TaxTMI 
TaxTMI 
2025 (10) TMI 1458
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.... order which is time barred and hence void. 3. The Ld. CIT(A) has erred in law and in fact in confirming the addition made on account of unexplained investment amounting to Rs. 4,70,49,835/- 4. The Ld. CIT(A) ought to have eld that the deduction of interest expenditure of Rs. 2,46,33,261/- was allowable to the appellant as directed by Hon'ble Tribunal instead of setting aside to the Ld. A.O. for verification. 5. The Ld. CIT(A) ought to have deleted the addition on account of unexplained investments to the extent relief granted by the Hon'ble Tribunal instead of setting aside to the Id. A.O. for verification. 6. The Ld. CIT(A) has erred in law and in fact in not appreciating that no interest u/s. 234D of the Act ought to be levied under the hands of the appellant. 7. The Ld. CIT(A) has erred in law and in fact in not appreciating that the interest u/s. 220 of the Act were incorrectly computed by the Ld. A.O." 3. We take up the grounds raised by the assessee seriatim. Ground no. 1 and 2 are not pressed by the assessee, in the course of hearing before us and are therefore, disposed of as not pressed. Before we adjudicate ground n....
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....arrying out the assessment proceedings. In the third round of litigation, the assessment was completed u/s. 144 r.w.s. 254, vide order dated 30.03.2016, determining total income at Rs. 11,79,22,546/- for which ld. CIT(A) gave partial relief and the matter went before the Coordinate Bench whereby the additions to the extent of Rs. 10,87,49,014/- were contested. Details of this is tabulated below: Sr No. Particulars/Source of addition Amount of total addition (Rs,) Addition deleted by the learned CIT(A) (Rs.) Balance addition confirmed by the learned CIT(A) (Rs.) 1. Custodian letter dated 29.10.1993 4,70,49,835 4,24,93,665 45,56,170 2. Companies letter received under section 133(6) 3,17,388 4,175 3,13,213 3. Dividend details/Warrants 6,13,86,742 5,14,78,822 99,07,920 Total 10,87,53,965 9,29,76,662 1,47,77,303 4.3. Coordinate Bench deleted substantial additions from the table above in ITA No.416/Mum/2023 and ITA No. 1180/Mum/2023, vide order, dated 26.10.2023. Out of the above table, addition of Rs. 4,70,49,835/- in respect of ....
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....us companies. Ld. AO was given liberty to seek any clarification from the Custodian in this regard. Thus, the direction was given to the ld. AO to re-adjudicate the matter only on the aspect of the addition for determination of shareholding in the hands of the assessee. The relevant paragraph in this respect from the aforesaid order of the Coordinate Bench is extracted below for ready reference. "16. From the perusal of the aforesaid letter dated 28/11/2017, issued by the Custodian, in reply to the clarification sought by the Revenue in the case of one of the assessee of Harshad Mehta Group, we find that the Custodian clarified that the actual owner of the shares is the person/ entity whose name is shown as owner 2 and the second holder of the shares were shown as holder. Upon careful examination of the details submitted by the Custodian, vide letter dated 29/10/1993, in light of the aforesaid clarification issued vide letter dated 28/11/2011, we find that shareholding of the assessee, which is claimed to be, inter-alia, the basis for addition in her hands as unexplained investment in shares, was held by the assessee as the second holder and she was not the owner of the sh....
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....r statistical purposes." [emphasis supplied by us by bold and underline] 4.5. while giving effect to these aforesaid directions, ld. AO passed the impugned assessment order dated 19.07.2024 whereby he reiterated the addition of Rs. 4,70,49,835/-, determining total income at Rs. 10,25,26,065/- for which the assessee is in appeal vide ground No. 3 before us. This being fourth round of litigation before the Tribunal, the issue before us has to be adjudicated based on the directions given by the Coordinate Bench in the preceding round and therefore, the scope for our adjudication is limited and restricted by the directions given in the preceding round by the Coordinate Bench. For this, we carefully take note of the findings and directions given by the Coordinate Bench in para 17 for which the basis is noted in para 15 and 16, having reference to the custodian letter dated 29.10.1993 for which a clarification was obtained vide letter dated 28.11.2011 issued by the custodian. After having taken into account the clarificatory letter dated 28.11.2011, the Coordinate Bench deleted the addition of Rs. 4,70,49,835/- by holding it as not sustainable. 4.6. However, another aspect in re....
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....ing in the hands of the assessee by taking into account the letter from the custodian including its clarification and letters from various companies, as well as claim of the actual holding by the assessee. We would thus restrict our observations and findings to this aspect of the addition for which the direction was given by the Coordinate Bench to the ld. AO who did not look into this aspect but reiterated the addition of Rs. 4,70,49,835/-. For this, we refer to the addition made by the ld. AO, holding it as unexplained investments in respect of 21 scrips, details of which is tabulated below: Sr. No. Scrip Name As per Assessment order Qty. Expl. Unexpl Inv. (Qty) Unexpl. Inv. (Rs.) Holding as per Ld. A.O. Credit as per books Unexpl. Qty. 1 ACC LTD. 34,184 23,647 10,537 11,013 - 3,15,05,691 2 ASHOK LEY FIN 3,000 - 3,000 - 3,000 8,19,375 3 ASIAN HOTELS 1,700 700 1,400 - 1,400 1,94,600 4 BHARATI TELE 20,028 9,000 11,028 - 2,028 1,11,540 5 EICHER MOTOR 3,400 1,000 2,400 - 2,400 1,44,000 6 EXCEL IND 14,420 12,400 2,020 - ....
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....r dated 28.02.1995, wherein addition was made relying upon the custodian letter. 4.10. Upon referring to the contents of these letters, it was submitted that they do not provide any details of shares acquired during assessment year 1992-93 or the details of shares held as on 31.03.1992 and hence, are not relevant for the purpose of making addition in the hands of the assessee to treat the investments as unexplained. Addition made by the ld. AO is bifurcated into two buckets one relating to nine companies in respect of which ld. AO had information of the shareholding of the assessee and for the other 12 companies, where ld. AO did not have any information neither from companies nor from the custodian. The details are tabulated as furnished by the assessee: Sr. No Scrip Name As per Assessment order Qty. Expl. Unexpl. Inv. (Qty) Unexpl. Inv. (Rs.) Holding as per Ld. A.O. Credit as per books Unexpl -Qty. 1 ACC Ltd 34,184 23,647 10,537 11,013 -- 3,15,05,691 2 Eicher Motor 3,400 1,000 2,400 -- 2,400 1,44,000 3 Finolex Pipe 1,250 250 1,000 -- 1,000 82,250 4 Hind Lever 6,012 10....
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....02.1995 after seeking credit for the details of purchases and evidences thereof submitted by the appellant during the original assessment to the tune of 23,647 shares, the balance unexplained investment was determined as per the Annexure 4 of the assessment order [Page 199 to 202 of PB No.2] at 10,537 valued at Rs. 5,77,95,445/- 35. Subsequently, vide order dated 29.02.2012, the Ld. CIT(A), directed the Ll. Ld. A.O. to grant credit in respect of the investments made by the appellant and substantiated by the evidences filed before the Ld. A.O. but not considered by him. Accordingly, the relief in respect of the addition on account of the said holding for which details were already available before the Ld. A.O. was determined for Rs. 14,29,30,785/- and addition to that extent was deleted. This is evident from the order giving effect to the Ld. CIT(A) order dated 03.09.2012 [Page 232 to 234 of PB No.2). The break-up of the said relief of Rs. 14,29,30,785/- as considered by the Ld. A.O. while passing the aforesaid order giving effect is enclosed at Page 235 of PB No.2. 36. The perusal of the said chart showing break-up of the relief shows that in respect of holding of....
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....on of shares over the years till 31.03.1992 at 7,800 shares out of which 6,000 shares were acquired in the earlier years. These 6,000 shares were acquired during A.Y. 91-92 as is evident from the break-up of the investment enclosed at Page 237 to 238 of PB No. 2, details of date-wise purchases enclosed at Page 242 to 247 of PB No. 2 and the orders of the appellate authorities accepting the books of accounts of the appellant for A. Y. 91-92 enclosed from Page 248 to 262 of PB No.2. (d) As regards 1,800 shares, the appellant has established that these shares were acquired during the year and the same was supported by relevant evidences. The nature and source of such acquisition is already filed before the Ld. A.O. These evidences are explained and referred to in the subsequent paras. 42. In view of the above, it is submitted that the unexplained investment determined by the Ld. A.O. for 2400 shares was incorrect. Finolex Pipes - Addition of Rs. 82,250/- 43. The Ld. A.O. had determined shareholding of the appellant at 1,250 shares and after granting credit of 250 shares, balance 1,000 shares were treated as unexplained. 44. We submit that p....
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....o the year under appeal. (b) The appellant has acquired 9,250 shares over the period till 31.03.1992 out of which 6,200 shares were acquired in earlier years. Part of the said holding has also been sold in the earlier years and the capital gain offered by the appellant has been accepted by the department. These 6,200 shares were acquired during A.Y. 91-92 as evident from the break-up of the investment, details of date-wise purchases and the orders of the appellate authorities accepting the books of accounts of the appellant for A. Y. 91-92. All the above details and orders are enclosed at Page 237 to 262 of PB No.2. (e) As regards 3,050 shares, the appellant has established that these shares were acquired during the year and the same was supported by relevant evidences. The nature and source of such acquisition is already filed before the Ld. A.O. These evidences are explained and referred to in the subsequent paras. 50. In view of the above, it is submitted that the unexplained investment in 5.912 shares was incorrect. JCT Ltd - Addition of Rs. 55.96.320/- 51. The A.O. has determined the shareholding of the Appellant at 49,977 shares an....
