GROWMORE EXPORTS LTD, MUMBAI V. DCIT CEN CIR 31, MUMBAI

ITA 4629/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71550 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 06-11-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 08-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'G' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 4629/MUM/2011 (ASSESSMENT YEAR: 2004-05) M/S. GROWMORE EXPORTS LTD. DCIT, CENTRAL CIRCLE - 3 1 32, MADHULI, 3RD FLOOR MUMBAI DR. ANNIE BESANT ROAD, NEHRU VS. CENTRE, WORLI, MUMBAI 400018 PAN - AAACG4939P APPELLANT RESPONDENT APPELLANT BY: SHRI DHARMESH SHAH RESPONDENT BY: DR. P. DANIEL DATE OF HEARING: 06.11.2013 DATE OF PRONOUNCEMENT: 06.11.2013 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) 40, MUMBAI AND IT PERTAINS TO A.Y. 2004-05 . 2. THOUGH THE ASSESSEE COMPANY RAISED FIVE GROUNDS, IN THE GROUNDS OF APPEAL ANNEXED TO FORM NO. 36, AT THE TIME OF HE ARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT GROUNDS NO. 1, 2 & 3 ARE NOT PRESSES AND GROUND NO. 5 IS GENERAL IN NATURE; IN S HORT ONLY GROUND NO. 4 IS PRESSED FOR CONSIDERATION. UNDER THESE CIRCUMS TANCES WE REJECT GROUNDS NO. 1, 2, 3 & 5. 3. WITH REGARD TO GROUND NO. 4 THE LEARNED COUNSEL SUB MITTED THAT THE ASSESSEE BORROWED MONEY FROM FAMILY BROKERAGE FIRMS FOR MAKING INVESTMENT IN SHARES AND SECURITIES PRIOR TO 08.06. 1992. INTEREST PAYABLE TO THESE CREDITORS WAS CLAIMED AS DEDUCTION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO EX PLAIN AS TO WHY THE INTEREST LIABILITY SHOULD NOT BE DISALLOWED. DESPIT E THE EXPLANATION ITA NO. 4629/MUM/2011 M/S. GROWMORE EXPORTS LTD. 2 TENDERED BY THE ASSESSEE THE AO REJECTED THE CLAIM AND PROCEEDED TO DISALLOW THE INTEREST PAYABLE ON LOANS, WHICH WAS C ONFIRMED BY THE LEARNED CIT(A) BY OBSERVING THAT ON IDENTICAL CIRCU MSTANCES IN THE CASE OF SHRI HITESH MEHTA, BROTHER OF LATE SHRI HARSHAD MEH TA, SAME ISSUE WAS DECIDED AGAINST THE ASSESSEE. FOLLOWING THE FINDING S IN THE ORDER PASSED IN THE CASE OF SHRI HITESH MEHTA FOR A.Y. 2005-06 T HE CLAIM OF INTEREST EXPENDITURE WAS NOT ACCEPTED BY THE LEARNED CIT(A). FURTHER AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING THE LEARNED COUNSEL PLACED B EFORE US COPY OF THE ORDER PASSED BY ITAT IN THE CASE OF SHRI HITESH MEH TA FOR ASSESSMENT YEARS 2005-06 AND 2006-07 (ITA NO. 7726 & 7727/MUM/2010 D ATED 26.04.2013) TO SUBMIT THAT IDENTICAL ISSUE WAS SET ASIDE TO THE FILE OF THE CIT(A) TO ADJUDICATE AFRESH. HE HAS ALSO PLACED BEFORE US A C OPY OF THE ORDER PASSED BY ITAT A BENCH IN THE CASE OF M/S. AATUR HOLDING S P. LTD. (ITA NO. 5481/ MUM/2011 DATED 07.08.2013) TO SUBMIT THAT IN THE CA SE OF ANOTHER GROUP CONCERN, UNDER IDENTICAL CIRCUMSTANCES, THE ISSUE W AS SET ASIDE TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. 5. THE LEARNED D.R. ALSO ADMITTED THAT THE ISSUE INVOL VED IN THE AFORECITED ORDERS OF THE ITAT ARE IDENTICAL. 6. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE WE S ET ASIDE THE ISSUE TO THE FILE OF THE LEARNED CIT(A) WHO IS DIRECTED T O ADJUDICATE THE MATTER AFRESH IN ACCORDANCE WITH LAW AND IN THE LINES INDI CATED IN THE AFOREMENTIONED ORDERS. 7. IT DESERVES TO BE NOTICED THAT THE ASSESSEE FILED A DDITIONAL GROUND ALONGWITH LETTER DATED 31 ST OCTOBER, 2013 WHEREIN IT WAS CONTENDED THAT THE INCOME ASSESSED BY THE AO OUGHT TO HAVE BEEN TAXED IN THE HANDS OF SHRI HARSHAD S. MEHTA AND NOT IN THE HANDS OF THE ASSESS EE. HOWEVER, AT THE TIME OF HEARING THE LEARNED COUNSEL ADMITTED THAT T HIS ADDITIONAL GROUND WAS WRONGLY RAISED AND IT HAS NO SUBSTANCE. UNDER T HESE CIRCUMSTANCES WE REJECT THE ADDITIONAL GROUND. ITA NO. 4629/MUM/2011 M/S. GROWMORE EXPORTS LTD. 3 8. IN THE RESULT, AS PRONOUNCED IN THE OPEN COURT, THE APPEAL FILED BY THE ASSESSEE COMPANY IS TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH NOVEMBER, 2013. SD/- SD/- (D. KARUNAKARA RAO) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 6 TH NOVEMBER, 2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 40, MUMBAI 4. THE CIT CENTRAL II, MUMBAI CITY 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.