Shri Arvindbhai Purshottamdas Patel, Ahmedabad V. The ACIT, Circle-10, Ahmedabad

ITA 1606/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1122 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 20-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 30-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.1606/AHD/2013 / ASSTT. YEAR: 2009-2010 ARVINDBHAI PURSHOTTAMDAS PATEL VIRAJ ENTERPRISES 6, HAREKRISHNA COMPLEX B/H. DIPALI CINEMA ASHRAM ROAD AHMEDABAD. PAN : ABEPP 8387 Q VS ACIT, CIR.10 AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI UMAIDSINGH BHATI, AR REVENUE BY : SHRI DINESH SINGH, SR.DR / DATE OF HEARING : 20/06/2016 / DATE OF PRONOUNCEMENT: 14/07/2016 $%/ O R D E R THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE LD.CIT(A)-XVI, AHMEDABAD DATED 13.3.2013 PASSED FOR THE ASSTT.YEAR 2009- 10. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL: 1.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPE ALS) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF PROP ORTIONATE INTEREST MADE BY THE ID. A.O. AMOUNTING TO RS.90,000/-. 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPE ALS) ERRED IN LAW AND ON FACTS IN SUSTAINING DISALLOWANCE TO THE EXTE NT OF RS.20,400/- MADE BY THE ID. A.O. OUT OF VARIOUS EXPENSES. ITA NO.1606/AHD/2013 2 3.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPE ALS) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS.2 1,000/- U/S 40A(IA) OF THE INCOME TAX ACT, 1961. 4.0 THE APPELLANT MAY BE ALLOWED TO ADD, AMEND, ALTER OR RAISE ADDITIONAL GROUNDS OF APPEAL. 3. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTS ET DID NOT PRESS GROUND NOS.2 AND 3, HENCE, THEY ARE REJECTED. THE GROUND NO.4 IS A GENERAL GROUND OF APPEAL, WHICH DOES NOT CALL FOR RECORDING OF ANY FI NDING, HENCE, IT IS REJECTED. 4. AS FAR AS GROUND NO.1 IS CONCERNED, THE LD.AO HA S RECORDED THE FOLLOWING FINDING: DISALLOWANCE OF INTEREST EXPENSES ON PROPORTIONATE BASIS 'INCURRED FOR NON-BUSINESS PURPOSE: ON PERUSAL OF THE BALANCE SHEET AS AT 31/03/2009, T HE PROPRIETOR'S CAPITAL ACCOUNT SHOWS NEGATIVE BALANCE OF RS.26,68,287/-. I T IS FURTHER SEEN THAT ASSESSEE THAT ASSESSEE HAS MADE ADVANCES OF RS.15,0 0,000/- TO ONE PANCHAMRUT INFRASTRUCTURE. THE ASSESSEE WAS ASKED T O FURNISH THE DETAILS OF LOANS & ADVANCES MADE TO PANCHAMRUT INFRASTRUCTURE. THE ASSESSEE HAS SUBMITTED THAT SUCH ADVANCES WERE MADE TO THE AFORE MENTIONED PARTY ON 06/10/2008 FOR THE PURPOSE OF HOUSING FACILITY. HOW EVER, NO INTEREST HAS BEEN CHARGED ON SUCH ADVANCES ALTHOUGH ASSESSEE PAID INT EREST ON BANK LOANS TO THE EXTENT OF RS.2,22,011/-. THE ASSESSEE WAS THERE FORE ASKED TO EXPLAIN WHY THE INTEREST PAID ON ADVANCES BEING MADE FOR NON-BU SINESS PURPOSES SHOULD NOT BE WORKED OUT AND ACCORDINGLY DISALLOWED ON PRO PORTIONATE BASIS. THE ASSESSEE ACCEPTED THE SAME. ACCORDINGLY, THE INTERE ST ON THE ADVANCES OF RS.15,00,000/- IS CALCULATED 12% FOR 6 MONTHS, WH ICH COMES TO RS.90,000/- IS RESTRICTED FROM THE CLAIM OF INTEREST EXPENSES. THE SUM OF RS.90,000/- IS ACCORDINGLY DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. (RS.90,000/-) 5. ON APPEAL, THE LD.CIT(A) HAS CONFIRMED THIS FIND ING ON THE GROUND THAT BEFORE THE AO, THE ASSESSEE HAS AGREED FOR THE ADDI TION. BEFORE ME, IT WAS CONTENDED BY THE LD.COUSNEL FOR THE ASSESSEE THAT A SUM OF RS.15.00 LAKHS WAS PAID ON 10.4.2008. HE TOOK ME THROUGH BANK ACCOUNT FILED AT PAGE NO.35. ITA NO.1606/AHD/2013 3 ACCORDING THE LD.COUNSEL FOR THE ASSESSEE, NO PROPO RTIONATE DISALLOWANCE OF INTEREST OUGHT TO BE MADE. 6. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORD ERS OF THE REVENUE AUTHORITIES. HE POINTED OUT THAT ON PAGE NO.17 OF THE PAPER BOOK, THE ASSESSEE HAS SHOWN TOTAL LOAN WHICH COMES TO RS.59.98 LAKHS. THEREFORE, THE ASSESSEE FAILED TO DEMONSTRATE THAT RS.15 LAKHS WAS ADVANCED OUT OF THE INTEREST FREE FUNDS. THOUGH THE ASSESSEE HAS FILED PAPER BOOK RU NNING INTO 40 PAGES, BUT I DO NOT WISH TO CONSIDER ANY OF THE DETAILS, BECAUSE , NEITHER BEFORE THE AO NOR BEFORE THE LD.CIT(A) THE ASSESSEE HAS CONTESTED THI S ADDITION. I HAVE PERUSED THE GROUND OF APPEAL TAKEN BEFORE THE LD.CIT(A) ALO NG WITH STATEMENT OF FACTS. THE ASSESSEE HAS NOWHERE PLEADED THAT THE ASSESSEE HAD NOT AGREED FOR THIS DISALLOWANCE BEFORE THE AO. ONCE THE ASSESSEE HAS AGREED FOR THE ADDITION, HE PROHIBITED THE AO TO CONDUCT ANY INQUIRY ON THE FACTS. NOW, IN THE SECOND APPELLATE STAGE, THE ASSESSEE CANNOT PLEAD TO CONDU CT A FRESH INQUIRY, MORE SO, WHEN THE AO WILL NOT HAVE ANY OPPORTUNITY TO REBUT THE DOCUMENTS OR THE DETAILS SUBMITTED BY THE ASSESSEE. CONSIDERING THE STAND OF THE ASSESSEE BEFORE THE AO, I FIND NO MERIT IN THIS GROUND OF AP PEAL OF THE ASSESSEE. IT IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 14 TH JULY, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 14/07/2016