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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI N.K. BILLAIYA & SHRI AMARJIT SINGH
आदेश / O R D E R
PER N.K. BILLAIYA, AM:
These bunch of appeals of three different assessees were heard together as they involved common issues and are disposed of by this common order for the sake of convenience.
At the very outset representatives from both sides agreed that the common issues involved in all these appeals have already been decided in plethora of decisions of the Tribunal in Harshad Mehta group of cases. Related orders were provided by the Ld. Counsel for our kind perusal. 2.1. Having said all that we proced by deciding the appeals as follows:
ITA No. 6198/Mum/2011- A.Y. 2003-04
The Ld. Counsel for the assessee stated that he is not pressing ground No. 1, 2 & 3, the same are dismissed as not pressed.
4.1. This issue has been considered by the Ld. CIT(A) at Para-6 of his order. The additions have been made in respect of deposits which according to the AO were not reconciled.
4.2. Before us, the Ld. Counsel for the assessee stated that an identical issue was considered by the Tribunal in one of the group cases viz., Hitesh S. Mehta in ITA No. 1671/M/2012.
4.3. We have carefully gone through the decision of the Tribunal in the case of Hitesh S. Mehta (supra). We find that a similar issue was considered at para-33 as under:
“Ground No. 4 relates to the addition on account of deposits in the bank account treated as suspense entries amounting to Rs. 50,641/-. We find that identical issues were before the Tribunal in ITA No 5587/M/11. The Tribunal has considered identical issues at para-6 of its order and at para 6.3 the Tribunal held as under:
“After considering the rival submissions and considering the material on record, we found that this issue needs readjudication at the end of the learned CIT(A). Learned CIT(A) has dismissed the ground of the assessee by observing in para 8.2(iii) at page 6, which are as under :-
“(iii) In respect of the item at sr. no.2 to 4, the appellant has merely claimed that the same represents dividend income of the appellant. He has however, pleaded before the Assessing Officer that the said evidence is not in his possession and hence the same may be obtained from the custodian. I find that the onus to explain the deposit entry is on the appellant and hence unless the burden of proving the deposit is discharged, the onus does not shift on the Assessing Officer. It is seen that no evidence is filed in respect of the claim of the appellant that 4 & 6198/M/11 ITA Nos. 560 & 561/M/13 & 6831/M/13 the amount of Rs.37,715/-, Rs.2,54,500/- and Rs6,80,500/- does not represent interest income. In the light of the same, the said addition of the said amounts as interest income is confirmed.”
After going through the finding of the learned CIT(A), we found that the learned CIT(A) should have obtained the details from custodian as the custodian appointed by the Special Court, is not obliged to assessee by providing necessary details in spite of various requests made on behalf of the assessee. Copies of requests are placed on record. In view of the above facts and circumstances of the case, we set aside this issue to the file of the CIT(A) to decide the issue afresh after obtaining necessary details from the custodian and after affording opportunity of hearing to the assessee. We order accordingly.”
The Ld. CIT(A) is directed to readjudicate this issue in the line of the above directions of the Tribunal for A.Y. 1994-95. Ground No. 4 is allowed for statistical purpose.”
Respectfully following the findings of the Co-ordinate Bench, we direct accordingly. Ground No. 4 is treated as allowed for statistical purpose.
Ground No. 5 is common in all the captioned appeals and it relates to the disallowance on account of interest expenses. The quantum of disallowance may differ in the captioned appeals.
5.1. An identical issue has been considered by the Tribunal in the case of M/s. Growmore Research & Assets Mgt. Ltd. in & 5138/M/2012 and ITA No. 2150/M/13. We find that the Tribunal has considered the issue at para-5 of its order which read 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 5 & 6198/M/11 ITA Nos. 560 & 561/M/13 & 6831/M/13 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.”
Respectfully following the findings of the Co-ordinate Bench, we direct accordingly. Ground No. 5 is also treated as allowed for statistical purpose.
Ground No. 6 relates to the addition on account of other expenses amounting to Rs. 15,204/-.
6.1. This issue has been considered by the Ld. CIT(A) at para-7.4 of his order wherein he has observed that the assessee has not submitted the details of the expenses amounting to Rs. 15,204/-.
6.2. Before us, the Ld. Counsel for the assessee stated that the details have not been properly appreciated by the First Appellate Authority. In our considered opinion and in the interest of justice and fair play, this issue needs reconsideration by the First Appellate
6 & 6198/M/11 ITA Nos. 560 & 561/M/13 & 6831/M/13 Authority. We, therefore, restore this issue to the file of the Ld. CIT(A). The assessee is directed to file necessary details in support of its claim and the Ld. CIT(A) is directed to verify the same and decide the issue afresh. Ground No. 6 is treated as allowed for statistical purpose.
Ground No.7 relates to the addition on account of diminutionin trading stock amounting to Rs. 2,05,464/-.
7.1. The assessee is in the business of share trading which has been accepted by the AO in his assessment order. For certain statutory reasons, the assessee is not permitted to do trading in the shares in the stock market but at the same time the assessee is showing the shares as stock-in-trade and following the same as per the method of accounting regularly followed by her for the business. Therefore, in our considered opinion, any diminution in the value of the stock as at the end of the year has to be allowed. We, therefore, set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition of Rs. 2,05,464/-. This ground of the assessee is allowed.
In the result, the appeal filed by the assessee is partly allowed for statistical purpose. - A.Y. 2003-04 – Revenue’s appeal
This appeal by the Revenue is directed against the order of the Ld. CIT(A)-40, Mumbai dated 27.6.2011 pertaining to A.Y. 2003-04.
7 & 6198/M/11 ITA Nos. 560 & 561/M/13 & 6831/M/13 10. The sole grievance of the Revenue is that the Ld. CIT(A) erred in holding that no interest could be levied in the present case u/s. 234A, 234B and 234C of the Act.
10.1. Before us, the Ld. DR brought to our notice that this issue has been decided by the Hon’ble Jurisdictional High Court in favour of the Revenue and against the assessee to which the Counsel fairly conceded .
10.2. This issue has also come up before the Tribunal in one of the group cases viz., M/s. Harsh Estates Pvt. Ltd. in 1033 & 3464/M/2013. We find that the Tribunal has considered this issue at para-6 of its order wherein it has held as under:
“So far as, charging of interest u/s 234A, 234B and 234C is concerned the ld. Counsel for the assessee contended that it may be sent to the file of the ld. Assessing officer. However, the ld. Special counsel contended that the levy of interest is mandatory therefore it should be 5 M/s Harsh Estates Pvt. Ltd. decided against the assessee. However the ld. Counsel for the assessee contended that it may be sent to the Assessing Officer for actual calculation purposes only. Agreed, levy of interest is mandatory and sometimes consequential depending upon the facts of each case. We note that identical issue arose before the Tribunal in the aforesaid cases therefore following the reasoning contained therein, we direct the Assessing Officer to recomputed the interest liability after reducing the amount of tax deductable at source and decide as per the provisions of law. We direct accordingly, thus, this ground is allowed for statistical purposes.”
Respectfully following the findings of the Co-ordinate Bench, we direct accordingly.
In the result, the appeal filed by the Revenue is treated as allowed for statistical purpose.
ITA No. 560/Mum/2013 – A.Y. 2001-02
This appeal by the assessee is preferred against the order of the Ld. CIT(A)-37, Mumbai dated 20.11.2012 pertaining to assessment year 2001-02.
Ground No. 1, 2 & 3 are not pressed and the same are dismissed as not pressed.
Ground No. 4 relates to the addition on account of interest expenditure.
14.1. This ground is identical to ground No. 5 of for A.Y. 2003-04 in assessee’s appeal. Following the same reasoning mentioned hereinabove at para 5 & 5.1, grounds of appeal taken for A.Y. 2001-02 is also allowed for statistical purpose.
15. Ground No. 5 relates to levy of interest u/s. 234A, 234B & 234C of the Act.
This ground is identical to ground No. 1 of for A.Y. 2003-04 in Revenue’s appeal. Following the same reasoning mentioned hereinabove at para 10 to 10.2, ground of appeal taken for A.Y. 2001-02 is also allowed for statistical purpose.
ITA No. 561/Mum/2013- A.Y. 2003-04
Ground No. 1, 2 & 3 are not pressed and the same are dismissed as not pressed.
Ground No. 4 relates to the addition on account of interest expenditure.
18.1. This ground is identical to ground No. 5 of for A.Y. 2003-04 in assessee’s appeal. Following the same reasoning mentioned hereinabove at para 5 & 5.1, grounds of appeal taken for A.Y. 2003-04 is also allowed for statistical purpose.
19. Ground No. 5 relates to levy of interest u/s. 234A, 234B & 234C of the Act.
This ground is identical to ground No. 1 of for A.Y. 2003-04 in Revenue’s appeal. Following the same reasoning mentioned hereinabove at para 10 to 10.2, ground of appeal taken for A.Y. 2003-04 is also allowed for statistical purpose.
ITA No. 6831/M/2013 – A.Y. 2009-10
This appeal by the assessee is preferred against the order of the Ld. CIT(A)-40, Mumbai dated 30.9.2013 pertaining to Assessment year 2009-10.
Ground No. 1 is not pressed therefore it is dismissed as not pressed.
22.1. Ground No. 2 relates to the disallowance of interest expenditure.
22.2. This ground is identical to ground No. 5 of for A.Y. 2003-04 in assessee’s appeal. Following the same reasoning mentioned hereinabove at para 5 & 5.1, ground of appeal taken for A.Y. 2009-10 is also allowed for statistical purpose.
This issue has been considered by the AO at para-7 of his order wherein he has observed that the assessee has not shown proper withdrawals for household expenses. According to the AO, the assessee must be spending Rs. 25,000/- per month which is not reflected in the books. The AO therefore added Rs. 3,00,000/- to the total taxable income u/s. 69C of the Act.
The assessee carried the matter before the Ld. CIT(A) but without any success.
Before us, the Ld. Counsel for the assessee filed a chart showing details of personal withdrawals which read as under:
Sr. Name Addition on Addition on Personal No. account of low account of low withdrawals withdrawals by withdrawals disclosed shown AO Confirmed by Ld. by Dr. Hitesh S. CIT(A). Mehta 1. Dr. Hitesh S. Mehta ----- ------ 25,79,747/- 2. Shri Ashwin S. Mehta 12,00,000/- 6,00,000/- ----- 3. Shri Sudhir S. Mehta 12,00,000/- 12,00,000/- ----- 4. Smt. Jyoti H. Mehta 21,60,000/- 10,80,000/- ----- 5. Smt. Deepika A Mehta 3,00,000 3,00,000/- ----- (appellant) 6. Smt. Rina S. Mehta 12,00,000/- 6,00,000/- ----- Total 60,60,000/- 37,80,000/- 25,79,747/-
The Ld. Counsel further filed a chart showing year-wise details of withdrawals which reads as under:
Sr. No. Assessment year Amount
11 & 6198/M/11 ITA Nos. 560 & 561/M/13 & 6831/M/13 1. 2001-02 93,500/- 2. 2002-03 1,23,600 3. 2003-04 6,59,476/- 4. 2004-05 3,72,580/- 5. 2005-06 6,41,454/- 6. 2006-07 7,00,333/- 7. 2007-08 13,40,729/- 8. 2008-09 13,10,545/- 9. 2009-10 25,79,747
It is the say of the Ld. Counsel that the entire family lives in the same place and the withdrawals of the entire groups is sufficient to meet out the personal expenditures.
28.1. The Ld. Counsel further stated that the professional fee paid to consultants and lawyers have been separately debited by Dr. Hitesh S. Mehta in his profit and loss account amounting to Rs. 12,70,258/-.
Per contra, the Ld. DR strongly supported the findings of the AO.
We have given a thoughtful consideration to the facts brought on record before us. We find that in the group cases, the addition on account of low withdrawals made by the AO amounting to Rs. 60,60,000/- have been restricted by the Ld. CIT(A) at Rs. 37,80,000/- which also includes the present addition of Rs. 3,00,000/-. Considering the factual matrix of the entire family, in our considered opinion, an addition of Rs. 1,50,000/- should meet the ends of justice. We, modify the findings of the Ld. CIT(A) and direct the AO to make
In the result, appeal filed by the assessee in is partly allowed for statistical purpose, the appeal filed by the Revenue in ITA No. 5870/M/.11, is treated as allowed for statistical purpose, appeal filed by the assessees in ITA Nos. 560 & 561/M/13 are partly allowed for statistical purpose & appeal filed by the assessee in ITA No. 6831/M/13 is partly allowed for statistical purpose .
Order pronounced in the open court on 21st October, 2015