Saltee Infotex (India) Pvt. Ltd., Kolkata V. DCIT, CC - VII, Kolkata, Kolkata

ITSSA 5/KOL/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9359 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-06-2013
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 05-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 16-02-2012
• Court: TRIBUNAL
• Department Lawyers: A K MAHAPATRA
• Assessee Lawyers: M SATNALIWALA
• Keywords: Search and seizure; Proportionate interest
• Section: 132

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () . .. . . .. . , ,, , , ! ' #!' ' #!' ' #!' ' #!', ,, , ] ]] ] [BEFORE HONBLE SRI N.S.SAINI AM & HONBLE SRI M AHAVIR SINGH, JM] !% !% !% !% /IT(SS)A NO.05/KOL/2012 #& '(/ ASSESSMENT YEAR : 2008-09 (*+ / APPELLANT ) - - ( -.*+ /RESPONDENT) SALTEE INFOTEX (INDIA) PVT. LTD. D.C.I.T., CENTR AL CIRCLE-VII, KOLKATA -VERSUS- KOLKATA (PAN:AACCA 8202 F) *+ / 0 / FOR THE APPELLANT: SHRI M.SATNALIWALA, FCA -.*+ / 0 / FOR THE RESPONDENT: SHRI A.K.MAHAPATRA, CIT 1 2 / 3 /DATE OF HEARING : 05.06.2013 4' / 3 /DATE OF PRONOUNCEMENT : 11.06.2013. 5 / ORDER PER SHRI N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESEE AGAINST THE ORDER OF LD. CIT(A)-CENTRAL-I, KOLKATA DATED 19.12.2011. 2. THE FIRST GROUND OF APPEAL TAKEN BY THE ASSESSE E IS THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THAT THE ASSESSMENT MADE U/ S 153A/143(3) WAS NOT BAD IN LAW THOUGH THERE WAS NO SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE CONTENDED BEFORE THE LD. CIT(A) THAT THERE WAS NO SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE COMPANY. NO PANCHNAMA WAS ISSUED IN THE NAME OF THE COMPANY NOR THE NAME WAS MENTIONED IN THE PANCHNAMA ISSUED IN THE NAME OF OTHER PERSON. T HEREFORE ORDER PASSED U/S 153A/143(3) SHOULD BE ANNULLED. 4. THE LD. CIT(A) CALLED FOR A REPORT FROM THE AO. THE AO IN HIS LETTER DATED 01.09.2011 SUBMITTED THAT THE PANCHNAMA DATED 24.04 .2009 SHOWS THAT SEARCH AND IT(SS)A.05 /KOL/2012 SALTEE INFOTEX (INDIA)P.LTD, KOLKATA VS DCIT.CC.VII.KOL A.YR.2008-09 2 SEIZURE WAS CARRIED OUT IN THE CASE OF THE ASSESSEE ON 24.04.2009 AND HENCE THE SUBMISSION OF THE ASSESSEE THAT NO SEARCH AND SEIZU RE ACTION WAS CARRIED OUT U/S 132 OF THE ACT WAS FACTUALLY NOT CORRECT. THEREFORE THE LD . CIT(A) DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 5. BEFORE US ALSO THE ASSESSEE REITERATED THE SUBMI SSIONS MADE BEFORE THE LD. CIT(A). 6. THE LD. DR HAS FILED BEFORE US A COPY OF SEARCH WARRANT WHEREIN WE FIND THAT THE NAME OF THE COMPANY SALTEE INFOTEX (INDIA)PVT. LTD. IS MENTIONED. THE LD. DR HAS ALSO FILED A COPY OF THE PANCHNAMA WHEREIN ALSO THE NAME OF THE ASSESSEE COMPANY APPEARS. THUS FROM THE MATERIALS AVAILABLE ON RECOR D, IT IS ABSOLUTELY CLEAR THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE PREMISES OF THE ASESSEE AND THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND DISMISS THIS GROUND OF APPEAL OF THE ASSESEE. 7. THE OTHER GROUND OF APPEAL RAISED BY THE ASSESSE E IS THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE DISALLOWANCE OF RS.12,3 5,114/- OUT OF INTEREST PAID. 8. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD CLAIMED DEDUCTION FOR INTEREST EXPENDITURE OF RS.66,54,339/- U/S 24(B) OF THE ACT UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE AO FOUND THAT THE ASSESSEE HAD TAKEN LOAN FROM AXIS BANK LTD. DURING THE MONTH OF SEPTEMBER 2007 OF RS.65,44,71,63/- TO REPAY THE EXISTING LOAN AND BALANCE WAS UTILSIED FOR OTHER PURPOSES. HE FOUND T HAT INVESTMENT IN HOUSE PROPERTY WAS RS.4,47,67,130/- WHEREAS LOAN TAKEN FROM AXIS B ANK WAS RS.6,54,47,163/- ON WHICH ASSESSEE PAID INTEREST OF RS.40,67,163/-. THE REFORE HE HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION IN RESPECT OF INTEREST PAYABL E FOR MONEY BORROWED FOR HOUSE PROPERTY. ACCORDINGLY HE ALLOWED DEDUCTION FOR PROP ORTIONATE INTEREST EXPENDITURE U/S 24(B) OF THE ACT OF RS.27,82,018/- OUT OF THE TOTAL INTEREST EXPENDITURE OF RS.40,67,163/- AND DISALLOWED THE BALANCE AMOUNT OF INTEREST EXPENDITURE OF RS.12,84,144/-. IT(SS)A.05 /KOL/2012 SALTEE INFOTEX (INDIA)P.LTD, KOLKATA VS DCIT.CC.VII.KOL A.YR.2008-09 3 8.1. BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED T HAT IT HAS MADE INVESTMENT IN FD AS PER ITS BALANCE SHEET AS ON 31.03.2008 OF RS.34, 71,362/- AND THEREFORE IT IS ENTITLED FOR DEDUCTION OF INTEREST EXPENDITURE FOR INVESTMEN T IN SUCH FDR. 8.2. THUS THE LD. CIT(A) OBSERVED THAT THE INVESTME NT OF RS.26,26,319/- WAS MADE AT THE FAG END OF THE YEAR AND ONLY INVESTMENT OF R S.8,45,313/- WAS MADE UNDER FDR THROUGHOUT THE YEAR. HE THEREFORE ESTIMATED INTERES T EXPENDITURE OF RS.50,000/- ON INVESTMENT IN FDR AND ALLOWED DEDUCTION FOR THE SAM E AGAINST THE INTEREST INCOME OF RS.1,71,688/- ASSESSED BY THE AO. 9. THE LD. AR OF THE ASSESSEE SUBMITTED THAT INTERE ST EXPENDITURE SHOULD BE ALLOWED ON THE INVESTMENT UNDER FDR OF RS.34,71,362 / AND THE LD. CIT(A) WAS NOT JUSTIFIED IN ESTIMATING THE DEDUCTION ON ACCOUNT OF INTEREST EXPENDITURE AT RS.50,000/-. 10. THE LD. DR SUPPORTED THE ORDER OF THE LD. CIT(A ). 11. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE UNDISPUTED FACTS OF THE CA SE ARE THAT THE ASSESSEE HAD CLAIMED DEDUCTION FOR INTEREST EXPENDITURE OF RS.66,54,339/ - U/S 24(B) OF THE ACT UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE AO FOUND THAT THE ASSESSEE HAD TAKEN LOAN FROM AXIS BANK LTD. DURING THE MONTH OF SEPTEMBER 2 007 OF RS.65,44,71,63/- TO REPAY THE EXISTING LOAN AND BALANCE WAS UTILSIED FO R OTHER PURPOSES. HE FOUND THAT INVESTMENT IN HOUSE PROPERTY WAS RS.4,47,67,130/- W HEREAS LOAN TAKEN FROM AXIS BANK WAS RS.6,54,47,163/- ON WHICH ASSESSEE PAID IN TEREST OF RS.40,67,163/-. THEREFORE HE HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION IN RESPECT OF INTEREST PAYABLE FOR MONEY BORROWED FOR HOUSE PROPERTY. ACCO RDINGLY HE ALLOWED DEDUCTION FOR PROPORTIONATE INTEREST EXPENDITURE U/S 24(B) OF THE ACT OF RS.27,82,018/- OUT OF THE TOTAL INTEREST EXPENDITURE OF RS.40,67,163/- AND DI SALLOWED THE BALANCE AMOUNT OF INTEREST EXPENDITURE OF RS.12,84,144/-. BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED THAT IT HAS BEEN MADE INVESTMENT IN FD AS PER ITS B ALANCE SHEET AS ON 31.03.2008 OF RS.34,71,362/- AND THEREFORE IT IS ENTITLED FOR DED UCTION OF INTEREST EXPENDITURE FOR IT(SS)A.05 /KOL/2012 SALTEE INFOTEX (INDIA)P.LTD, KOLKATA VS DCIT.CC.VII.KOL A.YR.2008-09 4 INVESTMENT IN SUCH FDR. THUS THE LD. CIT(A) OBSERVE D THAT THE INVESTMENT OF RS.26,26,319/- WAS MADE AT THE FAG END OF THE YEAR AND ONLY INVESTMENT OF RS.8,45,313/- WAS MADE UNDER FDR THROUGHOUT THE YEA R. HE THEREFORE ESTIMATED INTEREST EXPENDITURE OF RS.50,000/- ON INVESTMENT I N FDR AND ALLOWED DEDUCTION FOR THE SAME AGAINST THE INTEREST INCOME OF RS.1,71,688 /- ASSESSED BY THE AO. NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE LD. AR OF THE ASS ESSEE TO CONTROVERT THE ABOVE FINDING OF THE LD. CIT(A). NO MATERIAL WAS ALSO BRO UGHT ON RECORD BY THE LD. AR TO SHOW THAT ANY EXPENDITURE MORE THAN RS.50,000/- WAS INCURRED BY THE ASSESSEE ON ACCOUNT OF INTEREST FOR EARNING OF INTEREST INCOME. THEREFORE WE DO NOT FIND ANY GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISS ED. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 11.6.2013. SD/- SD/- [ .' #!' , ] [ .., ,, , ] [MAHAVIR SINGH ] [N.S.SAINI] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (3 3 3 3) )) ) DATE: 11.06.2013. R.G.(.P.S.) 5 / -##6 76'8- COPY OF THE ORDER FORWARDED TO: 1. SALTEE INFOTEX (INDIA) PVT.LTD., DN-9, SECTOR-V, KO LKATA-700091. 2 D.C.I.T., CENTRAL CIRCLE-VII, KOLKATA 3 . CIT KOLKATA 4. CIT (A)-CENTRAL-I, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. .6 -#/ TRUE COPY, 51/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES IT(SS)A.05 /KOL/2012 SALTEE INFOTEX (INDIA)P.LTD, KOLKATA VS DCIT.CC.VII.KOL A.YR.2008-09 5