Income Tax Appellate Tribunal - Mumbai
Shiv Discretionary Family Trust, ... vs Assessee on 29 September, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI "D" BENCH, MUMBAI
BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL
MEMBER,
AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER.
ITA. No. 6277/Mum/2013
(Assessment Year: 1984-85)
Radhakrishan Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AACTR0817Q
&
ITA. No. 6282/Mum/2013
(Assessment Year: 1984-85)
Shiv Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai
Respondent
PAN: AAMTS2808L
&
I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O )
and Other 14 appeals. Page 2
ITA. No. 6286/Mum/2013
(Assessment Year: 1984-85)
Mahadev Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AADTM3001E
&
ITA. No. 6287/Mum/2013
(Assessment Year: 1984-85)
Narayan Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AABTN7276Q
&
I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O )
and Other 14 appeals. Page 3
ITA. No. 6288/Mum/2013
(Assessment Year: 1984-85)
Rayman Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AACTR0815N
&
ITA. No. 6289/Mum/2013
(Assessment Year: 1984-85)
Mukund Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AADTM3003G
&
I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O )
and Other 14 appeals. Page 4
ITA. No. 6290/Mum/2013
(Assessment Year: 1984-85)
Manmohan Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AADTM3005A
&
ITA. No. 6294/Mum/2013
(Assessment Year: 1984-85)
Murari Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AADTM3002H
&
I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O )
and Other 14 appeals. Page 5
ITA. No. 6295/Mum/2013
(Assessment Year: 1984-85)
Ranchod Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AACTR0816R
&
ITA. No. 6300/Mum/2013
(Assessment Year: 1984-85)
Ram Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AACTR0834K
&
I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O )
and Other 14 appeals. Page 6
ITA. No. 6301/Mum/2013
(Assessment Year: 1984-85)
Tarak Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AACTT1826F
&
ITA. No. 6302/Mum/2013
(Assessment Year: 1984-85)
Nilkanth Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AABTN7277R
&
I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O )
and Other 14 appeals. Page 7
ITA. No. 6303/Mum/2013
(Assessment Year: 1984-85)
Murlidhar Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AADTM3004B
&
ITA. No. 6328/Mum/2013
(Assessment Year: 1984-85)
Krishna Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AACTK0953C
&
I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O )
and Other 14 appeals. Page 8
ITA. No. 6330/Mum/2013
(Assessment Year: 1984-85)
Divakar Discretionary Family Trust
C/o. Sevantilal N. Shah & Co.
28, Dalamal Chambers, 2nd Floor,
17, New Marine Lines, Mumbai-400 020 Appellant
Vs.
Income Tax Officer - 12(2)(1),
Mumbai Respondent
PAN: AABTD7891H
आवेदक क ओर से / By Assessee : Shri Rajendra D. Shah, A.R.
राज व क ओर से / By Revenue : Shri Jeetendra Kumar, D.R.
सन
ु वाई क तार ख/Date of Hearing : 24.09.2015
घोषणा क तार ख/Date of
Pronouncement :29.09.2015
ORDER
PER BENCH :
All these appeals pertain to different assessees of same group filed by assessee are arising out from the respective orders of CIT(A)-23, Mumbai, dated 29.08.2013 for all appeals on similar issue. So, they are being disposed of by way of common order for the sake of convenience. I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O ) and Other 14 appeals. Page 9
2. In ITA No. 6277/Mum/2013 for A.Y. 1984-85, in case of Radhakrishan Discretionary Family Trust, assessee has filed appeal on the following grounds:
"1) In law and in facts and circumstances of the Appellant's case, the learned CIT(A) has grossly erred in the points of law and facts.
2) In law and in facts and circumstances of the Appellant's case, the learned CIT(A) has grossly erred in holding that appellant is not entitled to interest on refund of Rs. 40,442/-.
3) In law and in facts and circumstances of the Appellant's case, the learned CIT(A) has grossly erred in holding that appellant is not eligible for interest on refund of Rs.1l,138/-.
4) In law and in facts and circumstances of the Appellant's case, the learned CIT(A) has grossly erred in holding that appellant is not eligible for interest on interest."
3. Assessee is beneficiary of K. Kachradas Patel Specific Family Trust, having 0.5% share in parent trust, as per Schedule-1 before CIT(A) and forming part of trust deed of said trust. Assessee trust derives 0.5% deferred share also as per Schedule-II before CIT(A) and forming part of trust deed of parent trust.
4. First issue is with regards to entitlement to interest on refund of Rs.40,442/-. Assessee filed its return of income for A.Y. 1984-85 with concerned Income Tax Officer, Mumbai showing total income of Rs.1,10,290/- and paid taxes thereon of Rs.51,580/-.
I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O ) and Other 14 appeals. Page 10 4.1 Assessee was assessed to income of Rs.1,10,290/- by Income Tax Officer vide his order dated 27.02.1987. The said income was assessed to tax on protective basis as the same was assessed to tax on substantive basis in case of main Trust, i.e. K. Kachradas Patel Specific Family Trust. The main trust was agitating the matter in higher judicial forums. Ultimately, main trust i.e. K. Kachradas Patel Specific Family Trust settled the dispute with department by making a declaration of said income under K.V.S.S. 4.2 On substantive assessment of income in hands of main trust was protectively assessed in case of assessee i.e. beneficiary trust and same was deleted by Assessing Officer, Ward 16(5), Mumbai vide order u/s.155 of Income Tax Act dated 28.11.2000. Thus total income in case of this assessee was computed at nil as per above order dated 28.11.2000.
4.3 Assessing Officer allowed refund thereon as per following details:
Total taxes paid Rs.51,580/- Less: Refunded vide order dt.29/2/88 Rs.40,442/- Bal. refund due Rs.11,138/-
Assessing Officer allowed refund of Rs.11,138/- as per above calculation.
4.4 Subsequently, assessee submitted rectification application u/s.154 of the Act dated 07/12/2000 seeking following refunds;
I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O ) and Other 14 appeals. Page 11
1) Refund of Rs.40,442/-, allegedly transferred in case of main trust, along with due interest.
2) Interest on refund as also interest on interest. It appears from the order of Assessing Officer that assessee filed rectification application dated 05.10.2012 for interest on refund u/s.244A till the date of refund order for A.Y. 1984-85. It has been stated in order u/s.154 that refund for the above assessment year was allowed vide order u/s.155(2) dated 28.11.2000 but interest on the same was not given and it was for the reason that assessee had filed rectification application.
4.5 Assessing Officer passed order u/s.154 dated 05.12.2012 rejecting the rectification application of assessee. Thus, Assessing Officer disallowed the claim of interest of assessee with following observations on page 2 of its order:
"Regarding the contention of the assessee that interest u/s.214/244A of the I.T. Act should be allowed on the refund amount, it may be observed that the refund has arisen on account of declaration made under the KVSS by the main trust, i.e. K. Kachradas Patel Specific Family Trust. By filing the declaration under KVSS, the main trust got the benefit of exemption from paying to the Income Tax Department, the interest on the disputed income. As a result of this KVSS declaration, refund has arisen in the case of the beneficiary trust. As the main trust has not paid interest on the disputed income, the beneficiary trust cannot be allowed interest on the consequential refund that arose. It would amount to double jeopardy for the Income Tax Department."
"Further, it may be observed that no claim for the said I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O ) and Other 14 appeals. Page 12 refund was made in the return of Income filed. The claim for refund was made only after the KVSS declaration in the case of the main trust was filed and accepted. The decision to opt for the KVSS was taken by the assessee and any fall out thereof cannot be attributed to the department. As the refund has been arisen consequential to the KVSS declaration filed by the main trust, and delay in the claim and issue of refund is attributable entirely to the assessee and not to the department. In view of the specific provisions of Sec. 244A (2) of the Act, no interest u/s.244A is payable to the assessee."
4.6 Matter was carried before the First Appellate Authority against the claim of assessee made by it in its petition u/s.154. In appeal, CIT(A) with regards to allowability of fund of tax paid of Rs.40,442/-, assessee stated that Assessing Officer held in his order u/s.154 of the income Tax Act dated 28.11.2000, determined the refund of Rs.51,580/- due to assessee. However, refund of Rs.11,138/- was only allowed to assessee after adjustment of Rs.40,442/- alleged to has been refunded vide order dated 29.02.1988. However, no proof of such payment or adjustment has been provided to the assessee. Hence, Assessing Officer be required to provide proof of such payment or adjustment of Rs.40,442/- to assessee or in alternative he may be instructed to refund the said amount to assessee. CIT(A) also observed that assessee has himself admitted that in income tax computation form, refund of Rs.40,442/- has been shown to have been already refunded. Hence according to CIT(A), it was an admitted position that I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O ) and Other 14 appeals. Page 13 Assessing Officer has computed the refund amount and has agreed that such refund is payable to assessee. Thus, assessee may approach concerned Assessing Officer or other concerned authorities to establish that refund had not been received and that Assessing Officer was required to make payment on account of refund computed by him. In view of above, CIT(A) dismissed the appeal on technical point.
4.7 Before us, learned Authorized Representative submitted that under facts and circumstances, CIT(A) grossly erred that assessee is not entitled to interest on refund of Rs.40,442/- and eligibility for interest on refund of Rs.11,138/- as raised by ground no.2 & 3 before us. He pointed out that this issue is covered in favour of assessee in case of similarly placed trust i.e. Vaibhavi Discretionary Family Trust vs. ITO 12(2)(1) and other appeals by ITAT 'F' Mumbai Bench by observing as under:
"7. We have heard both the parties and their contentions have carefully been considered. In the present cases assessees are common to the assessees with regard to whom, earlier Special Bench had decided the issue that assessee is entitled to interest on the refund. Special Bench order was on the merits of the issue as well as on the validity or otherwise of section 263 of the Act which was invoked by the CIT to deny these assesses benefit of interest which was already granted by the AO. Special Bench has decided this issue in favour of the assessee and relevant observation of Special Bench have already been reproduced above.
I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O ) and Other 14 appeals. Page 14 7.1 The Revenue challenged the aforementioned order of Special Bench before Hon'ble Gujarat High Court and Gujarat High Court has not only upheld the decision of Special Bench on the issue regarding grant of interest but Hon'ble High Court has also directed Revenue authorities that they should not drag the assesseess to unnecessary avoidable litigation. In spite of such a warning given by the Court to the Revenue, the Department again in the present cases has dragged these assessees in litigation for non- granting of the interest. The relevant observations of their Lordships of Gujarat High Court have already been reproduced. It is made clear that the facts of the present cases and those which were decided by the Special Bench and Hon'ble Gujarat High Court are pari-materia and this fact was not disputed by the Revenue. The AO has adopted a view which is contrary to the decision of Special Bench and the decision of the Hon'ble Gujarat High Court and as he has again made the disallowance by rejecting the rectification application of the assessee. Thus, the conduct of the AO is against the decision rendered by Special Bench. Similarly, Ld. CIT(A) has disregarded the Special Bench by simply holding that the same would not be applicable. According to Ld. CIT(A) the said order was in respect of section 244A. We don't find any justification in such disregard shown by Ld. CIT(A). Therefore, in the facts & circumstances of the case, such conduct of the Revenue is neither according to the accepted position of law settled by the higher judicial forums nor it is appreciable for the reason that Hon'ble Gujarat High Court has already directed the Revenue not to drag the assessee in unnecessary avoidable litigation.
7.2 The issue regarding grant of interest to the assessees is clearly covered by the decision of the Special Bench as well as Hon'ble Gujarat High Court which have not been contended to be reversed or modified. Therefore, we direct I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O ) and Other 14 appeals. Page 15 the Revenue to grant the interest to the assessee and Ground No.2 & 3 are allowed."
Nothing contrary was brought to our knowledge. Facts being similar, so following same reasoning, Assessing Officer is directed to pay interest on refund of Rs.40,442/- till 29.02.1988 and interest on refund of Rs.11,138/- till 28.11.2000 as prayed. Assessing Officer is directed accordingly.
5. As a result, appeal filed by assessee is allowed.
6. Similar issue arose in ITA Nos. 6282, 6286, 6287, 6288, 6289, 6290, 6294, 6295, 6300, 6301, 6302, 6303, 6328 & 6330/Mum/2013. Facts being similar, so following same reasoning, Assessing Officer is directed to grant relief as granted by us in ITA No.6277/Mum/2013 in case of Radhakrishan Discretionary Family Trust as discussed.
7. As a result, all these appeals filed by all assessees are allowed as discussed above.
Pronounced in the open Court on this the 29th day of September, 2015.
Sd/- Sd/-
(ASHWANI TANEJA) (SHAILENDRA KUMAR YADAV)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai: Dated 29/09/2015
True Copy
S.K.SINHA
I TA N o . 6 2 7 7 / M u m / 1 3 ( R a d h a k r i s h a n D i s c r e t i o n a r y F a m i l y T r u s t v s . I T O ) and Other 14 appeals. Page 16 आदे श क त ल प अ े षत / Copy of Order Forwarded to:-
1. राज व / Revenue
2. आवेदक / Assessee
3. संबं धत आयकर आयु!त / Concerned CIT
4. आयकर आयु!त- अपील / CIT (A)
5. )वभागीय ,-त-न ध, आयकर अपील य अ धकरण, मुंबई / DR, ITAT, Mumbai
6. गाड2 फाइल / Guard file.
By order/आदे श से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, मंुबई ।