ACIT - 2(3)(2), MUMBAI V. STRATEGIC CAPITAL CORPORATION PVT. LTD., MUMBAI

ITA 6166/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0231 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 19-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: VIMAL PUNMIYA LD
• Keywords: Business income; Business expenditure
• Section: 143(3)

Judgement Text

ITA NO 6166/MUM/2016 STRATEGIC CAPITAL CORPORATION PRIVATE LIMITED ASSESSMENT YEAR 2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 6166/MUM/2016 ( / ASSESSMENT YEAR: 2012-13) ASSISTANT COMMISSIONER OF INCOME TAX-2(3)(2) ROOM NO.552, 5 TH FLOOR, AAYKAR BHAVAN, M.K.ROAD MUMBAI 400 020 / VS. STRATEGIC CAPITAL CORPORATION PRIVATE LTD. 44, MINT ROAD, FORT MUMBAI -400 001 ! ./ ./PAN/GIR NO. AAACS-5283-Q ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : VIMAL PUNMIYA, LD. AR REVENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 16/08/2017 / DATE OF PRONOUNCEMENT : 18/08/2017 ITA NO 6166/MUM/2016 STRATEGIC CAPITAL CORPORATION PRIVATE LIMITED ASSESSMENT YEAR 2012-13 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. IN THE CAPTIONED APPEAL FOR ASSESSMENT YEAR [AY ] 2012-13 AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-6 [CIT(A)], MUMBAI DATED 28/07/2016, THE REVENUE IS AGGRIEVED B Y NON-ADJUDICATION OF GROUNDS PERTAINING TO INTEREST INCOME AND DISALL OWANCE OF BUSINESS EXPENDITURE BY LD. CIT(A). 2. BRIEFLY STATED, THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE ENGAGED IN THE BUSINESS OF SECURITIES, INVESTMENTS & OTHER FINANCI AL ACTIVITIES WAS ASSESSED U/S 143(3) FOR IMPUGNED AY ON 04/03/20 15 AT RS.79,37,992/- AFTER CERTAIN ADDITIONS / DISALLOWANCES / REARRANGEMENT OF HEADS OF INCOME AS AGAINST NIL RETURN FILED BY THE ASSESSEE ON 30/09/2012. AS ALREADY STATED, THE REVENUE IS AGGRI EVED BY NON- ADJUDICATION OF CERTAIN GROUNDS BY LD.CIT(A) AND IS IN APPEAL B EFORE US. 3. DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED BY L D. AO THAT THE ASSESSEE DID NOT CARRY OUT ANY BUSINESS ACTIVITY DU RING THE IMPUGNED AY AND THE ONLY SOURCE OF ITS INCOME WERE INCOME FROM LETTING OUT OF PROPERTY, GAIN ON SALE OF INVESTMENTS, DIVIDEND INC OME AND INTEREST INCOME, WHICH WERE OFFERED AS BUSINESS INCOME BY THE ASSESSEE. HOWEVER, THE RENTAL INCOME, IN THE OPINION OF LD. A O, WAS ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY , AGAINST WHICH THE ASSESSEE WAS ENTITLED FOR STATUTORY DEDUCTION @30%. SIMILARLY, THE INTEREST & OTHER INCOME, IN THE OPINION OF LD. AO, WERE ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES, AGAINST WHICH THE ASSESSEE WAS ITA NO 6166/MUM/2016 STRATEGIC CAPITAL CORPORATION PRIVATE LIMITED ASSESSMENT YEAR 2012-13 3 ELIGIBLE TO CLAIM RELATED EXPENSES U/S 57. ACCORDIN GLY, BY REARRANGEMENT OF HEADS OF INCOME IN THE ABOVE MANNER, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED AT RS.79,37,992/-. THE ASSE SSEE HAD CLAIMED TOTAL BUSINESS EXPENSES OF RS.1,95,65,312/- WHICH F INALLY GOT RESTRICTED TO RS.67,05,697/- U/S 57, RESULTING INTO NET DISALL OWANCE OF RS.1,28,59,615/-. 