M/s. PANATONE FINVEST LTD., MUMBAI V. DCIT - 2(2), MUMBAI

ITA 7447/MUM/2007

• Counselvise Citation: 744719914 RSA 2007
• Duration Of Justice: 5 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: K
• Next Hearing Date: 30-07-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 13-12-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJEET KUMAR JAIN
• Assessee Lawyers: BURZIS TARAPOREWALA
• Keywords: Business income; Cost of acquisition
• Section: 37

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, M UMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND P.M.JAGTAP (AM) . . , . . , ./I.T.A. NO.7446 & 7447/MUM/2007 ( / ASSESSMENT YEARS : 2004-05 & 2005-06) PANATONE FINVEST LIMITED BOMBAY HOUSE-24, HOMI MODY STREET, MUMBAI-400001 / VS. DY. COMMISSIONER OF INCOME TAX - 2(2), ROOM NO.505,5 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020. ./ ./PAN/GIR NO. : AAACP9523G ( & / APPELLANT) .. ( '& / RESPONDENT) & / ASSESSEE BY : S HRI BURZIS TARAPOREWALA '& ) /RESPONDENT BY : SHRI AJEET KUMAR JAIN ) , / DATE OF HEARING : 30.7.2013 ) , /DATE OF PRONOUNCEMENT : 02.08.2013 / O R D E R PER B.R.MITTAL,JM: THESE TWO APPEALS ARE FILED BY ASSESSEE ARE FOR A SSESSMENT YEARS 2004-05 AND 2005-06 AGAINST ORDER OF LD.CIT(A), BOTH DATED 17.9 .2007 ON SIMILAR GROUNDS. 2. GROUNDS OF APPEAL IN BOTH APPEALS ARE COMMON, TH EREFORE, WE REPRODUCE GROUNDS TAKEN BY THE ASSESSEE IN ASSESSMENT YEAR 20 04-05, FOR THE SAKE OF CONVENIENCE, AS UNDER: 1. THE COMMISSIONER OF INCOME TAX (APPEALS)- II, MUMBAI [CIT(A)] ERRED IN DISALLOWING INTEREST PAID BY THE APPELLANT OF RS.94 ,35,28,348/- AS EXPENDITURE IN RESPECT OF CAPITAL BORROWED UNDER SECTION 36(1)(III ) OF THE INCOME- TAX ACT, 1961 (THE ACT). FURTHER, THE CIT(A) ERRED IN NOT CONSI DERING SUCH AMOUNT AS ELIGIBLE FOR DEDUCTION UNDER SECTION 37 OF THE ACT. FURTHER, THE CIT (A) ERRED IN NOT CONSIDERING SUCH AMOUNT AS ELIGIBLE FOR DEDUCTION U NDER SECTION 37 OF THE ACT. 2. WITHOUT PREJUDICE TO THE CONTENTION THAT THE APPELLANT BE ALLOWED DEDUCTION OF INTEREST UNDER SECTION 36(1) (III)/SECTION 37 OF THE ACT, THE APPELLANT SUBMITS THAT IT BE PERMITTED TO CAPITALIZE THE INTEREST PAI D BY IT AND ENHANCE THE COST OF ACQUISITION OF THE 45% OF THE SHARE CAPITAL OF VIDE SH SANCHAR NIGAM LTD. I.T.A. NO.7446 & 7447/MUM/2007 2 3. AT THE TIME OF HEARING, LD. AR SUBMITTED THAT IS SUE INVOLVED IN BOTH APPEALS ARE IDENTICAL. HE FURTHER SUBMITS THAT IN GROUND NO.1 OF THE APPEAL FOR BOTH ASSESSMENT YEARS IS DISALLOWANCE OF INTEREST EXPENDITURE CLAIM ED BY ASSESSEE OF RS.94,35,28,348/- FOR ASSESSMENT YEAR 2004-05 AND RS.77,95,85,805/- F OR ASSESSMENT YEAR 2005-06 AND EVEN AFTER DISALLOWANCE, THERE IS AN EXCESS BUSINES S LOSS. THAT THE SAID BUSINESS LOSS ALONG WITH THE BUSINESS LOSS FOR THE SUBSEQUENT ASS ESSMENT YEARS, ARE FAR IN EXCESS OF THE ASSESSED BUSINESS INCOME, RESULTING IN THE BUSI NESS LOSS LAPSING IN TERMS OF PROVISIONS OF SECTION 72 OF THE INCOME TAX ACT, 196 1 (THE ACT). LD. AR SUBMITTED THAT THIS GROUND OF APPEAL FOR BOTH ASSESSMENT YEARS IS OTIOSE EVEN IF THE SAME ARE ALLOWED, AS THE CARRIED FORWARD BUSINESS LOSS WOULD INCREASE RESULTING IN THE SAME LAPSING AFTER REQUISITE PERIOD IN TERMS OF SECTION 72 OF THE ACT WITHOUT RESULTING IN ANY TAX ADDITION TO THE ASSESSEE. HE SUBMITTED THAT IN VIEW OF ABOVE, ASSESSEE DOES NOT WISH TO PRESS GROUND NO.1 FOR BOTH ASSESSMENT YEAR S UNDER CONSIDERATION. HE FURTHER SUBMITTED THAT GROUND NO.2 FOR BOTH THE ASSESSMENT YEARS BEING AN ALTERNATIVE GROUND TO GROUND NO.1 AND THE SAME ARE ALSO NOT PRESSED FOR. HE SUBMITTED THAT BOTH APPEALS OF THE ASSESSEE MAY BE DISMISSED AS THE GROUND OF APPEALS ARE NOT PRESSED FOR IN VIEW OF ABOVE. LD. AR HAS ALSO FILED A LETTER STATING T HE ABOVE FACTS WHICH IS PLACED ON RECORD. 4. LD. DR SUBMITTED THAT HE HAS NO OBJECTION TO DIS MISS THE APPEALS OF THE ASSESSEE IN VIEW OF THE FACTS AS STATED BY LD. AR. 5. IN VIEW OF ABOVE SUBMISSIONS OF LD. AR, WE DISM ISS GROUNDS OF APPEAL TAKEN BY ASSESSEE FOR BOTH ASSESSMENT YEARS UNDER CONSIDERAT ION. 6. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE FOR ASSESSMENT YEARS 2004-05 AND 2005-06 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2ND AUG, 2013 ) 0 1 2ND AUG, 2013 ) SD /- SD/- ( . . / P.M.JAGTAP) ( . . /B.R.MITTAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 1 DATED 2/ 08/2013 I.T.A. NO.7446 & 7447/MUM/2007 3 . . ./ SRL , SR. PS ! / COPY OF THE ORDER FORWARDED TO : 1. & / THE APPELLANT 2. '& / THE RESPONDENT. 3. 5 ( ) / THE CIT(A)- 4. 5 / CIT 5. 6 '8 , , 8 , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , 8 , /ITAT, MUMBAI