Kalpana Bharatbhai Bodiwala, Ahmedabad V. The Income tax Officer,Ward-10(2), Ahmedabad

ITA 797/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9189 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 18-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L SHARMA
• Assessee Lawyers: WRITTEN SUBMISSION NON E
• Keywords: Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI KUL BHARAT, JUDICIAL MEMBER) ITA. NO: 797/AHD/2013 (ASSESSMENT YEAR: 2009-10) KALPANA BHARATBHAI BODIWALA, 301,ANANDMANGAL COMPLEX-3, AMBAWADI, AHMEDABAD V/S INCOME TAX OFFICER, WARD- 10 (2), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: ABTPB4403C APPELLANT BY : WRITTEN SUBMISSION (NON E) RESPONDENT BY : SHRI B. L. SHARMA, SR. D.R. ( )/ ORDER DATE OF HEARING : 09 -03-2 016 DATE OF PRONOUNCEMENT : 11 -03-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE C ORRECTNESS OF THE ORDER OF THE LD. CIT(A)-XVI, AHMEDABAD DATED 01.01. 2012 PERTAINING TO A.Y. 2009-10. ITA NO. 797/ AHD/2013 . A.Y. 2009-1 0 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSES SEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 1,87 ,444/- TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF INTEREST PAID AGAINST OVER DRAFT. 3. VIDE LETTER DATED 25.04.2013, THE ASSESSEE HAS REQU ESTED THE BENCH TO DECIDE THE APPEAL AFTER CONSIDERING THE WRITTEN SUB MISSIONS MADE BY THE ASSESSEE. 4. WE HAVE GONE THROUGH THE WRITTEN SUBMISSIONS OF THE ASSESSEE AND HAVE HEARD THE LD. D.R. AT LENGTH. 5. THE ASSESSEE IS DERIVING INCOME FROM SALARY AND INT EREST ON FIXED DEPOSIT WITH THE BANK AND COMMISSION. THE RETURN FO R THE YEAR WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER CASS. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE A.O NOTICED TH AT THE ASSESSEE HAS CLAIMED A DEDUCTION ON ACCOUNT OF INTEREST PAID ON OVER DRAFT FACILITY, THE SAID INTEREST IS CLAIMED AS SET OFF F ROM INTEREST INCOME. 6. THE ASSESSEE WAS ASKED TO JUSTIFY THE CLAIM. ASSESS EE EXPLAINED THAT SHE HAS RECEIVED INTEREST ON FIXED DEPOSIT AT RS. 3 ,38,267/- FROM CORPORATION BANK AND PAID INTEREST ON OVER DRAFT FA CILITY AT RS. 1,87,444/-. IT WAS FURTHER EXPLAINED THAT THE OVER DRAFT LIMIT HAS BEEN UTILIZED FOR MAKING ADVANCE/LOAN TO SHAIMAN CHEMICA LS PVT. LTD. AND K BODIWALA & CO. ON WHICH SHE IS EARNING INTEREST @ 12%. IT WAS CLAIMED THAT THE PAYMENT OF INTEREST IS DIRECTLY RE LATED TO THE EARNING OF INTEREST INCOME, THEREFORE, THE INTEREST SHOULD BE ALLOWED. 7. THIS EXPLANATION OF THE ASSESSEE DID NOT FIND FAVOU R WITH THE A.O WHO WENT ON TO DISALLOW THE CLAIM OF INTEREST OF RS. 1, 87,444/-. ASSESSEE ITA NO. 797/ AHD/2013 . A.Y. 2009-1 0 3 CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOU T ANY SUCCESS. IN HER WRITTEN SUBMISSIONS, THE ASSESSEE HAS MADE SIMI LAR CLAIMS AS WERE MADE BEFORE THE LOWER AUTHORITIES. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE ASSESSMENT ORDER. 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FAC TS IN ISSUES BEFORE US. THERE IS NO DENIAL THAT THE OVER DRAFT FACILITY HAS BEEN USED BY THE ASSESSEE IN LENDING MONEY TO SHIMAN CHEMICALS PVT. LTD. AND K BODIWALA & CO. THE ASSESSEE IS EARNING INTEREST @ 12% ON SUCH LENDING WHEREAS THE ASSESSEE PAYING INTEREST @ 10% ON OVER DRAFT FACILITY UTILIZED BY HER. THUS, IT IS CLEAR THAT TH E ASSESSEE IS EARNING NET INTEREST @ 2%. 9. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE IS EA RNING SIMILAR INTEREST SINCE LAST 10 YEARS WHERE NO ADVERSE INFERENCE HAS BEEN DRAWN. IN OUR CONSIDERED OPINION, THE PAYMENT OF INTEREST ON THE UTILIZATION OF OVER DRAFT FACILITY HAS A DIRECT NEXUS ON EARNING INTERE ST BY LENDING THE MONEY UTILIZED FROM THE OVER DRAFT ACCOUNT. THUS, T HE INTEREST IS AN ALLOWABLE EXPENDITURE U/S. 57(III) OF THE ACT. 10. WE, ACCORDINGLY SET ASIDE THE FINDINGS OF THE LD. C IT(A) AND DIRECT THE A.O TO ALLOW THE INTEREST AS EXPENDITURE AMOUNTING TO RS. 1,87,444/-. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 11 - 03 - 2016 SD/- SD/- (KUL BHARAT) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY