Ashok Constructions, Hyderabad V. Income Tax Officer, Ward-14(2), Hyderabad

ITA 784/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5267 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2014-2015
• Appeal Filed On: 26-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Capital asset

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER I.T.A. NO.784/HYD/2018 ASSESSMENT YEAR: 2014-15 ASHOK CONSTRUCTIONS, HYDERABAD [PAN: AAPFA7813A] VS INCOME TAX OFFICER, WARD-14(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P.MURALI MOHANA RAO, AR FOR REVENUE : SHRI ROHIT MUJUMDAR, DR DATE OF HEARING : 10-03-2021 DATE OF PRONOUNCEMENT : 03-05-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL FOR AY.2014-15 ARISES FROM TH E CIT(A)-6, HYDERABADS ORDER DATED 31-01-2018 PASSED IN CASE NO.0285/2016-17/A3/CIT(A)-6, IN PROCEEDINGS U/S.143 (3) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. IT TRANSPIRES AT THE OUTSET THAT THE SOLE ISSUE PLEADED I N ASSESSEES MAIN AS WELL AS ITS ADDITIONAL GROUNDS THAT THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE ERRED I N LAW AND ON FACTS IN DISALLOWING INTEREST CLAIMED OF RS.74,52, 751/- ON THE GROUND THAT IT HAD ITSELF AGREED TO THE SAME IN THE C OURSE ITA NO. 784/HYD/2018 :- 2 -: OF ASSESSMENT DT.29-12-2016 AS WELL AS IN THE CIT(A)S ORDER UNDER CHALLENGE, PASSED EX-PARTE. 3. BOTH THE LEARNED REPRESENTATIVES REITERATED THEIR RESPECTIVE STANDS AGAINST AND IN SUPPORT OF THE IMPUGNE D DISALLOWANCE. WE NOTICE FROM A PERUSAL OF THE ASSESSM ENT ORDER THAT THE ASSESSEE HAD TAKEN LEASE RENTAL DISCOUNTI NG LOAN FROM M/S.ICICI BANK OF RS.6,43,31,364/-. IT S TATED THAT THE SAME HAD BEEN INITIALLY SANCTIONED FOR CONSTRUCTI ON OF THE PROPERTY BY M/S.KOTAK MAHINDRA BANK. THE ASSESSEE-F IRMS FURTHER CASE WAS THAT M/S.ICICI BANK HAD IN FACT TAKEN O VER M/S.KOTAK MAHINDRA BANKS ENTIRE LOAN AND THE EXCESS COMPONENT THEREIN HAD BEEN UTILIZED FOR DERIVING BUSI NESS INCOME. THE ASSESSING OFFICER MADE THE IMPUGNED DISALLOWANCE ON THE GROUND THAT INTEREST EXPENDITURE I NCURRED ON CAPITAL BORROWED FOR ACQUIRING A CAPITAL ASSET IS N OT ENTITLED FOR DEDUCTION TILL THE DATE IT WAS FIRST PUT TO USE IN BUS INESS. HE THUS CONCLUDED THAT THE ASSESSEE HAD FAILED TO ESTABLI SH ANY NEXUS BETWEEN ITS BUSINESS VIZ-A-VIZ THE IMPUGNE D INTEREST PAYMENT. 4. THE CIT(A) HAS AFFIRMED THE IMPUGNED INTEREST DISALLOWANCE THAT THE ASSESSEES AUTHORISED REPRESENTA TIVE HAD MADE A CLEAR UNEQUIVOCAL CONCESSION BEFORE THE ASSES SING OFFICER IN FAVOUR OF THIS DISALLOWANCE. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL PLEADINGS. SUFFICE TO SAY, THIS CASE FILE DOES NOT IN DICATE ANY SUCH CONCESSION MADE BY THE ASSESSEE OR ITS AUTHORISED REPRESENTATIVE BEFORE THE ASSESSING OFFICER OR THE CIT( A) THAT IT COULD NOT EXPLAIN THE RELEVANT NEXUS BETWEEN THE CAPITAL ITA NO. 784/HYD/2018 :- 3 -: BORROWED FROM M/S.ICICI BANK AND ITS UTILIZATION FOR BUSINESS PURPOSES. FACED WITH THIS SITUATION, WE DEEM IT APPROPRIATE THAT THE LEARNED ASSESSING OFFICER NEEDS TO RE-EXAMINE THE ENTIRE ISSUE AFRESH WITHIN THREE EFFECTIVE OPPORTUNITIES OF H EARING. THE ASSESSEE OR ITS AUTHORISED REPRESENTATIVE IS DIRECTED TO APPEAR BEFORE THE ASSESSING OFFICER ON OR BEFORE 30-09-2021 , WITH ALL THE RELEVANT DETAILS AT ITS OWN RISK AND RESPONSIBILITY. 6. THIS ASSESSEES APPEAL IS TREATED AS ALLOWED FOR S TATISTICAL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MAY, 2021 SD/- SD/- ( A. MOHAN ALANKAMONY ) ( S.S. GODAR A ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 03-05-2021 TNMM ITA NO. 784/HYD/2018 :- 4 -: COPY TO : 1.ASHOK CONSTRUCTIONS, C/O. P.MURALI & CO., CHARTER ED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2.THE INCOME TAX OFFICER, WARD-14(2), HYDERABAD. 3.CIT(APPEALS)-6, HYDERABAD. 4.PR.CIT-6, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.