2014 (4) TMI 1236 - AT - Income Tax

Disallowance of interest - HELD THAT - As the issue involved in the present appeals of the assessee as well as all the material facts relevant thereto are similar to the case of Shri Hitesh S. Mehta 2013 (10) TMI 1065 - ITAT MUMBAI decided by the Tribunal, the ld. Representatives of both the sides have agreed that the issue involved in the present case relating to disallowance of interest expenditure should also be sent back to the ld. CIT(A). Accordingly, we set aside the impugned orders of the CIT(A) confirming the disallowance made by the A.O. on account of interest expenditure and remit the matter back to him for deciding the same afresh.

Summary

Issues involved:
Appeals against orders passed by CIT(A) for assessment years 2004-05 and 2005-06; Delay in filing appeals; Condonation of delay; Disallowance of interest expenditure; Comparison with similar case of Shri Hitesh S. Mehta; Remitting matter back to CIT(A) for fresh decision.

Analysis:
The appeals filed by the assessee against the orders passed by the CIT(A) for assessment years 2004-05 and 2005-06 raised common issues and were heard together for convenience. The assessee sought condonation of a 13-day delay in filing the appeals, attributing it to a delay in releasing the appeal fees by the custodian. The Tribunal, considering a similar case, condoned the delay and proceeded to dispose of the appeals on merit.

The counsel for the assessee did not press grounds 1 to 5 raised in both appeals, leading to their dismissal. However, the issue concerning the disallowance of interest, raised in ground 6 of both appeals, was discussed. The disallowance of interest expenditure by the Assessing Officer, upheld by CIT(A) following a decision in the case of Shri Hitesh S. Mehta, was challenged. The Tribunal had set aside a similar issue in Mehta's case for fresh adjudication by CIT(A). Given the similarity in facts, both parties agreed to remit the matter back to CIT(A) for a fresh decision in line with the Tribunal's directions in Mehta's case. Consequently, ground 6 of both appeals was treated as allowed for statistical purposes.

In conclusion, both appeals were partly allowed for statistical purposes, with the matter regarding the disallowance of interest expenditure being remitted back to CIT(A) for a fresh decision. The order was pronounced on 16th April 2014.