KULDEEP SINGH NANDA, MUMBAI V. ACIT 11(1), MUMBAI

ITA 423/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92850 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 20-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Assessee Lawyers: S A MUKADAM

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 423 /MUM/ 2014 ( / ASSESSMENT YEAR : 2010 - 11 SHRI KULDEEP SINGH NANDA, 16, VASANT PEDDAR ROAD, MUMBAI - 400 026 / VS. THE ACIT 11(1), AAYAKAR BHAVAN, MUMBAI - 400 020 ./ ./ PAN/GIR NO. : AABPN 3364K ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI S.A. MUKADAM / RESPONDENT BY : SHRI ASGHAR ZAIN / DATE OF HEARING :25 . 0 6 .2015 / DATE OF PRONOUNCEMENT: 25 .0 6 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 3 , MUMBAI DT. 2 2 . 11 .201 3 PERTAINING TO ASSESSMENT YEAR 20 1 0 - 1 1 . 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN ALLOWING THE EXPENSES OF RS. 1,74,848/ - ONLY OUT OF TOTAL EXPENSES OF RS. 9,94,787/ - CLAIMED U/S. 57(III) OF THE ACT. ITA. NO. 423/M/2014 2 3. WHILE SCRUTINIZING THE RETURN OF INCOME, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS EARNED RS. 42,01,723/ - UNDER THE FOLLOWING HEADS: PARTICULARS RS. INTEREST ON BONDS 2,62,500/ - INTEREST ON FD WITH BANK 22,53,732/ - INTEREST ON MIS 24,000/ - POST OFFICE INTEREST 1,08,800/ - INTEREST ON CO DEPOSIT 3,85,559/ - INTEREST ON DEBENTURE 35,507/ - INTEREST ON SHCL 11,31,625/ - 3.1. THE AO OBSERVED THAT THE ASSESSEE HAS TREATED THESE INCOME UNDER THE HEAD INCOME FROM BUSINESS AND HAS CLAIMED EXPENSES AGGREGATING TO RS. 9,94,787/ - . THE ASSESSEE WAS ASKED TO JUSTIFY HIS STAND. THE ASSESSEE FILED A DETAILED REPLY VIDE LETTER DT. 29.11.2012. AFTER CAREFULLY CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, THE AO OBSER VED THAT THE ASSESSEE HAS NOT DEMONSTRATIVELY ESTABLISHED THAT THE EXPENSES WERE INFACT LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF MAKING OR EARNING SUCH INCOME. THE AO DISALLOWED THE CLAIM OF EXPENSES. 4. AGGRIEVED BY THIS , ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND REITERATED HIS CLAIM THAT ALL THE EXPENSES HAVE BEEN INCURRED FOR THE PURPOSE OF EARNING THE INCOME. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS MADE BY THE ASSESSEE, THE LD. CIT(A) OBSERVED THAT AGAINST TH E INTEREST RECEIVED OF RS. 42.01 LAKHS, THE ASSESSEE HAS DEBITED VARIOUS EXPENSES AMOUNTING TO RS. 9.94 LAKHS. MOST OF THESE EXPENSES ARE RELATED TO MAINTENANCE OF FIXED ASSETS WHICH CONSIST OF BUNGALOW AT LONAVALA, ITA. NO. 423/M/2014 3 COMPUTER, FURNITURE AND FIXTURE, OFFICE PREMISES AND FOUR MOTOR VEHICLES PURCHASED DURING THE YEAR. THE LD. CIT(A) WAS OF THE FIRM BELIEF THAT THESE CLEARLY HAVE NO DIRECT OR INDIRECT NEXUS WITH THE INTEREST INCOME. THE LD. CIT(A) FURTHER OBSERVED THAT APART FROM THIS, THERE ARE REGULAR OFFIC E EXPENSES AND PETROL EXPENSES, WHICH CAN PARTLY BE ATTRIBUTED TO THE EARNING OF INTEREST INCOME. FURTHER, THERE ARE SOME DIRECT EXPENSES WHICH HAVE A CLEAR NEXUS TO THE EARNING OF INTEREST INCOME. THE LD. CIT(A) MARKED DIRECT EXPENSES AS (1) AUDIT FEE R S. 7,500/ - (2) BANK CHARGES RS. 6,902/ - (3) INTEREST ON OVERDRAFT RS. 60,446/ - AND FROM OTHER EXPENSES THE LD. CIT(A) ALLOWED RS. 1,00,000 ON ESTIMATE BASIS. ACCORDINGLY, THE LD. CIT(A) DIRECTED THE AO TO ALLOW EXPENSES AMOUNTING TO RS. 1,74,848/ - AND CON FIRMED THE ADDITION OF BALANCE AMOUNT. 5. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 7. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED TH E ORDERS OF THE REVENUE AUTHORITIES. 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS THAT THE ASSESSEE HAS EARNED INCOME ONLY FROM FIXED DEPOSIT WITH BANK INTEREST, FROM POST OFFICE DEPOSITS AND INTEREST ON DEBENTURES AND BONDS. THESE INCOMES HAVE BEEN RIGHTLY TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES. WE HAV E GIVEN A THOUGHTFUL CONSIDERATION TO THE EXPENDITURE CLAIMED BY THE ASSESSEE UNDER VARIOUS HEADS. WE FAILED TO PERSUADE OURSELVES TO ALLOW SUCH EXPENDITURES U/S. 57(III) OF THE ACT FOR EARNING INTEREST INCOME. HOWEVER, ITA. NO. 423/M/2014 4 WE FIND THAT THE LD. CIT(A) HAS AL READY ALLOWED RS. 1.74 LAKHS. IN OUR CONSIDERED OPINION, NO FURTHER ALLOWANCE IS REQUIRED. WE, ACCORDINGLY CONFIRM THE FINDINGS OF THE LD. CIT(A) AND DISMISS ASSESSEES APPEAL. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. OR DER PR ONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 25 TH JUNE , 2015 . SD/ - SD/ - ( I.P. BANSAL ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 25 TH JUNE , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI