Kalpana Bharatbhai Bodiwala, Ahmedabad V. The Income tax Officer,Ward-10(2), Ahmedabad

ITA 240/AHD/2012

• Counselvise Citation: 24020514 RSA 2012
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 27-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MK SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL VICE PRESIDENT AND SHRI S.S. GODARA JUDICIAL MEMBER ITA S NO . 240 /AHD/ 201 2 A. Y .20 0 8 - 09 KALPANA BHARATBHAI BODIWALA, 301 ANAND MANGAL COMPLEX - III, AMBAWADI. PAN: ABTPB 4403C VS INCOME TAX OFFICER WARD - 10(2), NARAYAN CHAMBERS, AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : S HRI M.K. SINGH, SR. D.R. , ASSESSEE(S) BY : NONE (WRITTEN SUBMISSIONS) / DATE OF HEARING : 21 / 0 5 /201 5 / DATE OF PRONOUNCEMENT: 19 / 0 6 /201 5 / O R D E R PER S.S. GODARA , JUDICIAL MEMBER THIS ASSESSEE S APPEAL FOR A.Y. 200 8 - 0 9 , ARISE S FROM ORDER OF TH E CIT(A) - XVI, AHMEDABAD DATED 23.11.2011 , PASSED I N CASE NO .CIT(A) - XVI/ITO/WD - 10(2)/639/10 - 11 , IN PROCEEDINGS UNDER SECTION 143(3 ) OF THE INCOME TAX ACT , 1961, IN SHORT THE ACT . 2. CASE CALLED TWICE. NOBODY HAS COME PRESENT AT THE ASSESSEE S BEHEST. T H E REGISTRY HAS ALREADY SERVED THE ASSESSEE AN RPAD NOTICE ISSUED ON 17.4.2015. WE PROCEED EX - PARTE ITA NO. 240 /AHD/20 1 2 KALPANA BHARATBHAI BODIWALA FOR A.Y. 200 8 - 0 9 - 2 - AGAINST HER IN THESE CIRCUMSTANCES AND PROCEED TO DECIDE THE APPEAL ON MERIT. 3. THE ASSESSEE - INDIVIDUAL FILED HER RETURN ON 30.11.2009 ADMITTING INCOME OF RS.5,22,852/ - . THE ASSESSING OFFICER TOOK UP SCRUTINY. THE ASSESSEE HAD SOUGHT SET OFF OF BANK OVERDRAFT INTEREST TO THE TUNE OF RS.1,87,444/ - AGAINST FIXED DEPOSITS WITH THE BANK AND SIMILAR INTEREST RECOGNIZED AS INCOME FROM OTHER SOURCES. SHE STATED TO HAVE RECEIVED FIXED DEPOSITS INTEREST FROM THE CO R P O RATION BANK OF RS.3,38,267/ - AN D PAID OVERDRAFT LIMIT INTEREST ON FIXED DEPOSITS @10 OF RS.1,87,444/ - . SHE WOULD FURTHER CLAIM TO HAVE BEEN ENJOYING FD OVERDRAFT LIMIT OF RS.18,63,000/ - FROM THE BANK F OR THE LAST TEN YEARS AND ADVANCED THE SAME @ 12% AS DISCLOSED IN THE ACCOUNTS. THE ASSESSING OFFICER IN ASSESSMENT ORDER DATED 8.9.2011 OBSERVED THAT THE ASSESSEE S INTEREST WAS NOT FROM ANY BUSINESS ACTIVITY BUT ONLY FROM BANK DEPOSITS AND OTHER CREDITOR S ASSESSED AS INCOME FROM OTHER SOURCES. HE HELD THAT THOUGH SECTION 57(III) OF THE ACT PERMITTED DEDUCTION OF EXPENDITURE IN EARNING SUCH INCOME U/S.56, HOWEVER, THE SAME HAD TO BE WHOLLY AND INCLUSIVELY INCURRED FOR THE PURPOSE OF MAKING OR EARNING THE VERY INCOME. HE QUOTED ASSESSEE S FAILURE IN SHOWING NEXUS OF THE ABOVESAID INTEREST INCOME AND THE ONE SOUGHT TO BE SET OFF AND MADE THE IMPUGNED DISALLOW ANCE . ITA NO. 240 /AHD/20 1 2 KALPANA BHARATBHAI BODIWALA FOR A.Y. 200 8 - 0 9 - 3 - 4. THE CIT(A) HAS AGREED WITH THE ASSESSING OFFICER S FINDINGS AS UNDER: 2.0 THE ONLY GROUN D OF APPEAL IS REGARDING THE DISALLOWANCE OF INTEREST OF RS. 1,52,782 / - PAID ON OD ACCOUNT. THE ASSESSING OFFICER HAD DISCUSSED THIS ISSUE IN PARA - 3 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAD NOTICED THAT THE ASSESSEE HAD RECEIVED INTEREST OF RS. 5, 23,012 / - OUT OF WHICH BANK OD INTEREST OF RS. 1,52,782 / - WAS REDUCED. AS PER FACTS OF THE CASE, THE ASSESSES WAS NOT HAVING ANY BUSINESS OR PROFESSION AND THEREFORE, THE ASSESSEE WAS REQUIRED BY THE ASSESSING OFFICER TO CO - RELATE THE INTEREST BORROWING WIT H THE INCOME OFFERED WITH NEXUS. HOWEVER, THE ASSESSEE HAD NOT SUBMITTED ANY JUSTIFICATION OR PROVED THE NEXUS OF BORROWING WITH INCOME OFFERED AND THEREFORE THE CLAIM OF INTEREST OF RS.1,52,782 / - WAS DISALLOWED AND ADDED TO INCOME. AS PER INFORMATION PROV IDED BY THE LD. COUNSEL, THE INTEREST OF RS.1,46,070 / - WAS RECEIVED FROM M/S K.BODIWALA & CO., THE INTEREST OF RS.70,560 / - WAS RECEIVED FROM M/S SHAIMAN CHEMICALS PVT. LTD., THE INTEREST OF RS. 2,85,252 / - WAS RECEIVED FROM CORPORATION BANK, THE INTEREST OF RS.4,976 / - WAS RECEIVED FROM PUNJAB NATIONAL BANK AND THE INTEREST OF RS.15,562/ - WAS RECEIVED FROM POST OFFICE, AND INTEREST OF RS.1 ,52, 782 / - WAS PAID TO CORPORATION BANK. THE INTEREST ON FDRS WAS RECEIVED FROM THE CORPORATION BANK THEREFORE, THE INTEREST PAYMENT CANNOT BE LINKED TO THE F D R I NTEREST. A P PARENTLY, THE ASSESSEE WAS NOT HAVING ANY BUSINESS OR PROFESSION AND THEREBY, THE APPELLANT WAS REQUIRED TO ESTABLISH THAT THE INTEREST PAID TO BANK WAS INCURRED FOR EARNING THE OTHER INTEREST INCOME BECAUSE THE INTEREST WAS NOT INCURRED FOR THE INTEREST EARNED FROM FDRS. IN ABSENCE THEREOF, THE ASSESSING OFFICER WAS JUSTIFIED IN DISALLOWING THE INTEREST EXPENSES OF RS. 1,52,782 / - AND THE SAME IS HEREBY CONFIRMED. THE DECISIONS RELIED UPON CAN BE APPLIED ONLY WHEN IT IS ESTABLISHED THAT THE I NTEREST PAYMENT WAS MADE FOR EARNING THE INTEREST INCOME AND THEREFORE, THE APPELLANT CANNOT DERIVE SUPPORT FROM THE DECISIONS RELIED UPON BY HER COUNSEL. THE GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 5. WE HAVE HEARD T HE REVENUE AND GONE THROUGH THE ASSESSEE S WRITTEN SUBMISSIONS AS WELL AS THE RELEVANT FINDINGS. BOTH THE LOWER AUTHORITIES HAS DISALLOWED THE ASSESSEE S CL A IM ITA NO. 240 /AHD/20 1 2 KALPANA BHARATBHAI BODIWALA FOR A.Y. 200 8 - 0 9 - 4 - OF INTEREST SET OFF UNDER SECTION 57(III) OF THE ACT QUOTING HER FAILURE IN PROVING NEXUS THEREO F WITH THE INTEREST INCOME TREATED UNDER THE HEAD OTHER SOURCES. THERE IS HARDLY ANY DISPUTE THAT THE VERY STATUTORY PROVISION ALLOWS AN EXPENDITURE IN EARNING INCOME FROM OTHER SOURCES WHICH IS LAID OUT OR EXPENDED WHOLLY AND INCLUSIVELY FOR THE PURPOS E OF MAKING OR EARNING SUCH INCOME . THE CIT(A) FINDINGS HAVE EXAMINED THE ASSESSEE S INTEREST RECEIPTS FROM EACH SOURCE . NEITHER THE ASSESSEE S PLEADINGS NOR HER WRITTEN SUBMISSION S IN CASE RECORD ARE ABLE TO PROVE ANY NEXUS BETWEEN HER INTEREST INCOME AN D THE INTEREST EXPENDITURE SOUGHT TO BE SET OFF. IN THESE CIRCUMSTANCES , WE HOLD THAT THE ASSESSEE S IMPUGNED CLAIM IS NOT ALLOWABLE. HER SOLE SUBSTANTIVE GROUND ACCORDINGLY FAILS. 6. THE ASSESSEE S APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON T HIS DAY, THE 19 TH JUNE ,201 5 AT AHMEDABAD . SD/ - SD/ - ( G.D. AGRAWAL ) ( S.S. GODARA ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED 19 / 06 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD ITA NO. 240 /AHD/20 1 2 KALPANA BHARATBHAI BODIWALA FOR A.Y. 200 8 - 0 9 - 5 - 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD