SHRI MUKESH G. BHOJWANI, Ahmedabad V. THE ITO, WARD -6(2), Ahmedabad

ITA 1206/AHD/2003

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0589 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-11-2009
• Assessment Year: 1996-1997
• Appeal Filed On: 26-03-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP GARG
• Assessee Lawyers: S N DIVETIA
• Keywords: Commercial expediency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI H.L. KARWA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING: 03.11.2009 DRAFTED ON: 11.1 1.2009 ITA NO.1206/AHD/2003 ASSESSMENT YEAR : 1996-1997 SHRI MUKESH G. BHOJWANI 72, MANEKBAUG SOCIETY, NR. NEHRUNAGAR, AMBAWADI, AHMEDABAD VS. INCOME TAX OFFICER, WARD-6(2), AHMEDABAD. PAN/GIR NO. : 31-109-PN-7184 (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI S.N.DIVETIA RESPONDENT BY: SHRI SANDEEP GARG, SR. D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD.CIT(APPEALS)-XV, AHMEDABAD DATED 17.01.2003 IN A PPEAL NO.CIT(A)-XV/WD- 6(2)/357/99-00. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE ASSESSEE IS AS FOLLOWS: 1. THAT THE LEARNED ASSESSING OFFICER HAS ERRED IN DISALLOWING INTEREST PAYMENTS OF RS.15,07,803/-, AND THE LEARNED COMMISS IONER OF INCOME TAX(APPEALS) HAS ERRED IN UPHOLDING THE DISALLOWANC E TO THE EXTENT OF RS.14,97,803/-. IN VIEW OF THE FACTS AND CIRCUMSTAN CES OF THE CASE, TOTAL INTEREST EXPENDITURE INCURRED BY THE APPELLANT SHOULD BE ALL OWED AS A DEDUCTION. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. I N THE INSTANT CASE, THE LEARNED ASSESSING OFFICER DISALLOWED CLAIM FOR INTEREST EXP ENDITURE OF RS.15,07,803/- OUT OF TOTAL INTEREST EXPENDITURE OF RS.19.83,531/- ON THE GROUND THAT INTEREST BEARING BORROWED FUNDS WERE UTILISED FOR NON BUSINESS AND P ERSONAL PURPOSES. ON APPEAL, ITA NO 1206/AHD/2003. M/S.SHRI MUKESH G. BHOJWANI ASST.YEAR -1996-97 - 2 - LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OBSERVED THAT INTEREST OF RS.10,000/- IS ALLOWABLE UNDER SECTION 24(1)(VI) OF THE ACT FOR UTILIZATION OF BORROWED FUNDS IN ACQUISITION OF HOUSE PROPERTY. IN RESPECT OF OTHER INTEREST EXPENDITURE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AGREED WITH THE CONCLUSION OF THE LEARNED ASSESSING OFFICER. THUS, LEARNED COMMISSIONER OF INCOME TAX(APPEALS) RESTRICTED THE DISALLOWANCE OF INTEREST EXPENDITURE TO RS.14,97,806/-. 4. BEFORE US, THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT DECISION OF THE HON'BLE SUPREME COUR T IN THE CASE OF S.A.BUILDERS LTD. VS. COMMISSIONER OF INCOME TAX (APPEALS)& ANR. (2007) 288 ITR 1(SC) COULD NOT BE CONSIDERED IN THE INSTANT CASE, DUE TO NON A VAILABILITY OF THE SAID DECISION ON THE DATE OF THE PASSING OF ORDER BY THE LOWER AU THORITIES. HE ALSO CONTENDED THAT THE INTEREST FREE ADVANCES GIVEN BY THE ASSESSEE WAS OUT OF COMMERCIAL EXPEDIENCY. HE THEREFORE, SUBMITTED THAT THE ISSUE SHOULD BE RESTORED TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR TAKING INTO CO NSIDERATION THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF S.A.BUILDERS L TD. VS. COMMISSIONER OF INCOME TAX (APPEALS) & ANR. (2007) 288 ITR 1(SC) A ND THE ISSUE SHOULD BE DECIDED IN THE LIGHT OF THE SAID DECISION. THE LEARNED DEPA RTMENTAL REPRESENTATIVE HAS NOT RAISED ANY OBJECTION TO THIS SUBMISSION OF THE LEAR NED AUTHORISED REPRESENTATIVE OF THE ASSESSEE. IN THESE CIRCUMSTANCES, WE SET AS IDE THE ORDERS OF THE LOWER AUTHORITIES AND REMAND THE MATTER BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR DECIDING THE ISSUE AFRESH AFTER CONSIDE RING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF S.A.BUILDERS LTD. VS. COMMISSIONER OF INCOME TAX (APPEALS) & ANR. (2007) 288 ITR 1(SC) AND AFTER AL LOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS, THIS GROUND OF AP PEAL IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO 1206/AHD/2003. M/S.SHRI MUKESH G. BHOJWANI ASST.YEAR -1996-97 - 3 - 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT AT THE CONCLUSION OF THE HEARING IN THE PRESENCE OF THE PARTIES ON 03/11/2009. SD/- SD/- ( H.L. KARWA ) ( N.S. SAINI ) JUDICIAL MEMBER ACCO UNTANT MEMBER AHMEDABAD; DATED 03/11/ 2009 PREPARED AND COMPARED BY : PARAS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XV, AHMEDABAD. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD