V.N.Devadoss, CHENNAI V. ACIT, CHENNAI

ITA 1344/CHNY/2015

• Counselvise Citation: 134421714 RSA 2015
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 01-09-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 01-06-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: T HARISH
• Keywords: Capital expenditure
• Section: 37

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , ! ' , # $% BEFORE SHRI N.R.S.GANESAN, JUDICIAL MMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ ITA NO. 1344/MDS/2015 / ASSESSMENT YEAR : 2011-12 MR. V.N.DEVADOSS, NO.333, POONAMALLEE HIGH ROAD, AMINJAKARAI, CHENNAI 600 029. PAN AAFPD4228E ( /APPELLANT) VS THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-I(3), CHENNAI 34. ( /RESPONDENT) / APPELLANT BY : SHRI T. HARISH, CA / RESPONDENT BY : SHRI P . RADHAKRISHNAN, JCIT / DATE OF HEARING : 01.09.2015 ! / DATE OF PRONOUNCEMENT: 04.09.2015 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 31 .3.2015. - - ITA 1344/15 2 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WITH REGARD TO CONFIRMING THE DISALLOWANCE OF INTEREST E XPENDITURE OF ` 27 LAKHS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS AVAILED A LOAN OF ` 5,00,00,000/- FROM INDIA BULLS FINANCIAL SERVICES. OUT OF THIS LOAN, THE ASSESSEE PAID A SU M OF ` 1,50,00,000/- TOWARDS SELF-ASSESSMENT TAX FOR THE A SSESSMENT YEAR 2008-09. THE ASSESSEE CLAIMED INTEREST OF ` 27 LAKHS, WHICH WAS DISALLOWED BY THE ASSESSING OFFICER. AGG RIEVED BY THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE COMMIS SIONER OF INCOME-TAX(APPEALS), WHO CONFIRMED THE ADDITION MAD E BY THE AO. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES AND CONSIDERED THE ARGUMENTS OF THE LD. AR. A READING OF SEC. 37 CLEARLY SHOWS: ANY EXPENDITURE (NOT BEING EXPENDITURE OF THE NATU RE DESCRIBED IN SECTION 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE),LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVE LY FOR THE PURPOSES OF THE BUSINESS OF PROFESSION SHAL L BE - - ITA 1344/15 3 ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER TH E HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. 5. AS THE PAYMENT OF TAXES IS THE PERSONAL LIABILIT Y OF THE ASSESSEE, THE INTEREST PAID ON THE LOAN BORROWED FO R THE PURPOSE OF PAYING SELF-ASSESSMENT TAX IS NOT ALLOWABLE. IN THIS REGARD, THE FOLLOWING DECISIONS SUPPORT OUR VIEW, WHEREIN I T HAS BEEN HELD THAT THE INTEREST THAT WAS PAID BY THE ASSESSE E ON ANY SUM BORROWED BY HIM FOR PAYMENT OF INCOME-TAX IS NOT DE DUCTIBLE FROM HIS NET INCOME SINCE, IT IS ONLY APPLICATION O F PROFITS AND NOT EXPENDITURE INCURRED TO EARN PROFITS: 1. EAST INDIA PHARMACEUTICAL WORKS LTD. V. CIT (SC) 222 ITR 627 2. H.H.MAHARAJA MARTHAND SING JUDEO VS. CIT (MP) 23 9 ITR 404 3. KISHINCHAND CHELLARAM VS. CIT (BOM) 114 ITR 654 6. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT THE CIT(APPEALS) IS JUSTIFIED IN CONFIRMING THE FINDING OF THE AO. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE CIT(APPEALS) AND THE SAME IS CONFIRMED. - - ITA 1344/15 4 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 4 TH OF SEPT., 2015 AT CHENNAI. SD/- SD/- ( ' . . ' . #$ ) ( % & ' ( ) ) N.R.S.GANESAN * )+,-./0-1223-04* 5 67 /JUDICIAL MEMBER 6789::2;.<-.<=>?@>0 %5 /CHENNAI, A6 /DATED, THE 4 TH SEPT., 2015. MPO* 6$ BCDC /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. E)* /CIT(A) 4. E /CIT 5. CF# G /DR 6. #HI /GF.