Smt. Swaran Lata, Patiala V. ITO, W-1, Patiala

ITA 1624/CHANDI/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5565 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 01-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDER KANTA SR DR
• Assessee Lawyers: DEEPINDER SINGH
• Keywords: Notional interest

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH , . '.., # $, %& BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 1624/CHD/2017 / ASSESSMENT YEAR : 2013-14 SMT. SWARAN LATA, #2, NARULA COLONY, NEAR PATIALA AUTO ENTERPRISES, THE MALL, PATIALA THE ITO, WARD-1, PATIALA ./PAN NO: AAFPL1622F / APPELLANT /RESPONDENT ! ' /ASSESSEE BY : SH. DEEPINDER SINGH, ADVOCATE # ! ' / REVENUE BY : SMT.CHANDERKANTA, SR.DR $ % ! & /DATE OF HEARING : 14.08.2018 '()* ! & / DATE OF PRONOUNCEMENT : 12.11. 2018 %'/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 16.10.2017 OF THE COMMISSIONER OF INCOM E TAX (APPEALS)-3, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)] AGI TATING THE CONFIRMATION OF ADDITION OF NOTIONAL INTEREST @ 12% ON THE INTER EST FREE ADVANCES MADE BY THE ASSESSEE TO HER CLOSE RELATIVES I.E. SON AND NEPHEW. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS BROUGHT OUR ATTENTION TO THE RECORD OF THE LOWER AUTHORITIES FOR MAKING / CONFIRMATION OF THE AFORESAID ADDITIONS ONLY ON THE BASIS OF ASSUMPTION S AND PRESUMPTION, WITHOUT ANY RELIABLE EVIDENCE. IT WAS NOTED BY THE ASSESSING OFFICER THAT THAT THE ASSESSEE HAD NOT CHARGED ANY INTEREST ON THE ADVANCES GIVEN TO HER SON AND NEPHEW. THE ASSESSING OFFICER HAS POINTED O UT THREE ENTRIES IN THIS ITA NO. 1624/CHD/2017- SMT. SWARAN LATA, PATIALA 2 RESPECT. FIRSTLY, THE ASSESSEE HAD ADVANCED AN AMO UNT OF RS. 10 LACS TO HER NEPHEW SHRI JATINDER SINGLA WITHOUT CHARGING ANY I NTEREST. FURTHER, AN AMOUNT OF RS. 17 LACS WAS ADVANCED WITHOUT INTEREST TO HER SON SHRI SACHIN KANSAL WHICH THE ASSESSEE HAS CLAIMED THAT THE ACTU AL PAYMENT WAS OF RS. 16 LACS AND NOT RS. 17 LACS. THE THIRD ENTRY IS RE GARDING THE ADVANCEMENT OF AMOUNT OF RS. 15 LACS TO M/S ANMOL ENTERPRISES, PROPRIETORSHIP CONCERN OF HER NEPHEW SHRI JATINDER SINGLA, BUT THE SAME WA S ADVANCED AT AN INTEREST RATE OF @ 9% PER ANNUM. THE ASSESSING OFF ICER OBSERVED THAT THE ASSESSEE, ON THE OTHER HAND, HAD TAKEN SOME CAR LOA N ON INTEREST BASIS. HE, THEREFORE, ASSUMED THAT THE ASSESSEE MIGHT HAVE TAK EN INTEREST @ 12% FROM THE AFORESAID PERSONS AND ACCORDINGLY MADE THE ADDI TION OF @ 12 % ON THE INTEREST FREE ADVANCES MADE TO HER SON AND HER NEPH EW AND FURTHER ADDED 3% INTEREST IN THE CASE OF M/S ANMOL ENTERPRISES TO WHOM THE ASSESSEE CHARGED INTEREST @ 9%. 3. SIMPLY BECAUSE THE ASSESSEE HAS TAKEN SOME CAR L OAN ON INTEREST BASIS THAT ITSELF IN OUR VIEW, CANNOT BE A GROUND TO MAKE THE IMPUGNED ADDITIONS. THE LOANEES ARE THE CLOSE RELATIVES OF THE ASSESSEE AND IT IS THE OWN WILL OR WISH OF THE ASSESSEE WHETHER TO CHARGE INTEREST FRO M HER CLOSE RELATIVES LIKE HER SON OR NEPHEW OR NOT. THERE IS NO EVIDENCE THAT THE ASSESSEE HAS CHARGED ANY INTEREST FROM THE AFORESAID PERSONS. IN VIEW OF THIS, THE ADDITIONS MADE BY THE ASSESSIN G OFFICER AND FURTHER CONFIRMED BY THE CIT(A) ARE NOT SUSTAINABLE IN THE EYES OF LAW AND THE SAME ARE ACCORDINGLY ORDERED TO BE DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.11.2018 SD/- SD/- ( ' . . , # $ / B.R.R. KUMAR) %& / ACCOUNTANT MEMBER ( / SANJAY GARG ) / JUDICIAL MEMBER ITA NO. 1624/CHD/2017- SMT. SWARAN LATA, PATIALA 3 DATED : 12.11 .2018 .. (, ! -. /. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ 0 / CIT 4. $ 0 ( )/ THE CIT(A) 5. .12 3 , & 3 , 45627 / DR, ITAT, CHANDIGARH 6. 26 8% / GUARD FILE (, $ / BY ORDER, 9 # / ASSISTANT REGISTRAR