SHRI MANOJ JAIN, JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 133/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3177 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 02-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Assessee Lawyers: APEKSHA KALRA
• Keywords: Business expenditure
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 133/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2012-13 SHRI MANOJ JAIN, PROP. M/S MAXWELL INDIA, F- 946(D) ROAD NO. 14, V.K.I. AREA, JAIPUR. CUKE VS. THE ITO, WARD-4(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABPPJ 0403 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI ARPIT VIJAY (C.A.) & MR. APEKSHA KALRA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI. J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 28/06/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT :21/08/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-2, JAIPUR DATED 10.11.2017 FOR THE ASSESSMEN T YEAR 2012-13 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND S OF APPEAL AS UNDER:- ITA NO. 133/JP/2018 SHRI MANON JAIN VS. ITO 2 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(APPEAL) IS NOT JUSTIFIED IN CONFIRMING THE DISA LLOWANCE OF INTEREST EXPENSES OF RS. 9,16,025/- PAID TO HDFC BANK. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD. CIT(APPEAL) IS NOT JUSTIFIED IN CONFIRMING THE LUMS UM ADDITION OF RS. 1,00,000/- MADE ON ACCOUNT OF LOW H OUSE HOLD EXPENSES. 2. IN GROUND NO. 1, THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF INTEREST EXPENSES OF RS. 9,16,025/- PAID TO HDFC BA NK. THE LD. AR HAS SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS TAKEN A LOAN OF RS. 71 LAKHS FROM HDFC BANK ON 14.0 3.2011 FOR MEETING THE WORKING CAPITAL REQUIREMENT OF HIS FIRM M/S MAXWELL INDIA. IT WAS SUBMITTED THAT RS. 64,17,000/- WAS DIRECTLY CREDITED TO THE FIRMS CURRENT ACCOUNT ON 14.03.2011 AND THE REMAINING AMO UNT OF RS. 6,08,818/- AFTER DEDUCTING DISBURSEMENT EXPENSE S OF RS. 74,182/-, WHICH WAS DISBURSED INITIALLY IN PERSONAL SAVING ACCOUNT OF THE ASSESSEE WAS SUBSEQUENTLY TRANSFERRED TO THE CURREN T ACCOUNT OF M/S MAXWELL INDIA ON THE VERY NEXT DAY I.E. 15.03.2011. IT WAS SUBMITTED THAT THE ENTIRE LOAN AMOUNT WAS DEPOSITED IN THE CU RRENT ACCOUNT OF M/S MAXWELL INDIA PROPRIETORSHIP FIRM OF THE ASSESSEE A ND WAS USED FOR MEETING WORKING CAPITAL REQUIREMENT. IT WAS FURTHER SUBMITTED THAT FROM THE PERUSAL OF THE CAPITAL ACCOUNT OF THE ASSE SSEE MAINTAINED IN M/S MAXWELL INDIA, IT CAN BE NOTED THAT THE LOAN AM OUNT WAS EXCLUSIVELY USED FOR MEETING THE WORKING CAPITAL OF THE FIRM AN D NO AMOUNT WAS TAKEN OUT FROM THE BUSINESS AFTER THE DATE OF LOAN DISBURSEMENT ON 15.03.2011. IT WAS FURTHER SUBMITTED THAT THE IMMOV ABLE PROPERTIES AND OTHER INVESTMENTS AS SHOWN IN PERSONAL BALANCE SHEE T AS ON 31. ITA NO. 133/JP/2018 SHRI MANON JAIN VS. ITO 3 03.2012 WERE ALREADY HELD BY THE ASSESSEE BEFORE TH E HDFC LOAN AMOUNT WAS DISBURSED. IT WAS ACCORDINGLY SUBMITTED THAT THE AOS CONTENTION THAT THE LOAN AMOUNT WAS USED FOR MAKING INVESTMENT IN IMMOVABLE PROPERTIES AND INVESTMENT IN SHARES, MUTU AL FUNDS WAS NOT CORRECT. 3. THE LD. DR IS HEARD WHO HAS RELIED ON THE FINDI NGS OF THE LOWER AUTHORITIES. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND FORCE IN THE ARGUMENT OF THE LD. AR WHEN THE LOAN AMOUNT FROM HDFC BANK WAS CREDITED IN THE FIRMS CURRENT ACCOUNT AND SUBSEQUENTLY THERE IS NO WITHDRAWAL BY THE ASSESSEE FROM THE FIRMS CURRENT ACCOUNT FOR HIS PERSONAL PURPOSE S AND IN THE ABSENCE OF ANY FINDING BY THE ASSESSING OFFICER THAT THE FU NDS WERE DIVERTED TO MEET NON- BUSINESS EXPENDITURE, THE INTEREST ON THE HDFC LOAN HAS RIGHTLY BEEN CLAIMED BY THE ASSESSEE. IT IS FURTHER NOTED THAT IN THE SUBSEQUENT ASSESSMENT YEARS 2013-14 & 2014-15, THE ASSESSEE HAS CLAIMED INTEREST PAID TO HDFC BANK AND THE SAME HAS BEEN DULY ALLOWED BY THE REVENUE IN TERMS OF PROCEEDINGS COMP LETED U/S 143(3) OF THE ACT. IN LIGHT OF THE SAME, THE ADDITION SO M ADE BY THE ASSESSING OFFICER IS HEREBY DELETED. IN THE RESULT, THE GROUN D OF APPEAL IS ALLOWED. 5. IN GROUND NO. 2, THE ASSESSEE HAS CHALLENGED THE LUMP SUM DISALLOWANCE OF RS. 1,00,000/- MADE BY THE AO ON AC COUNT OF LOW HOUSEHOLD EXPENSES. DURING THE COURSE OF HEARING, T HE LD. AR HAS SUBMITTED THAT THE ASSESSEE HAS MADE DRAWING OF RS. 3,00,000/- WHICH ITA NO. 133/JP/2018 SHRI MANON JAIN VS. ITO 4 INCLUDES HOUSE HOLD EXPENSES INCURRED THROUGH CRED IT CARD AMOUNTING TO RS. 1,55,490/- AND HOUSE HOLD EXPENSES INCURRED IN CASH/BANK WITHDRAWALS AMOUNTING TO RS. 1,44,510/-. IT WAS FUR THER SUBMITTED THAT THE WHOLE OF THE CREDIT CARD PAYMENT OF RS. 2,89,25 4/- CANNOT BE CONSIDERED AS A PART OF THE DRAWINGS OF RS. 3,00,00 0/- AS RS. 1,33,764/- IS INCURRED TOWARDS BUSINESS AND TRAVELLING EXPENSE S WHICH HAS BEEN CLAIMED AS BUSINESS EXPENSES IN THE BOOKS OF M/S MA XWELL INDIA. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE IS RESIDING IN HIS PARENTAL HOUSE IN A JOINT FAMILY AND THE OTHER MEMBERS OF THE FAMILY HAVE ALSO WITHDRAWN AMOUNT FROM THEIR RESPECTIVE BANK ACCOUNTS TOWARDS THE HOUSE HOLD EXPENDITURE TOTALING TO RS. 7,00,000/-(INCLUDING TH AT OF THE ASSESSEE) WHICH IS QUIET SUFFICIENT FOR MEETING DAY TO DAY EX PENSES OF THE ASSESSEES JOINT FAMILY. IN LIGHT OF THE SAME, IT W AS SUBMITTED THAT ADHOC OF RS. 1,00,000/- IS NOT JUSTIFIED AND THE SAME MAY BE DELETED. 6. THE LD. DR IS HEARD WHO HAS RELIED ON THE FINDIN G OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND FORCE IN THE ARGUMENTS OF THE LD. AR THAT THERE ARE SUFFICIENT HOUSE HOLD DRAWINGS OF RS. 7,0 0,000/- INCLUDING RS. 3,00,000/- BY THE ASSESSEE WHICH IS SUFFICIENT FOR MEETING THEIR DAY- TO-DAY HOUSE HOLD EXPENSES. FURTHER, THE AO HAS NO T BROUGHT ON RECORD ANY EVIDENCE TO SUPPORT THE ADHOC DISALLOWAN CE OF RS. 1,00,000/-. IN LIGHT OF THE SAME, THE ADHOC ADD ITION OF RS. 1,00,000/- MADE BY THE AO IS HEREBY DELETED. ITA NO. 133/JP/2018 SHRI MANON JAIN VS. ITO 5 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/08/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21/08/2018. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI MANOJ JAIN, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD- 4(2), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 133/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR