Appeal details
Counselvise Citation
[2018] 124 COUNSELVISE.COM (IT) 6777 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 10 month(s) 6 day(s)
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
01-06-2018
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
A
Assessment Year
2004-2005
Appeal Filed On
26-07-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI BEFORE SHRI JOGINDER SINGH , JM & SHRI R.C.SHARMA, AM M A NO. 248/M UM/20 16 (ARISING OUT OF ITA NO.5434/MUM/2011) ( ASSESSMENT YEAR : 2004 - 05 ) M A NO. 249/M UM/20 16 (ARISING OUT OF ITA NO.5435/MU M/2011) ( ASSESSMENT YEAR : 2005 - 06 ) LIC HOUSING FINANCE LTD., 2 ND FLOOR, BOMBAY LIFE BUILDING 45/47, VEER NARIMAN ROAD FORT, MUMBAI 400 023 VS. DCIT CIRCLE 2(2) AAYAKAR BHAVAN VEER NARIMAN ROAD MUMBAI 400 020 PAN/GIR NO. AAACL1799C APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI H.P. MAHAJAN REVENUE BY MS. ARJU GARODIA DATE OF HEARING 01 / 06 /201 8 DATE OF PRONOUNCEMENT 01 / 06 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THESE M.A. AROSE OUT OF ITA NOS.5 434/MUM/2011 & 5435/MUM/2011. 2. C ERTAIN APPARENT MISTAKES ARE POINTED OUT BY LEARNED AR IN THE ORDER PASSED ON 09/10/2015. AS PER LEARNED AR I N ITS ORDER DATED 09/10/2015 TOWARDS THE END OF PARAGRAPH 12 ON PAGE 7 OF THE ORDER - 'THERE IS NO DISPUTE THAT T HE ASSESSEE DID CARRY A SUM OF M A NO .248/MUM/2016 & 249/MUM/2016 LIC HOUSING FINANCE LTD., 2 RS.484,22,01,385/ - TO RESERVE FROM 1.4.1997 TILL 31.3.2003. WE FOUND THAT IT IS AN APPARENT MISTAKE IN SO FAR AS THE SAID SUM WAS IN FACT CARRIED TO RESERVE FROM FY 1989 - 90 AND NOT FROM 1.4.1997. ACCORDINGLY WE CORRECT THE S AME. 3. IN PARA 16 OF ORDER DATED 09/10/2015, REFERENCE HAS BEEN MADE TO SUB - SECTION 4A INSERTED IN S 41 'BY THE FINANCE ACT 1997. IT HAS HOWEVER BEEN INADVERTENTLY STATED THAT THIS SUB SECTION WAS INSERTED WITH FROM 1.4.2008. THE CORRECT YEAR IS HOWEVER 1 998 AND NOT 2008. SINCE IT IS AN APPARENT MISTAKE, WE RECTIFY THE SAME. 4. IT WAS FURTHER ARGUED THAT THE ISSUE WHETHER , BALANCE IN PROFIT & LOSS ACCOUNT WHICH IS NOT IN THE NATURE OF ANY OTHER RESERVE HAVING SPECIFIC OBJECTIVES, SHOULD FORM PART OF GENERAL RESERVES HAS NOT BEEN SPECIFICALLY ADJUDICATED BY THE TRIBUNAL . AS IT IS A MISTAKE APPARENT FROM RECORD, WE RECALL THE ORDER TO A LIMITED EXTENT OF DECIDING WHETHER BALA NCE IN PROFIT AND LOSS ACCOUNT WHICH IS NOT IN THE NATURE OF ANY OTHER RESER VE HAVING SPECIFIC OBJECTIVES, SHOULD FORM PART OF GENERAL RESERVES. WE DIRECT ACCORDINGLY. 5. IN THE RESULT, M.A. FILED BY THE ASSESSEE IS ALLOWED IN PART. 6. IN M.A. NO.249/MUM/2016, THE ASSESSEE HAS ALLEGED THAT FOLLOWING GROUNDS OF APPEAL, WHICH WER E UNIQUE TO AY 2005 06 WERE NOT ADJUDICATED IN THE ORDER PASSED IN ITA 5435/MUM/2011: M A NO .248/MUM/2016 & 249/MUM/2016 LIC HOUSING FINANCE LTD., 3 1, WITHOUT PREJUDICE TO GROUND 1, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER PASSED BY THE AO RESTRICTING THE DEDUCTION U/S 36(1)(VIII) TO RS. 29 CRORES AS AGAI NST THE CLAIM MADE BY ASSESSEE AT RS. 101 CRORES. AMONG OTHERS, ID. CIT(A) ERRED IN : - (A) WITHOUT PREJUDICE, DISALLOWANCE OF RS. 71.65 CRORES CONFIRMED BY THE LD CIT(A) IN AY 2005 - 06 INCLUDES RS. 20.48 CRORES DISALLOWED U/S 36(1)(VIII) IN AY 2004 - 05 AND TO THIS EXTENT THERE IS DOUBLE DISALLOWANCE OF RS. 20.48 CRORES. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION OF INTEREST OF RS. 7,37,92,296/ - ON NON - PERFORMING ASSETS UNDER SECTION 43D OF INCOME TAX ACT READ WITH RULE 6 EB WITHOUT APPRECIATING T HE FACT THAT THE APPELLANT HAD CONSISTENTLY FOLLOWED THE ACCOUNTING POLICY OF ACCRUING INTEREST INCOME ON NPA ON REALIZATION WHICH IS ALSO IN COMPLIANCE WITH MANDATORY NHB GUIDELINES, AS 9 AND OTHER APPLICABLE ACCOUNTING STANDARDS, PROVISIONS OF THE COMPAN IES ACT AND INCOME TAX ACT. WITHOUT PREJUDICE, LD CIT(A) FAILED TO APPRECIATE THAT : - (A) SECTION 43D, INSERTED BY FINANCE ACT 1999 TO PROVIDE 'TAX INCENTIVES FOR PROMOTION OF HOUSING' IS NOT A CHARGING SECTION AND CAN BE INVOKED ONLY WHEN INCOME I S RECOGNIZED BY THE ASSESSEE IN WHICH CASE ASSESSEE IS GIVEN RELIEF UNDER SECTION 43D SO AS TO TAX THE INTEREST INCOME ON DOUBTFUL DEBTS ONLY WHEN IT IS REALIZED. (B) SECTION 43D CANNOT BE READ IN CONTRADICTION TO NORMS PRESCRIBED BY NHB. (C) AFTER INSERTION OF SECTION 43D, METHOD OF ACCOUNTING FOLLOWED BY THE APPELLANT WAS CATEGORICALLY ACCEPTED BY THE DEPARTMENT IN EARLIER YEARS. (D) NOTIONAL INTEREST ON NPA, IF TAXED IN THE HANDS OF ASSESSEE, THEN CORRESPONDINGLY SAME AMOUNT SHOU LD BE ALLOWED DEDUCTION AS BAD DEBTS U/S 36(1}(VII). 7. NOT DECIDING THE ISSUE RAISED BY THE ASSESSEE IN ITS APPEAL, WHILE PASSING THE ORDER AMOUNTS TO MISTAKE APPARENT FROM RECORD. WE THEREFORE, RECALL THE ORDER WITH A LIMITED ISSUE TO DECIDE THE ABOVE G ROUNDS RAISED BEFORE US. 8. IN THE RESULT M.A. IS ALLOWED IN PART. 9. IN THE RESULT, BOTH THE M.A.S ARE ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 01 / 06 /201 8 M A NO .248/MUM/2016 & 249/MUM/2016 LIC HOUSING FINANCE LTD., 4 SD/ - ( JOGINDER SINGH ) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 01 / 06 /201 8 KARUNA SR. PS 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. GU ARD FILE. //TRUE COPY//
