HARSH ESTATES P.LTD, MUMBAI v. ASST CIT CEN CIR 31, MUMBAI

ITA 597/MUM/2015 | 2011-2012
Pronouncement Date: 07-10-2016 | Result: Allowed

Appeal Details

RSA Number 59719914 RSA 2015
Assessee PAN AAACH3480L
Bench Mumbai
Appeal Number ITA 597/MUM/2015
Duration Of Justice 1 year(s) 8 month(s) 8 day(s)
Appellant HARSH ESTATES P.LTD, MUMBAI
Respondent ASST CIT CEN CIR 31, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 07-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted H
Tribunal Order Date 07-10-2016
Assessment Year 2011-2012
Appeal Filed On 29-01-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH H MUMBAI BEFORE SHRI R.C.SHARMA ACCOUNTANT MEMBER AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO.597/MUM/2015 (ASSESSMENT YEAR : 2011-12) HARSH ESTATES PVT. LTD. 32 MADHULI 3 RD FLOOR A.B. ROAD WORLI MUMBAI-400018. PAN: AAACH3480L VS. ACIT CC-31(7) [NOW DCIT CC-4(3)] 4 TH FLOOR AAYAKAR BHAVAN M. K. ROAD MUMBAI-400012. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DHAVAL SHAH (AR) REVENUE BY : SHRI DR. P. DANIEL (SPECIAL COUNSEL) DATE OF HEARING : 05.10.2016 DATE OF PRONOUNCEMENT : 07.10.2016 O R D E R PER PAWAN SINGH JM: 1. THIS APPEAL U/S 253 OF THE INCOME-TAX ACT IS DIRECT ED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-40 MUMBAI DATED 21.10. 2014. THE ASSESSEE HAS BASICALLY RAISED THE FOLLOWING GROUND OF APPEAL :- (I) THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLO WANCE OF INTEREST EXPENSES OF RS. 6 14 669/-. (II) THAT THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF INTEREST U/S 234A 234B AND 234C OF THE ACT. (III) THAT THE LD. CIT(A) ERRED IN LAW AND IN FACTS IN NO T APPRECIATING THAT INCOME ASSESSED IN THE HANDS OF THE APPELLANT WAS SUBJECTE D TO THE PROVISIONS OF TDS AND HENCE ON THE SAID AMOUNT OF TAX NO INTEREST CAN BE LEVIED U/S. 234B AND 234C OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR RELEVANT AY ON 29.09.2011. WHILE FRAMING THE ASSESS MENT THE ASSESSING OFFICER (AO) BESIDES OTHER ADDITION AND DISALLOWANC E DISALLOWED THE INTEREST EXPENDITURE OF RS. 6 14 669/- IN THE ASSES SMENT ORDER. AGGRIEVED BY 2 ITA NO. 597/M/2015- HARSH ESTATES PVT. LTD. THE ORDER OF AO THE ASSESSEE FILED APPEAL BEFORE T HE CIT(A) WHEREIN THE ADDITION OF INTEREST EXPENDITURE WAS SUSTAINED. FUR THER AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE FILED THIS APPEAL BEF ORE US CHALLENGING THE CONFIRMATION OF DISALLOWANCE OF INTEREST EXPENSES A S WELL AS LEVY OF INTEREST U/S 234A 234B & 234C OF THE ACT. 3. AT THE OUTSET HEARING THE AUTHORIZED REPRESENTATIV E (AR) OF THE ASSESSEE ARGUED THAT THE GROUNDS OF APPEAL RAISED IN THE PRE SENT APPEAL IS COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF THIS TRIBUNAL IN AATUR HOLDING PVT. LTD. VS. ACIT IN ITA NO. 599/MUM/2015. LD. DEPARTME NTAL REPRESENTATIVE (DR) FOR THE REVENUE ARGUED THAT IN ITA NO. 599/MUM /2015 THE JURISDICTIONAL COURT HAS RESTORED THIS SIMILAR GROU ND OF APPEAL TO THE FILE OF