DCIT Circle-22 (1), V. Satish Kumar Lakhina,

ITA 1372/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8342 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 17-06-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 11-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Assessee Lawyers: RAJAN MALIK
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `G : NEW DELHI) BEFORE HONBLE SR. VICE PRESIDENT SHRI R.P. GARG A ND HONBLE JUDICIAL MEMBER, SHRI RAJPAL YADAV ITA NO.1372/DEL./2008 (ASSESSMENT YEAR : 2004-05) DCIT, CIRCLE 22(1), VS. SH. SATISH KUMAR LAKHINA, NEW DELHI. B-127, OKHLA INDL. AREA, PH. I, NEW DELHI. (PAN/GIR NO.AAAPL5766A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJAN MALIK, ADV., REVENUE BY : MS. ANUSHA KHURANA, SR. DR ORDER PER R.P. GARG, SR.VP THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) FOR ASSESSMENT YEAR 2004-05. 2. THE ONLY DISPUTE RAISED IN THIS APPEAL IS AGAINS T RESTRICTING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AT RS.27,68,264 ON ACCOUNT OF INTEREST PAID TO RS.9,08,623 ONLY. THE A SIMILAR ISSUE REGARDING UPHOLDING THE DISALL OWANCE CAME UP BEFORE THE TRIBUNAL AND IT WAS SET ASIDE TO THE FILE OF THE ASSESSING O FFICER FOR ASSESSMENT YEAR 2004- 05 IN ITA NO.1049/DEL./2008 DATED 20.2.2009 FOR CON SIDERATION AFRESH AND WE ARE CONCERNED IN THIS APPEAL WITH REGARD TO THE BALANCE DISALLOWANCE DELETED BY THE CIT(A). THE REASON GIVEN BY THE CIT(A) FOR SUCH DISALLOWANC E IN PARA.3.3 IS AS UNDER: 3.3. HOWEVER, THE CLAIM OF THE APPELLANT THAT THE INTEREST PAID BY HIM ON BORROWED FUND WAS ONLY RS.9,08,623 APPEARS TO BE CO RRECT. THE DISALLOWANCE OF SUNDRY BANK CHANGES PAID FOR AVAILING BANKING SERVI CES CAN NOT BE MADE U/S 36(1)(III). HENCE, THE DISALLOWANCE MADE BY THE AS SESSING OFFICER IS RESTRICTED TO RS.9,08,623, THE AMOUNT OF INTEREST PD BY THE APPEL LANT. ITA NO.1372/DEL./2008 (A.Y. : 2004-05) 2 3. WE HAVE HEARD THE PARTIES AND CONSIDERED THE RI VAL SUBMISSIONS. THE BREAK-UP OF DETAILS OF THE TOTAL EXPENDITURE BOOKED UNDER THE H EAD BANK CHARGES IS AS UNDER: SL.NO. HEAD AMOUNT 1. CHARGES OF BILL DISCOUNT 126,282.00 2. DD COMMISSION & OTHER BANK CHARGES 806,172.90 3. FOREIGN BANK CHARGES 647,172.00 4. INTEREST ON BILL DISCOUNTING 382,588.00 5. OD INTEREST 12,776.00 6. PC INTEREST 513,259.00 7. GUARANTEE COMMISSION 277,271.00 TOTAL AS PER BLANCE SHEET 2,766,264.90 4. ITEMS RELATING TO SL.NO.1,2,3 & 7 ARE NOT INTERE ST PAYMENTS, BUT CHARGES OF BILL DISCOUNT, DD COMMISSION & OTHER BANK CHARGES, FOREI GN BANK CHARGES AND GUARANTEE COMMISSION. THEY HAVE NOTHING TO DO WITH THE INTER EST PAID ON BORROWINGS AND, THEREFORE, THE CIT(A), IN OUR OPINION, WAS JUST AND RIGHT IN ALLOWING THE SAME AS THE EXPENDITURE WAS FOR AVAILING BANKING SERVICES AND WAS INCURRED FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 6. ORDER PRONOUNCED IN OPEN COURT ON 17.06.2009. (RAJPAL YADAV) (R.P. GARG) JUDICIAL MEMBER SR. VICE PRESIDENT DATED: JUNE 17, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-XXVIII, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT ITA NO.1372/DEL./2008 (A.Y. : 2004-05) 3