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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI C.N. PRASAD, HON’BLE & SHRI MANOJ KUMAR AGGARWAL, HON’BLE
O R D E R PER C.N. PRASAD (JM) This appeal is filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-22, Mumbai [hereinafter in short “Ld.CIT(A)”] in Appeal No. CIT(A)-22/IT/366/10829/2016-17 dated 28.02.2018 for the Assessment Year 2006-07.
Revenue has raised the following grounds in its appeal: -
(A.Y: 2006-07) Wockhardt Hospitals Ltd., “1. Whether on the facts and under the circumstances of the case, the Ld.CIT(A) was justified in deleting the addition made by the AO u/s 14A of the IT Act on account of interest of Rs. 72,48,280/- paid for acquisition of controlling stake in the subsidiary company without appreciating that the provisions of section 14A are applicable even if the investment is made to acquire controlling stake in the subsidiary company and even though no dividend has actually been received, in light of the decision of the Supreme Court in the case of Maxopp Investments Vs CIT 115 SC 2018? 2. Whether on the facts and under the circumstances of the case, the Ld.CIT(A) was justified in deleting the addition made by the AO u/s 36(1)(iii) of the IT Act on account of interest of Rs. 72,48,280/- paid on the capital borrowed for purchase of a capital asset i.e. plot of land under the garb of acquisition of controlling stake in the subsidiary company without appreciating that the proviso to section 36(1)(iii) categorically prohibits the allowance of interest paid on the capital borrowed for acquisition of a capital asset till the date on which such capital asset was first to use? 3. Whether on the facts and under the circumstances of the case, the Ld.CIT(A) was justified in deleting the addition made by the AO u/s 14A of the IT Act on account of interest of Rs. 30,20,046/- paid for acquisition of investments in mutual funds of Rs. 14,00,90,000/- for non business purpose, purely on presumptive basis with an assumption of utilization of own funds of Rs. 55,77,17,592/- for investment in mutual funds of Rs.14,00,90,000/- as the own funds are more than investments in mutual funds, without appreciating that the assessee has not satisfactorily proved beyond doubt the nexus as to whether the investments made in Mutual Funds have been made out of the own funds or the loans borrowed for business purpose?
At the time of hearing, Authorized Representative of the assessee vide letter dated 12.08.2020 submitted that tax effect on the issue in the present appeal is ₹.34,56,319/- which is below ₹.50 Lacs and in view of the CBDT Circular No. 17/2019 dated 08.08.2019 in F.No.279/Misc.142/2007-ITJ (Pt), the appeal of the Revenue is not maintainable.
(A.Y: 2006-07) Wockhardt Hospitals Ltd., 4. Departmental Representative also agreed with the above submission of the Authorized Representative of the assessee.
We have heard the submissions and perused the grounds of appeal in this appeal. We find that the tax effect in this appeal is less than ₹.50 Lakhs and therefore the appeal of the Revenue is not maintainable on account of low tax effect in view of the CBDT Circular No. 17/2019 dated 08.08.2019. Hence this appeal is dismissed.
In the result, appeal of the Revenue is dismissed.
Order Pronounced in the Open Court on the 18th August, 2020