Appeals partly allowed, issues on interest charged remitted. Reopening of assessments dismissed. Disallowance of interest remitted.

The appeals were partly allowed, with issues regarding charging of interest under sections 234A, 234B, and 234C remitted back for re-adjudication due to the overriding effect of the Special Court Act. The challenges against the reopening of assessments and rejection of books of account were dismissed. The issue of assessment of income from attached assets was also dismissed. The matter of disallowance of interest expenditure and addition on account of suspense entries were remitted back for fresh adjudication. An additional ground raised by the assessee was deemed academic by the Tribunal.

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Issues Involved:
1. Charging of interest under sections 234A, 234B, and 234C of the Income Tax Act.
2. Reopening of assessment under section 147.
3. Rejection of books of account.
4. Assessment of income from attached assets.
5. Disallowance of interest expenditure.
6. Addition on account of suspense entries.

Issue-wise Detailed Analysis:

1. Charging of Interest under Sections 234A, 234B, and 234C:
The primary issue for the assessment years (AYs) 1998-99, 2000-01, 2001-02, and 2008-09 was the charging of interest under sections 234A, 234B, and 234C. The Assessing Officer (AO) had charged interest as per these sections. The assessee contended that as a notified entity under the Special Court Act, interest could not be charged since the assets were under the control of the custodian and the assessee could not pay advance tax without the Special Court's direction. The First Appellate Authority (FAA) agreed and deleted the interest charges, citing the overriding effect of the Special Court Act over the Income Tax Act. The Tribunal remitted the issue back to the FAA for re-adjudication, following a similar decision in the case of Hitesh Mehta for AYs 2005-06 to 2007-08.

2. Reopening of Assessment under Section 147:
For AYs 1998-99 and 2000-01, the assessee challenged the reopening of the assessment under section 147. However, during the hearing, the Authorized Representative (AR) did not press this ground, leading to its dismissal.

3. Rejection of Books of Account:
The AO rejected the books of account under section 145(3), citing that the assets and documents were with the custodian, making it impossible to determine the true income. The FAA upheld this rejection, noting the lack of evidence regarding the sanctity of the books. The Tribunal, referencing a similar issue in the case of Hitesh Mehta, remitted the matter back to the FAA for fresh adjudication.

4. Assessment of Income from Attached Assets:
The assessee argued that no income from attached assets could be assessed in their hands. This ground was not pressed during the hearing for AYs 1998-99 and 2000-01, leading to its dismissal.

5. Disallowance of Interest Expenditure:
For AYs 1998-99, 2000-01, 2001-02, and 2008-09, the issue of disallowance of interest expenditure was raised. The Tribunal had previously remitted this issue back to the AO for fresh adjudication in the case of the assessee for AYs 2005-06 to 2007-08. Following this precedent, the Tribunal restored the matter to the AO for fresh adjudication for the relevant AYs.

6. Addition on Account of Suspense Entries:
For AY 2001-02, there was an addition of Rs. 2.92 lakhs on account of suspense entries. The Tribunal noted that a similar issue in the case of Hitesh Mehta for AY 2001-02 had been remitted back to the FAA. Following this, the Tribunal also remitted this issue back to the FAA for fresh adjudication.

Additional Ground:
The assessee raised an additional ground for all four AYs, arguing that the income should be assessed in the hands of Shri Harshad S. Mehta as per a Special Court decision. The Tribunal treated this ground as academic in nature, stating that the decision of the Hon'ble Supreme Court would be followed without dispute, and thus, no specific direction was required.

Conclusion:
The appeals filed by both the AO and the assessee were partly allowed, with several issues remitted back to the FAA or AO for fresh adjudication, ensuring that the assessee is given a reasonable opportunity of being heard.

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