SHRI K.C. PARWAL HUF, JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 841/JPR/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 5934 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 13-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANMOHAN KANDPAL ACIT DHK
• Assessee Lawyers: DEWANG GARGIEYA
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA , ACCOUNTANT MEMBER VK;DJ VIHY LA -@ ITA NO. 841/JP/2017 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2013-14 K.C. PARWAL HUF, D-54, SIDDHI VINAYAK ASHOKA MARG, C-SCHEME, JAIPUR. CUKE VS. I.T.O., WARD 6(2), JAIPUR. LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AACHK 8335 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI DEWANG GARGIEYA (ADV) JKTLO DH VKSJ LS @ REVENUE BY : SHRI MANMOHAN KANDPAL (ACIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20/11/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 21/11/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A)-2, JAIPUR DATED 14/08/2017 FOR THE A.Y. 2013-14 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. IN THIS APPEAL, THE ASSESSEE IS BASICALLY AGGRIEVED FOR UPHOLDING THE DISALLOWANCE OF INTEREST TO THE EXTENT OF RS. 1,68,460/-. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. THE FACTS IN BRIEF ARE THAT THE ASSESSEE HUF HAS RETURNED INCOME FROM INTEREST AND ITA 841/JP/2017 KC PARWAL HUF VS ITO 2 LONG TERM CAPITAL GAIN. THE AO EXAMINED THE LOANS AND INTEREST PAID AND RECEIVED BY THE ASSESSEE DURING THE YEAR. IT IS SEEN THAT LOANS HAVE BEEN TAKEN AT DIFFERENT INTEREST RATES RANGING FROM 9.5% TO 24% WHILE INTEREST IS PAID TO MS KRITIKA PARWAL AT THE RATE OF 24%. SINCE THE RATE OF INTEREST PAID TO MS KRITIKA PARWAL WAS FOUND TO BE ON THE HIGHER SIDE THE A.O. HAD ASKED THE ASSESSEE TO EXPLAIN THE SAME. THE A.O. HELD THAT THE INTEREST PAID TO MS KRITIKA PARWAL WAS MUCH HIGHER THAN THE INTEREST RATE AT WHICH THE ASSESSEE HAS RECEIVED THE FUND, ACCORDINGLY, HE DISALLOWED EXCESS INTEREST OF RS. 1,68,460/- PAID TO MS KRITIKA PARWAL. BY THE IMPUGNED ORDER, THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE A.O., AGAINST WHICH, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE ITAT. 4. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM THE RECORD I FOND THAT DURING THE COURSE OF ASSESSMENT, THE ASSESSEE WAS ASKED TO FURNISH DETAILS OF INTEREST PAID AND RECEIVED ALONGWITH RATE OF INTEREST. IT WAS NOTICED THAT THE KARTA HAVE MOSTLY RECEIVED THE INTEREST @ 14% FROM VARIOUS PARTIES AND PAID THE INTEREST ONLY TO KRITIKA PARWAL @ 24%. VIDE NOTE SHEET ENTRY DATED 30/10/2015, THE ASSESSEE WAS ASKED TO FURNISH THE JUSTIFICATION W.R.T. EXCESS INTEREST PAID TO RELATED PARTY. THE ASSESSEE HAS SUBMITTED THAT DUE TO AVALIBILITY OF FUNDS, EFFECTIVE UTILIZATION OF DAYS, BROKERAGE ITA 841/JP/2017 KC PARWAL HUF VS ITO 3 FACTOR, RECEIPTS OF FUNDS, THE EFFECTIVE RATE OF INTEREST RECEIVED COMES TO 23.45% TO 25.13%, THEREFORE, EXCESS INTEREST HAS NOT BEEN PAID. 5. I FOUND THAT THERE IS OPENING BALANCE OF KRITIKA PARWAL FOR WHICH INTEREST WAS PAID FOR WHOLE OF YEAR OF RS. 7,87,477/- @ 24% WHILE THE ASSESSEE HAS RECEIVED INTEREST @ 9.5% TO 24%. HOWEVER, INTEREST RECEIVED @ 24% FROM M/S KRITIKA COMPLEX PVT. LTD. WAS DULY CONSIDERED IN RESPECT OF INTEREST PAID. FURTHER, NO EVIDENCE OF BROKERAGE HAS BEEN PROVIDED/CLAIMED. CONSIDERING THE ENTIRETY OF FACTS AND CIRCUMSTANCES, THE EXCESS INTEREST PAID IN COMPARISON TO INTEREST PAID @ 24% WAS CORRECTLY DISALLOWED. ACCORDINGLY, I DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE LOWER AUTHORITIES FOR DISALLOWING EXCESS INTEREST PAID TO MS. KRITIKA PARWAL WHO WAS RELATED TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST NOVEMBER, 2019 SD/- JES'K LH 'KEKZ ( RAMESH C SHARMA ) YS[KK LNL; @ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 ST NOVEMBER, 2019 *RANJAN ITA 841/JP/2017 KC PARWAL HUF VS ITO 4 VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI K.C. PARWAL HUF, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD 6(2), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 841/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR