ASST CIT 8(3)(1), MUMBAI V. TATA HOUSING DEVELOPMENT CO. LTD, MUMBAI

ITA 1549/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4023 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 06-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G PANSARI
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAM LAL NEGI, JM I.T.A. NO. 1549/MUM/2017 ( ASSESSMENT YEAR: 2012 - 13 ) ASST. CIT - 8(30(1), ROOM NO. 615, M. K. ROAD, MUMBAI - 400 020 VS. M/S. TATA HOUSING DEVELOPM ENT COMPANY LTD. 12 TH FLOOR, TIMES TOWERS, KAMLA MILLS, SENAPATI BAPAT MARG, LOWER PAREL (W), MUMBAI PAN/GIR NO. AAACT 0191 Q ( REVENUE ) : ( ASSESSEE ) CROSS OBJECTION NO. 236/MUM/2018 (ARISING OUT OF ITA NO. 1549/MUM/2017) (ASSESSMENT YEAR: 2012 - 13 ) M/S. TATA HOUSING DEVELOPMENT COMPANY LTD. 12 TH FLOOR, TIMES TOWERS, KAMLA MILLS, SENAPATI BAPAT MARG, LOWER PAREL (W), MUMBAI VS. ASST. CIT - 8(30(1), ROOM NO. 615, M. K. ROAD, MUMBAI - 400 020 PAN/GIR NO. AAACT 0191 Q (ASSESSEE) : ( REVENUE ) REVENUE BY : SHRI D. G. PANSARI ASSESSEE BY : SHRI MADHUR AGARWAL DATE OF HEARING : 11.10.2018 DATE OF PRONOUNCEMENT : 02.11 .2018 O R D E R PER S HAMIM YAHYA, A. M.: THIS A PPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARISE OUT OF T HE ORDER OF THE LEAR N ED COMMISSIONER OF INCOME T AX (APPEALS) - 14, MUMBAI (LD.CIT(A) FOR SHORT) DATED 13.12.2016 AND PERTAINS TO THE A SSESSMENT YEAR (A.Y.) 2012 - 13. 2 ITA NO. 1549/M/17 & CO NO. 236/M/18 2. THE GROUNDS RAISED IN REVENUES APPEAL READS AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCE S OF THE CASE AND IN LAW, THE ID. CIT(A) GROSSLY ERRED IN ALLOWING INTEREST EXPENDITURE OF RS.2,24,94,527/ - UNDER RULE 8D(2)(II) WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) GROSSLY ER RED IN ALLOWING INTEREST EXPENDITURE OF RS.71,23,575/ - UNDER RULE 8D(2)(III) WITHOUT APPRECIATING THE FACTS OF THE CASE. 3. THE GROUNDS RAISED IN ASSESSEES CROSS OBJECTION READS AS UNDER: 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN CONFIRMING DISALLOWANCE OF RS. 1.32.558/ - U/S. 14A R.W.R. 8D(2)(III). REVENUES APPEAL: 4. THE ISSUE IN DISPUTE RELATES TO DISALLOWANCE OF RS.2 , 24 , 94 ,527/ - UNDER RULE 8D(2)( II ) AND RS.7 , 1 2,35 7/ - UNDER RULE 8D ( 2 ) ( III ). 5. ON THE ISSUE OF DISALLOWANCE U/S. 8D(2)( II ) CONSEQUENT TO THE DISALLOWANCE BY THE ASSESSING OFFICER (A.O. FOR SHORT) , THE LD. CIT(A) HAS GIVEN A FINDING THAT THE ASSESSEE HAS SUFFICIENT INTEREST FREE OWN FUNDS AVAILABLE, HENC E NO DI SALLOWANCE IN THIS REGARD IS REQUIRED. HE HELD AS UNDER: THE RESERVES BAD SURPLUS IS RS.3,40,67,24,296/ - WHILE THE CLOSING VALUE OF INVESTMENT IS RS.1,99,68,57,265/ - ONLY. THE BOOK PROFIT DURING THE YEAR IS RS.1,86,65,63,819/ - . THEREFORE, RELYING O N THE DECISION IN THE CASE OF CIT VS. HDFC BANK LTD. 366 ITR 505 AND CIT VS. RELIANCE PETROPRODUCTS (P.) LTD. [2010] 322 ITR 158 (SC) UTILITY AND POWER LTD. 313 ITR 340 (BOM) NO ADDITION CAN BE MADE U/R. 8D(2)(II) AGAINST THE PAYMENT OF INTEREST. 6. UPON HEARING BOTH THE COUNSEL AND PERUSING THE RECORDS, W E FIND THAT THE FINDING OF THE LD. CIT(A) HAS NOT BEEN CONTROVERTED BY THE REVENUE. SINCE IT IS ALSO BASED UPON 3 ITA NO. 1549/M/17 & CO NO. 236/M/18 HON'BLE JURISDICTIONAL HIGH COURT S DECISION , WE DO NOT FIND ANY INFI RMITY IN THE SAME . HE NCE, WE UPHOLD THE SAME. 7. ON THE ISSUE OF DISALLOWANCE U/S. 8D(2)(I I I), THE LD. C IT(A) HAS RESTRICTED THE SAME TO EXEMPT INCOME EARNED OF RS.1 , 32 , 558 / - . WE FIND THAT THE VIEW IS DULY SUPPORTED BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF P R. CIT VS. EMPIR E PACKAGE PVT. LIMITED (IN ITA NO. 415 OF 2015 (O&M) VIDE ORDER DATED 12.01.2016). SINCE NO CONTRARY JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT HAS BEEN SHOWN, WE FOLLOW THE ABOVE HIGH COURT DECISION AND UPHOLD THE ORDER OF THE LD. CIT(A ). 8. HENCE, THE REVENUES APPEAL IS DISMISSED. ASSESSEES CROSS OBJECTION : 9. AS REGARDS THE ASSESSEES CROSS OBJECTION, THE PLEA OF THE ASSESSEE IS THAT THE DISALLOWANCE U/S. 8D2(III ) SHOULD ALSO BE RE STRICTED BY MAKING THE COMPUTATION ONLY WITH RE FERENCE TO THE INVESTMENT WHICH YIELD EXEMPT INCOME IN ACCORDANCE WITH THE DECISION OF SPECIAL BENCH IN THE CASE OF ASST. CIT VS. VIREET INVESTMENT (P.) LTD . [2017] 82 TAXMANN.COM 415 (DEL - TRIB)(SB) . 10. UPON HEARING BOTH THE COUNSEL AND PERUSING THE RECO RDS, WE FIND OURSELVES IN AGREEMENT WITH THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE. FOLLOWING THE ABOVE DECISION FROM SPECIAL BENCH IN THE CASE OF VIREET INVESTMENT (P.) LTD . (SUPRA) , WE REMIT THE ISSUE TO THE FILE OF THE A.O. 4 ITA NO. 1549/M/17 & CO NO. 236/M/18 11. IN THE RESULT, T HE REVENUES APPEAL STANDS DISMISSED AND THE ASSESSEES CROSS OBJECTION IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 02.11.2018 SD/ - SD/ - ( RAM LAL NEGI ) (S HAMIM YAHYA) J UDIC IAL MEMBER A CCOUNTANT MEMBER MUMBAI ; DATED : 02.11.2018 ROSHANI , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD F ILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI