ITO, New Delhi V. Sh. Anil Gupta, New Delhi

ITA 2199/DEL/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4225 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-07-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 11-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: ASHOK AGARWAL
• Section: 68

Judgement Text

1 ITA NO. 219 9/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI R. S. SYAL, ACCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.-2199/DEL/2014 (ASSESS MENT YEAR 2010-11) ITO WARD-32(4) NEW DELHI (APPELLANT) VS ANIL GUPTA B-67, DEFENCE COLONY NEW DELHI AAHPG8980A (RESPONDENT) APPELLANT BY SH. S. K. JAIN, DR RESPONDENT BY SH. ASHOK AGARWAL, CA ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 06/01/2014 PASSED BY CIT(A), XXVI, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION TO THE TUNE OF RS.91,37,430/- MADE BY A.O IGNORING THE QUANTUM OF INTEREST FREE LOAN. IT IS NOTE WORTH THAT IN THE R ELEVANT ASSESSMENT YEAR THE NEW LOAN OF RS.6,53 CRORES WAS GIVEN DURING THE YEAR TO 7 ENTITIES AND AMOUNT OF RS.8.78 CRORES WAS RECEIVED FROM 15 ENTITIES. CLEARLY THE ASSESSE E IS IN THE BUSINESS OF LENDING OF MONEY ON INTEREST. THER EFORE, DATE OF HEARING 28.07.2016 DATE OF PRONOUNCEMENT 05.08.2016 2 ITA NO. 219 9/DEL/2014 THE ADDITION ON ACCOUNT OF CHARGING NOTIONAL INTERE ST MADE BY A.O IS JUSTIFIABLE AND CORRECT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.10,20,000/ - AS UNDISCLOSED INCOME U/S 68 OF THE I.T ACT, 1961. AS PER PARA 3 OF THE ASSESSMENT ORDER RS.4,80,000/- WAS DISCLOSED BY THE ASSESSEE AS LOAN FROM MS. PROMILLA GUPTA AND AS PER HDFC BANK STATEMENT (A/C. NO. 00031000309133) RS. 15,00,000/- WERE GIVEN BY SMT. PROMILLA GUPTA, B-67, DEFENCE COLONY, NEW DELHI. T HE LD.CIT(A) HAS COMPLETELY DISCREET LOAN ISSUE AND GI VEN RELIEF AND NOT TREATED THE SAME AS UNDISCLOSED INCO ME. 3. THE ASSESSEE FILED HIS RETURN OF INCOME ON 29/7/ 2010 SHOWING INCOME OF RS. 3,35,240/-. THE CASE WAS SCRUTINIZED AND THE ASSESSMENT WAS COMPLETED ON 20/3/2013. THE ASSESSI NG OFFICER MADE ADDITION INCOME OF RS.10,20,000/- AS UNSECURED LOAN U/S 68 OF THE ACT, RS.91,37,430/- ON ACCOUNT OF NOTIONAL I NTEREST @ 15% PER ANNUM ON LOAN AND ADVANCES OF RS.6,09,16,205/- GIVEN TO VARIOUS PERSONS. THUS TOTAL ADDITION OF RS. 1,04,92 ,670/- WAS MADE. 4. AGGRIEVED BY THIS, THE ASSESSEE FILED APPEAL BEF ORE THE CIT(A). THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER RIGHTLY HELD THAT MERELY FURNISHING PARTICULARS IS NOT ENOUGH AN D CORRECTLY DISALLOWED RS.10,20,000/- U/S 68 OF THE ACT. THE L D. DR FURTHER SUBMITTED THAT THE INTEREST INCOME PAID DURING THE YEAR AMOUNTS TO UNSECURED LOANS AND HENCE ASSESSING OFFICER RIGHTL Y WORKED OUT 3 ITA NO. 219 9/DEL/2014 RS.91,37,430/- AND ADDED IT TO THE TOTAL INCOME OF THE ASSESSEE. THEREFORE, CIT(A) WAS WRONG IN ALLOWING THE APPEAL OF THE ASSESSEE. 6. THE LD. AR RELIED ON THE ORDER OF THE CIT(A) AND SUBMITTED THAT ALL THE RECORDS WERE BROUGHT BEFORE THE ASSESS ING OFFICER. AS RELATES TO GROUND NO. 1, THE LD. AR SUBMITTED THAT WHEN THE ASSESSEE HAS SECURED INTEREST FREE LOANS AND ADVANC ES AND WHILE RETURNING THE SAME HE HAS NOT OBLIGATION TO PAY INT EREST THEREON. IN RESPECT GROUND NO. 2 THAT OF LOAN GIVEN TO PROMILLA GUPTA, THE LD. AR SUBMITTED THAT ALL THE DOCUMENTS WERE BEFORE THE ASSESSING OFFICER .AND THUS IT CANNOT BE TREATED AS UNACCOUNT ED LOAN. THUS, THE CIT(A) RIGHTLY SET ASIDE THE ORDER OF THE ASSES SING OFFICER . 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RECORDS. AS REGARDS GROUND NO. 1 RELATED TO INTEREST FREE LO AN, WHEN THE PARTY TAKES A LOAN OR ADVANCES WITHOUT ANY INTEREST ONLY THE PRINCIPAL AMOUNT HAS TO BE REPAID AT THE ESTIMATED TIME. IT IS NOT NECESSARY TO PAY INTEREST WHEN THERE IS NO SUCH ARR ANGEMENT AS SUCH. THUS, THE CIT(A) WAS RIGHT IN DELETING THIS A DDITION. AS REGARDS TO GROUND NO. 2, AFTER GOING THROUGH THE AS SESSMENT ORDER, THE LEDGER ACCOUNT OF PROMILLA GUPTA AND COMPUTATIO N OF INCOME OF THE ASSESSEE, IT IS SEEN THAT THE ASSESSING OFFICE R HAS NOT TAKEN COGNIZANCE OF ALL THE RELEVANT DOCUMENTS AS TO ON W HAT BASIS DISALLOWANCE U/S 68 OF THE ACT FOR RS.10,20,000/- W AS MADE. THE CIT(A) FOR BOTH THE GROUNDS HAS CORRECTLY ARRIVED A T THE CONCLUSION AND ALLOWED THE APPEAL OF THE ASSESSEE. 4 ITA NO. 219 9/DEL/2014 8. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. THE ORDER IS PRONOUNCED IN THE OPEN COURT 05TH OF AUGUST, 2016. SD/- SD/- (R.S. SYAL) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05/08/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 28.07.2016 PS 2. DRAFT PLACED BEFORE AUTHOR 29.07.2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS .0 8 .2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 05.08.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 5 ITA NO. 219 9/DEL/2014 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.