VIMESH N. ZAVERI HUF, MUMBAI V. ITO 17(3)(5), MUMBAI

ITA 5742/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1891 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 05-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMA
• Assessee Lawyers: KIRAN MEHRA; RAVI DASIJA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ITA NO.5742/MUM/2018 ( ASSESSMENT YEAR: 2014-15) SHRI VIMESH N. ZAVERI HUF, 114, SUN FLOWER APARTMENTS, 99, CUFFE PARADE, MUMBAI 400005. VS. ITO-17(3)(5), MUMBAI PAN/GIR NO.AAFHV 6406 A (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY KIRAN MEHRA & SHRI RAVI DASIJA REVENUE BY SHRI KUMAR PADMAPANI (SR.DR) DATE OF HEARING 04/12/2019 DATE OF PRONOUNCEMENT 09/12/2019 / O R D E R PER: R.C. SHARMA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 03/08/2018 OF LD. CIT(A)-28, MUMBAI FOR THE A.Y. 20 14-15 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1 961 (IN SHORT, THE ACT). 2. IN THIS APPEAL, THE ASSESSEE IS BASICALLY AGGRIE VED FOR THE DISALLOWANCE OF INTEREST CLAIMED IN THE P&L ACCOUNT . 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. DURING THE COURSE OF SCRUTINY ASSESSMENT, ON PERUSAL OF COMPUT ATION OF TOTAL INCOME FILED WITH THE RETURN OF INCOME, THE A.O. OBSERVED THAT THE ASSESSEE HAS ITA NO. 5742/MUM/2018 SHRI VIMESH N. ZAVERI HUF VS ITO 2 SHOWN THE AGGREGATE INTEREST INCOME OF RS. 4,02,077 /- WHICH INCLUDES INTEREST FROM M/S RSA EXIM PVT. LTD. OF RS. 3,16,30 2/-. AGAINST SUCH INCOME, THE ASSESSEE CLAIMED INTEREST EXPENSES OF R S. 31,32,720/- AND HAS CLAIMED LOSS FROM OTHER SOURCES OF RS. 27,30,64 3/-. IN THIS CONTEXT, IT IS NOTICED FROM THE BALANCE SHEET THAT THE ASSESSEE IS HAVING A NEGATIVE BALANCE OF CAPITAL AND ALL THE LOAN FUNDS WERE UTIL IZED FOR THE PURPOSE OF PROVIDING LOANS. FROM THE ABOVE, IT IS CLEAR THAT T HE INTEREST BEARING FUNDS WERE UTILIZED FOR THE PURPOSE OF PROVIDING IN TEREST FREE LOANS. THE INTEREST EXPENSES ARE ELIGIBLE FOR ONLY AN AMOUNT O F RS. 3,16,302/- AS THE SAME WERE UTILIZED FOR PROVIDING INTEREST BEARING L OANS. CONSIDERING THESE FACTS, THE INTEREST TO THE EXTENT OF RS. 28,1 6,418/- [RS. 3132720- RS.316302] WAS DISALLOWED AND ADDED BACK TO THE TOT AL INCOME. BY THE IMPUGNED ORDER, THE LD. CIT(A) HAS CONFIRMED THE AC TION OF THE A.O., AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEF ORE THE ITAT. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CARE FULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND FOUND THAT THE INTEREST EXPENDITURE CLAIMED BY ASSESSEE HAS BEEN DISALLOWED BECAUSE THE FUNDS SO BORROWED ON WHICH THE INTEREST WAS CLAIMED WAS NOT UTILIZED FOR THE PURPOSE OF BUSINESS AND FOR EARNING ANY INTEREST. AFTER GIVING CREDIT OF RS.3,16,302/- IN RESPECT OF INTEREST INCOME, THE A.O. HAS DISALLO WED BALANCE INTEREST OF RS.28,16,418/-. I DO NOT FIND ANY INFIRMITY IN DISA LLOWANCE OF THE BALANCE INTEREST SO CLAIMED AS EXPENSES BY THE ASSESSEE. ITA NO. 5742/MUM/2018 SHRI VIMESH N. ZAVERI HUF VS ITO 3 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 TH DECEMBER, 2019. SD/- (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI; DATED 09/12/2019 *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//