ITO - 4(2(4), MUMBAI V. M. W. INFRA DEVELOPERS PRIVATE LTD., MUMBAI

ITA 6690/MUM/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5471 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 23-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J SARAVANAN
• Assessee Lawyers: HARSH KAPARIA
• Keywords: Tax effect
• Section: 201; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D , MUMBAI BEFORE S HRI M. BALAGANESH (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 6690 /MUM/2017 ASSESSMENT Y EAR: 2012 - 2013 THE ITO - 4(2)(4), ROOM NO. 647, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 4000 20 VS. M /S M. W. INFRA DEVELOPERS PVT. LTD., 99, NIRANJAN, OPP ROC OFFICE, MARINE LINES, MUMBAI - 21 PAN: AAECS3701M (APPELLANT) (RESPONDENT) REVENUE BY : SHRI J. SARAVANAN (CIT DR ) ASSESSEE BY : SHRI HARSH KAPARIA ( A R ) DATE OF HEARING: 28 /08 /201 9 DATE OF PRONOUNCEMENT: 28 / 0 8 /201 9 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 15.09.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (AP PEALS) - 9 (FOR SHORT THE CIT(A) , MUMBAI, FOR THE ASSESSMENT YEAR 2012 - 13 , WHEREBY THE LD. CIT(A) HAS PARTLY ALLOWED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2 . AGG RIEVED BY THE ORDER OF LD. CIT (APPEAL S ), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROUNDS : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE ADDITION OF GUARA NTEE COMMISSION OF RS. 30,00,000/ - WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS NOT ENGAGED IN THE BUSINESS OF GIVING GUARANTEE TO OTHER COMPANIES AND 2 ITA NO. 6690 / MUM/2017 ASSESSMENT YEAR: 2012 - 13 THE SAME IS NOT ANCILLARY TO THE ASSESSEES MAIN BUSINESS OF CONSTRUCTION OF INFRASTRUCTURE PROJECT S AND, THEREFORE, INCOME GENERATED THROUGH GUARANTEE COMMISSION HAS TO BE TREATED AS INCIDENTAL INCOME AND TAXABLE UNDER INCOME FROM OTHER SOURCES U/S 56 OF THE INCOME TAX ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) E RRED IN DELETING THE DISALLOWANCE OF INTEREST EXPENSES AMOUNTING TO RS. 17,77,050/ - WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT PROVED THAT THE INTEREST BEARING FUNDS HAVE BEEN UTILIZED FOR THE PROJECT IN HAND OR FOR EARNING INCOME. 3. ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE DISALLOWANCE OF VARIOUS EXPENSES AMOUNTING TO RS. 1,05,72,661/ - WITHOUT APPRECIATING THE FACT THAT SINCE THE ASSESSEES PROJECT WAS NOT YET STARTED, ALL RELATED EXPENS ES HAS TO BE CAPITALIZED. 3 . AT THE OUTSET, THE LD. COUNSEL FOR THE RESPONDENT/ASSESSEE POINTED OUT THAT THE TAX EFFECT OF THE RELIEF GRA NTED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS BELOW RS. 5 0 LACS AND AS PER C IRCULAR NO.17 OF 2019 DATED 08. 08.2019 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT) , DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA , THE CBDT HAS REVISED THE MONETARY LIMIT FOR FILING APPEAL S BEFORE THE ITAT FROM THE EXISTING LIMIT OF RS. 20 LACS TO RS. 50 LACS . I N THE LIGHT OF THE AFORESAID FACTS, THE LD. COUNSEL SUBMITTED THAT THIS APPEAL IS NOT MAINTAINABLE AND LIABLE TO BE DISMISSED. T HE LD. COUNSEL FURNISHED CALCULATION SHEET, AS PER WHICH, THE TAX EFFECT IN TH IS CASE IS RS. 49,80,220/ - . 4 . THE LD. DEPARTMEN TAL REPRESENTATIVE (DR) FAIRLY CONCEDED THAT TH IS APPEAL IS NOT MAINTAINABLE IN LIGHT OF THE AFORESAID C IRCULAR ISSUED BY THE CBDT , HOWEVER , SUBMITTED THAT THE DEPARTMENT MAY BE GIVEN LIBERTY TO FILE MISCELLANEOUS APPLICATION IN CASE IT IS FOUND THAT THE C ASE FALLS UNDER ANY OF THE EXCEPTIONS PROVIDED IN THE C IRCULAR. 3 ITA NO. 6690 / MUM/2017 ASSESSMENT YEAR: 2012 - 13 5 . WE HAVE GONE THROUGH THE IMPUGNED ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND THE GROUNDS OF APPEALS. AS POINTED OUT BY THE LD. COUNSEL, THE TAX EFFEC T IN THIS APPEAL IS LESS THAN RS. 5 0 LACS. ACCORDINGLY, W E DISMISS THE AFORESAID APPEAL FILED BY THE REVENUE AS NOT MAINTAINABLE/WITHDRAWN . HOWEVER, IN CASE , IT IS FOUND THAT THE CASE FALLS UNDER ANY OF THE EXCEPTIONS PROVIDED IN THE CIRCULAR, THEN THE REVENUE IS AT LIBERT Y TO FILE MISCELLANEOUS APPLICATION FOR RECALLING THE ORDER OF THE TRIBUNAL. IN THE RESULT, APPEAL FILED BY THE REVENUE FOR ASSESSMENT YEAR 2012 - 2013 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH AUGUST , 2019 . SD/ - SD/ - ( M. BALAGANESH ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 28 / 08 / 201 9 ALINDRA, PS / 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 C OPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI