Income Tax Appellate Tribunal - Mumbai
Asst Cit 8(3)(1), Mumbai vs Tata Housing Development Co. Ltd, ... on 2 November, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI
BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAM LAL NEGI, JM
I.T.A. No. 1549/Mum/2017
(Assessment Year: 2012-13)
Asst. CIT-8(30(1), M/s. Tata Housing Development
Room No. 615, M. K. Road, Company Ltd.
Mumbai-400 020 Vs. 12th Floor, Times Towers,
Kamla Mills, Senapati Bapat Marg,
Lower Parel (W), Mumbai
PAN/GIR No. AAACT 0191 Q
(Revenue) : (Assessee)
Cross Objection No.236/Mum/2018
(Arising out of ITA No. 1549/Mum/2017)
(Assessment Year: 2012-13)
M/s. Tata Housing Development Asst. CIT-8(30(1),
Company Ltd. Room No. 615, M. K. Road,
th
12 Floor, Times Towers, Vs. Mumbai-400 020
Kamla Mills, Senapati Bapat Marg,
Lower Parel (W), Mumbai
PAN/GIR No. AAACT 0191 Q
(Assessee) : (Revenue)
Revenue by : Shri D. G. Pansari
Assessee by : Shri Madhur Agarwal
Date of Hearing : 11.10.2018
Date of Pronouncement : 02.11.2018
ORDER
Per Shamim Yahya, A. M.:
This appeal by the Revenue and cross objection by the assessee arise out of the order of the learned Commissioner of Income Tax (Appeals)-14, Mumbai ('ld.CIT(A) for short) dated 13.12.2016 and pertains to the assessment year (A.Y.) 2012-13. 2 ITA No. 1549/M/17 & CO No. 236/M/18
2. The grounds raised in Revenue's appeal reads as under:
1. On the facts and circumstances of the case and in law, the id. CIT(A) grossly erred in allowing interest expenditure of Rs.2,24,94,527/- under Rule 8D(2)(ii) without appreciating the facts of the case.
2. On the facts and circumstances of the case and in law, the id. CIT(A) grossly erred in allowing interest expenditure of Rs.71,23,575/- under Rule 8D(2)(iii) without appreciating the facts of the case.
3. The grounds raised in assessee's cross objection reads as under:
1 . On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income-tax (Appeals) erred in confirming disallowance of Rs. 1.32.558/- u/s. 14A r.w.r. 8D(2)(iii).
Revenue's appeal:
4. The issue in dispute relates to disallowance of Rs.2,24,94,527/- under rule 8D(2)(ii) and Rs.7,12,357/- under rule 8D(2)(iii).
5. On the issue of disallowance u/s. 8D(2)(ii) consequent to the disallowance by the Assessing Officer (A.O. for short), the ld. CIT(A) has given a finding that the assessee has sufficient interest free own funds available, hence no disallowance in this regard is required. He held as under:
The reserves bad surplus is Rs.3,40,67,24,296/- while the closing value of investment is Rs.1,99,68,57,265/- only. The book profit during the year is Rs.1,86,65,63,819/-. Therefore, relying on the decision in the case of CIT vs. HDFC Bank Ltd. 366 ITR 505 and CIT vs. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158 (SC) Utility and Power Ltd. 313 ITR 340 (Bom) no addition can be made u/r. 8D(2)(ii) against the payment of interest.
6. Upon hearing both the counsel and perusing the records, we find that the finding of the ld. CIT(A) has not been controverted by the Revenue. Since it is also based upon 3 ITA No. 1549/M/17 & CO No. 236/M/18 Hon'ble jurisdictional High Court's decision, we do not find any infirmity in the same.
Hence, we uphold the same.
7. On the issue of disallowance u/s. 8D(2)(iii), the ld. CIT(A) has restricted the same to exempt income earned of Rs.1,32,558/-. We find that the view is duly supported by the Hon'ble Punjab & Haryana High Court in the case of Pr. CIT vs. Empire Package Pvt. Limited (in ITA No. 415 of 2015 (O&M) vide order dated 12.01.2016). Since no contrary judgment of Hon'ble jurisdictional High Court has been shown, we follow the above High Court decision and uphold the order of the ld. CIT(A).
8. Hence, the Revenue's appeal is dismissed.
Assessee's cross objection:
9. As regards the assessee's cross objection, the plea of the assessee is that the disallowance u/s. 8D2(iii) should also be restricted by making the computation only with reference to the investment which yield exempt income in accordance with the decision of Special Bench in the case of Asst. CIT vs. Vireet Investment (P.) Ltd. [2017] 82 taxmann.com 415 (Del-Trib)(SB).
10. Upon hearing both the counsel and perusing the records, we find ourselves in agreement with the submissions of the ld. Counsel of the assessee. Following the above decision from Special Bench in the case of Vireet Investment (P.) Ltd. (supra), we remit the issue to the file of the A.O. 4 ITA No. 1549/M/17 & CO No. 236/M/18
11. In the result, the Revenue's appeal stands dismissed and the assessee's cross objection is allowed for statistical purpose.
Order pronounced in the open court on 02.11.2018 Sd/- Sd/-
(Ram Lal Negi) (Shamim Yahya)
Judicial Member Accountant Member
Mumbai; Dated : 02.11.2018
Roshani, Sr. PS
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent
3. The CIT(A)
4. CIT - concerned
5. DR, ITAT, Mumbai
6. Guard File
BY ORDER,
(Dy./Asstt. Registrar)
ITAT, Mumbai