4. AGGRIEVED, THE ASSESSEE CONTESTED THE STAND OF L D. AO SUCCESSFULLY BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 28/07/2016, WHERE LD. CIT(A), RELYING UPON TRIBUNALS DECISION IN ASSESSEES OWN CASE FOR AY 2010-11, ALLOWED THE APPEAL OF THE ASSE SSEE. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5. THE LD. DEPARTMENTAL REPRESENTATIVE [DR], BY DRA WING OUR ATTENTION TO THE GROUNDS OF APPEAL, CONTENDED THAT THE LD. CIT(A) FAILED TO ADJUDICATE THE ISSUE PERTAINING TO HEAD UNDER WH ICH THE INTEREST & OTHER INCOME WOULD BE CHARGEABLE TO TAX SINCE THE ISSUE WAS NOT THERE BEFORE THE TRIBUNAL IN AY 2010-11 AND HENCE THE REL IANCE OF LD. CIT(A) ON THE TRIBUNALS ORDER IN THIS REGARD WAS MISPLACE D. SIMILARLY, LD. DR DREW ATTENTION TO THE FACT THAT ALLOWABILITY OF BUS INESS EXPENDITURE HAS NOT BEEN DEALT WITH BY LD. CIT(A) IN THE IMPUGNED O RDER. 6. PER CONTRA, LD. REPRESENTATIVE FOR ASSESSEE [AR] CONTENDED THAT THE ISSUE WAS FULLY COVERED IN ASSESSEES FAVOR BY TRIBUNALS ORDER FOR AY 2010-11 VIDE ITA NO. 587/M/2014 ORDER DATED 02/0 7/2015 AND HENCE, THERE WAS NO SUBSTANCE IN REVENUES APPEAL. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE CITED ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2010-11 . AFTER PERUSING THE GROUNDS OF APPEAL RAISED BEFORE THE TRIBUNAL IN AY 2010-11, WE CONCUR ITA NO 6166/MUM/2016 STRATEGIC CAPITAL CORPORATION PRIVATE LIMITED ASSESSMENT YEAR 2012-13 4 WITH THE STAND OF LD. DR THAT THE ISSUE PERTAINING TO HEAD UNDER WHICH INTEREST & OTHER INCOME WOULD BE CHARGEABLE WAS NOT THERE BEFORE THE TRIBUNAL AND LD. CIT(A) ERRED IN APPRECIATING THE F ACTS PROPERLY AND THEREFORE, REQUIRE ADJUDICATION BY LD. CIT(A). IT I S FURTHER NOTED THAT THE ASSESSEE HAD CLAIMED BUSINESS EXPENDITURE OF RS.1,9 5,65,312/- OUT OF WHICH AN AMOUNT OF RS.67,05,697/- ONLY HAS BEEN ALL OWED U/S 57 BY LD. AO AND PRIMA FACIE, THE ALLOWABILITY OF BALANCE EXPENDITURE HAS NOT BEE N EXAMINED BY EITHER OF THE LOWER AUTHORITIES. 8. IN VIEW OF THE ABOVE, WE DEEM IT FIT TO RESTORE THE MATTER BACK TO THE FILE OF LD. CIT(A) FOR ADJUDICATION OF HEAD UNDER W HICH INTEREST & OTHER INCOME WOULD BE CHARGEABLE TO TAX. AS A LOGICAL CONSEQUENC E, IF THE SAME ARE FOUND CHARGEABLE UNDER THE HEAD BUSINESS INCOME, LD. CIT(A) IS FURTHER DIRECTED TO EXAMINE THE ALLOWABILITY OF BUSINESS EXPENSES CLAIMED BY THE ASSESSEE AFTER AFFORDING ADEQUATE OP PORTUNITY OF BEING HEARD. THE ASSESSEE, IN TURN, IS DIRECTED TO SUBSTA NTIATE HIS CLAIM IN THIS REGARD WITH DOCUMENTARY EVIDENCES. NEEDLESS TO SAY, RENTAL INCOME WOULD BE ASSESSED UNDER THE HEAD BUSINESS INCOME AS PER TRIBUNALS ORDER FOR AY 2010-11. 9. RESULTANTLY, THE REVENUES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH AUGUST, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 18 . 08.2017 SR.PS:- THIRUMALESH ITA NO 6166/MUM/2016 STRATEGIC CAPITAL CORPORATION PRIVATE LIMITED ASSESSMENT YEAR 2012-13 5 ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. $'- , - , / DR, ITAT, MUMBAI 6. . / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI