Muralidhar Agarwal, Cuttack V. ACIT, Rourkela

ITA 394/CTK/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90838 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-05-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 08-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SAHU
• Keywords: Opportunity of being heard; Corroborative evidences

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK B ENCH, CUTTACK , . . , BEFORE SHRI SUNIL KUMAR YADAV, JM & SHRI B.P.JAIN, AM ./ ITA NO.394 /CTK/2013 ( ! ! ! ! / ASSESSMENT YEAR :2006-07) MURALIDHAR AGARWAL, GURUDWARA ROAD, BARBIL, KEONJHAR. VS. ACIT, ROURKELA CIRCLE, ROURKELA ' ./ # ./ PAN/GIR NO. ( '$ / APPELLANT ) .. ( %&'$ / RESPONDENT ) ( * * * * /ASSESSEE BY : SHRI S.N.SAHU * * * * /REVENUE BY : SHRI K.K.NATH + ( / DATE OF HEARING : 21 ST MAY, 2015 -.! ( / DATE OF PRONOUNCEMENT 26 TH MAY,2015 / / / / / O R D E R PER B.P.JAIN(AM) THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER O F THE LD CIT(A)-II, BHUBANESWAR DATED 8.3.2013 FOR THE ASSESSMENT YEAR 2006-07. 2. THE CONCISE GROUND OF APPEAL READS AS UNDER: THAT THE DISALLOWANCE OF RS.2,46,676/- THE CLAIM O F DEDUCTION TOWARDS PAYMENT OF INTEREST IS NOT JUSTIFIED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS DECLARED THE INCOME FROM HEAVY GOODS CARRIAGE VEHICLES U/S. 44AE AT RS.2,85, 450/-. THE AO OBSERVED THAT THE DEDUCTION ALLOWABLE UNDER THE PROVISIONS OF SECTION S 30 TO 38 SHALL BE DEEMED TO HAVE BEEN GIVEN FULL EFFECT AND NO FURTHER DEDUCTION UND ER THESE SECTIONS SHALL BE ALLOWED. 2 ITA NO.394 /CTK/2013 ASSESSMENT YEAR :2006-07 ACCORDINGLY, THE CLAIM OF DEDUCTION TOWARDS INTERES T FOR AN AMOUNT OF RS.2,46,676/- WAS NOT PERMISSIBLE. THE ASSESSEE CLAIMED THAT SUCH IN TEREST IS AGAINST UNSECURED BORROWINGS WHICH THE ASSESSEE HAS TAKEN IN MAKING I NVESTMENT IN HIS BUSINESS BUT IN SUPPORT OF THE SAME, NO SUPPORTING EVIDENCE WAS PRO DUCED. IN THE ABSENCE OF PROPER EVIDENCE , THE CLAIM OF THE ASSESSEE CANNOT BE ALLO WED AND, ACCORDINGLY, THE AO DISALLOWED NET INTEREST PAID OF RS.2,46,676/- AND A DDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. ON APPEAL, THE LD CIT(A) CONFIRMED THE ACTION OF THE AO. 5. THE LD COUNSEL FOR THE ASSESSEE REITERATED THE S UBMISSIONS AS MADE BEFORE THE AUTHORITIES BELOW THAT THE INTEREST IS PAID TO THRE E PARTIES, NAMELY, RAJ SECURITIES LTD., KANHAIYA CONSULTANTS PVT LTD., AND DIGVIJAY TRACON PVT LTD., AND THE TOTAL AMOUNT OF INTEREST PAID TO THEM WAS RS.2,80,649.00 AND AFTER RECEIVING THE INTEREST OF RS.33,973/- FROM RAMCO, THE NET INTEREST PAID WAS RS.2,46,676/- . IT WAS ARGUED THAT THE ASSESSEE HAS NOT INVESTED THE FUNDS FOR THE PURCHASE OF TWO NUMBERS OF HEAVY GOODS CARRIAGE VEHICLES AND NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE SAID AMOUNT WAS UTILIZED FOR THE PURCHASE OF TWO HE AVY GOODS CARRIAGE VEHICLES. ACCORDINGLY, LD COUNSEL FOR THE ASSESSEE PRAYED TO ALLOW THE APPEAL OF THE ASSESSEE BY REVERSING THE ORDER OF THE LD CIT(A). 6. ON THE OTHER HAND, THE LD D.R. RELIED ON THE ORD ERS OF AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE UNDISPUTED FACTS IN THE PRESENT CASE IS THAT THE AS SESSEE HAS BEEN CLAIMING DEDUCTION ON INTEREST PAID TO THREE DIFFERENT PARTIES AS AFOR ESAID . THE SAID AMOUNT HAS BEEN 3 ITA NO.394 /CTK/2013 ASSESSMENT YEAR :2006-07 CLAIMED TO HAVE BEEN INVESTED IN BUSINESS. IN SUPPO RT OF THE CLAIM, THE LD COUNSEL FOR THE ASSESSEE HAS BROUGHT TO OUR NOTICE THE COPY OF THE BALANCE SHEET IN WHICH THE CURRENT BALANCE OF SUCH PARTIES ARE OUTSTANDING TO WHOM HE CLAIMS OF HAVING INTEREST PAID OR BORROWED MONEY HAVING BEEN GIVEN TO SUCH PA RTIES SAID AMOUNT HAVING BEEN USED FOR BUSINESS AND NOT FOR PURCHASE OF HEAVY GOO DS CARRIAGE VEHICLES. AS A MATTER OF FACT, THE ASSESEE HAS NOT PRODUCED ANY SUPPORTIN G EVIDENCE TO PROVE THAT IN FACT THE BORROWED FUNDS HAD BEEN USED FOR THE PURPOSES OF TH E BUSINESS OF THREE PARTIES AS MENTIONED HEREINABOVE. THE ASSESSEE HAS NOT PRODUC ED THE COPY OF THE BANK STATEMENTS FROM THE BANK FROM WHOM LOAN HAS BEEN BO RROWED AND HAS CLAIMED THAT THE SAID BORROWED AMOUNT HAS BEEN INVESTED IN BUSINESS THIS NEXUS HAS TO BE PROVED BY THE ASSESSEE. IT IS AN ESTABLISHED LAW THAT THE PE RSON WHO CLAIMS HAS TO PROVE THE SAME. IN THE PRESENT CASE, THE ASSESSEE HAS CLAIME D INTEREST EXPENDITURE AND, THEREFORE, HE HAS TO PROVE THE SAME THAT THE SAID B ORROWINGS HAVE NOT BEEN USED FOR PURCHASE OF TWO HEAVY VEHICLES BUT FOR MAKING INVES TMENT IN THE BUSINESS EITHER BEFORE BOTH THE AUTHORITIES OR EVEN BEFORE US. SUBMISSION OF BALANCE SHEET BEFORE THE AUTHORITIES BELOW OR EVEN BEFORE US CANNOT PROVE TH AT THE AMOUNT BORROWED HAS BEEN INVESTED IN THE BUSINESS AS MENTIONED HEREINABOVE A ND NOT FOR BUYING TWO HEAVY GOODS CARRIAGE VEHICLES. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THE ASSESSEE IS REQUIRED TO PRODUCE BANK STATEMENT FROM THE BANK SHOWING THE AMOUNT BORROWED AND HOW THE SAME HAS BEEN UTILIZED. NEITHER OF THE AUTHORITIES HAVE EXAMINED THIS ISSUE. ACCORDINGLY, WE ARE OF THE VIEW THAT THE MATTER REQ UIRES RECONSIDERATION AND, THEREFORE, THE MATTER IS SET ASIDE TO THE FILE OF THE AO WHO W ILL EXAMINE THE ISSUE KEEPING IN VIEW OUR OBSERVATIONS AS MENTIONED ABOVE AND DECIDE THE ISSUE DENOVO BUT AFTER AFFORDING 4 ITA NO.394 /CTK/2013 ASSESSMENT YEAR :2006-07 ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . THE ASSESSEE SHALL CO-OPERATE DURING THE ASSESSMENT PROCEEDINGS IN VIEW OF OUR FI NDINGS HEREINABOVE. GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED FOR STATIS TICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 / 05/2015. SD/- SD/- ( ) (SUNIL KUMAR YADAV) ( . . ) (B.P.JAIN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK; DATED 26 /05/2015 11 B.K.PARIDA, SR. PS / / / / %( %( %( %( 3!( 3!( 3!( 3!( / COPY OF THE ORDER FORWARDED TO : / / / / / BY ORDER, 1 11 1 1 11 1 1 11 1 1 11 1 1 11 1 1 11 1 4 44 4 / 5 5 5 5 (ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. '$ / THE APPELLANT : MURALIDHAR AGARWAL, GURUDWARA ROAD, BARBIL, KEONJHAR. 2. %&'$ / THE RESPONDENT. ACIT, ROURKELA CIRCLE, ROURKELA 3. 6 ( ) / THE CIT(A)-II, BHUBANESWAR 4. 6 / CIT , BHUBANESWAR. 5. 7 %( , , / DR, ITAT, CUTTACK 6. 9 :+ / GUARD FILE. &( %( //TRUE COPY//