The DCIT, Circle-9,, Surat v. M/s. Mitul Gems,, Surat

ITA 2193/AHD/2009 | 2003-2004
Pronouncement Date: 27-07-2012 | Result: Dismissed

Appeal Details

RSA Number 219320514 RSA 2009
Assessee PAN AAEFM9684N
Bench Ahmedabad
Appeal Number ITA 2193/AHD/2009
Duration Of Justice 3 year(s) 17 day(s)
Appellant The DCIT, Circle-9,, Surat
Respondent M/s. Mitul Gems,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 27-07-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 27-07-2012
Date Of Final Hearing 25-07-2012
Next Hearing Date 25-07-2012
Assessment Year 2003-2004
Appeal Filed On 10-07-2009
Judgment Text
ITA NO 2193 /AHD/2009 A.YR.. 2003 -04 1 IN THE INCOME TAX APPELLATE TRIBUNAL BBENCH AHM EDABAD (BEFORE SHRI MUKUL KR.SHRAWAT JM & SHRI ANIL CHATUR VEDI A.M.) I.T.A. NO. 21 93 /AHD/2009. (ASSESSMENT YEAR: 2003 - 04 ) THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-9 ROOMNO.423 AAYAKAR BHAVAQN MAJURA GATE SURAT. (APPELLANT) VS. M/S.MITUL GEMS 401 KRINK TOWER VARACHHA ROAD SURAT. (RESPONDENT) PAN: AAEFM 9684 N APPELLANT BY : SHRI S.S.JHA SR. D.R. RESPONDENT BY : NONE. ( )/ ORDER DATE OF HEARING : 25-7-2012 DATE OF PRONOUNCEMENT : 27-7-2012 PER: SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF LD. CIT (A)V- SURAT DATED 16-4-2009 FOR THE ASSESSMENT YEAR 2003- 04. 2. DURING THE COURSE OF HEARING BEFORE THE TRIBUNAL ON BEHALF OF THE RESPONDENT NONE APPEARED. THIS APPEAL WAS EARLIER F IXED FOR HEARING ON 16-5-2012 WHEN LD. D.R. REQUESTED FOR ADJOURNMENT A ND THE MATTER WAS FIXED ON 17-5-2012. ON 17-5-2012 ASSESSEES COUNSEL ASKED FOR ADJOURNMENT AND THE MATTER WAS ADJOURNED TO 25-7-20 12. BOTH THE PARTIES WERE INFORMED ABOUT THE SAME. HOWEVER ON 25-7-2012 NOBODY APPEARED ITA NO 2193 /AHD/2009 A.YR.. 2003 -04 2 ON BEHALF OF THE RESPONDENT HENCE WE DECIDED TO PRO CEED WITH MATTER ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3. THE REVENUE IN ITS APPEAL EFFECTIVELY TAKEN ONLY GROUND WHICH READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.5 82 927/- MADE BY THE A.O. ON ACCOUNT OF INTEREST ON FD AS T HERE WERE NO EVIDENCE TO SHOW THAT THE INTEREST INCOME WAS ADDED TO THE P & L ACCOUNT. 4. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS O F IMPORT AND EXPORT OF DIAMONDS. IT FILED RETURN OF INCOME ON 18-12-200 3 DECLARING TOTAL INCOME OF RS.39 40 340/-.THE CASE WAS SELECTED FOR SCRUTIN Y AND THE ASSESSMENT WAS FINALIZED U/S. 143(3) DETERMINING TOTAL INCOMER AT RS. 46 58 120/-. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. A.O . NOTICED THAT ASSESSEE HAD EARNED INTEREST OF RS.5 82 927/- FROM FIXED DEPOSIT WITH SARAWAT BANK AND IT WAS NETTED OFF WITH THE GROSS I NTEREST EXPENSES OF RS.44 96 099/- AND THUS RS.39 13 172/- WAS SHOWN AS INTEREST EXPENSES UNDER THE HEAD OF FINANCIAL CHARGES IN THE PROFIT AND LOSS ACCOUNT. THE A.O. HELD THAT THE INTEREST INCOME OF RS.5 82 927/- AS BEING NOT INCOME FROM PROFIT BUT INCOME FROM OTHER SOURCES FOR THE P URPOSE OF DEDUCTION U/S. 80HHC AND THEREFORE REDUCED IT FOR THE PURPOSE OF D EDUCTION U/S. 80HHC BUT TREATED IT AS INCOME FROM OTHER SOURCES. SUBSEQ UENTLY A.O. PASSED ORDER ON 25-3-2008 U/S. 154 ON THE GROUND THAT IN T HE ORDER U/S. 143(3) ITA NO 