ITO 12(3)(2), MUMBAI V. SUSHILADEVI O. PARASRAMPURIA, MUMBAI

ITA 2485/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3107 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 13-01-2015
• Assessment Year: 1996-1997
• Appeal Filed On: 30-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 2485/MUM/2011 (ASSESSMENT YEAR:1996-97) INCOME TAX OFFICER-12(3)(2), ROOM NO.102, AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020 APPELLANT VS. MRS. SUSHILADEVI O. PARASRAMPURIA 3 RD FLOOR, MITTAL TOWER, A WING, NARIMAN POINT, MUMBAI 400 021 RESPONDENT PAN: AAGPP3365H /BY APPELLANT : SHRI VINOD KUMAR, D.R. /BY RESPONDENT : SHRI SATISH MODI, A.R. /DATE OF HEARING : 16.06.2016 /DATE OF PRONOUNCEMENT : 17.06.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-23, MUMBAI, DA TED 16.12.2010 FOR A.Y. 1996-97 ON FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE ASSES SING OFFICER TO COMPUTE THE INTEREST DISALLOWANCE ON THE NET ITA NO.2485/MUM/11 A.Y. 96-97 [ITO VS. MRS. SUSHILADEVI O. PARASRAMPURIA) PAGE 2 INTEREST BEARING FUND AMOUNTING TO RS.39,80,926/- USED FOR INVESTMENT IN PERSONAL ASSETS/INTEREST FRE E ADVANCES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THE FAC T THAT THE DISALLOWANCE OF INTEREST OF RS.23,37,805/- WAS MADE BY THE ASSESSING OFFICER SINCE THE INTEREST PAYMENT ON LOAN BORROWED FOR INVESTMENT IN PERSONAL ASSET TO THE TUNE OF RS.1,71,48,377/- WERE NOT ALLOWABLE EXPENDITURE U/S 37(1) AS THE SAME HAD NOT BEEN EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOS E OF BUSINESS. 2. BEFORE US, AT THE OUTSET, LD. AUTHORIZED REPRESENTA TIVE SUBMITTED THAT THE PRESENT APPEAL OF THE REVENUE NE EDS TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF T HE CBDT CIRCULAR NO.21 OF 2015 DATED 10.12.2015. THE LD. D EPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT THE TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED BY THE AFORESAID CBDT CIRCULAR. 2.1 WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATE RIAL ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REVENUE, WE PRIMA-FACIE FIND THAT THE TAX EFFECT IN THIS APPEAL IS BELOW RS.10 LACS. AS PER THE ANNOUNCEMENT OF CE NTRAL BOARD OF DIRECT TAXES (CBDT) DATED 10.12.2015 (CIRC ULAR NO. 21 OF 2015), NO DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF GIVEN BY LD. CIT(A) BEFORE THE INCOME TAX TR IBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST EXCEEDS RS. 10 L ACS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RET ROSPECTIVELY TO THE PENDING APPEALS. IN THE PRESENT CASE, SINCE IT IS AN UNDISPUTED FACT THAT ON THE ADDITIONS WHICH ARE IN DISPUTE, THE TAX EFFECT IS LESS THAN RS. 10 LACS AND IN THE ABSE NCE OF ANY ITA NO.2485/MUM/11 A.Y. 96-97 [ITO VS. MRS. SUSHILADEVI O. PARASRAMPURIA) PAGE 3 MATERIAL ON RECORD BY THE REVENUE TO DEMONSTRATE TH AT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY EXEMPTION S SPECIFIED IN CLAUSE (8) OF THE AFORESAID CBDT CIRCULAR, WE AR E OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBED BY THE INSTRUCTI ONS OF THE AFORESAID CBDT CIRCULAR WOULD BE APPLICABLE TO THE PRESENT APPEAL OF THE DEPARTMENT AND THEREFORE THE PRESENT APPEAL IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. HOWE VER, IN CASE THERE IS ANY ERROR IN THE COMPUTATION OF THE TAX EF FECT INVOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT CIRCULAR I S NOT APPLICABLE, IT WOULD BE OPEN TO THE REVENUE TO SEEK REVIVAL OF THE APPEAL. IN SUCH CIRCUMSTANCES, WE DISMISS THE APPEALS OF REVENUE WITHOUT EXPRESSING ANY OPINION ON MERITS OF THE CASE. 3. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS THE 17 TH DAY OF JUNE, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 17/06/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&