MITUL ENTERPRISES, MUMBAI V. ITO 24(2)(4), MUMBAI

ITA 130/MUM/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2313 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 12-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 11-01-2016
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: RAMESH ZATAK IA

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ./ ITA NO. 130 / MUM/20 1 6 ( / ASSESSMENT YEAR : 20 08 - 20 09 MITUL ENTERPRISES , 20, B.J.INDUSTRIAL ESTATE, KANCHPADA MALAD (WEST), MUMBAI - 400064 VS. ITO - 24(2)(4), MUMBAI ./ ./ PAN/GIR NO. : A AEFM 5179 Q ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI RAMESH ZATAK IA /REVENUE BY : SHRI NEIL PHILIP / DATE OF HEARING : 12 / 0 7 /201 6 / DATE OF PRONOUNCEMENT 27 / 07 /201 6 / O R D E R THIS IS AN APPEAL FILED B Y THE ASSESSEE AGAINST THE ORDER OF CIT(A) - MUM BAI, FOR THE ASSESSMENT YEAR 20 08 - 2009 . 2. IN THIS APPEAL THE ASSESSEE IS AGGRIEVED FOR DISALLOWANCE OF REMUNERATION PAID TO THE PARTNER, ON THE PLEA THAT INTEREST INCOME WAS NOT CONSIDERED AS FIRMS INCOME. 3. I HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT THE AO HAS DISALLOWED THE REMUNERATION PAID TO PARTNERS RS.1,73,567/ - (RS.2,23,567 50000). THE REASON BEING THE PROFIT OF FIRM OF RS.2,04,059/ - INCLUDE D INTEREST RS.1,09,370/ - ON FIXED DEPOSITS AND RS.8,21,974/ - INTEREST RECEIVED ON LOANS. AS PER A O I F THE INTEREST INCOME I.E ON FIXED DEPOSIT AND ON LOANS IS REDUCED, THERE IS A LOSS FOR THE YEAR UNDER CONSIDERATION . ITA NO. 130 / 1 6 2 4. I FOUND THAT ASSESSEE HAD ALSO PAID INTEREST OF RS.10,14,487/ - . THUS TOTAL AMOUNT OF INTEREST RECEIVED WAS LESS THAN INTEREST PAID DURING THE YEAR. ACCORDINGLY THERE IS DEBIT IN THE HEAD OF INTEREST EXPENDITURE. HENCE AO WAS NOT JUSTIFIED IN EXCLUDING THE INTEREST INCOME FROM THE PROFIT OF FIRM, DISREGARDING THE INTEREST EXPENDITURE INCURRED BY ASSESSEE, THEREBY REDUCING THE AMOUNT OF REMUNERATION PAID TO THE PARTNERS. I DIRECT THE AO TO ALLOW ASSESSEES CLAIM OF REMUNERATION PAID TO PARTNERS. 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 27 /07 / 201 6 . SD/ - ( R.C.SHARMA ) / ACCOUNTANT MEMBER MUMBAI ; DATED 27 /0 7 /201 6 . . /PKM , / AKV . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTR AR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//