Shri Pradip Kr. Chopra, Kolkata V. DCIT, CIR-12, KOLKATA, Kolkata

ITA 930/KOL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4239 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 23-11-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 03-05-2016
• Court: TRIBUNAL
• Assessee Lawyers: S L KOCHAR; ANIL KOCHAR S
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H KOLKATA BEFORE SHRI S.S.VISWANETHRA RAVI, JM & DR. A.L.SAI NI, AM ./ ITA NO.930/KOL/2016 ( / ASSESSMENT YEAR:2007-2008) SHRI PRADEEP KUMAR CHOPRA 86, CANNING STREET, KOLKATA-700001 VS. DCIT, CIRCLE-12, KOLKATA 3 NO.GOVT.PLACE (W), KOLKATA-1 ./ ./PAN/GIR NO. : ACAPC 9922 B ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI S.L.KOCHAR & ANIL KOCHAR, ADVOCATES /REVENUE BY : SHRI SALLONG YADEN, ADDL.CIT / DATE OF HEARING : 23/11/2016 /DATE OF PRONOUNCEMENT 30/11/2016 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO THE ASSESSMENT YEAR 2007-2008, IS DIRECTED AGAINST THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-10, KOLKATA, I N APPEAL NO.617/CIT(A)-10/CIR-12/2014-15/KOL, DATED 25.02.20 16, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASS ESSING OFFICER (AO) UNDER SECTION143(3) OF THE INCOME TAX ACT 1961, (IN SHORT THE ACT), DATED 31.12.2009. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE FILED ITS RETURN OF INCOME ON 17.01.2008 DECLARING TOTAL INCOME OF RS.13,13,570/-. THE RETURN OF INCOME WAS PROCESSED U/S.143(1) ON 26.03.2009 AT THE RETURNED INCOME FIGURE. THEREAFTE R THE CASE WAS SELECTED FOR SCRUTINY PROCEEDINGS U/S 143 (3) OF TH E ACT AND THE AO HAS ITA NO.930/16 PRADEEP KUMAR CHOPRA 2 TREATED RS. 2,19,192/- AS EXPENDITURE OF PERSONAL N ATURE AND THEREFORE MADE THE ADDITION OF RS.2,19,192/-. 3. AGGRIEVED FROM THE ORDER OF AO, THE ASSESSEE FIL ED APPEAL BEFORE THE LD. CIT(A), WHO HAS CONFIRMED THE ADDITION MADE BY THE AO OBSERVING THE FOLLOWINGS :- 03. GROUND NO. 4, 6 RELATES TO VARIOUS DISALLOWANC E MADE BY AO. THE ISSUES HAVE BEEN DEALT BY THE AO IN ASSESSMENT ORDER AS FOLLOWS: 'IT IS SEEN FROM THE COMPUTATION OF INCOME THAT THE ASSESSEE HAS CLAIMED AN EXPENSES OF RS.2,19,192/- AGAINST THE IN COME UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. THE EXPENSES WERE AS UNDER; BANK CHARGES RS.1,462/- INTEREST PAID RS.1,96,780/- PROFESSIONAL TAX RS.2,500/- LOAN PROCESSING FEES RS.18,450/- TOTAL RS,2,19,792/- BUT CONSIDERING THE NATURE OF INCOME OF THE ASSESSE E, THE ABOVE EXPENDITURES WERE CONSIDERED AS PERSONAL IN NATURE. IN VIEW OF THE ABOVE THE EXPENDITURE CLAIMED OF RS.2,19,192/- IS H EREBY DISALLOWED AND ADDED BACK TO THE RETURNED INCOME OF THE ASSESSEE.' 03. DURING THE COURSE OF APPEAL, THE APPELLANT HAS CONTESTED ALL THE ABOVE ADDITIONS MADE BY THE AO EXCEPT RS.1,462 ON A CCOUNT OF BANK CHARGES. IT IS NOTICED THAT DESPITE VALID SERV ICE OF NOTICE ISSUED U/S 250 OF THE INCOME TAX ACT TO THE APPELLANT, THE RE HAS BEEN NO ATTEMPT BY THE APPELLANT TO JUSTIFY HIS CASE FURTHE R AND SUBMIT ANY RELEVANT DOCUMENTS. IT IS TO BE NOTED THAT IT IS FO R THE APPELLANT TO BOLSTER AND SUPPORT THE GROUNDS TAKEN DURING THE AP PEAL, AND THE CLEAR ONUS IS CAST UPON HIM TO DEFEND HIS / HER CAS E. THE APPELLANT HAS NOT HELPED HIS OWN CASE BY FAILING TO AVAIL THE OPPORTUNITY OF BEING HEARD WHICH WAS AFFORDED TO HIM. THEREFORE, IN THE ABSENCE OF ANYTHING SAID OR EVIDE NCED CONTRARY TO THE FINDINGS AND ADDITIONS OF THE AO, THE ACTION OF THE AO IS CONFIRMED, AND THE GROUNDS TAKEN BY THE APPELLANT S TAND DISMISSED. 4. NOT BEING SATISFIED WITH THE ORDER OF CIT(A), TH E ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL :- ITA NO.930/16 PRADEEP KUMAR CHOPRA 3 1. FOR THAT THE LD. CIT (A) ERRED IN DISMISSING THE APPEAL OF THE APPELLANT ON THE ALLEGED GROUNDS. 2. FOR THAT THE LD. CIT (A) FAILED TO CONSIDER THE RELEVANT RECORDS AND ERRED IN CONFIRMING THE ORDER OF THE A.O. WHO H AD DISALLOWED THE CLAIM OF THE APPELLANT IN RESPECT OF PAYMENTS T OWARDS BANK CHARGES, INTEREST, PROFESSIONAL TAX AND LOAN PROCES SING FEES TOTALING TO RS.2,19,192/-. 3. FOR THAT THE APPELLANT HAD CLAIMED THE AFORESAID EXPENSES AS DEDUCTION AGAINST THE INCOME DERIVED BY HIM FROM VA RIOUS SOURCES AND THAT THE LD. CIT (A) OUGHT TO HAVE ALLOWED THE CLAIM OF THE APPELLANT AS THE EXPENSES CLAIMED WERE INCURRED WHO LLY & EXCLUSIVELY TO EARN INCOME. 4. FOR THAT THE LD. CIT (A) OUGHT NOT TO HAVE PROCE EDED ONLY ON THE BASIS OF THE OBSERVATIONS OF THE A.O. BUT TO HAVE A PPLIED HIS MIND TO THE FACTS OF THE CASE OF THE APPELLANT AND THE LAW APPLICABLE AND OUGHT TO HAVE ALLOWED THE APPEAL OF THE APPELLANT. 5. FOR THAT FURTHER GROUNDS OF APPEAL MAY KINDLY BE ALLOWED TO BE TAKEN AT THE TIME OF HEARING OF THE APPEAL. 5. ALTHOUGH, IN THIS APPEAL, THE ASSESSEE HAS RAISE D MULTIPLE GROUNDS OF APPEAL BUT AT THE TIME OF HEARING THE MAIN GRIEV ANCE OF THE ASSESSEE HAS BEEN CONFINED TO GROUND NO.2 ONLY AND OTHER GRO UNDS WERE NOT PRESSED BY THE ASSESSEE. 6. GROUND NO.2 RELATES TO DISALLOWANCE OF EXPENSES LIKE BANK CHARGES, INTEREST PAID, PROFESSIONAL TAX AND LOAN P ROCESSING FEES ETC. TOTALLING TO RS.2,19,192/- TREATING THESE EXPENDITU RE AS PERSONAL IN NATURE. 6.1. LD. AR FOR THE ASSESSEE HAS VEHEMENTLY SUBMITT ED BEFORE US THAT ALL THE EXPENSES DISALLOWED BY THE AO AND CONFIRMED BY THE LD. CIT(A), ARE INCURRED BY THE ASSESSEE FOR THE PURPOSE OF BUS INESS TO INVEST THE MONEY IN THE PARTNERSHIP FIRM. LD. AR SUBMITTED THA T HE HAS BORROWED MONEY FROM THEIR FRIENDS AND RELATIVES AND PAID INT EREST RS.1,96,780/-. THE ASSESSEE HAS BORROWED THIS MONEY FROM HIS FRIEN DS AND RELATIVES IN ITA NO.930/16 PRADEEP KUMAR CHOPRA 4 ORDER TO INVEST IN THE PARTNERSHIP FIRM THEREFORE I T IS FOR THE PURPOSE TO INVEST MONEY IN PARTNERSHIP FIRM AND IN TURN THE PA RTNERSHIP FIRM GIVES INTEREST TO THE ASSESSEE. THE ASSESSEE HAS LENT MON EY TO HIS PARTNERSHIP FIRM WHERE HE IS ONE OF THE PARTNERS. THE ASSESSEE IS GETTING INTEREST FROM THE PARTNERSHIP FIRM ON THE SAID LOAN. DURING THE Y EAR UNDER CONSIDERATION, THE ASSESSEE HAS RECEIVED INTEREST FROM PARTNERSHIP FIRM AT RS.5,81,620/- AND HE PAID INTEREST AT RS.1,96,780/-. THE INTEREST PAID BY HIM IS CONNECTED WITH INTEREST RECEIVED FROM THE PARTNERSH IP FIRM BECAUSE THE ASSESSEE HAS BORROWED THE MONEY FROM HIS FRIENDS AN D RELATIVES AND IN TURN HE HAS INVESTED IN THE PARTNERSHIP FIRM, WHERE FROM HE IS GETTING INTEREST. THEREFORE, IT IS A GENUINE EXPENDITURE AN D SHOULD BE ALLOWED. 6.2. ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE LD. AO, WHICH WE HAVE ALREAD Y NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREV ITY. 6.3. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT I N THE SUBMISSIONS OF THE ASSESSEE, AS THE PROPOSITIONS CANVASSED BY THE LD. AR FOR THE ASSESSEE ARE SUPPORTED BY FACTS NARRATED ABOVE BY HIM. LD AR HAS PRODUCED BEFORE US THE PROFIT AND LOSS ACCOUNT OF ASSESSEE W HERE INTEREST RECEIVED IS CREDITED AT RS.5,81,620/- AND INTEREST PAID DEBI TED AT RS.1,96,780/-. LD. DR FOR THE REVENUE HAS OBJECTED THAT INTEREST PAID RS.1,96,780/- HAD NOT BEEN VERIFIED BY LD. CIT(A). AS THE LD. DR FOR THE REVENUE RELIED ON THE ASSESSMENT ORDER AND DURING THE ASSESSMENT PROCEEDI NGS THE ASSESSEE DID NOT PRODUCE ANY COGENT EVIDENCE TO PROVE THAT I NTEREST PAID AT ITA NO.930/16 PRADEEP KUMAR CHOPRA 5 RS.1,96,780/- FOR THE PURPOSE OF HIS BUSINESS TO IN VEST MONEY IN THE PARTNERSHIP FIRM, WHEREFROM HE IS GETTING INTEREST ON LOAN. THEREFORE, CONSIDERING THE FACTUAL POSITION, WE ARE OF THE VIE W THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE LD. CIT(A). LD. CIT(A) MAY SEEK A REMAND REPORT FROM THE AO TO VERIFY THE INTEREST PA ID AT RS.1,96,780/-. THEREFORE, WE REMIT THE CASE BACK TO THE LD. CIT(A) TO ADJUDICATE THE ISSUE AFTER SEEKING A PROPER REMAND REPORT FROM THE AO AN D BY GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 6.4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30/1 1/2016. S D/ - (S.S.VISWANETHRA RAVI) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 30/11/2016 & ()* /PRAKASH MISHRA , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) & ' , / ITAT, KOLKATA 1. / THE APPELLANT-PRADEEP KUMAR CHOPRA 2. / THE RESPONDENT.-DCIT, CIR-12, KOLKATA 3. 4 ( ) / THE CIT(A), KOLKATA. 4. 4 / CIT 5. 56 7 8 , 8 , / DR, ITAT, KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//