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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO & SHRI AMARJIT SINGH
सुनवाई की तायीख / Date of Hearing : 25.04.2016 घोषणा की तायीख /Date of Pronouncement : 25.04.2016 आदेश / O R D E R
PER D. KARUNAKARA RAO, AM:
This appeal filed by the assessee on 10.4.2013 is against the order of the CIT (A)-40, Mumbai dated 11.2.2013 for the assessment year 2010-2011. In this appeal, assessee raised the following grounds , which read as under: 2. “1. The Ld CIT (A) has erred in law and in facts in passing the order u/s 250 of the Act. 2. the Ld CIT (A) has erred in law and in facts in passing the order without complying with the principles of natural justice.
3. The Ld CIT (A) has erred in law and in facts and in not appreciating that no income from attached assets can be assessed in the hands of the assessee. 4. the Ld CIT (A) has erred in law and in facts in not granting relief of liability amounting to Rs. 5,14,455/-, towards interest expenditure claimed by the appellant. 5. the Ld CIT (A) has erred in law and in facts in confirming the calculation of book profit u/s 115JB amounting to Rs. 24,98,585/-. 6. the Ld CIT (A) has erred in law and in facts in confirming interest charged u/s 234A, 234B and 234C of the Act.”
3. At the outset, Shri Dharmesh Shah, Ld Counsel for the assessee mentioned that ground nos. 1, 2 and 3 are not pressed. After hearing the Ld DR, the said grounds are dismissed as not pressed.
Ground no.4 & 5 are interconnected and relate to the disallowance of interest expenditure of Rs. 5,14,455/-. In this regard, at the outset, Ld Counsel mentioned that an identical issue came up for adjudication before the ITAT, Mumbai in the case of Hitesh S. Mehta vs. DCIT vide & 7727/M/2010 dated 26.4.2013, wherein the Tribunal set aside the issue to the files of CIT (A) for adjudication of the issue afresh by adjudicating the respective ground relating to the rejection / reliability of the books of account. Para 5 from the said order of the Tribunal (supra) is relevant in this regard and the same reads 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 AYs 2005- 06 and 2006-07 towards interest expenditure claimed by the assessee. It is pertinent to note that the findings given in para 3.3 above in respect of rejection / reliability 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 to the files of the CIT (A) to adjudicate afresh along with the adjudication of the respective ground pertaining to the rejection / reliability of the books of accounts.”
On the other hand, Ld DR dutifully relied on the order of the AO/CIT (A). 6. We have heard both the parties and perused the orders of the Revenue Authorities as well as the order of the Tribunal in the case of Hitesh S. Mehta (supra). Whether the interest liabilities of Rs. 5,14,455/- constitutes ascertained one or not is also linked to the issue of rejection of books of accounts as the books of account is the basis for computation of book profits u/s 115JA of the Act. This is common issue qua the issue adjudicated in the case of the Hitesh S. Mehta (supra) and matter was set aside. Respectfully following the said order of the Tribunal, we are of the considered opinion that the issue raised in ground no.4 and 5 should be set aside to the files of the CIT (A) for fresh adjudication of the issue after granting a reasonable opportunity of being heard to the assessee. The decision if any should be taken only after considering the decision in the case of Hitesh S Mehta, (supra). Accordingly, ground nos.4 and 5 are set aside. 7. Ground no.6 relates to charging of interest u/ss 234A, 234B and 234C of the Act. In connection with the charge of interest u/s 234B of the Act, Ld Counsel for the assessee submitted that the assessee being a ‘notified person’, there is no change of interest. It is his further submission that the receipts of the assessee are subjected to TDS. On the contrary, Special Counsel for the Revenue filed various