ITO 5(2)(3), V. JANUS INVESTMENT P.LTD,

MA 1/MUM/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3286 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2007-2008
• Appeal Filed On: 01-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N PADMANABAN
• Assessee Lawyers: R C JAIN
• Keywords: Notional interest

Judgement Text

, ' INCOME TAX APPELLATE TRIBUNAL,MUMBAI I BENCH , , BEFORE S/SH. I P BANSAL,JUDICIAL M EMBER & RAJENDRA,ACCOUNTANT MEMBER / MA NO.01/MUM/2015 (ARISING OUT OF / ITA NO.5057/MUM/2010) / ASSESSMENT YEAR - 2007 - 08 INCOME TAX OFFICER - 5(2)(2) R.NO.567, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD MUMBAI - 400 020. VS M /S. JANUS INVESTMENT PVT. LTD. MADGAONKAR HOUSE, 17 MATHEW ROAD, OPERA HOUSE MUMBAI - 400 004. PAN: A AACJ 1252 E ( / APP LICANT ) ( / RESPONDENT ) /ASSESSEE BY : SHRI R .C. JAIN / REVENUE BY :SHRI N. PADMANABAN / DATE OF HEARING : 01 - 05 - 2015 / DATE OF PRONOUNCEMENT : 17 - 0 6 - 2015 / ORDER PER RAJENDRA, AM - VIDE ITS APPLICATION,DATED 01.01.201 5 ,THE ASSESSING OFFICER(AO)HAS STATED THAT THERE WERE MISTAKES IN THE ORDER PASSED BY THE TR IBUNAL ON 09.04.2014,THAT SAME HAVE TO RECTIFIED BY PASSING ORDER U/S.254(2) OF THE ACT. BRIEF FACTS: A SSESSEE - COMPANY,ENGAGED IN THE BUSINESS OF LEASING OF PROPERTY AND DEVELOPMENT OF PROPERTIES, FILED ITS RETURN OF INCOME ON 29/10/2007,DECLARING TOTAL I NCOME OF RS. NIL AND THE AO FINALISED THE ASSESSMENT ORDER U/S.143(3) OF THE ACT,1961 ON 30.12.2009, DETERMINING THE TOTAL INCOME AT RS.4,71,93,590/ - BY DISALLOWING 1/5TH OF INTEREST OF RS.63.86 LAKHS ON BORROWED CAPITAL (RELATING TO THE PERIOD UPTO THE D ATE OF COMPLETION OF CONSTRUCTION OF BUILDING) AND ADDING NOTIONAL INTEREST ON DEPOSIT MONEY AND SHARE APPLICATION MONEY.IT FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA),WHO DECIDED THE ISSUE IN FAVOUR OF THE =.THE APPEAL FILED BY THE AO WAS D ECIDED BY THE TRIBUNAL AND THE MATTER WAS RESTORED BY IT TO THE FILE OF THE FAA FOR FRESH ADJUDICATION.THE TRIBUNAL OBSERVED AS UNDER: 3.2 BEFORE US, DR SUPPORTED THE ORDER OF THE AO. AR SUBMITTED THAT INTEREST PAYMENT WAS ALLOWED IN EARLIER AY, THAT TH E ASSESSEE NEVER TREATED THE PROPERTY IN QUESTION AS STOCK IN TRADE. ON A SPECIFIC QUERY BY THE BENCH AS TO WHETHER THE ASSESSEE HAD NOT CLAIMED THE INTEREST EXPENDITURE UNDER ANY OTHER SECTION, AR FAIRLY CONCEDED THAT HE WAS NOT IN A POSITION TO MAKE S UCH AN AVERMENT. WE FIND THAT IN THE STATEMENT OF FACTS ALSO ASSESSEE HAS NOT MADE A CLAIM THAT IT HAD NOT MADE CLAIM ABOUT THE INTEREST EXPENDITURE UNDER ANY OTHER HEAD. FAA HAS ALSO NOT GIVEN ANY FINDING IN THIS REGARD. AS PER THE PROVISIONS OF SECTIO N 24 OF THE ACT, INTEREST PAYMENT CAN BE ALLOWED WHILE COMPUTING THE INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY, IF THE ASSESSEE HAD NOT MADE A CLAIM ABOUT THE SAME UNDER OTHER SECTIONS OF THE ACT. AS THE FAA HAS NOT VERIFIED THIS VITAL FACT,SO, I N THE INTEREST OF JUSTICE, WE ARE REMANDING BACK THE MATTER TO THIS FILE FOR FURTHER VERIFICATION. GROUND NO.2 IS DECIDED IN FAVOUR OF THE A.O., IN PART.' M A NO.01 /MUM/201 5 ,AY. 0 7 - 08 2 AS PER THE AO THE CLAIM MADE BY THE ASSESSEE WITH REGARD TO THE INTEREST PAYMENT WAS ALLOWED BY T HE A.O. IN THE ASSESSMENT YEAR 2006 - 07 WAS NOT FULLY CORRECT,THAT IN THE ORIGINAL ASSESSMENT FOR A.Y. 2006 - 07 COMPLETED U/S.143(3),ON 30/12/2008,TOTAL LOSS WAS CALCULATED AT RS.60,76,960/ - BY ALLOWING 1/5 TH OF ACCUMULATED INTEREST,THAT THE INCOME CHARGEAB LE TO TAX HAD ESCAPED ASSESSMENT FOR THE AY 2006 - 07 FOR THE REASON THAT THE ASSESSEE HAD CLAIMED 1/5 TH OF ACCUMULATED INTEREST OF CONSTRUCTION PERIOD OF RS.63,86, 544/ - WHICH WAS NOT IN ACCORDANCE WITH PROVISIONS OF SECTION 24(B) OF THE ACT,THAT MATTER W AS RE - OPENED ,THAT THE RE - ASSESSMENT WAS COMPLETED U/S.143(3) R.W.S.147 OF THE ACT,ON 30/12/2011 DETERMINING THE TOTAL INCOME AT RS.3,09,584/ - , BY DISALLOWING 1/5 TH OF ACCUMULATED INTEREST,THAT THE ORDER OF THE TRIBUNAL HAD TO BE AMENDED ACCORDINGLY. 4. DU RING THE COURSE OF HEARING B EFORE US, DEPARTMENTAL REPRESENTATIVE(DR) COULD NOT POINT OUT AS TO WHAT WAS THE MISTAKE APPARENT IN THE RECORD THAT HAD TO BE RECTIFIED.THE TRIBUNAL HAD DECIDED THE ISSUE ON THE BASIS OF AVAILABLE MATERIAL. IF THE AO HAD REOPENED THE ASSESSMENT AND MADE A DISALLOWANCE AND THESE FACTS COULD AFFECT THE OUTCOME OF THE ISSUE THE AO SHOULD APPEAR BEFORE THE FAA TO FILE AN EXPLANATION ABOUT THE CHRONOLOGY OF EVENTS.BUT,IN ANY MANNER THE SUBSEQUENT DECISION TAKEN BY THE AO CANNOT BE HELD TO BE A MISTAKE APPARENT FROM THE RECORD.IT APPEARS THAT THE AO IS NOT AWARE THAT HE WANTS US TO REVIEW OUR ORDER,BUT IT IS NOT POSSIBLE AS PER THE PROVISIONS OF SECTION 254(2)OF THE ACT.AS THERE IS NO MISTAKE IN THE ORDER PASSED BY THE TRIBUNAL,THEREFORE, PRAYER MADE BY THE AO IS REJECTED. AS A RESULT, MISCELLANEOUS APPLICATION FILED BY THE AO STANDS DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE ,2015. 17 , 2015 SD/ - SD/ - ( /I P BANSAL) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI, /DATE: 17 .06. 2015 . . . JV. SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI.