MATOSHREE INFRASTRUCTURE PVT LTD, MUMBAI V. ITO, W-7(2)(1), MUMBAI

ITA 911/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6488 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 18-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K GUBGOTRA J
• Assessee Lawyers: NEELAM C JADHAV
• Keywords: Proportionate interest
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ITA NO. 911/MUM/2019 ( ASSESSMENT YEAR: 2011-12) MATOSHREE INFRASTRUCTURE PVT. LTD., 102, ADITI BUILDING, SHIVSENA BHAVAN PATH, DADAR (W), MUMBAI- 400028. VS. I.T.O. WARD-7(2)(1) AAYAKAR BHAVAN, MAHARSHI KARVE ROAD, CHUCHGATE, MUMBAI-400020 PAN/GIR NO. AAFCM 2002 G (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY NEELAM C JADHAV (AR) REVENUE BY SHRI R.K. GUBGOTRA (JCIT-DR) DATE OF HEARING 06/02/2020 DATE OF PRONOUNCEMENT 10/02/2020 / O R D E R PER: R.C. SHARMA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 31/10/2018 OF LD. CIT(A)-13, MUMBAI FOR THE A.Y. 20 11-12 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR TH E DISALLOWANCE MADE U/S 14A OF THE ACT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN P ROPERTY DEVELOPMENT BUSINESS. THE ASSESSMENT OF THE COMPANY RESULTED IN ITA NO. 911/MUM/2019 MATOSHREE INFRASTRUCTURE P LTD. VS ITO 2 ADDITION OF RS. 6,32,483/- TO THE RETURNED INCOME. THE ADDITION REPRESENTS DISALLOWANCE OF EXPENSES OF RS. 6,32,483 /- INVOKING THE PROVISION OF SECTION 14A. THE SAID DISALLOWANCE IS CONFIRMED BY THE LD. CIT(A). 4. FROM THE RECORD I FOUND THAT THE DISALLOWANCE HA S BEEN MADE BY THE A.O. GIVING REASONING THAT THE ASSESSEE HAS TAK EN UNSECURED LOANS OF RS. 2.97 CRORES AND IS PAYING INTEREST ON LOAN O F RS. 1.19 CRORES. ACCORDINGLY, HE DISALLOWED PROPORTIONATE INTEREST U /S 14A. AS PER P&L ACCOUNT THE ASSESSEE HAS ONLY CLAIMED INTEREST OF R S. 14,292/-. WHILE INVOKING PROVISIONS OF SECTION 14A OF THE ACT, THE DISALLOWANCE CANNOT BE MORE THAN THE EXPENDITURE CLAIMED. IN THE INSTAN T CASE, AS PER THE AUDITED ACCOUNTS, THE ASSESSEE HAS ONLY INCURRED EX PENDITURE ON ACCOUNT OF PAYMENT OF INTEREST TO THE EXTENT OF RS. 14,292/-. ACCORDINGLY, I DIRECT THE A.O. TO AGAIN VERIFY THE FACTS AND RESTRICT DISALLOWANCE U/S 14A OF THE ACT TO THE EXTENT OF RS . 14,292/-. I DIRECT ACCORDINGLY. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH FEBRUARY, 2020. SD/- (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI; DATED 10/02/2020 ITA NO. 911/MUM/2019 MATOSHREE INFRASTRUCTURE P LTD. VS ITO 3 *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//