CHEMTEX ENGINEERING OF INDIA LTD, MUMBAI v. ITO 10(3)(1), MUMBAI

ITA 582/MUM/2010 | 2003-2004
Pronouncement Date: 22-12-2010 | Result: Allowed

Appeal Details

RSA Number 58219914 RSA 2010
Assessee PAN AABCC2061M
Bench Mumbai
Appeal Number ITA 582/MUM/2010
Duration Of Justice 11 month(s)
Appellant CHEMTEX ENGINEERING OF INDIA LTD, MUMBAI
Respondent ITO 10(3)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 22-12-2010
Date Of Final Hearing 14-12-2010
Next Hearing Date 14-12-2010
Assessment Year 2003-2004
Appeal Filed On 22-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH MUMBAI BEFORE SHRI R.S. PADVEKAR JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO. 582/MUM/2010 (ASSESSMENT YEAR: 2003-04) CHEMTEX ENGINEERING OF INDIA LTD. INCOME TAX OFFICE R - 10(3)(1) CHEMTEX HOUSE HIRANANDANI AAYAKAR BHAVAN M.K. ROA D GARDENS MAIN STREET POWAI VS. MUMBAI 400020 MUMBAI 400076 PAN - AABCC 2061 M APPELLANT RESPONDENT APPELLANT BY: SHRI H.P. SUTAR RESPONDENT BY: SHRI SURENDRA KUMAR O R D E R PER B. RAM AKOTAIAH A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)- XXII MUMBAI DATED 11.11.2009 CONFIRMING THE PENALTY UNDE R SECTION 271(1)(C) LEVIED BY THE A.O. ON DISALLOWANCE OF INTEREST OF ` 19 26 000/-. 2. BRIEFLY STATED DURING THE ASSESSMENT PROCEEDINGS T HE A.O. MADE AN ADDITION OF ` 19 26 000/- ON ACCOUNT OF INTEREST UNDER SECTION 36 (1)(III) HOLDING THAT THE ASSESSEE HAS DIVERTED INTEREST BEA RING FUNDS FOR NON- BUSINESS PURPOSES BY GIVING INTEREST FREE LOANS TO ITS SUBSIDIARIES. HAVING THE DISALLOWANCE CONFIRMED BY THE CIT(A) THE A.O. F INALISED THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) AND LEVIED PENA LTY HOLDING THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME AND TH E CIT(A) CONFIRMED THE SAME STATING THAT THE CLAIM IS NOT FOUND BONAFIDE. 3. AT THE OUTSET THE LEARNED COUNSEL SUBMITTED THAT TH E ISSUE IN QUANTUM PROCEEDINGS HAVE BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY ALLOWING THE AMOUNT BY THE ITAT IN ITA NO. 6464/MUM /2008 DATED 15 TH JANUARY 2010 HOLDING THAT ADVANCING INTEREST FREE F UNDS TO ITS 100% SUBSIDIARY IS FOR THE PURPOSE OF COMMERCIAL EXPEDIE NCY FOLLOWING THE DECISION OF THE APEX COURT IN THE CASE OF S.A. BUIL DERS 288 ITR 1. SINCE THE ADDITION ON THE BASIS OF WHICH THE PENALTY WAS LEV IED WAS NO LONGER ITA NO. 582/MUM/2010 CHEMTEX ENGINEERING OF INDIA LTD. 2 SUSTAINED THERE IS NO QUESTION OF LEVYING PENALTY U NDER SECTION 271(1)(C). IN VIEW OF THIS THE PENALTY IS CANCELLED. 4. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER 2010. SD/- SD/- (R.S. PADVEKAR) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 22 ND DECEMBER 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXII MUMBAI 4. THE CIT X MUMBAI CITY 5. THE DR C BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.