ITO 2(2)(3), MUMBAI V. MATHAKIA INVESTMENTS P.LTD, MUMBAI

ITA 5260/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0328 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 06-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T A KHANDR
• Assessee Lawyers: Y N THAKKAR

Judgement Text

ITA NO. 5260/M/2015 MATHAKIA INVESTMENTS 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBA I BEFORE SHRI D.T. GARASIA, JM AND MANOJ KUMAR AGRAWA L, AM ITA NO. 5260/MUM/2015 A.Y. 2011-12 ITO 2(2)(3), AAYAKAR BHAVAN, R. NO. 542, M.K. RD MUMBAI VS. MATHAKIA INVESTMENTS P. LTD 7 TH FLOOR, INDIAN GLOBE CHANBERS, 142, W.H. MARG, V.T., MUMBAI 400038. PAN NO. AAACM5656K (APPELLANT) : (RESPONDENT) ASSESSEE BY : MR. T.A. KHAN(DR) RESPONDENT BY : MR. Y.N. THAKKAR (AR) DATE OF HEARING : 08.08.2017 DATE OF PRONOUNCEMENT : 16.08.2017 O R D E R PER D.T. GARASIA, JUDICIAL MEMBER : THE ABOVE APPEAL RELATE TO ASSESSMENT YEAR 2011-12. THIS APPEAL ARISE OUT OF THE ORDER DATED 10.08.2015 OF THE COMM ISSIONER OF INCOME TAX (APPEALS) 05 [HEREINAFTER REFERRED TO AS THE CIT( A)] RELEVANT TO ASSESSMENT YEAR 2011-12. 2. DURING THE COURSE OF HEARING, LD. AR SUBMITTED THAT ISSUE IN CONTROVERSY REGARDING RECOGNISED THE NATIONAL INTER EST INCOME ON OUTSTANDING DEBT WHEN THE INTEREST IS SUBJECT MATTE R OF A DECREE BEFORE THE COURT.IN THIS REGARD, THE REVENUE SUBMISSION THAT A SSESSEE SHOULD HAVE RECOGNISED THE INTEREST INCOME ON OUTSTANDING DEBTS PURCHASED BY THE ASSESSEE FROM BANK OF BARODA BY VIRTUE OF ASSIGNMEN T DATE. THE TRIBUNAL HAS DECIDED THIS ISSUE BY THE ORDER IN ITATS ORDER NO. 7392-7398/M/2013 IN ASSESSEES APPEAL AND MATTER IS DECIDED IN FAVOU R OF THE ASSESSEE, THEREFORE, THIS APPEAL MAY BE DISMISSED. ON THE OT HER HAND, LD. DR CONCEDED TO IT. ITA NO. 5260/M/2015 MATHAKIA INVESTMENTS 2 3. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT ISSUE IN CONTROVERSY IS COVERED IN FAVOUR OF T HE ASSESSEE BY ASSESSEES OWN CASE IN ITAT ORDER NO. 7392-7398/M/2013. WHEREIN, THE TRIBUNAL HAS DECIDED THE ISSUE BY OBSERVING AS UNDE R: 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE PAPER BOOKS FILE D BEFORE US. ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE RELE VANT MATERIAL PLACED BEFORE US, WE FIND, THERE IS NO DISPUTE ON THE FACT S ABOUT THE ASSESSEE ACQUIRING THE DEBTS FROM THE BANK OF BARODA FOR A S UM OF RS. 84,97,400/- WITH THE BORROWED FUNDS, THE LOAN CREDI TORS HAVE NOT PAID INTEREST INCOME TO THE EITHER BANK OR TO THE ASSESS EE, ASSESSEE HAS NOT RECOGNISED THE INCOME FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION ETC. THE LEGAL ISSUE I.E. TO BE DECIDED ON THE RIG HT TO RECOVER THE INTEREST INCOME BY THE ASSESSEE DURING THE PENDENCY OF SUIT (NO. 105 OF 1986) IN BOMBAY CITY CIVIL COURT. IN THIS REGARD, WE HAVE P ERUSED THE PROVISIONS OF THE SAID SECTION 34 OF THE CPC AND THE SAME READ S AS UNDER:- 34. INTEREST:- (1) WHERE AND IN SO FAR AS A DECRE E IS FOR THE PAYMENT OF MONEY, THE COURT MAY, IN THE DECREE, ORDER INTEREST AT SUCH RATE AS THE COURT DEEMS REASONABLE TO BE PAID ON THE PRINCIPAL SUM ADJUDGED, FROM THE DATE OF THE SUIT TO THE DATE OF THE DECREE, IN ADDITION TO ANY INTEREST ADJUDGED ON SUCH PRINCIPAL SUM FOR ANY PERIOD PRIOR TO THE INSTITUTION OF THE SUIT, [WITH FURTHER INTEREST AT SUCH RATE NOT E XCEEDING SIX PER CENT PER ANNUM, AS THE COURT DEEMS REASONABLE ON SUCH PR INCIPAL SUM], FROM THE DATE OF THE DECREE TO THE DATE OF PAYMENT, OR T HE SUCH EARLIER DATE AS THE COURT THINKS FIT. [PROVIDED THAT WHERE THE LIABILITY IN RELATION TO THE SUM SO ADJUDGED HAD ARISEN OUT OF A COMMERCIAL TRANSACTION, THE RATE OF SUCH FURTHER INTEREST MAY EXCEED SIX PER CENT PER ANNUM, BUT SHALL NOT EX CEED THE CONTRACTUAL RATE OF INTEREST OR WHERE THERE IS NO CONTRACTUAL R ATE, THE RATE AT WHICH MONEYS ARE LENT OR ADVANCED BY NATIONALISED BANKS I N RELATION TO COMMERCIAL TRANSACTIONS. EXPLANATION I:- IN THIS SUB-SECTION, NATIONAL BANK MEANS A CORRESPONDING NEW BANK AS DEFINED IN THE BANKING CO MPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 197 0 (5 OF 1970). EXPLANATION II:- FOR THE PURPOSES OF THIS SECTION, A TRANSACTION IS A COMMERCIAL TRANSACTION, IF IT IS CONNECTED WITH THE INDUSTRY, TRADE OR BUSINESS OF THE PARTY INCURRING THE LIABILITY.] ( 2) WHERE SUCH A DECREE IS SILENT WITH RESPECT TO THE PAYMENT OF FURTHER INTEREST [ON SUCH PRINCIPAL SUM] FROM THE D ATE OF DECREE TO THE ITA NO. 5260/M/2015 MATHAKIA INVESTMENTS 3 DATE OF PAYMENT OR OTHER EARLIER DATE, THE COURT SH ALL BE DEEMED TO HAVE REFUSED SUCH INTEREST, AND A SEPARATE SUIT THEREFOR SHALL NOT LIE. 12. WE HAVE ALSO EXAMINED THE INTERPRETATION OF T HE SAID SECTION AND THE RELEVANT EXPLANATION IS ALREADY INCORPORATED IN THE ABOVE PARAS OF THIS ORDER. WE HAVE CONSIDERED THE CITED JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MAHARASHTR A STATE FINANCIAL CORPORATION LTD. (SUPRA). FURTHER, WE HAVE ALSO CO NSIDERED THE REASONING GIVEN BY THE CIT(A) IN PARAS 4.1.4 AND 4. 1.5 OF HIS ORDER. CONSIDERING THE ABOVE, WE ARE OF THE OPINION, THE C ONCLUSION DRAWN BY THE CIT(A) IS FAIR AND REASONABLE AND IT DOES NOT C ALL FOR ANY INTERFERENCE. ACCORDINGLY, RELEVANT GROUNDS RAISED BY THE REVENUE IN ALL THE FOUR APPEALS ARE DISMISSED. 4. WE RESPECTFULLY, FOLLOWING THE SAME, WE DISMISS THE DEPARTMENTAL APPEAL. ORDER PRONOUNCED IN OPEN COURT ON 16 TH AUGUST, 2017. SD/- SD/- MANOJ KUMAR AGRAWAL (ACCOUNTANT MEMBER) D.T. GARASIA (JUDICIAL MEMBER) MUMBAI, DATED: 16.08.2017 RAHUL DHOKE / P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH BY ORDER DY /ASSTT.REGISTRAR, ITAT, MUMBAI.