2013 (10) TMI 1066 - AT - Income Tax

Allowability of liabilities towards interest expenditure Held that - In view of the fact that the present assessee is also linked to the group assessee connected with the similar set of facts and issues as that of the present assessee Also, reliance has been placed upon the judgment in the case of Hitesh Mehta 2013 (10) TMI 1065 - ITAT MUMBAI . Interest expenditure is allowed Decided in favor of Assessee.

Summary

Issues:
- Appeal against order of Ld.CIT(A)-IV, Mumbai for assessment years 2004-05 & 2005-06.
- Confirmation of liabilities related to interest expenditure.
- Similarity with another case decided by ITAT regarding interest expenditure.

Analysis:
The judgment pertains to two appeals filed by the assessee against the order of the Ld.CIT(A)-IV, Mumbai for the assessment years 2004-05 & 2005-06. The appeals were disposed of by a common order. Grounds No. 1, 2 & 3 in both appeals were not pressed and hence did not require adjudication. However, Ground no. 3 in both appeals related to the action of the Ld.CIT(A) in confirming liabilities amounting to Rs. 2,05,112/- and Rs. 2,05,799/- respectively for the AYs 2004-05 & 2005-06 towards interest expenditure claimed by the assessee.

The judgment referenced a case involving Hitesh Mehta where the ITAT had set aside a similar issue to the files of the Ld.CIT(A) for fresh adjudication. The ITAT's direction in the Hitesh Mehta case was considered relevant for the present assessee due to their connection with a group assessee facing similar facts and issues. Therefore, the issues related to interest expenditure were also set aside to the file of the Ld.CIT(A) for fresh adjudication in line with the direction given by the ITAT in the Hitesh Mehta case. Consequently, Ground Nos. 3 in both appeals were allowed for statistical purposes.

In conclusion, the appeals filed by the Assessee were allowed for statistical purposes. The order was pronounced in the open court on August 23, 2013.