Bhaichand Amoluk Consultancy Services ... vs Assessee

श्री जोगिन्दर स हिं , न्याययक सदस्य, एवुं श्री डी. करुणाकर राव, ऱेखा सदस्य के समक्ष

BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER

आमकय अऩीर सं. / ITA no.319/Mum./2013 (ननधधायण वषा / Assessment Year : 2009-10)

Bhaichand Amoluk Consultancy Services Pvt. Ltd., 2nd Floor Commercial Union House ................. अऩीरधथी / 9, Wallace Street, Fort Appellant Mumbai 400 020 PAN - AAACB6034A

फनधभ v/s

Asstt. Commissioner of Income Tax-1(1) Room no.533, Aayakar Bhavan ................... प्रत्मथी / 101, M.K. Road, Mumbai 400 020 Respondent

ननधधारयती की ओय से / Assessee by : Shri D.V. Lakhani यधजस्व की ओय से / Revenue by : Shri Vijay Kumar Bora

सन ु वधई की तधयीख / आदे श घोषणध की तधयीख / Date of Hearing - 09.04.2015 Date of Order - 20.5.2015

ORDER

डी. करुणाकर राव, ऱेखा सदस्य के द्वारा / PER D. KARUNAKARA RAO, A.M.

The present appeal preferred by the assessee is directed against

the impugned order dated 23rd October 2012, passed by the Bhaichand Amoluk Consultancy Services Pvt. Ltd.

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Commissioner (Appeals)-I, Mumbai, for the assessment year 2009-10.

Following grounds have been raised by the assessee:-

"1. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in confirming the disallowance on account of interest of ` 38,08,000. The appellant prays that the addition made by the Assessing Officer and confirmed by the learned CIT(A) is not justified and be deleted.

2. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in granting part relief as regards the disallowance u/s 14A is concerned. The appellant prays that the original addition made by the Assessing Officer u/s 14A amounting to ` 70,64,684 and the part relief given by eh learned CIT(A) is not justified. The appellant prays that the addition made by the Assessing Officer and confirmed by the learned CIT(A) may be deleted.

3. On the facts and in the circumstances of the case the appellant prays that the disallowance u/s 14A be restricted to ` 6,17,100 and the disallowance made by the Assessing Officer and confirmed by the learned CIT(A) may be deleted.

4. On the facts and in the circumstances of the case and in law the learned CIT(A) has erred in confirming the levy of interest u/s 234B at ` 9,17,922. The appellant denies the liability of payment of interest under section 234B. On the facts and circumstances of the case the appellant submit that levy of interest under section 234B at ` 9,17,922 is not justified and be deleted."

2. The relevant facts of the case are that the assessee is engaged in

the business of trading in shares and securities and filed its return of

income showing income at ` 1,10,61,975. During the assessment

proceedings under section 143(3) of the Act, there were enquiries into

accounts of the assessee and the Assessing Officer eventually

computed the assessed income at ` 1,50,35,480. The increase in the

total income is on account of couple of additions made by the Assessing Bhaichand Amoluk Consultancy Services Pvt. Ltd.

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Officer. The Assessing Officer made an addition of ` 38,08,000, on

account of interest allocated for investment. He did not allow the claim

of the assessee which relates to calculation of interest under section

14A r/w rule 8D of the Income Tax Rules, 1962.

3. During the first appellate proceedings, the assessee succeeded

partly. Being aggrieved by the said order of the learned CIT(A), the

assessee is in appeal before us with the grounds mentioned above. The

ground-wise adjudication is given in the following paragraphs:-

4. Ground no.1, relates to confirmation of addition of ` 38,08,000 on

account of disallowance of interest.

5. Before us, the learned Counsel for the assessee informed that

identical issue came up for adjudication before the Tribunal in

assessee's own case for the assessment year 2003-04 and 2004-05, a

copy of which is placed in the paper book. He submitted that since the

assessee had adequate interest free sources of income for investment,

therefore, the disallowance of interest is uncalled for. For this

proposition, he relied on the decision of the Hon'ble Jurisdictional High

Court in Reliance Utilities and Power Ltd., [2009] 313 ITR 340 (Bom.).

Bringing our attention to the contents of Para-5.2 of the order dated

23rd July 2010 passed by the Tribunal, in ITA no.523 and 524/Mum./ Bhaichand Amoluk Consultancy Services Pvt. Ltd.

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2008, for the assessment year 2003-04 and 2004-05 cited supra, the

learned Counsel for the assessee submitted that the issues raised were

remanded to the file of the Assessing Officer for passing fresh orders

after necessary examination of the assessee's claim. Further, he

brought our attention to the contents of Para-3.2 of the impugned

order and submitted that the learned CIT(A) referred to the decision of

the Tribunal cited supra, however, she has not appreciated the facts of

the present case. The fact of not passing a speaking order giving the

relevant information about the availability of own funds and

applicability of the decision of the Hon'ble Jurisdictional High Court

cited supra were also highlighted.

6. On the other hand, the learned Departmental Representative

dutifully relied on the orders of the authorities below.

7. After hearing the rival contentions and on a perusal of the

impugned order passed by the learned CIT(A), we find that the

contents of Para-3.2 of the impugned order does not make any

reference to the assessee's funds qua the borrowed funds and the

applicability of the cited binding judgment of the Hon'ble Jurisdictional

High Court. As prayed by the learned Counsel for the assessee, we are

of the considered opinion that the mater needs to be restored for want

of speaking order. Consequently, we set aside the impugned order Bhaichand Amoluk Consultancy Services Pvt. Ltd.

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passed by the learned CIT(A) and restore the issue back to the file of

the Assessing Officer for denovo adjudication by passing a speaking

order after providing reasonable opportunity of being heard to the

assessee. Accordingly, ground no.1, is allowed for statistical purposes.

8. Ground no.2, relates to disallowance of interest under section 14A

of the Act.

9. Before us, at the outset, the learned Counsel for the assessee

mentioned that grounds no.2 and 3 are to be remanded considering the

nexus of interest segment commonly attracting to the provisions of

section 36(1) as well as section 14A. The learned Departmental

Representative relied on the order of the learned CIT(A).

10. We have heard both the parties. Since ground no.1 is restored to

the file of the Assessing Officer, therefore, we set aside the impugned

order passed by the learned CIT(A) on this issue and restore ground

no.2 and 3, back to the file of the Assessing Officer and direct him to

adjudicate these ground no.2 and 3 afresh simultaneously. While

adjudicating these grounds, the Assessing Officer may note the

assessee's request for restricting the disallowance to ` 7,11,585 as

against ` 6,17,100, as mentioned in ground no.3 of the appeal before

us. Accordingly, ground no.2 and 3, are allowed for statistical purposes.

Bhaichand Amoluk Consultancy Services Pvt. Ltd.

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10. ऩरयणधभत् ननधधारयती की अऩीर सधंख्मकीम उद्दे श्म के लरए स्वीकृत की जधती है ।

10. In the result, assessee's appeal is allowed for statistical purpose.

Order pronounced in the open Court on 20th May 2015.

Sd/- Sd/- जोगिन्दर स हिं डी. करुणाकर राव न्याययक सदस्य ऱेखा सदस्य JOGINDER SINGH D. KARUNAKARA RAO JUDICIAL MEMBER ACCOUNTANT MEMBER

मुंबई MUMBAI, ददनाुंक DATED: 20.5.2015

आदे श की प्रनतलरपऩ अग्रेपषत / Copy of the order forwarded to:

(1) ननधधारयती / The Assessee;

(2) यधजस्व / The Revenue;

(3) आमकय आमुक्त(अऩीर) / The CIT(A);

(4) आमकय आमुक्त / The CIT, Mumbai City concerned; (5) पवबधगीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / The DR, ITAT, Mumbai; (6) गधर्ा पधईर / Guard file.

सत्मधपऩत प्रनत / True Copy आदे शधनुसधय / By Order प्रदीऩ जे. चौधयी / Pradeep J. Chowdhury वरयष्ठ ननजी सधचव / Sr. Private Secretary उऩ / सहधमक ऩंजीकधय / (Dy./Asstt. Registrar) आमकय अऩीरीम अधधकयण, भुंफई / ITAT, Mumbai