DCIT CEN CIR 4(1), MUMBAI vs. HIMANSHU B. KANAKIA, MUMBAI

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ITA 5521/MUM/2016Status: DisposedITAT Mumbai11 April 2018AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, noting that the issue was covered by the Tribunal's own prior decision in the assessee's own case for the preceding assessment year. The Revenue's appeal was therefore dismissed.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting the disallowance of interest expense claimed by the assessee. The CIT(A) had found a nexus between interest expense and interest income based on bank statements.

What were the issues?

Whether the CIT(A) erred in holding that a nexus existed between interest expense and interest income solely based on bank statements, and whether the deduction claimed under Section 57(iii) was allowable.

Which sections of the Income-tax Act were involved?

Section 57(iii),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “J”, MUMBAI

Before: SHRI G.S. PANNU & SHRI RAM LAL NEGI

For Appellant: Ms. Arju Garodia
For Respondent: Shri Anuj Kisnadwala
Hearing: 09/04/2018Pronounced: 11/04/2018

The captioned appeal by the Revenue is directed against the order of CIT(A)-52, Mumbai dated 20.06.2016, pertaining to the Assessment Year 2012-13, which in turn has arisen from the order dated 27.02.2015 passed by the Assessing Officer, Mumbai under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’).

2.

In its appeal, Revenue has raised the following Grounds of appeal :-

“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that there existed a nexus between the interest expense and interest income solely on the basis of the Bank Statements?

2. The Appellant craves to leave, to add, to amend and/or to alter any of grounds of appeal, if need be.

The Appellant, therefore, prays that on the ground stated above, the order of the CIT(A)-52, Mumbai may be set aside and that of the Assessing Officer restored.”

3.

The solitary dispute involved in this appeal relates to the action of CIT(A) in deleting the disallowance made by the Assessing Officer on account of deduction claimed by assessee u/s 57(iii) of the Act.

4.

At the time of hearing, the learned representative for the assessee pointed out that the issue in dispute is covered in favour of the assessee by the decision of the Tribunal in assessee’s own case for Assessment Year 2011-12 vide order dated 16.03.2016 whereby the Tribunal has upheld the decision of the CIT(A) allowing the assessee’s claim of deduction u/s 57(iii) of the Act. The learned representative further submitted that, in view of the above, the CIT(A) made no mistake in allowing the claim of the assessee.

5.

The ld. DR appearing for the Revenue did not object to the factual matrix brought out by the learned representative.

6.

Having considered the rival submissions, in our view, the order of CIT(A) does not require any interference inasmuch as the CIT(A) has followed his own decision dated 18.02.2014 in the assessee’s case for Assessment Year 2011-12, which has been upheld by the Tribunal vide its order dated 16.03.2016 (supra). Thus, the Revenue fails in its appeal.

7.

In the result, appeal of the Revenue is dismissed.

Order pronounced in the open court on 11th April, 2018.

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