M/s Srinivas Saree Centre , Gulbarga V. The Income Tax Officer ward-2 , Gulbarga

ITA 1680/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7147 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 16-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PALANI KUMAR
• Assessee Lawyers: P A CHILLAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH SMC-B, BANGALORE BEFORE SHRI A.K.GARODIA, ACCOUNANT MEMBER ITA NO.1680 (BANG) 2017 (ASSESSMENT YEAR : 2010 11) M/S. SRINIVAS SAREE CENTRE, APPELLANT SHOP NO. 68, GULBARGA 585101. PAN. ABAFS1170N VS THE ITO, WARD 2, GULBARGA RESPONDENT ASSESSEE BY : SHRI P. A. CHILLAL, ADVOCATE REVENUE BY : SHRI PALANI KUMAR, ADDL. CIT DATE OF HEARING : 20-11-2017 DATE OF PRONOUNCEMENT : 2 4-11-2017 O R D E R PER A. K. GARODIA, A.M.: THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIRE CTED AGAINST THE ORDER OF CIT (A) GULBARGA DATED 21.06.2017 FOR A. Y. 2010 11 . 2. THE ASSESSEE HAS RAISED AS MANY AS 4 GROUNDS BUT THE EFFECTIVE GRIEVANCE IS ONLY ONE AND THAT IS THIS THAT THE DISALLOWANCE OF RS. 72,782/- OUT OF INTEREST EXPENDITURE BY INVOKING THE PROVISIONS OF SECTION 4 0A (2) IS NOT JUSTIFIED. 3. LEARNED AR OF THE ASSESSEE SUBMITTED THAT AS PER THE AO, THE PAYMENT OF INTEREST BY THE ASSESSEE @ 15% PER ANUMN ON BORROWI NGS FROM THE RELATIVES OF THE PARTNERS OF THE ASSESSEE FIRM IS EXCESSIVE BECAUSE THE SCHEDULED BANKS ARE CHARGING INTEREST @ 12%. HE SUBMITTED THAT THE SAID RATE OF INTEREST BY SCHEDULED BANKS IS FOR SECURED LOAN AND THE ASSESSEE HAS BORR OWED UNSECURED LOANS BUT THIS FACTUAL ASPECT IS IGNORED BY THE AO. LEARNED DR OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ITA NO. 1680(BANG)2017 2 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND FORCE IN THE SUBMISSION OF THE LEARNED AR OF THE ASSESSEE BECAUSE THE RATE OF INTE REST IN RESPECT OF UNSECURED LOAN IS ALWAYS HIGHER AS COMPARED TO SECURED LOAN BECAUS E THE LENDER UNDERTAKES EXTRA RISK. IN THIS VIEW OF THE MATTER, 15% RATE OF INTER EST FOR UNSECURED LOAN AS AGAINST 12% FOR SECURED LOAN IS NOT EXCESSIVE IN MY OPINION . HENCE, I DELETE THIS DISALLOWANCE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (A.K. GARODIA) ACCOUNTANT MEMBER BANGALORE D A T E D : 24.11.2017. /MS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.