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आयकर अपीलीय अिधकरण, ‘ई’ खंडपीठ मुंबई INCOME TAX APPELLATE TRIBUNAL,MUMBAI “E” BENCH सव"ी राजे", लेखा सद" एवं संदीप गोसांई, "ाियक सद" Before S/Sh. Rajendra,Accountant Member & Sandeep Gosain,Judicial Member आयकर अपील सं/.ITA No.90/Mum/2013,िनधा"रण वष"/Assessment Year-2008-09. M/s. Eminent Holdings Pvt. Ltd. ACIT- Central Circle-31 32, Madhuli, 3rd floor, Nehru Centre, Worli,Mumbai-18. Mumbai. PAN: AAACE 3115 N (अपीलाथ" /Appellant) (""थ" / Respondent) िनधा"रती ओर से/Assessee by : Shri Dharmesh Shah-AR राज" की ओर से/ Revenue by : Dr. P. Daniel- (DR) सुनवाई की तारीख / Date of Hearing : 04-11-2015 घोषणा की तारीख / Date of Pronouncement : 01.01.2016 आयकर अिधिनयम,1961 1961 की धारा 254 254(1)के अ"ग"त आदेश 1961 1961 254 254 Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद" राजे" के अनुसार PER RAJENDRA, AM- Challenging the order dt.19.11.2012 of CIT(A)-2012, the assessee has filed the present appeal raising seven Grounds of Appeal.Vide its letter dt.15.2.2014 the assessee has raised one additional ground also. 2.During the course of hearing before us, the Authorised Representative (AR) stated that the assessee was not interested in pursuing Ground No.1-3 and the additional ground No.5 for the year under consideration.Therefore, same stands dismissed as not pressed.It was also stated that Ground No.6 was consequential to Ground No.5. 3.Ground No.4 deals with not granting relief toward interest expenditure of Rs.5,14,455/-.During the course of hearing before us, Representatives of both the sides agreed that the issue has arisen in the Harshad S. Mehta, (HSM) group on many occasions and that the Tribunal, had decided the identical issue in the case of the individual of the group as well as the corporate entities of the group.We find that the Tribunal had restored back the issue to the file of the AO in all such cases. 3.1.We find that while deciding the appeal in the case of Atur Holding Pvt. Ltd.(ITA/8481/ Mum/2010 AY07-08 dt.23.9.2015) the Tribunal has decided the issue as under : 3.It leaves us with ground No.5 which deals with disallowance of Interest Expenditure of Rs. 69.40 lakhs.During the course of hearing before us,Representatives of both the sides agreed that the issue has arisen in the Harshad S. Mehta(HSM) group on many occasions and that the Tribunal had decided the identical issue in the cases of the individual of the group as well as the corporate entities of the group.We find that the Tribunal has restored back the issue to the file of the AO in all such cases. We would like to reproduce the relevant portion of the case of Pratima H Mehta,one of the members of the HSM group,to which one of us was party (ITA/350/ Mum/ 2013(AY-2009-10 dt. 11.5.2015).In that matter the third ground of appeal read as under : “The learned Commissioner of Income tax(Appeals) has erred in law and in facts in not granting
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deduction of liability amounting to Rs.9,3587628/- towards interest expenditure claimed by the appellant.” The Tribunal decided the case as under :
"2. …... Ground No.3 was stated to be covered by the earlier decision of the Tribunal in group case. Reference was made to the decision dated 5/3/2015 passed in ITA No. 5135& ITA/8481/M/10;8352/10 ,Aatur Holdings P.Ltd. 3 5136/Mum/2012 & ITA Nos.2151/Mum/2013 in the case of Growmore Leasing & Inv. Ltd. and reference was made to the following observations:
"
Ground No. 4 relates to the disallowance of interest expense. The Ld. Counsel for the assessee brought to our notice that the decision relied upon by the Ld. CIT(A) while disposing this ground has been set aside by the Tribunal to the file of the Ld. CIT(A).
The Ld. Departmental Representative could not bring any distinguishing decision in favour of the Revenue.
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 in ITA Nos. 2139, 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 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."
Ld. Special Counsel did not controvert to such contention of Ld. AR that the issue is covered by the aforementioned decision.
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 statistical purposes for the year under appeal. Ground no.6 consequential in nature,hence is not being adjudicated.
It leaves us with Ground No.5 which deals with disallowance of Interest Expenditure of Rs. 69.40 lakhs.During the course of hearing before us,Representatives of both the sides agreed that the issue has arisen in the Harshad S. Mehta(HSM) group on many occasions and that the Tribunal had decided the identical issue in the cases of the individual of the group as well as the corporate entities of the group.We find that the Tribunal has restored back the issue to the file of the AO in all such cases. We would like to reproduce the relevant portion of the case of Pratima H. Mehta,one of the members of the HSM group,to which one of us was party (ITA/350/ Mum/ 2013(AY-2009-10 dt. 11.5.2015).In that matter the third ground of appeal read as under : “The learned Commissioner of Income tax(Appeals) has erred in law and in facts in not granting deduction of liability amounting to Rs.9,3587628/- towards interest expenditure claimed by the appellant.” The Tribunal decided the case as under :
"2. …... Ground No.3 was stated to be covered by the earlier decision of the Tribunal in group case. Reference was made to the decision dated 5/3/2015 passed in ITA No. 5135& 5136/Mum/2012 & ITA Nos.2151/Mum/2013 in the case of Growmore Leasing & Inv. Ltd. and reference was made to the following observations: " 2
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Ground No. 4 relates to the disallowance of interest expense. The Ld. Counsel for the assessee brought to our notice that the decision relied upon by the Ld. CIT(A) while disposing this ground has been set aside by the Tribunal to the file of the Ld. CIT(A).
The Ld. Departmental Representative could not bring any distinguishing decision in favour of the Revenue.
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 in ITA Nos. 2139, 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 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."
Ld. Special Counsel did not controvert to such contention of Ld. AR that the issue is covered by the aforementioned decision.
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 statistical purposes for the year under appeal. Ground no.6 consequential in nature,hence is not being adjudicated.
Next Ground of appeal is about calculating book profit as per 115JB of the Act amounting to Rs. 26.34 lacs. Before us, the AR and the DR agreed that identical issue for the AY 07-08 (ITA 8200/M/2010 dt.12.2.14) was restored back to the file of the First Appellate authority (FAA) for fresh adjudication. Following the above order the issue is set aside to the file of the FAA. As stated Ground No.6 is consequential to Ground No.5 and hence it is not being adjudicated separately. As a result, appeal filed by the Assessee stands partly allowed. फलतः िनधा"रती "ारा दािखल क" गई अपील अंशतः मंजूर क" जाती है. Order pronounced in the open court on 1st January, 2016. आदेश क" घोषणा खुले "यायालय म" "दनांक 01 जनवरी, 2016 को क" गई । (संदीप गोसांई / Sandeep Gosain) (राजे" / RAJENDRA) "ाियक सद" / JUDICIAL MEMBER लेखा सद" / ACCOUNTANT MEMBER मुंबई/Mumbai,िदनांक/Date: 01.01.2016. व.िन.स.Jv.Sr.PS. 3
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आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : 1.Appellant /अपीलाथ"
Respondent /""थ" 3.The concerned CIT(A)/संब" अपीलीय आयकर आयु", 4.The concerned CIT /संब" आयकर आयु" 5.DR A Bench, ITAT, Mumbai /िवभागीय "ितिनिध, ए खंडपीठ,आ.अ."ाया.मुंबई 6.Guard File/गाड" फाईल स"ािपत "ित //// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst.