SMT. VIMLA GUPTA, AJMER V. INCOME TAX OFFICER, AJMER

ITA 922/JPR/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5991 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 04-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DHK
• Assessee Lawyers: NIKHILESH KATARIA
• Keywords: Business income
• 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 BENCH SMC, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; DS LE{K BEFORE: SHRI SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 922/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15. SMT. VIMLA GUPTA E-402, SHASTRI NAGAR, AJMER. CUKE VS. INCOME TAX OFFICER, WARD 2(1) AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AHMPG 5240 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI NIKHILESH KATARIA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM RAI (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23.09.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 24/09/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 27 TH SEPTEMBER, 2017 OF LD. CIT (A), AJMER FOR THE ASSES SMENT YEAR 2014-15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE ASSESSMENT ORDER PASSED U/S 143(3) IS BAD IN LAW AS WELL AS ON FACTS AND HENCE, THE SAME MAY PLEASE BE QUASHED. 2. RS. 1,15,425/-. THE LD. AO ERRED IN LAW AS WELL AS ON THE FACTS OF THE PRESENT CASE IN DISALLOWING PAYMENT OF INTEREST ON HOUSING LOAN AND THE LD. CIT (A) ERRED IN SUSTAINING THE SA ME. 3. RS. 1,36,197/-. THE LD. AO ERRED IN LAW AS WELL AS ON THE FACTS OF THE PRESENT CASE IN DISALLOWING PAYMENT OF INTEREST ON LOAN TAKEN MERELY ON PRESUMPTION AND THE LD. CIT (A) ERR ED IN SUSTAINING THE SAME. 4. THE APPELLANT PRAYS YOUR HONORS INDULGENCE TO A DD, AMEND, MODIFY OR DELETE ALL OR ANY GROUND OF APPEAL. 2 ITA NO. 922/JP/2017 SMT. VIMLA GUPTA, AJMER. 2. AT THE TIME OF HEARING, THE LD. A/R OF THE ASSES SEE HAS STATED AT BAR THAT THE ASSESSEE DOES NOT PRESS GROUND NOS. 1 & 2 OF THE AP PEAL AND THE SAME MAY BE DISMISSED AS NOT PRESSED. THE LD. D/R HAS RAISED N O OBJECTION IF THE GROUND NOS. 1 & 2 OF THE ASSESSEES APPEAL ARE DISMISSED AS NOT PRE SSED. ACCORDINGLY, GROUND NOS. 1 & 2 OF THE ASSESSEES APPEAL ARE DISMISSED BEING NO T PRESSED. GROUND NO. 3 IS REGARDING DISALLOWANCE OF INTEREST OF RS. 1,36,197/-. 3. THE A.O. HAS NOTED THAT THE ASSESSEE HAS TAKEN A LOAN OF RS. 40,00,000/- AGAINST FDR FROM BARODA RAJASTHAN KHETRIYA GRAMIN B ANK. THE SAID LOAN AMOUNT WAS NOT UTILIZED FOR THE PURPOSE OF BUSINESS BUT TH E ASSESSEE HAS USED THE SAME FOR INTEREST FREE ADVANCES TO CERTAIN PARTIES. FURTHER , THE AO NOTED THAT THE ASSESSEE HAS ALSO TAKEN A LOAN OF RS. 5,00,000/- FROM ONE SH RI KUMAR AGNEET AND THE SAID AMOUNT WAS GIVEN TO SMT. PUSHPA TEJWANI. THE ASSES SEE HAS PAID INTEREST ON THE LOAN OF RS. 60,000/- AS AGAINST THE INTEREST RECEIV ED OF RS. 45,000/-. THEREFORE, THE AO MADE THE DISALLOWANCE OF RS. 1,21,197/- IN RESPE CT OF THE LOAN TAKEN AGAINST FDR AND GIVEN TO VARIOUS PARTIES AS INTEREST FREE ADVAN CES AND RS. 15,000/- BEING THE DIFFERENCE OF INTEREST PAID BY THE ASSESSEE IN RESP ECT OF THE LOAN TAKEN FROM SHRI KUMAR AGNEET AND INTEREST RECEIVED BY THE ASSESSEE FROM SMT. PUSHPA TEJWANI TOTAL AMOUNTING TO RS. 1,36,197/-. THE ASSESSEE CHALLENG ED THE ACTION OF THE AO BEFORE THE LD. CIT (A) BUT COULD NOT SUCCEED. 4. BEFORE THE TRIBUNAL, THE LD. A/R OF THE ASSESSEE HAS REFERRED TO THE COMPUTATION OF INCOME AND SUBMITTED THAT THE ASSESS EE HAS CLAIMED ONLY RS. 45,000/- AS INTEREST IN RESPECT OF THE LOAN OF RS. 5,00,000/- AND FURTHER THE ASSESSEE HAS CLAIMED ONLY RS. 1,21,197/- IN RESPECT OF THE L OAN TAKEN AGAINST FDR WHEREAS 3 ITA NO. 922/JP/2017 SMT. VIMLA GUPTA, AJMER. THE INTEREST OF RS. 1,28,211/- WAS RECEIVED BY THE ASSESSEE FROM THE FDR. THEREFORE, THE EXPENDITURE OF PAYMENT OF INTEREST I N RESPECT OF THE LOAN TAKEN AGAINST FDR IS TO SAVE AND EARNING INTEREST ON THE FDR. THE ASSESSEE PRESERVED THE SAID INCOME BY TAKING THE LOAN AND NOT WITHDRAWING THE FDR PREMATURELY. SIMILARLY THE INTEREST OF RS. 45,000/- WAS CLAIMED AGAINST TH E INTEREST FROM OTHER PARTIES OF RS. 45,158/-. THUS THE ASSESSEE HAS OFFERED NET IN TEREST INCOME, THEREFORE, NO FURTHER ADDITION OR DISALLOWANCE IS CALLED FOR. TH E AO HAS MADE AN ADDITION OF RS. 15,000/- BEING THE INTEREST OF RS. 60,000/- AND RS. 45,000/- RECEIVED BY THE ASSESSEE WHEREAS THE ASSESSEE HAS CLAIMED ONLY RS. 45,000/- AGAINST THE RECEIPT OF RS. 45,158/-. HENCE THE LD. A/R HAS SUBMITTED THAT THE DISALLOWANCE MADE BY THE AO IS NOT JUSTIFIED AND THE SAME BE DELETED. 5. ON THE OTHER HAND, THE LD. D/R HAS RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE AO HAS MADE TOTAL DISALLOWANCE OF RS. 1 ,36,197/- TOWARDS THE INTEREST PAID OF RS. 1,21,197/- ON LOAN TAKEN BY THE ASSESSE E AGAINST FDR AND FURTHER A DIFFERENCE OF RS. 15,000/- BEING THE INTEREST INCOM E AND INTEREST PAID IN RESPECT OF THE LOAN OF RS. 5,00,000/- TAKEN BY THE ASSESSEE FR OM ONE SHRI KUMAR AGNEET AND LOAN WAS GIVEN TO SMT. PUSHPA TEJWANI. FROM THE CO MPUTATION OF INCOME, IT IS CLEAR THAT THE BUSINESS INCOME OF THE ASSESSEE WAS ACCEPT ED BY THE AO AS EXEMPT UNDER SECTION 10(12A). THEREFORE, IT IS NOT A CASE OF AN Y INTEREST EXPENDITURE CLAIMED AGAINST THE BUSINESS INCOME. FURTHER THE ASSESSEE H AS CLAIMED ONLY RS. 45,000/- AS INTEREST AGAINST THE INTEREST INCOME OF RS. 45,158/ -. HENCE THE ACTUAL PAYMENT OF INTEREST BY THE ASSESSEE OF RS. 60,000/- IS IRRELEV ANT WHEN THE ASSESSEE HERSELF HAS 4 ITA NO. 922/JP/2017 SMT. VIMLA GUPTA, AJMER. NOT CLAIMED THE SAID AMOUNT AND RESTRICTED THE CLAI M ONLY TO RS. 45,000/-. THEREFORE, THE DISALLOWANCE OF RS. 15,000/- MADE BY THE AO IS UNCALLED FOR. SIMILARLY, THE ASSESSEE HAS EARNED INTEREST OF RS. 1,28,211/- ON FDR AND HAS CLAIMED THE INTEREST OF RS. 1,21,197/- BEING THE PAYMENT OF INTEREST ON THE LOAN TAKEN AGAINST FDR. THEREFORE, IT IS A CLEAR CASE OF INCU RRING THE EXPENDITURE OF INTEREST TO PRESERVE THE INCOME FROM THE FDR. THESE FACTS ARE CLEAR FROM THE COMPUTATION AND NOT IN DISPUTE, THEREFORE, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE DISALLOWANCE MADE BY THE AO IS NOT JUSTIFIED AND TH E SAME IS DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 24/09/20 19. SD/- ( FOT; IKY JKWO (VIJAY PAL RAO) U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 24/09/2019. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SMT. VIMLA GUPTA, AJMER. 2. THE RESPONDENT THE ITO WARD 2 (1), AJMER. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 922/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 922/JP/2017 SMT. VIMLA GUPTA, AJMER.