RASILA S. MEHTA, MUMBAI v. ACIT CC 23, MUMBAI

ITA 6828/MUM/2013 | 2009-2010
Pronouncement Date: 27-04-2015 | Result: Partly Allowed

Appeal Details

RSA Number 682819914 RSA 2013
Assessee PAN ABNPM8219R
Bench Mumbai
Appeal Number ITA 6828/MUM/2013
Duration Of Justice 1 year(s) 5 month(s)
Appellant RASILA S. MEHTA, MUMBAI
Respondent ACIT CC 23, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 27-04-2015
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 27-04-2015
Assessment Year 2009-2010
Appeal Filed On 26-11-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI R.C. SHARMA ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO JUDICIAL MEMBER ITA NO. 6 828 /M/2013 ASSESSMENT YEAR: 2009 - 1 0 RASILA S. MEHTA 32 MADHULI DR. A.B. ROAD WORLI MUMBAI 40 0 018 PAN: ABNPM8219R VS. ACIT CC 23 AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : S HRI DHARMESH SHAH A.R. REVENUE BY : DR. P. DANIAL SP L. COUNSEL DATE OF HEARING : 2 7 .04. 201 5 DATE OF PRONOUNCEMENT : 27.04.2015 O R D E R PER VIJAY PAL RAO JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 30 .0 9.2013 OF CIT(A) FOR THE ASSESSMENT YEAR 200 9 - 1 0. THE AS SESSEE IS A NOTIFIED PERSON UNDER SPECIAL COURT ( TRIAL OF O FFENCES R ELATING TO T RANSACTION S IN S ECURITIES ) ACT 1992 AND ALL HER ASSETS INCLUDING BANK ACCOUNT ARE ATTACHED AND VESTED IN THE HAND OF THE CUSTODIAN APPOINTED UNDER THE SAID ACT. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING TOTAL INCOME OF RS. 3 57 12 085/ - . THE ASSESSING OFFICER (AO) COMP LE TED THE ASSESSMENT UNDER SECTION 143(3) ON 04.11.11 WHEREBY COMPUTED THE TOTAL INCOME OF THE ASSESSEE AT 5 71 4 0 616 / - BY DISALLOWING CERTAIN CLAIMS OF EXPENSES. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A) BUT COULD NOT SUCCEED. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: ITA NO. 6 828 /M/2013 RASILA S. MEHTA 2 1. THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) OUGHT TO HAVE APPRECIATED TH AT AS PER THE DECISION OF HON'BL E SPECIAL COURT DATED 30.04.2010 IN MP NO. 41 OF 1999 THE ASSETS UNDER CONSIDERATION AND THE CONSEQUENTIAL INCOME BELONGS TO SHRI HARSHAD S. MEHTA AND HENCE THE INCOME ASSESSED BY THE ASSESSING OFFICER OU GHT TO HAVE BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE HANDS OF THE APPELLANT. 2. THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS THAT IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENDITURE AMOUNTING TO RS.8 9 31 61 5/ - . 3. THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS THAT IN CONFIRMING THE LEVY OF INTEREST U / S.23A 234B AND 234C OF THE ACT. 4. THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APP RECIATING THAT THE INCOME ASSESSED IN THE HANDS OF THE APPELLANT WERE SUBJECTED TO THE PROVISIONS OF TDS AND HENCE ON THE SAID AMOUNT OF TAX NO INTEREST CAN BE COMPUTED U/S. 234B AND 234C OF THE ACT. GROUND NO.1 2. GROUND NO.1 REGARDING THE INCOME FROM THE ASSETS ATTACHED AND VESTED IN THE HANDS OF CUSTODIAN APPOINTED IS THE INCOME TO BE TAX ED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE HANDS OF THE ASSESSEE. AT THE TIME OF HEARING THE LD. A.R. OF THE ASSESSEE HAS STATED THAT THE ASSESSEE DOES NOT PRESS GROUND NO.1 OF THE APPEAL AND THE SAME MAY BE DISMISSED. THE LD. D.R. HAS RAISED NO OBJECTION IF GROUND NO.1 IS DISMISSED AS PRAYED. ACCORDINGLY THE GROUND NO.1 OF THE ASSESSEES APPEAL IS DISMISSED BEING NOT PRESSED. GROUND NO.2 3. GROUN D NO.2 IS REGARDING DISALLOWANCE OF INTEREST EXPENDITURE AMOUNTING TO RS.89 31 615/ - . WE HAVE HEARD THE LD. A.R. AS WELL AS THE LD. D.R. AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE AO HAS DISALLOWED THIS AMOUNT ON ACCOUNT OF INTEREST EXPENDITURE AGAINST THE INTEREST INCOME ON ITA NO. 6 828 /M/2013 RASILA S. MEHTA 3 THE GROUND THAT THE LIABILITY HAS NOT BEEN CRYSTALLISED OR PAID DURING THE YEAR AS THE INTEREST CLAIM TO BE PAYABLE IS TENTATIVE AND PROVISIONAL. THUS THE CLAIM OF INTEREST EXPENDITURE WAS DISALLOWED BY THE AO BY TREATING T HE SAME AS CONTINGENT LIABILITY. 4. ON APPEAL THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO BY FOLLOWING THE ORDER IN THE CASE OF SHRI HI TESH S. MEHTA . T HE LD. A.R. OF THE ASSESSEE HAS POINTED OUT THAT IN THE CASE OF SHRI HI TESH S. MEHTA THE T RIBUNAL HAS SET ASIDE THE ISSUE TO THE RECORD OF THE LD. CIT(A). 5. WE NOTE THAT IN THE CASE OF SHRI HI TESH S. MEHTA THE TRIBUNAL VIDE ORDER DATED 26.04.13 IN ITA NOS.7726 & 7727/M/2010 SET ASIDE THE ISSUE OF DISALLOWANCE OF INTEREST EXPENDITURE TO TH E RECORD OF THE CIT(A) IN PARA 5 AS UNDER: 5. GROUND NO. 4 RELATES TO THE ACTION OF THE LD.CIT(A) IN CONFIRMING THE LIABILITIES AMOUNTING TO RS.11 24 99 052/ - AND RS.12 61 36 245/ - RESPECTIVELY FOR THE A.YS 2005 - 06 AND 2006 - 07 TOWARDS INTEREST EXPENDITUR E CLAIMED BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT THE FINDINGS GIVEN IN PARA 3.3 ABOVE IN RESPECT OF REJECTION/RELIABILIT Y OF THE BOOKS OF ACCOUNTS AND THE PROPOSED ADJUDICATION OF THE LD.CIT(A) IN VIEW OF THE SAID DIRECTION MAY HAVE DIRECT IMPACT ON THE ISSUE OF THE IMPUGNED LIABILITY WE SET ASIDE THIS ISSUE ALSO TO THE FILES OF THE LD.CIT(A) TO ADJUDICATE AFRESH ALONG WITH THE ADJUDICATION OF THE RESPECTIVE GROUND PERTAINING TO THE REJECTION/RELIABILI TY OF THE BOOKS OF ACCOUNTS. 6. WE FURTHER NOT E THAT FOR THE ASSESSMENT YEAR S 2000 - 01 AND 2001 - 02 THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ORDER DATED 28.11.14 HAS SET ASIDE THIS ISSUE OF DISALLOWANCE OF INTEREST EXPENDITURE IN PARA 7 AS UNDER: 7. A CAREFUL PERUSAL OF THE ORDER OF THE LD. CIT(A) SHO WS THAT AT PARA 5.4 OF HIS ORDER HE HAS FOLLOWED THE DECISION IN THE CASE OF HITESH S. MEHTA SON OF THE ASSESSEE FOR A.Y. 2005 - 06. THE LD. CIT(A) HAS ALSO INCORPORATED HIS FINDINGS IN THE CASE OF HITESH S. MEHTA AND FOLLOWING THE FINDINGS IN THE SAID ORDE R THE GROUND OF APPEAL WITH RESPECT TO THE CLAIM OF INTEREST EXPENSE IS DISMISSED. ACCORDINGLY WE SET ASIDE THIS ISSUE TO THE RECORD OF THE LD. CIT(A) FOR ITA NO. 6 828 /M/2013 RASILA S. MEHTA 4 DECIDING THIS ISSUE AFRESH IN THE SIMILAR TERMS AS IN THE EARLIER ASSESSMENT YEAR. 7 . GROUND NOS.3 & 4 ARE REGARDING LEVY OF INTEREST UNDER SECTION 234A 234B & 234C. AS FAR AS THE LEVY OF INTEREST UNDER SECTION 234A 234B & 234C ARE CONCERNED AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF CASCAD E HOLDINGS P. LTD. VS. DCIT VIDE ORDER DATED 29.09.14 IN ITA NO.2900/M/2013 IN PARA 3 AS UNDER: 3.GROUND NO.6 IS ABOUT INTEREST TO BE CHARGED U/S.234A 234B AND 234 C OF THE ACT.AT THE TIME OF THE HEARING BEFORE US IT WAS AGREED BY THE REPRESENTATIVES O F BOTH THE SIDES THAT THE IDENTICAL ISSUE WAS DELIBERATED UPON AND DECIDED BY THE TRIBUNAL IN THE CASE OF M/S. TOPAZ HOLDINGS PVT. LTD. (ITA NO.2146/MUM/2013 AY.2001 - 02 DATED 18.06.2014).WE FIND THAT IN THE MATTER OF TOPAZ HOLDINGS PVT.LTD.