M/S. WOCKHARDT HOSPITALS LTD, MUMBAI V. THE ACIT 10(1), MUMBAI

ITA 2194/MUM/2008

• Counselvise Citation: 219419914 RSA 2008
• Duration Of Justice: 3 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 23-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 01-04-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: SHITAL BANDEKAR
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G,MUMBAI BEFORE SHRI R.S. SYAL (AM) & SMT. ASHA VIJAYARAGH AVAN (JM) I.T.A.NO.2194/MUM/2008 (A.Y. 2004-05) WOCKHARDT HOPITALS LTD., WOCKHARDT TOWERS, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400 051. PAN: AAACW3342G VS. ASSTT. COMMR. OF INCOME-TAX-10(1), 461, AAYKAR BHAVAN, M.K. ROAD, MUMBAI-400 020. APPELLANT RESPONDENT APPELLANT BY MR.KACHUN KAUSHAL, MR. DHANESH BAFNA & MS. SHITAL BANDEKAR. RESPONDENT BY MR. A. K. NAYAK. DATE OF HEARING 23-08-2011 DATE OF PRONOUNCEMENT 26-08-2011 O R D E R PER R.S. SYAL, AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDE R PASSED BY THE CIT(A) ON 16-01-2008 IN RELATION TO THE ASSESSMENT YEAR 2 004-05. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF INTEREST EXPENDITURE OF RS.70,87,50 0/- INCURRED BY THE ASSESSEE. 3. FILTERING OUT UNNECESSARY DETAILS, IT IS SEEN TH AT THE ASSESSEE BORROWED A SUM OF RS.13.93 CRORES AND INVESTED THE SAME IN THE SHARES OF M/S. KANISHKA HOUSING DEVELOPMENT CO. PVT. LTD. THE AO HELD THAT INTEREST OF RS.70.87 LAKHS PAID ON SUCH BORROWING WAS NOT ALLOWABLE U/S.14A OF THE ACT. 4. THE LD. CIT(A) UPHELD THE SUSTENANCE OF DISALLOW ANCE. ITA NO. 2194/M/2008 WOCKHARDT HOSPITALS LTD.. 2 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CONT ENDED THAT THE AMOUNT OF LOAN WAS INVESTED IN THE SHARES OF M/S. KANISHKA HO USING DEVELOPMENT CO. PVT. LTD. WITH A VIEW TO ACQUIRE THE SAID COMPANY ITSEL F FOR THE REASON THAT IT HAD CERTAIN LANDS WHICH THE ASSESSEE WAS INTENDED TO TA KE OVER BY PURCHASING OF THE SAID COMPANY. IT WAS STATED THAT M/S. KANISHKA HOUS ING DEVELOPMENT CO. LTD. DID NOT CARRY OUT ANY BUSINESS EITHER IN THE YEAR I N QUESTION OR IN THE PAST AND THERE WAS NO QUESTION OF THE POSSIBILITY OF EARNING ANY DIVIDEND INCOME. THE LD. A.R. FILED AN APPLICATION UNDER RULE 29 OF ITAT R ULES SEEKING PERMISSION TO FILE ADDITIONAL EVIDENCE IN THE SHAPE OF COPIES OF ANNUA L ACCOUNTS OF M/S. KANISHKA HOUSING DEVELOPMENT CO. LTD. FOR THE ASSESSMENT YEA R UNDER CONSIDERATION AND ALSO ASSTT. YEARS 2007-08 AND 2008-09. 6. THE LD. D.R. OBJECTED TO THE ADMISSION OF ADDITI ONAL EVIDENCE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTICED THAT THE ASSESSEES CONTENTIO N HAS REMAINED THAT THE SHARES OF KANISHKA WERE ACQUIRED FOR HAVING CONTROL OVER T HE LAND TO BE USED BY THE HOSPITAL FOR ITS PURPOSE, WHICH IT IS TRYING TO DEM ONSTRATE MORE EFFECTIVELY WITH THE ADDITIONAL EVIDENCE. TAKING INTO CONSIDERATION THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, WE ARE OF THE CO NSIDERED OPINION THAT THE ENDS OF JUSTICE WOULD MEET ADEQUATELY IF THE IMPUGNED OR DER ON THIS ISSUE IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF AO FOR DE CIDING IT AFRESH, INTER ALIA, IN ACCORDANCE WITH THE ADDITIONAL EVIDENCE WHICH THE A SSESSEE IS PROPOSING TO FILE BEFORE US. WE ARE MAKING IT VERY CLEAR THAT NO OBSE RVATION MADE BY US IN THIS ORDER SHOULD BE CONSTRUED AS REFLECTING OUR OPINION ON THE MERITS OF THE CASE. THE AO IS DIRECTED TO DECIDE THIS ISSUE AFRESH AS PER LAW AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO. 2194/M/2008 WOCKHARDT HOSPITALS LTD.. 3 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED ON THE 26TH DAY OF AUGUST, 20 11. SD/- SD/- (SMT. ASHA VIJAYARAGHAVAN) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 26TH AUGUST, 2011. NG: COPY TO : 1. ASSESSEE. 2. DEPARTMENT. 3 CIT(A)-X,MUMBAI. 4 CIT, MC-X,MUMBAI. 5.DR,G BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. ITA NO. 2194/M/2008 WOCKHARDT HOSPITALS LTD.. 4 DETAILS DATE INITIALS DESIGN ATION 1. DRAFT DICTATED ON 23-08-11 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 23-08-11 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER *