N H SECURITIES LTD, v. ASST CIT 40,

MA 426/MUM/2011 | 2002-2003
Pronouncement Date: 16-11-2011 | Result: Allowed

Appeal Details

RSA Number 42619924 RSA 2011
Assessee PAN AAACS7140Q
Bench Mumbai
Appeal Number MA 426/MUM/2011
Duration Of Justice 3 month(s) 4 day(s)
Appellant N H SECURITIES LTD,
Respondent ASST CIT 40,
Appeal Type Miscellaneous Application
Pronouncement Date 16-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 16-11-2011
Assessment Year 2002-2003
Appeal Filed On 11-08-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B MUMBAI BEFORE SHRI D.K. AGARWAL (AM) & SHRI T.R. SOOD (A M) M.A. NO. 426/MUM/2011 (ARISING OUT OF I.T.A. NO. 78/MUM/2009) (A.Y. 2002-03) N.H. SECURITIES LTD. BHUPEN CHAMBERS GR. FLOOR 9 DALAL STREET FORT MUMBAI-400 023. PAN: AAACS 7140 Q VS. ASST. COMMR. OF INCOME-TAX CENTRAL CIRCLE 40 MUMBAI. APPLICANT RESPONDENT APPLICANT BY SHRI RAJIV KHANDELWAL. RESPONDENT BY SHRI P . DANIEL. DATE OF HEARING 11 - 11 - 2011 DATE OF PRONOUNCEMENT 16 - 11 - 2011 O R D E R PER D.K. AGARWAL JM : THIS MISC. APPLICATION FILED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER OF THE TRIBUNAL DATED 11-05-2011 IN ITA NO.78/MUM/2009 FOR ASSESSMENT YEAR 2002-03. 2. IN THE MISC. APPLICATION DATED NIL THE ASSESSEE INTER ALIA STATED THAT THE TRIBUNAL WHILE DISPOSING OF GROUND NO. 2 OF THE AP PEAL HAS DIRECTED THE AO TO ALLOW INTEREST OF 3 65 59 646/- I.E. BY REDUCING RS .4 80 00 000/- FROM THE AMOUNT OF RS.8 45 59 646/-. IT WAS FURTHER SUBMITTE D THAT THE TRIBUNAL OUGHT NOT TO HAVE GIVEN THE DIRECTION TO ALLOW RS.8 45 59 646 /- REDUCED BY M.A.NO.426/M/2011 NH SECURITIES LTD. 2 RS.4 80 00 000/- INASMUCH AS THE AO HAS ALREADY DIS ALLOWED THE SAID RS.4 80 00 000/- WHILE ALLOWING RS.9 73 25 814/- WH ICH IS INTEREST DEBITED TO THE P & L ACCOUNT FOR THE PERIOD 01-04-2001 TO 30-09-20 01. THE DISALLOWANCE OF RS.4 80 00 000/- IS ON THE SUM OF RS.30 CRORES @ 16 % FOR THE FULL YEAR PERIOD ALTHOUGH THE AO CONSIDERED RS.9 73 25 814/- WHICH I S THE INTEREST DEBITED TO THE P & L ACCOUNT FOR THE PERIOD 01-04-2001 TO 30-09-20 01. IT WAS THEREFORE SUBMITTED THAT THE ORDER PASSED BY THE TRIBUNAL BE AMENDED TO ALLOW THE ENTIRE AMOUNT OF INTEREST AS CLAIMED BY THE ASSESSEE. 3. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED IN THE MISC. APPL ICATION FURTHER SUBMITS THAT IN PARA 5 OF THE ASSESSMENT ORDER THE AO ON THE BAS IS OF ASSESSEES LETTER DATED 15-02-2005 HAS DISALLOWED THE INTEREST ON RS.30 CRO RES AMOUNTING TO RS.4 80 00 000/- WHICH WAS ALREADY DISALLOWED BY TH E ASSESSEE AND ON THIS ISSUE THERE IS NO DISPUTE. HE FURTHER SUBMITS THAT IN PAR A 6 OF THE ASSESSMENT ORDER THE AO MENTIONED THAT IN THE COMPUTATION OF INCOME THE ASSESSEE HAS FURTHER CLAIMED INTEREST OF RS.8 47 77 146/- AS INTEREST LI ABILITY NOT PROVIDED IN THE BOOKS OF ACCOUNT. THE AO DISALLOWED THE SAME ON THE GROUN D THAT THE ASSESSEE HAS NOT PASSED NECESSARY ENTRIES IN THE BOOKS OF ACCOUNT. H E FURTHER SUBMITS THAT ON APPEAL THE LD. CIT(A) CONFIRMED THE DISALLOWANCE MA DE BY THE AO. HE FURTHER SUBMITS THAT AGAINST THE SAID ORDER THE ASSESSEE HA S RAISED A SPECIFIC GROUND NO. 2 BEFORE THE TRIBUNAL CHALLENGING THE SUSTENANCE OF DISALLOWANCE OF RS.8 47 77 146/-. HE FURTHER SUBMITS THAT THE ABOVE LIABILITY OF INTEREST WAS CLAIMED IN THE RETURN THROUGH CHART OF COMPUTATION OF INCOME APPEARING AT PAGE 1 OF THE ASSESSEES PAPER BOOK SUPPORTED BY COPY OF BANK STATEMENTS APPEARING AT PAGES 50 & 51 OF THE ASSESSEES PAPER BOOK. HE F URTHER SUBMITS THAT SINCE THE AMOUNT WAS BORROWED BY THE ASSESSEE FOR BUSINESS PU RPOSE AND AMOUNT OF M.A.NO.426/M/2011 NH SECURITIES LTD. 3 INTEREST WAS DEBITED BY THE BANK IN THE ASSESSEES ACCOUNT THE SAID INTEREST IS ALLOWABLE IN VIEW OF THE DECISION OF THE TRIBUNAL I N THE CASE OF CHAT COMPUTER PVT. LTD. VS. DCIT IN ITA NO.4818/MUM/2007 FOR ASSE SSMENT YEAR 2002-03 DATED 30-12-2010. WITH REGARD TO THE DISALLOWANCE OF RS.4 80 00 000/- THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT SINCE IT WAS DISALLOW ED BY THE ASSESSEE ITSELF AND ALSO BY THE AO SEPARATELY THEREFORE REDUCING THE SAME AMOUNT FROM THE SEPARATE CLAIM OF INTEREST OF RS.8 45 59 646/- AMOU NTS TO DOUBLE DISALLOWANCE AND HENCE TO THIS EXTENT THERE IS A MISTAKE IN THE ORDER OF THE TRIBUNAL WHICH MAY BE RECTIFIED. 4. ON THE OTHER HAND THE LD. D.R. SUBMITS THAT SIN CE RS.4 80 00 000/- HAS BEEN DISALLOWED FOR THE PERIOD 01-04-2001 TO 30-09- 2001 THEREFORE FOR THE REMAINING PERIOD THE SAME AMOUNT HAS TO BE DISALLOW ED AND HENCE THERE IS NO MISTAKE IN THE ORDER PASSED BY THE TRIBUNAL AND TH EREFORE THE ORDER PASSED BY THE TRIBUNAL BE UPHELD. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE DISALLOWANCES OF INTEREST OF RS.4 80 00 000/- AND RS.8 45 59 646/- ( ENTRY IN BANK STATEMENT FOR THE PERIOD 1-4-2001 TO 31-12-2001 FOR RS.4 48 61 46 4/- + ENTRY FOR THE PERIOD 1-1-2002 TO 30-03-2002 FOR RS.3 96 98 182/-) ARE T WO DIFFERENT ISSUES INASMUCH AS IN THE ASSESSMENT ORDER THE AO HAS CONSIDERED AN D DISALLOWED THE ABOVE AMOUNTS SEPARATELY. WE FURTHER FIND THAT IN GROUND NO. 2 WHICH IS UNDER CONSIDERATION BEFORE US THE ASSESSEE HAS NOT CHALL ENGED THE SUSTENANCE OF DISALLOWANCE OF RS.4 80 00 000/- AS IT HAS ALREADY