M/S SATYAM BUILDERS, Mumbai V. DY. CIT 17(2) PRESENTLY WARD 20 (3)(2), Mumbai

ITA 4865/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3716 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 22-07-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Revenue expenditure
• Section: 201

Judgement Text

1 ITA NO.4 865 /MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY ( JUDICIAL MEMBER) I.T.A. NO. 4 865 /MUM/201 9 (ASSESSMENT YEAR : 20 11 - 1 2 ) M/S SATYAM BUILDERS 401, MAHAVIR ORION BUILDING PLOT NO.48,DR. SUBHA D BATWADEKAR ROAD, MATUNGA EAST, MUMBAI - 400 019 PAN : AANFS6091G VS DY.CIT 17(2) PRESENTLY WARD 20(3)(2), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY NONE RESPONDENT BY S MT. SMITA VERMA (DR) DATE OF HEARING 0 3 - 0 2 - 2021 DATE OF PRONOUNCEMENT 25 /0 2 /2021 O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST ORDER DATED 23 - 0 5 - 201 9 OF LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 3 2 , MUMBAI FOR THE ASSESSMENT YEAR 20 11 - 1 2 . 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO DISALLOWANCE OF INTEREST EXPENDITURE AMOUNTING TO RS.34,02,902/ - . 2 ITA NO.4 865 /MUM/2019 3. BRIEFLY THE FACTS ARE, THE ASSESSEE, A PARTNERSHIP FIRM, IS ENGAGED IN THE BUSINESS OF CONSTRUCTION OF BUILDING. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE FILED ITS RETURN OF INCOME ON 18 - 07 - 2011 DECLARING LOSS OF RS.35,67,872/ - . I N COURSE OF ASSESSMENT PROCEEDINGS, THE A SSESSING O FFICER NOTICED THAT THE ASSESSEE HAS DEBITED INTEREST EXPENDITURE OF RS.38,89,191/ - ON UNSECURED LOAN. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS NOT CARRIED OUT ANY WORK. FURTHER, HE OBSE RVED THAT THE ASSESSEE HAS SHOWN UNSECURED LOAN OF RS.3,38,90,019/ - AS ON 31 - 03 - 2010 AND CLAIMED THA T IT HAS BEEN USED FOR BUSINESS. H OWEVER, SINCE THE CLOSING WORK - IN - PROGRESS OF EARLIER YEAR HAS REMAINED INTACT FOR THE CURRENT YEAR, THE ASSESSING OFFICER WAS OF THE VIEW THAT INTEREST EXPENDITURE CLAIM ED OF RS.34,82,118/ - CANNOT BE ALLOWED AS EXPENDITURE, BUT HAS TO BE ADDED TO THE CLOSING WORK - IN - PROGRESS. ACCORDINGLY, HE DISALLOWED AND CAPITALIZED THE INTEREST EXPENDITURE OF RS.34,82,118/ - . THOUGH , THE ASSESSEE CONTESTED THE AFOR ESAID DISALLOWANCE; HOWEVER, LEARNED COMMISSIONER (APPEALS) CONFIRMED THE ADDITION. 4. WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWEVER, CONSIDERING THE NATURE OF DISPUTE, I PROCEED T O DISPOSE OF THE APPEAL EX PARTE QUA THE AS SESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL ON RECORD . 5. HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN FROM THE GROUND RAISED BY THE ASSESSEE, IDENTICAL ISSUE RELATING TO CAPITALIZATION OF INTEREST CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2009 - 10. WHILE DECIDING THE ISSUE IN ITA NO.6761/MUM/2012 DATED 26 - 10 - 2016, THE T RIBUNAL HAS ALLOWED 3 ITA NO.4 865 /MUM/2019 ASSESSEES CLAIM BY HOLDING THAT THE INTEREST SHOULD BE ALLOWED AS REVENUE EXPENDITURE. FACTS BEING IDENTICAL, FOLLOWING THE AFORESAID DECISION OF THE TRIBUNAL, I DELETE THE ADDITION. GROUND 1 IS ALLOWED. 6. GROUNDS 2 & 3 BE ING CONSEQUENTIAL AND PREMATURE ARE DISMISSED. 7. IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 /0 2 /2021. SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER MUMBAI, DATED : 25 / 0 2 /2021. PAVANAN, SR.P.S (ON CONTRACT) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONENT. 3. THE CIT(A) 4. 4. THE CIT 5. D.R., ITAT, MUMBAI. 6. GUARD FILE. //TRUE COPY// BY ORDER I.T.A.T., MUMBAI. 4 ITA NO.4 865 /MUM/2019