2193 /AHD/2009 A.YR.. 2003 -04 3 THROUGH OVERSIGHT A.O. HAS DEDUCTED INTEREST. THUS HE MADE ADDITION OF RS.5 82 .927/-. THIS ACCORDING TO ASSESSEE RESULTED IN DOUBLE ADDITION. AGAINST THE ORDER OF A.O. PASSED U/S. 154 ASSESSEE PREFERRED APPEAL BEFORE CIT (A). CIT (A) ALLOWED THE APPEAL OF THE A SSESSEE BY HOLDING AS UNDER:- I HAVE CAREFULLY CONSIDERED THE REASONS GIVEN BY A.O. AND THE SUBMISSIONS OF APPELLANT. AFTER GOING THROUGH THE S AME I AGREE WITH THE CONTENTION OF APPELLANT THAT THE ACTION OF A.O . IN MAKING ADDITION OF RS.5 82 927/- BY PASSING ORDER U/S. 154 OF THE A CT HAS RESULTED IN DOUBLE TAXATION AS ASSESSEE HAS CLAIMED DEDUCTION I N PROFIT AND LOSS ACCOUNT ONLY IN RESPECT OF THE NET AMOUNT. I FIND T HAT GROSS INTEREST EXPENDITURE IS OF RS.44 96 099/- AND AFTER SETTING OFF INTEREST INCOME OF RS.5 82 927/- APPELLANT CLAIMED NET AMOUNT AS D EDUCTION. IN THE ORIGINAL; ASSESSMENT ORDER THE A.O. HAS CORRECTLY DEDUCTED INTEREST INCOME OF RS.5 82 927/- FROM THE BUSINESS INCOME AS THIS AMOUNT ALREADY STANDS INCLUDED IN BUSINESS INCOME BY WAY O F REDUCTION OF INTEREST EXPENSES. IN THE ORIGINAL ORDER AFTER MAK ING ABOVE DEDUCTION THE SAME IS ALREADY TAXED SEPARATELY UND ER THE HEAD OF INCOME FROM OTHER SOURCES AND THUS NO FURTHER ADDI TION IS CALLED FOR. HENCE THE ADDITION OF RS.5 82 927/- IS HEREBY DELE TED. 6. AGAINST THIS ORDER OF LD. CIT (A) THE REVENUE I S NOW IN APPEAL BEFORE US. 7. BEFORE US THE LD. D.R. RELIED ON THE ORDER OF A .O. ITA NO 2193 /AHD/2009 A.YR.. 2003 -04 4 8. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATER IAL ON RECORD. THE FACTUAL POSITION IS THAT ASSESSEE HAD EARNED INTERE ST ON FIXED DEPOSIT OF RS.5 82 927/- AND NETTED IT OFF WITH THE GROSS INT EREST EXPENSES OF RS.44 96 099/- AND THUS RS.39 13 172/- WAS CLAIMED AS INTEREST EXPENSES WHILE PASSING THE ORDER U/S.143(3) A.O. DEDUCTED IN TEREST ON F.D. AMOUNTING TO RS.5 82 927/- FROM BUSINESS INCOME AND TAXED UNDER THE HEAD OF INCOME FROM OTHER SOURCES. THUS INTEREST AL READY STANDS INCLUDED IN BUSINESS INCOME BY WAY OF REDUCTION OF INTEREST EXPENSES. CIT (A) HAS GIVEN A FINDING THAT IN THE ORIGINAL ASSESSMENT OR DER INTEREST INCOME OF RS.5 82 927/- WAS CORRECTLY DEDUCTED FROM BUSINESS INCOME AS IT ALREADY STANDS INCLUDED IN BUSINESS INCOME BY WAY OF REDUCT ION OF INTEREST EXPENSES. THUS NO FURTHER ADDITION WAS CALLED FOR IN THE ORDER U/S.154 THE ACTION OF THE A.O. IN MAKING ADDITION OF RS.5 82 92 7/- BY PASSING ORDER U/S. 154 HAS RESULTED IN DOUBLE TAXATION. THIS FINDING C OULD NOT BE CONTROVERTED BY THE REVENUE BEFORE US. IN VIEW OF THESE FACTS WE FIND NO REASON TO INTERFERE TO THE ORDER OF CIT (A) AND WE ACCORDINGL Y UPHOLD HIS ORDER. 9. THUS THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 27 - 7 - 201 2. SD/- SD/- (MUKUL KUMAR SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACC OUNTANT MEMBER AHMEDABAD. S.A.PATKI. ITA NO 2193 /AHD/2009 A.YR.. 2003 -04 5 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-V SURAT. 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHMEDABAD. 1.DATE OF DICTATION 26 - 7 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 26 / 7 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..