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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI RAJENDRA, AM & SHRI AMARJIT SINGH, JM
आयकर अपील सं/ & 2133/Mum/2015 (िनधा�रण वष� / Assessment Year: 1994-95 & 1997-98) बनाम/ Growmore Leasing & Asst. Commissioner of Investment Pvt. Ltd. Income Tax Central Circle – Vs. 32, Madhuli, Dr. A.B.Road, 31 (Now DCIT, CC 4(3) ) 4th Floor, Aayakar Bhavan, Worli, Mumbai – 400 018 M.K.Road, Mumbai – 400 020 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAACG4397D (अपीलाथ� /Appellant) (��थ� / Respondent) .. Assessee by: Shri Ashwin Kashinath & Shri Dharmesh Shah Revenue by: Dr. P. Daniel सुनवाई की तारीख / Date of Hearing: 24.03.2017 घोषणा की तारीख /Date of Pronouncement: 29.03.2017 आदेश / O R D E R PER AMARJIT SINGH, JM:
The assessee has filed the above mentioned appeals against the order dated 30.01.2015 for the A.Y.1994-95 and 02.01.2015 for the A.Y.1997-98 passed by the Commissioner of Income Tax (Appeals)-52, Mumbai [hereinafter referred to as the “CIT(A)”].
ITA NO.2132/MUM/2015:- &2133/M/2015 A.Y.1994-95 & 1997-98
The assessee has raised the following grounds:-
“1. The Ld. Commissioner of Income-Tax (Appeals) ought to have appreciated that as per the decision of Hon’ble Special Court dated 30.04.2010 in MP No.41 of 1999, the assets under consideration and the consequential income belongs to Late Shri Harshad S. Mehta and hence the income confirmed by the learned Commissioner of Income-Tax (Appeals) ought to have been taxed in the hands of Late Shri Harshad S. Mehta and not in the hands of the appellant.
2. The Ld. Commissioner of Income-tax (Appeals) ought to have appreciated that the appellant was entitled to deduction on account of interest payable to other brokerage firms.
3. The Ld. Commissioner of Income Tax (Appeals) has erred in law and in facts in confirming the levy of interest u/s234A, 234B and 234C of the Act.
4. The learned Commissioner of Income Tax (Appeals) has erred in law and in facts in not appreciating that the income assessed in the hand 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.
5. The appellant craves leave of your honour to add to, alter, amend and / or delete all or any of the foregoing grounds of appeal
.”
3. The brief facts of the case are that the assesse was a private Ltd. incorporated in India. It is one of the entities belonging to the Harshad S. Mehta group. The assessee did not file its return of income. The assessee’s accounts were not audited. In fact, the assessee’s books were incomplete. Notices u/s.142(1) of the Income Tax Act, 1961 (in short “the Act”) were issued on 23.03.1995, 18.11.1996 and 28.11.1996. The assessee did not furnish return of income in response to the notices issued. However, he submitted the details of dividend and interest income and raised the claim of expenses. The assessee also contended that in view of the letter dated &2133/M/2015 A.Y.1994-95 & 1997-98 17.01.1997 and in view of the order of special court dated 20.02.1995, interest under sections 234A, 234B and 234C is not chargeable. The assessee also furnished the copies of bank accounts and T.D.S. certificates. The assessee’s representative explained the various credit and debit entries and also claimed that the credit for tax deducted at source. In brief the issues were involved with regard to the chargeabililty to tax of the dividend and interest income on the investment. The assessment was completed by Assessing Officer by assessing the tax to the tune of Rs.1,53,10,103/-. Feeling aggrieved the appeal was filed before the CIT(A) who partly allowed the appeal but the assessee was not satisfied, therefore, the present appeal has been filed by raising the points mentioned above.
ISSUE NO.1:-
At the time of argument this issue has not been pressed before us, therefore, this issue has been decided in favour of the revenue against the assessee being not pressed.
ISSUE NO.2:-
Under this issue, the assessee has took the plea that he was entitled to the deduction on account of interest payable to other brokerage firms. The learned representative of the assessee has argued that this issue has duly been covered by the order of the Hon’ble Income Tax Appellate Tribunal in the assessee’s own case in & 1311/Mum/ 2014 for A.Y.2002-03 and 2006-07 dated 16.10.2015, therefore, in the said circumstances the necessary &2133/M/2015 A.Y.1994-95 & 1997-98 directions can be given to the Assessing Officer in accordance with law. However, on the other hand the learned departmental representative has refuted the said contentions. By giving the careful thoughts to the contention raised by the learned representative of the parties and perusing the record carefully, it came into the notice that this matter of controversy has already been remanded to the Assessing Officer by the by the Hon’ble Income Tax Appellate Tribunal in the assessee’s own case in & 1311/Mum/ 2014 for A.Y.2002-03 and 2006-07 dated 16.10.2015. The finding of the Hon’ble Income Tax Appellate has been given in the para 7 of the said order which is hereby reproduced below:-
“7. We have carefully gone through the order of the Tribunal (supra). The Tribunal at para 5 & 6 of its order has held as under:-
“We have carefully perused the orders of the authorities below. While disposing the ground relating to the disallowance of interest, we find that the Ld. CIT(A) has followed the findings given in the case of Eminent Holdings Pvt. Ltd. We find that the Tribunal in the case of Eminent Holdings Pvt. Ltd. in 2140 and 2141/Mum/2013 have followed the decision of the Tribunal given in common group case of Hitesh S.
&2133/M/2015 A.Y.1994-95 & 1997-98
Mehta at para 2.3 of the order and restored the matter to the file of the Ld. CIT(A) for fresh adjudication. 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.
Before closing this issue, the Ld. Counsel for the assessee pointed out that the Ld. CIT(A) has held that the issue of interest expenditure is pending before the Hon’ble Special Court. It is the say of the Ld. Counsel that the proceedings in which the said issue of interest was issued by the custodian have been already concluded which fact 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 deciding 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 accounting followed by them and as per the provisions of the law. Ground No.4 is treated as allowed for statistical purpose”
&2133/M/2015 A.Y.1994-95 & 1997-98
Respectfully following the decision of the Co-ordinate Bench, we restore this issue to the file of the Ld. CIT(A). The Ld. CIT(A) is directed to decide the issue afresh in the light of the directions given hereinabove. Ground No.2 of the captioned appeals is treated as allowed for statistical purpose.”
Respectfully, following the decision of the co-ordinate bench, we restore this issue to the file of CIT(A) who is directed to decide this issue afresh in the light of the directions given in the assessee’s own case in & 1311/Mum/ 2014 for A.Y.2002-03 and 2006-07 dated 16.10.2015 by giving an opportunity of being heard to the assessee in accordance with law. Accordingly, this issue is hereby decided in favour of the assessee against the revenue. This issue is hereby allowed for statistical purpose.
ISSUE NO.3&4:-
Issue no.3 and 4 are inter connected, therefore, are being taken up together for adjudication. The learned representative of the assessee has argued that in connection with the above said issues the Hon’ble Income Tax Appellate Tribunal in the assessee’s own case in dated 05.03.2015 for A.Y.2007-08 and 2009-10 has already passed the order which is required to be followed in accordance with law and accordingly directions can be &2133/M/2015 A.Y.1994-95 & 1997-98 given. The order passed by the Hon’ble Income Tax Appellate Tribunal in the assessee’s own case in dated 05.03.2015 for A.Y.2007-08 and 2009-10 has been perused which is reproduced as under:-
“9. Ground No.6 relates to the charging of interest u/s.234A, 234B and 234C of the Act.
10. The Ld. Counsel for the assessee brought to our notice that an identical issue was considered by the Tribunal in one of the group cases viz., M/s. Harsh Estates Pvt. Ltd. in 1033 and 3464/Mum/2013. We find force in the contention of the Ld. Counsel.
11. The Tribunal has considered this issue at para-6 of its order and restored the matter to the file of AO to recompute the interest liability as per the provisions of the law. We direct accordingly, Ground No.6 is treated as allowed for statistical purpose.”
In view of the finding of the order passed by the Hon’ble Income Tax Appellate Tribunal in the assessee’s own case in dated 05.03.2015 for A.Y.2007-08 and 2009-10 we set aside the finding of the CIT(A) on this issue and restore the matter to the file of Assessing Officer to recompute the &2133/M/2015 A.Y.1994-95 & 1997-98 interest liability as per the provisions of law. We direct accordingly. Ground no. 3 & 4 are hereby treated as allowed for statistical purpose.
GROUND NO.5:-
Ground no.5 is formal in nature which is nowhere require adjudication.
In the result, the appeal filed by the assessee is hereby ordered 10. to be partly Allowed.
11. The assessee has raised the following grounds:-
“1. The Ld. Commissioner of Income-Tax (Appeals) ought to have appreciated that as per the decision of Hon’ble Special Court dated 30.04.2010 in MP No.41 of 1999, the assets under consideration and the consequential income belongs to Late Shri Harshad S. Mehta and hence the income confirmed by the learned Commissioner of Income-Tax (Appeals) ought to have been taxed in the hands of Late Shri Harshad S. Mehta and not in the hands of the appellant.
2. The Ld. Commissioner of Income-tax (Appeals) erred in law and facts in confirming the disallowance of audit fees claimed by the appellant.
The Ld. Commissioner of Income Tax (Appeals) ought to have appreciated that the appellant was entitled to deduction on account of interest payable to other brokerage firms.
4. The Ld. Commissioner of Income Tax (Appeals) has erred in law and in facts in confirming the levy of interest u/s234A, 234B and 234C of the Act.
5. The learned Commissioner of Income Tax (Appeals) has erred in law and in facts in not appreciating that the income assessed in &2133/M/2015 A.Y.1994-95 & 1997-98
the hand 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. 6. The appellant craves leave of your honour to add to, alter, amend and / or delete all or any of the foregoing grounds of appeal”
The facts of the present case are quite similar to the above said however the figures are different.
ISSUE NO.1 & 2:-
At the time of argument these issues has not been pressed before us, therefore, these issues have been decided in favour of the revenue against the assessee being not pressed.
ISSUE NO.3:-
Under this issue, the assessee has took the plea that he was entitled to the deduction on account of interest payable to other brokerage firms. The learned representative of the assessee has argued that this issue has duly been covered by the Hon’ble Income Tax Appellate Tribunal in the assessee’s own case in & 1311/Mum/ 2014 for A.Y.2002-03 and 2006-07 dated 16.10.2015, therefore, in the said circumstances the necessary directions can be given to the Assessing Office in accordance with law. However, on the other hand the learned departmental representative has refuted the said contentions. By giving the careful thoughts to the contention &2133/M/2015 A.Y.1994-95 & 1997-98 raised by the learned representative of the parties and perusing the record carefully, it came into the notice that this matter of controversy has already been remanded to the Assessing Officer by the by the Hon’ble Income Tax Appellate Tribunal in the assessee’s own case in & 1311/Mum/ 2014 for A.Y.2002-03 and 2006-07 dated 16.10.2015. The finding of the Hon’ble Income Tax Appellate has been given in the para 7 of the said order which is hereby reproduced below:-
“7. We have carefully gone through the order of the Tribunal (supra). The Tribunal at para 5 & 6 of its order has held as under:-
“We have carefully perused the orders of the authorities below. While disposing the ground relating to the disallowance of interest, we find that the Ld. CIT(A) has followed the findings given in the case of Eminent Holdings Pvt. Ltd. We find that the Tribunal in the case of Eminent Holdings Pvt. Ltd. in 2140 and 2141/Mum/2013 have followed the decision of 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 adjudication. Respectfully following the findings &2133/M/2015 A.Y.1994-95 & 1997-98 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.
Before closing this issue, the Ld. Counsel for the assessee pointed out that the Ld. CIT(A) has held that the issue of interest expenditure is pending before the Hon’ble Special Court. It is the say of the Ld. Counsel that the proceedings in which the said issue of interest was issued by the custodian have been already concluded which fact 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 deciding 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 accounting followed by them and as per the provisions of the law. Ground No.4 is treated as allowed for statistical purpose”
Respectfully following the decision of the Co-ordinate Bench, we restore this issue to the file of the Ld. CIT(A). The Ld. CIT(A) is directed to decide the issue afresh in &2133/M/2015 A.Y.1994-95 & 1997-98 the light of the directions given hereinabove. Ground No.2 of the captioned appeals is treated as allowed for statistical purpose.”
Respectfully, following the decision of the co-ordinate bench, we restore this issue to the file of CIT(A) who is directed to decide this issue afresh in the light of the directions given in the assessee’s own case in & 1311/Mum/ 2014 for A.Y.2002-03 and 2006-07 dated 16.10.2015 by giving an opportunity of being heard to the assessee in accordance with law. According this issue is hereby allowed for statistical purpose.
ISSUE NO.4&5:-
Issue no.3 and 4 are inter connected, therefore, are being taken up together for adjudication. The learned representative of the assessee has argued that in connection with the said issue the Hon’ble Income Tax Appellate Tribunal in the assessee’s own case in dated 05.03.2015 for A.Y.2007-08 and 2009-10 has already passed the order which is require to follow in accordance with law and accordingly directions can be given. The order passed by the Hon’ble Income Tax Appellate Tribunal in the assessee’s own case in ITA No.5135&5136/Mum/2012 dated 05.03.2015 for A.Y.2007-08 and 2009-10 has been perused which is reproduced as under:- &2133/M/2015 A.Y.1994-95 & 1997-98
“9. Ground No.6 relates to the charging of interest u/s.234A, 234B and 234C of the Act.
The Ld. Counsel for the assessee brought to our notice that an identical issue was considered by the Tribunal in one of the group cases viz., M/s. Harsh Estates Pvt. Ltd. in 1033 and 3464/Mum/2013. We find force in the contention of the Ld. Counsel.
The Tribunal has considered this issue at para-6 of its order and restored the matter to the file of AO to recompute the interest liability as per the provisions of the law. We direct accordingly, Ground No.6 is treated as allowed for statistical purpose.”
In view of the finding of the order passed by the Hon’ble Income Tax Appellate Tribunal in the assessee’s own case in dated 05.03.2015 for A.Y.2007-08 and 2009-10 we set aside the finding of the CIT(A) on this issue and restore the matter to the file of Assessing Officer to recompute the interest liability as per the provisions of law. We direct accordingly. Ground no. 3 & 4 are hereby treated as allowed for statistical purpose.
GROUND NO.6:-
Ground no.5 is formal in nature which is nowhere require adjudication. &2133/M/2015 A.Y.1994-95 & 1997-98