(SUPRA) ONE OF T HE GROUP CONCERNS THE TRIBUNAL HAD DECIDED THE ISSUE 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 THAT THE PROVISIONS OF S. 234A 234B AND 234C OF THE ACT W ERE DEEMED TO HAVE COMPLIED WITH THAT THE ASSETS WERE ALREADY IN ATTACHMENT OF THE CUSTODIAN APPOINTED UNDER THE PROVISIONS 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 BOMBAY 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 THE NOTIFIED ENTITIES AL SO THAT THE ASSESSEE WAS IN THE PROCESS OF FILING AN APPEAL AGAINST THE SAID ORDER BEFORE THE HON'BLE SUPREME COURT THAT THE INCOME EARNED IN THE YEAR UNDER CONSIDERATION WAS SUBJECTED TO PROVISIONS OF TDS THAT THE CHANGEABILITY OF THE SECTION 234A 234 B AND 234C OF THE ACT SHOULD BE AFTER CONSIDERING THE AMOUNT OF TAX DEDUCTIBLE AT SOURCE ON THE INCOME ASSESSED. THE APPELLANT RELIES IN THIS REGARD ON THE FOLLOWING DECISIONS. HE RELIED UPON THE CASES OF MOTOROLA INC. V. DC1T [95 1TD 269 (DEL.(SB)] SEDCO FORES DRILLING CO. LTD. [264 1TR 320] NGC NETWORK ASIA LLC [313 1TR 187] SUMMIT BHATACHARYA 1 300 1TR (AT) 347 (BOM)(SB).1 VIJAL GOPAL JINDAL 11TA NO. 4333/DE1/2009J & ELNI110 RUIZ BERDEJO [320 ITR 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 PROVISIONS OF SECTION 234A 234B AND 234C WERE APPLICABLE TO THE NOTIFIED PERSON ALSO. THEREFORE UPHOLDING THE ITA NO. 6 828 /M/2013 RASILA S. MEHTA 5 ORDER OF THE FAA TO THAT EXTENT WE HOLD THAT PROVISIONS OF SECTION 234 OF THE ACT ARE APPLICABLE.AS FAR AS CALCULATION PART IS CONCERNED WE FIND MERITS IN THE SUBMISSION MADE BY THE ASSESSEE.THEREFORE WE ARE RESTORIN G BACK THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION WHO WOULD DECIDE THE ISSUE AFTER CONSIDERING THE AMOUNT TAXED DEDUCTIBLE AT SOURCE ON THE INCOME ASSESSED AND AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUND NO.5 IS ALLOWED IN PART IN FAVOUR OF THE ASSESSEE.' RESPECTFULLY FOLLOWING THE ABOVE GROUND NO.6 IS ALLOWED IN FAVOUR OF THE ASSESSEE IN PART. 8. THUS IN VIEW OF THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DEFINE HOLDING PVT. LTD. THE ISS UE OF LEVY OF INTEREST UNDER SECTION 2 3 4A 2 3 4B & 2 3 4C IS DECIDED AGAINST THE ASSESSEE. AS REGARDS THE CALCULATION AND COMPUTATION OF THE INTEREST UNDER SECTION 234A 234B & 234C ARE CONCERNED THE LD. A.R. OF THE ASSESSEE HAS SUBMITTED THAT THE QUANTUM O F THE INTEREST UNDER SECTION 234 WILL BE DEPENDENT UPON THE OTHER ISSUES SET ASIDE AS WELL AS AFTER CONSIDERING THE AMOUNT OF TAX DEDUCTED AT SOURCE ON THE INCOME ASSESSED. IN VIEW OF THE FINDING OF THIS TRIBUNAL IN THE CASE OF CASCADE HOLDINGS P. LTD. (SUPRA) THE ISSUE IS RESTORED BACK TO THE FILE OF THE AO FOR LIMITED PURPOSE OF COMPUTATION AND CALCULATION OF THE QUANTUM OF INTEREST UNDER SECTION 234. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OP EN COURT ON 27. 04. 201 5 . SD/ - SD/ - ( R.C. SHARMA ) ( VIJAY PAL RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 27 .04.2015 . * KISHORE SR. P.S. ITA NO. 6 828 /M/2013 RASILA S. MEHTA 6 COPY TO: THE APPELLA NT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT ( A) CONCERNED MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.