DCIT - 1(1)(1), MUMBAI V. B E BILLIMORIA & CO LTD., MUMBAI

ITA 3019/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3611 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 08-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SATISH MODILD
• Keywords: Sale consideration of property below Jantri Value; Rule 8D; Capital Gains
• Section: 143(3); 14A

Judgement Text

B.E.BILLIMORIA & CO. LTD. ITA NO.3019MUM/2019 ASSESSMENT YEAR: 2015-16 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE HONBLE SHRI SAKTIJIT DEY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.3019/MUM/2019 ( / ASSESSMENT YEAR:2015-16) DCIT - 1(1)(1) ROOM NO.533/579, 5 TH FLOOR AAYKAR BHAWAN, M.K.ROAD MUMBAI-400 020 / VS. M/S. B .E.BILLIMORIA & CO. LTD. 2 ND FLOOR, SHIV SAGAR ESTATE, A BLOCK DR.A.B.ROAD, WORLI MUMBAI - 400018 PAN/GIR NO. AA ACB - 1542 - P ( '# /APPELLANT ) : ( $%'# / RESPONDENT ) ASSESSEE BY : SHRI SATISH MODI-LD. AR REVENUE BY : SHRI OOMMEN THARIAN-LD. SR. DR / DATE OF HEARING : 11/11/2020 / DATE OF PRONOUNCEMENT : 11/11/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2015-16 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME- TAX (APPEALS)-2, MUMBAI [IN SHORT REFERRED TO AS C IT(A)], APPEAL NO. CIT(A)-2/IT/10173/2017-18 DATED 04/02/2019 IN ALLOW ING STAMP DUTY CHARGES & REGISTRATION FEES AS DEDUCTIBLE EXPENDITU RE WHILE COMPUTING B.E.BILLIMORIA & CO. LTD. ITA NO.3019MUM/2019 ASSESSMENT YEAR: 2015-16 2 SHORT TERMS CAPITAL GAINS. THE REVENUE IS ALSO AGGR IEVED BY DELETION OF DISALLOWANCE U/S 14A. 2. WE HAVE CAREFULLY HEARD THE RIVAL ARGUMENTS AND PERUSED THE ORDERS OF LOWER AUTHORITIES. OUR ADJUDICATION TO TH E SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3. THE MATERIAL ON RECORD WOULD SHOW THAT THE ASSES SEE BEING RESIDENT CORPORATE ASSESSEE WAS ASSESSED FOR THE YE AR UNDER CONSIDERATION U/S. 143(3) ON 27/10/2017. DURING ASS ESSMENT PROCEEDINGS, IT TRANSPIRED THAT THE ASSESSEE SOLD A N OFFICE PREMISES VIDE AGREEMENT DATED 31/03/2015 FOR A CONSIDERATION OF R S.19 CRORES AND OFFERED SHORT-TERM CAPITAL GAINS OF RS.11.49 CRORES . HOWEVER SINCE THE STAMP DUTY VALUE OF THE PREMISES WAS RS.20.59 CRORE S, LD. AO INVOKING THE PROVISIONS OF SEC.50C, ADDED THE DIFFERENTIAL A MOUNT OF RS.1.59 CRORES TO THE INCOME OF THE ASSESSEE. THE SECOND DISALLOWANCE MADE BY LD. AO WAS INTEREST AND INDIRECT EXPENDITURE DISALLOWANCE U/S 14A READ WITH RULE 8D( 2)(II) & 8D(2)(III) WHICH AGGREGATED TO RS.5.86 LACS. 4. BEFORE LD. CIT(A), THE ASSESSEE DREW ATTENTION T O THE FACT THAT IT INCURRED AGGREGATE EXPENDITURE OF RS.160.26 LACS ON ACCOUNT OF STAMP DUTY, REGISTRATION CHARGES AND SOCIETY TRANSFER FEE S AS PER THE CONTRACTUAL TERMS WHICH WAS AN ALLOWABLE EXPENDITURE U/S 50(1)( I) OF THE ACT. THE SAID CLAIM WAS RESTRICTED TO RS.159.23 LACS I.E. TO THE EXTENT OF DIFFERENCE IN STAMP DUTY VALUE AND ACTUAL SALE CONS IDERATION. THEREFORE, IT WAS SUBMITTED THAT THERE WAS NO JUSTIFICATION FO R ADDITION OF RS.159.23 LACS. CONCURRING WITH THE SAME, LD. CIT(A) DIRECTED LD. AO TO DELETE THIS ADDITION. B.E.BILLIMORIA & CO. LTD. ITA NO.3019MUM/2019 ASSESSMENT YEAR: 2015-16 3 THE INTEREST DISALLOWANCE U/S 14A WAS DELETED SINCE THE ASSESSEES INTEREST FREE FUNDS WERE FOUND TO BE MORE THAN THE INVESTMENTS AND THEREFORE NO ADDITIONS THEREOF WERE JUSTIFIED IN TE RM OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN CIT V/S HDFC BANK LTD 49 TAXMANN.COM 335. THE INDIRECT EXPENDITURE DISALLOWANCE OF RS.0.62 LACS WAS DELETED SINCE THE SAME HAD ALREADY BEEN DI SALLOWED BY THE ASSESSEE WHILE COMPUTING ITS INCOME. AGGRIEVED AS AFORESAID, THE REVENUE IS UNDER FURTHE R APPEAL BEFORE US. 5. UPON DUE CONSIDERATION, WE FIND NO REASON TO INT ERFERE IN THE IMPUGNED ORDER IN ANY MANNER. THE EXPENDITURE INCUR RED BY THE ASSESSEE ON TRANSFER OF PROPERTY WAS AN ALLOWABLE E XPENDITURE WHILE COMPUTING SHORT-TERM CAPITAL GAINS AND THE SAME HAS RIGHTLY BEEN ALLOWED BY LD. CIT(A). THE INTEREST DISALLOWANCE U/S 14A WOULD NOT SURVIVE SINCE THE FACT THE ASSESSEE HAD SUFFICIENT INTEREST FREE FUNDS TO MAKE THE INVESTMENT REMAIN UNCONTROVERTED BEFORE US. THE INDIRECT EXPEN DITURE WAS ALREADY BEEN OFFERED BY THE ASSESSEE IN ITS COMPUTATION OF INCOME AND THEREFORE, THE SAME COULD NOT BE DISALLOWED AGAIN. HENCE, WE FIND NO REASON TO INTERFERE IN THE IMPUGN ED ORDER ON ANY OF THE ISSUE. 6. THE APPEAL STAND DISMISSED. ORDER PRONOUNCED ON 11 TH NOVEMBER, 2020. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 11/11/2020 SR.PS:-JAISY VARGHESE B.E.BILLIMORIA & CO. LTD. ITA NO.3019MUM/2019 ASSESSMENT YEAR: 2015-16 4 !' #' / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. + ,$- , - , / DR, ITAT, MUMBAI 6. , ./0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.