M/s.Topaz Holdings Pvt. Ltd. 32, Madhuli, 3rd Floor, Dr. Annie Besant Road, Nehru Centre, Worli, Mumbai 400018 Vs. The ACIT, CC-31, Mumbai.
October, 29th 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES `E' MUMBAI
[^ .. , Û ^ .. [ , ¢
BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND
SHRI R.C.SHARMA , ACCOUNTANT MEMBER
ITA NO.5131/MUM/2012 (A.Y.2008-09)
ITA NO.5132/MUM/2012 (A.Y.2009-10)
M/s.Topaz Holdings Pvt. Ltd. The ACIT, CC-31,
32, Madhuli, 3rd Floor, Mumbai.
Dr. Annie Besant Road, Vs.
Nehru Centre, Worli,
(Appellant ) (Respondent)
Appellant by : Shri Dharmesh Shah
Respondent by : Dr.P.Daniel
Date of hearing : 21/10/2014
Date of pronouncement : 21/10/2014
PER I.P.BANSAL, J.M:
Both these appeals are filed by the assessee and are directed against two
separate orders passed by Ld. CIT(A)-40, Mumbai dated 26.06.2012 for
assessment years 2008-09 and 2009-10. Grounds of appeal for both the years
are identical except difference in the figures. Grounds of appeal for a.Y 2008-
09 read as under:
"1. The learned Commissioner of Income-tax (Appeals) has erred in law and in
facts in passing the order u/s.250 of the Act.
2.The learned Commissioner of Income-tax (Appeals) has erred in law and in
facts in not appreciating that no income from attached assets can be assessed in
the hands of the appellant.
2 ITA NO.5131& 5132/MUM/2012 (A.Y.2008-09)
3.The learned Commissioner of Income Tax (Appeals) has erred in law and in
facts in confirming the disallowance of Rs.2,86,72,678/- on account of interest
4. The learned Commissioner of Income-tax (Appeals) has erred in law and
facts in confirming the calculation of book profit u/s. 115JB at Rs.2,20,528/-
5. The learned Commissioner of Income-tax (Appeals) has erred in law and in
facts in confirming interest charges u/s. 234A, 234C of the Act".
2. For assessment year 2009-10 the figure mentioned in Ground No.3 & 4
are mentioned as Rs.3,12,709/- and Rs.1,76,760/- respectively.
3. Both these appeals were argued together by both the parties and ground
of appeal are also identical, therefore, for the sake of convenience both of them
are disposed of by this consolidated order.
4. It may also be mentioned here that in both appeals additional grounds
were also field by the assessee which were not pressed by Ld. AR, therefore,
additional grounds raised in both the years are dismissed as being not
5. It may further be mentioned that Ground No.1 & 2 in both the appeals
were not pressed, therefore, they are also dismissed as being not pressed.
6. Apropos Ground No.3 & 4 in both the appeals, it was submitted by Ld.
AR that while deciding these grounds Ld. CIT(A) has placed reliance on the
decision in the group case of the assessee namely M/s.Eminent Holdings P.
Ltd. in respect of assessment year 2007-08 and following the same he has
dismissed these grounds. Reference was invited to paras 7, 7.2 and 8 of the
impugned order passed by Ld. CIT(A). It was further submitted that the
Tribunal in the case of M/s. Eminent Holdings P. Ltd. has restored back the
issue to the file of Ld. CIT(A). Reference in this regard was made to the order
passed by the Tribunal which is dated 12/02/2014 passed in cross appeals in
3 ITA NO.5131& 5132/MUM/2012 (A.Y.2008-09)
ITA No.8200/Mum/2010 and 8353/Mum/2010 in the case of M/s. Eminent
Holdings P. Ltd. and vice versa . Copy of the order was placed on our record
and was also given to Ld. DR. Reference was made to the following portion of
the said order:
"4. Ground No.4 & 5 are inter-connected relating to the disallowance of inter-
connected relating 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 ITA No.7726 & 7727/M/2010 dated 26.04.2013, 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) isrelevant 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) iii 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."
5. 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
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 & 5 are set aside."
6.1 Referring to above observation it was submitted by Ld. AR that similar
order may be passed in the present appeals also.
4 ITA NO.5131& 5132/MUM/2012 (A.Y.2008-09)
6.2 Ld. DR did not object to the such submissions of Ld. A.R.
7. In view of the situation after hearing both the parties, respectfully
following the aforementioned decision of Tribunal, we restore this issue to the
file of Ld. CIT(A) for fresh adjudication as per directions given in the
aforementioned order. We direct accordingly. These grounds for both the
years are considered to be allowed for statistical purposes. In the manner
8. Apropos ground No.5 of both the appeals, it was submitted by Ld. AR
that this issue is covered by the order of the Tribunal in assessee's own case
for A.Y 2001-02. Reference in this regard was made to the order passed by
the Tribunal dated 18/06/2014 in ITA No.2146/Mum/2013, copy of the order
was placed on our record and was also given to Ld. DR. Reference was made to
the following observations:
3.Next ground of appeal is about levy of interest u/s. 234 of the Act. Before us,
AR stated that the assessee was a notified entity, that the provisions of s. 234A,
234B and 234C of the Act were deemed to have complied with, that the assets
were already in attachment of the Custodian appointed under the provisions of
the Special Courts Act, that the Tribunal in the case of the appellant and several
other entities had held the view in favour of the appellant, that the Hon'ble
Bombay High Court in the case of Divine Holdings Pvt. Ltd. and Cascade
Holdings Pvt. Ltd. had held that the provisions of sections 234A,2348 and 234C
of the Act were mandatory and were applicable to the notified entities also, that
the assessee was in the process of filing an appeal against the said order before
the Hon'ble Supreme Court, that the income earned in the year under
consideration was subjected to provisions of TDS, that the changeability of the
section 234A, 234B and 234C of the Act should be after considering the amount
of tax deductible at source on the income assessed. The appellant relies in this
regard on the following decisions. He relied upon the cases of Motorola inc. V.
DCIT [95 ITD 269 (Del.(SB)], Sedco Fores Drilling Co. Ltd. [264 ITR 320],NGC
Network Asia LLC [313 ITR 1871 ,Summit Bhatacharya [ 300 ITR (AT) 347
(Bom)(SB)], Vijal Gopal Jindal [ITA No. 4333/De1J2009] & Emillo Ruiz Berdejo
[320 ITR 190 (Bom)J.DR relied upon the cases of Devine Holdings Pvt. Ltd.
3.1.We have heard the rival submissions and perused the material before us. We
find that in the case of Devine Holdings Pvt. Ltd. Hon'ble Bombay High Court has
held that provisions of section 234A, 234B and 234C were applicable to the
notified person also. Therefore, upholding the order of the FAA to that extent, we
hold that provisions of section 234 of the Act are applicable. As far as calculation
5 ITA NO.5131& 5132/MUM/2012 (A.Y.2008-09)
part is concerned, we find merits in the submission made by the assessee.
Therefore, we are restoring back the issue to the file of the AO for fresh
adjudication who would decide the issue after considering the amount taxed
deductible at source on the income assessed and after affording a reasonable
opportunity of hearing to the assessee. Ground no.5 is allowed in part in favour of
8.1 Referring to the aforementioned order it was submitted by Ld. AR that
similar order may be passed.
8.2 On the other hand, Ld. DR relied upon the order passed by Ld. CIT(A).
9. We have heard both the parties. After considering the submissions of
both the parties, respectfully following the aforementioned decision we restore
this issue to the file of AO for fresh adjudication as per directions given in the
aforementioned order. We direct accordingly. This ground for both the years
is also considered to be allowed for statistical purposes in the manner
10. In the result, both the appeals filed by the assessee are considered to be
partly allowed for statistical purposes in the manner aforesaid.
Order pronounced in the open court on 21/10/2014
(.. [ /R.C.SHARMA ) (.. / I.P. BANSAL)
/ ACCOUNTANT MEMBER Û / JUDICIAL MEMBER
6 ITA NO.5131& 5132/MUM/2012 (A.Y.2008-09)
/Copy of the Order forwarded to :
1. / The Appellant
2. × / The Respondent.
3. () / The CIT(A)-
4. / CIT
5. , , / DR, ITAT,
6. [ / Guard file.
/ BY ORDER,
× //True Copy//
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai
.../Vm, Sr. PS