ACIT 25(2), MUMBAI V. H.K. PUJARA BUILDERS, MUMBAI

ITA 6191/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3376 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2014-2015
• Appeal Filed On: 30-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M RAJAN
• Assessee Lawyers: PRAKASH K JOTWANI
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'H' BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 6191/MUM/2018 (ASSESSMENT YEAR: 2014-15) A C I T - 25(2) ROOM NO. 508, 5TH FLOOR C-10 PRATYAKSHA KAR BHAVAN BKC, BANDRA (E) MUMBAI 400051 VS. M/S. H.K. PUJARA BUILDERS 11, SWASTIK PLAZA V.L. MARG, JUHU SCHEME VILE PARLE (W) MUMBAI 400049 PAN AAAFH7230H APPELLANT RESPONDENT APPELLANT BY: SHRI M. RAJAN RESPONDENT BY: SHRI PRAKASH K. JOTWANI DATE OF HEARING: 11.09.2019 DATE OF PRONOUNCEMENT: 03.12.2019 O R D E R PER SHAMIM YAHYA, AM THIS APPEAL FILED BY REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LEARNED CIT(A)-37, MUMBAI DATED 05.09.2016 AND IT R ELATES TO A.Y. 2014- 15. 2. THE ISSUE RAISED IN THE APPEAL IS THAT THE CIT(A) E RRED IN DELETING THE DISALLOWANCE OF INTEREST OF ` 1,08,66,516/-. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE SCRUTI NY PROCEEDINGS, THE AO HAS OBSERVED THAT THE ASSESSEE HAS PAID INTEREST OF ` 1,08,66,516/- TO M/S. GRAFTON MERCHANT PVT. LTD. THE AO HAS FURTHER OBSERVED THAT THE INTEREST PAID TO THE GRAFTON MERCHANT PVT. LTD. WAS DISALLOWED IN THE A.Y. 2013-14 AS THE ASSESSEE COULD NOT PROVE THE CREDIT WORTHINESS OF THE LENDER AND GENUINENESS OF LOAN TRANSACTION AS THE U NSECURED LOAN OF ` 3,75,00,000/- TAKEN FROM GRAFTON MERCHANT PVT. LTD. WAS TREATED AS NON- GENUINE TRANSACTION. THEREFORE, THE AO HAS DISALLOW ED CLAIM OF INTEREST OF ` 1,08,66,516/ AND ADDED BACK TO THE TOTAL INCOME. ITA NO. 6191/MUM/2018 M/S. H.K. PUJARA BUILDERS 2 4. UPON ASSESSEES APPEAL THE LEARNED CIT(A) REFERRED TO THE ORDER OF THE CIT(A) FOR A.Y. 2013-14 AND HELD AS UNDER: - IT IS EVIDENT FROM THE ORDER OF CIT(A)-37 THAT THE LOAN OF RS.3,75,00,000/- IS GENUINE. THE A.O. HAS MADE ADDI TION OF RS.1,08,66,516/- ON ACCOUNT OF INTEREST PAID ON LOA N. AS THE LOANS FROM THE ABOVE MENTIONED PARTY HAVE BEEN HELD TO BE GENUINE, THE INTEREST PAID OF RS.1,08,66,516/- IS ALSO HELD TO B E GENUINE. CONSIDERING THE EARLIER DECISION OF CIT(A)-37, THE A.O. IS DIRECTED TO DELETE THE SAID ADDITION. THIS GROUND OF APPEAL IS ALLOWED. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL B EFORE US. 5. AT THE OUTSET IT IS NOTED THAT THE AFORESAID ORDER OF THE LEARNED CIT(A) FOR A.Y. 2013-14 IS CONFIRMED BY THE ITAT IN ITA NO. 3127/MUM/2017 FOR A.Y. 2013-14 VIDE ORDER DATED 22. 02.2019. IN THIS VIEW OF THE MATTER THERE IS NO INFIRMITY IN THE ORD ER OF THE LEARNED CIT(A). 6. MOREOVER, THE TAX EFFECT IN THIS CASE IS BELOW THE LIMIT FIXED BY CBDT VIDE CIRCULAR NO. 17/2019 DATED 8 TH AUGUST, 2019 FOR FILING APPEALS BEFORE ITAT. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD DECEMBER, 2019. SD/ - SD/ - (SAKTIJIT DEY) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 3 RD DECEMBER, 2019 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -37, MUMBAI 4. THE CIT - 25, MUMBAI 5. THE DR, H BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.