DCIT, CHENNAI V. M/s. Doshi Housing Ltd., CHENNAI

ITA 2340/CHNY/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7389 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 12-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M MATHIVANAN
• Assessee Lawyers: S SRINIRANJANI
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2340/CHNY/2016 ( )( / ASSESSMENT YEAR : 2008-09 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1(1), CHENNAI - 600 034. V. M/S DOSHI HOUSING LIMITED, 3H, 560, CENTURY PLAZA, ANNA SALAI, TEYNAMPET, CHENNAI - 600 018. PAN : AAACD 1187 G (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI M. MATHIVANAN, ADDL. CIT -.+, / 0 / RESPONDENT BY : MS. S. SRINIRANJANI, ADVOCATE 1 / 2% / DATE OF HEARING : 27.06.2018 3') / 2% / DATE OF PRONOUNCEMENT : 24.07.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -1, CHENNA I, DATED 17.05.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2008 -09. 2 I.T.A. NO.2340/CHNY/16 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS DISA LLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 36(1)(III) O F THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 3. SHRI M. MATHIVANAN, THE LD. DEPARTMENTAL REPRESE NTATIVE, SUBMITTED THAT THE ASSESSING OFFICER DISALLOWED 27,60,000/- TOWARDS INTEREST PAID TO THE DIRECTORS, UNDER SECTI ON 36(1)(III) OF THE ACT. ACCORDING TO THE LD. D.R., THE ASSESSEE-COMPA NY HAD ENOUGH SURPLUS FUNDS FOR CONDUCTING BUSINESS, THEREFORE, T HERE WAS NO NEED FOR PAYMENT OF INTEREST. MOREOVER, ACCORDING TO TH E LD. D.R., THE FUNDS GIVEN TO THE DIRECTORS WERE NOT CHARGED INTER EST. THE ASSESSEE IS PAYING INTEREST FOR WHAT WAS RECEIVED F ROM THE DIRECTORS.. THE CIT(APPEALS), ACCORDING TO THE LD. D.R., BY FOLLOWING THE ORDER OF THIS TRIBUNAL IN THE ASSESSE E'S OWN CASE FOR ASSESSMENT YEARS 2004-05 TO 2006-07, ALLOWED THE CL AIM OF THE ASSESSEE. ACCORDING TO THE LD. D.R., THE REVENUE H AS ALREADY FILED AN APPEAL BEFORE THE HIGH COURT AND THE SAME IS PEN DING FOR ADJUDICATION. 4. WE HEARD MS. S. SRINIRANJANI, THE LD.COUNSEL FOR THE ASSESSEE ALSO. ACCORDING TO THE LD. COUNSEL, THE A DVANCES GIVEN IN THE EARLIER YEARS CONTINUE THIS YEAR ALSO. THE INT EREST PAID EARLIER 3 I.T.A. NO.2340/CHNY/16 YEAR WAS ALLOWED BY THIS TRIBUNAL. THEREFORE, ACCO RDING TO THE LD. COUNSEL, THERE IS NO REASON TO DISALLOW THE CLAIM O F THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ADVANCES WERE RECEIVED FROM DIRECT ORS DURING THE EARLIER ASSESSMENT YEARS AND THE ASSESSEE WAS CONTI NUOUSLY PAYING INTEREST. THIS TRIBUNAL ALLOWED THE CLAIM O F THE ASSESSEE TOWARDS INTEREST IN THE EARLIER ASSESSMENT YEARS. NOW, THE ONLY OBJECTION OF THE LD. D.R. IS THAT AN APPEAL IS PEND ING BEFORE THE HIGH COURT. THIS TRIBUNAL IS OF THE CONSIDERED OPI NION THAT MERE PENDENCY OF APPEAL BEFORE THE HIGH COURT CANNOT BE A GROUND TO TAKE A DIFFERENT VIEW. IT IS NOT A CASE OF THE REV ENUE THAT THE ORDER OF THE TRIBUNAL IS STAYED BY THE HIGH COURT. IN TH OSE CIRCUMSTANCES, THE CIT(APPEALS) HAS RIGHTLY FOLLOWED THE ORDER OF THIS TRIBUNAL, THEREFORE, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 6. THE NEXT ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE A CT. 4 I.T.A. NO.2340/CHNY/16 7. WE HEARD THE LD. D.R. AND THE LD.COUNSEL FOR THE ASSESSEE. THE CIT(APPEALS) BY FOLLOWING THE ORDER OF THIS TRI BUNAL IN THE ASSESSEE'S OWN CASE IN I.T.A. NO.1571/MDS/2012, DIR ECTED THE ASSESSING OFFICER TO EXCLUDE THE STRATEGIC INVESTME NT MADE BY THE ASSESSEE-COMPANY IN THE PARTNERSHIP FIRMS. SINCE T HE CIT(APPEALS) HAS FOLLOWED THE ORDER OF THIS TRIBUNA L, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE IS NO REASON T O INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAM E IS CONFIRMED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED ON 24 TH JULY, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 24 TH JULY, 2018. KRI. 5 I.T.A. NO.2340/CHNY/16 / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-1, CHENNAI 4. PRINCIPAL CIT, CHENNAI- 1, CHENNAI. 5. 7: -2 /DR 6. ;( < /GF.