Mukesh Chand Jain, Hansi V. ITO, Hisar

ITA 1586/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4142 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 17-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.1586/DEL/2017 ASSESSMENT YEAR : 2012-13 MUKESH CHAND JAIN, C/O. JAIN PETROL SUPPLY COMPANY, HANSI. VS. ITO, WARD- 5, HISAR. PAN : AAVPJ9264G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPAT, SHRI V. RAJA KUMAR, ADVS. DEPARTMENT BY : SHRI ARUN KUMAR YADAV, SR.DR DATE OF HEARING : 01-01-2018 DATE OF PRONOUNCEMENT : 12-01-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 02.01.2017 OF CIT(A), ROHTAK RELATING TO ASSESSMENT YEAR 2012-13. 2. ALTHOUGH A NUMBER OF GROUNDS HAVE BEEN RAISED BY THE ASSESSEE, THEY ALL RELATE TO THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE DISALLOWANCE OF INTEREST TO THE TUNE OF RS.3,34,380/- MADE BY THE ASSESSING OFF ICER. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 28.09.2012 DECLARING TOTAL INCOME OF RS.1,08,580/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF INTEREST U/S 57 OF THE I.T. ACT. IN 2 ITA NO.1586/DEL/2017 ORDER TO EXAMINE THE ISSUE REGARDING CLAIM OF INTER EST U/S 57, THE ASSESSEE WAS REQUIRED TO GIVE JUSTIFICATION OF INTEREST CLAIMED IN THE COMPUTATION OF INCOME. IN THIS REGARD, THE ASSESSEE FILED DETAILS OF INTER EST PAID/RECEIVED TO/FROM VARIOUS PERSONS/CONCERNS. ON GOING THROUGH THE DETAILS OF INTEREST PAID, THE ASSESSING OFFICER NOTICED THAT INTEREST OF RS.3,34,380/- HAS BEEN SHOWN TO HAVE BEEN PAID ON ACCOUNT OF HDFC, GREATER NOIDA LOAN ACCOUNT. ON BEING CONFRONTED BY THE ASSESSING OFFICER, THE ASSESSEE CONTENDED THAT MOST OF THE INTEREST PAID WAS FOR BUSINESS PURPOSE APART FROM INVESTMENT IN SHARES, F DR ETC. WHICH ARE INCIDENTAL TO BUSINESS AND DESERVES TO BE ALLOWED AS SUCH WITH OUT ANY DISALLOWANCES BEING AFFECTED ON ACCOUNT OF INTEREST PAID ON CAPITAL BOR ROWED. 4. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE ABOVE ARGUMENTS OF THE ASSESSEE. HE OBSERVED THAT THE AS SESSEE HAS OBTAINED OD LIMIT FROM HDFC BANK AND THE AMOUNT RAISED AS LOAN IN THI S ACCOUNT NO.17318020000017 HAS BEEN TRANSFERRED TO ASSESSEE S SAVING BANK ACCOUNT NO.17311000002808 MAINTAINED IN THE SAME BRANCH. H E MADE INVESTMENT IN PERSONAL ASSETS THROUGH THIS ACCOUNT IN PAYMENT OF PROPERTIES ETC. THEREFORE, HE MADE A DISALLOWANCE OF RS.3,34,380/- AND ADDED THE SAME TO THE TAXABLE INCOME OF THE ASSESSEE. 5. IN APPEAL, LD. CIT(A) UPHELD THE ADDITIONS MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE COULD NOT CONTROVER T THE FINDING OF THE ASSESSING 3 ITA NO.1586/DEL/2017 OFFICER AND WAS NOT ABLE TO PROVE HOW THE INTEREST PAID TO HDFC BANK WAS IN THE COURSE OF BUSINESS ACTIVITY. 6. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LOAN OBTAINED FROM THE HDFC BANK, WHICH WAS TRANSFERRED TO SAVINGS BANK AC COUNT HAS BEEN UTILIZED FOR PURCHASE OF VARIOUS PROPERTIES, THE INCOME OF W HICH HAS BEEN OFFERED TO TAX OR IS TAXABLE. THEREFORE, WITHOUT CONSIDERING THE FACTS OF THE CASE PROPERLY, THE LOWER AUTHORITIES DISALLOWED THE INTEREST OF RS.3,3 4,380/-. HE SUBMITTED THAT GIVEN AN OPPORTUNITY, HE IS IN A POSITION TO SUBSTA NTIATE THAT THE INTEREST IS AN ALLOWABLE EXPENDITURE. HE ACCORDINGLY REQUESTED TH AT THE MATTER MAY BE SET- ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH A D IRECTION TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THE CLAIM. 8. LD. DR ON THE OTHER HAND OPPOSED THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE FOR SETTING-ASIDE OF THE ISSUE. HE SUBMIT TED THAT NOTHING WAS PRODUCED BEFORE THE ASSESSING OFFICER OR THE LD. CIT(A) OR E VEN BEFORE THE TRIBUNAL AS TO HOW THE INTEREST IS AN ALLOWABLE EXPENDITURE. HE S UBMITTED THAT THE ORDER OF THE LD. CIT(A) BE UPHELD AND THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 9. I HAVE CONSIDERED THE VARIOUS ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE LD. CIT (A) AND THE PAPER BOOK FILED 4 ITA NO.1586/DEL/2017 ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE ME. I FIND THE ASSESSING OFFICER DISALLOWED THE INTEREST EXPENDITURE OF RS.3,34,380/- CLAIMED BY THE ASSESSEE U/S 57 ON THE GROUND THAT OVERDRAFT LIMIT EXTENDED BY HDFC BANK HAS BEEN TRANSFERRED TO ASSES SEES SAVINGS BANK ACCOUNT AND THE ASSESSEE MADE INVESTMENT IN PERSONA L ASSETS THROUGH THIS ACCOUNT IN PAYMENT OF PROPERTY ETC. IT IS THE SUBM ISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE PROPERTIES SO PURCHASED HAVE FETCHED INCOME WHICH IS TAXABLE AND, THEREFORE, SUCH INTEREST HAS TO BE ALL OWED AS AN EXPENDITURE. ALTHOUGH, IT IS AN ADMITTED FACT THAT THE LD. COUNS EL FOR THE ASSESSEE HAS NOT GIVEN ANY SPECIFIC EVIDENCE OF SUCH INCOME FROM THE PROPERTIES WHICH HAVE BEEN OFFERED TO TAX, HOWEVER, CONSIDERING THE TOTAL ITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RES TORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE AN OPPOR TUNITY TO THE ASSESSEE TO SUBSTANTIATE WITH EVIDENCE TO HIS SATISFACTION REGA RDING THE OFFER OF SUCH INCOME FROM THE PROPERTIES WHICH HAS BEEN PURCHASED OUT OF LOAN OBTAINED FROM HDFC AND TRANSFERRED TO THE SAVINGS BANK ACCOUNT, WHICH HAS BEEN UTILIZED FOR PURCHASE OF PROPERTIES. THE ASSESSING OFFICER SHAL L DECIDE THE ISSUE AS PER FACT AND LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSE SSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 5 ITA NO.1586/DEL/2017 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH JANUARY, 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 12-01-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI