SUSHILA ASHOK KATARIA, MUMBAI V. ITO WD 12(3)(4), MUMBAI

ITA 3984/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2957 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 30-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARI S RAHEJA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 3984/MUM/2014 (ASSESSMENT YEAR:2009-10) MRS. SUSHILA ASHOK KATARIA 601, COMMERCE HOUSE, NAGINDAS MASTER ROAD, MUMBAI 400023 APPELLA NT VS. INCOME TAX OFFICER WARD 12(3)(4), MUMBAI RESPONDENT PAN: AACPK0830C /BY APPELLANT : SHRI HARI S. RAHEJA, A.R. /BY RESPONDENT : SHRI VINOD KUMAR, D.R. /DATE OF HEARING : 16.06.2016 /DATE OF PRONOUNCEMENT : 24.06.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-23, MUMBAI, DATED 10.03.2014 FOR A.Y. 2009-10 ON FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(APPEALS) GROSSLY ERRED IN ITA NO.3984/MUM/14 A.Y. 09-10 [MRS. SUSHILA A. KATA RIA VS.ITO] PAGE 2 CONFIRMING THE DISALLOWANCE OF INTEREST MADE BY THE ASSESSING OFFICER IN RESPECT OF SHRI RAHUL SHAH, AN D IN HOLDING THAT THE LOAN IS OUT OF INTEREST BEARING FUNDS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CASH DEPOSITED IN THE BANK AN D IN HOLDING THAT THERE WAS A LONG GAP BETWEEN THE PERIOD OF WITHDRAWAL AND REDEPOSIT, AND HENCE THE EXPLANATION DOES NOT APPEAR TO BE LOGICAL. 2. ASSESSING OFFICER OBSERVED THAT ASSESSEE HAD SHO WN INTEREST RECEIPT OF RS.6,68,843/- AND HAD CLAIMED I NTEREST EXPENSES OF RS.1,98,804/-. HOWEVER, ON VERIFICATIO N IT WAS FOUND THAT ASSESSEE HAD RECEIVED INTEREST O FRS.11, 21,499/- AND HAD CLAIMED INTEREST EXPENSES OF RS.6,44,461/-. ASSESSING OFFICER FURTHER FOUND THAT SOME OF THE IN TEREST BEARING FUNDS HAD BEEN UTILIZED FOR INVESTMENT AND OTHER ACTIVITIES ON WHICH NO INTEREST HAD BEEN RECEIVED. ASSESSEE WAS ISSUED SHOW CAUSE NOTICE TO EXPLAIN AS TO WHY I NTEREST EXPENSES CLAIMED SHOULD NOT BE DISALLOWED AS RELATE D TO OTHER ACTIVITY ON WHICH NO INTEREST HAD BEEN RECEIVED. A SSESSING OFFICER OBSERVED THAT ASSESSEE DID NOT FILE ANY SUB MISSION NOR HAD ANY CO-RELATION BEEN FILED OF UTILIZATION OF IN TEREST BEARING FUNDS TO JUSTIFY THE CLAIM OF INTEREST EXPENSES OF RS.6,44,641/- AS RELATED TO INTEREST EARNING ACTIVI TY. IN VIEW OF THE SAME, ASSESSING OFFICER HELD THAT ASSESSEE H AD DIVERTED THE INTEREST BEARING FUNDS FOR OTHER THAN INTEREST EARNING PURPOSES. THEREFORE, HE DISALLOWED THE AMOUNT OF RS.3,05,945/-. ITA NO.3984/MUM/14 A.Y. 09-10 [MRS. SUSHILA A. KATA RIA VS.ITO] PAGE 3 2.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) GRA NTED PARTIAL RELIEF TO ASSESSEE. 2.2 THE STAND OF ASSESSEE HAS BEEN THAT LOAN OF RS. 15 LACS GIVEN TO SHRI RAHUL K. SHAH, CONFIRMATION OF ACCOUN TS HAVE BEEN SUBMITTED AND WHICH REVEALS THAT NO INTEREST HAS BEEN RECEIVED AS THE SAID PARTY WAS UNABLE TO PAY THE PR INCIPAL AMOUNT AND WITH GREAT DIFFICULTIES ASSESSEE MANAGED TO GET BACK PRINCIPAL AMOUNT. 3. ASSESSEE HAS FILED PHOTOCOPY OF THE CHEQUE OF RS .15 LACS RECEIVED FROM SAID PART AFTER LOAN MADE WITHOUT INT EREST, WHICH HAS NOT BEEN DISPUTED BY ASSESSEE AND THE STA ND OF ASSESSEE HAS BEEN THAT SINCE PARTY WAS IN A DISTRES S POSITION, SO, HE WAS NOT IN POSITION TO PAY INTEREST. NOTHIN G CONTRARY WAS BROUGHT ON BEHALF OF REVENUE THAT CREDITOR WAS NOT IN POSITION TO PAY INTEREST. HE HARDLY MANAGED TO GIV E BACK THE SIMILAR AMOUNT, SO IT IS A REASONABLE CASE FOR NOT CHARGING INTEREST FROM HIM. ASSESSING OFFICER IS DIRECTED A CCORDINGLY. 4. NEXT ISSUE IS WITH REGARDS TO CASH DEPOSITED IN BANK. THE STAND OF ASSESSEE HAS BEEN THAT THE DEPOSIT OF RS.1 LAC ON 9 TH MARCH, 2008 AND RS.1 LAC ON 10 TH MARCH, 2008 WAS OUT OF THE CASH WITHDRAWAL OF RS.3 LACS MADE ON 2 ND FEBRUARY, 2008. RS.1 LAC WAS GIVEN TO HER DAUGHTER SONAL KA TARIA AS A TEMPORARY LOAN WHICH WAS RETURNED AND DEPOSITED IN THE ITA NO.3984/MUM/14 A.Y. 09-10 [MRS. SUSHILA A. KATA RIA VS.ITO] PAGE 4 BANK. ASSESSEE HAS DEPOSITED A SUM OF RS.1 LAC OUT OF CASH IN HAND AVAILABLE IN THE BALANCE SHEET WAS THE 31 ST MARCH 2008 WHICH BALANCE SHEET IS A PART OF THE RECORD OF THE RETURN FOR A.Y.2008-09 AND NOT REFUTED BY ASSESSING OFFICE R IN ANY MANNER. IN THIS FACTUAL BACKGROUND, ASSESSING OFFI CER WAS NOT JUSTIFIED IN MAKING ADDITION IN QUESTION. SAME IS DIRECTED TO BE DELETED. 5. AS A RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF JUNE, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 24/06/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&