S.H.A.M.K MERCANTILE P. LTD, MUMBAI V. ACIT 9(3), MUMBAI

ITA 8302/MUM/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100907 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 04-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 30-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: G L PURSNANY

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI N.K . BILLAIYA, ACCOUNTANT MEMBER AND RAM L AL NEGI, JUDICIAL MEMBER / I .T.A. NO. 8302/MUM/2010 ( / ASSESSMENT YEAR : 2007 - 08 M/S. S.H.A.M.K. MERCANTILE PVT. LTD., HIRA PREM MILAN CHS, PLOT NO. 563/564, 18 TH ROAD, KHAR (W), MUMBAI - 400 052 / VS. THE ITO 9(3), AAYAKAR BHAVAN, MUMBAI - 400 020 ./ ./ PAN/GIR NO. : AAACH 9121N ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI G.L. P U RS N ANY / RESPONDENT BY: SHRI AJAY MODI / DATE OF HEARING : 0 7 .0 9 .2015 / DATE OF PRONOUNCEMENT : 0 7 .0 9 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 20 , MUMBAI D ATED 1.10.201 0 PERTAINING TO ASSESSMENT YEAR 200 7 - 0 8 . 2. THE ASSESSEE HAS RAISED 3 SUBSTANTIVE GROUNDS OF APPEAL. GROUND NO. 1 RELATES TO THE ADDITION ON ACCOUNT OF BROKERAGE AND STAMP DUTY EXPENSES. ITA. NO. 8302/M/2010 2 2.1. WHILE SCRUTINIZING THE RETURN OF INCOME, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS RE DUCED 6,17,952/ - BEING BROKERAGE AND STAMP DUTY FROM THE GROSS ANNUAL VALUE OF THE LET OUT PROPERTY. THE AO DISALLOWED THESE EXPENSES WHICH WAS CONFIRMED BY THE LD. CIT(A) . 2. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE COULD NOT SUBSTANTIATE THE CLAIM QUA THE RELEVANT PROVISIONS FOR TAXING THE INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 3. AFTER CONSIDERING THE FACTUAL MATRIX, IN OUR CONSIDERED OPINION, ONLY SPECIFIED EXPENDITURES ARE ALLOWABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY, THER EFORE THE DISALLOWANCE MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) IN RESPECT OF BROKERAGE AND STAMP DUTY EXPENSES ARE UPHELD. GROUND NO. 1 IS ACCORDINGLY DISMISSED. 4. GROUND NO. 2 RELATES TO THE CLAIM OF INTEREST PAID ON BORROWED CAPITAL TO PURCHAS E IMMOVEABLE PROPERTY INCOME FROM WHICH IS OFFERED TO TAX. 4.1. WE FIND THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y. 2006 - 07 IN ITA NO. 6231/M/2010 WHEREIN THE TRIBUNAL SET ASIDE THE MATTER TO THE FILE OF THE AO T O RE - EXAMINE THE CLAIM OF THE ASSESSEE AS PER THE PROVISIONS OF THE LAW. 4.2. WE HAVE THE BENEFIT OF THE ASSESSMENT ORDER PASSED IN PURSUANT TO THE DIRECTIONS OF THE TRIBUNAL FOR A.Y. 2006 - 07. WE FIND THAT FOLLOWING THE DIRECTIONS OF THE TRIBUNAL, THE A O HAS ALLOWED THE ITA. NO. 8302/M/2010 3 CLAIM OF INTEREST ON BORROWED FUNDS HOLDING THAT THE BORROWED FUNDS HAVE BEEN UTILIZED TO ACQUIRE THE LEASE OUT PROPERTIES. RESPECTFULLY FOLLOWING THE DIRECTIONS OF THE TRIBUNAL GIVEN FOR A.Y. 2006 - 07 WHICH HAS BEEN FOLLOWED BY THE AO AF TER DUE VERIFICATION , FOR SIMILAR REASONS WE RESTORE THIS ISSUE TO THE FILE OF THE AO. THE AO IS DIRECTED TO ALLOW THE CLAIM OF INTEREST AS IN A.Y. 2006 - 07. GROUND NO. 2 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 5. GROUND NO. 3 RELATES TO THE DI SALLOWANCE OF DEDUCTION OF INTEREST PAID OUT OF THE INTEREST EARNED. 5.1. WE FIND THAT IN A.Y. 2006 - 07, THE AO HAS ALLOWED THE CLAIM OF NET INTEREST I.E. TO SAY INTEREST PAID ON BORROWED FUNDS WAS REDUCED BY THE INTEREST RECEIVED ON DEPOSIT WITH THE BANK. WE, THEREFORE, DO NOT FIND ANY REASON FOR CLAIMING OF INTEREST ONCE AGAIN AS EXPENDITURE. GROUND NO. 3 IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 7 TH SEPTEMBER , 2015 SD/ - SD/ - ( RAM L AL NEGI ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 7 TH SEPTEMBER , 2015 . . ./ RJ , SR. PS ITA. NO. 8302/M/2010 4 / 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 COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI