S. SANTHOSH, Pathanamthitta V. ACIT, Kollam

ITA 233/COCH/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64799 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 11-04-2011
• Court: TRIBUNAL
• Department Lawyers: B SAJEEV
• Assessee Lawyers: CHANDRASEKHAR SANTHOSH KUMAR
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 233/COCH/2011 ASSESSMENT YEAR: 2006-07 SHRI S.SANTHOSH, ARAPPURAYIL PUTHEN VEEDU, MANNADI P.O., ENATHU, PATHANAMTHITTA-691530. [PAN : APMPS 8776E] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOLLAM. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI CHANDRASEKHAR SANTHOSH KUMAR, CA REVENUE BY SHRI B.SAJEEV, JR. DR DATE OF HEARING 06/09/2012 DATE OF PRONOUNCEMENT 07/09/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 06-01-2011 PASSED B BY THE LD. CIT(A)-I, TRIVANDRUM AND IT RELATES TO THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE IS ASSAILING THE DECISION OF THE LD . CIT(A) IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENDITURE OF RS. 19,76,3 96/- AS RELATING TO INTEREST BEARING FUNDS DIVERTED FOR NON-BUSINESS PURPOSES. 3. THE FACTS RELATING TO THE SAID ISSUE ARE STATED IN BRIEF. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAS WITHDRAWN A SUM OF RS. 1.42 CRORES FROM HIS BUSINESS FOR PERS ONAL PURPOSES. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS PAID A SUM OF RS. 21.09 LAKHS AS INTEREST TO VARIOUS BANKS ON THE OUTSTANDING LOAN OF RS. 1.52 C RORES. ACCORDINGLY, THE AMOUNT WITHDRAWN BY THE ASSESSEE WAS TREATED BY THE ASSESS ING OFFICER AS DIVERSION OF INTEREST I.T.A. NO.233/COCH/2011 2 BEARING FUNDS. ACCORDINGLY HE WORKED OUT THE INTER EST ATTRIBUTABLE TO THE FUNDS SO DIVERTED AT RS. 19.76 LAKHS AND DISALLOWED THE SAME . THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE THE LD. CIT(A) BUT COULD NOT SUCCEE D. HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) AS WELL AS THE ASSESSING OFFICER DID NOT APPRECIATE THE FACT THAT THE ASSESSEE HAS NOT WITHDRAWN ANY INTEREST BEARING FUND FOR HIS PERSONAL PURPOSES. H E SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS TAKEN CHITTY FUND LOANS TO THE TUNE OF ABOUT RS.1.42 CRORES AND THE PROCEEDS THERE FROM HAS BEEN WITHDRAWN BY THE ASSESSEE FOR HIS PERSONAL PURPOSES. HE FURTHER SUBMITTED THAT THE A SSESSEE HAS VARIOUS LOANS FROM THE BANKS IN THE EARLIER YEARS AND THEY HAVE BEEN UTILI SED ONLY FOR BUSINESS PURPOSES. 5. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE A SSESSEE IS PUTTING A FRESH FACT BEFORE THE TRIBUNAL AND THIS CLAIM WAS NOT PUT BEFO RE THE LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. ACCORDING TO THE LD. AR THE BANK LOANS HAVE BEEN TAKEN BY THE ASSESSEE IN THE EARLIER YEARS AND THEY HAVE BEEN USED FOR BUSINESS PURPOSES. IT HAS ALSO BEEN POINTED OUT THAT THE ASSESSEE HAS TAKEN CHITTY FUND LOANS DURING THE YEA R UNDER CONSIDERATION AND THE SAID LOANS HAVE BEEN UTILISED FOR MAKING WITHDRAWALS FOR PERSONAL PURPOSES. ACCORDINGLY, IT IS THE CONTENTION OF THE LD. AR THAT THE DISALLOWAN CE OF INTEREST ON BANK LOANS IS NOT PROPER UNDER THE ABOVE SAID FACTS. HOWEVER, AS SUB MITTED BY THE LD. DR, THESE FACTS HAVE NOT BEEN BROUGHT TO THE NOTICE OF THE ASSESSIN G OFFICER OR THE LD. CIT(A). THESE FACTS, WHICH ARE SUBMITTED BEFORE US FOR THE FIRST TIME, NEEDS TO BE EXAMINED BY THE ASSESSING OFFICER, AS THEY MAY HAVE A VITAL BEARING ON THE IMPUGNED ISSUE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT( A) AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO E XAMINE AFRESH THE CLAIM OF THE ASSESSEE AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LA W AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I.T.A. NO.233/COCH/2011 3 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY O N 07-09-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 7TH SEPTEMBER, 2012 GJ COPY TO: 1. SHRI S.SANTHOSH, ARAPPURAYIL PUTHEN VEEDU, MANNA DI P.O., ENATHU, PATHANAMTHITTA- 691530. 2.THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE- 1, KOLLAM 3.THE COMMISSIONER OF INCOME-TAX(APPEALS)-I,TRIVAND RUM. 4.THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN