M/s MKJ Developers Ltd Vs ACIT (ITAT Kolkata)
Learned counsel’s sole submission during the course of hearing is that assessee had in fact converted its shares held as stock-in-trade into investments only on 31.03.2005 than on 01.04.2004. He pleads that both the lower authorities have erred particularly in computing the impugned interest disallowance on erroneous assumption of facts that the convergent of shares to investment in fact took place of opening date of the relevant previous year. Learned Departmental Representative fails to dispute the clinching fact that neither the Assessing Officer nor the CIT(A) have examined the said vital date of the impugned conversion of assessee’s stock-in-trade to investment whilst computing the proportionate disallowance in issue dispute the fact that the taxpayer’s statement of fact had made it clear that actual date of conversion was 31 .03.2005 only. We therefore deem it appropriate to restore this sole substantive ground back to the Assessing Officer for factual verification of date of the stock-in-trade shares to investments in issue to be followed by necessary computation of the proportionate interest disallowance as per law after affording adequate opportunity of hearing to the assessee.
Decision: Matter remanded.
FULL TEXT OF THE ITAT JUDGEMENT
This assessee’s appeal for assessment year 2005-06 arises against the Commissioner of Income Tax (Appeals)-2, Kolkata’s order dated 06.04.2017 passed in case No.244/CIT(A)-2/14-15 involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’.
Heard both the parties. Case file perused.
2. The assessee’s sole substantive ground challenges both the lower authorities action invoking sec. 36(1)(iii) proportionate interest disallowance of ₹1 ,02,00,000/- during the course of assessment as affirmed in lower appellate proceedings. The CIT(A)’s detailed discussion qua the instant issue reads as follows:-
“Grounds-1, 2, & 3
These grounds of appeal as raised by the assessee against the order of the assessing officer are as under:-
