Shri Anilkumar P. Soni, Ahmedabad V. The ACIT, Circle-3, Ahmedabad

ITA 2511/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0682 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 25-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ANILKUMAR P. SONI JOHNSON JEWELLERS, OPP. DENA BANK, MANEK CHOWK, AHMEDABAD - 380001 PAN: ADFPS0242 L (APPELLANT) VS THE ACIT, CIR - 3, AHMEDABAD (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: S H RI S.N. DIVETIA , A.R. DATE OF HEARING : 04 - 08 - 2 016 DATE OF PRONOUNCEMENT : 18 - 08 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS ASSE SSEE S APPEAL FOR A.Y. 2008 - 09 , AR ISES FROM ORDER OF THE CIT(A) - III, AHMEDABAD DATED 14 - 06 - 2013 IN APPEAL NO. CIT(A) - III/249 / ACIT CIR. 3/12 - 13 , UPHOLDING SECTION 40A(2)(B) DISALLOWANCE/ADDITION OF RS. 6,86,717/ - MADE BY THE ASSESSING I T A NO . 2511 / A HD/20 13 A SSESSMENT YEAR 200 8 - 09 I.T.A NO. 2511 /AHD/20 13 A.Y. 2008 - 09 PAGE NO ANILKUMAR P. SONI VS. ACIT 2 OFFICER, IN PROCEEDI NGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. FACTS OF THE CASE ARE IN A NARROW COMPASS. THE ASSESSEE - AN INDIVIDUAL TRADES IN PRECIOUS METAL GOLD, JEWELLARY ETC. HE FILED RETURN ON 27 - 09 - 2008 DECLARING TOTAL INCOME OF RS. 1,50,21,552/ - ALONG WITH AGRICULTURAL INCOME OF RS. 1,88,424/ - . THE ASSESSING OFFICER TOOK UP SCRUTINY. HE NOTICED THE ASSESSEE TO HAVE DEBITED INTEREST IN P & L ACCOUNT @ 24% AS PAID TO M/S. DEVSATYA CORPORATION, GEETABEN D. SONI AND SHARDABEN P. SONI AMOUNTING TO R S. 13,32,550/ - , RS. 6,73,930/ - AND RS. 7,39,790/ - ; RESPECTIVELY AS AGAINST THAT PAID IN OTHER CASES @ 18%. THE ASSESSING OFFICER ACCORDINGLY INVOKED SECTION 40A(2)(B) OF THE ACT TO BENCHMARK ASSESSEE S INTEREST PAYMENT @ 18% AND COMPUTED TH E CORRESPONDING INTEREST DISALLOWANCE @ 6% COMING TO RS. 6,86,717/ - THEREBY TREATING 24% INTEREST IN QUESTION AS EXCESSIVE. THE CIT(A) UPHOLDS ASSESSING OFFICER S ACTION. 3. WE HAVE HEARD BOTH THE PARTIES. THERE IS NO DISPUTE THAT BOTH THE LOWER AUTHO RITIES HAVE INVOKED THE IMPUGNED SECTION 40A(2)(B) DISALLOWANCE BY BENCHMARKING ASSESSEE S INTEREST RATE PAID IN OTHER CASES @ 18% TO DISALLOW 6% EXCESSIVE RATE IN C ASE OF ABOVE THREE PAYEES. THERE IS NOT EVEN IOTA OF DISCUSSION IN THE LOWER ORDERS ABOUT MARKET RATE OF INTEREST. NOR ANY EXERCISE IN THIS DIRECTION SEEMS TO HAVE BEEN CARRIED OUT. HON BLE JURISDICTIONAL HIGH COURT IN (2014) 50 TAXAMANN.COM 52 (GUJ ) CIT VS. SARJAN REALITIES LTD HOLDS I.T.A NO. 2511 /AHD/20 13 A.Y. 2008 - 09 PAGE NO ANILKUMAR P. SONI VS. ACIT 3 THAT THE IMPUGNED DISALLOWANCE CANNOT BE INVOKED SOLELY BE CAUSE AN ASSESSEE HAS MADE INTEREST PAYMENTS AT DIFFERENT RATES TO VARIOUS PAR TIES. WE RE PEAT THAT THERE IS NO OTHER MATERIAL DISCUSSED APART FROM ADOPTING INTEREST RATE @ 18% AS PAID TO OTHER PAYEES. WE ACCORDINGLY FOLLOW HON BLE JURISDICTIONAL HIGH COU RT DECISION TO DELETE THE IMPUGNED INTEREST DISALLOWANCE/ADDITION. 4. THE ASSESSEE SUCCEEDS IN ITS APPEAL. ORDER PR ONOUNCED IN THE OPEN C OURT ON 18 - 08 - 201 6 SD/ - SD/ - ( AMARJIT SINGH ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 18 /08 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,