SUKESH VINOD GOEL, MUMBAI V. CIT-6, MUMBAI

ITA 1428/MUM/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4465 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 10-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K DHONDIAL J
• Assessee Lawyers: EKTA JOSHI
• Keywords: Business income
• Section: 133(6)

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.1428/MUM/2015 ASSESSMENT YEAR: 2011-12 MR. SUKESH VINID GOEL, SHOP NO.22, LINK WAY ESTATE OPP. GARDEN VIEW RESTAURANT, NEW LINK ROAD, MALAD(WEST), MUMBAI-400064 / VS. ITO-8(1)(4), MUMBAI, / ASSESSEE / REVENUE P.A. NO. AAEPG0153E $ % & / ASSESSEE BY MS. EKTA JOSHI, $ % & / REVENUE BY SHRI A.K.DHONDIAL JCIT-DR / DATE OF HEARING 06/01/2016 & / DATE OF ORDER: 06/01/2016 & / O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 24/11/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, THOUGH THE ASSESSEE HAS RAISED MANY GROUNDS BUT DUR ING HEARING, THE LD. COUNSEL FOR THE ASSESSEE, MS. EKTA JOSHI, ITA NO.5506/MUM/2015 M/S TESLA TECHNOLOGIES & OXIDATION PVT. LTD. 2 PRESSED/ARGUED GROUND NO.2 & 3 ONLY WHICH IS WITH R ESPECT TO ADDITION OF RS.4,30,844/- UNDER THE BUSINESS INC OME ON WHICH INTEREST EXPENSES WERE DISALLOWED. 2. THE CRUX OF ARGUMENT ADVANCED BY MS. EKTA JOSHI IS IDENTICAL TO THE GROUND RAISED BY CONTENDING THA T THE ASSESSEE PAID AND RECEIVED INTEREST. MY ATTENTION W AS INVITED TO THE RUNNING ACCOUNT OF THE ASSESSEE BY CONTENDIN G THAT AT BEST RS.85,500/- UNDER INCOME FROM OTHER SOURCES CO ULD HAVE DISALLOWED. ON THE OTHER HAND, SHRI A.K. DHON DIAL, LD. DR, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUG NED ORDER. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT THE ASSESSEE DECLARED TAXABLE INCOME OF RS.8,40,565/- IN HIS RETURN. THE ASSESSEE PAID RS.10,77,210/- ON ACCOUNT OF INTEREST ON LOAN TAKEN FROM ONE SHRI ANIL KEJRIWAL. THE ASSESSEE VIDE LETTER DATED 31/11/2013 FURNISHED THE DETAILS OF LOANS TAKEN FRO M SHRI KEJRIWAL AND ITS UTILIZATION ALONG WITH CALCULATION OF INTEREST EARNED FROM M/S GOEAL PETROCHEM PVT. LTD. AND PRAVI N PLASTICS. THE ASSESSING OFFICER DISALLOWED THE INTE REST EXPENSES OF RS.85,500/- OUT OF RS.6,46,326/- WHICH WAS CLAIMED AGAINST INTEREST INCOME CONSIDERING RS.5 LA KH PAID TO MANOHAR BIDAYE, RS.4 LAKH PAID TO SHRI SUKESH GOEL( HUF) AND RS.50 LAKH CASH WITHDRAWAL. THE ASSESSEE UTILIZ ED THE FUNDS FOR BUSINESS PURPOSES. THE ASSESSEE BEFORE T HE ITA NO.5506/MUM/2015 M/S TESLA TECHNOLOGIES & OXIDATION PVT. LTD. 3 ASSESSING OFFICER COULD NOT ESTABLISHED THE DIRECT LINK DURING ASSESSMENT PROCEEDING, THEREFORE, THE ASSESSING OFF ICER ADDED RS.4,30,884/-, INTEREST, WHICH WAS CLAIMED AG AINST BUSINESS INCOME. IT WAS EXPLAINED BY THE LD. COUNSE L THAT THE ASSESSEE IS ACTING AS A SUB-BROKER OF BONANZA PORTF OLIO FROM WHICH HE EARNED COMMISSION INCOME OF RS.27,022/-. BONANZA PORTFOLIO DOES NOT OFFER CREDIT FACILITY TO THE CLIENTS OF THE ASSESSEE, WHEREAS, THE CLIENTS OF THE ASSESSEE OFFERS CREDIT FACILITY IN RELATION TO SHARE PURCHASE TRANSACTION WHICH TOOK PLACE ON BEHALF OF CUSTOMERS OF THE ASSESSEE. TO MA KE SUCH PAYMENT ON BEHALF OF THE CUSTOMER, LOAN WAS TAKEN F ROM MARKET I.E. SHRI ANIL KEJRIWAL AT RATE OF 9%. IT I S NOTED THAT THE ASSESSEE PAID INTEREST OF RS.10,77,210/- DURING THE YEAR OUT OF WHICH 40% OF SUCH INTEREST I.E. RS.4,30,884/ - WAS CLAIMED AGAINST COMMISSION INCOME. IT IS NOTED THA T THE ASSESSING OFFICER, DURING ASSESSMENT PROCEEDINGS, C ALLED INFORMATION U/S 133(6) OF THE ACT FROM M/S BONANZA PORTFOLIO LTD, WHEREIN, THE COMMISSION PAYMENT TO THE ASSESSE E WAS DENIED. HOWEVER, THE ASSESSEE SUBMITTED THE DETAILS VIDE LETTER DATED 12/11/2013. HOWEVER, THE LD. ASSESSING OFFICER MADE THE ADDITION ON THE PLEA THAT THE ASSESSEE DID NOT ESTABLISH THE NEXUS OF INTEREST EXPENDITURE TO THE BUSINESS INCOME, THEREFORE, HE DISALLOWED RS.4,30,884/- AND RS.85,500/- UNDER THE HEAD BUSINESS INCOME AND INCO ME FROM OTHER SOURCES RESPECTIVELY. IT IS NOTED THAT T HE LD. ASSESSING OFFICER IGNORED THE FACT THAT HE HIMSELF ACCEPTED IN THE ASSESSMENT ORDER (POINT NO. 6.5.2) THAT ONLY R S.9,50,000 ITA NO.5506/MUM/2015 M/S TESLA TECHNOLOGIES & OXIDATION PVT. LTD. 4 WAS NOT USED FOR EARNING INCOME AND REMAINING WAS U SED FOR GIVING LOAN TO GEOL PETROCHEM PVT. LTD AND PRAVIN P LASTICS FROM WHOM THE ASSESSEE EARNED INTEREST INCOME. HE A LSO IGNORED THE FACT THAT IF RS.9,50,000 ONLY WAS NOT U SED FOR EARNING INCOME THE HOW HE CAN DISALLOW INTEREST INC OME OF RS.4,30,884/-. THE ASSESSEE HAS DULY ESTABLISHED TH E NEXUS AS THE ASSESSEE HAS RECEIVED AND PAID INTEREST FOR EARNING BUSINESS INCOME, THUS GROUND NO 2 IS ALLOWED. 2.2. SO FAR AS, GROUND NO. 3 IS CONCERNED, AT BEST , THE LD. ASSESSING OFFICER UNDER THE FACTS AVAILABLE O N RECORD WAS JUSTIFIED TO ADD RS.85,500/-, UNDER THE HEAD INCOME FROM OTHER SOURCES BY DISALLOWING INTEREST EXPENSES AT T HE RATE OF 9% OF THE AMOUNT RS.9,50,000/-, THUS, THE LD. ASSES SING OFFICER WAS RIGHT IN ADDING/DISALLOWING RS.85,500/- , CONSEQUENTLY, THIS GROUND OF THE ASSESSEE IS DISMIS SED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN TH E PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 06/01/2016. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 06/01/2016 F{X~{T? P.S / ! ITA NO.5506/MUM/2015 M/S TESLA TECHNOLOGIES & OXIDATION PVT. LTD. 5 & $ )!*+ ,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI