Shri Jagdish Thakkar, Vadodara V. The Deputy Commissioner of Income Tax, Circle-1(2), Vadodara

ITA 1291/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0253 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 29-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR VARMA
• Assessee Lawyers: M K PATEL
• Section: 234B

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ I.T.A. NO. 1291/AHD/2017 ( / ASSESSMENT YEAR : 2012-13) JAGDISH THAKKAR PROP.: KOMAL ROADWAYS 8/B, GURUKRUPA SHOPPING CENTRE, RAMAKAKA ROAD, VADODARA - 391740 / VS. DCIT CIRCLE- 1(2), VADODARA- 390007 ./ ./ PAN/GIR NO. : AAV PT9 901 A ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI M. K. PATEL, A.R. / RESPONDENT BY : SHRI SUMIT KUMAR VARMA, SR. DR / DATE OF HEARING 24/06/2019 !'# / DATE OF PRONOUNCEMENT 28/06/2019 $%/ O R D E R PER SUDHANSHU SRIVASTAVA - JM: THIS APPEAL OF THE ASSESSEE IS PREFERRED AGAINST TH E ORDER DATED 30.01.2017 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-5, VADODARA (HEREINAFTER CALLED CIT(A)) FOR ASSESSMENT YEAR 2012-13. ITA NO.1291/AHD/2017 [JAGDISH THAKKAR. VS. DCIT] A.Y. 2012-13 - 2 - 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE IS ENGAGED IN THE BUSINESS OF TRANSPORT AND ALSO EARNS INCOME FRO M HOUSE PROPERTY. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DISCLOSED A TURNOVER OF RS. 1,05,91,055/- AND NET P ROFIT OF RS. 10,16,219/- WAS DECLARED. THE RETURN OF INCOME WAS FILED DECLARING A TOTAL INCOME OF RS. 16,17,065/-. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY ASSESSMENT THROUGH CASS AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT THE ASS ESSEE HAD CLAIMED DEDUCTION OF RS. 6,83,951/- UNDER SEC. 57(I I) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) TOWARD S INTEREST PAID TO FIVE PARTIES. THE ASSESSEE WAS REQUIRED TO SUBSTAN TIATE THE CLAIM OF INTEREST BY SHOWING THAT INTEREST BEARING FUNDS HAV E BEEN GIVEN AS LOAN AND EARN INTEREST. THE AO OBSERVED THAT THE A SSESSEE WAS EARNING INCOME FROM BUSINESS AND PROFESSION BUT WAS CLAIMING INTEREST EXPENSES UNDER SEC. 57(II) OF THE ACT WHIC H WAS NOT PERMISSIBLE. THE AO PROCEEDED TO ADD THIS AMOUNT T O THE INCOME OF THE ASSESSEE. 2.1 THE ASSESSEES APPEAL BEFORE THE LD. FIRST APPE LLATE AUTHORITY WAS ALSO DISMISSED AND AGGRIEVED WITH THE ADJUDICAT ION OF THE LD. CIT (A) THE ASSESSEE IS NOW BEFORE THIS TRIBUNAL (I TAT) AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1.0 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS. 6,83,951/- ITA NO.1291/AHD/2017 [JAGDISH THAKKAR. VS. DCIT] A.Y. 2012-13 - 3 - BEING THE INTEREST PAID AND CLAIMED AS DEDUCTION UN DER SECTION 57 OF THE I T ACT. 2.0 THE LD. COMMISSIONER OF INCOME TAX (APPEALS)OUG HT TO HAVE APPRECIATED THAT SAID INTEREST WAS PAID TO EARN THE INCOME DULY OFFERED BY THE APPELLANT FOR TAX. 3.0 THE LD. COMMISSIONER OF INCOME TAX (APPEALS)ERR ED IN LAW AND ON FACTS HAS DISMISSED THE GROUND RELATING TO I NITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C)OF THE INCOME TAX ACT, 1961 FOR THE ALLEGED CONCEALMENT AND/OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 4.0 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN LAW AND ON FACTS IN CONFIRMING THE CHARGING OF INTE REST UNDER SECTION 234B AND 234C OF THE INCOME TAX ACT, 1961. 5.0 THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, DE LETE OR MODIFY THE ABOVE GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 3.0 THE LD. AUTHORISED REPRESENTATIVE (AR) SUBMITTE D THAT THE ASSESSEE HAD CLAIMED THIS INTEREST PAYMENT AS DEDUC TION UNDER SEC. 57(II) BY AN INADVERTENT MISTAKE. IT WAS SUBMITTED THAT IT WAS NOT IN DISPUTE THAT THE SAID EXPENDITURE WAS INCURRED. TH E LD. AR ALSO PLACED ON RECORD A COPY OF THE COMPUTATION OF THE I NCOME AND DEMONSTRATED THAT THE ASSESSEE HAD BEEN EARNING INC OME FROM BUSINESS AND PROFESSION AND SUBMITTED THAT, THEREFORE, THE S AID INTEREST WAS ALLOWABLE UNDER SEC. 36 OF THE ACT AS BUSINESS EXPE NDITURE. IT WAS PRAYED THAT THE DISALLOWANCE MAY BE DELETED. 4.0 IN RESPONSE, THE LD. SENIOR DEPARTMENTAL REPRES ENTATIVE (SR. DR) SUBMITTED THAT DEDUCTION UNDER SEC. 57(II) OF T HE ACT WAS PERMISSIBLE ONLY FROM INCOME UNDER THE HEAD OTHER S OURCE AND SINCE THERE WAS NO CLEAR NEXUS BETWEEN THE EXPENDITURE IN CURRED AND THE ITA NO.1291/AHD/2017 [JAGDISH THAKKAR. VS. DCIT] A.Y. 2012-13 - 4 - INCOME EARNED, THE ASSESSEES CLAIM WAS NOT ALLOWAB LE. THE SR. DR VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT (A). 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE MATERIAL ON RECORD. THE FACTS OF THE CASE ARE NOT IN DISPUTE. UNDISPUTEDLY, THE ASSESSEE HAS INCOME FROM BUSINESS WHICH IS DULY REFLECTED IN HIS COMPUTATION OF INCOME. ADMITTEDLY , THE ASSESSEE HAS NOT SHOWN ANY INCOME UNDER THE HEAD INCOME FROM OTH ER SOURCES BUT HAS CLAIMED PAYMENT OF INTEREST UNDER SEC. 57(II) O F THE ACT. IT IS THE CONTENTION OF THE ASSESSEE THAT THIS DEDUCTION OF I NTEREST UNDER SEC. 57(II) WAS BECAUSE OF INADVERTENT ERROR. IT IS THE PLEA OF THE ASSESSEE THAT THE IMPUGNED INTEREST WAS PAID TO EARN THE INC OME WHICH HAD BEEN DULY OFFERED TO TAX BY THE ASSESSEE. ALTHOUGH THE LD. CIT (A) HAS DISCUSSED THE ISSUE AT LENGTH AND HAS ALSO GIVEN A CATEGORICAL FINDING AS TO WHY THE IMPUGNED AMOUNT WAS NOT ALLOWABLE AS A DEDUCTION UNDER SEC. 57(II) OF THE ACT, IT IS OUT CONSIDERED OPINION THAT THE ASSESSEES PLEA FOR ALLOWING THE DEDUCTION OF INTER EST U/S 36 OF THE ACT NEEDS TO BE CONSIDERED IN THE INTEREST OF JUSTICE. ACCORDINGLY, WE RESTORE THE ISSUE TO THE FILE OF THE LD. CIT (A) TO ADJUDICATE THE ISSUE AFRESH BY EXAMINING THE ASSESSEES CLAIM FOR ALLOWA BILITY UNDER SEC. 36 OF THE ACT AFTER DULY EXAMINING AND RECORDING A FINDING THAT THE SAID INTEREST PAYMENT RELATED TO EARNING OF INCOME UNDER THE HEAD BUSINESS OR PROFESSION. NEEDLESS TO SAY, THE LD. C IT (A) SHALL ALLOW PROPER OPPORTUNITY TO THE ASSESSEE TO PRESENT HIS C ASE. ITA NO.1291/AHD/2017 [JAGDISH THAKKAR. VS. DCIT] A.Y. 2012-13 - 5 - 5.1 GROUND NOS. 3 AND 4 ARE CONSEQUENTLY IN NATURE AND NEED NO SEPARATE ADJUDICATION. 5.2 GROUND NO. 5 IS GENERAL IN NATURE AND ALSO NEED S NO SEPARATE ADJUDICATION. 6. IN THE FINAL RESULT, THE APPEAL OF THE ASSESSE E IS STANDS ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (AMARJIT SINGH) (SUDHANSHU SRIV ASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 28/06/2019 TANMAY TRUE COPY !' #' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. $ / ASSESSEE 3. ) *+ , / CONCERNED CIT 4. ,- / CIT (A) 5. 012 33*+, *+#, 56$)$ / DR, ITAT, AHMEDABAD 6. 289 : / GUARD FILE. BY ORDER / $% , ;/5 *+#, 56$)$ < 1.DATE OF DICTATION ON 25.06.2019 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 26.06.2019 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 28.06.2019 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 28.06.2019 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR . P.S./P.S 28.06.2019 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28.06.2019 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER THIS ORDER PRONOUNCED IN OPEN COURT ON 2 8/06/2019