D.C.I.T. - 5(2)(1), Mumbai V. M/S. NEESHAL MERCHANDISING PVT. LTD., Mumbai

ITA 1049/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4283 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 23-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Tax effect
• Section: 201; 64

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B , MUMBAI BEFORE S HRI SHAMIM YAHYA ( AM ) AND SHRI RAM LAL NEGI (JM) ITA NO. 1049/MUM/2018 ASSESSMENT Y EAR: 2011 - 12 THE DY. COMMISSIONER OF INCOME TAX, 5(2)(1), R. NO. 571, AAYAKAR BHAVAN, M.K. ROAD, M UMBAI - 400020 VS. M/S NEESHAL MERCHANDISING PVT. LTD., 64 - H/2, GROUND FLOOR, BANSILAL BUILDING, JSS ROAD, OPERA HOUSE, MUMBAI - 400004 PAN: AACCN4443K (APPELLANT) (RESPONDENT) REVENUE BY : SHRI RITESH MISHRA (D R) ASSESSEE BY : NONE DATE OF HEARING: 12/03 /201 9 DATE OF PRONOUNCEMENT: 13 / 03 /201 9 O R D E R PER RAM LAL NEGI, JM THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 04.09.2017 PASSED BY THE COMMISS IONER OF I NCOME TAX (APPEALS) - 10 (FOR SHORT THE CIT (A)) , MUMBAI, FOR THE ASSESSMENT YEAR 2011 - 12 , WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) ON THE FOLLOWING EFFECTIVE GROUND S : 1. THE LD. CIT (A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO CONSIDER THE INTEREST EXPENSES OF RS. 51,18,876/ - AS COST OF A CQUISITION OF SHARES OF COAL 2 ITA NO. 1049/MUM/2018 ASSESSMENT YEAR: 2011 - 12 INDIA LTD. FOR THE PURPOSE OF COMPUTATION OF SHORT TERM CAPITAL GAIN. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE ENTIRE INTEREST EXPENSES AMOUNTING TO RS. 51,18,876/ - NEED T O BE CAPITALIZED TOWARDS COST OF ACQUISITION OF THE SHARES WITHOUT APPRECIATING THAT MAJOR PART OF SUCH INTEREST EXPENSES WAS INCURRED IN RELATION TO THOSE EQUITY SHARES OF M/S COAL INDIA LTD. WHICH WERE APPLIED BY THE ASSESSEE BUT NOT ALLOTTED TO IT DURI NG THE COURSE OF IPO (INITIAL PUBLIC OFFERING). 3. THIS CASE WAS FIXED FOR HEARING ON 12.03.2019 . HOWEVER, WHEN THE CASE WAS CALLED OUT FOR HEARING, NONE APPEARED ON BEHALF OF THE RESPONDENT/ASSESSEE. WE NOTICE D THAT THE TAX EFFECT OF THE RELIEF GRANTED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS BELOW RS.20 LACS . 4. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FAIRLY CONCEDED THAT TH IS APPEAL IS NOT MAINTAINABLE IN VIEW OF THE CBDT CIRCULAR DATED 11 TH JULY, 2018 . THE LD. DR ALSO DID NOT POINT OUT T HAT TH IS APPEAL FALL S IN ANY OF THE EXCEPTIONS CARVED OUT IN THE ABOVE SAID CIRCULAR. 5. SINCE, THE TAX EFFEC T IN THIS APPEAL IS LESS THAN RS. 20 LACS AND AS PER THE CBDT CIRCULAR NO. 3/2018, F. NO. 279/MISC.142/2007 - ITJ (PT) DATED 11 TH JULY, 2018 ISSUED BY CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA LIMIT FIXED BY THE CBDT FOR FILING THE APPEAL BEFORE THE ITAT IS 20 LACS . 6. HENCE , IN THE LIGHT OF THE CBDT CIRCULAR AFORESAID, W E DISMISS THE AFORESAID AP PEAL FILED BY THE REVENUE AS NOT MAINTAINABLE . 3 ITA NO. 1049/MUM/2018 ASSESSMENT YEAR: 2011 - 12 IN THE RESULT, APPEAL FILED BY THE REVENUE FOR ASSESSMENT YEAR 2011 - 12 IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH MARCH , 2019 . SD/ - SD/ - ( S HAMIM YAHYA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 13 / 03 / 201 9 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI