DCIT CEN CIR 5(2), MUMBAI V. SATRA PROPERTIES (INDIA) LTD, MUMBAI

ITA 5529/MUM/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 8388 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 30-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule 8D

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘G‘ BENCH MUMBAI BEFORE: SHRI M.BALAGANESH, ACCOUNTANT MEMBER & SHRI KULDIP SINGH, JUDICIAL MEMBER ITA No.5529/Mum/2018 (Asse ssment Year :2012-13) Dy. Commissioner of Income Tax, Central Circle-5(2) Room No.1908, 19 th Floor, Air India Building, Nariman Point, Mumbai-400 021 Vs. M/s. Satra Properties (INDIA) Limited Dev Plaza, 2 nd Floor Opp. Andheri Fire Station S.V. Road, Andheri(E) Mumbai – 400 058 PAN/GIR No. AAACE1835C (Appellant) .. (Respondent) Revenue by Shri Hoshang B. Irani Assessee by None Date of Hearing 14/02/2022 Date of Pronouncement 22/02/2022 आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in ITA No.5529/Mum/2018 for A.Y.2012-13 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-53, Mumbai in appeal No.CIT(A)-53/IT-97/DCCC-5(2)/2015-16 dated 16/07/2018 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 23/03/2015 by the ld. Deputy Commissioner of Income Tax, Central Circle-5(2), Mumbai (hereinafter referred to as ld. AO). ITA No.5529/Mum/2018 M/s. Satra Properties (India) Ltd., 2 2. The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in deleting the disallowance made on account of interest u/s.14A of the Act r.w.r 8D(2)(ii) of the Income Tax Rules (hereinafter referred to as Rules). 3. None appeared on behalf of the assessee. We have heard the ld. DR and perused the materials available on record. We find that assessee had made investments amounting to Rs.59,78,10,450/- as on 31/03/2011 and the same remained as such as on 31/03/2012 also. Hence, no fresh investments were made during the year under consideration. The assessee earned dividend income on its investments to the tune of Rs.1,46,03,900/- and claimed the same as exempt u/s.10 of the Act in the return of income. However, no expenditure was disallowed by the assessee u/s.14A of the Act voluntarily in the return of income. Accordingly, the ld. AO invoked the computation mechanism provided in Rule 8D(2) of the Rules and computed the disallowance thereon u/s.14A of the Act as under:- i) Under Rule 8D(2)(ii) - Rs.301,55,675/- ii) Under Rule 8D(2)(iii) - Rs. 29,89,052/- Total Disallowance Rs.3,31,44,727/- ============= 3.1. We find that the ld. CIT(A) by considering the decision of Hon’ble Supreme Court in the case of Maxopp Investments reported in 402 ITR 640 and after considering the elaborate submissions of the assessee made both on facts as well as by placing reliance on various case laws gave a factual finding that assessee had paid interest on its non- convertible debentures during the year and monies raised through such ITA No.5529/Mum/2018 M/s. Satra Properties (India) Ltd., 3 debentures were not used by the assessee for making investments and the same had been used only for repaying the term loans. At the outset we find that this factual finding of the ld. CIT(A) was not controverted by the Revenue before us. 3.2. There is no dispute in the instant case with regard to the applicability of Rule 8D(2) of the Rules as is evident from para 5.6 of the order of the ld. CIT(A). We find that the ld. AO himself had duly excluded the interest on specific purpose loans i.e. term loans and vehicle loans while making the disallowance of interest under Rule 8D(2)(ii) of the Rules. The ld. CIT(A) had categorically observed that the fresh loans taken during the year had not been utilized for making any investments. Hence, the interest paid on fresh loans cannot be subject matter of disallowance under Rule 8D(2)(ii) of the Rules. This factual finding of the ld. CIT(A) had not been controverted by the Revenue before us and this is the only dispute before us to be decided in this appeal. We do not find any appeal which is filed by the assessee before us against the order of the ld. CIT(A). Hence, we do not deem it fit to interfere in the order of the ld. CIT(A). Accordingly, the grounds raised by the Revenue are dismissed. 4. In the result, appeal of the Revenue is dismissed. Order pronounced on 22/ 02/2022 by way of proper mentioning in the notice board. Sd/- (KULDIP SINGH) Sd/- (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 22/02/2022 KARUNA, sr.ps ITA No.5529/Mum/2018 M/s. Satra Properties (India) Ltd., 4 Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy//