RAJEEV RENIWAL (HUF), MUMBAI V. DCIT CIR 38, MUMBAI

ITA 455/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55883 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 23-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 19-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: REEPAL THAISHAWALA
• Keywords: Business income
• Section: 14A

Judgement Text

1 RAJEEV RENIWAL (HUF) RAJEEV RENIWAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI D BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI R K PANDA , AM & SHRI VIJAY PAL RAO, JM ITA NO. 455/MUM/2010 (ASST YEAR 2007-08) RAJEEV RENIWAL (HUF) 302 SYLVERTON BLDG 102 WODE HOUSE ROAD COLABA, MUMBAI 5 VS THE DY COMMR OF INCOME TAX CIR 38 MUMBAI (APPELLANT) (RESPONDENT) & ITA NO. 458/MUM/2010 (ASST YEAR 2007-08) RAJEEV RENIWAL 302 SYLVERTON BLDG 102 WODE HOUSE ROAD COLABA, MUMBAI 5 VS THE DY COMMR OF INCOME TAX CIR 38 MUMBAI (APPELLANT) (RESPONDENT) PAN NO. AAEHR1928L ASSESSEE BY SH REEPAL THAISHAWALA REVENUE BY SH SHANTAN BOSE DT.OF HEARING 23 RD NOV 2011 DT OF PRONOUNCEMENT 30 TH , NOV 2011 PER VIJAY PAL RAO, JM THESE APPEALS BY TWO DIFFERENT ASSESSEES (HUF & IN DIVIDUAL) ARE AGAINST TWO SEPARATE ORDERS BOTH DATED 14.12.2009 FOR THE AY 20 07-08. 2 THE FIRST COMMON ISSUE IN THESE APPEALS RAISED BY THE ASSESSEES IS WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) IS JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENDITURE AGAINST SHORT TERM CAPITAL GAINS. 3 WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL A S THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT AN IDENTICAL ISSUE HAS 2 RAJEEV RENIWAL (HUF) RAJEEV RENIWAL BEEN CONSIDERED AND DECIDED BY THE TRIBUNAL IN THE CASE OF SHRI SANJEEV RENIWAL (HUF) & SH RAKESH RENIWAL (HUF) THE OTHER FAMILY ME MBERS OF THE ASSESSEE, IN ITA NOA.451 AND 457/MUM/2010 VIDE ORDER DT 16.3.2011 AS UNDER: 7.1 HOWEVER, WE FIND MERIT IN THE SUBMISSION OF LE ARNED COUNSEL FOR THE ASSESSEE THAT SINCE THE ASSESSEE HAS PURCHASED THE SHARES OUT OF THE BORROWINGS MADE FROM SHRI SHANTI SARUP RENIWAL AND IMM EDIATELY ON SALE OF SUCH SHARES, THE AMOUNT HAS BEEN RETURNED TO SHRI SHAN TI SARUP RENIWAL, THEREFORE, AT LEAST THE INTEREST ATTRIBUTABLE TO SUC H SCRIP FOR THE NUMBER OF DAYS WHICH WAS HELD BY THE ASSESSEE SHOULD BE ALLOW ED AS A DEDUCTION. FROM THE STATEMENT OF STCG, WE FIND THE ASSESSEE HAS CAL CULATED INTEREST OF RS.12,81,220. HOWEVER, SUCH CALCULATION WAS NOT BEF ORE THE ASSESSING OFFICER OR THE CIT(A). WE, THEREFORE, DEEM IT PROPER TO RESTOR E THE MATTER TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO VERIFY THE INTERE ST SO CALCULATED BY THE ASSESSEE ON THE BASIS OF THE UTILIZATION OF THE BOR ROWED FUND FOR THE NUMBER OF DAYS FROM THE DATE OF PURCHASE TILL THE DATE OF SALE OF THE SHARES. NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL AFFORD REASONABLE OPP ORTUNITY OF BEING HEARD TO THE A5SESSEE WHILE VERIFYING SUCH CALCULATION, A COPY OF WHICH IS PLACED IN PAPER BOOK PAGES 14 & 15. THE GROUND RAISED BY THE ASS ESSEE ON THIS ISSUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 4 WE FURTHER NOTE THAT THE TRIBUNAL ALSO FOLLOWED THE ORDER IN THE CASE OF THE OTHER FAMILY MEMBERS OF THE ASSESSEE IN THE CASE OF SH SHANTI SURUP RENWAL, SMT SWEETY RENIWAL AND SHRI SANJEEV RENIWAL IN ITA NOS 454, 454 & 456/MUM/2010 VIDE ORDER DATED 28 TH APRIL 2011 AND SET SIDE THE ISSUE TO THE RECORD O F THE ASSESSING OFFICER. 5 ACCORDINGLY, RESPECTFULLY FOLLOWING THE ORDERS OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF THE FAMILY CONCERN (HUF), W E SET ASIDE THE ISSUE TO THE RECORD OF THE ASSESSING OFFICER IN SIMILAR DIRECTIONS. 6 NEXT ISSUE IN THE APPEAL IN ITA NO.458/MUM/2010 I S AS UNDER: IN LAW AND IN THE FACTS & CIRCUMSTANCES OF THE AP PELLANTS CASE, THE HONBLE C.I.T.(A) HAS FAILED IN DIRECTING THE LD. A.O. TO E NHANCE THE DISALLOWANCE MADE BY APPLYING PROVISIONS OF SECTION 14A. THE HON BLE C.I.T.(A) FAILED TO GRASP THE FACT THAT THE LD. A.O. HAS ALREADY ALLOWED THE OTHER EXPENSES AS 3 RAJEEV RENIWAL (HUF) RAJEEV RENIWAL BEING TOWARDS BUSINESS INCOME AT THE TIME OF ASSESS MENT PROCEEDINGS AND HENCE NO FURTHER DISALLOWANCE CAN BE MADE FROM THE S AME. 7 WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL A S THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THIS ISSUE HAS BEEN CONSIDERED AND ADJUDICATED BY THE TRIBUNAL IN THE C ASE OF OTHER FAMILY MEMBERS OF THE ASSESSEE IN ITA NO.453 AND 456/MUM/2010 VIDE OR DER DT 28.4.2011 IN PARA 8 AS UNDER: 8. WE HAVE HEARD THE PARTIES. BOTH DIE PARTIES AGREE D THAT THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE EASE OF DCT VS. GODREJ AND BOYCE MFG CO LTD 328 ITR 81 (BOM) WAS NOT AVAILABLE BEFORE T HE FIRST APPELLATE AUTHORITY AN:! HENCE THIS ISSUE CAN GO BACK TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN-THE LIGHT OF THE PRINCIPLES LAID DO WN BY THE HONBLE HIGH OF BOMBAY IN THE CASE OF GODREJ AND BOYCE MFG CO LTD ( SUPRA). WE, THEREFORE, SET ASIDE THE ORDER OF THE LD CIT(A) ON THE ISSUE OF THE DISALLOWANCE MADE U/S 14A AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSIN G OFFICER FOR FRESH ADJUDICATION WITH DIRECTION TO DECIDE SAME IN THE L IGHT OF THE PRINCIPLES LAID DOWN IN THE CASE OF GODREJ AND BOYCE MFG CO LTD (SU PR5A). ACCORDINGLY, GROUND NOS 3 TO 5 ARE ALLOWED FOR STATISTICAL PURPOSE. 8 ACCORDINGLY, RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF THE OTHER FAMILY MEMBERS OF THE ASSESSEE, WE SET ASIDE THE ISSUE TO THE RECORD OF THE ASSESSING OFFICER IN THE SIMILAR DIRECTIONS. 9 IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THE 30 TH ,DAY OF NOV 2011. SD/ SD/ ( R K PANDA ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 30 TH , NOV 2011 RAJ* 4 RAJEEV RENIWAL (HUF) RAJEEV RENIWAL COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI 5 RAJEEV RENIWAL (HUF) RAJEEV RENIWAL