JAYESH RATILAL GADA, MUMBAI V. ITO WD 16(1)(2), MUMBAI

ITA 187/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3673 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 28-03-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 09-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANJIV M SHAH
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI R S SYAL, ACCOUNTANT MEMBER & SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.:187/M/2012 ASSESSMENT YEAR: 2008-09 MR. JAYESH RATILAL GADA, VS. THE ITO WD 16(2)(2) , 103, MAHAVIR APARTMENT, MUMBAI. 1 ST FLOOR, TARDEO ROAD, NR. BHATIA HOSITAL, MUMBAI 400 007 PAN: AABPG3911B (APPELLANT) (RESPONDENT) APPELLANT BY : MR. SANJIV M SHAH RESPONDENT BY : MR. SANJAY AGRAWAL DATE OF HEARING : 01.05.2013 DATE OF PRONOUNCEMENT : 08.05.2013 ORDER PER SANJAY GARG, JM : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 17.10.2011 RELEVANT TO A.Y. 20 08-09, CONFIRMING THE ADDITION MADE BY THE AO PERTAINING TO THE INTEREST EXPENDITU RE OF RS.18,59,428/-. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E, AN INDIVIDUAL, HAVING INCOME FROM SPECULATION, COMMISSION AND INCOME FROM OTHER SOURCES, FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.4,68,800/-. DURING TH E ASSESSMENT PROCEEDINGS THE AO FOUND INTEREST EXPENDITURE OF RS.18,59,428 AGAINST INCOME FROM OTHER SOURCES. ITA NO. 187/MUM/2012 AY : 2008-09 2 BEFORE THE AO THE ASSESSEE SUBMITTED THAT THE INTER EST WAS PAID ON LOANS TAKEN FOR EARNING INTEREST AND FOR LOANS TAKEN FOR SUBSCRIBIN G THE SHARES IN PUBLIC ISSUES AND LOANS TAKEN FOR F & O MARGIN MONEY AND EARNING RE NTAL INCOME. THE AO HELD THAT THERE WAS NO NEXUS OF INTEREST EXPENSES WITH THE IN COME EARNED UNDER THE HEAD INCOME FROM OTHER SOURCES AND, ACCORDINGLY, DISAL LOWED THE SAME. THE LEARNED CIT(A) ALSO HELD THAT THE ASSESSEE FAILED TO ESTABL ISH THE CO-RELATION AS TO UTILISATION OF THE LOANS FOR EARNING INCOME EITHER UNDER THE HE AD OTHER SOURCES OR UNDER ANY OTHER HEAD OF INCOME. THUS, THE LEARNED CIT(A) UPH ELD THE ADDITION MADE BY THE AO. 3. BEFORE US, AT THE OUTSET, THE LEARNED COUNSEL FO R THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAD SUBMITTED A CHART TO THE LEAR NED CIT(A) PRESENTING AN OVERALL CO-RELATION BETWEEN THE INTEREST PAID AND INCOME EA RNED, BUT THE SAME WAS DISCARDED BY HIM. THE ASSESSEE HAS MOVED AN APPLIC ATION FOR ADMISSION OF ADDITIONAL EVIDENCE ALONG WITH CERTAIN DOCUMENTS AT TACHED TO IT, PRAYING THAT THE SAID DOCUMENTS, WHICH ARE IN THE SHAPE OF BANK STATEMENT S, DULY PROVE THE CO-RELATION BY WAY OF ONE TO ONE TRANSACTIONS BETWEEN THE INTEREST PAID ON CAPITAL BORROWED AND THE INCOME EARNED AS ALSO REGARDING THE INVESTMENT MADE BY THE ASSESSEE IN THIS RESPECT. HE HAS FURTHER STATED IN THE APPLICATION THAT NONE OF THE AUTHORITIES BELOW HAD CALLED UPON THE ASSESSEE TO SPECIFICALLY PROVE THE CO-RELATION BETWEEN ONE TO ONE TRANSACTIONS I.E. THE BORROWED FUNDS AND UTILISATIO N OF THE AMOUNTS. HE FURTHER STATED THAT THERE WAS NO OCCASION FOR HIM TO SUBMIT THE SAID DOCUMENTS BEFORE THE AUTHORITIES BELOW. ON THE OTHER HAND, THE LEARNED DR HAS OPPOSED THE APPLICATION. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D REPRESENTATIVES. IT MAY BE OBSERVED THAT THE DISALLOWANCE HAS BEEN MADE FOR WANT OF NEXUS/ CO-RELATION BETWEEN BORROWED EXPENSES, INTEREST PAID AS WELL AS INVESTMENT OF BORROWED MONEY INTO BUSINESS. THE ASSESSEE THROUGH DOCUMENTS IN Q UESTION, WHICH ARE IN THE SHAPE ITA NO. 187/MUM/2012 AY : 2008-09 3 OF BANK ACCOUNT STATEMENTS, WANTS TO CO-RELATE BETW EEN THE INTEREST PAID ON CAPITAL BORROWED AND INCOME EARNED AS ALSO INVESTMENT MADE BY THE ASSESSEE IN THIS RESPECT. THE EVIDENCE SOUGHT TO BE PRODUCED, IN OU R VIEW, IS VERY MUCH IMPORTANT AS IT GOES TO THE ROOT OF THE CASE TO ARRIVE AT A C ORRECT CONCLUSION. THE DOCUMENTS SOUGHT TO BE PRODUCED ARE NECESSARILY REQUIRED TO B E TAKEN INTO CONSIDERATION FOR THE JUST AND PROPER DECISION OF THE CASE. ACCORDINGLY, WE ALLOW THE APPLICATION OF THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE. THE MATTER IS RESTORED BACK TO THE FILE OF THE AO WITH A DIRECTION TO LOOK INTO AND SCRUTIN IZE THE DOCUMENTS SO SOUGHT TO BE PRODUCED BY THE ASSESSEE AND MAKE A FRESH ASSESSMEN T ON THIS GROUND. NEEDLESS TO SAY THAT DUE AND PROPER OPPORTUNITY WILL BE GIVEN B Y THE AO TO THE ASSESSEE TO REPRESENT HIS CASE AND TO PRODUCE THE RELEVANT DOCU MENTS. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF MAY 2013. SD/- SD/- (R S SYAL) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 8 TH MAY, 2013 SA COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T. CONCERNED MUMBAI 4. CIT (A) CONCERNED MUMBAI 5. THE DR, J - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI