DCIT CEN CIR 2(3), MUMBAI V. ACME HOUSING INDIA P. LTD, MUMBAI

ITA 6840/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0234 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 04-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARJU GORADIA
• Assessee Lawyers: RAVIKANT S PATH AK
• Section: 14A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 6840 /MUM/ 2017 (ASSESSMENT YEAR 20 13 - 14 ) DCIT CC - 2(3) ROOM NO. 803 OLD CGO ANNEX BLDG. M.K. ROAD MUMBAI - 400 020. V S . M/S. ACME HOUSING INDIA PVT. LIMITED ACME GHAR 19 - K.D. ROAD VILE PARLE (WEST) MUMBAI - 400 021. PAN : AADCA0705E ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI RAVIKANT S. PATHAK DEPARTMENT BY MS. ARJU GORADIA DATE OF HEARING 21. 2 . 201 8 DATE OF PRONOUNCEMENT 21 . 2 . 201 8 O R D E R THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED CIT(A) - 48, MUMBAI AND IT RELATES TO A.Y. 2013 - 14. THE REVENUE IS AGGRIEVED BY THE DECISION OF THE LEARNED CIT(A) IN GRANTING RELIEF TO THE ASSESSEE IN RESPECT OF ADDIT ION MADE U/S. 14A OF THE ACT. 2. I HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE - COMPA NY IS A BUILDER AND DEVELOPER . DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE RECEIVED DIVIDEND INCOME OF RS. 6,97,000/ - FROM MUTUAL FUNDS AND CLAIMED THE SA ME AS EXEMPT. T HE ASSESSEE DISALLOWED A SUM OF RS. 3.63 LAKHS U/S. 14A OF THE ACT. THE ASSESSING OFFICER TOOK THE VIEW THAT THE DISALLOWANCE SHOULD BE COMPUTED AS PER PROVISIONS OF RULE 8D OF THE I.T. RULES AND ACCORDINGLY DISALLOWED A SUM OF RS. 38.44 LAK HS UNDER RULE 8D(2)(II) OF THE I.T. RULES OUT OF INTEREST EXPENDITURE AND RS.5.30 LAKHS U/ R . 8D(2)(III) OUT OF ADMINISTRATIVE EXPENSES. AFTER GIVING SET OFF OF DISALLOWANCE MADE BY THE ASSESSEE, THE ASSESSING OFFICER MADE THE DISALLOWANCE OF RS. 40.11 LAK HS U/S. 14A OF THE ACT. BEFORE THE LEARNED CIT(A), THE ASSESSEE SUBMITTED THAT OWN FUNDS AVAILABLE WITH IT IS MORE THAN THE VALUE OF INVESTMENT AND HENCE AS PER THE M/S. ACME HOUSING INDIA PVT. LIMITED 2 DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF HDFC BANK LTD. (383 ITR 523) , NO DISALLOWANCE IS CALLED FOR OUT OF INTEREST EXPENDITURE. THE LEARNED CIT(A) AGREED WITH THE CONTENTION OF THE ASSESSEE AND ACCORDINGLY, DELETED THE DISALLOWANCE OF RS. 38.44 LAKHS MADE OUT OF INTEREST EXPENDITURE. THE REVENUE IS AGGRIEVED BY THE SAME. 3. I NOTICED THAT THE LEARNED CIT(A) HAS RECORDED A FINDING THAT OWN FUNDS AVAILABLE WITH THE ASSESSEE AS ON 31.3.2013 WAS TO THE TUNE OF RS. 4914.36 LAKHS , WHILE INVESTMENT HELD BY THE ASSESSEE AS ON THAT DATE WAS RS. 1810.56 LAKHS , THUS SHOWING THAT TH E OWN FUNDS AVAILABLE WITH THE ASSESSEE IS MORE THAN THE VALUE OF INVESTMENTS. ACCORDINGLY THE LEARNED CIT(A) HAS DELETED THE DISALLOWANCE MADE U/R. 8D(2)(II) OUT OF INTEREST EXPENDITURE BY FOLLOWING THE DECISION RENDERED BY JURISDICTIONAL HIGH COURT IN TH E CASE OF HDFC BANK LTD (SUPRA), WHEREIN IT WAS HELD THAT THE DISALLOWANCE OUT OF INTEREST EXPENDITURE IS NOT CALLED FOR WHEN THE OWN FUNDS AVAILABLE WITH THE ASSESSEE IS MORE THAN THE VALUE OF INVESTMENTS. SINCE DECISION TAKEN BY THE LEARNED CIT(A) IS SU PPORTED BY THE DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF HDFC BANK LTD. (SUPRA) , WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE. 4. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMIS SED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 2 1.2. 201 8 . SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 21 / 2 / 20 1 8 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI M/S. ACME HOUSING INDIA PVT. LIMITED 3 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSTT. REGISTRAR /SENIOR PS ) PS ITAT, MUMBAI