DCIT 10(1), MUMBAI V. KHORAKIWALA HOLDINGS & INVESTMENTS P. LTD, MUMBAI

ITA 6475/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4254 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 01-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RADHA KATYAL NARAN G
• Assessee Lawyers: ABHITAN MEHTA
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI G.S.PANNU (AM) AND SHRI RAM LAL NEGI (J M) ITA NO 6475/MUM/2013 ASSESSMENT YEAR: 2010-11 THE DCIT - 10(1), 455, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI- 400020. VS. M/S. KHORAKIWALA HOLDING & INVESTMENT P. LTD., WOCKHARDT TOWER, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI- 400051. PAN : AAACK1955D (APPELLANT) (RESPONDENT) & CO NO 13/MUM/2015 (ITA NO.6475/MUM/2013) ASSESSMENT YEAR: 2010-11 M/S. KHORAKIWALA HOLDING & INVESTMENT P. LTD., WOCKHARDT TOWER, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI- 400051. PAN : AAACK1955D VS. THE DCIT - 10(1), 455, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI- 400020. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. RADHA KATYAL NARANG RESPONDENT BY : SHRI. ABHITAN MEHTA DATE OF HEARING: 11/04/2016 DATE OF PRONOUNCEMENT: 11/04/2016 O R D E R PER RAM LAL NEGI, JM THE PRESENT APPEAL AND THE CROSS OBJECTION PER TAINING TO THE ASSESSEE M/S. KHORAKIWAL HOLDING & INVESTMENT P. LTD. FOR THE ASS T. YEAR 2010-11 HAVE BEEN 2 ITA NO 6475/MUM/2013 ASSESSMENT YEAR: 2010-11 & CO.13/MUM/2015 (ITA NO.6475/MUM/2013) ASSESSMENT YEAR: 2010-11 FILED BY THE REVENUE AND THE ASSESSEE RESPECTIVELY, AGAINST ORDER DATED 06/08/2013 PASSED BY THE LD. CIT(A)-21, MUMBAI 2. ITA NO. 6475/MUM/2013 A.Y. 2010-11 2.1 THE DEPARTMENT HAS CHALLENGED THE IMPUGNED ORDE R DT. 06/08/2013 PASSED BY THE LD. CIT(A) ON THE FOLLOWING EFFECTIVE GROUNDS:- 1.1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS ERRED IN ALLOWING INTEREST INCOME OF RS. 8,16,418/- CLAIMED BY THE ASSESSEE UNDER THE HEAD PROFIT & GA INS FROM BUSINESS AND PROFESSION WITHOUT APPRECIATING THE F ACT THAT THE INTEREST INCOME EARNED ON FIXED DEPOSITS PLACED WIT H BANK OF INDIA IS TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCE S AND NOT UNDER THE HEAD INCOME FROM BUSINESS. 1.2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE FOLLOWED THE APEX COUR T DECISION IN THE CASES OF CIT VS. TUTICORIN ALKALI CHEMICAL & FERTIL IZERS LTD. (227 ITR 172) & TOGAR CO-OP. SALE SOCIETY VS. ITO (322 ITR 2 83) (SC) WHEREIN IT IS HELD THAT INTEREST INCOME IS TO BE TAXED UNDE R THE HEAD INCOME FROM OTHER SOURCES. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 2 LAKH AND INTEREST RS.9000/- EARNED BY THE ASSESSEE BY HOLDING THAT IT BELONGS TO M/S. CAROL INFO SERVICES LTD. WITHOUT APPRECIATING THE FACT THAT ANY DEPOSITS RECEIVED OR GIVEN TO BE REFLECTED IN THE A SSESSEES BALANCE SHEET. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN NOT CONFIRMING DISALLOWANCE OF RS. 8,16,418/- U/S 31(I)(III) OF THE I.T. ACT AND IN RESTORING THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. 3 ITA NO 6475/MUM/2013 ASSESSMENT YEAR: 2010-11 & CO.13/MUM/2015 (ITA NO.6475/MUM/2013) ASSESSMENT YEAR: 2010-11 2.2 AT THE OUTSET, THE LD. AR POINTED OUT THAT TH E TAX INVOLVED IN THIS CASE DOES NOT EXCEED RS. 10,00,000/-. AS PER THE LATEST CBDT CIRCULAR NO. 21 OF 2015, DATED 10 TH DECEMBER, 2015, NEW GUIDELINES OF MONETARY LIMIT F OR FILING OF APPEALS BY THE DEPARTMENT HAS BEEN ISSUED, WHEREBY THE TAX EFFECT FOR FILING OF APPEAL BEFORE THE ITAT HAS BEEN PRESCRIBED AS AMOUN T EXCEEDING RS. 10 LAKHS. IN THE SAID CIRCULAR, IT HAS BEEN SPECIFICALLY CLAR IFIED THAT THE SAID INSTRUCTION WILL APPLY RETROSPECTIVELY TO ALL THE PENDING APPEA LS. AS PER THE CALCULATION SHEET SUBMITTED BY THE LD. AR, THE AMOUNT OF TAX IN VOLVED IN THE PRESENT APPEAL IS RS.6,26,400/-. THE LD. DR. DID NOT RAISE ANY OBJECTION. IN VIEW OF THE SAID CIRCULAR, THE APPEAL FILED BY THE REVENUE IS N OT MAINTAINABLE. WE, THEREFORE, DISMISS THE SAME IN LIMINE . CO 13/MUM/2015. THE ASSESSEE HAS FILED THE PRESENT CROSS OBJECTION AGAINST THE IMPUGNED ORDER PASSED BY THE CIT(A) DATED 06/08/2013 ON THE FOLLOWING EFFECTIVE GROUNDS:- 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN RESTORING THE CLAIM ALLOWAB LE U/S 36(I)(III) OF RS. 8,16,418 TO THE AO. 2) WITHOUT PREJUDICE, THE CIT(A) ERRED IN NOT DIREC TING AO TO ALLOW INTEREST OF RS. 8,16,418 U/S 36(I)(III) OF THE ACT. 3) WITHOUT PREJUDICE, THE ASSESSEE PRAYS THAT INTER EST OF RS. 8,16,418 BE ALLOWED WHILE COMPUTING INCOME OF THE C URRENT PERIOD. 2. THE LD. AR DID NOT ADVANCE ARGUMENTS TO SUBSTAN TIATE THE GROUNDS OF CROSS OBJECTION RAISED BY THE ASSESSEE. IT APPEARS THAT T HE ASSESSEE DOES NOT INTEND TO PURSUE ITS CASE. WE, THEREFORE, DISMISS THE CRO SS OBJECTION PETITION FILED BY THE ASSESSEE AS NOT PRESSED. 4 ITA NO 6475/MUM/2013 ASSESSMENT YEAR: 2010-11 & CO.13/MUM/2015 (ITA NO.6475/MUM/2013) ASSESSMENT YEAR: 2010-11 4. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T AS WELL AS CROSS OBJECTION FILED BY THE ASSESSEE FOR THE A.Y. 2010-11 ARE DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH APRIL, 2016 SD/- SD/- ( G.S.PANNU ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED:11/04/2016 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. ! , # !$ , / DR, ITAT, MUMBAI 6. %& ' / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA 5 ITA NO 6475/MUM/2013 ASSESSMENT YEAR: 2010-11 & CO.13/MUM/2015 (ITA NO.6475/MUM/2013) ASSESSMENT YEAR: 2010-11 SR. NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 11.04.16 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 11.04.16 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 ORDER PRONOUNCEMENT ON 11.04.16 SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DISPATCH OF ORDER