Smt. Sushma Mundhra , Kolkata V. ITO, Ward - 32(4) , Kolkata

ITA 80/KOL/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7305 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-08-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 16-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business expenditure

Judgement Text

ITA NO. 80/KOL/2019 AS SESSMENT YEAR: 2015-2016 S MT. SUSHMA MUNDHRA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ & HZ) I.T.A. NO. 80/KOL/2019 ASSESSMENT YEAR: 2015-2016 SMT. SUSHMA MUNDHRA,............................... ...............................APPELLANT SUITE NO. 312, 3 RD FLOOR, DIAMOND PRESTIGE, 41A, A.J.C. BOSE ROAD, KOLKATA-700 017 [PAN: AEPPM7672F] -VS.- INCOME TAX OFFICER,................................ ...................................RESPONDENT WARD-32(4), KOLKATA APPEARANCES BY: SHRI GIRIDHAR DHELIA, FCA, FOR THE APPELLANT SMT. MADHUMITA GHOSH, ADDL. CIT, SR. D.R , FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : AUGUST 20, 2019 DATE OF PRONOUNCING THE ORDER : OCTOBER 18, 2019 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-9, KOLKATA DAT ED 22.11.2018 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE DISALLOWANCE OF RS.3,61,254/- MADE BY THE ASSESSING OFFICER AND CON FIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF INTEREST AND BANK CHARGE S. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN TRADING BUSINESS UNDER THE NAME AND STYLE OF A PROP RIETARY CONCERN M/S. AKASH CHEMICALS AND POLYMERS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HER ON 20.09.2015 DECLAR ING TOTAL INCOME OF RS.18,44,470/-. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, HER CLAIM FOR DEDUCTION ON ACCOUNT OF BANK INTEREST AND BANK CHARGES WAS JUSTIFIED BY THE ASSESSEE BY SUBMITTING THAT THE SAID EXPENSE S WERE INCURRED IN ITA NO. 80/KOL/2019 AS SESSMENT YEAR: 2015-2016 S MT. SUSHMA MUNDHRA 2 RELATION TO UNSECURED LOAN OF RS.42,05,000/- BORROW ED AND UTILIZED FOR THE PURPOSE OF HER BUSINESS. THE ASSESSING OFFICER, HOWEVER, NOTED THAT THE SAID LOAN OF RS.42,05,000/- WAS REFLECTED IN TH E BALANCE-SHEET OF THE ASSESSEE AND NOT IN THE BALANCE-SHEET OF HER PROPRI ETARY CONCERN M/S. AKASH CHEMICALS AND POLYMERS. HE, THEREFORE, DISALL OWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF BANK INTEREST AND BANK CHARGES AMOUNTING TO RS.3,61,254/-. ON APPEAL, THE LD. CIT( APPEALS) CONFIRMED THE SAID DISALLOWANCE. 3. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE HAS INVITED MY ATTENTION TO THE PERSONAL BALANCE-SHEET OF THE ASSESSEE PLACED AT PAGE NO. 17 OF THE PAPER BOOK TO POINT OUT THAT THE UNSECURED LOAN OF RS.42,05,000/- WAS APPEARING ON THE LIABILITY SIDE, WHILE THE INVESTMENT MADE BY THE ASSESSEE IN THE CAPITAL OF M/S. AKASH C HEMICALS AND POLYMERS AMOUNTING TO RS.1,12,61,700/- WAS APPEARING ON THE ASSETS SIDE. HE HAS ALSO INVITED MY ATTENTION TO THE RELEVANT BALANCE-S HEET OF M/S. AKASH CHEMICALS AND POLYMERS, THE PROPRIETARY CONCERN OF THE ASSESSEE PLACED AT PAGE NO. 19 OF THE PAPER BOOK TO SHOW THAT THE C APITAL INVESTED BY THE ASSESSEE IN THE SAID CONCERN WAS UTILIZED FOR THE P URPOSE OF BUSINESS IN THE FORM OF CLOSING STOCK, SUNDRY DEBTORS, ETC. KEE PING IN VIEW THESE DOCUMENTARY EVIDENCES PLACED ON RECORD BY THE LD. C OUNSEL FOR THE ASSESSEE, I FIND THAT THE UNSECURED LOAN OF RS.42,0 5,000/- WAS ENTIRELY USED BY THE ASSESSEE FOR THE PURPOSE OF THE BUSINES S CARRIED ON IN THE NAME AND STYLE OF HER PROPRIETARY CONCERN AND THERE WAS NO CASE OF DIVERSION OF THE SAID LOAN FOR ANY NON-BUSINESS PUR POSE. I AM, THEREFORE, OF THE VIEW THAT THE INTEREST EXPENDITURE AND BANK CHARGES INCURRED BY THE ASSESSEE IN RESPECT OF THE LOAN OF RS.42,05,000 /- WAS RIGHTLY CLAIMED BY THE ASSESSEE AS BUSINESS EXPENDITURE AND THE LD. CIT(APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF THE SAM E AS MADE BY THE ASSESSING OFFICER. I, THEREFORE, DELETE THE DISALLO WANCE MADE BY THE ITA NO. 80/KOL/2019 AS SESSMENT YEAR: 2015-2016 S MT. SUSHMA MUNDHRA 3 ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPE ALS) ON THIS ISSUE AND ALLOW THIS APPEAL OF THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 18, 2019. SD/- (P.M. JAGTAP) VICE-PRESIDENT (KOLKATA & HYDERABAD ZONES) KOLKATA, THE 18 TH DAY OF OCTOBER, 2019 COPIES TO : (1) SMT. SUSHMA MUNDHRA, SUITE NO. 312, 3 RD FLOOR, DIAMOND PRESTIGE, 41A, A.J.C. BOSE ROAD, KOLKATA-700 017 (2) INCOME TAX OFFICER, WARD-32(4), KOLKATA (3) COMMISSIONER OF INCOME TAX (APPEALS)-9, KOLKA TA, (4) COMMISSIONER OF INCOME TAX, KOLKATA- , KOLKATA; (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.