ADIT (IT) 3(2), MUMBAI V. BNP PARIBAS SA, MUMBAI

ITA 6536/MUM/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3457 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 22-12-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 22-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATBIR SINGH
• Keywords: Revenue expenditure
• Section: 143(3)

Judgement Text

I.T.A NO.6536/ MUM/2009 ASSESSMENT YEAR: 2005-06 1 IN THE INCOME TAX APPELLATE TRIBUNAL, J BENCH, MUMBAI. [ CORAM D.K.AGARWAL, JM AND PRAMOD KUMAR, AM ] I.T.A NO.6536/ MUM/2009 ASSESSMENT YEAR: 2005-06 ADIT (IT) 3(2) .. APPELLANT SCINDIA HOUSE, R.NO.134, 1 ST FLOOR, N.M.ROAD, MUMBAI. VS BNP PARIBAS SA ,. RESPONDEN T FRENCH BANK BUILDING, 62, HOMJI STREET, FORT, MUMBAI. PA NO.AAACB 4868 Q APPELLANT BY : SHRI SATBIR SINGH, CIT (DR) RESPONDENT BY : NONE O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CALL ED INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 27 TH OCTOBER, 2009, IN THE MATTER OF ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSME NT YEAR 2005-06, ON THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DELETION OF DISALLOWANCE OF THE ASSESSEES CLAIM OF DEDUCTION ON ACCOUNT OF BROKEN PERIOD INTEREST PAID WHILE PURCHASING SECURITIES DURING THE YEAR AMOUNTING TO ` .11,40,97,653/-. 2. DESPITE THE PROPER SERVICE OF NOTICE, NOBODY ATTEN DED ON BEHALF OF THE ASSESSEE WHEN THE APPEAL WAS CALLED ON FOR HEARING. THER EFORE, WE PROCEED TO DECIDE I.T.A NO.6536/ MUM/2009 ASSESSMENT YEAR: 2005-06 2 THE MATTER EXPARTE QUA THE RESPONDENT-ASSESSEE. THE LEAR NED DEPARTMENTAL REPRESENTATIVE HAS BEEN HEARD. 3. BRIEFLY STATED RELEVANT MATERIAL FACTS ARE LIKE TH IS. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSE E HAS PAID ` .11,40,97,653/- BY WAY OF BROKEN PERIOD INTEREST ON CURRENT SECURITIES PURCHASED DURING THE YEAR UNDER CONSIDERATION. THE AO ASKED TH E ASSESSEE TO FURNISH THE DETAILS OF BROKEN PERIOD INTEREST PAID BY IT. THE EXPLANATI ON WAS NOT ACCEPTABLE TO THE ASSESSING OFFICER. THE AO, FOLLOWING THE DECISION OF TH E HONBLE SUPREME COURT IN THE CASE OF VIJAY BANK LTD V. ACIT, 187 ITR 541 (SC) HEL D THAT THE BROKEN PERIOD INTEREST PAID BY THE ASSESSEE IS CAPITAL NATURE AND NOT ELIGIBL E FOR DEDUCTION. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) . THE LD CIT (A) FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF AMERICAN EXPRESS INTERNATIONAL BANKING CORPORATION V CIT, 258 ITR 6 01(BOM) HELD THAT THE BROKEN PERIOD INTEREST IS DEDUCTIBLE AS REVENUE EXPENDITURE. AGGRIEVED BY THE STAND SO TAKEN BY THE CIT (A), THE ASSESSING OFFICER IS IN APPEAL BEFOR E US. 4. HAVING HEARD THE LEARNED DEPARTMENTAL REPRESENTA TIVE, WE FIND THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE JUR ISDICTIONAL HIGH COURT IN THE CASE OF AMERICAN EXPRESS INTERNATIONAL BANKING CORPOR ATION(SUPRA). WE ALSO FIND THAT THE CIT (A) HAS ALLOWED THE STAND OF THE ASSESSEE F OLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF AMERICAN EXP RESS INTERNATIONAL BANKING CORPORATION(SUPRA). THEREFORE, WE DO NOT FIND ANY I NFIRMITY IN THE ORDER OF THE CIT (A) TO INTERFERE. THE SAME IS ACCORDINGLY, UPHELD. 5. IN THE RESULT, THE APPEAL STANDS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 23 RD DECEMBER, 2010 SD/- (D.K.AGARWAL ) (JUDICIAL MEMBER) SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI, DATED 23 RD DECEMBER, 2010 I.T.A NO.6536/ MUM/2009 ASSESSMENT YEAR: 2005-06 3 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),10, MUMBAI 4. DIT (IT), RANGE-3, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH J, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI I.T.A NO.6536/ MUM/2009 ASSESSMENT YEAR: 2005-06 4