TMI Blog2020 (4) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 7090/MUM/2016, ITA No. 7091/MUM/2016 And ITA No. 7092/MUM/2016 - - - Dated:- 31-1-2020 - Shri Rajesh Kumar (AM) And Shri Ram Lal Negi (JM) For the Assessee : Shri Neelkanth Khandelwal (DR) For the Revenue : Shri P. Daniel/V. Jenardhanan (DRs) ORDER PER BENCH These appeals have been filed by the revenue against the common order dated 30.09.2016 passed by the Commissioner of Income Tax (Appeals)-49 (for short the CIT(A), Mumbai, for the assessment years 2010-11, 2011-12 and 2012-13, whereby the Ld. CIT(A) has partly allowed the appeals filed by the assessee against the assessment orders passed u/s 143 (3) r.w.s. 153A of the Income Tax Act, 1961 (for short the Act ). Since, these appeals pertain to the same assessee and the department has raised the identical issue in all the three appeals, these were clubbed, heard together and are being disposed of by this common and consolidated order for the sake of convenience. 2. Since, the facts of these cases are similar, we take the facts of the case pertaining to the AY 2010-11 as a lead case. 3. The assessee engaged in the business of share in stock brokering, investment and trading in shares and sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... become infructuous. 5(a). On the other hand, the Ld. Departmental Representative Sh. P. Daniel, Senior Counsel fairly admitted that the Tribunal has allowed the appeal of the assessee and in view of the said order, the Department s appeals have become infructuous. 6. We have perused the material on record including the decision of the coordinate Bench in assessee s appeals. We notice that the facts of the case pertaining to the AYs. 2011-12 and 2012-13 are identical except the interest income claimed by the assessee and the issues involved in all the three assessment years are identical. The coordinate Bench has decided the assessee s appeals ITA No. 6548/Mum/2016 for the AY 2010-11, ITA No. 6549/Mum/2016, for the AY 2011-12 and ITA No. 6550/Mum/2016 for the AY 2012-13 by following the decision of the coordinate Bench rendered in the assessee s own case for the AYs. 2008-09 and 2009-10 in ITA No. 3225/Mum/2013 and 7518/Mum/2013 and allowed the assessee s appeals. The findings of the coordinate Bench in the assessee s appeals for the AYs. 2010-11, 2011-12 and 2012-13 read as under:- 10. We have considered rival contentions and carefully gone through the orders of the auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09 Panther Fincap Management Services Pvt. Ltd 7278/Mum/2007 193 and369/Mum/2008 14. We found that the banks have stopped providing the interest as they are governed by the NPA guidelines of the RBI and as the account of the assessee has turned NPA long back, the banks have stopped providing the interest, this should not come in the way of allowing the interest as the liability and obligation of assessee to pay interest persists. 15. The break-up of interest expenditure debited to the profit and loss account are as under:- A.Y. Interest debited to the P L account Break-up of interest expenditure debited to the profit and loss account Remarks 2010-11 ₹ 8,59,64,086 l.MMCB- ₹ 48,63,019 2. GTB Overdraft - ₹ 7,50,1 5,304 3. GTB Bank guarantee ₹ 59,85,000 4. HDFC-₹ 3,003 5. Service tax ₹ 97,760 Interest received onFixed deposits Rs. 1,88,64,396 and Therefore, the interest Expenditure is Restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of deposit to the tune of ₹ 24,35,12,8137- with National Stock Exchange on which the NSE allowed interest of ₹ 2,60,42,2977- during the financial year 2007-08 relevant to the assessment year under consideration. We find that these deposit of ₹ 24 crores accumulated out of various bank guarantee invoked and proceeds of FDRs given as security. The source of the said amounts of accumulated funds with the NSC are from the borrowed funds from banks. Now the question before us is whether the assessee is entitled to deduction of interest incurred to various banks from whom the funds were arranged from the interest received from National Stock Exchange which is assessable under the head income from other sources . For the sake of convenience and better understanding, the provisions of section 57(iii) are reproduced below : '57. The income chargeable under the head Income from other sources shall be computed after making the following deductions, namely :- (i), (ia) (ii), (iia) ** ** ** (iii) any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s exercised in 2002. We find merit in the arguments of the Id.AR that the interest incurred to these banks namely Global Trust Bank and Centurion Bank , ICICI Bank should be allowed while assessing the interest income of the assessee from the deposits with NSE and we are not convinced with the findings of Id.CIT(A) that there is no nexus between the funds/deposits lying with the NSE under lien and NSE have various deposits or FDR under lien or deposits out of sources as discussed supra and the interest expense accrued in favour of various banks on the money borrowed for the purpose of FDRs for security and also for bank guarantees to NSC. Accordingly, we set aside the order of Id.CIT(A) and direct the AO to allow deduction of interest of ₹ 2,74,88,000/- out of the interest received from the National Stock Exchange. This ground is allowed in favour of the assessee. 9. The issue raised in ground no.4 is against the non allowance of credit of tax ₹ 38,79,584/-. This ground was taken before the Ld. CIT(A) who dismissed the ground by holding that the assessee was free to move an application u/s 154 of the Act before the AO and accordingly, claim the credit of TDS and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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