2014 (11) TMI 1283 - AT - Income Tax

Delay in filling appeal late by 11 days - Disallowance on account of interest expenses - HELD THAT - In our considered opinion, the assessee does not stand to benefit by lodging an appeal late and when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. We, accordingly condone the delay for both the years. A careful perusal of the order of the Ld. CIT(A) shows that he has followed the decision in the case of Hitesh S. Mehta 2013 (10) TMI 1065 - ITAT MUMBAI son of the assessee for A.Y. 2005-06In the case of Hitesh S. Mehta, we find that the Tribunal has restored this issue to the file of the Ld. CIT(A) to adjudicate afresh along with the adjudication of the other ground pertaining to the rejection/reliability of the books of account. Since the Ld. CIT(A) has followed his own decision in the case of Hitesh S. Mehta, respectfully following the findings of the Tribunal in the case of Hitesh S. Mehta as mentioned hereinabove, the issue is restored to the file of the Ld. CIT(A) to be decided afresh in the line of the directions given in the case of Hitesh S. Mehta. Appeals filed by the assessee is treated as partly allowed for statistical purpose.

Summary

Issues:
- Appeals against two separate orders of the Ld. CIT(A)-40, Mumbai for A.Yrs. 2000-01 & 2001-02
- Disallowance of interest expenses in both years
- Condonation of delay in filing the appeal
- Claim of interest as a contractual obligation

Analysis:
1. The appeals were filed against two orders of the Ld. CIT(A)-40, Mumbai for different assessment years. The appellant raised additional grounds in both appeals, but later decided not to press them, leading to their dismissal as not pressed.

2. The main issue in both appeals was the disallowance of interest expenses. The appellant modified the quantum of interest disallowance in both years. The appeals were also filed late, with a delay of 11 days. The reason cited for the delay was the heavy workload of the appellant's son, who was handling tax and litigation matters.

3. The Appellate Tribunal considered the delay in filing the appeals and decided to condone the delay, stating that substantial justice should prevail over technical considerations. The Tribunal then proceeded to hear arguments regarding the claim of interest expenses by the appellant.

4. The appellant argued that the interest expenses were incurred due to contractual obligations and should be allowed. However, the Departmental Representative opposed the claim, citing a previous Tribunal decision where a similar claim was dismissed.

5. The Ld. CIT(A) had based his decision on a previous case involving the son of the appellant, where the claim of interest expenses was dismissed. The Tribunal noted that the issue was restored in the son's case for fresh adjudication along with other matters related to the books of account.

6. Following the Tribunal's findings in the son's case, the Appellate Tribunal decided to restore the issue of interest expenses to the file of the Ld. CIT(A) for fresh adjudication in line with the directions given in the son's case.

7. Ultimately, the appeals filed by the appellant were treated as partly allowed for statistical purposes, indicating a partial success in challenging the disallowance of interest expenses. The order was pronounced in open court on 28th November 2014.