PANKAJ TRANSPORT P.LTD, MUMBAI V. ACIT 10(1), MUMBAI

ITA 3849/MUM/2012

• Counselvise Citation: 384919914 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 24-09-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 01-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T ROUMUAN PAITE
• Assessee Lawyers: M SUBRAMANIAN
• Section: 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C MUMBAI . . , / !' , # $ % BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER . / ITA NO. 3849/MUM/2012 ' ' ' ' / ASSESSMENT YEAR 2009-10 M/S.PANKAJ TRANSPORT PVT. LTD., 310, DAMJI SHAMJI INDUSTRIAL COMPLEX, LBS MARG, NEAR MADHUBAN TOYOTA, KURLA (WEST), MUMBAI 400070 / VS. THE ACIT 10(1) MUMBAI. ( # ./ )* ./ PAN/GIR NO. : AAACP 2214L ( (+ / APPELLANT ) .. ( ,-(+ / RESPONDENT ) APPELLANT BY SHRI M.SUBRAMANIAN RESPONDENT BY : SHRI T.ROUMUAN PAITE . /# / DATE OF HEARING : 24/09//2013 01' . /# / DATE OF PRONOUNCEMENT : 24/09/2013 2 / O R D E R PER I.P.BANSAL, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST AN ORDER PASSED BY LD. CIT(A)-21 DATED 2/3/2012 FOR ASSESSME NT 2009-10. GROUND OF APPEAL READS AS UNDER: THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS)-X XI CONFIRMED THE ADDITION OF A SUM OF RS. 2,31,623/- UNDER SECTION 14A OF THE IN COME TAX ACT,1961. YOUR APPELLANTS SUBMIT THAT THE SAID ADDITION OF RS.2,31 ,623/- BE DELETED. 2. WHILE COMPUTING DISALLOWANCE UNDER SECTION 14A THE AO DISALLOWED A SUM OF RS.2,31,623/- WITH REFERENCE TO RULE 8D AS P ER FOLLOWING CALCULATIONS: . / ITA NO. 1204/MUM/2011 ' ' ' ' / ASSESSMENT YEAR 2001-02 2 1. AMOUNT OF DIRECTLY RELATED EXPENDITURE RS. NIL II.DISALLOWANCE OF INTEREST EXPENSES: RS.1,99,722 INTEREST EXPENSES RS.35,97,097 (B) OPENING BALAN.CE OF INVESTMENTS 63,80,240 CLOSING BALANCE OF INVESTMENTS 63,80,240 TOTAL 1,27,60,480 AVERAGE AMOUNT (B) 63,80,240 INTEREST EXPENSES . . RS. (C) OPENING BALANCE OF ASSETS 12,44,37,621 CLOSING BALANCE OF ASSETS 10,53,85,528 TOTAL 22,98,23,149 AVERAGE AMOUNT (C) 11,49,11,575 DISALLOWANCE OF INTEREST + A*B/C I.E. 35,97,097* 63,80,240/11,49,11,575 = 54,533 III. DISALLOWANCE OF OTHER EXPENSES 0.5% OF AVERAGE AMOUNT OF INVESTMENTS 0.5% OF RS.63,80,240 RS. 31,901 TOTAL DISALLOWANCE U/S.14A RS.2,31,623 3. BEFORE US IT IS THE CASE OF LD. AR THAT ASSESSEE DID NOT EARN ANY INCOME FROM DIVIDEND DURING THE YEAR UNDER CONSIDERATION. HE FURTHER SUBMITTED THAT ASSESSEE DID NOT USE INTEREST BEARING BORROWED BUN DS, THEREFORE, THE AO WAS WRONG IN CALCULATING DISALLOWANCE ON ACCOUNT OF INT EREST EXPENSES AT RS.1,99,722/-. HE FURTHER SUBMITTED THAT IN SUBSEQ UENT YEAR I.E. A.Y 2010-11 LD. CIT(A) HAS ACCEPTED THIS PROPOSITION AND HE HAS DELETED THE DISALLOWANCE WITH REGARD TO INTEREST WHICH WAS DISALLOWED AT A S UM OF RS.1,08,119/-. HE . / ITA NO. 1204/MUM/2011 ' ' ' ' / ASSESSMENT YEAR 2001-02 3 HAS PRODUCED BEFORE US COPY OF THE ORDER OF LD. CIT (A) WHICH IS DATED 9/5/2012 IN RESPECT OF A.Y 2010-11 AND COPY WAS GIV EN TO LD. DR. 4. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. INTEREST CAN BE DISALLOWED ONLY IF THE INTEREST BEARING BORROWED FUNDS ARE UTILIZED FOR THE PURPOSE OF MAKING INVEST MENT FROM WHERE THE TAX FREE INCOME IS EARNED. HOWEVER, THIS ISSUE HAS NOT BEEN EXAMINED BY THE AO IN THE YEAR UNDER CONSIDERATION. THEREFORE, TO THE EX TENT RS.1,97,722/- WHICH PERTAINS TO INTEREST, WE RESTORE THE ISSUE TO THE F ILE OF AO TO EXAMINE THE CONTENTION OF THE ASSESSEE THAT NO INTEREST BEARING BORROWED FUNDS WERE UTILIZED FOR MAKING INVESTMENT IN THE SECURITIES, T HE DIVIDEND INCOME OF WHICH IS EXEMPT. 4.1 SO FAR AS IT RELATES TO ANOTHER DISALLOWANCE O F RS.31,901/-, WE UPHOLD THE DISALLOWANCE. WE DIRECT ACCORDINGLY. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 24/09/2013 2 . 01' # 3 45 24 /09/2013 1 . 6 % SD/- SD/ - ( !' / N.K.BILLAIYA ) ( . . / I.P. BANSAL ) # / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 4 DATED 24 /09/2013 . / ITA NO. 1204/MUM/2011 ' ' ' ' / ASSESSMENT YEAR 2001-02 4 2 2 2 2 . .. . ,/78 ,/78 ,/78 ,/78 98'/ 98'/ 98'/ 98'/ / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. : ( ) / THE CIT(A)- 4. : / CIT 5. 8;6 ,/ , , / DR, ITAT, MUMBAI 6. 6< = / GUARD FILE. 2 2 2 2 / BY ORDER, -8/ ,/ //TRUE COPY// > >> > / ? ? ? ? ) ) ) ) (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS