ITO, Ward - 49 (1), Kolkata, Kolkata V. Md. Jearul Haque, North 24 Parganas

ITA 1766/KOL/2011

• Counselvise Citation: 176623514 RSA 2011
• Duration Of Justice: 3 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 22-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRIDHAR BHATTACHARYYA
• Assessee Lawyers: MANOJ K TIWARI
• Section: 143(3)

Judgement Text

I.T.A. NO. 1766/KOL./2011 ASSESSMENT YEAR: 2008-2009 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 1766/KOL/ 2011 ASSESSMENT YEAR : 2008-2009 INCOME TAX OFFICER,................................ ............................APPELLANT WARD-49(1), KOLKATA, MANICKTALA CIVIC CENTRE, UTTARAPAN COMPLEX, 2 ND FLOOR, KOLKATA-700 054 -VS.- MD. JEARUL HAQUE,.................................. ............................RESPONDENT CHAITAL, AMODPUR, BASIRHAT, 24-PARGANAS ( NORTH)-743 425 [PAN : ABGPH 5035 H] APPEARANCES BY: SHRI SRIDHAR BHATTACHARYYA, JCIT, SR. D.R., FOR THE DEPARTMENT SHRI MANOJ K. TIWARI, FCA , FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : NOVEMBER 04, 2015 DATE OF PRONOUNCING THE ORDER : NOVEMBER 20, 2015 O R D E R PER SHRI P.M. JAGTAP :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXII, KOLKATA DATED 30.08.2011 FOR THE ASSESSMENT YEAR 2008-09. 2. IN GROUND NO. 1 RAISED IN THIS APPEAL, THE REVEN UE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN DELETING THE ADDITION OF RS.1,22,77,957/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF DIFFERENCE OF STOCK BETWEEN THE BOOKS OF ACCOUNT AND STOCK STA TEMENT SUBMITTED BY THE ASSESSEE TO THE BANK. I.T.A. NO. 1766/KOL./2011 ASSESSMENT YEAR: 2008-2009 PAGE 2 OF 8 3. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF DEALING IN CEMENT AND BUILDING MATE RIALS UNDER THE NAME AND STYLE OF HIS PROPRIETARY CONCERN M/S. MAA BUIL DERS & HARDWARE. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION W AS FILED BY HIM ON 30.09.2008 DECLARING TOTAL INCOME OF RS.2,97,450/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER GATHE RED THE INFORMATION FROM THE BANK OF THE ASSESSEE I.E. S.B.I., HABRA BR ANCH REGARDING THE STOCK DECLARED BY THE ASSESSEE AS ON 31.03.2008. THE SAID INFORMATION REVEALED THAT THE VALUE OF STOCK DECLARED BY THE ASSESSEE TO BANK AS ON 31.03.2008 WAS RS.1,69,60,000/- AS AGAINST THE CLOSING STOCK O F RS.46,82,043/- DECLARED BY THE ASSESSEE IN THE BOOKS OF ACCOUNT. I N THIS REGARD, EXPLANATION OFFERED BY THE ASSESSEE THAT HIGHER STO CK WAS DECLARED TO THE BANK TO GET LARGER LOAN FACILITY WAS NOT FOUND ACCE PTABLE BY THE ASSESSING OFFICER. ACCORDING TO HIM, THERE WAS NO EVIDENCE PR ODUCED BY THE ASSESSEE TO SHOW THAT THE VALUE OF STOCK DECLARED T O THE BANK WAS WRONG AND THAT THE VALUE OF STOCK DECLARED IN THE BOOKS O F ACCOUNT ONLY WAS SACROSANCT. ACCORDINGLY, RELYING ON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF COIMBATORE SPINNING & WEA VING CO. LTD. VS.- CIT REPORTED IN 95 ITR 375, HE ADDED THE DIFFERENCE OF RS.1,22,77,957/- IN THE VALUE OF STOCK DECLARED BY THE ASSEESSEE TO BAN K TO ITS TOTAL INCOME IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 24.12.2010. 4. AGAINST THE ORDER PASSED UNDER SECTION 143(3), A N APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE LD. CIT(APPEALS) D ISPUTING, INTER ALIA, THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOU NT OF DIFFERENCE IN STOCK. DURING THE COURSE OF APPELLATE PROCEEDINGS B EFORE THE LD. CIT(APPEALS), IT WAS SUBMITTED BY THE ASSESSEE THAT THE ASSESSMENT OF HIS INCOME COULD NOT BE MADE BY THE ASSESSING OFFICER O N THE BASIS OF A STATEMENT THAT HAD BEEN GIVEN BY HIM TO THE BANK FO R AVAILING HIGHER CREDIT FACILITY. IT WAS CONTENDED THAT THE IMPUGNED ADDITION WAS MADE BY THE ASSESSING OFFICER ONLY ON THE BASIS OF SUCH STA TEMENT FURNISHED TO THE BANK WITHOUT MAKING ANY ATTEMPT TO FIND OUT THE COR RECTNESS OF SAID I.T.A. NO. 1766/KOL./2011 ASSESSMENT YEAR: 2008-2009 PAGE 3 OF 8 STATEMENT. IT WAS SUBMITTED THAT THE BOOKS OF ACCOU NT REGULARLY MAINTAINED BY THE ASSESSEE WERE PRODUCED BEFORE THE ASSESSING OFFICER AND NO DEFECT WHATSOEVER WAS POINTED OUT BY HIM IN THE SAID BOOKS. IT WAS CONTENDED THAT THE BOOKS OF ACCOUNT OF THE ASSE SSEE WERE ACCEPTED BY THE ASSESSING OFFICER AND THE ADDITION MADE BY HIM ON THE BASIS OF STOCK DECLARED BY THE ASSESSEE AT A HIGHER VALUE TO BANK FOR SPECIFIC PURPOSE ALONE WAS NOT SUSTAINABLE. IN SUPPORT OF THIS CONTE NTION, RELIANCE WAS PLACED BY THE ASSESSEE ON THE DECISION OF THE HONB LE MADRAS HIGH COURT IN THE CASE OF CIT VS.- N. SWAMI REPORTED IN 241 I TR 363 (MAD.) AND THAT OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS.- RELAXO FOOTWEAR [2000] REPORTED IN 123 TAXMAN 322 (RAJ.). AS REGARD S THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF COIMBATORE SPINNING & WEAVING CO. LTD. (SUPRA) RELIED UPON BY THE ASSESSING OFFIC ER, IT WAS CONTENDED ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(APPEALS) THAT THE SAME WAS DISTINGUISHABLE ON FACTS AND THE RELIANCE OF THE AS SESSING OFFICER ON THE SAID CASE FOR MAKING THE ADDITION ON ACCOUNT OF HIG HER STOCK DECLARED BY THE ASSESSEE TO THE BANK WAS CLEARLY MISPLACED. 5. THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM WERE FORWARDED BY THE LD. CIT(APPEALS) TO THE ASSESSING OFFICER FO R LATER COMMENTS. IN THE REMAND REPORT SUBMITTED TO THE LD. CIT(APPEALS), TH E ASSESSING OFFICER OFFERED HIS COMMENTS ON THE SUBMISSIONS MADE BY THE ASSESSEE AND AFTER TAKING INTO CONSIDERATION THE SAME, THE COUNTER-COM MENTS OFFERED BY THE ASSESSEE AND THE ENTIRE MATERIAL AVAILABLE ON RECOR D, THE LD. CIT(APPEALS) PROCEEDED TO DECIDE THE ISSUE RELATING TO THE ADDIT ION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF HIGHER VALUE OF STO CK DECLARED TO THE BANK. FIRST OF ALL, HE FOUND THAT THE CASE OF M/S. COIMBATORE SPINNING & WEAVING CO. LTD. RELIED UPON BY THE ASSESSING OFFIC ER WAS DISTINGUISHABLE ON FACTS, INASMUCH AS, BOOKS OF ACCOUNT OF THE ASSE SSEE IN THE SAID CASE WERE NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER BY POINTING OUT CERTAIN SPECIFIC DEFECTS AND THE SAME, THEREFORE, W ERE FOUND TO BE UNRELIABLE TO PROVE THAT THE VALUE OF STOCK DISCLOS ED BY THE ASSEESSEE IN THE BOOKS OF ACCOUNT WAS A TRUE POSITION. THE LD. C IT(APPEALS) THEREAFTER I.T.A. NO. 1766/KOL./2011 ASSESSMENT YEAR: 2008-2009 PAGE 4 OF 8 DISCUSSED THE VARIOUS CASE LAWS CITED BY THE ASSESS EE IN SUPPORT OF HIS CASE ON THE ISSUE UNDER CONSIDERATION AND APPLYING THE LEGAL POSITION EMERGING FROM THE SAID JUDICIAL PRONOUNCEMENTS TO T HE FACTS OF THE ASSESSEES CASE, HE FINALLY HELD, FOR THE FOLLOWING REASONS, THAT THE ADDITION MADE BY THE ASSESSING OFFICER MERELY ON TH E BASIS OF HIGHER VALUE OF STOCK DECLARED BY THE ASSEESSEE TO BANK WA S NOT SUSTAINABLE. THE LEGAL POSITION THAT EMERGES FROM THE ABOVE DIS CUSSED JUDICIAL PRONOUNCEMENTS, INCLUDING THE ONES RELIED UPON BY T HE A.O., IS THAT IN CASES WHERE AN ASSESSEE HAS OBTAINED CREDIT LIMIT FROM BANK AGAINST HYPOTHECATION OF STOCK AND THERE IS DI FFERENCE IN THE STOCK DECLARED TO THE BANK AND THE STOCK AS PER ASS ESSEE'S BOOKS OF ACCOUNT, NO ADDITION CAN BE MADE JUST FOR THE REASO N THAT THE ASSESSEE HAD DECLARED LARGER STOCK TO THE BANK IF T HE ASSESSEE HAD MAINTAINED REGULAR BOOKS OF ACCOUNT IN WHICH NO DEF ECT WAS FOUND BY THE ASSESSING AUTHORITY OR THE BOOKS OF ACCOUNT HAD NOT BEEN REJECTED. THE MERE FACT THAT THE ASSESSEE HAD MADE A STATEMENT BY ITSELF TO THE BANK CANNOT BE TREATED AS IRREBUTTABL E PRESUMPTION AGAINST THE ASSESSEE AND THE FIGURES OF THE STOCK R EPORTED TO THE BANK AUTHORITIES CANNOT BE TAKEN AT THEIR FACE VALU E AS TRUE AND THE ASSESSING AUTHORITY CANNOT MAKE ADDITION MERELY REFERRING TO THE STATEMENT GIVEN BY THE ASSESSEE TO THE BANK. IN THE INSTANT CASE, THE ASSESSEE HAS MAINTAINED RE GULAR BOOKS OF ACCOUNT WHICH WERE DULY AUDITED BY TAX AUD ITORS. THE AUDITORS HAD NOT POINTED OUT ANY DEFECT IN THE ACCO UNTS OF THE ASSESSEE. IN HIS REMAND REPORT THE A.O. HAS EXPLICI TLY STATED THAT BEFORE PASSING ORDER UNDER SECTION 143(3), ALL THE DOCUMENTS FILED BY THE ASSESSEE WERE EXAMINED AND IT WAS FOUND THAT THOSE WERE AT PAR WITH THE ACCOUNTS SUBMITTED BEFORE THE DEPAR TMENT. THESE OBSERVATIONS OF THE A.O. CLEARLY PROVE THAT THE STO CK DISCLOSED TO THE DEPARTMENT BY THE ASSESSEE WAS THE CORRECT ONE AND WAS AS PER THE ASSESSEE'S BOOKS OF ACCOUNT. NO PART OF PUR CHASES OR SALES DISCLOSED BY THE ASSESSEE HAS BEEN FOUND TO BE INFL ATED OR BOGUS BY THE A.O. NO DEFECT HAS BEEN POINTED OUT BY THE A .O. IN THE ASSESSEE'S BOOKS OF ACCOUNT NOR HAVE THEY BEEN REJE CTED BY HIM. AS REGARDS THE AOS OPINION IN THE REMAND REPORT TH AT IT CANNOT BE TAKEN AS GRANTED THAT THE ASSESSEE DID NO T HAVE ANY OTHER SET OF BOOKS ON THE BASIS OF WHICH HE SUBMITT ED HIS STATEMENT OF CLOSING STOCK BEFORE THE BANK IS ONLY AN ASSUMPTION AND NOT BASED ON ANY FACTS. THERE IS NO INDICATION, LEAVE ASIDE ANY EVIDENCE, BROUGHT ON RECORD BY THE A.O. THAT THE AS SESSEE WAS MAINTAINING ANY PARALLEL SET OF BOOKS OF ACCOUNT. T HEREFORE, SUCH ASSUMPTION ON THE PART OF THE A.O. IS FOUND TO BE B ASELESS AND NOT TENABLE. I.T.A. NO. 1766/KOL./2011 ASSESSMENT YEAR: 2008-2009 PAGE 5 OF 8 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. D.R. HAS STRONGLY RELIED ON THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE IN SUPPORT OF THE REVENUES CASE AND CONTENDED THAT THE DECISION OF T HE HONBLE MADRAS HIGH COURT IN THE CASE OF COIMBATORE SPINNING & WEA VING CO. LTD. (SUPRA) RELIED UPON BY THE ASSESSING OFFICER MAY BE TAKEN I NTO CONSIDERATION TO DECIDE THE ISSUE. HOWEVER, AS OBSERVED BY THE LD. C IT(APPEALS) IN HIS IMPUGNED ORDER AND FURTHER REITERATED BY THE LD. CO UNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US, THE FACTS INVOLVE D IN THE CASE OF COIMBATORE SPINNING & WEAVING CO. LTD. BEFORE THE H ONBLE MADRAS HIGH COURT, WERE DISTINGUISHABLE ON FACTS, INASMUCH AS T HE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE IN THE SAID CASE WERE FO UND TO BE UNRELIABLE BY THE ASSESSING OFFICER BY POINTING OUT MATERIAL A ND SPECIFIC DEFECTS AND IT WAS A CASE WHERE STOCK WAS PLACED BY THE ASSESS EE WITH THE BANK. IN THE PRESENT CASE, NO DEFECT WHATSOEVER HAS BEEN POI NTED OUT BY THE ASSESSING OFFICER IN THE BOOKS OF ACCOUNT MAINTAINE D BY THE ASSESSEE AND THIS IS A CASE WHERE THE ASSESSEE HAS HYPOTHECATED THE STOCK AND NOT PLACED WITH THE BANK, WE FIND OURSELVES IN AGREEMEN T WITH THE LD. CIT(APPEALS) THAT THE CASE OF COIMBATORE SPINNING & WEAVING CO. LTD. DECIDED BY THE HONBLE MADRAS HIGH COURT IS DISTING UISHABLE ON FACTS AND THE RELIANCE OF THE ASSESSING OFFICER THEREON WAS C LEARLY MISPLACED. BEFORE THE LD. CIT(APPEALS) AS WELL AS BEFORE US, V ARIOUS CASE LAWS HAVE BEEN CITED ON BEHALF OF THE ASSESESE INCLUDING THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL, WHEREIN A SIMILA R ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE IN THE IDENTICAL FACTS AND C IRCUMSTANCES. IN ONE OF SUCH DECISION RENDERED IN THE CASE OF ITO VS.- SHR I MANIK MUKHERJEE (ITA NO. 1033/KOL/2013 DATED 27.06.2014), NO DEFECT WHAT SOEVER WAS POINTED OUT BY THE ASSESSING OFFICER IN THE BOOKS O F ACCOUNT MAINTAINED BY THE ASSESSEE AND ADDITION WAS MADE TO THE TOTAL INCOME OF THE ASSESESE SOLELY ON THE BASIS OF HIGHER VALUE OF STOCK DECLAR ED TO THE BANK. THIS ADDITION WAS HELD TO BE UNSUSTAINABLE BY THE TRIBUN AL OBSERVING THAT THE ADDITION SOLELY BASED UPON THE STOCK STATEMENT SUBM ITTED TO THE BANK WAS NOT JUSTIFIED, ESPECIALLY WHEN THE HIGHER VALUE OF STOCK TO THE BANK WAS I.T.A. NO. 1766/KOL./2011 ASSESSMENT YEAR: 2008-2009 PAGE 6 OF 8 CLAIMED TO BE DECLARED BY THE ASSESSEE TO AVAIL MOR E CREDIT FACILITY AND THE THING WAS BROUGHT ON RECORD BY THE ASSESSING OF FICER TO SHOW THAT THE STOCK DECLARED BY THE ASSESSEE IN THE BOOKS OF ACCO UNT WAS NOT CORRECT. A SIMILAR ISSUE HAS BEEN TAKEN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS.- RIDDHI STEEL & TUBES PVT. LTD. REPORTE D IN 220 TAXMAN 148 (GUJ.) AND CITED BY THE LD. COUNSEL FOR THE ASSESSE E, WHEREIN IT WAS HELD THAT ONLY ON ACCOUNT OF INFLATED STATEMENTS FURNISH ED TO THE BANKING AUTHORITIES FOR THE PURPOSE OF AVAILING LARGER CRED IT FACILITIES, NO ADDITION COULD BE MADE ON ACCOUNT OF DIFFERENCE BETWEEN THE STOCK SHOWN IN THE BOOKS OF ACCOUNT AND IN THE STATEMENT FURNISHED TO THE BANKING AUTHORITIES. KEEPING IN VIEW THE RATIO OF THESE CAS E LAWS CITED BY THE LD. COUNSEL FOR THE ASSESSEE AND HAVING REGARD TO THE F ACTS OF THE CASE INCLUDING THE FACT THAT NO DEFECT HAS BEEN POINTED OUT BY THE ASSESSING OFFICER IN THE BOOKS OF ACCOUNT OF THE ASSESSEE SHO WING THE SAME TO BE UNRELIABLE, WE ARE OF THE VIEW THAT THE ADDITION MA DE BY THE ASSESSING OFFICER MERELY ON THE BASIS OF INFLATED HIGHER VALU E OF STOCK SUBMITTED TO THE BANK WAS NOT SUSTAINABLE. IN THIS VIEW OF THE M ATTER, WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSUE AND UPHOLDING THE S AME, WE DISMISS GROUND NO. 1 OF THE REVENUES APPEAL. 7. IN GROUND NO. 2, THE REVENUE HAS CHALLENGED THE ACTION OF THE ASSESSING OFFICER IN DELETING THE ADDITION OF RS.16 ,145/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST ON FIXED D EPOSITS. 8. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE IS HAVING A FIX ED DEPOSIT OF RS.5,50,000/- WITH BANK, ON WHICH INTEREST DURING T HE YEAR UNDER CONSIDERATION WAS ACCRUED TO THE EXTENT OF RS.32,75 0/-. SINCE THE ASSESSEE HAD DISCLOSED SUCH INTEREST ONLY TO THE EX TENT OF RS.16,605/- IN HIS COMPUTATION OF INCOME, THE BALANCE AMOUNT OF RS .16,145/- WAS ADDED BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE. BEFORE THE LD. CIT(APPEALS), IT WAS POINTED OUT BY THE ASSESSEE TH AT ALTHOUGH INTEREST OF I.T.A. NO. 1766/KOL./2011 ASSESSMENT YEAR: 2008-2009 PAGE 7 OF 8 RS.16,605/- ONLY WAS OFFERED IN THE COMPUTATION OF TOTAL INCOME, THE BALANCE AMOUNT OF RS.16,145/- WAS SEPARATELY INCLUD ED UNDER THE HEAD INCOME FROM OTHER SOURCES IN THE PROFIT & LOSS AC COUNT. THIS CLAIM OF THE ASSESSEE WAS FOUND TO BE CORRECT BY THE LD. CIT (APPEALS) ON VERIFICATION OF THE RELEVANT DOCUMENTS. ACCORDINGLY , THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSUE WAS DELETED BY HIM. 9. AFTER HAVING CONSIDERED THE RIVAL SUBMISSIONS AN D PERUSING THE RELEVANT MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE HAVING OFFERED THE ENTIRE INTEREST INCOME OF RS.32,750/- D URING THE YEAR UNDER CONSIDERATION AS FOUND BY THE LD. CIT(APPEALS) ON V ERIFICATION OF THE RELEVANT DOCUMENTARY EVIDENCE, THE ADDITION OF RS.1 6,605/- MADE BY THE ASSESSING OFFICER SEPARATELY HAD RESULTED IN DOUBLE ADDITION AND THE LD. CIT(APPEALS) IS FULLY JUSTIFIED IN DELETING THE SAM E. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND DISMISS GROUND NO.2 OF THE REVENUES APPEAL. 10. IN GROUND NO. 3, THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN DELETING THE ADDITION OF RS.43,680/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PROPORTIONATE DISAL LOWANCE OF INTEREST ALLEGEDLY ATTRIBUTABLE TO INTEREST-FREE LOAN GIVEN BY THE ASSESSEE. 11. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESESE HAS ADVANCED A LOAN OF RS.3,12,000/- TO HIS WIFE FREE OF INTEREST. HE ALSO FOUND THAT SU BSTANTIAL INTEREST ON BORROWED FUND WAS PAID BY THE ASSESSEE AND THE SAME WAS CLAIMED AS DEDUCTION. HE, THEREFORE, WORKED OUT THE INTEREST A TTRIBUTABLE TO THE LOAN ADVANCED BY THE ASSESSEE TO HIS WIFE AT RS.43,680/- AND MADE A DISALLOWANCE TO THAT EXTENT. 12. ON APPEAL, LD. CIT(APPEALS) DELETED THE SAID DI SALLOWANCE MADE BY THE ASSESSING OFFICER AFTER HAVING FOUND THAT THE A SSESSEE WAS HAVING I.T.A. NO. 1766/KOL./2011 ASSESSMENT YEAR: 2008-2009 PAGE 8 OF 8 SUFFICIENT OWN FUNDS IN THE FORM OF CAPITAL, WHO AD VANCED THE LOAN TO HIS WIFE FREE OF INTEREST. 13. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL AVAILABLE ON RECORD, IT IS OBSERVED THAT T HE ASSESSEE WAS HAVING OWN CAPITAL OF MORE THAN RS.10 LAKHS DURING THE YEA R UNDER CONSIDERATION AS FOUND BY THE LD. CIT(APPEALS) AND SINCE THE SAME WAS MORE THAN SUFFICIENT TO ADVANCE A LOAN OF RS.3,12,000/- TO HI S WIFE, WE FIND OURSELVES IN AGREEMENT WITH THE LD. CIT(APPEALS) THAT THE SAI D LOAN WAS NOT GIVEN BY THE ASSESSEE OUT OF BORROWING FUNDS SO AS TO WAR RANT ANY DISALLOWANCE OUT OF INTEREST. THE IMPUGNED ORDER OF THE LD. CIT( APPEALS) ON THIS ISSUE IS, THEREFORE, UPHELD DISMISSING GROUND NO. 3 OF TH E REVENUES APPEAL. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 20, 2015. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 20 TH DAY OF NOVEMBER, 2015 COPIES TO : (1) INCOME TAX OFFICER, WARD-49(1), KOLKATA, MANICKTALA CIVIC CENTRE, UTTARAPAN COMPLEX, 2 ND FLOOR, KOLKATA-700 054 (2) MD. JEARUL HAQUE, CHAITAL, AMODPUR, BASIRHAT, 24-PARGANAS ( NORTH)-743 425 (3) COMMISSIONER OF INCOME-TAX (APPEALS)- XXXII, KOLKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.