ANNAPURNA SHRIKANT TIBREWALA, MUMBAI V. ASST CIT CEN CIR 43, MUMBAI

ITA 4059/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2304 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 21-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K DHONDIAL
• Assessee Lawyers: SHENAL SHAH
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH , MUMBAI BEFORE SRI MAHAVIR SINGH, J M AND SRI RAMIT KOCHAR , AM ITA NO . 4059 /MUM/2013 (A.Y: 2009 - 10 ) SMT. ANNAPURNA SHRIKANT TIBREWALA, 504, PANCHASHEEL GOKULDHAM CHS, GOKULDHAM MULUND, LINK ROAD, GOREGAON (E AST), MUMBAI 400 063 PAN: ABWPT 5218 N VS. THE ASST. COMMISSIONER, CENTRAL CIRCLE - 43, AAYAKAR BHAVAN, MUMBAI 400 020 APPELLANT .. RESPONDENT APPELLANT BY .. SHRI SHENAL SHAH, AR RESPONDENT BY .. SHRI A. K. DHONDIAL, SR. DR DATE OF HEARING .. 20 - 10 - 2016 DATE OF PRONOUNCEMENT .. 20 - 10 - 2016 O R D E R PER MAHAVIR SINGH , JM : THIS APPEAL BY THE ASSESSEE IS ARISING OU T OF THE ORDER OF THE CIT - (A) - 36 , MUMBAI IN APPEAL NO. CIT (A) - 36 / AP - 88/ 12 - 13 DATE D 11 - 03 - 2013 . ASSESSMENT WAS FRAMED BY THE A C I T , CENTRAL CIRCLE - 43 , MUMBAI FOR THE ASSESSMENT YEAR 2009 - 10 VIDE HIS ORDER DATED 16 - 12 - 2011 U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) . 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF TH E CIT ( A) , MUMBAI IN C ONFIRMING THE DISALLOWANCE OF EXPENDITURE RELATABLE TO EXEMPTED INCOME BY THE AO AMOUNTING TO RS.18,23,244/ - BY INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT READ WITH RULE 8D OF THE INCOME TAX RULES, 1962 (HEREINAFTER THE RULES). 3. BRIEFLY STATED FACTS ARE THAT THE AO DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS NOTICED FROM THE STATEMENT OF ACCOUNT THAT THE ASSESSEE HAS DERIVED DIVIDEND INCOME OF RS.5,37,941/ - , WHICH WAS CLAIMED AS EXEMPT U/S 10(38) OF THE ACT. ACCORDING TO THE AO, NO EXPENSES HAVE BEEN ATTRIBUTED AGAINST THIS EXEMPT INCOME AND ACCORDINGLY, HE BY INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT READ WITH RULE 8D OF THE RULES MADE DISALLOWANCE OF INTEREST AND AVERAGE OF VALUE OF INVESTMENT AT RS.18,23,244/ - . AGGRIEVED, THE ASSE SSEE PREFERRED APPEAL BEFORE THE CIT (A), WHO ALSO CONFIRMED THE ACTION OF THE AO ITA NO. 4059 /MUM/20 1 3 2 WITHOUT GOING INTO THE FACTS OF THE CASE. AGGRIEVED, NOW THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE LEARNED SR. DR AND GONE THROUGH THE FACT S AND CIRCUMSTANCES OF THE CASE. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE FIRST OF ALL TAKEN US THROUGH THE ASSESSEES ACCOUNTS FILED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HE HAS TAKEN US THROUGH THE BALANCE AS ON 31 - 03 - 2009 WHE REIN SECURED LOAN FROM STANDARD CHARTERED BANK LTD. WAS TAKEN OF RS.1,41,67,128/ - AND ON THIS, INTEREST PAID WAS RS.17,24,096/ - . THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THIS SECURED LOAN WAS ADVANCED TO ROHA DYE CHEM PVT. LTD. AMOUNTING TO RS.1.50 CRORES ON 26 - 05 - 2008 IMMEDIATELY AFTER CREDIT OF THE SAME AMOUNT OF RS.1,44,27,500/ - ON 26 - 05 - 2008 IN BANK OF INDIA, SION BRANCH, ACCOUNT NO.0041101100043190 . IN VIEW OF THIS, THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THE INVESTMENT IN SHARES TO TH E TUNE OF RS.9,18,68,280/ - AND THE ASSESSEES OWN CAPITAL IS ABOUT RS.7,14,65,709/ - . IN VIEW OF THIS, THE LEARNED COUNSEL FOR THE ASSESSEE CLEARLY STATED THAT THIS SECURED LOAN FROM STANDARD CHARTERED BANK LTD. WAS GIVEN TO ROHA DYE CHEM PVT. LTD. FROM WHE RE THE ASSESSEE HAS EARNED INTEREST INCOME AT RS.20,76,618/ - AND PAID TAX ON THE SAME. THE LEARNED COUNSEL FOR THE ASSESSEE FULLY EXPLAINED THE NEXUS BETWEEN THE LOAN TAKEN FROM THE STANDARD CHARTERED BANK LTD. AND THE AMOUNT ADVANCED TO ROHA DYE CHEM PVT . LTD. WHEN THESE FACTS WERE CONFRONTED, THE LEARNED SR. DR COULD NOT FIND ANY FAULT. IN VIEW OF THE CLEAR FACTS OF THE CASE, WE ARE OF THE VIEW THAT THERE IS NO EXPENDITURE CLAIMED BY THE ASSESSEE QUO THIS EXEMPTED INCOME. IN TERMS OF THE ABOVE, WE REVERS E THE ORDERS OF THE AUTHORITIES BELOW AND ALLOW THE CLAIM OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 20 - 10 - 2016 . SD/ - (RAMIT KOCHAR ) ACCONTANT MEMBER MUMBAI, DATED: 20 - 10 - 2016 LAKSHMIKANTA DEKA/SR.PS SD/ - ( MAHAVIR SINGH ) JUDICIAL MEMBER ITA NO. 4059 /MUM/20 1 3 3 BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI SR. NO. PARTICULARS DATE INITIALS MEMBER CONCERNED 1 DICTATION GIVEN ON 20 / 1 0/16 LK D EKA JM 2 DRAFT PLACED BEFORE AUTHOR 21 /10/16 / 26/10/16 3 DRAFT PROPOSED/PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO THE SR.PS 6 KEPT FOR PRONOUNCEMENT ON 7 FILE SENT TO THE BENC H CLERK 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. T HE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//