BHARAT BIJLEE LTD., MUMBAI V. DCIT CIR. 6(1), MUMBAI

MA 149/MUM/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5456 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 30-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M RAJGURU
• Assessee Lawyers: RONAK G DOSHI
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI R.C. SHARMA (AM)& SHRI PAWAN SINGH (JM ) M.A. NO. 149/MUM/2016 IN I.T.A. NO. 3227/MUM/2013 (ASSESSMENT YEAR 2009-10) BHARAT BIJLEE LIMITED 6 TH FLOOR ELECTRIC MANSION APPASAHEN MARATHA MARG PRABHADEVI MUMBAI-400 025. VS. DCIT CIRCLE 6(1) ROOM NO. 506 5 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. (APPELLANT) (RESPONDENT) PAN NO.AAACB2900K ASSESSEE BY SHRI RONAK G. DOSHI DEPARTMENT BY SHRI M. RAJGURU DATE OF HEARING 17.3.2017 DATE OF PRONOUNCEMENT 17.3.2017 O R D E R PER PAWAN SINGH (JM) :- THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASS ESSEE FOR SEEKING RECTIFICATION OF THE ORDER DATED 27.5.2016 PASSED I N ITA NO. 3227/MUM/2013. IN THE APPLICATION THE ASSESSEE PLEADED THAT DURING THE COURSE OF HEARING BEFORE THE TRIBUNAL THE APPLICANT/ASSESSEE HAD SUBM ITTED A CHART ALONG WITH COMPILATION WHICH CONSIST OF BALANCE SHEET OF THE A SSESSEE AS ON 31.3.2009. THE APPLICANT/ASSESSEE HAS SPECIFICALLY POINTED OUT THAT AS FAR AS INVESTMENT MADE FOR EARNING EXEMPT INCOME IN EARLIER YEARS ARE CONCERNED; THE ASSESSEE HAD SUFFICIENT INTEREST FREE FUNDS AVAILABLE WITH I T. THE APPLICANT/ASSESSEE FURTHER PLEADED THAT THE TRIBUNAL WHILE PASSING THE ORDER INADVERTENTLY MADE A MISTAKE WHILE CONSIDERING GROUND NO. (II) ABOUT DIS ALLOWANCE U/S. 14A READ WITH RULE 8D OF THE I.T. RULES. THE APPLICANT/ASSES SEE FURTHER PLEADED THAT THE ASSESSEES OWN SUFFICIENT INTEREST FREE FUNDS AVAIL ABLE AMOUNTING TO RS.19,949.59 LAKHS WHEREAS, INVESTMENT RESULTING EX EMPT INCOME IS RS.454.57 LAKHS ONLY. FURTHER LOAN FUNDS DURING THE PREVIOUS YEAR HAVE ALSO GONE DOWN BHARAT BIJLEE LIMITED 2 FROM RS.1803.80 LAKHS TO RS. 1163.35 LAKHS AT THE E ND OF THE YEAR. IN THE APPLICATION THE ASSESSEE RELIED UPON THE DECISION I N THE CASE OF RELIANCE UTILITIES & POWER LIMITED (313 ITR 340), HDFC BANK (366 ITR 505) & HDFC BANK LTD. (67 TAXMANN.COM 42). THE APPLICANT/ ASSE SSEE PRAYED IN THE APPLICATION THAT THE TRIBUNAL INADVERTENTLY CONFIRM ED THE DISALLOWANCE OF INTEREST EXPENSES OF RS 5,98,273/- U/S. 14A OF THE ACT READ WITH RULE 8D(2)(II) OF THE I.T. RULES. 2. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTI ES AND GONE THROUGH THE RECORDS OF THE CASE. THE LEARNED AR OF THE ASSESSEE DRAWN OUR ATTENTION TO PAGE NO. 1 OF THE FACTUAL PAPER BOOK, WHEREIN OUR A TTENTION WAS DRAWN AT SCHEDULE B OF THE BALANCE SHEET OF THE ASSESSEE AS ON 31.3.2009, WHEREIN THE ASSESSEE HAS RECORDED RESERVES AND SURPLUS FUNDS OF RS. 19384.43 LAKHS. THE ASSESSEE HAS MADE INVESTMENT OF RS. 754.57 LAKHS AS PER SCHEDULE F ( THOUGH Y MENTIONED IN THE APPLICATION AS RS. 454.57 LAKHS) . IN SUPPORT OF HIS SUBMISSION THE LEARNED AR FURTHER RELIED UPON THE D ECISION IN THE CASE OF RELIANCE UTILITIES & POWER LIMITED AND IN TWO CASES OF HDFC BANK CITED (SUPRA) AND SUBMITTED THAT NO INTEREST DISALLOWANCE AS PROVIDED IN SUB CLAUSE (2)(II) OF RULE 8D IS WARRANTED AGAINST THE ASSESSE E AS THE ASSESSEE HAS SUFFICIENT INTEREST FREE FUNDS AVAILABLE WITH IT. 3. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESEN TATIVE FOR THE REVENUE FAIRLY SUBMITTED THAT THE ASSESSEE HAS SUFF ICIENT INTEREST FREE FUNDS AVAILABLE WITH IT AND HENCE NO DISALLOWANCE OF INTE REST U/S. 14A READ WITH RULE 8D(2)(II) IS WARRANTED. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PARTIES. WE HAVE SEEN THAT THE ASSESSEE HAS SUFFICIENT INTEREST FREE FUND S AVAILABLE WITH IT AND INVESTMENT MADE DURING THE YEAR RESULTING EXEMPT IN COME IS ONLY RS. 754.57 LAKHS AND AS PER VARIOUS DECISIONS HONBLE JURISDIC TIONAL HIGH COURT THE PRESUMPTION UNDER THE LAW THAT IF THE ASSESSEE HAS SUFFICIENT INTEREST FREE FUNDS AVAILABLE WITH IT THE PRESUMPTION IS THAT THE ASSESSEE HAS INVESTED OUT OF BHARAT BIJLEE LIMITED 3 INTEREST FREE FUNDS AND NO DISALLOWANCE U/R 8D(2)(I I) IS WARRANTED. HENCE IN VIEW OF THE ABOVE DISCUSSION, WE DIRECT THE ASSESSI NG OFFICER TO DELETE THE DISALLOWANCE OF RS. 5,98,237/- OUT OF TOTAL DISALLO WANCE U/S. 14A OF THE ACT. WE ORDER ACCORDINGLY. 5. IN THE RESULT, MISCELLANEOUS APPLICATION FILED B Y THE ASSESSEE IS ALLOWED AND THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. ORDER HAS BEEN PRONOUNCED IN THE COURT ON 17 .3.2 017. SD/- SD/- (R.C. SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED : 17/3/2017 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, ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI