2016 (5) TMI 1489 - AT - Income Tax

ITAT Mumbai: Assessee's Appeal Partly Allowed for A.Y. 2006-07 & 2008-09

Smt. Deepika A. Mehta. Versus The DCIT And The ACIT, Central Circle-23, Mumbai. Versus Smt. Deepika A. Mehta. And Vice-Versa.

The Appellate Tribunal ITAT Mumbai partly allowed the assessee's appeal for A.Y. 2006-07 & 2008-09, confirming additions for personal drawings and ... Reopening of assessment - addition on account of personal drawings and interest expenses - HELD THAT:- As decided in assessee's own case Bench restricted the addition to 50% of the addition sustained by the CIT(A). Addition on account of interest expense - HELD THAT:- An identical issue has been considered by the coordinate Bench in assessee's own case thus we restore this issue to the file of the Ld. CIT(A) for fresh adjudication after giving reasonable opportunity of being heard to the assessee. Accordingly, this ground of appeal is treated as allowed for statistical purpose. Interest u/s 234A, 234B and 243C is consequential - we allow the appeal of the revenue for statistical purpose and direct the AO to re-compute the interest liability after reducing the amount of tax deductible at source and decide as per the provisions of law. Issues:- Assessment order challenge for A.Y. 2006-07- Addition on account of personal drawings and interest expenses- Re-opening of assessment validity- Tax liability under sections 234A, 234B, and 234C for A.Y. 2006-07- Disallowance of interest expenditure and personal household expenses for A.Y. 2008-09Assessment Order Challenge for A.Y. 2006-07:The appeals were filed by the assessee and the revenue for A.Y. 2006-07 & 2008-09. The assessee challenged the assessment order by filing an appeal before the CIT(A). The CIT(A) partly allowed the appeal but confirmed certain additions, including personal drawings and interest expenses. The assessee raised grounds challenging the re-opening of assessment, addition on personal drawings, and interest expenses.Addition on Account of Personal Drawings and Interest Expenses:The Coordinate Bench's decision in Smt. Rasila Mehta vs DCIT Mumbai was referenced, where it was decided to restrict the addition on personal drawings to 50% of the amount sustained by the CIT(A). The Tribunal followed this decision and directed the AO to make a disallowance accordingly. Similarly, the issue of interest expense was restored to the file of the CIT(A) for fresh adjudication based on the findings in M/s Growmore Research & Assets Mgt. Ltd. case. The Tribunal treated these grounds partly allowed and allowed for statistical purposes.Re-opening of Assessment Validity:The assessee raised concerns regarding the validity of re-opening the assessment under section 148. However, the AR submitted that certain grounds were not contested, leading to the dismissal of those grounds. The Tribunal referred to the decision in Smt. Rasila Mehta case and decided the issues accordingly.Tax Liability under Sections 234A, 234B, and 234C for A.Y. 2006-07:The Revenue challenged the Ld. CIT(A)'s decision on interest levied under sections 234A, 234B, and 234C. The Tribunal referred to the decision in M/s Harsh Estate Pvt. Ltd. case and directed the AO to recompute the interest liability after reducing the tax deductible at source, following the provisions of the law. The appeal of the Revenue was allowed for statistical purposes.Disallowance of Interest Expenditure and Personal Household Expenses for A.Y. 2008-09:For A.Y. 2008-09, the assessee challenged the confirmation of disallowance of interest expenditure and personal household expenses. The Tribunal referred to the findings of coordinate Benches and decided to restore the issues to the file of the CIT(A) for fresh adjudication. The Tribunal treated these grounds as allowed for statistical purposes and partly allowed the appeal filed by the assessee for A.Y. 2006-07 and 2008-09.This detailed analysis covers the various issues involved in the judgment delivered by the Appellate Tribunal ITAT Mumbai, providing a comprehensive understanding of the legal proceedings and decisions made for each issue raised by the parties involved.