UNRELIABILITY OF THE BOOKS OF ACCOUNT PRODUCED BY THE ASSESSEE WHIC H FORMED ONE OF THE REASONS BY THE A.O. FOR THE SAID DISALLOWANCE. BY OWN ADMISSION T HE FACTS BEING IDENTICAL AND WHICH FACT HAS NOT BEEN DISPUTED BY EITHER PARTY BEFORE U S AS WELL AS THE FACT OF NO SEPARATE ADJUDICATION BY THE LD. CIT(A) IN THE INSTANT CASE WHO HAS ONLY FOLLOWED HIS EARLIER ORDER WE ONLY CONSIDER IT FIT AND PROPER THAT THE ISSUE UNDER REFERENCE IS ALSO LIKEWISE RESTORED BACK TO THE FILE OF THE LD. CIT(A) FOR A F RESH ADJUDICATION ISSUING DEFINITE FINDING/S QUA THE ASPECT ON WHICH THE TRIBUNAL FOUND THE ADJUDIC ATION SET ASIDE AS WANTING. WE DISPOSE THE ASSESSEES GROUND NO.3 FOR BOTH THE YEARS ACCORDINGLY. 4. THE ASSESSEE HAS BEFORE US ALSO RAISED AN ADDITI ONAL GROUND AS UNDER: 1. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT A S PER THE DECISION OF HONBLE SPECIAL COURT DATED 30.04.2010 IN MP NO. 41 OF 1999 THE ASSETS UNDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BE LONGS TO SHRI HARSHAD S. MEHTA AND HENCE THE INCOME ASSESSED BY THE ASSES SING OFFICER OUGHT TO HAVE BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEH TA AND NOT IN THE HANDS OF THE APPELLANT. ARGUING THE ASSESSEES CASE QUA THIS GROUND IT WAS SUBMITTED BY THE LD. AR THAT T HE SAME GROUND ALSO ASSUMED BY THE APPELLANT BEFORE THE TR IBUNAL FOR THE FIRST TIME IN THE CASE OF HITESH S. MEHTA FOR A.YS. 1994-95 1995-96 AND 2001-02 (IN ITA NOS .5587 TO 5589/MUM/2011 DATED 12.06.2013) STOOD ADMITTED BY IT IN VIEW OF THE DECISION BY THE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT [1998] 229 ITR 383 (SC). TAKING US THROUGH THE RELEVANT PART (PARA 5) OF ITS ORDER HE CONTINUED THAT THE TRIBUNAL HOWEVER FOUND THE ISSUE ACADEMIC INASMUCH AS THE DECISION OF THE APEX COURT WOULD NEVERTHELESS HOLD I.E. APPLY IRRESPECTIVE OF WHETHER ANY GROUND IN ITS RESPECT HAD BEEN ASSUMED BEFORE THE LOWER APPELLATE FORUMS OR N OT. A LIKE DIRECTION WAS ACCORDINGLY 4 ITA NOS. 5484 5485 5229 & 5230/MUM/2011 JYOTI H. MEHTA (A.YS. 2004-05 & 2005-06) PRAYED FOR. ON BEING ENQUIRED ABOUT THE STATUS OF T HE MATTER BEFORE THE APEX COURT IT WAS SUBMITTED BY HIM AT BAR THAT THE APPEAL AGAINST THE DECISION BY THE SPECIAL COURT DATED 30.04.2010 (IN MP NO. 41 OF 1999) HAS SINCE BEEN AD MITTED BY THE APEX COURT. THE LD. DR DID NOT DISPUTE OR OTHERWISE THROW ANY LIGHT ON THE MATTER. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD. THE ISSUE ARISING GOES TO THE VERY ROOT OF THE MATTER I.E. AS TO IN WHOSE HANDS THE IMPUGNED INCOME IS TO BE ASSESSED I.E. WHETHER THE INDIVIDUAL FAMILY ME MBERS OF HARSHAD S. MEHTA OR IN HIS OWN HANDS. ACCORDINGLY THE ISSUE BEING LEGAL WITH THE RELEVANT FACTS BEING NOT IN DISPUTE WE ADMIT THE ASSESSEES ADDITIONAL GROUND. AS REGARDS ITS ADJUDICATION EVEN AS CLARIFIED BY THE TRIBUNAL IN THE CASE OF HITESH S. MEHTA PER ITS ORDER DATED 12.06.2013 (SUPRA) WHERE AND TO THE EXTENT THE DECISION BY TH E APEX COURT IS RELEVANT AND HAS A DIRECT BEARING ON THE ISSUE UNDER REFERENCE THE SAME IS T O BE GIVEN EFFECT TO. THE AO IS DIRECTED ACCORDINGLY. WE DISPOSE OF THIS GROUND IN THESE TER MS. REVENUES APPEALS (ITA NOS. 5229 & 5230/MUM/2011) 6. COMING TO THE REVENUES APPEALS THE ONLY ISSUE AGITATED PER THE SAME FOR BOTH THE YEARS IS THE MAINTAINABILITY OF THE LEVY OF INTERES T U/SS.234A 234B AND 234C OF THE ACT. THE ASSESSEES CASE TOWARDS THE NON-CHARGEABILITY O F INTEREST UNDER THE SAID SECTIONS IS THAT IT HAD NO CONTROL OVER THE SUMS (INCOME) DEPOS ITED IN THE VARIOUS ACCOUNTS WHICH BECAME HER INCOME BY THE OPERATION OF LAW. THE CONT ROL OVER ALL THE ASSETS IN ANY CASE IS WITH THE CUSTODIAN SO THAT THE ASSESSEE COULD NOT BE PENALIZED FOR NON-PAYMENT OF ADVANCE-TAX TOWARD DEFAULT QUA WHICH THE INTEREST UNDER THE RELEVANT PROVISIONS I S ATTRACTED. THE LD. CIT(A) HAS IN ALLOWING RELIEF TO THE ASSESSEE FOLLOWED THE DECISION BY THE TRIBUNAL IN THE CASE OF ORION TRAVEL PVT. LTD. (IN ITA NO.6868/MUM/2008 FOR A.Y. 2004-05) ALSO REPRODUCING THERE-FROM AND DECIDED ACCORDINGLY VIDE PARAS 6 & 5 OF HIS ORDERS FOR A.YS. 2004-05 AND 2005-06 RESPECTIVELY. 7. BEFORE US IT WAS SUBMITTED BY THE LD. DR THAT T HE ORDER BY THE TRIBUNAL STANDS SINCE REVERSED BY THE HON'BLE JURISDICTIONAL HIGH C OURT IN THE CASE OF CIT VS. DIVINE 5 ITA NOS. 5484 5485 5229 & 5230/MUM/2011 JYOTI H. MEHTA (A.YS. 2004-05 & 2005-06) HOLDINGS (P.) LTD. (IN ITA NO. 3334 OF 2010). HOWEVER HE COULD NOT DESPITE BEING CALLED UPON TO DO SO FURNISH THE SAID DECISION TH OUGH CLAIMED IT TO BE ON THE BASIS THAT THE PROVISIONS OF SECTIONS 234A 234B AND 234C WOUL D NEVERTHELESS APPLY AS THE CHARGE OF INTEREST UNDER THE SAID SECTIONS IS COMPENSATORY AND THUS MANDATORY. THE LD. AR WHILE ADMITTING TO THE SAID DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT WOULD YET SUBMIT THAT THE MATTER COULD NOT TREATED AS COVERED AND THE MATTER MAY WELL NEED TO BE ARGUED. FURTHER THE TRIBUNAL HAS IN SIMILAR CIRCUM STANCES RESTORED THIS ISSUE BACK TO THE FILE OF THE FIRST APPELLATE AUTHORITY AND TOWARD W HICH HE WOULD TAKE US TO PARA 6 OF THE ORDER BY THE TRIBUNAL IN THE CASE OF HITESH S. MEHTA FOR A.YS. 2005-06 AND 2006-07 PROPOSING LIKE RESTORATION. 8. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD INCLUDING THE DECISION BY THE TRIBUNAL ON THIS ISSUE IN THE CASE OF HITESH S. MEHTA (SUPRA). THE TRIBUNAL IN VIEW OF HAVING SET ASIDE THE MATTER BACK TO THE FILE OF THE FIRST APPELLATE AUTHORITY QUA THE PRINCIPAL ISSUE ARISING FOR ITS ADJUDICATION I .E. ON QUANTUM SET ASIDE THIS ASPECT AS WELL FOR FRESH ADJUDICATION; THE SAME BEING CONSEQU ENTIAL AND IN ANY CASE PREMATURE. HOLDING OF THE MATTER AS CONSEQUENTIAL SO THAT THE SAID INTEREST PROVISIONS WOULD APPLY HOWEVER IMPLIES DECIDING THE MATTER INASMUCH AS TH IS IS PRECISELY THE ISSUE ARISING IN VIEW OF THE ASSESSEE CONTESTING THEIR MANDATORY APP LICATION IN VIEW OF THE PECULIAR CIRCUMSTANCES OF HER CASE. FURTHER THE ISSUE AS C ONCEDED TO BY THE PARTIES BEFORE US HAVING BEEN SINCE THE SUBJECT MATTER OF CONSIDERATI ON AND DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT WHICH IS BINDING ON THE REVENUE AS WELL AS ON US WE ARE UNABLE TO APPRECIATE THE ASSESSEES STAND FOR ARGUMENTS P ARTICULARLY IN VIEW OF THE FACTS BEING THE SAME AND THE MATTER LEGAL. AS EXPLAINED DURING THE COURSE OF HEARING ITSELF THE ADJUDICATION BY THE HON'BLE JURISDICTIONAL HIGH COU RT SO THAT THE INTEREST WOULD APPLY EQUALLY IN THE CASE OF THE NOTIFIED PERSONS AS THE ASSESSEE (AS WE ARE GIVEN TO UNDERSTAND OF THE SAID DECISION) WOULD IN OUR CLEAR VIEW HOLD . HOWEVER THE SAID DECISION BEING NOT BEFORE US SO THAT A FINAL VIEW IN THE MATTER CANNO T BE EXPRESSED IN THE ABSENCE THEREOF WE ONLY CONSIDER IT FIT AND PROPER TO RESTORE THE M ATTER BACK TO THE FILE OF THE LD. CIT(A) TO 6 ITA NOS. 5484 5485 5229 & 5230/MUM/2011 JYOTI H. MEHTA (A.YS. 2004-05 & 2005-06) DECIDE THE SAME IN ACCORDANCE WITH LAW TAKING DUE NOTE OF THE SAID DECISION BY THE HON'BLE JURISDICTIONAL HIGH COURT PER A SPEAKING O RDER AND AFTER HEARING BOTH THE PARTIES. WE DECIDE ACCORDINGLY. 9. IN THE RESULT THE ASSESSEES APPEALS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE REVENUES APPEALS ARE ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 14 2 013 SD/- SD/- (VIJAY PAL RAO) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER $ +% MUMBAI; DATED : 14.10.2013 . . ./ROSHANI SR. PS !'#$ %$' / COPY OF THE ORDER FORWARDED TO : 1. - / THE APPELLANT 2. ./- / THE RESPONDENT 3. $ 0! ( ) / THE CIT(A) 4. $ 0! / CIT CONCERNED 5. 1 2 .!3 & 3) $ +% / DR ITAT MUMBAI 6. 2 4 5 % / GUARD FILE & / BY ORDER ' / &( ) (DY./ASSTT. REGISTRAR) $ +% / ITAT MUMBAI