M/S. MAHARASHTRA HARDWARE STORES, MUMBAI V. DY. CIT CIR,13(2), MUMBAI

ITA 5513/MUM/2007

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3906 (ITAT-MUMBAI)
• Duration Of Justice: 8 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-02-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 20-08-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PIYUSH SONKAR
• Assessee Lawyers: PRAKASH K JOTWANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI AMIT SHUKLA (JM) I.T.A. NO. 5513/MUM/2007 (ASSESSMENT YEAR 2004 - 2005) M/S. MAHARASHTRA HARDWARE STORES, 4, PADMAKUNJ, 1 ST FLOOR, OPP. DALSHUKHBHAI, MUMBAI 400 067. VS. D.C.I.T - 13(2), MUMBAI. ( APPELLANT ) .. ( RESPONDENT ) PAN NO.AAAFM1362K ASSESSEE BY : SHRI PRAKASH K. JOTWANI DEPARTMENT BY : SHRI PIYUSH SONKAR (DR) DATE OF HEARING : 12.04.2016 DATE OF PRONOUNCEMENT : 04 .05.2016 O R D E R PER B.R. BASKARAN, AM : - THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DT. 18.5.2007 PASSED BY CIT(A) - 13, MUMBAI AND IT RELATES TO ASSESSMENT YEAR 2004 - 05. THE SOLITARY ISSUE URGED IN THIS APPEAL RELATES TO DISALLOWANCE OF INTEREST PROV ISION OF RS.38,56,748/ - . 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF TRADING IN IRON AND STEEL HARDWARE, 2 M/S. MAHARASHTRA HARDWARE STORES ITA NO. 5513/MUM/2007 GENERAL SUPPLIERS ETC. THE ASSESSEE HAD BORROWED LOAN FROM MADHAVAPURA MERCANTILE CO - OPERATIV E BANK LTD. DUE TO A SCAM THAT TOOK PLACE IN THE ABOVE SAID BANK, IT WAS NOT FUNCTIONING SINCE 2001 ONWARDS. FURTHER, THE LOAN ACCOUNT OF THE ASSESSEE WAS ALSO CLASSIFIED AS NON - PERFORMING ASSET. THEREFORE, THE ASSESSEE DID NOT MAKE ANY INTEREST PROVISIO N FOR FINANCIAL YEAR 2002 - 03. HOWEVER, THE ASSESSEE MADE A PROVISION FOR INTEREST EXPENDITURE TO THE TUNE OF RS. 38,56,748/ - . THE ASSESSING OFFICER, HOWEVER, DISALLOWED THE SAME BY INVOKING THE PROVISIONS OF SEC. 43B(E) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) , SINCE THE ASSESSEE DID NOT PAY THE INTEREST AMOUNT BEFORE THE DUE DATE FOR FILING RETURN OF INCOME . 3. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT THE PROVISIONS OF SEC. 43B(E) OF THE ACT WAS INTRODUCED FROM ASSESSMENT Y EAR 2005 - 06 ONWARDS AND ACCORDINGLY PRAYED FOR CANCELLATION OF THE ADDITION OF INTEREST CLAIMED. HOWEVER, THE LD. CIT(A) TOOK THE VIEW THAT THE LIABILITY TO PAY INTEREST DID NOT CRYSTALLIZE DURING THE PREVIOUS YEAR UNDER CONSIDERATION AND ACCORDINGLY, CON FIRMED THE ADDITION. 4. BEFORE US, THE LD. COUNSEL ON BEHALF OF THE ASSESSEE REITERATED THE POINT THAT THE PROVISIONS OF SEC. 43B(E) OF THE ACT IS NOT APPLICABLE FOR THE YEAR UNDER CONSIDERATION. HOWEVER, THE LD. DR POINTED OUT THAT THE ASSESSEE IS NOT I N A POSITION TO SHOW THAT THE INTEREST CLAIM OF RS.38,56,748/ - PERTAINED TO THE YEAR UNDER CONSIDERATION. THE LD. COUNSEL ALSO C OULD NOT CONTROVERT THE SAID FACT. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE OBSERVATIONS OF THE LD. CIT( A) THAT THE IMPUGNED INTEREST CLAIM DID NOT CRYSTALLIZE DURING THE YEAR UNDER CONSIDERATION REMAINS UNCONTROVERTED. FURTHER NO EVIDENCE WAS PRODUCED BEFORE US THAT THE IMPUGNED INTEREST EXPENDITURE CAN BE 3 M/S. MAHARASHTRA HARDWARE STORES ITA NO. 5513/MUM/2007 CLAIMED UNDER MERCANTILE SYSTEM OF ACCOUNTING. AC CORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS ORDER ON THIS ISSUE. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 4 .05.2016. SD/ - SD/ - (AMIT SHUKLA) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 0 4 .05.2016 *SSL* COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI