Chintan Babaria, Mumbai vs Assessee
- CitationI.T.A. No.6163/Mum/2012
Ratio decidendi
The rule this decision rests on
The interest expenditure on a loan taken for the specific purpose of acquiring trucks and lorries, where the assessee's own funds exceed its loan funds and the claimed interest is shown in the financial statements to relate to that loan, is not to be disallowed under section 14A of the Income Tax Act, 1961. Administrative expenses attributable to exempt income are disallowed under section 14A where the assessee does not press its challenge to that disallowance.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BEFORE HON'BLE S/SHRI H.L. KARWA, PRESIDENT AND B.R.BASKARAN (AM) सव ी एच.एल. कावा, अ य एवं बी.आर.बा करन, लेखा सद य आयकर अपील सं./I.T.A. No.6163/Mum/2012 ( नधारण वष / Assessment Year :2009-10)
Chintan Babaria, बनाम/ Jt. Commissioner of Income Tax 98, Princes Street, Vs. -14(3), Mansoor Building, Earnest House, 3rd Floor, Mumbai-400002 Nariman Point, Mumbai-400021 (अपीलाथ /Appellant) .. ( यथ / Respondent)
थायी ले ख ा सं . /जीआइआर सं . /PAN/GIRNo. :AICPB4114G
अपीलाथ ओर से / Appellant by : Shri Nishit Gandhi यथ क ओर से/Respondent by Shri Neil Philip
सन ु वाई क तार ख / Date of Hearing :31.12.2014 घोषणा क तार ख /Date of Pronouncement : 16.01.2015
आदे श / O R D E R
Per B.R.BASKARAN, Accountant Member:
The assessee has filed this appeal challenging the order dated 25- 06-2012 passed by ld CIT(A)-25, Mumbai and it relates to the assessment year 2009-10. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the disallowance made u/s 14A of the Act.
2. We have heard the parties and perused the record. The contention of the assessee is that his own funds are in excess of the loan funds. Further the loan funds have been taken for specific purposes, i.e., for purchase of trucks and lorries, since the assessee is a transport operator. He further submitted that the interest expenses claimed by the assessee relate to the loan taken for purchase of trucks and lorries. Accordingly, he 6163/M/2012 2
submitted that there is no requirement to make any disallowance out of interest expenditure u/s 14A of the Act.
3. A perusal of the financial statements filed by the assessee in the paper book would show that the assessee has claimed interest expenses relating to the loan taken for purchase of trucks and lorries. Hence we find merit in the submissions of the assessee. Accordingly, we hold that the interest expenditure is not required to be disallowed u/s 14A of the Act. With regard to the disallowance of administrative expenses, the Ld A.R did not press the same in view of the smallness of the amount. Accordingly we confirm the disallowance of administrative expenses made u/s 14A of the Act. The order of Ld CIT(A) stands modified accordingly.
4. In the result, the appeal of the assessee is partly allowed.
The above order was pronounced in the open court on 16 th Jan,2015.
घोषणा खुले यायालय म दनांकः 16 th Jan 2015 को क गई ।
sd sd
(एच.एल. कावा/ H.L. KARWA) (बी.आर. बा करन,/ B.R. BASKARAN) अ य / PRESIDENT लेखा सद य/Accountant Member मब ुं ई Mumbai: 16th Jan, 2015.
व. न.स./ SRL , Sr. PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु त(अपील) / The CIT(A)- concerned
4. आयकर आयु त / CIT concerned
5. वभागीय त न ध, आयकर अपील य अ धकरण, मब ुं ई / DR, ITAT, Mumbai concerned
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER, true copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free