LD. CIT(A) AND HE HAS NO OBJECTION IF THIS GROUND I S RESTORED TO THE FILE OF AO WITH SIMILAR DIRECTION. WE HAVE CONSIDERED THE R IVAL CONTENTIONS OF THE PARTIES AND SEEN THAT IN ITA NO. 599/MUM/2015 THE S IMILAR GROUND OF APPEAL OF THE ASSESSEE IN THAT CASE WAS RESTORED TO THE FILE OF THE LD. CIT(A) WITH THE FOLLOWING DIRECTION: 3. THE ASSESSEE IS AGGRIEVED FOR DISALLOWANCE OF I NTEREST EXPENSES OF RS.6 14 669/-. LD. AR PLACED ON RECORD ORDER OF THE TRIBUNAL IN AS SESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2007-08 DATED 23-9-2015 WHEREIN S IMILAR ISSUE WAS DECIDED BY THE TRIBUNAL AFTER OBSERVING AS UNDER :- 3: GROUND NO. 4 RELATES TO THE DISALLOWANCE OF INTE REST EXPENSE. THE LD. COUNSEL FOR THE ASSESSEE 40UGHT TO OUR NOTICE THAT THE DECISION RELIED UPON BY THE LD. CIT(A) WHILE DISPOSING THIS GROUND HAS BEEN SET ASIDE BY THE TRI BUNAL TO THE FILE OF THE LD. CIT(A). 4. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BR ING ANY DISTINGUISHING DECISION IN FAVOUR OF THE REVENUE. 5. WE HAVE CAREFULLY 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 T HE CASE OF EMINENT HOLDINGS PVT. LTD. WE FIND THAT THE TRIBUNAL IN THE CASE OF EMINE NT HOLDINGS IN IT A NOS. 2139 2140 AND 21411MUMJ2013 HAVE FOLLOWED THE DECISION O F THE TRIBUNAL GIVEN IN COMMON 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 ADJUDICATIO N. RESPECTFULLY FOLLOWING 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. BEFORE CLOSING THIS ISSUE THE LD. COUNSEL 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 THA T THE PROCEEDINGS IN WHICH THE SAID ISSUE OF INTEREST WAS ISSUED BY THE CUSTODIAN HAVE BEEN ALREADY CONCLUDED WHICH FACT 3 ITA NO. 597/M/2015- HARSH ESTATES PVT. LTD. HAS ALREADY BEEN RECORDED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. WE THEREFORE DIRECT THE LD. CIT(A) TO CONSIDER THIS FACT WHILE D ECIDING 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 THE METHOD OF ACCOUNTIN G 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 SITUATION AFTER HEARING BOTH THE PARTIES WE PASS SIMILAR ORDER AND THIS GROUND IS CONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES IN 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 STATI STICAL PURPOSES FOR THE YEAR UNDER APPEAL. GROUND NO.6 CONSEQUENTIAL IN NATURE HENCE IS NOT BEING ADJUDICATED.' 4. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR U NDER CONSIDERATION ARE SAME RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL I N ASSESSEE'S OWN CASE MATTER IS RESTORED BACK TO THE FILE OF CIT(A) FOR DECIDING AF RESH AS PER THE DIRECTION GIVEN BY THE TRIBUNAL IN ITS ORDER DATED 23-9-2015. 5. WITH REGARD TO CHARGING OF INTEREST U/S.234B & 2 34C I FOUND THAT SIMILAR ISSUE HAS BEEN DEALT WITH BY THE TRIBUNAL IN ASSESSEE'S O WN CASE AND THE MATTER WAS RESTORED BACK TO THE FILE OF AO. THE TRIBUNAL HAVE ITA NO.599/2015 DEALT WITH THE ISSUE OF CHARGING OF INTEREST IN ITS ORDER DATED 23 -9-2015 AS UNDER :- '3.NEXT GROUND OF APPEAL IS ABOUT LEVY OF INTEREST U/S. 234 OF THE ACT. BEFORE US AR STATED THAT THE ASSESSEE WAS A NOTIFIED ENTITY THA T THE PROVISIONS OF S. 234A 234B AND 234C.OF THE ACT WERE DEEMED TO HAVE COMPLIED WITH THAT THE ASSETS WERE ALREADY IN ATTACHMENT OF THE CUSTODIAN APPOINTED UNDER THE PRO VISIONS OF THE SPECIAL COURTS ACT THAT THE TRIBUNAL IN THE CASE OF THE APPELLANT AND SEVERAL OTHER ENTITIES HAD HELD THE VIEW IN FAVOUR OF THE APPELLANT THAT THE HON'BLE B OMBAY HIGH COURT IN THE CASE OF DIVINE HOLDINGS PVT. LTD. AND CASCADE HOLDINGS PVT. LTD. HAD HELD THAT THE PROVISIONS OF SECTIONS 234A 234B AND 234C OF THE ACT WERE MANDATORY AND WERE APPLICABLE TO T HE NOTIFIED ENTITIES ALSO THAT THE ASSESSEE WAS IN THE PROCESS OF FILING AN APPEAL AGAINST THE SAID ORDER BEFORE THE HON'BLE SUPREME COURT THAT TH E INCOME EARNED IN THE YEAR UNDER CONSIDERATION WAS SUBJECTED TO PROVISIONS OF TDS T HAT THE CHANGEABILITY OF THE SECTION 234A 234B AND 234C OF THE ACT SHOULD BE AFTER CONSIDERING THE AMOUNT OF TAX DEDUCTIBLE AT SOURCE ON THE INCOME ASSESSED. THE AP PELLANT RELIES IN THIS REGARD ON THE FOLLOWING DECISIONS. HE RELIED UPON THE CASES OF MO TOROLA INC. V. DCIT [95 ITD 269 (DEL. (SB)J SEDCO FORES DRILLING CO. LTD. [264 FTR 320J NGC NETWORK ASIA LLC [3 F 3 ITR 187] SUMMIT BHATACHARYA [ 300 ITR (AJ) 341' ( BOM)(SB)J VIJAL GOPAL JINDAL [ITA NO. 4333/DEL/2009] & EMILLO RUIZ BERDEJO [320 FTR 190 (BOM)].DR RELIED UPON THE CASES OF DEVINE HOLDINGS PVT. LTD. ' 3.1. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT IN THE CASE OF DEVINE HOLDINGS PVT. LTD. HON'BLE BOMBAY HIGH COURT HAS HELD THAT PROVIS IONS OF SECTION 234A 234B AND 234C WERE APPLICABLE TO THE NOTIFIED PERSON ALSO. THEREF ORE UPHOLDING THE ORDER OF THE FAA TO THAT EXTENT WE HOLD THAT P ROVISIONS OF SECTION 234 OF THE ACT ARE APPLICABLE. AS FAR AS CALCULATION PART IS CONCE RNED WE FIND MERITS IN THE SUBMISSION MADE BY THE ASSESSEE. THEREFORE WE ARE RESTORING B ACK THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION WHO WOULD DECIDE THE ISSUE A FTER CONSIDERING THE AMOUNT TAXED DEDUCTIBLE AT SOURCE ON THE INCOME ASSESSED AND AFT ER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUND NO.5 IS ALLOWED IN PART IN FAVOUR OF THE ASSESSEE. 4 ITA NO. 597/M/2015- HARSH ESTATES PVT. LTD. 4. WE HAVE SEEN THAT THE IDENTICAL GROUNDS WERE RESTOR ED TO THE FILE OF AO IN ITA NO. 599/MUM/2015 THUS RESPECTFULLY FOLLOWIN G THE ORDER OF THE TRIBUNAL BOTH THE GROUNDS OF THE PRESENT APPEAL AR E RESTORED TO THE FILE OF AO FOR DECIDING AFRESH IN ACCORDANCE WITH THE DIREC TION CONTAINED IN ORDER DATED 08.08.2016 (SUPRA). 5. GROUND NO.3 IN THE PRESENT APPEAL IS CONSEQUENTIAL IN NATURE AND NEEDS NO SPECIFIC ADJUDICATION WHEN GROUND NO.2 IS ALREADY R ESTORED TO THE FILE OF AO. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH OCTOBER 2016. SD/- SD/- (R.C.SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 07/10/2016 S.K.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/