MAYAVAN SHANTHI , NAMAKKAL V. ITO , WARD - 1 , NAMAKKAL

ITA 530/CHNY/2022

AI Insights

This case involves an appeal by Smt. Mayavan Shanthi against the order of the Commissioner of Income Tax (Appeals), which confirmed the disallowance of interest payments claimed by the assessee for the assessment year 2011-12. The assessee had claimed interest expenses amounting to ₹10,54,317, primarily paid to her husband, Dr. R. Mayavan. The Assessing Officer disallowed these claims, citing lack of genuine payment and insufficient documentation. The CIT(A) upheld this decision. The Tribunal found inconsistencies in the Assessing Officer's findings and noted the absence of detailed consideration of some interest payments. Consequently, the Tribunal remitted the matter back to the Assessing Officer for a thorough re-examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135107 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 06-03-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 21-06-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 148; 80C; 143(3); 143(2)

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI ŵी वी. दुगाŊ राव, Ɋाियक सद˟ एवं ŵी जी. मऺजुनाथा, लेखा सद˟ के समƗ । Before Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant Member आयकर अपील सं./I.T.A. No.530/Chny/2022 िनधाŊरण वषŊ/Assessment Year: 2011-12 Smt. Mayavan Shanthi, 65, Rangar Sannathi Street, Namakkal, Tamil Nadu 637 001. [PAN: ACSPS8564R] Vs. The Income Tax Officer, Ward 1, Namakkal. (अपीलाथŎ /Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri S. Sridhar, Advocate [Erode] ŮȑथŎ की ओर से/Respondent by : Shri P. Sajit Kumar, JCIT सुनवाई की तारीख/ Date of hearing : 07.03.2023 घोषणा की तारीख /Date of Pronouncement : 10.03.2023 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi dated 06.06.2022, relevant to the assessment year 2011–12. 2. Brief facts of the case are that the assessee filed her return of income for the assessment year 2011-12 on 30.03.2012 admitting an income of ₹.1,66,600/- after deduction under section 80C of the Income Tax Act, 1961 [“Act” in short]. While computing the income, the assessee has claimed large interest expenses paid to the husband of the assessee I.T.A. No. 530/Chny/2022 2 Dr. R. Mayavan to the extent of ₹.8,58,717/- under section 57(iii) of the Act. In order to verify the genuineness of claim in respect of interest payments made by the assessee, a notice under section 148 of the Act was issued on 26.02.2018 and accordingly, the assessee filed the return of income. Thereafter, a notice under section 143(2) of the Act was issued on 15.11.2018 and was duly served upon the assessee. After considering the submissions of the assessee, the assessment was completed under section 143(3) r.w.s. 147 of the Act dated 29.12.2018 by assessing total income of the assessee at ₹. 12,20,920/- after disallowing the claim of entire interest payments amounting to ₹.10,54,317/-. On appeal, the ld. CIT(A) confirmed the addition made by the Assessing Officer. 3. On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the issue involved in this appeal is squarely covered in favour of the assessee by the decision of the Tribunal in assessee’s own case for the assessment year 2012-13 and prayed for following the same to delete the addition. It was also contended that the claim of balance of interest amounting to ₹.1,95,600/- without considering the essential facts that the assessment order does not contain any mention/whisper about the same. I.T.A. No. 530/Chny/2022 3 4. On the other hand, the ld. DR has submitted that no details have been filed by the assessee before the Assessing Officer in respect of mode of payments. 5. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. On perusal of the assessment order, in the computation statement, the assessee has claimed interest payments amounting to ₹.10,54,317/- for the assessment year 2011-12 under the head expenses and the same are reproduced as under: Name Amount of interest paid (Rs.) Dr. R. Mayavan 8,58,717/- Mr. Partheeban, NKL 1,20,000/- M/s. Balaji Finance Loan 75,600/- 10,54,317/- The findings of the Assessing Officer in the assessment order at page 2 last para are reproduced as under: Further perusal of entries in the ledger of Smt. M. Shanthi, a sum of ₹.8,58,717/- is debited only by way of journal to Dr. R. Mayavan, which implies that the assessee has not paid any interest to him but only an accommodative entry. In view of the above, it is clear that the major portion of the interest was paid by the assessee though only 50% is her share as per the books of account. Therefore, the entire interest payment of ₹.8,58,717/- to M/s. Sundaram BNP Baripas made by the assessee to her husband Dr. R. Mayavan is not allowed to be deducted from ‘other sources’ as the assessee has failed to satisfy the conditions stipulated under sec. 57(iii) of the Income-tax Act, 1961. 6. The above findings of the Assessing Officer are contradictory. In the first sentence, the Assessing Officer observed that the assessee has I.T.A. No. 530/Chny/2022 4 not paid any interest to him but only an accommodative entry. However, in the second sentence, he is stating that “it is clear that the major portion of the interest was paid by the assessee though only 50% is her share as per the books of account”. Both the facts are required to be clarified by the Assessing Officer. 7. Further, in the assessment order, the Assessing Officer has given findings for the interest payment of ₹.8,58,717/-, whereas, while making disallowance of other interest payments, the Assessing Officer has not discussed anything about the claim of interest payment of ₹.1,20,000/- to Mr. Partheeban, NKL and ₹.75,600/- to M/s. Balaji Finance Loan. However, in the appellate order, the ld. CIT(A) has observed for the above interest payments that the assessee has not furnished the details of such interest, amount of loan and purpose for which the loan has been availed of, etc. and thereby, confirmed the disallowances made by the Assessing Officer. 8. Under the above facts and circumstances, we are of the considered opinion that the assessee shall be afforded one more opportunity to furnish complete details before the Assessing Officer, who shall consider and decide entire interest payments claimed by the assessee in accordance with law. Thus, we set aside the order of the ld. CIT(A) and I.T.A. No. 530/Chny/2022 5 remit the entire matters to the file of the Assessing Officer for fresh consideration. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 10 th March, 2023 at Chennai. Sd/- Sd/- (G. MANJUNATHA) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER Chennai, Dated, the 10.03.2023 Vm/- आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant, 2.ᮧ᭜यथᱮ/ Respondent, 3. आयकर आयुᲦ (अपील)/CIT(A), 4. आयकर आयुᲦ/CIT, 5. िवभागीय ᮧितिनिध/DR & 6. गाडᭅ फाईल/GF.