SMT MADHU SUNILKUMAR MALOO, Nagpur V. ACIT-CENTRAL-CIRCLE-1(2), Nagpur

ITA 59/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1612 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 07-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Corroborative evidences

Judgement Text

1 ITA NO. 59/NAG/2014 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO.59/NAG/2014 ASSESSMENT YEAR : 2008 - 09. MADHU SUNILKUMAR MALOO, ASSTT .COMMISSIONER OF NAGPUR. VS. INCOME - TAX, CENTRAL CIR. - 1(2), PAN ACHPM5769R. NAGPUR. APPELLANT. RESPONDENT. APPELLANT BY : NONE. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 10 - 11 - 2015. DATE OF PRONOUNCEMENT : 16 TH NOV., 2015. O R D E R . THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - III, NAGPUR DATED 27 - 11 - 2013 AND PERTAINS TO ASSESSMENT YEAR 2008 - 09. THE GROUNDS OF APPEAL READ AS UNDER : 1. CIT(APPEALS) ERRED IN CONFIRMING RS.80000/ - WITHOUT ANY BASIS. 2. CI T(APPEALS) ERRED IN CONFIRMING RS.128686 INTEREST DISALLOWANCE. 2. IN THIS CASE THE ASSESSEE HAD SUBMITTED AN ADJOURNMENT PETITION. HOWEVER, NOTING THAT THE ASSESSEE HAD BEEN GRANTED ADJOURNMENT IN EARLIER TWO OCCASIONS, I FIND THAT ADJOURNMENT PETITION O F THE ASSESSEE IS LIABLE TO BE REJECTED. IN MY CONSIDERED OPINION, THE MATTER CAN BE DISPOSED OF BY HEARING THE LEARNED D.R. AND PERUSING THE RECORDS. 2 ITA NO. 59/NAG/2014 3. APROPOS GROUND NO. 1 : ADDITION OF RS.80,000/ - ON ACCOUNT OF TRAVELLING EXPENSES. ON THIS ACCOUNT THE AO HAS HELD THAT THE ASSESSEE HAD DEBITED RS.1,20,000/ - ON ACCOUNT OF FOREIGN TRAVEL EXPENSES IN CAPITAL ACCOUNT. ASSESSEE HAD NOT GIVEN ANY DETAILS WHEN ASKED FOR THE SAME. HENCE THE AO ESTIMATED THE FOREIGN TRAVEL EXPENSES AT RS.2,50,000/ - AND ADDED TH E BALANCE AMOUNT OF RS.1,30,000/ - TO THE TOTAL INCOME. 4. UPON ASSESSEES APPEAL, LEARNED CIT(APPEALS) GRANTED THE ASSESSEE A FURTHER RELIEF OF RS.50,000/ - AND CONFIRMED THE ADDITION OF RS.80,000/ - . 5. UPON CAREFUL CONSIDERATION I FIND THAT NO TRAVELLING E XPENDITURE HAS BEEN CLAIMED BY THE ASSESSEE IN ITS COMPUTATION OF INCOME. IT IS ONLY IN THE CAPITAL ACCOUNT THAT RS.1,20,000/ - HAS BEEN SHOWN AS WITHDRAWAL FOR TRAVELLING EXPENSES. THE ASSESSEE NEED NOT FURNISH ANY SUPPORTING EVIDENCE FOR WITHDRAWALS IN THE CAPITAL ACCOUNT BECAUSE THEY ARE WITHDRAWAL/DRAWINGS ON CAPITAL ACCOUNT AND THE ASSESSEE IS FREE TO USE IT IN ANY MANNER THE ASSESSEE SO DESIRES. THE AO CANNOT ASK THE ASSESSEE TO GIVE THE DETAILS WITH SUPPORTING OF THE DRAWINGS IN CAPITAL ACCOUNT. LEARNED D.R. HAS SUBMITTED THAT THE ASSESSEE HAS UNDERTAKEN FOREIGN TRAVEL AND THERE COULD BE CHANCE THAT THE AMOUNT SPENT WAS MORE THAN RS.1,20,000/ - . I FIND THAT THIS REASONING IS TOTALLY DEVOID OF COGENCY. WHEN AN EXPENDITU RE HAS NOT BEEN CLAIMED IN THE COMPUTATION OF INCOME THE SAME CANNOT BE ADDED TO THE ASSESSEES INCOME ON AN ESTIMATE OR WHATEVER BASIS. IN MY CONSIDERED OPINION THE ADDITION IS TOTALLY UNJUSTIFIED BASED ON SURMISES AND CONJECTURE. ACCORDINGLY I DELETE TH E ADDITION. 6. APROPOS GROUND NO.2 : REGARDING CONFIRMATION OF RS.1,28,686/ - AS INTEREST DISALLOWANCE. DURING THE ASSESSMENT PROCEEDINGS, IT WAS OBSERVED THAT THE ASSESSEE HAD DEBITED RS.1,28,686/ - BEING THE INTEREST PAID ON ACCOUNT OF LOAN TAKEN FROM SHRI SUNIL MALOO. THE ASSESSEE FAILED TO FURNISH ANY DETAILS IN SUPPORT OF THE SAME. 3 ITA NO. 59/NAG/2014 THE AO OBSERVED THAT THE LOAN TAKEN HAD BEEN UTILISED FOR PURCHASE OF LAND AND, THEREFORE, DISALLOWED THE INTEREST PAID AND ACCORDINGLY ADDED THE SAME TO THE TOTAL INCOME OF T HE ASSESSEE. 7. BEFORE THE LEARNED CIT(APPEALS) ASSESSEE S REPRESENTATIVE DID NOT MAKE ANY SUBMISSION ON THIS ISSUE. LEARNED CIT(APPEALS) HELD THAT THE AO HAS BEEN ABLE TO CLEARLY ESTABLISH THE NEXUS BETWEEN THE LOAN TAKEN BY THE ASSESSEE AND AMOUNT UTILIZED. THAT THE ASSESSE HAS USED THE MONEY TOWARDS PURCHASE O F LAND WHICH IS FOR INVESTMENT PURPOSES. HENCE LEARNED CIT(APPEALS) HELD THAT DEDUCTION CLAIMED BY THE ASSESSEE FOR THE INTEREST PAID HAS BEEN CORRECTLY DISALLOWED. 8. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 9. UPON CAREFUL CONS IDERATION I NOTE THAT A CLEAR FINDING HAS BEEN RECORDED THAT THE AMOUNT BORROWED BY THE ASSESSEE HAS BEEN UTILIZED FOR PURCHASE OF LAND . HENCE INTEREST ON SUCH LOAN IS ADMITTEDLY IN A CAPITAL FIELD AND THE SAME CANNOT BE ALLOWED AS A DEDUCTION FROM INCOME. HENCE I CONFIRM THE ORDER OF LEARNED CIT(APPEALS) ON THIS ISSUE. 10. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF NOV., 2015. S D/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 16 TH NOV., 2015. 4 ITA NO. 59/NAG/2014 COPY FORWARDED TO : 1. MADHU SUNILKUMAR MALOO 101, JAI BHAWANI SOCIETY, WARDHAMAN NAGAR, C.A. ROAD, NAGPUR. 2. A.C.I.T., CENTRAL CIRCLE - 1(2), NAGPUR. 3. C.I.T. - III, NAGPUR. 4. C.I.T. NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR