ITO 19(2)-1, MUMBAI V. APPOSITE TRADING CO., MUMBAI

ITA 6944/MUM/2010

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3786 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-01-2016
• Assessment Year: 1997-1998
• Appeal Filed On: 06-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOMANATH S UKKALI
• Keywords: Revenue expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , !' , # , $ BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO.6944/MUM/2010 ( # % &% / ASSESSMENT YEAR: 1997-98) INCOME TAX OFFICER 19(2)(1) ROOM NO. 312, 3 RD FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI - 400012 / VS. M/S. APPOSITE TRADING CO. 159, CST ROAD , KALINA, SANTACRUZ (E) MUMBAI - 400098 ./ ./ PAN/GIR NO. : AAGFA0314K ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: MS. VASANTI PATEL DEPARTMENT BY: SHRI SOM ANATH S. UKKALI / DATE OF HEARING: 14.01.2016 /DATE OF PRONOUNCEMENT: 11.05.2016 ! / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED AGAINST THE ORDER DATED 16 .07.2010 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-30, MUM BAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESS MENT YEAR 1997-98. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF TRADING AND INVESTMENT I N SHARES, SECURITIES AND FINANCING. THE APPELLANT FILED RETURN OF INCOM E ON 29.10.1997 DECLARING TOTAL LOSS OF RS.1,59,38,536/-. THE ASSE SSMENT WAS COMPLETED ITA NO.6944/MUM/2010 ASSESSMENT YEAR: 1997-98 2 ON 24.03.2000 DETERMINING TOTAL LOSS OF RS.80,67,3 89/-. THE ASSESSING OFFICER MADE THE FOLLOWING DISALLOWANCES:- 1. DISCOUNTING CHARGES RS.62,65,735/- 2. INTEREST ON CALL MONEY RS.16,00,362/- 3. THE INTEREST RECEIVED ON DEBENTURES AMOUNTING TO RS.4,45,050/- WAS ALSO TAXED SEPARATELY. THE ASSESSEE WAS NOT SA TISFIED WITH THE ABOVE SAID DISALLOWANCE THEREFORE FILED AN APPEAL BEFORE THE LEARNED CIT(A) AND THE LEARNED CIT(A) CONFIRMED THE SAID ADDITION BUT THE ASSESSEE AGAIN FILED THE APPEAL BEFORE THE INCOME TAX APPELL ATE TRIBUNAL BUT THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI ACC EPTED THE APPEAL ON THE BASIS OF DECISION IN THE CASE OF EAST WEST C ORPORATION IN ITA NO.6034/MUM/2007 DATED 20.08.2007 AND REMANDED THE CASE. THEREAFTER THE ASSESSING OFFICER AGAIN ASSESSED THE INCOME OF THE ASSESSEE AND CONFIRMED THE ADDITION AND THEREAFTER THE ASSESSEE FILED THE APPEAL BEFORE THE LEARNED CIT(A). THE LEARNED CIT( A) ALLOWED THE DISALLOWANCE OF DISCOUNT CHARGES / FINANCE CHARGES AND INTEREST ON CALL MONEY THEREFORE FEELING AGGRIEVED THE REVENUE HAS F ILED THE APPEAL BEFORE US. ISSUE NO.1:- 4. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE RECORD CAREFULLY. THE FINDING GIVEN BY THE LEARNED CIT(A). BEFORE DI SCUSSING THE MATTER FURTHER, IT IS NECESSARY TO ADVERT:- ITA NO.6944/MUM/2010 ASSESSMENT YEAR: 1997-98 3 3.8 I HAVE EXAMINED THE SUBMISSIONS AND PERUSED THE RECORDS. I FIND FROM THE RECORDS THAT THE ISSUE IN THE PRESENT APPEAL BEFORE ME IS IDENTICAL TO THAT IN THE CASE O F M/S. WELLWORTH LABORATORIES, A GROUP CONCERN OF THE APPE LLANT. UNDER IDENTICAL CIRCUMSTANCES IN THE CASE OF GROUP CONCERN I.E. WELLWORTH LABORATORIES, DECIDED BY ME IN MY AP PELLATE ORDER NO.CIT(A)-30/ITO-19(2)(2)/IT-644/09-10 DATED 09.02.2010 FOR ASSESSMENT YEAR 1997-98 AND CIT(A)- 30/ITO-19(2)(2)/IT-643/09-10 FOR A.Y. 1996-97 THE DISALLOWANCE OF DISCOUNTING CHARGES AFTER EXAMINING THE ISSUE IN DETAIL HAS BEEN DELETED. THEREFORE, FINDI NG OF A FACT ON SIMILAR CIRCUMSTANCES WILL HAVE TO BE FOLLOWED A S JUDICIAL PROPRIETY REQUIRES CONSISTENCY. THUS, AF TER GOING THROUGH THE RECORDS, FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSING OFFICER IS DIRECTED TO DELETE THE DISALLO WANCE OF RS.62,65,735/- ON ACCOUNT OF DISCOUNTING CHARGES. THE APPELLANTS APPEAL ON THIS GROUND IS ALLOWED. THES E GROUND NOS. 1 & 2 ARE ALLOWED. 4.1 NO DOUBT THE LEARNED CIT(A) FOLLOW HIS OWN ORDE R IN CASE OF WELLWORTH LABORATORIES DATED 09.10.2010. BUT NOW T HERE IS NO AMBIGUITY WITH REGARD TO THE ALLOWANCE OF DISCOUNT CHARGES / FINANCE. THE REVENUE FILED THE APPEAL IN CASE OF WELLWORTH L ABORATORIES AND THE INCOME TAX APPELLATE TRIBUNAL IN ITS DECISION DATED 18.12.2014 DISMISSED THE APPEAL OF THE REVENUE AND UPHELD THE FINDING OF THE LEARNED CIT(A) AS CORRECT. THIS ISSUE HAS ALSO BEE N COVERED BY THE ITA NO.6944/MUM/2010 ASSESSMENT YEAR: 1997-98 4 DECISION OF THE INCOME TAX APPELLATE TRIBUNAL IN CA SE OF DELTA INTERNATIONAL IN ITA NO.5028/MUM/2009 DECIDED ON 24 .07.2013. THE DEPARTMENTAL REPRESENTATIVE DOES NOT BROUGHT ANY DI STINGUISHABLE FACT WHICH MAY JUSTIFY DEPARTURE FROM FINDING OF CO-ORDI NATE BENCH OF TRIBUNAL, THEREFORE, RESPECTIVELY FOLLOWING THE FIN DING OF THE CO-ORDINATE BENCH OF TRIBUNAL. THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO.2:- 5. THE ISSUE NO.2 IS IN CONNECTION WITH THE ALLOWAN CE OF INTEREST PAID ON CALL MONEY TO THE TUNE OF RS.16,00,362/-. THIS ISSUE HAS BEEN DECIDED BY THE LEARNED CIT(A) BY FOLLOWING THE DECI SION IN CASE OF NIRMALA M. DOSHI VS. CIT 82 ITR 648 (BOM). THEREAF TER THE INCOME TAX APPELLATE TRIBUNAL IN ITA NO.5947&5948/MUM/2011 IN CASE OF ALPHA CORPORATION DECIDED THE ISSUE AND ALLOWED THE INTEREST ON CALL MONEY. ON THE BASIS OF THE DECISION IN CASE OF NIR MAL M. DOSHI, CONSIDER THE SAID INTEREST AS REVENUE EXPENDITURE, THEREFORE ALLOWED THE SAME THEREAFTER ON THE BASIS OF SAID CASE THE TRIBU NAL HAS DECIDED THE CASE M/S. DELTA INTERNATIONAL (SUPRA). THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT BROUGHT ANY KIND DISTINGUISH ABLE FACTS ON RECORD WHICH IS CONTRARY TO THE AFORESAID OBSERVATION. TH EREFORE, IN VIEW OF THE SAID CIRCUMSTANCES WE ARE OF THE VIEW THAT THE LEAR NED CIT(A) HAS PASSED THE ORDER ON THIS ISSUE JUDICIOUSLY AND CORR ECTLY WHICH DOES NOT REQUIRED TO BE INTERFERE WITH AT THIS APPELLATE STA GE. ACCORDINGLY THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAI NST THE REVENUE. ITA NO.6944/MUM/2010 ASSESSMENT YEAR: 1997-98 5 6. IN RESULT THE APPEAL OF THE REVENUE IS HEREBY DI SMISSED ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MAY, 2016 SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) / ACCOUNTANT MEMBER #$ /JUDICIAL MEMBER % & MUMBAI; ' DATED : 11 TH MAY, 2016 MP MP MP MP ' ( )# !* +*& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ( ) / THE CIT(A)- 4. ( / CIT 5. )*+ $$,- , ,- , % & / DR, ITAT, MUMBAI 6. +./ 0 / GUARD FILE. ' / BY ORDER, ) $ //TRUE COPY// , / ' (DY./ASSTT. 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