Shri Mineshbhai R.Patel, Ahmedabad V. The Dy.CIT.,Circle-12, Ahmedabad

ITA 459/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85825 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 03-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 17-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: S V AGRAWAL
• Keywords: Revenue expenditure

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ./ ITA NO.459/AHD/2011 / ASSTT. YEAR: 2007-08 SHRI MINESHBHAI R. PATEL 39, SAIBABA SOCIETY MEGHANINAGAR AHMEDABAD. PAN : AGEPP 1680 M VS DCIT, CIR.12 AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI S.V. AGRAWAL REVENUE BY : SHRI B.L.YADAV, SR.DR / DATE OF HEARING : 03/03/2015 / DATE OF PRONOUNCEMENT: 13/03/2015 $%/ O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THIS AN APPEAL FILED BY THE REVENUE AGAINST ORDER OF THE CIT(A)-XX, AHMEDAB AD DATED 15.11.2010 FOR ASSTT.YEAR 2007-08. 2. THE SOLE GROUND OF THE APPEAL OF THE ASSESSEE TA KEN BY THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING DIS ALLOWANCE OF RS.5,66,870/- BEING INTEREST PAID PERTAINING TO THE EARLIER YEARS. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE AO OBSERVED THAT THE ASSESSEE HAD CLAIMED INTER EST EXPENDITURE OF RS.9,00,463/-. ON GOING THROUGH THE INTEREST ACCOU NT HE OBSERVED THAT ITA NO.459/AHD/2011 2 THE ASSESSEE PAID INTEREST VIDE JOURNAL VOUCHER ENT RY NOS.1, 2 AND 3 DATED 1.4.2006 TO SHIV SHAKTI STEEL CORPORATION, SW ASTIK DYE STUFF INDUSTRIES AND SWASTIK DYE CHEM CORPORATION OF RS.5 ,00,530/-, RS.52,980/- AND RS.13,360/-. THE ASSESSEE FOLLOWS MERCANTILE SYSTEM OF ACCOUNT AND GOING THROUGH THE JOURNAL VOUCHERS, THE AO FOUND THAT THE INTEREST PERTAINED TO EARLIER YEARS, AND HENCE, COULD NOT BE ALLOWED AS REVENUE EXPENDITURE FOR THE YEAR UNDER CONSIDERA TION. THEREFORE, HE DISALLOWED DEDUCTION OF INTEREST EXPENDITURE OF RS. 5,66,870/- WHILE COMPUTING THE INCOME OF THE ASSESSEE. 4. ON APPEAL, THE CIT(A) CONFIRMED THE DISALLOWANCE BY OBSERVING THAT AFTER GOING THROUGH THE SUBMISSIONS MADE BY TH E ASSESSEE AND REPORT OF THE AO, IT IS OBSERVED THAT THE PARTIES H AD CREDITED THE INTEREST FROM THE ASSESSEE IN THE BOOKS OF ACCOUNTS IN THE R ESPECTIVE YEARS. IT WAS ONLY THE ASSESSEE WHO HAD NOT DEBITED THE INTER EST IN HIS BOOKS OF ACCOUNTS. NO EVIDENCE OF DISPUTE BETWEEN THE PARTI ES HAS BEEN FILED DURING THE ASSESSMENT PROCEEDINGS OR APPELLATE PROC EEDINGS, AND ONLY THE CONFIRMATION LETTERS WERE FILED FROM THE CREDIT ORS, WHEREIN THE CREDITORS HAVE GIVEN STATEMENT THAT THE ASSESSEE DI D NOT WANT TO PAY INTEREST DUE TO HEAVY LOSSES. FROM THIS, THE CIT(A ) INFERRED THAT THERE WAS NO REAL DISPUTE REGARDING THE INTEREST, AND CON FIRMED THE ACTION OF THE AO IN DISALLOWING THE INTEREST EXPENDITURE OF R S.5,66,870/-. 5. BEFORE US ALSO, THE AR REITERATED THE SUBMISSION S MADE BEFORE THE CIT(A), BUT COULD NOT FILE ANY EVIDENCE TO SHOW THA T THERE WAS ANY GENUINE DISPUTE BETWEEN THE ASSESSEE AND LOAN CREDI TORS, AND THAT SUCH DISPUTE WAS SETTLED DURING THE YEAR UNDER CONSIDERA TION, AND THEREFORE, THE LIABILITY TO PAY INTEREST WAS CRYSTALLIZED DURI NG THE YEAR. IN ABSENCE OF ANY SUCH MATERIAL BEING BROUGHT ON RECORD, WE DO NOT FIND ANY GOOD ITA NO.459/AHD/2011 3 REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), W HICH IS CONFIRMED AND THE GROUND OF THE ASSESSEE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 13 TH MARCH, 2015 AT AHMEDABAD. SD/- SD/- ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER