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TMI Blog2020 (12) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011-12 and it appears to be adequate to maintain the entire family. Therefore, we are inclined to accept the findings of Ld. CIT(A) and accordingly, ground raised by revenue is dismissed. Addition u/s 57(iii) - assessee has accepted the fact that monies borrowed at a higher rate of interest has been utilized in avenues which offer a lower rate of interest and that too in a company in which the assessee is interested and supported the findings of AO - CIT-A deleted the addition - HELD THAT:- The loan is secured with the keyman insurance. Since, it is assigned to assessee, the loan also transferred in the name of assessee and assessee has paid interest on the above loan to the extent to LIC. This payment of interest is towards the loan assigned in the name of assessee and direct connection with the loan given to the company M/s Maneesh Pharmaceuticals Ltd. Therefore, there is direct link to the interest income earned by the assessee. Therefore, it is allowable expenditure u/s 57(iii) of the Act. With regard to Interest payment to Mr. Balkrishna Hedge, we notice that M/s Maneesh Pharmaceuticals Ltd. has taken loan from assessee and assessee has received the funds from Mr. Bal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) dated 31.03.2016 for AY 2010-11 to 2013-14 respectively. 2. Since the issues raised in all the appeals are identical, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed off by this consolidated order. Firstly, we are taking ITA No. 4546/Mum/2016 for AY 2012-13 filed by the revenue. 3. The brief facts of the case are that assessee has filed its return of income on 30.09.2012 declaring total income of ₹ 3,60,830/-. A search and seizure action under section 132 of the IT Act was conducted at office and residential premises of Ms Maneesh Pharmaceuticals Group on 29.08.2011. Being one of the associate members of the above group, the residential premises was also covered under search and seizure action. Subsequently, the case was selected for scrutiny and notice u/s.143(2) and 142(1) of the I.T. Act, 1961 were issued and served upon the assessee. In response, assessee filed relevant information as called for and after considering the detail submission of assessee, AO rejected the contention of assessee and made disallowance. 4. Aggrieved with the above order, assessee preferred appeal before Ld. CIT(A) and made the detail subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n deleting the disallowance of Ps. 75,55,490/- made by the AO under section 14A of the Act without appreciating the facts that the balance in the assessee's capital account is already utilized in the firm of assets lying in the balance sheet of the assessee and, therefore, the provisions of section 14A are required to be implemented in the case of the assessee. The appellant prays that the order of the C1T(A) on the above grounds be set aside and that of the Assessing Officer be restored. The appellant craves leave to amend or alter any ground and/or add new grounds which may be necessary. 6. With regard to ground no. 1, Ld. DR submitted before us that Ld CIT(A) erred in deleting the addition of ₹ 9,31,460/- made by the AO on account of deemed let out property without appreciating the facts that flat no. 63 is a distinct and unconnected unit which was earlier the SOP of the assessee and that although the flats numbered 61 62 are interconnected with each other, the alteration is not approved by the competent authority and therefore the three fiats, together represent three different housing units as they have been named, numbered and purchased as such and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e joined with other flats. But, the assessee claims that all the units are used as single dwelling unit by the joint family. 11. He further brought to our notice the observation of Ld. CIT(A) that Ld. CIT(A) while passing the order held the assessee has expanded his house by adding two flats to his existing flats on the same floor further held that since three flats 63, 61 62 are used as Single Dwelling Unit by the assessee and his family Members the same should be considered as one house within the meaning of Section 23(2) of the Income Tax Act, 1961. 12. Considered the rival submission and material placed on record. We notice from the record that in remand proceedings, AO has agreed with the documents submitted by assessee that the flat nos. 61, 62, 51 and 52 are combined and having single kitchen and common entrance, therefore, it satisfies the definition of single dwelling unit. Therefore, we are inclined to accept the findings of Ld. CIT(A) and accordingly, ground raised by revenue is dismissed. 13. With regard to ground no. 2, Ld. DR submitted that Ld CIT(A) erred in deleting the addition of ₹ 7,20,000/- made by the AO on account of low withdrawals without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has given a detailed chart explaining the nexus of interest earned with interest expended. 19. He brought to our notice the observation of Ld. CIT(A), which is reproduced below:- a) Ld. CIT(A) has deleted Interest addition of ₹ 29,57,708/- paid to LIC by observing the fact that these Interest expenditure has direct nexus with Interest earned from M/s Maneesh Pharmaceuticals Ltd. b) As regards Interest of ₹ 68,48,170/- paid to Dr. Balkrishna Hedge, the Ld. CIT(A) has observed the fact that these Interest expenditure has direct nexus with Interest earned from M/s Maneesh Pharmaceuticals Ltd. 20. In the light of the above, both the Interest paid to LIC Dr. Balkrishna Hedge is considered as allowable as deduction under Income Tax Act. 1961. 21. He further submitted that the AO also while passing the Order dated 04.05.2017 u/s 250 of the Income Tax Act. 1961 for the Assessment Year 2011-12 on direction of Ld. CIT(Appeal) has already verified the fact that Interest earned on Loan given to Dr. Balkrishna Hedge has direct nexus with Interest earned from MPL and therefore, the same is allowable as deduction u/s 57(iii) of the Income Tax Act, 1961. 22. Consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 18.880 /- but not shown any expenditure incurred. 25. He further submitted that interest of ₹ 29,57,308/- paid to LIC, ₹ 68,48,170/- paid to Dr. Balkrishna Hedge has direct immediate nexus with Interest Income earned from M/s Maneesh Pharmaceuticals Ltd. and therefore same is allowable as deduction u/s 57(iii) of the Act, 1961 accordingly, the same does not fall within the purview of Section 14A read with Rule 8D of the Income Tax Act. 1961. 26. He relied on the following Judgments:- a) REI Agro Ltd Vs DCIT, 98 DTR 339, ITAT Kolkata Bench b) Arnav Gruh Ltd, Mumbai Vs Assessing officer, ITA 5349/Mum/2011, ITAT Mumbai c) ACIT 7(2) Vs Reliance Land Pvt Ltd., ITA No 5547/Mum/2010, ITAT Mumbai. 27. He brought to our notice the observation of Ld. CIT(A) in para no. 1 on page 36, which is as under:- In para 8.7 above, the Interest expense of ₹ 98,05,878/- has been allowed u/s 57(iii) of the Act. Since the Interest expenses allowed are directly attributable to earning of Interest Income from M/s Maneesh Pharmaceuticals Ltd, disallowance under Rule 8D(2)(ii) is not required with respect to such expenditure. 28. Considered the riv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, we must deal with one procedural issue as well. While hearing of these appeals was concluded on 7th January 2020, this order thereon is being pronounced today on 14th day of May, 2020, much after the expiry of 90 days from the date of conclusion of hearing. We are also alive to the fact that rule 34(5) of the Income Tax Appellate Tribunal Rules 1963, which deals with pronouncement of orders, provides as follows: (5) The pronouncement may be in any of the following manners:- (a) The Bench may pronounce the order immediately upon the conclusion of the hearing. (b) In case where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date for pronouncement. (c ) In a case where no date of pronouncement is given by the Bench, every endeavour shall be made by the Bench to pronounce the order within 60 days from the date on which the hearing of the case was concluded but, where it is not practicable so to do on the ground of exceptional and extraordinary circumstances of the case, the Bench shall fix a future day for pronouncement of the order, and such date shall notordinarily(emphasis supplied by us now) be a day beyond a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also a few more days prior to, and after, the lockdown by observing that In case the limitationhasexpired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown . Hon ble Bombay High Court, in an order dated 15th April 2020, has, besides extending the validity of all interim orders, has also observed that, It is also clarified that while calculating time for disposal of matters made time-bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly , and also observed that arrangement continued by an order dated 26th Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he extraordinary steps taken suomotu by Hon ble jurisdictional High Court and Hon ble Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our considered view, even without the words ordinarily , in the light of the above analysis of the legal position, the period during which lockout was in force is to excluded for the purpose of time limits set out in rule 34(5) of the Appellate Tribunal Rules, 1963. Viewed thus, the exception, to 90-day time-limit for pronouncement of orders, inherent in rule 34(5)(c), with respect to the pronouncement of orders within ninety days, clearly comes into play in the present case. Of course, there is no, and there cannot be any, bar on the discretion of the benches to refix the matters for clarifications because of considerable time lag between the point of time when the hearing is concluded and the point of time when the order thereon is being finalized, but then, in our considered view, no such exercise was required to be carried out on the facts of this case. 11. To sum up, the appeal of the assessee is allowed, and appeal of the Assess ..... 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