DCIT CEN CIR 3(3), MUMBAI V. SHAREKHAN FINANCIAL SERVICES P.LTD, MUMBAI

ITA 5715/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3015 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2016
• Appeal Filed By: Department
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 21-12-2015
• Court: TRIBUNAL
• Department Lawyers: CAPT PRADEEP ARGY
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & RAMLAL NEGI (JM) I.T.A. NO. 5715 /MUM/20 15 (ASSESSMENT YEAR 20 11 - 12 ) DCIT, CC - 3(3) ROOM NO. 401 AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. VS. M/S. SHAREKHAN FINANCI AL SERVICES PVT. LTD. 10 TH FOOR, BETA BUILDING LODHA I THINK TECHNO PARK OFF. JVLR , OPP KANJURMARG STATION , MUMBAI - 400 042. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAICS5627E ASSESSEE BY SHRI HIRO RAI DEPARTMENT BY CAPT. PRADEEP ARGY DATE OF HEARING 26.9 . 201 6 DATE OF PRONOUNCEMENT 26 .9 . 201 6 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 10.9.2015 PASSED BY LEARNED CIT(A) - 51, MUMBAI AND IT RELATES TO A.Y. 2011 - 12. 2. THE REVENUE IS A GGRIEVED BY THE DECISION OF LEARNED CIT(A) IN DELETING THE INTEREST DISALLOWANCE MADE U/R. 8D(2)(II)OF THE I.T. RULES READ WITH SECTION 14A OF THE I.T. ACT. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FINANCIAL SERVICES. DURING THE YEAR UNDER CONSIDERAT ION THE ASSESSEE HAS RECEIVED DIVIDEND INCOME AND CLAIMED THE S AME AS EXEMPT. THE ASSESSEE DISALLOWED A SUM OF ` 6,000/ - U/S. 14A OF THE ACT READ WITH RULE 8D OF THE I.T. RULES. THE ASSESSING OFFICER, HOWEVER , COMPUTED THE DISALLOWANCE BY APPLYING RULE 8D OF THE I.T. RULES AT ` 65.69 LAKHS, WHICH INCLUDE D INTEREST DISALLOWANCE OF ` 63.09 LAKHS. BEFORE LEARNED CIT(A) THE ASSESSEE SUBMITTED THAT INTEREST FREE FUNDS AVAILABLE WITH IT IS IN EXCESS OF THE INVESTMENT MADE BY IT AND HENCE NO DISALLOWANCE OF INTER EST M/S. SHAREKHAN FINANCIAL SERVICES P. LTD. 2 EXPENDITURE IS CALLED FOR , IN VIEW OF THE DECISION OF HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF RELIANCE UTILITIES AND POWER LTD. (313 ITR 340). THE ASSESSEE ALSO SUBMITTED THAT HON'BLE BOMBAY HIGH COURT HAS TAKEN AN IDENTICAL VIEW IN THE CASE OF HDFC BANK LTD. AND THE TRIBUNAL HAS ALSO DECIDED AN IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE FOR A.Y. 2007 - 08. CONVINCED WITH THE CONTENTION S OF THE ASSESSEE, THE LEARNED CIT(A) DELETED THE INTEREST DISALLOWANCE AND HENCE T HE REVENUE HAS FILED THIS APPEAL CHALLENGING THE SAID DECISION. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE DID NOT ESTABLISH THE NEXUS BETWEEN THE INTEREST FREE FUNDS AND INVESTMENT MADE BY IT. ON THE CONTRARY, AR SUBMITTED THAT ABOVE SAID CONTENTION OF THE ASSESSEE HAVE BEEN DULY CONSIDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF HDFC BANK LTD (366 ITR 505 AND 383 ITR 529). 5. WE HAVE ALSO GONE THROUGH THE COPY OF BALANCE - SHEET FILED BY THE ASSESSEE. PERUSAL OF THE SAME WOULD SHO W THAT THE INTEREST - FREE FUND AVAILABLE WITH THE ASSESSEE IS IN EXCESS OF THE AMOUNT OF INVESTMENT MADE BY IT DURING THE YEAR UNDER CONSIDERATION AND ALSO IN THE IMMEDIATELY PRECEDING YEAR. W E NOT ICE THAT LEARNED CIT(A) HAS DULY TAKEN NOTE OF THESE FACTS AND MENTIONED TH E S AME IN PARA 5 OF HIS ORDER. HENCE IN VIEW OF THE DEC I SION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF HDFC BANK LTD. ( SUPRA ), WE DO NOT FIND ANY INFIRMITY IN THE DECISIO N RENDERED BY LEARNED CIT(A) ON THIS ISSUE. 6 . IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 26 . 9 .2016 SD/ - SD/ - (RAMLAL NEGI ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 26 / 9 / 20 1 6 COPY OF THE ORDER FORWARDED TO : M/S. SHAREKHAN FINANCIAL SERVICES P. LTD. 3 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE CO PY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI