ACIT, New Delhi V. Sh. Narinder Singh Kohli, New Delhi

ITA 3599/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91234 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 11-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 09-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DUM KANUNJNA
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K. : JUDICIAL MEMBER ITA NO. 3599/DEL/2012 A.Y. 2009-10 ACIT, CIRCLE-16(1), VS. NARINDER SINGH KOHLI, CIRCLE-16(1), NEW DELHI. 47, JOR BAGH, NEW DELHI . PAN: AAFPK 6203 N ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI P. DUM KANUNJNA SR. D R RESPONDENT BY : SHRI SATYAJIT GOYAL CA DATE OF HEARING : 11-06-2015 DATE OF ORDER : 17-06-2015. O R D E R PER S.V. MEHROTRA, A.M:- THIS APPEAL, BY THE REVENUE, IS DIRECTED AGAINST TH E ORDER DATED 2-4- 2012 PASSED BY THE LD. CIT(A)-XIX, NEW DELHI IN APP EAL NO. 270/2011-12 RELATING TO A.Y. 2009-10. 2 ITA 3599/DEL/2012 ACIT VS. NARINDER SINGH KOHLI 2. FOR A.Y. 2009-10, THE ASSESSEE FILED HIS RETUR N OF INCOME DECLARING LOSS OF RS. 2,28,12,072/-. THE ASSESSEE, LATE SHRI NARINDER SINGH KOHLI, IN THE RELEVANT ASSESSMENT YEAR DERIVED INCOME FROM SA LARY FROM COMPANY AS DIRECTOR, INCOME FROM HOUSE PROPERTY, INCOME FROM B USINESS, DIVIDEND INCOME AND INTEREST INCOME. THE AO NOTICED FROM P&L A/C THAT ASSESSEE HAD CLAIMED DEDUCTION ON ACCOUNT OF INTEREST PAYMEN T OF RS. 1,00,23,037/- I.E. PAID TO THE PARTIES FROM WHOM THE LOAN HAD BEE N TAKEN, WHEREAS THE ASSESSEE HAD ALSO GIVEN LOANS ON WHICH INTEREST OF RS. 68,75,452/- HAD BEEN RECEIVED FROM THE PARTIES TO WHOM LOAN HAD BEEN GIV EN. HE NOTED FROM THE BALANCE-SHEET THAT ASSESSEE HAD A DEBIT BALANCE OF RS. 1,57,21,565/- IN THE CAPITAL ACCOUNT. FROM THIS HE CONCLUDED THAT INTERE ST BEARING FUNDS HAD BEEN UTILIZED FOR PERSONAL PURPOSE AND, THEREFORE, HE DI SALLOWED A SUM OF RS. 18,86,588/- COMPUTED @ 12% OF RS. 1,57,21,565/- OUT OF INTEREST EXPENSES. 2.1. LD. CIT(A) DELETED THE DISALLOWANCE AFTER CONS IDERING THE ASSESSEES DETAILED SUBMISSIONS, AS REPRODUCED IN PARA 6.1 OF HIS ORDER WHEREIN IT WAS CLEARLY DEMONSTRATED THAT THE DEBIT BALANCE HAD ARI SEN BECAUSE OF LOSS INCURRED IN THE BUSINESS. 2.2. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. SOLE EFFECTIVE GROUND IS AS UNDER: 3 ITA 3599/DEL/2012 ACIT VS. NARINDER SINGH KOHLI LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CA SE IN DELETING THE ADDITION OF RS. 5,10,17,971/- MADE BY THE AO U/S 43B(F) OF THE I.T. ACT. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORD OF THE CASE. THE EXTRACT OF CAPI TAL ACCOUNT, AS SUBMITTED BY ASSESSEE, WAS AS UNDER: OPENING BALANCE 6,22,04,273.69 ADD: ANNUITY RECEIVED 2,592 .00 6,22,06,865.69 LESS: LOSS DURING THE YEAR 1,96,18,778.51 GIFT MADE 5,54,28,298.60 DRAWING 7,04,100.00 LIC PREMIUM 1,27,040.00 MEDICAL INSURANCE 34,695.00 INCOME TAX 2008-09 13,20,009.00 SECURITY TRANSACTION TAX 08-09 6,95,509.86 7,79,28,430.97 (-) 1,57,21,565.28 3.1. FROM A BARE PERUSAL OF THIS CAPITAL ACCOUNT, I T IS EVIDENT THAT AS AGAINST THE NET DEBIT BALANCE OF RS. 1,57,21,565.28, THE LO SS DURING THE YEAR WAS RS. 1,96,18,778.51. THEREFORE, IT IS EVIDENT THAT THE N ET DEBIT BALANCE IN THE CAPITAL ACCOUNT WAS ON ACCOUNT OF LOSS DURING THE Y EAR WHICH WAS MORE THAN THE NET DEBIT BALANCE IN THE ACCOUNT. THEREFORE, A O WRONGLY INFERRED THAT THE BORROWED FUNDS WERE UTILIZED FOR FINANCING THE NET DEBIT BALANCE IN THE CAPITAL ACCOUNT. NOTHING HAS BEEN BROUGHT ON RECORD TO CONTROVERT THE 4 ITA 3599/DEL/2012 ACIT VS. NARINDER SINGH KOHLI FINDING OF LD. CIT(A) IN ALLOWING RELIEF TO THE ASS ESSEE. WE, ACCORDINGLY, UPHOLD THE ORDER OF LD. CIT(A) ON THE ISSUE IN QUE STION. GROUND IS DISMISSED. 4. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 17-06-2015. SD/- SD/- (GEORGE GEORGE K.) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17-06-2015. MP: C OPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR