JYOTSNA SHARMA, NEW DELHI V. ACIT, CIRCLE- 59(1), NEW DELHI

ITA 1508/DEL/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 9142 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 05-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 37(1); 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 1508/DEL/2018 : ASSTT. YEAR : 2014-15 JYOTSNA SHARMA, A-165, PREET VIHAR, NEW DELHI-110098 VS ACIT, CIRCLE-59(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAYPS1805K ASSESSEE BY : SH. SALIL AGGARWAL, ADV. REVENUE BY : SH. BHOPAL SINGH, SR. DR DATE OF HEAR ING: 15 . 0 3 .20 2 1 DATE OF PRONOUNCEMENT: 19 .03 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-37, NEW DELHI DATED 30. 01.2018. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT THE LD. CIT(A) HAS WRONGLY DIRECTED TO ADD A SUM OF RS. 35,69,177.00 TO THE INCOME OF THE ASSESSEE, WHICH THE LD. ASSESSING OFFICER HAS ALREADY ALLOWED IN HER ASSESSMENT ORDER. 2. THE LD. CIT(A) IS NOT JUSTIFIED IN DISALLOWING EXPENDITURE U/S 37(1) ON ACCOUNT OF BANK INTEREST AMOUNTING TO RS. 35,69,177.00 DEBITED TO THE PROFIT & LOSS ACCOUNT. 3. THAT THE LD. CIT(A) HAS WRONGLY DIRECTED TO ADD A SUM OF RS. 35,69,177.00 ON ACCOUNT OF INTEREST PAID ON OVERDRAFT FACILITY WITHOUT AFFORDING ITA NO. 1508/DEL/2018 JYOTSNA SHARMA 2 REASONABLE OPPORTUNITY TO THE APPELLANT TO EXPLAIN THE SAME. 4. THAT THE LD. CIT(A) HAS WRONGLY INVOKED THE PROVISIONS OF SECTION 251 OF THE INCOME-TAX ACT, 1961 WITHOUT GIVING ANY SHOW CAUSE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 3. FACTS RELEVANT TO THE CASE ARE THAT THE ASSESSEE HAS GIVEN INTEREST FREE LOANS TO THE PARTIES AS UNDER: PARTY OPENING AS ON 01/04/2013 AMOUNT GIVEN DURING THE YEAR CLOSING AS ON 31/03/2014 ARVIND GULATI 128,000.00 - 128,000.00 BN FINLEASE PVT. LTD. 861,414.00 25,208,918.00 26,070,332.00 B.N. ESTATE PVT. LTD. - 11,112,851.00 11,112,851.00 DURGA GLOBAL PVT. LTD. - 22,590.00 22,590.00 989,414.00 36,344,359.00 37,333,773.00 4. THE AO HELD THAT BY ADVANCING INTEREST FREE LOAN S TO SISTER CONCERNS, THE ASSESSEE WAS CHANNELIZING INTEREST BE ARING FUNDS FOR NON-BUSINESS PURPOSES. 5. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. 6. BEFORE US, THE LD. AR ARGUED THAT THE ASSESSEE H AS GOT SUFFICIENT OWN FUNDS TO LENT THE AMOUNTS TO SISTER CONCERNS AND IT WAS NOT THE LOAN FUNDS WHICH HAVE BEEN GIVEN TO SISTER CONCERNS INTEREST FREE. ITA NO. 1508/DEL/2018 JYOTSNA SHARMA 3 7. WE HAVE PERUSED THE BALANCE SHEET OF THE ASSESSE E FOR THE YEAR ENDING 31.03.2014. SCHEDULES ANNEXED TO A FORMING PART OF BALANCE SHEE T AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 ST MARCH 2014 SCHEDULE-A PROPRIETOR CAPITAL ACCOUNT OPENING BALANCE ADD: PROFIT FOR THE YEAR ADD: ADDITIONS DURING THE YEAR 7,673,487.64 41,121,856.57 2,843,771.00 51,639,115.21 LESS: DRAWING 7,459,498.71 TOTAL 44,179,616.50 SCHEDULE-B FIXED ASSETS (AT WRITTEN DOWN VALUE) 102,448,808.61 102,448,808.61 8. FROM THE ABOVE, WE FIND THAT THE PROPRIETORS CA PITAL ACCOUNT IS ON ACCOUNT OF PROFIT FOR THE YEAR AND AD DITION DURING THE YEAR BOTH OF WHICH HAVE BEEN DETERMINED AFTER C LOSING OF THE BOOKS AT THE END OF THE FINANCIAL YEAR. HENCE, IT CANNOT BE SAID THAT THE ASSESSEE HAS GOT SUFFICIENT INTEREST FREE FUNDS AVAILABLE WITH HER TO ADVANCE INTEREST FREE LOANS. HOWEVER, AT THE SAME TIME, THE ACTION OF THE ASSESSING OFFICER TO CONSIDER INTEREST FOR A PERIOD OF 12 MONTHS ALSO CANNOT BE A CCEPTED. HENCE, IN THE INTEREST OF JUSTICE, WE REMAND THE MA TTER BACK TO THE FILE OF THE AO TO GO THROUGH THE QUARTERLY AND HALF YEAR UNAUDITED ACCOUNTS AND TO DETERMINE THE AVAILABILIT Y OF THE FUNDS AT THE GIVEN POINT OF TIME OF LENDING OF LOAN AND THE RESTRICT THE DISALLOWANCE TO THE EARLIER MONTHS ONL Y AND ON THE PERCENTAGE OF THE INTEREST PAID TO THE BANKS. ITA NO. 1508/DEL/2018 JYOTSNA SHARMA 4 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19/03/2021. SD/- SD/- (BHAVNESH SAINI) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 19/03/2021 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR