JCIT, (OSD), CIR-2(1), KOLKATA, Kolkata V. M/s Bengal Intelligent Parks Pvt. Ltd., Kolkata

ITA 704/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1844 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Assessee Lawyers: A K TIBREWALFCA
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI WASEEM AHMED, AM & HONBLE SH RI S.S.VISWANETHRA RAVI, JM] I.T.A NO. 704/KOL/201 6 ASSESSMENT YEAR :2009-10 JCIT(OSD),CIR-2(1), KOLKATA -VS- M/S BENGAL I NTELLIGENT PARKS PVT. LTD. [PAN: AACCB 0276 E] (APPELLANT) (RESPONDE NT) FOR THE APPELLANT : SHRI ARINDAM BHATTACHARJE E, ADDL.CIT. FOR THE RESPONDENT : SHRI A.K.TIBREWAL,FCA DATE OF HEARING : 01.01.2018 DATE OF PRONOUNCEMENT : 25.01.2018 ORDER PER WASEEM AHMED, AM THIS APPEAL BY THE REVENUE ARISE OUT OF THE ORDER O F THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-15, KOLKATA [IN SHORT THE LD CIT(A)] IN DATED 25.01.2016 AGAINST THE ORDER PASSED BY THE ITO,WARD-8(1), KOLK ATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT) DATED 30.12.2011 FOR THE ASSESSMENT YEAR 2009-10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF DISALLOWAN CE OF LOAN PROCESSING FEES OF RS. 60,18,065/- WHICH IS AN INADMISSIBLE EXPENSES A ND NOT ALLOWABLE AS DEDUCTION U/S 24. 2 ITA NO.704/KOL/2016 M/S BENGAL INTELLIGENT PARKS PVT. LTD. A.YR. 2009-10 2 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED CLARIFYING ABOUT SEC. 2(28A) OF THE AC T, THERE IS NO SPECIFIC CLARIFICATION FROM WHICH IT MAY CLEARLY BE STATED T HAT THE EXPENSES IS EXCLUSIVELY ALLOWABLE AS DEDUCTION U/S 24 OF THE I.T. ACT, 1961 . 3. THE APPELLANT CRAVES THE LEAVE TO MAKE ANY ADDIT ION, ALTERATION, MODIFICATION ETC. OF THE GROUNDS EITHER BEFORE THE APPELLATE PRO CEEDINGS, OR IN THE COURSE OF APPELLATE PROCEEDINGS. 2. THE SOLITARY ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE A O FOR RS. 60,18,065/- ON ACCOUNT OF LOAN PROCESSING FEE. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN TH E PRESENT CASE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF THE REAL EST ATE INFRASTRUCTURE AND RELATED ACTIVITIES. THE ASSESSEE, FOR THE YEAR UNDER CONSID ERATION, HAS FILED ITS RETURN OF INCOME DECLARING ITS TOTAL INCOME UNDER THE HEAD BUSINESS , OTHER SOURCES AND HOUSE PROPERTY. THE ASSESSEE WHILE COMPUTING THE INCOME UNDER THE H EAD HOUSE PROPERTY HAS CLAIMED THE DEDUCTION OF INTEREST U/S 24(B) OF THE ACT. THE AMOUNT OF INTEREST WAS INCLUSIVE OF LOAN PROCESSING FEES OF RS. 60,18,065/- ONLY. THE A O WAS OF THE VIEW THE AMOUNT OF LOAN PROCESSING FEE IS NOT ALLOWABLE DEDUCTION WHIL E DETERMINING THE INCOME UNDER THE HEAD HOUSE PROPERTY U/S 24(B) OF THE ACT. ON BEING CONFRONTED FOR THE AFORESAID DEDUCTION, THE ASSESSEE SUBMITTED THAT IT IS AN ALL OWABLE EXPENDITURE UNDER THE PROVISIONS OF THE ACT. HOWEVER, THE AO DISREGARDED THE CONTENTION OF THE ASSESSEE AND DISALLOWED THE AMOUNT OF LOAN PROCESSING FEE AND AD DED TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL TO TH E LD. CIT(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT THE LOAN PROCE SSING FEE IS PART AND PARCEL OF INTEREST EXPENSES AS PER THE PROVISION OF SECTION 2 (28A) OF THE ACT. THE LD. CIT(A) 3 ITA NO.704/KOL/2016 M/S BENGAL INTELLIGENT PARKS PVT. LTD. A.YR. 2009-10 3 AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE DE LETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER: I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE S UBMISSION OF THE AR. AS PER PROVISIONS OF SECTION 2(28A), THE LOAN PROCESSING FEE IS PART AND PARCEL OF INTEREST. HENCE, THE DEDUCTION IS TO BE ALLOWED TO THE ASSESSEE. THUS, THE DISALLOWANCE OF RS. 60,18,065/- IS DELETED. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 5. THE LD. DR BEFORE US SUBMITTED THAT IT IS NOT CL EAR FROM THE ORDER OF LOWER AUTHORITIES WHETHER THE IMPUGNED LOAN PROCESSING FE E PERTAINS TO PRE-CONSTRUCTION PERIOD AS PER THE EXPLANATION TO CLAUSE (B) OF SECTION 24 OF THE ACT. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF AO. HE LEFT THE ISSUE TO THE DISCRETION OF THE BENCH. ON THE OTHER HAND, THE LD. AR REITERATED THE SUBMIS SIONS AS MADE BEFORE THE LD. CIT(A) AND RELIED ON THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE LIMITED ISSUE IN THE INSTANT CASE RELATES TO THE FA CT WHETHER THE LOAN PROCESSING FEE IS ELIGIBLE FOR DEDUCTION U/S 24(B) OF THE ACT. AT THI S JUNCTURE, WE ARE INCLINED TO REPRODUCE THE PROVISION OF SECTION 2(28A) OF THE ACT WHICH RE AD AS UNDER: INTEREST MEANS INTEREST PAYABLE IN ANY MANNER IN R ESPECT OF ANY MONEYS BORROWED OR DEBT INCURRED (INCLUDING A DEPOSIT, CLAIM OR OTHER SIMILAR RIGHT OR OBLIGATION) AND INCLUDES ANY SERVICE FEE OR OTHER CHARGE IN RESPECT OF THE MONEYS BORROWED OR DEBT INCURRED OR IN RESPECT OF ANY CREDIT FACILITY WHICH HAS NOT BEEN UTILIZED. FROM THE PLAIN READING OF THE ABOVE PROVISION, WE N OTE THAT THE AMOUNT OF INTEREST IS INCLUSIVE OF LOAN PROCESSING FEE. THUS, WE CONCLUDE THAT THE AMOUNT OF LOAN PROCESSING FEE CLAIMED BY THE ASSESSEE IS VERY MUCH ELIGIBLE F OR DEDUCTION U/S 24(B) OF THE ACT. 6.1. THE ARGUMENT ADVANCED PLACED BY THE DR WHETHER THE LOAN PROCESSING FEE PERTAINS TO THE PRE-CONSTRUCTION PERIOD IS NOT ARISING FROM THE ORDER OF LOWER AUTHORITIES. AS THE ISSUE IS NOT ARISING FROM THE ORDER OF AO THEREFORE NO NEW DIMENSION CAN BE GIVEN TO THE IMPUGNED ISSUE. THEREFORE, WE DO NOT FIND ANY M ERIT IN THE ARGUMENT ADVANCED BY 4 ITA NO.704/KOL/2016 M/S BENGAL INTELLIGENT PARKS PVT. LTD. A.YR. 2009-10 4 THE DR. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY IN FIRMITY IN THE ORDER OF THE LD. CIT(A). WE UPHOLD THE SAME. HENCE, THE GROUND OF AP PEAL RAISED BY THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 25.01.2018 SD/- SD/- [S.S. VISWANETHRA RAVI] [WASEEM AHMED ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 25.01.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. JCIT(OSD), CIR-2(1), KOLKATA, AAYAKAR BHAWAN, 7T H FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-69. 2. M/S BENGAL INTELLIGENT PARKS PVT. LTD., 9B, WOOD STREET, 3 RD FLOOR, KOLKATA-700016. 3.C.I.T.- 4. C.I.T.- K OLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE /TRUE COPY/ BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S