Sh. Ram Gopal, Muzaffarnagar V. ITO, Muzaffarnagar

ITA 2368/DEL/2015

• Counselvise Citation: 236820114 RSA 2015
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 25-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 22-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: ANKIT GUPTA
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.2368/DEL/2015 ASSESSMENT YEAR : 2010-11 RAM GOPAL, PROP. M/S AGARWAL SUGAR COMPANY, 245, ARYANPURI, MUZAFFARNAGAR. PAN : AATPG8476D VS. ITO, WARD-1(1), MUZAFFARNAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANKIT GUPTA, ADVOCATE RESPONDENT BY: SHRI R.S. NEGI, SR.DR DATE OF HEARING : 25.08.2015 DATE OF PRONOUNCEMENT: 26.08.2015 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 13.2.2015 IN RELATION TO THE ASSESSMENT Y EAR 2010-11. 2. THE FIRST GROUND IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF INTEREST AMOUNTING TO RS.92,500/-. ITA NO.2368/DEL/2015 2 3. BRIEFLY STATED, THE FACTS OF THIS GROUND ARE THA T THE ASSESSEE PAID TOTAL INTEREST OF RS.1,24,075/- ON LOANS TAKEN BY HIM DU RING THE YEAR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED TH AT THE ASSESSEE PAID INTEREST OF RS.73,000/- TO M/S PRATAP ENTERPRISES I N RELATION TO LOAN OF RS.20 LAC; AND RS.19,500/- TO M/S KRISHNA CHANDRA VISHNU KUMAR RELATING TO A LOAN OF RS.10 LAC. HE FURTHER NOTICED THAT A LOAN O F RS.30 LAC WAS GIVEN TO M/S SURENDER KUMAR VISHNU KUMAR, A FAMILY CONCERN W ITHOUT INTEREST. HE, THEREFORE, DISALLOWED INTEREST OF RS.92,500/-, WHICH CAME TO BE APPROVED IN THE FIRST APPEAL. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, I FIND FROM PAGE 21 OF THE ASSE SSEES PAPER BOOK, WHICH IS STATEMENT OF ACCOUNT OF M/S SURENDER KUMAR SUBHA SH CHANDRA (STATED BY THE LD. AR TO BE THE CORRECT NAME INSTEAD OF M/S SU RENDER KUMAR VISHNU KUMAR) THAT THE ASSESSEE PAID RS.40 LAC BY MEANS OF THREE ENTRIES OF RS.20 LAC, RS.10 LAC AND RS.10 LAC ON 27.1.2010, 29.1.201 0 AND 30.1.2010 RESPECTIVELY. IT CAN BE SEEN FROM THE COPY OF THIS ACCOUNT THAT THERE ARE EITHER PAYMENTS BY THE ASSESSEE OR SOME AMOUNT HAVE BEEN RECEIVED BACK, WITHOUT THERE BEING ANY BUSINESS TRANSACTION. AT T HE END OF THE YEAR, THE ASSESSEE WAS TO RECEIVE A SUM OF RS.44,03,850/- FRO M THIS PARTY. THESE ITA NO.2368/DEL/2015 3 FACTS CLEARLY INDICATE THAT THE AMOUNT OF LOAN TAKE N FROM PRATAP ENTERPRISES AND KRISHNA CHANDRA VISHNU KUMAR ON WHICH INTEREST OF RS.92,500/- WAS PAID, HAS, IN FACT, BEEN UTILIZED ONLY FOR NON-BUSI NESS PURPOSE. IN MY CONSIDERED OPINION, THE AUTHORITIES BELOW WERE RIGH T IN SUSTAINING THIS DISALLOWANCE. THIS GROUND FAILS. 5. THE SECOND GROUND IS AGAINST THE DISALLOWANCE OF RS.4,80,328/- MADE BY THE AO U/S 43B OF THE ACT. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS NOTICED THAT SIMILAR ISSU E CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE AY 2008-09. A COPY OF THE ORDER DATED 7.8.2015 IN ITA NO.4041/DEL/2011 HAS BEEN PLACED ON RECORD IN WHICH SIMILAR DISALLOWANCE MADE BY THE AO HAS BEEN DELETED BY RECORDING THAT THE SAID AMOUNT OF SERVICE TAX WAS N OT RECEIVED DURING THE YEAR. POSITION FOR THE YEAR UNDER CONSIDERATION IS ALSO SIMILAR INASMUCH AS THE AMOUNT OF RS.4,80,328/- IN QUESTION WAS NOT REC EIVED TILL THE YEAR-END. RESPECTFULLY FOLLOWING THE PRECEDENT, I ORDER FOR T HE DELETION OF ADDITION. 7. THE ONLY OTHER GROUND IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF RS.8,878/- TOWARDS BANK CHARGES. ITA NO.2368/DEL/2015 4 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, I FIND THAT THE DETAIL OF BANK CHARGES IS AVAILABLE AT PAGE 38 OF THE PAPER BOOK. IT CAN BE SEEN THAT THESE AR E SMALL AMOUNTS OF BANK CHARGES PAID FOR ISSUANCE OF DRAFT, ETC. THE FINDI NG OF THE AO THAT THE ASSESSEE HAD NOT PAID THESE EXPENSES, BUT, INCREASE D THE LIABILITY, IS, THEREFORE, NOT JUSTIFIED. SINCE THE BANK CHARGES HA VE BEEN PAID BY THE ASSESSEE DURING THE COURSE OF HIS BUSINESS, I HOLD THAT THE SAME TO BE ELIGIBLE FOR DEDUCTION. THIS GROUND IS ALLOWED. 9. IN THE RESULT, THE APPEAL IS PARTLY ALLOWE D. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2015. SD/- (R.S. SYAL) ACCOUN TANT MEMBER DATED: 26 TH AUGUST, 2015. DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI