BNP PARIBAS SECURITIES INDIA P.LTD,MUMBAI vs. ITO 1(1)(4), MUMBAI

PDF · subscribers
ITA 3280/MUM/2014Status: DisposedITAT Mumbai22 August 2016AY 2009-108 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that there was a lack of proper opportunity for the assessee to present its case. Therefore, the matter was remanded back to the Assessing Officer (AO) for fresh adjudication.

What were the facts?

The assessee argued that the CIT(A) did not provide an adequate opportunity for hearing and submissions before passing the appellate order. The assessee had requested further hearing and to file additional submissions, but the CIT(A) passed the order without granting this opportunity.

What were the issues?

Whether the CIT(A) provided due opportunity of hearing to the assessee. Whether the matter should be remanded to the AO for fresh adjudication considering additional evidence and proper opportunity.

Which sections of the Income-tax Act were involved?

Section 246A,Section 35D,Section 28,Section 56,Section 59,Section 37(1),Section 57(iii),Section 234B,Section 234D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI

Before: SHRI D KARUNAKAR RAO & SHRI AMIT SHUKLA

For Appellant: Shri Ajit Kumar Jain, Shri Akshut Jain, Shri Ratnkar Thakkar

ITA No. : 3280/Mum/2014 (Assessment Year: 2009-10) बीएनपी प�रबास से�यू�रट�स इं�डया �ाइवेट Vs ITO-1(1) (4), Mumbai �ल�मटेड BNP Paribas Securities India P Ltd, 1 North Avenue Maker Maxity Bandra Kurlla Complex, Bandra(E), Mumbai -400 051 PAN : AADCB 4690 F अपीलाथ� (Applicant) ��यथ� (Respondent) �ी अिजत कुमार जैन अपीलाथ� क� और से Appellant by : Shri Ajit Kumar Jain �ी अ�ुत जैन Shri Akshut Jain �ी रतनाकर ठ�कर Shri Ratnkar Thakkar ��यथ� क� और से Respondent by �ी एन पी �संह Shri N P Singh : सुनवाई क� तार�ख /Date of Hearing : 22-08-2016 घोषणा क� तार�ख /Date of Pronouncement : 22-08-2016 आदेश ORDER अिमत शु�ला : �या. स.: PER AMIT SHUKLA, JM: The aforesaid appeal has been filed by the assessee against impugned order dated 21.01.2014, passed by Ld. CIT(Appeals)–I, Mumbai for the quantum of assessment passed under section 143(3) for the assessment year 2009- 10. In the grounds of appeal, following grounds have been raised:- “1 In not giving an adequate opportunity to the Appellant to present the Appellant’s rebuttal to certain aspects raised by बीएनपी प�रबास से�यू�रट�स इं�डया �ाइवेट �ल�मटेड 2 BNP Paribas Securities India P Ltd CIT(A) during the course of the hearings, despite the Appellant filing a letter dated January 10, 2014 with the CIT(A), to this effect.

2. In taxing income of Rs.12,30,14,130 earning by the another taxpayer [in BNP Paribas India Solutions Pvt Ltd (‘BNP Solutions’)]as income in the hands of the Appellant [i.e. BNP Paribas Securities India Pvt Ltd].

3. Without prejudice to Ground 2 above, by taxing the gross amount received by BNP Solutions amounting to Rs.12,30,14,130 in the hands of the Appellant and not allowing the Appellant to claim a tax deduction for the sum of Rs.10,69,68,808 being expenses incurred to earn the subject income.

4. In not due weightage to the following evidences that were submitted by the Appellant to the CIT(A) which demonstrates that the income of Rs.12,30,14,130 received by BNP Solutions from BNP Paribas SA, Hong Kong branch (‘BNP HK’) did not pertain to the Appellant and that the expenses of Rs.10,69,68,808 expended by BNP Solutions towards earning this income did not pertain to the Appellant. a) Letter dated February 22, 2013 issued by BNP Solutions to its statutory auditor; and b) Certificate dated March 2, 2013 issued by the statutory auditor to BNP Solutions.

5. In deciding on taxing the sum of Rs.12,30,14,130 in the hands of the Appellant by solely relying on a poorly worded letter dated November 22, 2011 that was filed by the Appellant before the learned AO and not appreciating all the evidences that were submitted in entirety.

6. Without prejudice to Grounds 2 to 5 by invoking the provisions of section 41(1) of the Act and section 56 read with section 59 of the Act against the Appellant taxing the sum of Rs.12,30,14,130 in the hands of the Appellant in the first year of its operations.

बीएनपी प�रबास से�यू�रट�स इं�डया �ाइवेट �ल�मटेड 3 BNP Paribas Securities India P Ltd

7.

In not considering June 1, 2008 as the date of set-up and the date of commencement of the business of the Appellant, and taxing the income of Rs.12,25,71,917 earned by the Appellant during the period June 1, 2008 to December 31, 2008 under section 56 of the Act as ‘Income from Other Sources’ and not under section 28 of the Act as ‘Business Income’.

8.

In confirming that expenses in the nature of (a) operating and other costs, (b) personnel cost and (c) registration fees, aggregating to Rs.20,80,75,902 fall within the ambit of section 35D of the Act.

9.

In not allowing a deduction for (a) operating and other coats, (b) personnel cost and (c) registration fees, aggregating to Rs.20,80,75,902 under section 37(1) of the Act.

10.

Without prejudice to Grounds 7 to 9 above, in not allowing (a) operating and other costs, and (b) personnel cost as a deduction under section 57(iii) of the Act from the income of Rs.12,25,71,917 earned by the Appellant during the period June 1, 2008 to December 31, 2008.

11.

In not deleting interest levied under section 234B of the Act amounting to Rs.39,65,445.

12.

In not deleting interest levied under section 234D of the Act amounting to Rs.7,99,840”.

2.

Before us, the Ld. Counsel Shri Ajit Kumar Jain, submitted that the major additions challenged by the assessee relates to firstly, disallowance of delayed payment of employee’s contribution to Provident Fund; secondly, cessation of tax liability under section 21(1) and lastly, disallowance of pre-commencement expenses on the ground that the same are not qualified for deduction under section 35D. At the outset he pointed out that, before the ld. CIT(A), the assessee had represented its case, however, on the date of बीएनपी प�रबास से�यू�रट�स इं�डया �ाइवेट �ल�मटेड 4 BNP Paribas Securities India P Ltd 6th January, 2014, the assessee was made to understand or was under the impression that further hearing would be provided by the ld. CIT(A) to clarify and make further submissions. In fact, assessee vide letter dated 10th January, 2014 (filed on 13th January, 2014) in the office of CIT(A), the assessee had specifically requested the Ld. CIT(A) to give opportunity for further hearing and to make additional submissions in support of the issues raised in the appeal before him. However, the Ld. CIT(A) thereafter, did not give any opportunity to the assessee and passed the appellate order on 21.01.2014. Thus, due and proper opportunity of hearing was not given by the First Appellate Authority to give proper rebuttal with respect to each and every addition made by the AO. He further submitted that, the assessee has also filed a petition for admission of additional evidences on 9th August, 2016 before this Tribunal, wherein, it has filed certain documents in support of its case which goes to the root of the issue involved. The reasons for admission have been elaborated in detail in the said petition. Thus, he requested that not only the additional evidences should be admitted but the appeal of the assessee should be heard on merits. By way of an alternative submission, he submitted that the entire matter can be restored back to the file of the CIT(A) or AO so that proper representation/submissions can be made by the assessee, because, at the stage of the first appellate authority adequate opportunity to the assessee was not given to represent its case.

4.

On the other hand, Ld. CIT-DR, Mr. N P Singh submitted that, nothing is borne out from the order of the CIT(A) that he) had required the assessee to furnish any बीएनपी प�रबास से�यू�रट�स इं�डया �ाइवेट �ल�मटेड 5 BNP Paribas Securities India P Ltd additional information or submission for which any further date was required to be given to the assessee. The assessee on its own volition has presumed that further date was to be given for the hearing and, therefore, assessee cannot plead that there is lack of providing proper or adequate opportunity of hearing by the First Appellate Authority. In any case, he submitted that if the additional evidences are to be admitted then the entire matter should be restored back to the file of the AO for fresh adjudication on the entire issues raised before the Tribunal.

5.

We have heard the rival contentions and also perused the relevant material placed before us on the preliminary ground as raised in 1st ground. In this regard the main contention of the Ld. Counsel Mr. Ajit Jain before us is that, there has been lack of proper opportunity of hearing by the First Appellate Authority. In support, he had drew our attention to letter filed before the CIT(A) which has been placed at paper book at page 169, the contents of which reads as under:- “January 10, 2014 The Commissioner of income-tax (Appeals)- I, 4th Floor, Piramal Chambers, Lalbaug, Parel, Mumbai -400 012 Dear Sir, Re: BNP Paribas Securities India Pvt Ltd (‘BNP Securities) PAN – AADCB 4690 F Assessment Year (‘AY’) 2009-10 Appeal No: IT-148/11-12 Appeal filed under section 246A(1)(a) of the Income-tax Act, 1961 We refer to the appeal submitted by our client, BNP Securities in respect of the AY 2009-10. In this respect and further to our meeting on January 6, 2014 in connection with this appeal, we understand that a further hearing will be scheduled to discuss certain aspects of the appeal prior to your office passing an order disposing the appeal.

More judgments on Section 35D

All 595 judgments and leading authorities on Section 35D →

Latest GST High Court judgments

Search GST case law →