VEENA SURESHKUMAR SHAH, MUMBAI V. ITO 17(1)(2), MUMBAI

ITA 1500/MUM/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2155 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 18-11-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 05-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.1500/M/2012 ASSESSMENT YEAR: 2003-04 M/S. VEENA SURESHKUMAR SHAH, 79/B, ADINATH CO-OP. HOUSING SOC., MAZGAON, BYCULLA (EAST), MUMBAI 400 010 PAN: ABPPS7018G VS. INCOME TAX OFFICER, 17(1)(2), PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400012 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI M.B. SANGHVI, A.R. REVENUE BY : SHRI SANJEEV KASHYAP, D.R. DATE OF HEARING : 29.12.2015 DATE OF PRONOUNCEMENT : 29.12.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 24.11.2009 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2003-04. 2. THE ASSESSEE HAS AGITATED THE CONFIRMATION OF LE VY OF PENALTY OF RS.51,517/- UNDER SECTION 271(1)(C) OF THE ACT. TH E BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) DISALLOWED THE INTEREST EXPENDITURE OF RS.1,88,386/- OUT OF THE TO TAL CLAIM OF INTEREST EXPENDITURE OF RS.2,76,130/- ON THE GROUND THAT THE ASSESSEE HAD PAID INTEREST ON OVERDRAFT/LOANS AT A HIGHER RATE WHEREAS THE ASS ESSEE HAD GIVEN LOAN AT LOWER RATE OF INTEREST. THE MATTER TRAVELLED TO THE TRIB UNAL AND THE TRIBUNAL VIDE ORDER DATED 20.07.07 HELD THAT THE ASSESSEE WAS ENT ITLED TO NETTING OF THE INTEREST, HOWEVER IT WAS DIRECTED THAT IN RESPECT O F MONEY BORROWED AT HIGHER RATE OF INTEREST AND GIVEN BY WAY OF LOAN AT A LOWE R RATE OF INTEREST, EXCESS ITA NO.1500/M/2012 M/S. VEENA SURESHKUMAR SHAH 2 INTEREST PAYMENT BE DISALLOWED. THE AO, WHILE GIVI NG EFFECT TO THE ORDER OF THE ITAT, DISALLOWED AN AMOUNT OF RS.2,36,635/- IN THIS RESPECT. HOWEVER, IN THE MEANWHILE THE AO IMPOSED PENALTY ON ACCOUNT OF THE DISALLOWANCE OF INTEREST VIDE ORDER DATED 27.12.06 I.E. BEFORE THE PASSING OF THE ORDER OF THE TRIBUNAL. 3. THE LD. CIT(A), TAKING INTO CONSIDERATION THE OR DER OF THE TRIBUNAL IN THE QUANTUM APPEAL, HELD THAT SINCE THE DISALLOWANC E OF INTEREST EXPENDITURE HAS BEEN UPHELD BY THE TRIBUNAL, HENCE PENALTY UNDE R SECTION 271(1)(C) OF THE ACT HAS BEEN RIGHTLY IMPOSED. 4. FROM THE PERUSAL OF THE IMPUGNED ORDER, WE FIND THAT NEITHER IT IS A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME N OR OF CONCEALMENT OF INCOME. IT IS A SIMPLE CASE OF DISALLOWANCE OF INT EREST EXPENDITURE ON THE GROUND THAT THE ASSESSEE HAD GIVEN INTEREST AT A LO WER RATE OF INTEREST. THOUGH THE LD. A.R. OF THE ASSESSEE HAS EXPLAINED THAT THE BORROWED FUNDS WERE NOT USED FOR GIVING LOAN RATHER THE OWN FUNDS OF THE AS SESSEE WERE USED, HOWEVER WITHOUT GOING INTO THE MERITS OF THE ABOVE CONTENTI ON, WE FIND THAT IT IS A CASE OF SIMPLE DISALLOWANCE OF INTEREST EXPENDITURE. IT IS NEITHER A CASE OF FURNISHING OF ANY INACCURATE PARTICULARS OF INCOME NOR OF CONCEALMENT OF INCOME. HENCE, THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT ATTRACTED IN THIS CASE. IN VIEW OF THE ABOVE, THE PENALTY SO LEVIED BY THE LOWER AUTHORITIES IS HEREBY ORDERED TO BE DELETED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.12.2015. SD/- SD/- (RAMIT KOCHAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.12.2015. * KISHORE, SR. P.S. ITA NO.1500/M/2012 M/S. VEENA SURESHKUMAR SHAH 3 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.