SHRI. BHARAT K SHAH, Mumbai V. ACIT-19(1), Mumbai

ITA 2379/MUM/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5438 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 14-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 143(3); 14A; 143(2)

Judgement Text

ITA No.2379/Mum/2019 A.Y.2009-10 Shri Bharat K. Shah Vs. ACIT-19(1) 1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORESHRI AMARJIT SINGH, ACCOUNTANT MEMBER & Ms. KAVITHA RAJAGOPAL, JUDICIAL MEMBER ITA No.2379/Mum/2019 (A.Y 2009-10) Shri Bharat K. Shah 1101-A, 11 th Floor, Tirupati, Bhulabhai Desai Road, Mahalaxmi, Mumbai – 400 004 Vs. ACIT-19(1) Matru Mandir, Tardeo, Mumbai - 400007 लेख सं./ज आइआर सं./PAN/GIR No: AOWPS8142R Appellant .. Respondent Appellant by : None Respondent by : C.T. Mathews Date of Hearing 24.03.2022 Date of Pronouncement 31.03.2022 आदेश / O R D E R PER AMARJIT SINGH, AM: The present appeal filed by the assessee is directed against the order passed by the CIT(A)-30, Mumbai, which in turn arises from the order passed by the A.O. u/s 143(3) of the Income Tax Act, 1961 for A.Y. 2009-10. The assessee has assailed the impugned order on the following grounds before us: “1. The learned CIT (A) erred in upholding the order of the learned AO whereby the learned AO erred in disallowing interest of Rs.32,78,831/- without properly appreciating the facts and circumstances of the case. ITA No.2379/Mum/2019 A.Y.2009-10 Shri Bharat K. Shah Vs. ACIT-19(1) 2 2. The learned CIT(A) erred in her observation that the appellant had not furnished copies of his capital account in M/s. Ritesh Exports and M/s. Lipsa India and also ledger account of interest paid as these were submitted alongwith written submissions dated 28.01.2019 and again alongwith written submissions on 29.1.2019. 3. The learned CIT(A) erred in her observation that the appellant had not furnished justification as to why interest expenditure of Rs.32,78,831/- should be allowed in view of interest free loan given to wife of the Appellant as the learned CIT(A) did not called for such explanation from the Appellant. 4. The learned CIT(A) erred in brushing aside the submissions on the applicability of the provisions of Sec. 14A while disallowing the sum of Rs.32,78,831/-, especially as the Appellant had sufficient interest funds in the form of his Capital. 5. The learned CIT (A) also erred in interpreting the provisions of Sec. 57 (iii) in a narrow and restrictive meaning not warranted by the language of the section. The Appellant craves leave to add, alter, amend, amplify, modify or withdraw any of the ground of appeal.” 2. Since all the grounds of appeal relates to issue of disallowance of interest of Rs.32,78,831/-, therefore, these grounds of appeal are adjudicated together in this order. 3. Fact in brief is that return of income declaring total loss of Rs.66,02,583/- was filed on 17.09.2009. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued and served on the assessee on 30.08.2010. During the course of assessment the Assessing Officer noticed that assessee has received interest income on capital from M/s Ritesh Exports to the amount of Rs.59,60,000/-, however, assessee has claimed interest expenses of Rs.58,51,483/- against the loan taken. The A.O has asked the assessee to explain nature of interest expenses claimed. After perusal of the explanation of the assessee the A.O noticed that part of interest expenses to the amount of Rs.32,78,831/- was not related to the business activities of the assessee. ITA No.2379/Mum/2019 A.Y.2009-10 Shri Bharat K. Shah Vs. ACIT-19(1) 3 Therefore, part of interest expenses of Rs.32,78,831/- disallowed and added to the total income of the assessee. 4. Aggrieved, the assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. 5. During the course of appellate proceedings before us neither assessee has furnished any submission nor attended the proceedings. It is also noticed that the case of the assessee was listed for 11 times for hearing and assessee has taken adjournment for 5 times and 6 times assessee has not made any compliance. Therefore the case of the assessee is adjudicated after hearing ld. D.R and taking into consideration the material available on record. 6. Heard the ld. D.R and perused the material on record. During the course of assessment the A.O has verified the claim of interest expenditure of the assessee to the amount of Rs.58,51,483/-. The A.O found that out of aforesaid interest expenses, an amount of Rs.32,78,831/- was not related to the business activities of the assessee. On the basis of submission made by the assessee before the ld. CIT(A) it was revealed that assessee had given interest bearing funds approximately of Rs.70,70,000/- to Deepti V. Shah as interest free loan and the assessee had failed to establish its nexus with either taxable income or exempt income despite giving 16 opportunities at the time of appellate proceedings before the ld. CIT(A). The ld. CIT(A) has also stated that assessee has not furnished even copy of his capital account in the books of M/s Ritesh Export or M/s Lipsa India. In the light of the above facts and circumstances we don’t find any infirmity in the decision of ld. ITA No.2379/Mum/2019 A.Y.2009-10 Shri Bharat K. Shah Vs. ACIT-19(1) 4 CIT(A), therefore, grounds of appeal filed by the assessee stand dismissed. 7. In the result, all the grounds of appeal of the assessee is dismissed. Order pronounced in the open court on 31.03.2022 Sd/- Sd/- (KAVITHA RAJAGOPAL) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 31.03.2022 PS: Rohit आदेश की े /Copy of the Order forwarded to : 1. / The Appellant 2. / The Respondent. 3. संबंिधत आयकर आय / The CIT(A) 4. आयकर आय ( ) / Concerned CIT 5. िवभ ग य िति िध, आयकर य िधकरण, हमद ब द / DR, ITAT, Mumbai 6. ग $% फ ई / Guard file. आदेशानुसार/BY ORDER, स ािपत ित //True Copy// ( Asst. Registrar) ITAT, Mumbai