AHK Broking Pvt. Ltd., Ahmedabad V. The ITO, Wrad-1(1)(1), Ahmedabad

ITA 2756/AHD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8797 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-03-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 07-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L F JAIN
• Assessee Lawyers: S N DIVETIA
• Keywords: Unexplained cash credit; Wrong claim; Set aside
• Section: 143(3); 201; 13; 68

Judgement Text

PAGE 1 OF 3 , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT) BEFORE , SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS . MADHUMITA ROY , JUDICIAL MEMBER ./ IT A NO . 2756 /AHD/ 2017 / ASSTT. YEAR : 2013 - 2014 AHK BROKING PVT. LTD. , FORMERLY AHK DEVELOPERS P. LTD. , 404, ANKET BUILDING , NR. MUNICIPAL MARKET, C.G ROAD , AHMEDBAD - 380009 . PAN: AAHCA8282C VS . I.T.O, WARD - 1(1)(1) AHMEDABAD . (APPLICANT) ( RESPON D ENT ) ASSESSEE BY : SHRI S.N. DIVE TIA , A.R REVENUE BY : SHRI L.F. JAIN , SR. D.R / DATE OF HEARING : 14 / 07 / 2020 / DATE OF PRONOUNCEMENT: 24 /07 /2 020 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) - 1 , AHMEDABAD [ LD. CIT (A) IN SHORT] , DATED 25 / 10 / 2017 ARI SING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DATED 2 5 / 0 2 / 201 6 RELEVANT TO ASSESSMENT YEAR (A . Y) 2013 - 14 . 2. T HE ONLY ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF INTEREST EXPENSES ON THE UNSECURED LOA N BY TREATING THE SAME AS BOGUS . IT A NO.2756/AHD/2017 ASSTT. YEAR 2013 - 14 PAGE 2 OF 3 2.1 THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF PROPERTY DEALING AND INVESTMENT IN SHARES . T HE AO DURING THE ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAS CLAIMED INTEREST EXPENSES ON UNSECURED LOAN FROM CERTAIN PARTIES . HOWEVER IN THE IMMEDIATE PREVIOUS YEAR 2011 - 12 CORRESPONDING TO ASSESSMENT YEAR 2012 - 13, WHILE FRAMING THE AS SESSMENT UNDER SECTION 143( 3 ) OF THE ACT, THE AO HAS TREATED SUCH UNSECURED LOAN AS BOGUS IN NATURE AND THEREFORE ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT. 2.2 THE AO, ACCORDINGLY HELD THAT INTEREST EXP ENSES ON SUCH UNSECURED LOAN CAN T NOT BE ALLOWED AS DEDUCTION BEING NON - GENUINE EXPENSES. HENCE, THE AO DISALLOWED THE AMOUNT OF INTEREST EXPENSES AMOUNTING TO RS. 57,56,220/ - ON SUCH UNSECURED LOAN AND ADD ED TO THE TOTAL INCOME OF THE ASSESSEE. 3. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A) WHO ALSO CONFIRMED THE ORDER OF THE AO. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 86 AND SUBMITTED THAT THE ASSESSEE HAS PREFERRED AN APPEAL TO THE H ON BLE ITAT FOR THE ASSESSMENT YEAR 2012 - 13 AGAINST THE ADDITION MADE BY THE AO FOR TRE ATING THE AMOUNT OF SUCH LOAN AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. THE H ON BLE ITAT V IDE ORDER DATED 1 ST NOVEMBER 2018 IN ITA NUMBER 1071/A HD /2016 WAS PLEASED TO SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION. HOWEVER THE AO IN THE CONSEQUENTIAL ORDER HAS AGAIN CONFIRMED THE AMOUNT OF IMPUGNED UNSECURED LOAN AS UNEXPLAIN ED CASH CREDIT AND THEREFORE THE SAME WAS DISALLOWED BY THE AO. AGAINST THAT ORDER OF THE AO, AN APPEAL WAS PREFERRED BEFORE THE LEARNED CIT (A) WHICH IS PENDING FOR FURTHER AD JUDICATION A S OF NOW. ACCORDINGLY THE LEARNED AR FOR THE ASSESSEE CO NTENDED THAT THE MATTER IN THE PRESENT CASE NEEDS IT A NO.2756/AHD/2017 ASSTT. YEAR 2013 - 14 PAGE 3 OF 3 TO BE SET ASIDE TO THE FILE OF THE LEARNED CIT (A) FOR FRESH ADJUDICATION AS THE DISPUTE ON HAND DEPENDS UPON THE OUTCOME OF THE APPEAL WHICH IS PENDING BEFORE THE LEARNED CIT (A) FOR THE ASSESSMENT YEAR 20 12 - 13 . 5. O N THE OTHER HAND, THE LEARNED DR DID NOT RAISE ANY OBJECTION IF THE MATTER IS SET ASIDE TO THE FILE OF THE AO FOR FRESH ADJUDICATION AS PER THE PROVISIONS OF LAW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MAT ERIALS AVAILABLE ON RECORD. THERE IS NO AMBIGUITY TO THE FACT THAT THE AMOUNT OF INTEREST EXPENSE ON THE UNEXPLAINED CASH CREDIT IS NOT ALLOWABLE AS DEDUCTION. AS SUCH INTEREST EXPENSES REPRESENTS THE BOGUS CLAIM OF THE ASSESSEE. HOWEVER WE NOTE THAT THE I SSUE WHETHER THE IMPUGNED AMOUNT OF UNSECURED LOAN REPRESENTS UNEXPLAINED CASH CREDIT IS SUBJECT MATTER OF LITIGATION WHICH IS PENDING BEFORE THE LEARNED CIT (A). THUS WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE ON HAND DEPENDS UPON THE OUTCOME OF THE APP EAL WHICH IS PENDING BEFORE THE LEARNED CIT (A) FOR THE ASSESSMENT YEAR 2012 - 13 . ACCORDINGLY, WE FIND FORCE IN THE ARGUMENT OF THE LEARNED AR FOR THE ASSESSEE THAT THE MATTER ON HAND NEEDS TO BE SET ASIDE TO THE FILE OF THE LEARNED CIT (A) FOR FRESH ADJUDI CATION AS PER THE PROVISIONS OF LAW AND AFTER CONSIDERING THE ORDER OF THE LEARNED CIT (A) FOR THE ASSESSMENT YEAR 2012 - 13 . H ENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR THE STATISTICAL PURPOSES. 7 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR THE STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE COURT ON 24 /07 / 2020 AT AHMEDABAD. - SD - - SD - (MS MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 24 / 07 /2020 M ANISH