Aromatics India Private Limited, New Delhi V. ACIT, Circle-3(1), New Delhi

ITA 813/DEL/2020

AI Insights

The case involves Aromatics India Pvt. Ltd, the appellant, contesting an addition of Rs. 362,482 to their income, which was imposed by the AO and confirmed by the CIT(A). The addition was based on the difference in interest rates between secured bank loans (13.25%) and unsecured loans from group companies (1.75%). The Tribunal examined the interest rates applied to both secured and unsecured loans and determined that the rate difference was within a reasonable range, leading to the deletion of the addition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131731 (ITAT-DELHI)
• Duration Of Justice: 3 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-02-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 13-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘A’, NEW DELHI Before Sh. C. M. Garg, Judicial Member Dr. B. R. R. Kumar, Accountant Member ITA No. 813/Del/2020 : Asstt. Year: 2015-16 Aromatics India Pvt. Ltd, F-25, DSIDC Industrial Complex, Rohtak Road, Nangloi, New Delhi-110041 Vs. ACIT, Circle-3(1), New Delhi (APPELLANT) (RESPONDENT) PAN No. AAACA9994J Assessee by : Sh. Ranjan Malik, CA Revenue by : Sh. Kanv Bali, Sr. DR Date of Hearing: 09.02.2023 Date of Pronouncement: 14.02.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by assessee against the order of the ld CIT(A)-32, New Delhi dated 19.01.2018. 2. The assessee has raised ground No. 2 with regard to confirmation of addition of Rs. 362482/- on account of excessive interest paid on unsecured loan, this addition being arbitrary and contrary to the facts and provisions of law and is liable to be deleted. 3. Aggrieved with addition of Rs. 362482/- made by the AO as confirmed by the ld CIT(A), the assessee filed appeal before the Tribunal. On going through the record we find that the addition has been made on account of the difference between the lending rate of the banks of 13.25% and payment of interest @1.75% on the loan received from the group ITA No. 813/Del/2020 Aromatics India Pvt. Ltd 2 companies. We find that the difference of 1.75 % interest rate on secured loans from the banks and the unsecured loans from the private parties can be an acceptable range, and hence, the addition made is hereby deleted. Order Pronounced in the Open Court on 14/02/2023. Sd/- Sd/- (C. M. Garg) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 14/02/2023 *Ajay Kumar Keot, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR