Appeal details
Counselvise Citation
162220114 RSA 2013
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 5 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
25-03-2015
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
E
Next Hearing Date
12-03-2015
Assessment Year
2010-2011
Appeal Filed On
20-03-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E , NEW DELHI) BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 1622/DEL/2013 ASSESSMENT YEAR : 2010-11 MANI STOCK BROKERS LTD. VS. DCIT, CC-8, (NOW KNOW AS MANI INFRA CONSULTANCY LLP) NEW DELH I C/O O.P.SAPRA & ASSOCIATES, ADVOCATES, C-763, NEW FRIENDS COLONY, NEW DELHI-110 025 GIR / PAN:AAACD4968M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K. GUPTA, FCA RESPONDENT BY : SHRI P. DAM KANUNJHA, SR. DR DATE OF HEARING : 12.03.2015 DATE OF PRONOUNCEMENT : 25.03.2015 ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE OR DER OF LD. CIT(A) DATED 03.12.2012. THE ONLY EFFECTIVE GROUND TAKEN BY ASSESSEE IS AGAINST ACTION OF LD. CIT(A) BY WHICH HE HAD CONFIRMED THE ADDITION OF RS.1,09,620/- MADE BY A.O. U/S 40A(2)(B) OF THE ACT . 2. THE FACTS AND CIRCUMSTANCES OF THE CASE ARE THA T DURING ASSESSMENT PROCEEDINGS THE A.O. OBSERVED THAT ASSESSEE HAD PAI D INTEREST TO SPECIFIED PERSONS @ 15% P.A. WHEREAS THE RATE OF INTEREST PAI D TO OTHERS WAS RANGING BETWEEN 12% TO 13.50%. WHEN QUESTIONED BY A.O., TH E ASSESSEE SUBMITTED THAT INTEREST ON UNSECURED LOANS WAS PAID AS PER MA RKET TREND. HOWEVER, THE ITA NO.1622/DEL/2012 2 A.O. DID NOT AGREE WITH THE CONTENTION OF ASSESSEE AND MADE ADDITION OF RS.1,09,620/- BEING EXCESSIVE PAYMENT OF INTEREST U /S 40A(2)(B) OF THE ACT. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE LD. CIT (A) AND MADE VARIOUS SUBMISSIONS. LD. CIT(A) ALSO DID NOT AGREE WITH TH E CONTENTION OF ASSESSEE AND CONFIRMED THE ADDITION. AGGRIEVED, THE ASSESSE E IS IN APPEAL BEFORE US. 3. AT THE OUTSET, LD. A.R. SUBMITTED THAT THE ASSES SEE HAD PAID INTEREST ON UNSECURED LOAN AND INTEREST ON UNSECURED LOANS FROM PRIVATE PERSONS IS ALWAYS AT A HIGHER RATE AS COMPARED TO INTEREST CHA RGED BY A BANK. IT WAS FURTHER SUBMITTED THAT BANKS GENERALLY DISBURSE LOA N UP TO 60% TO 70% OF MARKET VALUE OF SECURITY, WHEREAS UNSECURED LOANS A RE GRANTED WITHOUT ANY SECURITY, THEREFORE HIGHER RATE OF INTEREST HAD TO BE PAID ON LOANS RAISED ON UNSECURED LOANS. IT WAS FURTHER SUBMITTED THAT ALL THE THREE PERSON TO WHOM INTEREST HAD BEEN PAID, HAD REQUESTED FOR REFUND OF DEPOSITS OR PAYMENT OF INTEREST @ 18% AND, THEREFORE KEEPING IN VIEW THE B USINESS INTERESTS, THE ASSESSEE AGREED TO PAY INTEREST @ 15%. MOREOVER IT WAS SUBMITTED THAT THE ASSESSEE HAD EARNED INTEREST INCOME FROM M/S. HALWA SIA DEVELOPERS PVT. LTD. @ 21% P.A. AND IN THIS RESPECT, OUR ATTENTION WAS INVITED TO PAPER BOOK PAGES 1 & 2 WHERE A COPY OF ACCOUNT OF SAID PARTY W AS PLACED. 4. LD. D.R. HEAVILY RELIED UPON THE ORDERS OF AUTHO RITIES BELOW. 5. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. 6. WE FURTHER FIND THAT A.O. HAD MADE THE ADDITIONS BY HOLDING AS UNDER: VIDE LETTER DATED 25.11. 2011 THE ASSESSEE COMPANY WAS ASKED THE RATES OF INTEREST PAID TO PERSONS OTHER THAN SPECIFIED PERSO NS WITH DETAILS OF INTEREST PAID TO THEM. VIDE LETTER DATED 05.12.2011 THE ASSE SSEE COMPANY HAS FURNISHED RATE OF INTEREST PAID TO PERSONS TO OTHER PERSONS. FROM THE PERUSAL OF DETAILS OF RATES OF INTEREST FILED, IT IS SEEN T HAT THE RATE OF INTEREST PAID TO OTHERS ARE SHOWN @ 12%, 13% & 13.50% AND WHEREAS RA TE OF INTEREST PAID ITA NO.1622/DEL/2012 3 TO PERSONS SPECIFIED ON THE SECTION 40A(2)(B) IS SH OWN @ 15% WITH A NOTE THAT RATE OF INTEREST IS AS PER MARKET TREND ON UNS ECURED LOAN AND IS NOT EXCESSIVE. 1 HAVE CONSIDERED THE SUBMISSION OF THE ASSESSEE COMPANY AND FIND THAT THE CONTENTION OF THE ASSESSEE IS NOT ACC EPTABLE IN VIEW OF SECTION 40A(2)(B). SO THE EXCESS INTEREST PAID AS COMPUTED BELOW WILL BE ADDED TO THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSI DERATION: SL. NAME OF SPECIFIED AMOUNT OF AMOUNT OF IN TEREST PAYABLE AT THE EXCESS NO. PERSON INTEREST PAID 15% MAXIMUM RATE OF 13 .50% INTEREST PAID 1 NUPUR SALUJA 3,47.631/- 3,47,631X13.50/15=3,1 2,867/ 34,764/- 2 ANURADHA SALUJA 5,60,918/- 5,60,918X13.50/15=5 ,04,826/- 56,092/- 3 VISHAL SALUJA 1,87,644/- 1,87,644X13.50/15=1, 68,880/- 18,764/- TOTAL INTEREST PAID CONSIDERED TO BE EXCESSIVE RS.1,09,620/- THUS AS PER ABOVE CALCULATION EXCESS INTEREST PAID TO SPECIFIED PERSONS COME TO RS.1,09,620/- (34,764 + 56,092 + 18,764), WHICH IS ADDED TO THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION' 7. BEFORE LD. CIT(A), IT WAS SUBMITTED THAT PRIME L ENDING RATES OF BANKS WAS @12% TO 13.5% AND THEREFORE, INTEREST PAID ON U NSECURED LOANS @ 15% CANNOT BE SAID TO BE EXCESSIVE. MOREOVER, WE FIND THAT ASSESSEE HAS EARNED INTEREST ON LOANS ADVANCED BY IT @ 21% P.A. WHEN FA CT IS VERIFIABLE FROM PAPER BOOK PAGE I. THE INTEREST INCOME EARNED BY A SSESSEE IS MUCH MORE THAN INTEREST PAID BY IT WHICH FACT IS ALSO VERIFIA BLE FROM P & L ACCOUNT PLACED AT PAPER BOOK PAGE 3. THEREFORE, KEEPING IN VIEW THE ENTIRE FACTS AND CIRCUMSTANCES, INTEREST PAID BY ASSESSEE WAS NOT EX CESSIVE. 8. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, THE AP PEAL FILED BY ASSESSEE IS ALLOWED. 9. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MARCH, 2015. SD./- SD./- ( G. C. GUPTA) (T.S. KAPOO R) VICE PRESIDENT ACCOUNTANT MEMBER DATE:25 TH MARCH, 2015 ITA NO.1622/DEL/2012 4 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 16/3 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 18,19,20 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 25/3 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 25/3 SR. PS/PS 7 FILE SENT TO BENCH CLERK 25/3 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER
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