Devendra Kumar Gupta, Kolkata V. I.T.O.,Ward-29(1), Kolkata

ITA 2571/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0863 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 11-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA JCITSRDR
• Keywords: Business income; Source of fund
• Section: 143(3); 143(1); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.2571/KOL/2019 ASSESSMENT YEAR:2013-14 DEVENDRA KUMAR GUPTA A-74, LAKE GARDENS, KUSUM VILLA, KOLKATA- 700045 [ PAN NO.ADYPG 2099 J ] / V/S . INCOME TAX OFFICER WARD- 29(1), AAYAKAR DAKSHIN BHAWA, 4 TH FLOOR, 2, GARIAHAT ROAD (SOUTH), KOLKATA-68 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SANDEEP GUPTA, AR /BY RESPONDENT SHRI JAYANTA KHANRA, JCIT-SR-DR /DATE OF HEARING 05-02-2020 /DATE OF PRONOUNCEMENT 05-06-2020 /O R D E R THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2013-14, ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-8, KOLKATAS O RDER DATED 11.10.2019 PASSED IN CASE NO. CIT(A), KOL-8/10129/2014-15, INV OLVING PROCEEDINGS U/S. 154 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961; IN S HORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE RAISED IN THE INSTANT APPEAL SEEKS TO REVERSE BOTH THE LOWER AUTHORITIES ACTION DISALLOWING INTEREST CLAIM OF 8,56,245/- DURING THE ASSESSMENT AS WELL AFFIRMED THE LOWER APPELLATE PROCEEDINGS. THE CIT(A)S DETAILED DISCUSSION TO TH IS EFFECT READS AS UNDER:- 3. OBSERVATION AND DECISION : ITA NO.2571/KOL/2019 A.Y. 2013-14 DEVENDRA KR. GUPTA VS. ITO WD-29(1), KOL . PAGE 2 GROUND OF APPEAL NO. 1: IN THIS ASSESSEE, IN THE IN TIMATION U/S. 143(1) OF THE INCOME TAX ACT, 1961 LOSS OF RS.8,50,325/- UNDER TH E HEAD INCOME FROM OTHER SOURCES WAS NOT ALLOWED. DURING THE COURSE OF APPEAL PROCEEDINGS, THE APPELL ANT STATED THAT THE LOSS HAD ACCRUED MAINLY ON ACCOUNT OF PAYMENT OF INTEREST OF RS.8,04,000/- IN RESPECT OF UNSECURED LOANS TAKEN FROM VARIOUS FAMILY MEMBERS O F THE APPELLANT. THE APPELLANT IS HAVING A BUSINESS UNDER THE NAME AND S TYLE OF M/S DEV PACK, WHICH IS SELF-OWNED BY HIM. HOWEVER, THE LOANS TAKE N AGAINST WHICH THE INTEREST OF RS.8,04,000/- WAS PAID WAS REFLECTED IN THE PERSONAL BALANCE SHEET OF THE APPELLANT AND WAS NOT REFLECTED IN THE BALAN CE SHEET AND PROFIT AND LOSS ACCOUNT OF THE BUSINESS CONCERN NAMED AS M/S DEV PA CK. HENCE, THE LOANS SO TAKEN HAVE BEEN SHOWN BY THE APPELLANT HIMSELF IN H IS PERSONAL CAPACITY AND ARE NOT REFLECTED IN THE BOOKS OF ACCOUNT OF M/S DE V PACK AND HENCE THE INTEREST THEREON HAVE NOT BEEN SHOWN AS AN EXPENSE WHILE CALCULATING THE INCOME FROM BUSINESS AND PROFESSION. THIS INTEREST ON LOANS, AS HAVE BEEN TAKEN IN THE PERSONAL CAPACITY, HAVE BEEN THUS SET OFF AGAINST INCOMES EARNED UNDER THE HEAD INCOME FROM OTHER SOURCES . WHILE COMPUTING THE INCOME FROM OTHER SOURCES, IT CAN LEAD TO INCOME ONLY AND THERE CANNOT BE A NET LOSS WHILE CALCULATING INCOME FROM OTHER SOURCES. IN VIE W OF THIS, THE NET LOSS SHOWN BY THE APPELLANT UNDER THE HEAD INCOME FROM OTHER SOURCES CANNOT BE SET OFF AGAINST OTHER INCOMES EARNED BY THE APPELLANT. HENC E, THE PLEA OF THE APPELLANT THAT THE LOSS ARISING UNDER THE HEAD INCOME FROM OTHER SOURCES BE ALLOWED TO BE SET OFF FROM THE OTHER SOURCES OF INCOME IS N OT TENABLE AND THE PLEA OF THE APPELLANT CANNOT BE ACCEPTED. IN VIEW OF THIS, THE APPEAL IS NOT ALLOWED . 3. THE ASSESSEE HIMSELF ALONGWITH HIS SON IS PRESEN T IN COURT. HIS ONLY CASE DURING THE COURSE OF HEARING IS THAT BOTH THE LEARN ED LOWER AUTHORITIES OUGHT TO HAVE ALLOWED HIS INTEREST CLAIM SINCE IT PERTAINS T O CAPITAL BORROWED FOR THE PURPOSE OF DERIVING BUSINESS INCOME WHICH STANDS AC CEPTED AND ASSESSED BY THE ASSESSING OFFICER. THE REVENUES CASE ON THE OTHER HAND IS THAT THIS ASSESSEE HAS ALSO DECLARED INCOME FROM OTHER SOURCES AND SIN CE HE COULD NOT PROVE NEXUS OF THE IMPUGNED EXPENDITURE WITH BUSINESS INCOME, T HE INTEREST IN ISSUE HAS RIGHTLY BEEN DECLINED IN BOTH THE LOWER PROCEEDINGS . THE ASSESSEE AND HIS SON HAVE UNDERTAKEN TO PLACE ON RECORD THE NECESSARY DE TAILS IN CONSEQUENTIAL PROCEEDINGS AT THEIR OWN RISK AND RESPONSIBILITY. I DEEM IT APPROPRIATE IN THIS BACKDROP OF PLEADINGS THAT ASSESSEE DESERVES ONE MO RE INNING BEFORE THE ITA NO.2571/KOL/2019 A.Y. 2013-14 DEVENDRA KR. GUPTA VS. ITO WD-29(1), KOL . PAGE 3 ASSESSING OFFICER TO PROVE THAT THE IMPUGNED INTERE ST CLAIM HAS DIRECT NEXUS WITH HIS INCOME ASSESSED UNDER THE HEAD BUSINESS . I ORDER ACCORDINGLY. THE ASSESSING OFFICER IS DIRECTED TO RE-EXAMINE THE ENT IRE ISSUE AFRESH AS PER LAW WITHIN THREE EFFECTIVE OPPORTUNITIES OF HEARING. 4. BEFORE PARTING, IT IS NOTED THAT THE ORDER IS BE ING PRONOUNCED AFTER THE NINETY (90) DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAORDINARY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE PERIOD OF LOCKDOWN DAY NEED TO BE EXCLUDED. FOR COMING TO SUCH A CONCL USION, I RELY UPON THE DECISION OF THE CO-ORDINATE BENCH OF MUMBAI TRIBUNA L IN THE CASE OF DCIT VS.JSW LTD. IN ITA NO.6264/MUM/2018 & 6103/MUM/2018 DECIDED ON 14.05.2020 ASSESSMENT YEAR 2013-14. 5. THIS ASSESSEES APPEAL IS ACCEPTED FOR STATISTIC AL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN OPEN COURT ON 05/06/2020 SD /- (S.S. GODARA) JUDICIAL MEMBER KOLKATA, *DKP/SR.PS - 05/06/2020 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DEVENDRA KR. GUPTA, A-74, LAKE GARDENS, KUSUM VILLA KOLKATA-45 2. /RESPONDENT-ITO WD-29(1), AAYAKAR DAKSHIN BHAWAN, 4 TH FLOOR 2, GARIAHAT ROAD (SOUTH), KOLKATA-68 3. ' % / CONCERNED CIT 4. % - / CIT (A) 5. & ))' , ' / DR, ITAT, KOLKATA 6. + / GUARD FILE. BY ORDER/ , /TRUE COPY/ ',