HIRANANDANI MADHAVDAS TEJUJA, MUMBAI V. ITO 2(3)-3, MUMBAI

ITA 400/MUM/2012

• Counselvise Citation: 40019914 RSA 2012
• Duration Of Justice: 2 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 06-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 18-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: SANJAY PARIKH

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, M UMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND B.R.BHASKARAN (AM ) . . , . . , ./I.T.A. NO.400/MUM/2012 ( / ASSESSMENT YEAR : 2007-08) SHRI HIRANAND MADHAVDAS TEJUJA, 2, MEENAKSHI APARTMENTS, 26 TH ROAD, TPS-III, BANDRA, MUMBAI-400050 / VS. INCOME TAX OFFICER 2(3)(3), 5 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020. ( % / APPELLANT) .. ( &% / RESPONDENT) ./ ./PAN/GIR NO. : AAAPT9128Q % / APPELLANT BY : SHRI SANJAY PARIKH &% * /RESPONDENT BY : SHRI SURENDRA KUMAR * - / DATE OF HEARING : 26.2.2014 * - /DATE OF PRONOUNCEMENT : 28.2.2014 / O R D E R PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSME NT YEAR 2007-08 AGAINST ORDER OF LD. CIT(A) DATED 16.11.2011 ON THE FOLLOW ING GROUNDS: ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW: 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF AO OF TAXING INTEREST ON GROSS BASIS AND NOT ALLOWING THE NETTING OF INTERES T PAID; 2. AO HAS STATED THAT ON VERIFICATION OF DETAILS, IT I S SEEN THAT IN THE CAPITAL ACCOUNT, ASSESSEE HAS SHOWN INTEREST INCOME FROM NAZURA KHW AJA AT RS.1,87,500/-, WHICH IS REDUCED SHOWING INTEREST ON LOAN PAID OF RS.1,87,50 0/- AO HAS STATED THAT THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS AND TO JUSTIFY ALONG WITH VERIFIABLE DOCUMENTARY EVIDENCE. THAT THE ASSESSEE FILED A C OPY OF LEDGER ACCOUNT OF INTEREST PAID. AO HAS STATED THAT THE ASSESSEE ON HIS OWN A CCORD HAS COMPUTED THE INTEREST ALLOWABLE WITH REFERENCE TO ACQUISITION OF PLOT AN D CAPITALIZED THE SAME TO THE PLOT ACCOUNT. HE HAS STATED THAT THE ASSESSEE HAS NOT F URNISHED JUSTIFICATION WITH VERIFIABLE I.T.A. NO.400/MUM/2012 2 DOCUMENTARY EVIDENCE THAT HE HAS PAID INTEREST FO R THE AMOUNT OF LOAN TAKEN FOR ANY BUSINESS PURPOSES. AO TREATED INTEREST EARNED AS INCOME FROM OTHER SOURCES AND STATED THAT EXPENSES CLAIMED AS INTEREST PAID IS C APITALIZED IS DISALLOWED. BEING AGGRIEVED, ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASS ESSEE HAS STATED THAT THE ASSESSEE HAS TAKEN LOAN AT THE RATE OF 12% INTERE ST FROM TARAPUR PHARMACHEM AND ALSO RECEIVED INTEREST AT THE RATE OF 12% FROM N AZURA KHWAJA. HOWEVER, THE ASSESSEE FAILED TO ESTABLISH HOW MUCH INTEREST WAS PAID TO TARAPUR PHARMACHEM FOR THE AMOUNT RECEIVED. DURING THE ASSESSMENT YEAR 2007-08 ONLY RS.84,590/- WAS PAID TO TARAPUR PHARMACHEM AND WHEREAS ASSESSEE RECEIVE D INTEREST FROM NAZURA KHWAJA OF RS.1,87,500/-. THE LD. CIT(A) HAS CONFIRMED THE ACTION OF AO. 4. AT THE TIME OF HEARING, LD AR REFERRED PAGE 2 OF THE PAPER BOOK WHICH IS A CAPITAL ACCOUNT AND STATED THAT IN THE BALANCE SHEE T, THE ASSESSEE HAS SHOWN INTEREST LIABILITY OF RS.1,87,500/- ON THE LOAN RECEIVED BY IT. HE SUBMITTED THAT THE SAID INTEREST WAS PAID IN SUBSEQUENT ASSESSMENT YEAR. H E SUBMITTED THAT THE AUTHORITIES BELOW HAVE NOT CONSIDERED THE CAPITAL ACCOUNT OF T HE ASSESSEE AND HAS MADE DISALLOWANCE ONLY ON THE ACCOUNT THAT IN THE ASSESS MENT YEAR UNDER CONSIDERATION, THE ASSESSEE PAID THE INTEREST OF RS.84,590/- ON THE L OAN RECEIVED BY IT. HE SUBMITTED THAT THE MATTER MAY BE RESTORED TO LD. CIT(A) TO VERIFY THE SAID FACT TO ALLOW THE CLAIM OF INTEREST PAID TO TARAPUR PHARMACHEM ON THE LOAN REC EIVED BY IT. LD. DR HAS NO OBJECTION TO RESTORE THE MATTER TO LD. CIT(A) FOR HIS VERIFICATION. 5. IN VIEW OF ABOVE SUBMISSIONS OF THE LD. REPRESENTA TIVES OF THE PARTIES AND CONSIDERING THE ORDER OF LD. CIT(A), WE CONSIDER I T PRUDENT TO SEND BACK THIS ISSUE TO THE FILE OF LD. CIT(A) TO DECIDE THE SAME AFTER VER IFICATION OF THE CAPITAL ACCOUNT OF THE ASSESSEE AND DUE OPPORTUNITY OF HEARING TO THE PAR TIES AFRESH. THEREFORE, GROUND OF APPEAL TAKEN BY ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES BY RESTORING THE ISSUE TO THE LD. CIT(A). 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28TH FEBRUARY, 2014. 1 2 28TH FEBRUARY, 2014 * SD SD ( . . / B.R. BASKARAN ) ( . . /B.R.MITTAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER I.T.A. NO.400/MUM/2012 3 MUMBAI: 28TH FEBRUARY, 2014. . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. % / THE APPELLANT 2. &% / THE RESPONDENT. 3. 8 ( ) / THE CIT(A)- CONCERNED 4. 8 / CIT CONCERNED 5. 9 &: , - : , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) - : , /ITAT, MUMBAI