R.Muthuraman, CHENNAI V. ITO, CHENNAI

ITA 1084/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4070 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 01-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: S SUNDARARAMAN
• Keywords: Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI , ! . , ' BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER , AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1084/MDS/2017 /ASSESSMENT YEAR: 2012-13 SHRI R.MUTHURAMAN, NEW NO.3, THYAGARAJAPURAM, MYLAPORE, CHENNAI-600 004. VS. THE INCOME TAX OFFICER, NON-CORPORATE CIRCLE-1(3), CHENNAI-600 034. [PAN: AAJPM 9232 B ] ( & /APPELLANT) ( '(& /RESPONDENT) & ) / APPELLANT BY : MR.S.SUNDARARAMAN, CA '(& ) /RESPONDENT BY : MR.S.VIJAYA PRABHA, JCIT ) /DATE OF HEARING : 10.07.2017 ) /DATE OF PRONOUNCEMENT : 10.07.2017 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.1084/MDS/2017 IS AN APPEAL FILED BY THE ASS ESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-2 , CHENNAI, IN ITA NO.29/CIT(A)-2/2015-16 DATED 31.03.2017 FOR THE AY 2012-13. 2. MS.S.VIJAYA PRABHA, JCIT, REPRESENTED ON BEHALF OF THE REVENUE AND MR. S.SUNDARARAMAN, CA, REPRESENTED ON BEHALF OF TH E ASSESSEE. ITA NO.1084/MDS/2017 :- 2 -: 3. IT WAS SUBMITTED BY THE LD.AR THAT IN THE COURSE OF ASSESSMENT, THE AO HAD DISALLOWED THE INTEREST PAID TO M/S.SUPER SE LECTRO (P) LTD (IN SHORT SUPER SELECTRO) AND ALSO TO M/S.KARUR VYSYA BANK LTD. (IN SHORT KVB). IT WAS A SUBMISSION THAT THE ASSESSEE IS A DEALER O F WHITE GOODS. IT WAS A SUBMISSION THAT THE ASSESSEE HAD TAKEN LOAN OF RS.9 5,00,000/- FROM SUPER SELECTRO FOR THE PURCHASE OF VARIOUS WHITE GO ODS FOR ITS BUSINESS. THE ASSESSEE HAD PAID INTEREST ON THE SAID LOAN FOR THE AY 2010-11 AND THE SAME WAS ALSO ALLOWED. IT WAS A SUBMISSION THA T FOR THE AY 2011-12, THE INTEREST PAID WAS DISALLOWED ON THE GROUND THAT THE ASSESSEE HAS USED THE LOAN FOR INVESTING IN IMMOVABLE PROPERTIES. IT WAS A SUBMISSION THAT FOR THE AY 2011-12, THE ASSESSEE HAD FILED UNDER TH E DISPUTE RESOLUTION AS THERE WERE ALSO OTHER ISSUES IN THE ASSESSMENT. FO R THE AY 2012-13, BEING THE ASSESSMENT YEAR IN APPEAL, THE AO HAD FOL LOWED THE DISALLOWANCE FOR THE AY 2011-12 AND HAD DISALLOWED THE INTEREST PAID TO SUPER SELECTRO AND KVB. IT WAS A SUBMISSION THAT T HE LOAN FROM KVB HAD BEEN TAKEN FOR RE-PAYING PART OF THE LOAN FROM SUPE R SELECTRO. THE LD.AR PLACED BEFORE US THE DETAILS OF THE LOAN TAKEN AND THE DETAILS OF THE PAYMENTS MADE IN RESPECT OF THE PURCHASE OF THE STO CK OF THE WHITE GOODS. IT WAS A SUBMISSION THAT THE DETAILS HAVE N OT BEEN VERIFIED BY THE AO, AND HE HAD NO OBJECTION, IF THE ISSUE WAS RESTO RED TO THE FILE OF THE AO FOR VERIFICATION AND RE-ADJUDICATION. 4. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ER OF THE AO AND LD.CIT(A). ITA NO.1084/MDS/2017 :- 3 -: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMIT TEDLY, A PERUSAL OF THE ORDER OF THE AO SHOWED THAT THE AO HAS MADE THE DISALLOWANCE OF THE INTEREST BY FOLLOWING THE ORDER FOR THE AY 2011-12 WHICH HAS BEEN SETTLED UNDER THE DISPUTE RESOLUTION. A PERUSAL OF THE ASS ESSMENT ORDER ALSO CLEARLY SHOWED THAT THE LOAN FROM KVB HAS BEEN TAKE N FOR RE-PAYING PART OF THE LOAN IN RESPECT OF SUPER SELECTRO. WHETHER THIS LOAN TAKEN FROM SUPER SELECTRO HAS BEEN UTILIZED FOR BUYING STOCK O R WHETHER THE SAME HAS BEEN USED FOR NON-BUSINESS PURPOSES, THE FACTS ARE NOT EMANATING FROM THE ASSESSMENT ORDER CLEARLY. THE ASSESSEE HAS PLA CED BEFORE US DETAILED BREAKUP OF THE USAGE OF THE LOAN TAKEN FROM SUPER S ELECTRO. THIS NEEDS TO BE EXAMINED BY THE AO. IN THESE CIRCUMSTANCES, IN THE INTEREST OF NATURAL JUSTICE, THE ISSUES IN THIS APPEAL ARE RESTORED TO THE FILE OF THE AO FOR RE- ADJUDICATION AFTER GRANTING THE ADEQUATE OPPORTUNIT Y TO THE ASSESSEE TO SUBSTANTIATE HIS CASE. THE ASSESSEE SHALL PROVE TO THE AO THAT THE LOANS TAKEN WERE USED FOR BUSINESS PURPOSES ONLY. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON JULY 10, 201 7, AT CHENNAI. SD/- SD/- ( . ) ( A. MOHAN ALANKAMONY ) ! /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER ITA NO.1084/MDS/2017 :- 4 -: /CHENNAI, 1 /DATED: JULY 10, 2017. TLN ) '23 43 /COPY TO: 1. & /APPELLANT 4. 5 /CIT 2. '(& /RESPONDENT 5. 3 ' /DR 3. 5 ( ) /CIT(A) 6. /GF