Surinder Kumar Singal, Chandigarh V. ACIT, C-5(1), Chandigarh

ITA 73/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1231 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR ALYA
• Assessee Lawyers: N K SAINI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHES B, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA,ACCOUNTANT MEMBER ITA NO. 73/CHD/2018 ASSESSMENT YEAR: 2008-09 SHRI SURINDER KUMAR SINGAL, V THE ACIT, SCO 15, SECTOR 26, CIRCLE 5(1), CHANDIGARH. CHANDIGARH. PAN : ADYPS5462P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K.SAINI RESPONDENT BY : SHRI ANKUR ALYA, JCIT (DR) DATE OF HEARING : 07.08.2018 DATE OF PRONOUNCEMENT : 04.09.2018 ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASS AILING THE CORRECTNESS OF THE ORDER DATED 29.11.2017 OF CIT(A)-2 CHA NDIGARH PERTAINING TO THE 2008-09 ASSESSMENT YEAR. 2. ALTHOUGH THE ASSESSEE BY WAY OF A GROUND NO. 1 HAS THE EX-PARTE ORDER ALLEGING THAT NO NOTICE FOR THE SPECIFIC DATE OF HEARIN G HAS BEEN RECEIVED, HOWEVER, THE LD. AR INVITING ATTENTION TO GROUND N O. 2 SUBMITTED THAT THE PENALTY ORDER ITSELF DOES NOT SURVIVE IN VIEW OF T HE FACT THAT IN THE QUANTUM ORDER, THE ADDITION MADE BY THE AO HAS BEEN DE LETED BY THE ITAT. ATTENTION WAS INVITED TO ORDER WHEREIN THE CROSS APPEALS OF THE REVENUE AND THE ASSESSEE WERE DECIDED BY ORDER DATED 16.06.2016 IN ITA- 1100/CHD/2014 AND ITA 1023/CHD/2014. REFERRING TO COPY OF THE SAME AVAILABLE AT PAGES 4 TO 11 OF THE PAPER BOOK FILED ATTENTIO N WAS INVITED TO THE FACTS CONSIDERED BY THE ITAT IN PARA 9 OF THE SAID O RDER WHEREIN AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES, THE ADDITION SUS TAINED BY THE CIT(A) WAS ALSO DELETED BY THE ITAT. THE RELEVANT EXTRA CT RELIED UPON IS REPRODUCED HEREUNDER : 11. I HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE REFERRED T O STATEMENT OF ASSESSABLE INCOME (PB-13) TO SHOW THAT INCOME FROM OTHER SOURCES EARNED WAS SHOWN IN A SUM OF RS. 5,88,530/- WHICH I NCLUDES INCOME ITA 73/CHD/2018 A.Y.2008-09 PAGE 2 OF 2 FROM INTEREST, FDR AND LIC COMMISSION. THE ASSESSEE CLAIMED INTEREST AMOUNT OF RS. 5,56,933/- AS DEDUCTION UNDE R SECTION 57(III) FROM THE ABOVE INCOME. THE LD. COUNSEL FOR THE ASS ESSEE REFERRED TO PB-24 WHICH IS THE COPY OF THE HDFC BANK ACCOUNT TO SHOW THAT ON 05.10.2007, THERE IS HDFC LOAN AMOUNT OF RS. 98,03, 291/-. ON THE SAME DAY, AMOUNT OF RS. 85 LACS WAS ADVANCED TO M/S AAR KAY INNOVATIONS LTD. FURTHER, ON 06.10.2007, THE LOAN OF RS. 7,60,000/- WAS ADVANCED TO NATIONAL WOOLLEN MILLS. THE LD. CO UNSEL FOR THE ASSESSEE ALSO FILED DETAILS OF NEXUS BETWEEN HDFC L OAN AND LOAN ADVANCED TO THE ABOVE TWO PARTIES AND OTHERS. THESE DETAILS ON RECORD CLEARLY SUPPORT THE CLAIM OF THE ASSESSEE TH AT LOAN TAKEN FROM HDFC BANK HAS BEEN UTILIZED FOR THE PURPOSE OF EARNING INTEREST INCOME ON ADVANCING LOAN TO THESE TWO PART IES AND OTHERS. THUS, THE ASSESSEE HAS EARNED INCOME FROM OTHER SO URCES AGAINST WHICH INTEREST PAID TO HDFC BANK WAS ALSO RELATED T O EARNING OF INCOME FROM OTHER SOURCES. THE INTEREST PAID WAS, THEREFORE, LAID OUT OR EXPANDED WHOLLY AND EXCLUSIVELY FOR THE PURP OSE OF MAKING OR EARNING SUCH INCOME FROM OTHER SOURCES. THE ASSE SSING OFFICER DISALLOWED 80% OF THE INTEREST INCOME MEANING THERE BY EXPENDITURE HAVE BEEN INCURRED FOR EARNING INCOME FROM OTHER SO URCES. THE ASSESSEE, IN THIS WAY, HAS BEEN ABLE TO EXPLAIN THA T THERE WAS NEXUS BETWEEN EXPENDITURE INCURRED FOR EARNING INCOME FRO M OTHER SOURCES. THE EXPLANATION GIVEN BY ASSESSEE PROVED THAT INTEREST EXPENDITURE PAID TO HDFC BANK WAS FOR THE PURPOSE O F EARNING INTEREST I.E. 'INCOME FROM OTHER SOURCES'. I, THER EFORE, SET ASIDE THE ORDER OF AUTHORITIES BELOW AND DELETE ENTIRE ADDITI ON. 2.1. INVITING ATTENTION TO THE IMPUGNED ORDER AND THE PENA LTY ORDER, IT WAS HIS SUBMISSION THAT IT WAS THIS SPECIFIC ADDITION WHICH WAS SU BJECT MATTER OF PENALTY. ACCORDINGLY, IT WAS HIS PRAYER THAT SINCE THE ADDITION HAS BEEN DELETED, THE PENALTY THEREON, IT WAS SUBMITTED, CANNOT SUR VIVE. THE SAID POSITION OF THE LAW ON FACTS AVAILABLE ON RECORD WAS NOT DIS PUTED BY THE LD. SR.DR. 3. IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY ORDER IS DIRECTED TO BE QUASHED AS THE PENALTY IN THE ABSENCE O F ANY ADDITION CANNOT SURVIVE. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.09. 2018. SD/- SD/- (ANNAPURNA GUPTA) ( DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.