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....ined investment in 100 debentures was incorrect. Parasrampuria Syn - Addition of Rs. 9,36,478/- 57. The A.O. has determined the shareholding of the Appellant by 20,740 shares and after granting credit for 12,950 shares, the balance 7,790 shares were treated as un-explained. 58. We submit that pursuant to the enquiry from the custodian, the Ld. A.O. received letter dated 29.01.1998 issued by the company to the custodian which reflected the holding of the appellant [Page 228-230 of PB No. 2]. We submit that the said letter does not support the unexplained investment determined by the A.O. for the following reasons: (a) The said letter does not provide the information with respect to the date on which the holding is reflected. The letter shows the details of dividend for various years from F.Y. 90-91 to F.Y. 94-95. However, the details of the shares acquired during the year and the holding as on 31.03.1992 is not provided. (b) The letter, in any case, proves that out of 20,740 shares, 12,950 shares were held by the appellant even in the past years and therefore to that extent it cannot be alleged that investment was made during the year. ....
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....t the said letter does not support the unexplained investment determined by the A.O. for the following reasons: (a) The letter provided by the Ld. A.O. only refers to the holding of appellant's husband Dr. Hitesh S Mehta as the first holder jointly with the appellant. As such no holding in the name of the appellant is reflected in the said letter. (b) Moreover, the holding as per the said letter of the family member is also shown at 2,381 shares which also does not tally with the holding determined by the Ld. A.O. (c) The appellant had not acquired any shares during the year. As evident from the evidences and details placed on record, the 3,400 shares were acquired during A.Y. 90-91 or prior thereto and the balance 700 shares were acquired during A. Y. 91-92. No part of the holding was acquired during the year." 5. Per contra, ld. CIT DR supported the order of ld. AO and prayed for sustaining the addition, so made. 6. Undisputed fact of the matter is that the addition made by ld. AO while passing the order giving effect order u/s. 144 r.w.s. 254 has already been deleted by the Coordinate Bench in the preceding round of litigation (supra), holdin....
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....nditure has nexus with the income under the head 'income from other sources', including dividend income even though not direct. Coordinate Bench, thus directed the ld. AO to allow the interest expenditure claimed by the assessee u/s.57 of the Act. There is no whisper about any verification in this regard, while allowing the claim of interest expenditure. Relevant paragraphs of the decision of the Coordinate Bench in this respect are extracted below: "30. We have considered the submissions of both sides and perused the material available on record. From the perusal of the computation of total income, forming part of the paper book on pages 464-466, we find that the assessee claimed interest on bank loans of Rs. 2,46,33,261 against the income under the head "income from other sources". It is evident from the record that the learned CIT(A) placed reliance upon the decision of the Hon'ble jurisdictional High Court in CIT v/s Jagmohandas J. Kapadia, [1966] 61 ITR 663 (Bom.), in order to support the conclusion that unless the Interest expenditure was incurred solely for the purposes of making or earning dividend income, no deduction as possible under section 57 of th....
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....uding dividend income even though not direct. Accordingly, the AO is directed to allow the interest expenditure claimed by the assessee under section 57 of the Act. As a result, ground No. 3 raised in assessee's appeal is allowed, while ground No. 2 and 3 raised in Revenue's appeal is dismissed. 7.1. In the present case, ld. CIT(A) has, despite holding that the contention of the assessee is correct and ld. AO having failed to give effect to the said direction, remanded the matter for verification and give effect based thereon. In terms of the above findings of the Coordinate Bench, ld. AO is directed to allow the claim of interest expenditure claimed by the assessee as a deduction u/s.57. Ground no. 4 is allowed. 8. Ground no.5 raised by the assessee is related to ground no.3 already adjudicated upon by us in the above paragraphs. Accordingly, this ground is to be read in conjunction with our observations and findings given in ground no.3. Ground no. 5 is allowed. 9. Ground no.6 is in respect of levy of interest u/s.234D which according to the assessee ought not to have been levied in the hands of the assessee. In this respect, reference is made by the ld. Counsel ....
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....No. 1922, 19th Floor, Air India Bldg, Nariman Point, Mumbai-400021 रजि. नं./ Reg. No. 110 Day उपायà¥à¤•à¥à¤¤, केनà¥à¤¦à¥à¤°à¥€à¤¯ कारà¥à¤¯à¤¾à¤²à¤¯ ,come Tax, Const 21 MAY 2024 * Mumbai * * * मà¥à¤‚बई Sub .: Hon'ble ITAT order in the case of Mrs. Pratima H. Mehta - A.Y.1992-93 -reg. Sir, This is reference to your office letter no. DCIT-CC-4(1)/Pratima Mehta -ITAT order/2024-25 dated 02.05.2024 requesting this office to inform the basis/source relying on which the information of shareholding as on 31.03.1992 in the case was prepared and provided to the A.O by the Custodian during the assessment proceedings in the case of the assessee for A.Y.1992-93 that was completed on 28.02.1995. The information of shareholding as on 31.03.1992 was drawn based on the intimation given to the Custodian by the companies, which was reiterated in this office letter No.2302/CUS/BOM/HM/IT ASSESSMENT/ (2445) dated 28th November, 2017. In this regard the copies of letters from various companies reflecting the shareholding is....