STANDARD FIBRECHEM P.LTD, MUMBAI V. ACIT CIR 1(3), MUMBAI

ITA 4764/MUM/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4065 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 04-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 18-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K L KANAK
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.4764/M/2012 ASSESSMENT YEAR: 2008-09 M/S. STANDARD FIBRECHEM PVT. LTD., 602-A, PRATHAMESH TOWER, S.B. MARG, RAGHUWANSHI MILL, LOWER PAREL, MUMBAI 400 013 PAN: AAACS 8742E VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 1(3), 540, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI K. GOPAL, A.R. REVENUE BY : SHRI K.L. KANAK, D.R. DATE OF HEARING : 22.09.2015 DATE OF PRONOUNCEMENT : 03.02.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 05.06.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2008-09. 2. THE SHORT ISSUE RAISED IN THIS APPEAL IS RELATIN G TO THE DISALLOWANCE OF INTEREST EXPENDITURE UNDER SECTION 14A READ WITH RU LE 8D(2)(II) OF THE INCOME TAX RULES INCURRED FOR EARNING THE TAX EXEMPT INCOM E BY THE ASSESSEE. THE STAND OF THE ASSESSEE IS THAT NO INTEREST EXPENDITU RE HAS BEEN INCURRED IN RELATION TO INVESTMENTS. THE INTEREST EXPENDITURE HAS BEEN INCURRED BY THE ASSESSEE IN RELATION TO TRADING ACTIVITY IN SHARES AND NOT IN RELATION TO THE INVESTMENTS WHEREAS THE STAND OF THE REVENUE IS THA T FROM THE RECORDS IT IS NOT CLEAR THAT THE INTEREST EXPENDITURE HAS BEEN INCURR ED IN RELATION TO TRADING ACTIVITY ONLY. ITA NO.4764/M/2012 M/S. STANDARD FIBRECHEM PVT. LTD. 2 3. BOTH THE LD. REPRESENTATIVES OF THE PARTIES SUBM ITTED THAT THE ISSUE MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER (H EREINAFTER REFERRED TO AS THE AO) FOR VERIFICATION OF THE FACTS AS TO WHETHER THE INTEREST EXPENDITURE WAS INCURRED BY THE ASSESSEE IN RELATION TO THE TRADING ACTIVITY IN SHARES ONLY OR IN RESPECT OF INVESTMENTS ALSO AND ALSO TO VERIFY THE GENUINENESS OF THE SAID EXPENDITURE. WE, ACCORDINGLY, RESTORE THIS ISSUE T O THE FILE OF THE AO IN THE TERMS AS INDICATED ABOVE AND DIRECT THE AO TO EXAMI NE THE ACCOUNTS OF THE ASSESSEE AND GIVE A DEFINITE FINDING WHETHER THE IN TEREST EXPENDITURE WAS INCURRED IN RELATION TO TRADING ACTIVITY ONLY OR IN RESPECT OF INVESTMENTS ALSO AND TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 4. WITH THE ABOVE OBSERVATIONS, THE APPEAL OF THE A SSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03.02.2016. SD/- SD/- (N.K. BILLAIYA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 03.01.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.