JUGRAJ TEJRAJ AGENCY P. LTD, MUMBAI V. ACIT 5(2), MUMBAI

ITA 4899/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3766 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 12-03-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 20-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N M PORWAL
• Section: 5(2); 6

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI .. , ! ' ##, $ ' , % BEFORE SHRI R.S.SYAL, AM AND SHRI SANJAY GARG, JM ITA NO.4899/MUM/2011 : ASST.YEAR 2007-2008 M/S.JUGRAJ TEJRAJ AGENCY PRIVATE LIMITED 302 MAJESTIC SHOPPING CENTRE 144, GIRGAON ROAD, MUMBAI 400 004. PAN : AAACJ9013K. THE ASST.COMMISSIONER OF INCOME-TAX CIRCLE 5(2) MUMBAI. ( &' / // / APPELLANT) ) ) ) ) / VS. ( *+&'/ RESPONDENT) &' , ,, , - - - - / APPELLANT BY : SHRI N.M.PORWAL *+&' , - , - , - , - / RESPONDENT BY : SHRI MOHIT JAIN ) , .! / / / / DATE OF HEARING : 08.05.2013 /01 , .! / DATE OF PRONOUNCEMENT : 15.05.2013 '2 '2 '2 '2 / / / / O R D E R PER R.S.SYAL ( AM) : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 28.0 3.2011 IN RELATION TO THE ASSESSMENT YEAR 2007-2008. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF ` 3 LAKH. BRIEFLY STATED THE FACTS OF THE CASE ARE TH AT THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE PAI D INTEREST OF ` 3 LAKH TO M/S. NAMAN DEVELOPERS LIMITED. ON BEING CAL LED UPON TO JUSTIFY THE DEDUCTIBILITY OF THE INTEREST, THE ASSE SSEE STATED THAT IT RELATED TO ACQUISITION OF PROPERTY. THE ASSESSING O FFICER MADE DISALLOWANCE BY HOLDING THAT THIS INTEREST PAYMENT NOT BEING RELATED TO BUSINESS OF THE ASSESSEE, IS NOT ALLOWABLE U/S 3 6 OF THE INCOME-TAX ITA NO.4899/MUM/2011. M/S.JUGRAJ TEJRAJ AGENCY PRIVATE LIMITED. 2 ACT, 1961. THE LEARNED CIT(A) UPHELD THE ASSESSMENT ORDER ON THIS POINT. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE FIND IT AS AN UNDIS PUTED FACT THAT THE INTEREST WAS PAID TO M/S. NAMAN DEVELOPERS LIMITED ON SOME MONEY BORROWED WHICH WAS UTILIZED FOR ACQUISITION OF PR OPERTY. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE PROPERTY WAS NOT A BUSINESS ASSETS OF THE ASSESSEE-COMPANY. ONCE A LOAN IS BORR OWED ON WHICH INTEREST IS PAID, THE DEDUCTION HAS TO BE ALLOWED P ROVIDED THE LOAN IS FOR BUSINESS PURPOSES. THE BUSINESS PURPOSE MAY BE TO SATISFY THE REVENUE OR CAPITAL REQUIREMENTS. EVEN IF AN ASSET IS PURCHASED OUT OF BORROWED SUM, WHICH IS USED FOR THE PURPOSE OF BUSI NESS, THE DEDUCTION OF INTEREST ON LOAN HAS TO BE ALLOWED. IN VIEW OF THE FOREGOING REASONS, WE ARE OF THE CONSIDERED OPINION THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE DISALLOW ANCE. WE, THEREFORE, DELETE THE ADDITION. 4. 3 .4 5 . 6 , . 78 IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS 15 TH DAY OF MAY, 2013. '2 , /01 9')4 0 , # SD/- SD/- (SANJAY GARG) (R.S.SYAL) $ ' $ ' $ ' $ ' / JUDICIAL MEMBER ! ' ! ' ! ' ! ' / ACCOUNTANT MEMBER MUMBAI ; 9') DATED : 15 TH MAY, 2013. DEVDAS* ITA NO.4899/MUM/2011. M/S.JUGRAJ TEJRAJ AGENCY PRIVATE LIMITED. 3 '2 , *$.:; <;1. '2 , *$.:; <;1. '2 , *$.:; <;1. '2 , *$.:; <;1./ COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. *+&' / THE RESPONDENT. 3. = () / THE CIT, MUMBAI. 4. = / CIT(A)-9 , MUMBAI 5. ;@# *$.$) , , / DR, ITAT, MUMBAI 6. #A B / GUARD FILE. '2) '2) '2) '2) / BY ORDER, +;. *$. //TRUE COPY// C C C C/ // /7 7 7 7 ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI