PRATIBHA SHIPPING CO. LTD., MUMBAI V. D.C.I.T. 5(2), MUMBAI

ITA 6299/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2489 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 15-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

INCOME-TAX APPELLATE TRIBUNAL C BENC H MUMBAI , , BEFORE S/SH.JOGINDER SINGH,JUDICI AL MEMBER & RAJENDRA,ACCOUNTANT MEMBER ./I.T.A./6299/MUM/2012 , /ASSESSMENT YEAR: 2009-10 M/S. PRATIBHA SHIPPING COMPANY LIMITED 1201/1202, 12 TH FLOOR ARCADIA BLDG., NCPA ROAD NARIMAN POINT,MUMBAI-400 021. PAN:AAACP 7179 E VS. DCIT, RANGE-5(2) ROOM NO.571, 5 TH FLOOR AAYAKAR BHAVAN MUMBAI-400 001. ( /APPELLANT ) ( / RESPONDENT ) R EVENUE BY: SHRI LOVE KUMAR-DR ASSESSEE BY: NONE / DATE OF HEARING: 11.05.2016 / DATE OF PRONOUNCEMENT: 20.07.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER,DATED 12.07.2012 OF CIT(A)-9, MUMBAI,THE ASSESSEE HAS FILED THE PRESENT APPEAL.ASSESSE-COMPANY,ENGAGED IN THE SHIPP ING BUSINESS,FILED ITS RETURN OF INCOME ON 26.09.2011,DECLARING TOTAL INCOME AT RS.1,63,38, 590/-.THE ASSESSING OFFICER (A.O.) PASSED THE ASSESSMENT ORDER U/S. 143(3) OF THE ACT, WAS PASSED ON 12.12.2011,DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.2.48 CRORES UND ER THE NORMAL PROVISIONS OF THE ACT. UNDER THE MAT PROVISIONS THE INCOME WAS ASSESSED AT RS.8. 33 CRORES. 2. THE EFFECTIVE GROUND OF APPEAL IS ABOUT TAXATION O F INTEREST INCOME OF RS.1.53 CRORES AS INCOME FROM OTHER SOURCES. DURING THE ASSESSMENT PR OCEEDINGS THE AO HELD THAT INTEREST ON FD.S AND DIVIDENDS RECEIVED BY THE ASSESSEE COULD N OT BE SAID TO BE DERIVED FROM SHIPPING BUSINESS. HE THEREFORE,TAXED THE INTEREST INCOME UN DER THE HEAD INCOME FROM OTHER SOURCES. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).BEFORE HIM,THE ASSESSEE C ONTENDED THAT AO HAD WRONGLY TAXED THE INTEREST INCOME UNDER THE HEAD INTEREST FROM O THER SOURCES. 3.1 FAA REFERRED TO ORDER OF HIS PREDECESSOR FOR THE AY .2008-09 AND THE ORDER PASSED BY THE AO U/S.154 OF THE ACT ON 13.3.12. WITH REGARD TO TH E INTEREST INCOME THE FAA RELIED UPON THE CASE OF GODAVARI SUGAR MILLS (191 ITR359 AND SAMEER DIAMONDS EXPORT (254ITR548), STERLING FOODS (237 ITR579) AND LIBERTY INDIA (317 ITR 218) AND HELD THAT INTEREST INCOME WAS NOT DERIVED FROM THE BUSINESS AND WAS TO BE TAX ED UNDER THE HEAD INCOME FROM OTHER 6299-PRATIBHA 2 SOURCES.REFERRING TO THE CASE OF ASIAN STAR CO. LTD . (326ITR356), HE UPHELD THE ORDER OF THE AO. 4. BEFORE US,NONE APPEARED,ON BEHALF OF THE ASSESSEE, AS STATED EARLIER.THE DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE FAA. 5. WE HAVE PERUSED THE AVAILABLE MATERIAL ON RECORD.WE FIND THAT THE AO HAD TAXED THE INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SO URCES,THAT BOTH THE AUTHORITIES WERE OF THE OPINION THAT THE INTEREST INCOME HAD NO DIRECT NEXUS WITH THE BUSINESS OF THE ASSESSEE.WE FIND THAT THE FAA HAD RELIED UPON THE VARIOUS JUDGM ENTS,WHEREIN THE STAND TAKEN BY THE AO HAS BEEN UPHELD.THE ASSESSEE HAS NOT PRODUCED ANYTH ING BEFORE THE AO/FAA THAT PROVES THAT THE INTEREST INCOME EARNED BY IT HAD NEXUS WITH THE BUSINESS.THEREFORE,IN OUR OPINION THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL OR FACTUAL INFIRMITY.CONFIRMING HIS ORDER,WE ARE DECIDING THE EFFECTIVE GROUND OF APPEAL AGAINST THE ASSESSEE. AS A RESULT, APPEAL FILED BY THE ASSESSEE STAND S DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JULY,2016. 20 , 2016 SD/- SD/- /JOGINDER SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 20.07.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR G BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.