Income Tax Appellate Tribunal - Ahmedabad
Hina Nitin Parikh, Ahmedabad vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH "B" AHMEDABAD Before Shri, A.K.Garodia, Accountant Member and Shri Kul Bharat, Judicial Member ITA No.1800/ Ahd/2008 Assessment Year :2004-05 Hina Nitin Parikh V/s. ACIT, Central Circle-
21/22 Dhannjay 2(1), 333, 3 r d Floor,
Bungalow, B/h Shyam al Aaykar Bhavan, Ashram
3-B, Row House, Road, Ahmedabad
Satellite, Ahm edabad
[PAN No. ACVPP 7923N]
अपीलाथȸ /Appellant .. ू×यथȸ /Respondent)
ITA No.2449/ Ahd/2008
Assessment Year:2006-07
DCIT, Central Circle- V/s. Hina Nitin Parikh
2(1), 306, 3 r d Floor, 21/22 Dhannjay
Aaykar Bhavan, Ashram Bungalow, B/h Shyam al
Road, Ahmedabad 3-B, Row House,
Satellite, Ahm edabad
[P AN No. ACVPP 7923N]
अपीलाथȸ /Appellant .. ू×यथȸ /Respondent)
C.O. No.190-193/Ahd/2008
(a/o ITA No.2445-2446/Ahd/2008
and ITA No.2448-2449/Ahd/2008)
Assessm ent Years: 2002-03 to 2003-
04 and 2005-06 to 2006-07
Hina Nitin Parikh V/s. DCIT, Central Circle-
21/22 Dhannjay 2(1), 306, 3 r d Floor,
Bungalow, B/h Shyam al Aaykar Bhavan, Ashram
3-B, Row House, Road, Ahmedabad
Satellite, Ahm edabad
[PAN No. ACVPP 7923N]
अपीलाथȸ /Appellant .. ू×यथȸ /Respondent)
Hina N Parikh, Nitin B Parikh & Prudent Finance Pvt. Ltd. v. DCIT CC-2(1) A'bd Page 2 IT A No.2450-2451/Ahd/2008 Assessment Years:2000-01 to 2001-02 DCIT, Central Circle- V/s. Prudent Finance Pvt.
2(1), 306, 3 r d Floor, Ltd., 101, Akash Ganga
Aaykar Bhavan, Ashram Building, Gujarat
Road, Ahmedabad College Road.
Ellesbridge, Ahmedabad
[P AN No. AABCP 1836F]
अपीलाथȸ /Appellant .. ू×यथȸ /Respondent)
C.O. No. 194-199/Ahd/2008
(a/o ITA No.2450 to 2455/Ahd/2008)
Assessment Years: 2000-01 to 2005-06
Prudent Finance Pvt., V/s. DCIT, Central Circle-
Ltd., 101, Akash Ganga 2(1), 306, 3 r d Floor,
Building, Gujarat Aaykar Bhavan, Ashram
College Road, Road, Ahmedabad
Ellesbridge, Ahmedabad
अपीलाथȸ /Appellant .. ू×यथȸ /Respondent)
IT A No.2549-2550 & 2554/ Ahd/2008
Assessm ent Years:2000-01,2002-03 &
2006-07
DCIT, Central Circle- V/s. Nitin B Parikh
2(1), 306, 3 r d Floor, 21/22 Dhannjay
Aaykar Bhavan, Ashram Bungalow, B/h Shyam al
Road, Ahmedabad Row, 3-B, Row House,
Satellite, Ahm edabad
[P AN No. ACVPP 7923N]
अपीलाथȸ /Appellant .. ू×यथȸ /Respondent)
C.O. No. 213-218/Ahd/2008
(a/o ITA No. 2549-2554/Ahd/2008)
Assessm ent Years: 2000-01. 2002-03
to 2006-07
Hina N Parikh, Nitin B Parikh & Prudent Finance Pvt. Ltd. v. DCIT CC-2(1) A'bd Page 3 Nitin B Parikh V/s. DCIT, Central Circle-
21/22 Dhannjay 2(1), 306, 3 r d Floor,
Bungalow, B/h Shyam al Aaykar Bhavan, Ashram
Row, 3-B, Row House, Road, Ahmedabad
Satellite, Ahm edabad
[PAN No. ACVPP 7923N]
अपीलाथȸ /Appellant .. ू×यथȸ /Respondent)
आवेदक कȧ ओर से/By Assessee Shri S.N. Soparkar, SR-AR &
Shri P.M. Mehta, AR
राजःव कȧ ओर से/By Revenue Smt. Rolee Agarual, CIT-DR
सुनवाई कȧ तारȣख/Date of Hearing 10-04-2013
घोषणा कȧ तारȣख/Date of Pronouncement 17-05-2013
आदे श /O R D E R
PER BENCH:-
Out of this Bunch of various appeals and Cross Objections (COs), one appeal in the case of Hina N Parikh is filed by the assessee which is directed against the order of Commissioner of Income-tax (Appeals)-III, Ahmedabad dated 31-03-2008 for assessment year (AY) 2004-05. The remaining appeals, one in the case of Hina N Parikh, and three in the case of Nitin B Parikh and two in the case of Prudent Finance Pvt. Ltd., total six appeals are filed by the Revenue and all sixteen COs are filed by these three assessees. All these appeals and COs were heard together and are being disposed of by way of this common order for the sake of convenience.
2. First we take up appeal filed by the assessee i.e., in ITA No. 1800/Ahd/2008 in the case of Hina N Parikh. The grounds raised by assessee are as under:-
"1. On the facts and in the circumstances of the case, the CIT(A) has erred in not giving any finding relating to the validity of the assessment framed u/s. 153A of the I.T. Act. It is submitted that the assessments Hina N Parikh, Nitin B Parikh & Prudent Finance Pvt. Ltd. v. DCIT CC-2(1) A'bd Page 4 framed by the Assessing Officer u/s. 153A are bad in law, and hence, liable to be quashed.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in not directing the Assessing Officer to allow interest expenditure of Rs.42,82,834/- against the income from business and profession shown in the return of income. The Ld. Assessing Officer may be directed to allow such expenditure.
3. Without prejudice, on the facts and in the circumstances of the case, the CIT(A) erred in not giving any finding in respect of following ground of appeal raised before him:
'4. In the facts and circumstances of the case the assessing officer may be directed to allow interest expenditure of Rs.42,82,834/- against the income from business and profession shown in return of income.'
3. Ground No.1 was not pressed by Ld. AR of the assessee and accordingly rejected as not pressed.
4. Regarding ground No.2 and 3, it was submitted by Ld. AR of the assessee that Ground No.4 raised by assessee before Ld. CIT(A) was not decided by Ld. CIT(A) and hence, the issue should be restored back to the file of Ld. CIT(A) for deciding this ground of assessee. Ld. CIT-DR of the Revenue supported the order of Ld. CIT(A).
5. We have heard the rival submissions and perused the materials on record. We find that Ground No.4 raised by assessee before Ld. CIT(A) was, in fact not, decided by him. Hence, this issue is restored back to his file and Ld. CIT(A) is directed to decide this ground raised by assessee before him after providing reasonable opportunity of being heard to both sides. These two grounds of assessee's appeal stand allowed for statistical purposes.
6. In the result, assessee's appeal stands partly allowed for statistical purposes.
Hina N Parikh, Nitin B Parikh & Prudent Finance Pvt. Ltd. v. DCIT CC-2(1) A'bd Page 5
7. Now, we have taken up the appeal filed by the Revenue in the case of Hina N Parikh i.e., ITA No.2449/Ahd/2008 for AY 2006-07. Ground raised by Revenue is as under:-
"1. The learned CIT(A) has erred in law and on facts in deleting the disallowance of interest expenses U/s. 14A of the Act."
8. Ld. CIT-DR of the Revenue supported the order of Assessing Officer and reliance was placed on the decision of Special Bench rendered in the case of ITO v. Daga Capitals Investment Pvt. Ltd. (2006) 119 TTJ (Mum) (SB). Reliance was also placed on some other decisions of various Division Bench of this Tribunal but we are not discussing the same here because this issue is now covered by the judgment of Hon'ble Karnataka High Court rendered in the case of CCI Ltd. v. JCIT (2012) 20 taxmann.com. 196 (Kar), reliance has been placed by Ld. AR of the assessee. He also placed reliance on the decision rendered by Mumbai Bench in the case of Ganajam Trading Co. (P) Ltd. v. DCIT (2012) 25 taxmann.com 181 (Mum). Reliance was also placed on another Tribunal's decision rendered in the case of DCIT v. M/s. India Advantage Securities Ltd. in ITA No.6711/Mum/2011 dated 14-09-2012. He also relied on one more Tribunal's decision of Ahmedabad Bench rendered in the case of Ethio Plastics Pvt. Ltd. v. DCIT in ITA No.848/Ahd/2012 dated 10-12-2012. He submitted a copy of all those Tribunal's decisions and Hon'ble High Court's decision cited by him.
9. We have heard the rival submissions and perused the materials on record and gone through the orders of authorities below and the judgments cited by both the sides. Since this issue is now to be decided as per the only decision available of Hon'ble High Court i.e., of Karnataka High Court, the Tribunal's decisions cited by both the sides are not being discussed by us. In the judgment of Hon'ble Karnataka High Court rendered in the case of CCI Ltd. (supra) it was held that if the assessee is a dealer of shares and securities then it cannot be said that such purchases of shares and holding of shares were for the purpose of earning of dividend income and hence, Hina N Parikh, Nitin B Parikh & Prudent Finance Pvt. Ltd. v. DCIT CC-2(1) A'bd Page 6 expenditure incurred in acquiring these shares cannot be disallowed u/s. 14A of the Income-tax Act, 1961 (hereinafter referred to as 'the Act). In the present case, this is admitted position of fact that assessee is a dealer in shares and securities and this fact is noted by Assessing Officer also in his assessment order and inspite of this contention raised by Ld. AR of the assessee before us, nothing has been brought on record by Ld. CIT-DR of the Revenue to show otherwise. Since assessee is dealing in shares, we hold by following this judgment of Hon'ble Karnataka High Court that disallowance made by AO u/s. 14A of the Act on account of interest expenditure on proportionate basis cannot be sustained. We therefore do not find any reason to interfere in the order of Ld. CIT(A) on this issue. Accordingly, this ground of Revenue's appeal is rejected.
10. In the result, Revenue's appeal is dismissed.
11. Now, we take up various COs filed by the assessee. Ld. AR of the assessee did not press these COs and hence, all the COs are dismissed as not pressed.
12. Now, we take up the various appeals filed by the Revenue in the case of Shri Nitil B Parikh i.e., in ITA No. 2549-2550/Ahd/2008 and 2554/Ahd/2008. In all these appeals, the only ground raised by Revenue is regarding deletion of disallowance of interest expenditure made by Assessing Officer u/s. 14A of the Act.
13. At the time of hearing, both sides agreed that facts in the present appeals are similar with the facts in the case of Hina N Parikh because this assessee is also dealing in shares and therefore, this issue can be decided on Hina N Parikh, Nitin B Parikh & Prudent Finance Pvt. Ltd. v. DCIT CC-2(1) A'bd Page 7 similar line in the present case also. While deciding this issue, in the case of Hina N Parikh, we have decided this issue in favour of assessee by following the judgment of Hon'ble Karnataka High Court rendered in the case of CCI Ltd. (supra). Accordingly, in the present case also, all these three appeals of Revenue are decided in favour of assessee and these appeals of Revenue are dismissed.
14. Now, we take up the COs filed by assessee in CO No.213- 218/Ahd/2008. Ld. AR of the assessee submitted that these COs are not pressed and accordingly all these COs are dismissed as not pressed.
15. Now, we take up two appeals filed by the Revenue in the case of Prudent Finance Pvt. Ltd. in ITA No.2450-2451/Ahd/2008. The only issue raised by Revenue in these two appeals is regarding deletion of disallowance of interest expenditure u/s. 14A of the Act made by Assessing Officer.
16. Both sides agreed regarding that this assessee also i.e., the company also, is dealing in shares and securities. Hence, this issue can also be decided on similar line as in the case of Hina N.Parikh. In the case of Hina N Parikh and Nitin B Parikh, we have decided this issue in favour of assessee by following the judgment of Hon'ble Karnataka High Court rendered in the case of CCI Ltd. (supra) and since in the case of company also, Ld. CIT-DR of the Revenue could not establish that assessee is not dealer in share, we find no reason to interfere into the order of Ld. CIT(A) on this issue. Accordingly, both the appeals of Revenue are dismissed.
17. Now, we take up the COs filed by assessee being CO No. 194- 199/Ahd/2008. At the time of hearing, it was submitted by Ld. AR of assessee that these COs are not pressed and accordingly, all these COs are dismissed as not pressed.
Hina N Parikh, Nitin B Parikh & Prudent Finance Pvt. Ltd. v. DCIT CC-2(1) A'bd Page 8
18. In the result, appeals of Revenue as well as COs of assessee are dismissed.
19. In combined result, one appeal of assessee in ITA No. 1800/Ahd/2008 is partly allowed for statistical purposes and the remaining six appeals of Revenue in the case of three assessees are dismissed and all 16 COs of the three assessees are also dismissed. Order pronounced in Open Court on the date mentioned hereinabove at caption page.
Sd/- Sd/- (Kul Bharat) (A.K.Garodia) (Judicial Member) (Accountant Member) Ahmedabad, *Dkp Ǒदनांकः- 17/05/2013 अहमदाबाद ।
आदे श कȧ ूितिलǒप अमेǒषत / Copy of Order Forwarded to:-
1. अपीलाथȸ / Appellant
2. ू×यथȸ / Respondent
3. संबंिधत आयकर आयुƠ / Concerned CIT
4. आयकर आयुƠ- अपील / CIT (A)
5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड[ फाइल / Guard file.
By order/आदे श से, /True Copy/ उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद ।
Strengthen preparation & delivery of orders in the ITAT
1) date of taking dictation 14/05
2) direct dictation by Member straight on No computer/laptop/dragon dictate
3) date of typing & draft order place before Member 14/05, 15/05 4) date of correction 15/05
5) date of further correction --
6) date of initial sign by Members 15/05 7) order uploaded on 17/05
8) original dictation pad-part has been enclosed in the file Yes
9) final order and 2nd copy send to Bench Clerk on 17/05