ASSISTANT COMMISSIONER OF INCOME TAX 2(3)(1), MUMBAI V. DENA BANK, MUMBAI

ITA 1992/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1266 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 02-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LAKSHMI V PRASAD
• Assessee Lawyers: MRS LALITHA RAMESWARAN
• Keywords: Rule 8D

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D , BENCH MUMBAI B EFORE SHRI M.BALAGANESH, AM & SHRI RAM LAL NEGI, JM ITA NO. 1992 /MUM/201 8 ( ASSESSMENT YEAR : 2013 - 14 ) ASST. COMMISSIONER OF INCOME TAX - CIRCLE 2(3)(1) R.NO.552, 5 TH FLOOR, AAYAKAR BHAVAN M.K .ROAD, MUMBAI 400 020 VS. DENA BANK 17 - B, DENA BANK BUILDING HORNIMAN CIRCLE, FORT, MUMBAI 400 023 PAN/GIR NO. AAACD4249B (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI LAKSHMI V. PRASAD ASSESSEE BY SHRI S. ANANTHAN & MRS. LALITHA RAMESWARAN DATE OF HEARING 27 / 08 /2019 DATE OF PRONOUNCEMENT 04 / 09 /2019 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 1992/MUM/2018 FOR A.Y. 2013 - 14 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 6, MUMBAI IN APPEAL NO. CIT(A) - 6/IT - 204/41/2016 - 17 DATED 31/01/2018 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) R.W.S. 92CA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFE RRED TO AS ACT) DATED 30/12/2016 BY THE LD. ASST. COMMISSIONER OF INC OME TAX 2(3)(1), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO. 1992/MUM/2018 DENA BANK 2 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE LD. AO ON ACCOUNT OF BROKEN PERIOD INTEREST RELYING ON THE DECIS ION OF HIS PREDECESSOR IN ASSESSEES OWN CASE FOR A.Y RS .2010 - 11 TO 2012 - 13 IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WE HAVE HEARD RIVAL SUBMISSIONS. WE FIND THAT BOTH THE PARTIES BEFORE US MUTUALLY AGREED THAT THIS ISSUE IS ALREADY SETTLED BY THE OR DER OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.5259/MUM/2016 FOR THE A.Y.2012 - 13 DATED 22/12/2017 WHEREIN IT WAS HELD AS UNDER: - 10. THE SECOND GROUND PERTAINS TO ADDITION ON ACCOUNT OF BROKEN PERIOD INTEREST PAID BY THE APPELLANT FOR ACQUIRING SE CURITIES. AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, THE LD. CIT(A) HAS DECIDED THIS GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE LD. CIT(A) PASSED IN THE ASSESSEE'S OWN CASE FOR THE A.Y. 2010 - 11 AND 2011 - 12. WE FURT HER NOTICE THAT THE CIT (A) HAS DECIDED THIS ISSUE IN THE A.Y. 2010 - 11 AND 2011 - 12 RELYING ON THE VARIOUS JUDGMENTS INCLUDING THE JUDGMENT OF THE HON'BLE SUPREME COURT DELIVERED IN CIT VS. CITY BANK AND HON 'BLE BOMBAY HIGH COURT IN AMERICAN EXPRESS INTERNATIONAL BANKING CORPORATION VS. CIT 258 ITR 601 (BOM) AND THE DECISIONS OF THE COORDINATE BENCHES RENDERED IN APPELLANT'S OWN CASE ITA NO. 2337/M/201 1 DATED 10.04.2013 FOR A.Y. 2006 - 07 AND ITA NO. 3676/M/2012 DATED 09.04.2014 FOR A.Y. 2008 - 09. THE FINDINGS OF LD. CIT (A) READ AS UNDER: - 5.2 . I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE ON THE SUBMISSION OF APPELLANT. I HAVE ALSO GONE THROUGH THE DECISIONS RELIED UPON BY LD. AR AND THE AO. IT IS SEEN THAT SIMILAR ISSUE HAS COME UP FOR CONSIDERATION IN APPELLANT'S OWN CASE IN THE IMMEDIATELY PRECEDING A.YS. 2010 - 11 AND 2011 - 12. AFTER CONSIDERING THE FACTS OF THE CASE AND SUBMISSIONS OF THE APPELLANT , THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT VIDE PARA 5.3 OF APPEAL NO. CIT (A) - 6/IT - 26 & IT - 188/2013 - 14 DATED 28.12.2015. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUNDER FOR READY REFERENCE.: - 5.3 BE THAT AS IT MAY, I FIND THAT THI S ISSUE HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. CITIBANK NA IN CIVIL APPEAL NO. 1549 OF 2006 DATED 12.08.2008. FURTHER, HON'BLE BOMBAY HIGH COURT I N THE CASE OF AMERICAN EXPRESS ITA NO. 1992/MUM/2018 DENA BANK 3 INTERNATIONAL BANKING CORPORATION (SUPRA) HAS ALSO DECIDED THIS ISSUE IN FAVOUR OF THE APPELLANT. IT WAS ALSO SUBMITTED THAT HON'BLE ITAT, 'D' BENCH, MUMBAI IN APPELLANT'S OWN CASE HAS DECIDED THIS ISSUE IN ITS FAVOUR IN ITA NO. 2337/M/2011 DATED 10.04.2013 FOR A.Y. 2006 - 07 AND ITA NO. 3676/M/2012 DATED 09.04.2014 FOR A.Y. 2008 - 09. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF HON'BLE SUPREME COURT, JURISDICTIONAL HIGH COURT AND HON'BLE ITAT, IT IS HELD THAT THE BROKEN PERIOD INTEREST PAID BY THE APPELLANT IS ALLOWABLE AS DEDUCTION IN COMPUTING THE TOTAL INCOME. THE GROUND IS ACCORDINGLY, ALLOWED. 5.3 SINCE THE FACTS ARE SIMILAR, FOLLOWING THE REASONS GIVEN IN APPELLANT'S OWN CASE FOR A.Y. 2010 - 11 AND 2011 - 12 (SUPRA), NO DISAL LOWANCE IS CALLED FOR IN RESPECT OF BROKEN PERIOD INTEREST ON SECURITIES. ACCORDINGLY, THE ADDITION OF RS. 11,40,18,861/ - ON ACCOUNT OF BROKEN PERIOD INTEREST FOR ACQUIRING SECURITIES IS DELETED. THE GROUND IS ALLOWED.' 11. SINCE, THE LD. CIT (A) HAS DECID ED THE SAID ISSUE BY FOLLOWING THE DECISION OF CIT (A) IN ASSESSEE'S OWN APPEAL FOR THE A.Y. 2010 - 11 AND 2011 - 12. WE FURTHER NOTICE THAT THE LD. CIT (A) HAS DECIDED THIS ISSUE BY FOLLOWING THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. CITIBANK DELIVERED IN CIVIL APPEAL NO. 1549 OF 2006 DATED 12.08.2008 AND THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN AMERICAN EXPRESS INTERNATIONAL BANKING CORPORATION (SUPRA) AND THE DECISION OF ITAT, MUMBA I PASSED IN THE ASSESSEE'S OWN CASE, ITA NO. 2337/M/2011 DATED 10/04/2013 FOR THE A.Y. 2006 - 07 AND ITA NO. 3676/M/2012 DATED 09/04/2014 FOR THE A.Y. 2008 - 09. HENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT (A). ACCORDINGL Y, WE UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 3.1. WE FIND THAT THE LD. CIT(A) HAD PLACED RELIANCE ON THE ORDER OF HIS LD. PREDECESSOR IN ASSESSEES OWN CASE FOR EARLIER YEARS WHICH HAS BEEN FINALLY APPROV ED BY THIS TRIBUNAL. HENCE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN THIS REGARD. ACCORDINGLY, THE GROUND NO.1 RAISED BY THE REVENUE IS DISMISSED. 4 . GROUND NOS. 2 & 3 RAISED BY THE REVENUE IS WITH REGARD TO DELETION OF DISALLOWANCE MADE BY THE LD. CIT(A) U/S.14A OF THE ACT. WE FIND THAT THE LD. AO HAD MADE DISALLOWANCE U/S.14A OF THE ACT R.W.R. 8D(2) OF THE RULES BY APPLYING SECOND AND THIRD LIMB THEREON AND COMPUTED THE ITA NO. 1992/MUM/2018 DENA BANK 4 DISALLOWANCE AT RS.17,85,84,572/ - AFTER REDUCING THE AMOUNT ALREADY DIS ALLOWED BY THE ASSESSEE IN THE SUM OF RS.9 LAKHS. THE LD. CIT(A) BY FOLLOWING THE ORDER OF HIS PREDECESSOR IN ASSESSEES OWN CASE FOR A.Y.2010 - 11 TO 2012 - 13 WHICH IN TURN PLACED RELIANCE ON THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y.2008 - 09 IN ITA NO.3676/MUM/2012 DATED 09/04/2014 WHEREIN A CATEGORICAL FINDING WAS RECORDED THAT ASSESSEE IS HAVING SUFFICIENT OWN FUNDS TO MAKE INVESTMENTS IN VARIOUS SECURITIES AND ACCORDINGLY, NO DISALLOWANCE OF INTEREST NEED TO BE MADE UNDER SECOND LIMB OF RUL E 8D(2) OF THE RULES. SINCE THIS ISSUE IS ALREADY COVERED IN FAVOUR OF THE ASSESSEE ON FACTS AND IN VIEW OF THE FACT THAT NO CONTRARY FACTS WERE BROUGHT ON RECORD BY THE LD. DR, WE FIND THAT THE ORDER PASSED BY THE LD. CIT(A) DOES NOT CALL FOR ANY INTERFER ENCE WITH REGARD TO DELETION OF INTEREST UNDER SECOND LIMB OF RULE 8D(2) OF THE RULES. 4.1 . WITH REGARD TO DISALLOWANCE OF INDIRECT EXPENSES BY APPLYING THE THIRD LIMB OF RULE 8D(2) OF THE RULES , TH E LD. AR STATED BEFORE US THAT THE SAME IS NOT PRESSED B EFORE US . THE SAID STATEMENT MADE BY THE LD. AR IS RECKONED AS STATEMENT MADE FROM BAR, ACCORDINGLY, THE DISALLOWANCE MADE IN THIRD LIMB OF RULE 8D(2) ( I II) OF THE RULES IS SUSTAINED. ACCORDINGLY, GROUND NOS.2 & 3 RAISED BY THE REVENUE ARE PARTLY ALLOWED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 04 / 09 /201 9 SD/ - ( RAM LAL NEGI ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 04 / 09 / 2019 ITA NO. 1992/MUM/2018 DENA BANK 5 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//