CHANDRAKANT KANTILAL PATEL,AHMEDABAD V. THE ITO, WARD-3(3)(1), AHMEDABAD

ITA 1853/AHD/2024

AI Insights

The case revolves around an appeal by Chandrakant Kantilal Patel against the order of the Commissioner of Income Tax (Appeals), which confirmed an addition made by the Assessing Officer regarding notional interest income. The Assessing Officer had estimated a notional interest income of Rs. 8,79,631, assuming that the assessee would have earned interest had he not invested the money in immovable property but kept it in his HUF instead. The tribunal, however, disagreed with this assessment, stating that it was the assessee's decision on how to use his money, and the Assessing Officer had no authority to question this decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35045 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DHINAL SHAH
• Keywords: Notional interest
• Section: 143(3)

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before Shri Sanjay Garg, Judicial Member Chandrakant Kantilal Patel, 1 Madhuram Residency, Nr. Shiv Ganesh Bunglows 100 New Ring Road Thaltej, Ahmedabad PAN: ABOPP717L (Appellant) Vs The Income Tax Officer, Ward-3(3)(1), Ahmedabad (Respondent) Assessee by: Shri Dhinal Shah, A.R. Revenue by: None Date of hearing : 27-02-2025 Date of pronouncement : 26-03-2025 आदेश/ORDER The present appeal has been preferred by the assessee against the order passed by Commissioner of Income Tax (Appeals), Addl/JCIT(A)-12 Mumbai [hereinafter referred to as “CIT(A)’] dated 30-08-2024 arising out of the order passed u/s. 143(3) of of the Income Tax Act, 1961 (here-in-after referred to as “the Act”) relevant to the Assessment Year 2017-18. 2. Adjournment application has been filed on behalf of the ld. D.R. stating that she was not well. Identical type of application has been filed in all the cases fixed for today. It will not be appropriate to adjourn all the matters. Since there is not any complicated issue involved in this appeal and the ITA No. 1853/Ahd/2024 Assessment Year 2017-18 I.T.A No. 1853/Ahd/2024 Chandrakant Kantilal Patel, A.Y. 2017-18 2 matter can be decided after going through the records and after hearing the ld. A.R., therefore, I proceed to adjudicate upon this appeal. 3. The assessee is aggrieved by the action of the lower authorities in making/confirming the addition on account of notional interest income amounting to Rs. 8,79,631/-. 4. The brief facts of the case are that the assessee had given loan to his HUF and was earning interest income. The assessee decided to purchase some immovable property. He therefore, got back some of the amount from his HUF and invested the same in the immoveable property. The Assessing Officer observed that had the assessee not invested the amount in immoveable property, he would have earned interest income. He, therefore, estimated the notional interest income of the assessee on this account and made the impugned addition. Ld. CIT(A) confirmed the addition so made by the Assessing Officer. 5. I have heard the ld. Authorized Representative and gone through the record. This type of addition in my view is absolutely baseless and rather abuse of the powers by the Assessing Officer. It was the assessee’s money. It was upto the assessee as to whether he has to invest the same for earning the interest or to invest in immovable property. Further, it is upon the assessee whether he wants to invest his money for the purpose of earning of income or not and even he may spend the same as per his wishes. The assessee with his conscious decision had made investment of his money into I.T.A No. 1853/Ahd/2024 Chandrakant Kantilal Patel, A.Y. 2017-18 3 immovable property and there was no authority to the Assessing Officer to question his decision relating to application/investment of his money. The reason given by the Assessing Officer for making the impugned addition is totally baseless. The impugned addition is hereby ordered to be deleted. 6. In the result, the appeal filed by the assessee is hereby allowed. Order pronounced in the open court on 26-03-2025 Sd/- (Sanjay Garg) Judicial Member Ahmedabad : Dated 26/03/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद "