ASHITA KISHOR JANANI, MUMBAI V. ITO - 19(1)(2), MUMBAI

ITA 1842/MUM/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5909 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 15-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: TUSHANT SHAH
• Keywords: TDS
• Section: 143(3); 142(1); 143(1); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No. 1842/Mum/2020 (A.Y: 2012-13) Ashita Kishor janani 20 manglam, 99/A, Walkeshwar Road, Mumbai – 400006. Vs. ITO – 19(1)(2) Manturmandir,Tardeo,Grant Road, Mumbai-400007. ./ज आइआर ./PAN/GIR No. : AAQPJ0484P Appellant .. Respondent Appellant by : Mr.Tushant Shah.AR Respondent by : Mr. Rajesh Kumar Yadav.DR Date of Hearing 23.03.2022 Date of Pronouncement 28.03.2022 आद श / O R D E R PER PAVAN KUMAR GADALE JM: The assessee has filed the appeal against the order of the Commissioner of Income Tax (Appeals)-52, Mumbai passed 143(3) and 250 of the Act. The assessee has raised the following grounds of appeal: 1. On the facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the AOs action of disallowing interest of Rs. 8,56,125/- by invoking the provisions of Sec. 36(1)(iii) of the Act. ITA No. 1842/Mum/2020 Ashita Kishor Janani, Mumbai. - 2 - 2. The appellant craves leave to add to alter, amend and /or any of the foregoing grounds of appeal. 2. The brief facts of the case are that, the assessee is a doctor by profession and specializing in the field of radiologist and has a private clinic. The assessee has filed the return of income electronically on 27.09.2012 for the A.Y 2012-13 declaring a total income of Rs.10,72,530/- and the return of income was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny and notice u/s 143(2) and 142(1) of the Act are issued. In compliance, the Ld. AR of the assessee appeared from time to time and filed the details and the case was discussed. The Assessing Officer (A.O.) on perusal of the profit and loss account found that the assessee has disclosed the income, consisting of dividend income, sale of shares, profession income, bank interest and interest from other sources. Further the assessee has borrowed loans from various NBFC and Banks. The A.O is of the opinion that the barrowed funds are not utilized for the purpose of profession/business and the interest claim of Rs.8,56,125 should be disallowed. The Ld. AR has ITA No. 1842/Mum/2020 Ashita Kishor Janani, Mumbai. - 3 - filed the explanations in letter dated 2-2-2015 referred at Para 4 of the assessment order. Further the Ld. AR has filed the written submissions vide letter dated 10.03.2015 mentioning the utilization of funds effectively for the business purpose. Whereas the A.O was not satisfied with the explanations and observed that there is no nexus of borrowed funds utilized for the purpose of earning taxable income and made a disallowance of claim u/s 36(1)(iii) of the Act of Rs. 8,56,125/- and assessed the total income of Rs. 19,28,660/- and passed the order u/s 143(3) of the Act dated 03.03.2015. 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A).Whereas in respect of interest claim u/s 36(1)(iii) of the Act, the CIT(A) has confirmed the action of the A.O and dismissed the ground of appeal and in other grounds of appeal with respect to TDS, the CIT(A) has granted partial relief and partly allowed the appeal. Aggrieved by the CIT(A) order, the assessee has filed an appeal before the Hon’ble Tribunal. ITA No. 1842/Mum/2020 Ashita Kishor Janani, Mumbai. - 4 - 4. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the A.O. irrespective of the fact that the assessee has utilized the barrowed funds for earning income and referred in the financial statements and prayed for allowing the appeal. Contra, the Ld. DR supported the order of the CIT(A). 5. We heard the rival submissions and perused the material available on record. Prima-facie the assessee is doctor by profession and has disclosed income from profession along with income from sale of shares, income from House Property and income from other Sources. The assessee was engaged in trading in equity shares and investments and the income has been offered to tax, which is not disputed. On perusal of the facts of Loans, referred at page 2 of the assessment order, the loan amounts pertains to NBFC and national banks. The contention of the assessee before the lower authorities that the funds have been utilized for the purpose of trading in shares and the assessee has received the dividend income and also earned profit on share transactions which was offered to tax and was disclosed in the income tax return. ITA No. 1842/Mum/2020 Ashita Kishor Janani, Mumbai. - 5 - Prima facie the assessee has utilized this funds for the purpose of business and the revenue could not make out a case supporting with any evidence that the barrowed funds have been diverted for other purposes. We considering the facts, circumstances, and the income offered by the assessee are of the opinion that the disallowance cannot be sustained and accordingly we set aside the order of the CIT(A) and direct the A.O to delete the addition and allow the grounds of appeal of the assesee. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 28.03.2022. Sd/- Sd/- (PRASHANT MAHARISHI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 28.03.2022 KRK, PS /Copy of the Order forwarded to : 1. / The Appellant 2. / The Respondent. 3. आ र आ / The CIT(A) 4. आ र आ ( ) / Concerned CIT ITA No. 1842/Mum/2020 Ashita Kishor Janani, Mumbai. - 6 - 5. "#$ % & &' , आ र ) र*, Mumbai / DR, ITAT, Mumbai 6. % +, - . / Guard file. ान ु सार/ BY ORDER, " & //True Copy// 1. ( Asst. Registrar) ITAT, Mumbai