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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: HON’BLE SHRI SAKTIJIT DEY, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)
Aforesaid appeal by revenue for Assessment Year [in short referred to as ‘AY’] 2015-16 contest the order of Ld. Commissioner of Income- Tax (Appeals)-2, Mumbai [in short referred to as ‘CIT(A)’], Appeal No. CIT(A)-2/IT/10173/2017-18 dated 04/02/2019 in allowing stamp duty charges & registration fees as deductible expenditure while computing B.E.Billimoria & Co. Ltd. Assessment Year: 2015-16 short terms capital gains. The revenue is also aggrieved by deletion of disallowance u/s 14A.
We have carefully heard the rival arguments and perused the orders of lower authorities. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs.
The material on record would show that the assessee being resident corporate assessee was assessed for the year under consideration u/s. 143(3) on 27/10/2017. During assessment proceedings, it transpired that the assessee sold an office premises vide agreement dated 31/03/2015 for a consideration of Rs.19 Crores and offered short-term capital gains of Rs.11.49 Crores. However since the stamp duty value of the premises was Rs.20.59 Crores, Ld. AO invoking the provisions of Sec.50C, added the differential amount of Rs.1.59 Crores to the income of the assessee. The second disallowance made by Ld. AO was interest and indirect expenditure disallowance u/s 14A read with Rule 8D(2)(ii) & 8D(2)(iii) which aggregated to Rs.5.86 Lacs.
Before Ld. CIT(A), the assessee drew attention to the fact that it incurred aggregate expenditure of Rs.160.26 Lacs on account of stamp duty, registration charges and society transfer fees as per the contractual terms which was an allowable expenditure u/s 50(1)(i) of the Act. The said claim was restricted to Rs.159.23 Lacs i.e. to the extent of difference in Stamp Duty Value and actual sale consideration. Therefore, it was submitted that there was no justification for addition of Rs.159.23 Lacs. Concurring with the same, Ld. CIT(A) directed Ld. AO to delete this addition.
B.E.Billimoria & Co. Ltd. Assessment Year: 2015-16 The interest disallowance u/s 14A was deleted since the assessee’s interest free funds were found to be more than the investments and therefore no additions thereof were justified in term of the decision of Hon’ble Bombay High Court in CIT V/s HDFC Bank Ltd 49 Taxmann.com 335. The indirect expenditure disallowance of Rs.0.62 Lacs was deleted since the same had already been disallowed by the assessee while computing its income. Aggrieved as aforesaid, the revenue is under further appeal before us.
Upon due consideration, we find no reason to interfere in the impugned order in any manner. The expenditure incurred by the assessee on transfer of property was an allowable expenditure while computing short-term capital gains and the same has rightly been allowed by Ld. CIT(A). The interest disallowance u/s 14A would not survive since the fact the assessee had sufficient interest free funds to make the investment remain uncontroverted before us. The indirect expenditure was already been offered by the assessee in its computation of income and therefore, the same could not be disallowed again. Hence, we find no reason to interfere in the impugned order on any of the issue.