DEEPI ARORA, V. ASST CIT 19(1),

MA 176/MUM/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3772 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 30-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K RAVIKIRAN
• Assessee Lawyers: KARTHIK NATARAJAN
• Keywords: Cost of acquisition

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND SANJAY GARG, (JM) . . , , MISCELLANEOUS AP PLICATION NO. 1 76 /MUM/2015 ARISING OUT OF I.T.A. NO. 6349 / MUM/20 1 2 ( / ASSESSMENT YEAR : 2 0 0 8 - 09 ) MRS. DEEPI SINGH ARORA, 16, GOLF LINK, ARORA HOUSE, UNION PARK, KHAR (E), MUMBAI - 400052 / VS. THE ASSTT. COMMISSIONER OF INCOME TAX - 19(1), MU MBAI ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN : AAIPA1690A / APPELLANT BY SHRI KARTHIK NATARAJAN / RESPONDENT BY SHRI K RAVI KIRAN / D ATE OF HEARING : 18.12. 201 5 / DATE OF PRONOUNCEMENT : 18.12.2015 / O R D E R PER B.R. BASKARAN (AM) THE ASSESSEE HAS MOVED THIS MISCELLANEOUS APPLICATION SEEKING CORRECTION OF MISTAKES APPARENT FROM TH E RECORD IN THE ORDER DATED 20 - 08 - 2014 PASSED IN ITA NO.6349/MUM/2012. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ISSUE THAT WAS CONTESTED BEFORE US WAS ABOUT THE DEDUCTION OF INTEREST EXPENDITURE M A NO. 176 /MUM/2015 2 AGAINST SHORT TERM CAPITAL GAIN. THE ASSESS EE PLACED RELIANCE ON THE FOLLOWING CASE LAW IN SUPPORT OF HER CLAIM: - (A) ALKA RAJESH AGARAWAL VS. ACIT (ITA NO.2393/MUM/2012 DATED 9.10.2013) (B) KALYAJI J TANNA (DECD.) VS. ITO (ITA NO.3137/MUM/2010 DATED 29.3.2011. (C) S. BALAN ALIAS S HANMUGAM BALAKRISHNAN CHETTIAR VS. DCIT (ITA NO.1859/PN/2005 DATED 31.01.2008) THE TRIBUNAL NOTICED THAT THE DECISIONS (A) AND (B) REFERRED ABOVE RELATED TO THE INTEREST EXPENDITURE INCURRED ON APPLYING FOR INITIAL PUBLIC OFFER OF SHARES. THE TRI BUNAL OBSERVED THAT THE INTEREST EXPENDITURE INCURRED IN RESPECT OF MONEYS BORROWED FOR INITIAL PUBLIC OFFICER TILL THE DATE OF ALLOTMENT OF SHARES SHOULD BE CONSIDERED AS A PART OF COST OF ACQUISITION OF SHARES. SINCE THE ASSESSEE HAS NOT SHOWN THAT SH E HAS APPLIED UNDER INITIAL PUBLIC OFFERING AND FURTHER SINCE THE ASSESSEE HAS NOT SHOWN THAT SHE HAS CAPITALIZED THE INTEREST EXPENDITURE IN ACCORDANCE WITH THE ABOVE SAID PRINCIPLES, THE TRIBUNAL CONFIRMED THE DISALLOWANCE OF INTEREST. 3. THE LD COUN SEL SUBMITTED THAT THE A PART OF INTEREST EXPENDITURE PERTAIN TO INITIAL PUBLIC OFFERING AND SINCE THE ASSESSEE HAD CLAIMED ENTIRE INTEREST EXPENDITURE AS DEDUCTION, THERE WAS NO OPPORTUNITY TO POINT OUT THE SAME. ACCORDINGLY HE PRAYED THAT THE ORDER OF T HE TRIBUNAL MAY BE CORRECTED SUITABLY. 4. WE HEARD LD D.R IN THIS REGARD. WE NOTICE THAT THE TRIBUNAL HAS DISCUSSED ABOUT THE PRINCIPLES TO BE ADOPTED IN CONNECTION WITH THE CLAIM OF INTEREST EXPENDITURE INCURRED ON THE AMOUNT BORROWED FOR INITIAL PU BLIC OFFER. AS SUBMITTED BY THE ASSESSEE, THE DETAILS OF INVESTMENT MADE IN INITIAL PUBLIC OFFER COULD NOT BE FURNISHED BY THE ASSESSEE, SINCE SHE CONTESTED FOR ALLOWING ENTIRE INTEREST EXPENDITURE. ACCORDINGLY, WE ARE OF M A NO. 176 /MUM/2015 3 THE VIEW THAT THE ORDER PASSED B Y THE TRIBUNAL SUFFERS FROM MISTAKE APPARENT FROM RECORD TO THE EXTENT THE INTEREST EXPENDITURE RELATE TO THE INVESTMENT MADE IN INITIAL PUBLIC OFFERING. ACCORDINGLY, PARAGRAPH 8 OF THE IMPUGNED ORDER IS REPLACED BY THE FOLLOWING PARAGRAPH: - 8. IN TH E INSTANT CASE, IT IS NOT SHOWN THAT THE ASSESSEE HAS APPLIED FOR INITIAL PUBLIC OFFERING OUT OF BORROWED FUNDS. IN CASE, THE ASSESSEE HAS DONE SO, THEN THE INTEREST EXPENDITURE INCURRED UPTO THE DATE OF ALLOTMENT IS REQUIRED TO BE CAPITALIZED AS PER THE PRINCIPLES DISCUSSED ABOVE. HOWEVER, THIS MATTER REQUIRES EXAMINATION OF FACTS AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE MODIFY THE ORDER OF LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO EXAMINE THE CLAIM OF THE ASSESSEE WITH REGARD TO THE INIT IAL PUBLIC OFFERING IN ACCORDANCE WITH THE PRINCIPLES DISCUSSED ABOVE. 5. THE PARAGRAPH NO.10 SHALL BE REPLACED BY THE FOLLOWING PARAGRAPH: - 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS ALLOWED. PRONOUNCED ACCORDINGLY ON 18TH DEC , 201 5. 18 TH DEC. , 2015 SD SD ( / SANJAY GARG ) ( . . / B.R. BASKARAN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI: 18TH DEC. 201 5 . . . ./ SRL , SR. PS M A NO. 176 /MUM/2015 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CON CERNED 6. / GUARD FILE. / BY ORDER, T RUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI