THE WESTERN CHEMICAL INDUSTRIES, MUMBAI V. DCIT 24(3), MUMBAI

ITA 2455/MUM/2010

• Counselvise Citation: 245519914 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 29-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 29-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Assessee Lawyers: S C TIWARI
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, G, MUMBAI BEFORE SHRI R V EASWAR, PRESIDENT AND SHRI J SUDHAKAR REDDY, ACCOUNTANT MEMBER I T A NO: 2455/MUM/2010 (ASSESSMENT YEAR: 2006-07) M/S THE WESTERN CHEMICAL INDUSTRIES, MUMBAI APPEL LANT (PAN: AAAFW0105C) VS DEPUTY COMMISSIONER OF INCOME TAX 24(3) RESPONDEN T MUMBAI ASSESSEE BY: MR S C TIWARI REVENUE BY: MR JITENDRA YADAV DATE OF HEARING: 29 TH SEPTEMBER 2011 DATE OF PRONOUNCEMENT: 10 TH OCTOBER 2011 O R D E R R V EASWAR, PRESIDENT: THIS IS AN APPEAL BY THE ASSESSEE AND IT RELATES T O THE ASSESSMENT YEAR 2006-07. THE ASSESSEE IS A PARTNER SHIP FIRM TRADING IN CHEMICALS AND THE APPEAL ARISES OUT OF THE ASSES SMENT ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, ON 26.11.2008. 2. THE FIRST GROUND IS DIRECTED AGAINST THE DISALLO WANCE OF CERTAIN EXPENSES CLAIMED BY THE ASSESSEE (OTHER THAN INTERE ST). AT THE TIME OF THE HEARING OUR ATTENTION WAS DRAWN TO AN ORDER DAT ED 30 TH JUNE 2010 2 ITA NO: 2455/MUM/2010 PASSED BY THE G BENCH OF ITAT, MUMBAI IN THE ASSE SSEES OWN CASE FOR THE ASSESSMENT YEAR 2005-06, IN ITA NO: 1854/MU M/2009, IN WHICH THE DISALLOWANCE WAS UPHELD. RESPECTFULLY FOLLOWIN G THE SAID ORDER WE UPHOLD THE DISALLOWANCE OF EXPENSES (OTHER THAN INT EREST). 3. SO FAR AS GROUND NO:1 IS CONCERNED, IT IS ALSO T HE ASSESSEES CLAIM THAT THE INTEREST PAID TO THE PARTNERS CANNOT BE DISALLOWED BY CLUBBING IT WITH OTHER EXPENSES. ON THIS ASPECT TH E ORDER OF THE TRIBUNAL CITED ABOVE IS IN FAVOUR OF THE ASSESSEE ( PARA 6). WE THEREFORE CLARIFY THAT WHILE DISALLOWING THE EXPENS ES CLAIMED BY THE ASSESSEE, THE ASSESSING OFFICER SHALL NOT DISALLOW THE INTEREST PAID TO THE PARTNERS. SO FAR AS THE INTEREST IS CONCERNED, HE SHOULD RECOMPUTE THE SAME AND ALLOW IT AS PER SECTION 40(B)(IV) FOLL OWING THE DIRECTIONS ISSUED BY THE TRIBUNAL IN PARA 6 OF ITS ORDER CITED SUPRA. THUS GROUND NO:1 IS PARTLY ALLOWED. 4. GROUND NOS: 2 AND 3 RELATE TO THE TREATMENT GIVE N TO THE INTEREST INCOME. WHEREAS THE ASSESSEE CLAIMS THAT THE INTER EST SHOULD BE ASSESSED UNDER THE HEAD BUSINESS, THE DEPARTMENTA L AUTHORITIES HAVE ASSESSED THE SAME UNDER THE HEAD INCOME FROM OTHER SOURCES. THIS ISSUE HAS ALSO BEEN DECIDED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE CITED SUPRA. IN THAT ORDER IT HAS BEEN HE LD THAT THE INTEREST EARNED FROM FIXED DEPOSITS WAS RIGHTLY ASSESSED UND ER THE HEAD INCOME FROM OTHER SOURCES AND THAT IT CANNOT BE A SSESSED AS BUSINESS INCOME AS CLAIMED BY THE ASSESSEE. RESPEC TFULLY FOLLOWING THE SAID ORDER WE DISMISS GROUND NOS. 2 AND 3. 3 ITA NO: 2455/MUM/2010 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED WITH NO ORDER AS TO COSTS. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER 2011. SD/- SD/- (J SUDHAKAR REDDY) (R V EASWAR) ACCOUNTANT MEMBER PRESIDE NT MUMBAI, DATED 10 TH OCTOBER 2011 SALDANHA COPY TO: 1. M/S THE WESTERN CHEMICAL INDUSTRIES WESTERN HOUSE, SONAWALLA X ROAD NO.2 GOREGAON (EAST), MUMBAI 400 063 2. DCIT 24(3), MUMBAI 3. CIT-24, MUMBAI 4. CIT(A)-34, MUMBAI 5. DR G BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI