JAYANT FINVEST LTD, MUMBAI V. CIT 8, MUMBAI

ITA 2290/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1569 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 21-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Assessee Lawyers: NIKUNJ GADA
• Keywords: Business income
• Section: 143(3); 14A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH , MUMBAI BEFORE SRI AMIT SHUKLA , J M AND SRI RAJESH KUMAR , AM ITA NO . 2290 /MUM/2015 (A.Y: 2009 - 10 ) M/S. JAYANT FINVEST LIMITED, AKANDANAND 38, MAROL CO - OPERATIVE INDUSTRIAL ESTATE, OFF. M. V. ROAD, SAKINAKA, ANDHERI (E), MUMBAI - 59 PAN:AAACJ 0231 F VS. THE ASST. COMMISSIONER OF INCOME TAX - 8 , ROOM NO.259, AAYAKAR BHAVA WAN, MUMBAI 400 020 APPELLANT .. RESPONDENT APPELLANT BY .. SHRI NIKUNJ GADA, AR RESPONDENT BY .. SHRI M. C. OMI NINGSHEN, DR DATE O F HEARING .. 13 - 12 - 2016 DATE OF PRONOUNCEMENT .. 23 - 12 - 2016 O R D E R PER AMIT SHUKLA , JM : THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 23 - 01 - 2015 PASSED BY THE LEARNED CIT (A) - 17, MUMBAI IN QUANTUM FOR AS SESSMENT PASSED U/S 143(3) READ WITH SECTION 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR THE ASSESSMENT YEAR 2009 - 10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) GROSSL Y ERRED IN CONFIRMING THE ORDER PASSED BY T HE ASSESSING OFFICER WHICH WAS BAD IN LAW AS IT WAS PASSED WITHOUT GIVING THE APPELLANT AN ADEQUATE OPPORTUNITY. WITHOUT PREJUDICE TO ABOVE. 2. (I) ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LEARNED COM MISSIONER OF INCOME TAX (APPEAL) GROSSLY ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST OF RS.47,25,985/ - U/S. 14A R. W. R. 8D (2) (II) OF THE INCOME TAX RULES, 1961 WITHOUT APPRECIATING THAT INTEREST ITA NO. 2290 /MUM/20 1 5 ASSESSMENT YEAR: 2009 - 10 2 EXPENDITURE INCURRED BY APPELLANT WAS DIRECTLY RELATE D TO APPELLANTS BUSINESS INCOME. (II) HE FAILED TO APPRECIATE THAT THE LOAN SANCTIONING LETTER SPECIFICALLY DEBARRED THE APPELLANT TO UTILIZE THE LOAN FOR PURPOSES OTHER THAN THOSE APPLIED FOR. (III) HE GROSSLY ERRED IN OBSERVING THAT LOAN COULD BE USED FOR PURPOSE OF INVESTMENT IN THE SHARES OR ANY OTHER SECURITIES EVEN WHEN THE LOAN SANCTION LETTER SPECIFICALLY PROHIBITED SUCH USAGE. 3. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) GROSSLY ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENDITURE U/S. 36(1)(III) OF THE INCOME TAX ACT, 1961 OF RS.84,74,000/ - , HOLDING THAT BORROWED INTEREST BEARING FUNDS WERE NOT UTILIZED FOR APPELLANTS BUSINESS EVEN WHEN THE BORROWINGS WERE SPECIFICALLY USED FOR BUSINESS PURPOSES. 2. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRESENT APPEAL IS ARISING OUT OF THE PROCEEDINGS IN PURSUANCE OF ORDER U/S 263 OF THE ACT BY THE LEARNED CIT. THE SAID ORDER U /S 263 DATED 22 - 02 - 2013 , HAS , NOW BEEN Q UASHED BY THE TRIBUNAL IN ITA NO .3128/MUM/2013 VIDE ORDER DATED 09 - 09 - 2015. THEREFORE, THE IMPUGNED ORDER AS WELL AS THE PROCEEDINGS IN PURSUANCE OF SUCH AN ORDER PASSED U/S 263 HAS BEEN RENDERED INFRUCTUOUS. THEREFORE, THE IMPUGNED ORDER SHOULD BE QUASHED. 3. THE LEARNED DR ALSO CONCEDED TO THE FACT THAT THE ORDER PASSED U/S 263 BY THE CIT DATED 22 - 02 - 2013 HAS BEEN QUASHED BY THE TRIBUNAL. 4. AFTER CONSIDERING THE AFORESAID SUBMISSIONS AND ON PERUSAL OF THE IMPUGNED ORDERS, WE FIND TH AT THE LEA RNED CIT - 8, MUMBAI HAS CANCELLE D THE ORIGINAL ASSESSMENT ORDER IN HIS REVISIONARY JURISDICTION U/S 263 AND DIRECTED THE A O TO EXAMINE THE ISSUE OF ITA NO. 2290 /MUM/20 1 5 ASSESSMENT YEAR: 2009 - 10 3 DISALLOWANCE U/S 14A READ WITH RULE 8D OF THE IT RULES AS WELL AS TO EXAMINE THE ALLOW ABILITY OF IN TEREST U/S 36(1 ) (III) OF THE ACT. THE S AID ORDER OF THE LEARNED CIT HAS , NOW BEEN QUASHED BY THE TRIBUNAL VIDE ORDER DATED 09 - 09 - 2015 AND AS A CONSEQUENCE, ALL THE ORDERS WHICH HAVE BEEN PASSED , IN PURSUANCE THEREOF HAVE BECOME INFRUCTUOUS. ACCORDINGLY, T HE IMPUGNED ORDER OF THE LEARNED CIT (A) IS QUASHED AS INFRUCTUOUS. 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED TREATING THE SAME AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 13 - 12 - 2016 . BY ORDER, ASSISTANT R EGISTRAR ITAT, MUMBAI SR. NO. PARTICULARS DATE INITIALS MEMBER CONCERNED 1 DICTATION GIVEN ON 13.12.16 LK DEKA JM 2 DRAFT PLACED BEFORE AUTH OR 13.12.16 14.12.16 3 DRAFT PROPOSED/PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO THE SR.PS 15.1 2 .16 6 KEPT FOR PRONOUNCEMENT ON - 7 FILE SENT TO THE BENCH CLERK 16.1 2 .16 8 DATE ON WHICH FILE GO ES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER SD/ - ( RAJESH KUMAR ) ACCONTANT MEMBER MUMBAI, DATED: 13 - 12 - 2016 LAKSHMIKANTA DEKA/SR.PS SD/ - ( AMIT SHUKLA ) JU U DICIAL MEMBER COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//