BEEN DISALLOWED BY THE ASSESSEE ITSELF AND ASSESSED BY THE AO. THE ONLY DI SPUTE IS SUSTENANCE OF DISALLOWANCE OF RS.8 47 77 146/- WHICH CONSISTS OF INTEREST AS PER BANK M.A.NO.426/M/2011 NH SECURITIES LTD. 4 STATEMENT RS.8 45 59 646/- AND OTHER ITEM OF INTERE ST RS.2 12 500/-. THE LATTER AMOUNT OF RS.2 12 500/- HAS BEEN CONSIDERED SEPARA TELY BY THE TRIBUNAL IN PARA 17 OF ITS ORDER. THEREFORE AT PRESENT IT IS ALSO NOT IN DISPUTE BEFORE US. WE ARE CONCERNED WITH THE DISPUTE OF RS.8 45 59 646/-. IN PARA 16 OF THE ORDER OF THE TRIBUNAL DATED 11-05-2011 THE TRIBUNAL WHILE FOLL OWING THE ORDER OF THE TRIBUNAL IN THE CASE OF CHAT COMPUTER PVT. LTD. (SUPRA) HAS HELD THAT IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE REVENUE WE ARE OF THE VIEW THAT IN VIEW OF THE BANK STATEMENT THE ASSESSEE IS ENTITLED TO THE DEDUCTION OF INTEREST AS CLAIMED BY IT. IT WAS FURTHER HELD BY T HE TRIBUNAL THAT SINCE THE ASSESSEE HAS ITSELF DISALLOWED INTEREST OF RS.4 80 00 000/- BEING NOT UTILIZED FOR THE PURPOSE OF BUSINESS THE AO IS DIRECTED TO ALLO W THE BALANCE AMOUNT OF INTEREST OF RS.3 65 59 646/-. SINCE RS.4 80 00 000/ - IS THE AMOUNT OF INTEREST ON RS.30 CRORES FOR THE FULL YEAR THEREFORE WE DO NO T FIND ANY MERIT IN THE PLEA OF THE LD. D.R. THAT THE SAID SUM OF RS.4 80 00 000/- IS FOR SIX MONTHS ONLY. THIS BEING SO WE ARE OF THE VIEW THAT THERE IS AN APPAR ENT MISTAKE IN PARA 16 OF THE ORDER OF THE TRIBUNAL DATED 11-05-2011 IN TERMS OF SEC.254(2) OF THE ACT IN DIRECTING THE AO TO ALLOW BALANCE AMOUNT OF INTERES T OF RS.3 65 59 646/- AS THE SUM OF RS.4 80 00 000/- IS NOT PART OF THE TOTAL SU M OF RS.8 45 59 646/- AND ACCORDINGLY WE DIRECT THE AO TO ALLOW THE ENTIRE A MOUNT OF INTEREST AS PER BANK STATEMENT RS.8 45 59 646/- WITHOUT REDUCING THE AMO UNT OF RS.4 80 00 000/-. THE MISC. APPLICATION FILED BY THE ASSESSEE IS THE REFORE ALLOWED. 6. IN THE RESULT THE MISC. APPLICATION IS ALLOWED. ORDER PRONOUNCED ON THE 16TH DAY OF NOVEMBER 2011. SD/- SD/- (T.R. SOOD) (D.K. AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 16TH NOVEMBER 2011. M.A.NO.426/M/2011 NH SECURITIES LTD. 5 NG: COPY TO : 1. ASSESSEE. 2. DEPARTMENT. 3 CIT(A) MUMBAI CONCERNED. 4 CIT CITY MUMBAI CONCERNED. 5.DR B BENCH MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER ASST.REGISTRAR ITAT MUMBAI. M.A.NO.426/M/2011 NH SECURITIES LTD. 6 DETAILS DATE INITIALS DESIGNA TION 1. DRAFT DICTATED ON 14-11-2011 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 15-11-2011 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/ AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER