SMT. VIMLA DEVI SONKIA, Jaipur V. ITO, Jaipur

ITA 363/JPR/2012

• Counselvise Citation: 36323114 RSA 2012
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 11-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Assessee Lawyers: G G MUNDRA
• Section: 14A

Judgement Text

1 ITA 363(2)-12 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH SMC JAIPUR. ( BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER ) ITA NO. 363/JP/2012 ASSTT. YEAR : 2007-08. SMT. VIMLA DEVI SONKIA, VS. THE INCOME-TAX OFFICE R, SONKIA BHAWAN, WARD 1(2), SMS HIGHWAY, JAIPUR. JAIPUR. ITA NO. 364/JP/2012. ASSTT. YEAR : 2007-08. SHRI DEVESH SONKIA, VS. THE INCOME-TAX OFFICER, SONKIA BHAWAN, WARD 1(2) SMS HIGHWAY, JAIPUR. JAIPUR. (APPELLANTS) (RESPONDENT) APPELLANT BY : SHRI G.G. MUNDRA RESPONDENT BY : SHRI D.K. MEENA DATE OF HEARING : 27.06.2012. DATE OF PRONOUNCEMENT : 28.6.12. ORDER DATED : 28/6/2012. THESE ARE TWO APPEALS BY TWO DIFFERENT ASSESSEES A GAINST THE ORDERS OF LD. CIT (A) RELATING TO ASSESSMENT YEARS 2007-08. 2. IN BOTH THE APPEALS SIMILAR ISSUE IS INVOLVED. BOTH THESE ASSESSEES ARE OBJECTING IN CONFIRMING THE DISALLOWANCE OF INTEREST AT RS. 2,49 ,350/- IN CASE OF SMT. VIMLA DEVI AND RS. 84,830/- IN CASE OF SHRI DEVESH SONKIA. 3. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE THE COPY OF INTEREST ACCOUNT. IT WAS SEEN THAT IN CASE OF SMT. VIMLA DEVI, THE ASSESSEE IS PAYING 2 INTEREST AMOUNTING TO RS. 34,71,097/- AGAINST LOAN AND ADVANCES. THE ASSESSEE HAS SHOWN INTEREST INCOME OF RS. 2,49,350/-. TO THIS EXTENT THE ASSESSEE CLAIMED INTEREST EXPENSES AND SHOWN NIL INTEREST INCOME. THE AO HELD THAT EX PENDITURE CLAIMED ON ACCOUNT OF INTEREST PAID IS NOT ALLOWABLE AGAINST INTEREST INC OME AS LOAN WAS TAKEN FOR THE PURPOSES OF SHARE PURCHASE. THE LD. CIT (A) HAS CONFIRMED T HE ACTION OF THE AO. 4. THE LD. COUNSEL OF THE ASSESSEE FILED WRITTEN SU BMISSIONS. 5. ON THE OTHER HAND, THE LD. D/R PLACED RELIANCE O N THE ORDER OF LD. CIT (A). 6. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, I FIND THAT ASSESSEE DESERVES TO SUCCEED. IT IS NOTICED THAT A LL THE LOANS WERE TAKEN IN THE PAST AND ONLY A FRESH LOAN OF RS. 6,00,000/- WAS ADVANCED TO SHRI GOPAL DAS HUF. IT IS FURTHER SEEN THAT WHATEVER THE LOANS WERE TAKEN FOR BUYING SHARES, ASSESSEE HAS NOT CLAIMED ANY EXEMPTION IN VIEW OF PROVISIONS OF SECTION 14A. AS SESSEE GAVE CERTAIN AMOUNT TO SISTER CONCERN OR RELATIVES OUT OF BORROWED FUNDS. ONLY T O THAT EXTENT INTEREST WAS SET OFF AGAINST INTEREST INCOME. THEREFORE, IN MY CONSIDERE D VIEW THIS IS NOT A CASE OF DISALLOWANCE OF INTEREST UNDER SECTION 14A AS ASSES SEE CLAIMED DEDUCTION OF INTEREST AGAINST INTEREST INCOME WHICH IS OTHERWISE ALLOWABL E UNDER SECTION 57(III). IN VIEW OF THESE FACTS AND CIRCUMSTANCES, I DELETE THE IMPUGNE D ADDITION. 7. SIMILAR FACTS ARE INVOLVED IN CASE OF SHRI DEVES H SONKIA. THEREFORE ON THE SAME REASONING, I DELETE THE ADDITION IN THAT CASE ALSO. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED. 9. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28. 6.212. SD/- ( R.K. GUPTA ) JUDICIAL MEMBER 3 JAIPUR, D/ COPY FORWARDED TO :- SMT. VIMLA DEVI SONKIA, JAIPUR. SHRI DEVESH SONKIA, JAIPUR. THE ITO WARD 1(2), JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 363(2) /JP/2012) BY ORDER, AR ITAT JAIPUR.