Vinay Kumar Dhanpal , Nizamabad V. Income Tax Officer, Ward-1, Nizamabad

ITA 1754/Hyd/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 9129 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-01-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 02-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SITARAMA RAO
• Section: 20

Judgement Text

ITA NO 1754 OF 2019 VINAY KUMAR DHANPAL NIZAMABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1754/HYD/2019 ASSESSMENT YEAR: 2016-17 SHRI VINAY KUMAR DHANPAL NIZAMABAD PAN:ASIPD1411C VS. INCOME TAX OFFICER WARD-1 NIZAMABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI M.V. ANIL KUMAR REVENUE BY : SRI SITARAMA RAO, DR DATE OF HEARING: 07/01/2021 DATE OF PRONOUNCEMENT: 08/01/2021 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2016-17 AGAIN ST THE ORDER OF THE CIT (A)-5, HYDERABAD, DATED 18.09. 2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IN DIVIDUAL, DERIVING INCOME FROM HOUSE PROPERTY AND OTHER SOURC ES, FILED HIS RETURN OF INCOME FOR THE A.Y 2016-17 ON 29.3.2017 A DMITTING TOTAL INCOME OF RS.2,54,740/-. THE RETURN WAS SELECTED FO R LIMITED SCRUTINY THROUGH CASS CITING THE FOLLOWING: REASON DESCRIPTION:NEGATIVE INCOME FROM PARTNERSHIP FIRM RESULTING IN REDUCTION OF THE TAXABLE INCOME (SCHED ULE BP OF ITR) ISSUE: WHETHER LOSS FROM PARTNERSHIP FIRM IS ADMISS IBLE. 3. THE ASSESSEE WAS REQUIRED TO FURNISH CERTAIN SPE CIFIC INFORMATION AND THE ASSESSEE FURNISHED THE SAME. ON VERIFICATION OF SUCH INFORMATION, THE AO OBSERVED THAT THE ASSES SEE HAS CLAIMED TO HAVE TAKEN A LOAN TO PURCHASE OPEN LAND IN THE YEAR ITA NO 1754 OF 2019 VINAY KUMAR DHANPAL NIZAMABAD PAGE 2 OF 4 2004-05 AND HE WAS REGULARLY PAYING INTEREST ON LOA N AND DURING THE YEAR OF ACCOUNT, THE INTEREST ACCRUED WA S RS.10,85,360/- WHICH WAS CLAIMED U/S 36(1) OF THE I .T. ACT. THE ASSESSEE HAS ALSO CLAIMED THAT HE WAS NOT GIVEN INT EREST AS HE WAS OVER DUE TO FIRM AND INTEREST WAS CHARGED FROM HIM. HENCE HIS CLAIM SHOULD BE ALLOWED. THEREAFTER, THE ASSESS EE HAD TAKEN VARIOUS CONTENTIONS AND THE AO FINDING THAT THE ASS ESSEE IS TAKING DIFFERENT CONTENTIONS, DID NOT ALLOW THE ACCRUED IN TEREST FROM THE ASSESSEE WHILE COMPUTING HIS TAXABLE INCOME AND ACC ORDINGLY BROUGHT THE INTEREST TO TAX. AGGRIEVED, THE ASSESSE E PREFERRED AN APPEAL BEFORE THE CIT (A) BUT DID NOT APPEAR BEFORE HIM AND THEREFORE, THE CIT (A) PASSED AN EX-PARTE ORDER CON FIRMING THE ADDITIONS MADE BY THE AO. AGGRIEVED, THE ASSESSEE I S IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S OF APPEAL: 1. THE LEARNED CIT (A) ERRED IN LAW AND FACTS OF THE CASE IN NOT GIVING ANOTHER OPPORTUNITY OF HEARING WITHOUT IGNORING THE FACT THAT THE A.R WOULD BE BUS Y WITH FILING OF RETURNS IN SEPTEMBER. 2. YOUR APPELLANT SUBMITS THAT THE CIT (A) AS WELL AS THE AO ERRED IN LAW AND FACTS OF THE CASE IN NOT ALLOWI NG THE BUSINESS LOSS OF RS.10,85,360/- BEING INTEREST PAID ON OVERDRAWN CAPITAL BALANCE TO FIRM IN WHICH YOUR APPELLANT IS A PARTNER. 3. YOUR APPELLANT SUBMITS THAT THE CIT (A) AS WELL AS THE AO ERRED IN NOT ALLOWING THE LOSS FROM BUSINESS BEI NG THE INTEREST PAID TO THE FIRM ON OVERDRAWN CAPITAL BALANCE IN THE FIRM AS PER SECTION 28(V) OF THE I.T . ACT. 1961. 4. WITHOUT PREJUDICE TO THE ABOVE, ALTERNATIVELY YO UR APPELLANT SUBMITS THAT THE AMOUNT OVERDRAWN FROM TH E CAPITAL ACCOUNT IN FIRM, IN THE EARLIER YEARS WAS U TILIZED FOR THE ACQUISITION OF THE HOUSE PROPERTY IN THE YE AR 2010-11, HENCE THE INTEREST PAID IS ALLOWABLE AS DEDUCTION UNDER INCOME FROM HOUSE PROPERTY. 5. THE ASSESSEE CLAIMED DEDUCTION ON INTEREST OF RS.10,85,360 CHARGED ON HOUSING LOAN OF RS.90,44,662/- WHICH WAS UTILIZED FOR PURCHASE OF HOUSE NO.5-7-93 KHALEELWADI, NIZAMABAD, HE HA SUBMITTED SUPREME COURT RULING AND ALLAHABAD HIGH ITA NO 1754 OF 2019 VINAY KUMAR DHANPAL NIZAMABAD PAGE 3 OF 4 COURT JUDGMENT IN 20 ITR 330 PAGE, THE ADDITION MAY BE DELETED. 6. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING YOUR APPELLANT PRAYS THAT TH E HON'BLE MEMBERS MAY DIRECT DELETION OF THE ADDITION . 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT SINCE THE ORDER OF THE CIT (A) IS EX-PARTE THE ASSE SSEE, HE MAY BE GIVEN AN OPPORTUNITY TO EXPLAIN HIS CASE AND THEREF ORE, PRAYED A REMAND OF THE ISSUE TO THE CIT (A) OR THE AO. 5. THE LEARNED DR WAS ALSO HEARD WHO OPPOSED THE REMAND. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I FIND THAT INSPITE OF SEVERAL NOTICES G IVEN, THE ASSESSEE DID NOT APPEAR BEFORE THE CIT (A) AND SUBMIT ANY IN FORMATION BEFORE HIM. HOWEVER, IN THE INTEREST OF JUSTICE, I DEEM IT FIT AND PROPER TO DIRECT THE ASSESSEE TO PAY A SUM OF RS.10 00/- TO THE PM CARE FUND SUBJECT TO WHICH THE ISSUE IS REMANDED TO THE FILE OF THE AO FOR DENOVO CONSIDERATION IN ACCORDANCE WITH LAW. THE ASSESSEE SHALL PAY THE SUM WITHIN A PERIOD OF ONE MONTH FROM THE DATE OF RECEIPT OF THIS ORDER AND ON FURNISHING PROOF OF SU CH PAYMENT, THE AO SHALL RECONSIDER THE ISSUE ON MERITS. 7. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JANUARY, 2021. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 8 TH JANUARY, 2021. ITA NO 1754 OF 2019 VINAY KUMAR DHANPAL NIZAMABAD PAGE 4 OF 4 VINODAN/SPS COPY TO: 1 SHRI VINAY KUMAR DHANPAL C/O M.ANANDAM & CO. C.A, FLAT NO.7A SURYA TOWERS, SP ROAD, HYDERABAD TELANGANA 2 ITO WARD-1 OFFICE OF INCOME TAX, NIZAMABAD 3 CIT (A)-5 HYDERABAD 4 PR. CIT 5 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER