Income Tax Appellate Tribunal - Mumbai
Bnp Paribas Sa, Mumbai vs Department Of Income Tax on 27 October, 2009
1 I.T.A No.6536/ Mum/2009
Assessment year: 2005-06
IN THE INCOME TAX APPELLATE TRIBUNAL,
"J" BENCH, MUMBAI.
[ Coram D.K.Agarwal, JM and Pramod Kumar, AM ]
I.T.A No.6536/ Mum/2009
Assessment year: 2005-06
ADIT (IT) 3(2) ..... Appellant
Scindia House, R.No.134, 1st floor, N.M.Road,
Mumbai.
Vs
BNP Paribas SA ,.... Respondent
French Bank Building, 62, Homji Street,
Fort, Mumbai.
PA No.AAACB 4868 Q
Appellant by : Shri Satbir Singh, CIT (DR)
Respondent by : None
ORDER
Per Pramod Kumar:
1. By way of this appeal, the Assessing Officer has called into question correctness of CIT(A)'s order dated 27th October, 2009, in the matter of assessment u/s. 143(3) of the Income tax Act, 1961 for the assessment year 2005-06, on the following ground:
"On the facts and in the circumstances of the case and in law, the ld CIT (A) erred in deletion of disallowance of the assessee's claim of deduction on account of broken period interest paid while purchasing securities during the year amounting to `.11,40,97,653/-."
2. Despite the proper service of notice, nobody attended on behalf of the assessee when the appeal was called on for hearing. Therefore, we proceed to decide 2 I.T.A No.6536/ Mum/2009 Assessment year: 2005-06 the matter exparte qua the respondent-assessee. The learned Departmental Representative has been heard.
3. Briefly stated relevant material facts are like this. In the course of assessment proceedings, the Assessing Officer noticed that the assessee has paid `.11,40,97,653/- by way of broken period interest on current securities purchased during the year under consideration. The AO asked the assessee to furnish the details of broken period interest paid by it. The explanation was not acceptable to the Assessing Officer. The AO, following the decision of the Hon'ble Supreme Court in the case of Vijay bank Ltd v. ACIT, 187 ITR 541 (SC) held that the broken period interest paid by the assessee is capital nature and not eligible for deduction. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The ld CIT (A) following the decision of the Hon'ble Bombay High Court in the case of American Express International Banking Corporation v CIT, 258 ITR 601(Bom) held that the broken period interest is deductible as revenue expenditure. Aggrieved by the stand so taken by the CIT (A), the Assessing Officer is in appeal before us.
4. Having heard the learned Departmental Representative, we find that the issue is squarely covered by the decision of the Hon'ble Jurisdictional High Court in the case of American Express International Banking Corporation(supra). We also find that the CIT (A) has allowed the stand of the assessee following the decision of the Jurisdictional high Court in the case of American Express International Banking Corporation(supra). Therefore, we do not find any infirmity in the order of the CIT (A) to interfere. The same is accordingly, upheld.
5. In the result, the appeal stands dismissed.
Pronounced in the open court on 23rd December, 2010 Sd/- Sd/-
(D.K.Agarwal ) (Pramod Kumar)
(Judicial Member) (Accountant Member)
Mumbai, Dated 23rd December, 2010
3 I.T.A No.6536/ Mum/2009
Assessment year: 2005-06
Parida
Copy to:
1. The appellant
2. The respondent
3. Commissioner of Income Tax (Appeals),10, Mumbai
4. DIT (IT), Range-3, Mumbai
5. Departmental Representative, Bench 'J', Mumbai //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI 4 I.T.A No.6536/ Mum/2009 Assessment year: 2005-06