Bhoumik Bharat Shah, Raigad V. Income-tax Officer, Ward - 2, Panvel

ITA 610/PUN/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2556 (ITAT-PUNE)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 18-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARISES OUT OF PASSED
• Section: 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT . / ITA NO.610/PUN/2019 / ASSESSMENT YEAR : 2013-14 SHRI BHOUMIK BHARAT SHAH, NEAR DUTTA MANDIR, PALASPHA PHATA, ONGC, PANVEL, RAIGAD 410206 PAN : ARCPS8855Q VS. ITO, WARD-2, PANVEL (APPELLANT) (RESPONDENT) / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSE D BY THE CIT(A)-2, THANE ON 15-02-2019 IN RELATION TO THE ASSESSMENT YEAR 2013-14. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF INTEREST U/S 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT) AMOUNTING TO RS.7,70,602/-. APPELLANT BY NONE RESPONDENT BY SHRI M.K. VERMA DATE OF HEARING 17-06-2019 DATE OF PRONOUNCEMENT 18-06-2019 ITA NO.610/PUN/2019 SHRI BHOUMIK BHARAT SHAH 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNER IN A PARTNERSHIP FIRM, NAMELY, M/S. SHREE KRISHNA DEVELOPERS. RETURN OF INCOME DECLARING TOTAL INCOME OF RS.13,79,310/- WAS FURNISHED. DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) OBSERVED THAT THE ASSESSEE CLAIMED DEDUCTION OF RS.18,05,220/- U/S. 57 OF THE ACT AGAINST `INCOME FROM OTHER SOURCES TO THE TUNE OF RS.10,34,618/-. ON BEING CALLED UPON TO EXPLAIN THE REASO NS FOR EXCESS OF INTEREST EXPENDITURE OVER THE INTEREST INCOME, THE ASSESSEE STATED THAT THE AMOUNT BORROWED WAS UTILIZED, INTER ALIA, FOR ADVANCING LOANS. ON VERIFICATION, THE AO OBSERVED THA T THE ASSESSEE INVESTED IN PARTNERSHIP FIRM AND ALSO GAVE LOAN TO OTHER PARTIES. IN VIEW OF THIS FACT, HE HELD THAT THE EXCESS OF INTE REST PAID OVER INTEREST INCOME WAS DISALLOWABLE TO THE EXTENT OF RS.7,70,602/-. THE LD. CIT(A) CONFIRMED THE ADDITION. 4. I HAVE HEARD THE LD. DR AND GONE THROUGH THE RELEVAN T MATERIAL ON RECORD. THERE IS NO APPEARANCE FROM THE SIDE OF ASSESSEE DESPITE NOTICE. IT IS OBSERVED THAT THE AO HAS MA DE ADDITION OF RS.7,70,602/- OUT OF INTEREST EXPENDITURE CLAIME D BY THE ASSESSEE OF RS.18,05,220/- U/S.57 OF THE ACT, WHICH IS ONLY OVER AND ABOVE THE AMOUNT OF INTEREST INCOME. THE AO HAS NOT ITA NO.610/PUN/2019 SHRI BHOUMIK BHARAT SHAH 3 DISCUSSED OR GAVE ANY REASON AS TO WHY INTEREST OF RS.7, 70,602/- WAS NOT ALLOWABLE OUT OF TOTAL INTEREST PAID BY THE ASSESSEE TO THE TUNE OF RS.18,05,220/-. SIMPLY BECAUSE INTEREST PAID WAS MORE THAN THE INTEREST INCOME, CANNOT BE A GROUND TO DISALLOW THE JUS T EXCESS INTEREST EXPENDITURE. IN MY CONSIDERED OPINION, THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN SUSTAINING THE ADDITION WHICH IS HEREBY DELETED. 5. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JUNE, 2019. SD/- (R.S.SYAL) / VICE PRESIDENT PUNE; DATED : 18 TH JUNE, 2019 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-2, THANE 4. THE PR. CIT-2, THANE 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.610/PUN/2019 SHRI BHOUMIK BHARAT SHAH 4 DATE 1. DRAFT DICTATED ON 17-06-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 17-06-2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *