Shri Rameshbhai R.Patel, Ahmedabad V. The Income tax Officer,Ward-1(3), Ahmedabad

ITA 2723/AHD/2011

• Counselvise Citation: 272320514 RSA 2011
• Duration Of Justice: 2 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 04-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHUBHRATA VERMA JDIT
• Assessee Lawyers: S N DIVETIA
• Keywords: Principle of natural justice

Judgement Text

, , , , SMC, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, SMC BENCH . .. . . .. . , !' # ' !' # ' !' # ' !' # ' BEFORE SHRI G.C. GUPTA, VICE-PRESIDENT ITA NO.2723/AHD/2011 [ASSTT.YEAR : 2008-2009] RAMESHBHAI R. PATEL 16, KESHAV BAUG, COLONY SABARMATI, RAMNAGAR AHMEDABAD. PAN : ADOPP 6171 E /VS. ITO, WARD-1(3) AHMEDABAD. ( (( (%& %& %& %& / APPELLANT) ( (( ('(%& '(%& '(%& '(%& / RESPONDENT) )* + , #/ ASSESSEE BY : SHRI S.N. DIVETIA . + , #/ REVENUE BY : SHUBHRATA VERMA, JDIT / + *01/ DATE OF HEARING : 15 TH OCTOBER, 2013 234 + *01/ DATE OF PRONOUNCEMENT : 13.11.2013 #5 / O R D E R THIS APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-6, AHME DABAD DATED 3.10.2011. 2. THE GROUND NOS.1.1 TO 2.2 OF THE ASSESSEES APPE AL ARE AS UNDER: 1) THAT ORDER PASSED U/S.250 ON 3.10.2011 FOR AY 20 08-09 BY CIT(A) UPHOLDING THE DISALLOWANCE OF INTEREST EX PENSE ITA NO.2723/AHD/2011 -2- OF RS.1,89,267/- MADE BY AO IS WHOLLY ILLEGAL, UNLA WFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND O R ON FACTS IN NOT ALLOWING A FRESH OPPORTUNITY TO THE AP PELLANT WHEN THE GROUND FOR DISALLOWANCE WAS TO BE CHANGED FROM THE GROUND TAKEN BY AO. 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND O N FACTS IN CONFIRMING THE DISALLOWANCE OF INTEREST EX PENSE OF RS.1,89,267/- U/S.57(III) AS AGAINST THE DISALLOWAN CE MADE BY AO U/S.36(1)(III). 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE UPH ELD THE DISALLOWANCE OF INTEREST EXPENSES OF RS.1,89,267 U/ S.57(III) AS AGAINST THE DISALLOWANCE MADE BY AO U/S.36(1)(II I). 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS RECEIVED MORE INTEREST INCOME WHEN COMPARED TO THE INTEREST PAID DURING THE YEAR, AND THEREFORE, NO DISALLOWANCE WAS CALLED FOR. HE SUBMITTED THAT NO SIMILAR DISALLOWANCE WAS MADE IN THE EARLIER YEARS BY THE DEPARTMENT. THE LEARNED DR HAS RELIED ON TH E ORDERS OF THE AO AND THE CIT(A). 4. I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). I FIND THAT THE ASSESSEE CO ULD NOT PROVE THE NEXUS BETWEEN THE BORROWING MADE FROM SHRI JAYESH R ASHMIKANT TO WHOM THE INTEREST OF ` 1,89,267/- WAS PAID BY THE ASSESSEE AND THE INTEREST INCOME DECLARED AND EARNED BY THE ASSESSEE , DECLARED UNDER THE HEAD INCOME FROM OTHER SOURCES. IN THESE FAC TS OF THE CASE, I CONSIDER THAT IT SHALL BE IN THE INTEREST OF JUSTIC E TO RESTORE THIS ISSUE TO THE FILE OF THE AO WITH DIRECTION TO DECIDE THE ISS UE IN THE GROUNDS OF THE APPEAL DE NOVO AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ITA NO.2723/AHD/2011 -3- ASSESSEE. THE ASSESSEE SHALL BE AT LIBERTY TO PROD UCE EVIDENCE/S TO PROVE NEXUS BETWEEN THE BORROWING MADE FROM SHRI JA YESH RASHMIKANT, AND THE INTEREST INCOME DECLARED UNDER THE HEAD INCOME FROM OTHER SOURCES. I DIRECT ACCORDINGLY. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD