S.Kumar Enterprises (Synfabs) Ltd, ... vs Assessee

सर्वश्री आय.सी.शभमव, रेखम सदस्म एवुं श्री संजम गगव, न्ममयमक सदस्म BEFORE SHRI R.C.SHARMA, AM & SHRI SANJAY GARG, JM आमकय अऩीर सं./ITA No.1369&1370/Mum/2012 ( नििाारण वषा / Assessment Year :1998-99 & 1999-2000) S.Kumar Enterprises Vs. ITO 4(3)(4), Mumbai (Synfabs) Ltd., Niranjan, Ground Floor, 99, Marine Drive, Mumbai-400002 स्थममी रेखम सं ./ जीआइआय सं ./ PAN/GIR No. : AABCS 4905 Q (अऩीरमथी /Appellant) .. (प्रत्मथी / Respondent)

यनधमवरयती की ओर से /Assessee by : Shri D.P.Shroff यमजस्र् की ओर से /Revenue by : Shri Neil Philip

सुनर्मई की तमयीख / Date of Hearing : 25/03/2015 घोषणम की तमयीख/Date of Pronouncement 08/04/2015

आदे श / O R D E R

PER R.C.SHARMA (A.M):

These are the appeals filed by the assessee against the order of

CIT(A), for the A.Y.1998-99 & 1999-2000, in the matter of order passed

u/s.143(3) r.w.s147 of the I.T.Act.

2. The assessee is aggrieved for disallowance of interest in respect of

advances given by it.

3. Ld. AR placed on record order of the ITAT Mumbai Bench in

assessee's own case for the assessment year 2000-2001, wherein the

issue regarding disallowance of interest was decided in favour of the

assessee. Relevant para 14 of the order dated 30-9-2008, reads as under

:-

2

ITA Nos.1369&1370/12

"14. We have heard the learned representatives of the parties and perused the record. We find that the learned CIT(A) examined the submissions of the assessee as well as the facts on record and the case laws relied upon by the assessee thoroughly before coming to a conclusion that the appellant had paid interest of Rs.1.35 crores on the loan of Rs.7.50 crores, being 18% p.a. to M/s S.Kumar Sufabs Ltd., which was taken by the assessee company during the A.Y.1994-95 for the purpose of business. During the AY 94-95, the assessee company did not invest any amount in the shares. Hence, the Assessing Officer was not justified in invoking the provisions of Section 14A of the Act. Therefore, in the totality of the facts and circumstances case, we find that there is no infirmity in the action of the CIT(A) in directing the Assessing Officer to delete the addition made of Rs.1,35,70,931/- u/s.14A r.w.s.36(1)(iii) of the Act. We, therefore, uphold the order of the CIT(A) on this issue and dismiss the ground raised by the revenue."

4. Ld. AR also placed on record the details of loans and advances

given as on 31-3-1998 and 31-3-1999 along with details of interest paid

during the years, and contended that no disallowance is warranted

u/s.14A r.w. Section 36(1)(iii) in terms of decision by ITAT in assessee's

own case.

5. We have considered rival contentions and found from the record

that disallowance of interest in both the years under consideration was

made on account of advances given to associate concerns. The issue

with regard to disallowance of such interest has been considered by the

Tribunal in assessee's own case in the immediate succeeding

assessment year 2000-2001 vide order dated 23-9-2008 and was decided

in favour of the assessee. As the facts and circumstances during the

years under consideration was alleged to be same, in the interest of

justice, we restore the matter back to the file of AO for deciding afresh

keeping in view the observation made by CIT(A) vis-à-vis Tribunal in the

assessment year 2000-01 while deciding the issue of disallowance of 3 ITA Nos.1369&1370/12

interest u/s.14A read with Section 36(1)(iii) of the I.T. Act, in favour of

assessee. We direct accordingly.

6. In the result, both appeals of the assessee are allowed in part for statistical purposes.

Order pronounced in the open court on this 08/04/2015.

Sd/- Sd/- (संजम गगव) (आय.सी.शभमव) (SANJAY GARG) (R.C.SHARMA) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER भंफ ु ई Mumbai; ददनमंक Dated 08/04/2015 प्र.कु.मभ/pkm, यन.स/ PS

आदे श की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to :

1. अऩीरमथी / The Appellant

2. प्रत्मथी / The Respondent.

3. आमकय आमुक्त(अऩीर) / The CIT(A), Mumbai.

4. आमकय आमुक्त / CIT आदे शािसार/ BY ORDER,

5. वर्बमगीम प्रयतयनधध, आमकय अऩीरीम अधधकयण, भंफ ु ई / DR, ITAT, Mumbai

6. गमर्व पमईर / Guard file.

उप/सहायक पुंजीकार सत्ममवऩत प्रयत //True Copy// (Asstt. Registrar) आयकर अपीऱीय अधिकरण, भुंफई / ITAT, Mumbai