Annapurna Shrikant Tibrewala v. The Asst. Commissioner, Central Circle-43, Mumbai - 2016-LL-1020-20

Citation	2016-LL-1020-20
Appellant Name	Annapurna Shrikant Tibrewala
Respondent Name	The Asst. Commissioner, Central Circle-43, Mumbai
Court	ITAT-Mumbai
Relevant Act	Income-tax
Date of Order	20/10/2016
Assessment Year	2009-10
Judgment	View Judgment
Keyword Tags	disallowance of interest • exempted income • interest income • interest paid
Bot Summary:	Briefly stated facts are that the AO during the course of the assessment proceedings noticed from the statement of account that the assessee has derived dividend income of Rs.5,37,941/-, which was claimed as exempt u/s 10(38) of the Act. Aggrieved, the assessee preferred appeal before the CIT, who also confirmed the action of the AO 2 ITA No.4059/Mum/2013 without going into the facts of the case. Aggrieved, now the assessee is in second appeal before the Tribunal. The learned Counsel for the assessee first of all taken us through the assessee s accounts filed before the AO during the course of assessment proceedings. In view of this, the learned Counsel for the assessee stated that the investment in shares to the tune of Rs.9,18,68,280/- and the assessee s own capital is about Rs.7,14,65,709/-. In view of this, the learned Counsel for the assessee clearly stated that this secured loan from Standard Chartered Bank Ltd. was given to Roha Dye Chem Pvt. Ltd. from where the assessee has earned interest income at Rs.20,76,618/- and paid tax on the same. The learned Counsel for the assessee fully explained the nexus between the loan taken from the Standard Chartered Bank Ltd. and the amount advanced to Roha Dye Chem Pvt. Ltd. When these facts were confronted, the learned Sr. DR could not find any fault.

IN INCOME TAX APPELLATE TRIBUNAL BENCH, MUMBAI BEFORE SRI MAHAVIR SINGH, JM AND SRI RAMIT KOCHAR, AM ITA No.4059/Mum/2013 (A.Y:2009-10) Smt. Annapurna Shrikant Tibrewala, Vs. Asst. Commissioner, 504, Panchasheel Gokuldham CHS, Central Circle -43, Aayakar Gokuldham Mulund, Link Road, Bhavan, Mumbai 400 020 Goregaon (East), Mumbai 400 063 PAN: ABWPT 5218 N Appellant .. Respondent Appellant by .. Shri Shenal Shah, AR Respondent by .. Shri A. K. Dhondial, Sr. DR Date of hearing .. 20-10-2016 Date of pronouncement .. 20- 10- 2016 ORDER PER MAHAVIR SINGH, JM: This appeal by Assessee is arising out of order of CIT-(A)-36, Mumbai in appeal No.CIT(A)-36/AP-88/12-13 dated 11-03-2013. Assessment was framed by ACIT, Central Circle-43, Mumbai for assessment year 2009-10 vide his order dated 16-12-2011 u/s 143(3) of Income Tax Act, 1961 (hereinafter Act ). 2. only issue in this appeal of assessee is against order of CIT (A), Mumbai in confirming disallowance of expenditure relatable to exempted income by AO amounting to Rs.18,23,244/- by invoking provisions of section 14A of Act read with Rule 8D of Income Tax Rules, 1962 (hereinafter Rules ). 3. Briefly stated facts are that AO during course of assessment proceedings noticed from statement of account that assessee has derived dividend income of Rs.5,37,941/-, which was claimed as exempt u/s 10(38) of Act. According to AO, no expenses have been attributed against this exempt income and accordingly, he by invoking provisions of Section 14A of Act read with Rule 8D of Rules made disallowance of interest and average of value of investment at Rs.18,23,244/-. Aggrieved, assessee preferred appeal before CIT (A), who also confirmed action of AO 2 ITA No.4059/Mum/2013 without going into facts of case. Aggrieved, now assessee is in second appeal before Tribunal. 4. We have heard learned Sr. DR and gone through facts and circumstances of case. Before us, learned Counsel for assessee first of all taken us through assessee s accounts filed before AO during course of assessment proceedings. He has taken us through balance as on 31-03- 2009 wherein secured loan from Standard Chartered Bank Ltd. was taken of Rs.1,41,67,128/- and on this, interest paid was Rs.17,24,096/-. learned Counsel for assessee stated that this secured loan was advanced to Roha Dye Chem Pvt. Ltd. amounting to Rs.1.50 crores on 26-05-2008 immediately after credit of same amount of Rs.1,44,27,500/- on 26-05-2008 in Bank of India, Sion Branch, account No.0041101100043190. In view of this, learned Counsel for assessee stated that investment in shares to tune of Rs.9,18,68,280/- and assessee s own capital is about Rs.7,14,65,709/-. In view of this, learned Counsel for assessee clearly stated that this secured loan from Standard Chartered Bank Ltd. was given to Roha Dye Chem Pvt. Ltd. from where assessee has earned interest income at Rs.20,76,618/- and paid tax on same. learned Counsel for assessee fully explained nexus between loan taken from Standard Chartered Bank Ltd. and amount advanced to Roha Dye Chem Pvt. Ltd. When these facts were confronted, learned Sr. DR could not find any fault. In view of clear facts of case, we are of view that there is no expenditure claimed by assessee quo this exempted income. In terms of above, we reverse orders of authorities below and allow claim of assessee. 5. In result, appeal of assessee is allowed. Order pronounced in open court on 20-10-2016. Sd/- Sd/- (RAMIT KOCHAR) (MAHAVIR SINGH) ACCONTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 20-10-2016 Lakshmikanta Deka/Sr.PS 3 ITA No.4059/Mum/2013 Copy of Order forwarded to: 1. Appellant 2. Respondent. 3. CIT (A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER, Assistant Registrar ITAT, MUMBAI Sr. Particulars Date Initials Member No. Concerned 1 Dictation given on 20/10/16 LK Deka JM 2 Draft placed before author 21/10/16/ 26/10/16 3 Draft proposed/placed before second Member 4 Draft discussed/approved by Second member 5 Approved Draft comes to Sr.PS 6 Kept for pronouncement on 7 File sent to Bench Clerk 8 Date on which file goes to Head Clerk 9 Date of dispatch of Order Annapurna Shrikant Tibrewala v. Asst. Commissioner, Central Circle-43, Mumbai

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