ADDL CIT RG 1(2), MUMBAI V. MONEY MATTERS ADVISORY SERVICES LTD, MUMBAI

ITA 1021/MUM/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0472 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 06-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Assessee Lawyers: MAHESH O RAJORA
• Keywords: Unexplained cash credit; Business income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI PAWAN SINGH (JM) I.T.A. NO. 1021 /MUM/20 13 (ASSESSMENT YEAR 20 09 - 10 ) DCIT 1(2) ROOM NO. 535 5 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. V S . M/S. MONEY MATTERS ADVISORY SERVICES LTD. 1 - B, 1 ST FLOOR, COURT CHAMBERS, 35, NEW MARINE LINES MUMBAI - 400 020 PAN : AACCP2478C ( APPELLANT ) ( RESPONDENT ) A SSESSEE BY SHRI MAHESH O. RAJORA DEPARTMENT BY MS. S. PADMAJA DATE OF HEARING 31 . 0 1 . 201 8 DATE OF P RONOUNCEMENT 31 . 0 1 . 201 8 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 20.11.2012 PASSED BY THE LEARNED CIT(A) - 2, MUMBAI AND IT RELATES TO A.Y. 2009 - 10. THE REVENUE IS AGGRIEVED BY THE DECISI ON OF THE LEARNED CIT(A) RENDERED ON FOLLOWING ISSUES : - A) ASSESSMENT OF SHORT TERM CAPITAL GAINS OF ` 31.35 CRORES AS BUSINESS INCOME OF THE ASSESSEE B) DISALLOWANCE OF INTEREST EXPENDITURE OF ` 51.28 LAKHS. C) DISALLOWANCE MADE U/S. 14A OF THE ACT. 2. WE HEAR D THE PARTIES AND PERUSED THE RECORD. T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF FINANCIAL ADVISORY SERVICES , TRADING AND INVESTMENT IN SHARES. 3. FIRST ISSUE RELATES TO ASSESSMENT OF SHORT TERM CAPITAL GAINS ARISING ON SALE OF SHARES AS BUSINESS INCOME O F THE ASSESSEE . T HE ASSESSEE DE C LARED SHORT TERM CAPITAL GAINS ON SALE OF SHARES TO THE TUNE OF ` 3135.77 LAKHS. THE ASSESSING OFFICER ASSESSED THE SAME AS BUSINESS INCOME OF THE ASSESSEE. T HE LEARNED CIT(A), HOWEVER, REVERSED THE ORDER PASSED BY THE ASSESS ING OFFICER BY FOLLOWING HIS OWN ORDER PASSED IN ASSESSEES OWN CASE FOR A.Y. 2008 - 09. M/S. MONEY MATTERS ADVISORY SERVICES LTD. 2 4. WE NOTICED THAT THE ORDER PASSED BY THE LEARNED CIT(A) IN A.Y. 2008 - 09 HAS SINCE BEEN UPHELD BY THE COORDINATE BENCH OF THE TRIBUNAL VIDE ITS ORDER DATED 22.12.2017 P ASSED IN ITA NO. 135/MUM/2013. WE FURTHER NOTICED THAT THE ASSESSEE HAS REALISED SHORT TERM CAPITAL GAINS ON SALE OF SHARES OF ORBIT CORPORATION, ADANI ENTERPRISES LTD. AND GPC LTD. WE FURTHER NOTICED THAT ALL THESE SHARES HAVE BEEN PURCHASED IN THE YEAR R ELEVANT TO A.Y. 2008 - 09 AND HAVE BEEN SOLD DURING THE YEAR UNDER CONSIDERATION. IN A.Y. 2008 - 09 , THESE SHARES HAVE BEEN TREATED AS ASSESSEES INVESTMENT S AND THE GAIN ARISING ON SALE OF PART OF THOSE SHARES IN THAT YEAR HAS BEEN ACCEPTED AS SHORT TERM CA PITAL GAINS BY THE TRIBUNAL. UNDER THESE SET OF FACTS, THE CHAR AC TER OF THE SHARES AS ASSESSEES INVESTMENT S CANNOT BE TIN K E RE D WITH AT THIS STAGE. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS IS SUE. 5. NEXT ISSUE RELATES TO DISALLOWANCE OF INTEREST EXPENDITURE OF ` 51.28 LAKHS. 6. THE ASSESSING OFFICER HAD TREATED CERTAIN LOANS AS UNEXPLAINED IN A.Y. 2008 - 09 A CCORDINGLY AS S ESSED THEM UNEXPLAINED CASH CREDIT. ACCORDINGLY , DURING THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER DISALLOWED THE INTEREST EXPENDITURE CLAIMED ON THOSE LOANS. 7. LEARNED AR SUBMITTED THAT THE TRIBUNAL, IN A.Y. 2008 - 09, HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER AS UNEXPLAINED CASH CREDIT AND ACCORDINGL Y LOANS WERE TREATED AS EXPLAINED. ACCORDINGLY, HE SUBMITTED THAT INTEREST EXPENDITURE DISALLOWED BY THE ASSESSING OFFICER IS NOT CALLED FOR. 8. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE ON THIS ISSUE AND PERUSED THE RECORD. SINCE, LOANS TAKEN IN IMMEDIATELY PRECEDING YEAR HA VE BEEN TREATED AS GENUINE LOANS, INTEREST EXPENDITURE CLAIMED BY THE ASSESSEE THEREON DURING THE YEAR UNDER CONSIDERATION IS ALLOWABLE AS DEDUCTION. WE NOTICED THAT THE LEARNED CIT(A) HAS ALLOWED THE CLAIM ON THIS SET OF FACTS . A CCORDINGLY WE UPHOLD THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE. M/S. MONEY MATTERS ADVISORY SERVICES LTD. 3 9 . THE N EXT ISSUE RELATES TO DISALLOWANCE MADE U/S. 14A OF THE ACT. THE ASSESSING OFFICER COMPUTED THE DISALLOWANCE U/S. 14A OF THE ACT AT ` 28.01 LAKHS. THE ASSESSEE ITSELF HAD DISALLOWED A SUM OF ` 5.52 LAKHS U/S. 14A OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER ADDED THE DIFFERENCE AMOUNT OF ` 22.48 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE U/S. 14A OF THE ACT. THE LEARNED CIT(A), BY FOLLOWING THE DECISION RENDERED BY HON'BL E BOMBAY HIGH COURT IN THE CASE OF DELI GH T ENTERPRISES (ITA NO. 110 OF 2009 DATED 26.2.2009), HELD THAT NO DISALLOWANCE IS REQUIRED TO BE MADE IN RESPECT OF INVESTMENT FROM WHICH NO TAX FREE INCOME WAS EARNED. THE LEARNED CIT(A) HAD TAKEN AN IDENTICAL VIE W IN A.Y. 2008 - 09 ALSO AND THE SAME HAS BEEN UPHELD BY THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 135/MUM/2013) (REFERRED SUPRA). 1 0 . SINCE THE VIEW TAKEN BY THE LEARNED CIT(A) IS ALSO IN ACCORDANCE WITH THE DECISION RENDERED BY THE SPECIAL BENCH IN THE CASE OF VIREET INVESTMENTS PVT. LTD. (ITA NO. 502/DEL/2012), AND SINCE IDENTICAL VIEW HAS ALREADY BEEN UPHELD BY THE COORDINATE BENCH IN ASSESSEES OWN CASE IN AY 2008 - 09 , WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PA SSED BY THE LEARNED CIT(A) ON THIS ISSUE. 1 1 . IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 31 . 0 1 .201 8 . SD/ - SD/ - (PAWAN SINGH ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 31 / 0 1 / 20 1 8 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI M/S. MONEY MATTERS ADVISORY SERVICES LTD. 4 6. GUARD FILE. BY ORDER, //TRUE COPY// SENIOR P RIVATE S ECRETARY PS ITAT, MUMBAI