KANHA RAM AGARWAL HUF, Jaipur V. DCIT, Jaipur

ITA 988/JPR/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9043 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 17-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S L PODDAR DH R LS

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 VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA- @ ITA NO. 988/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 SHRI KANHA RAM AGARWAL HUF 129-E, GOVIND NAGAR, DUSHERRA KOTHI, JAIPUR. CUKE VS. THE D.C.I.T. CENTRAL CIRCLE-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AACHK 9251 R VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI S.L.PODDAR, ADVOCATE JKTLO DH VKSJR LS @ REVENUE BY : SHRI RAJESH OJHA, (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 27/01/2015 ?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 29/01/2015 VKNS'K @ ORDER PER: R.P. TOLANI, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 11/11/2013 BY THE LEARNED CIT(A), CENTRAL, JAIPUR F OR A.Y. 2009-10. THE SOLE GROUND OF APPEAL RAISED IS AS UNDER:- ITA 988/JP/2013_ KANHA RAM AGARWAL HUF VS. DCIT 2 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 90,683/- ON ACCOUNT OF INTEREST PAID TO BANK WITHOUT CONSID ERATION THE SUBMISSION OF THE ASSESSEE AND MATERIAL EVIDENC ES SUBMITTED DURING THE ASSESSMENT PROCEEDINGS. 2 LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT WH ILE EXPLAINING THE ALLOWABILITY OF INTEREST BEFORE THE ASSESSING OF FICER PROPER DETAILS OF UTILIZATION OF OVERDRAFT FACILITY WERE SUBMITTED. TH E ASSESSEE HAS AN OVERDRAFT OF RS. 21 LACS, WHICH HAS BEEN SPARINGLY U SED IS AS EVIDENT FROM THE YEARLY INTEREST PAID AT RS. 96,830/-. COMP LETE DETAILS OF UTILIZATION OF OVERDRAFT ARE GIVEN ON PAVE NO. 4 OF THE LEARNED CIT(A)S ORDER ARE AS UNDER:- INTEREST PAYMENT OF OVERDRAFT 90638 SHORT TERM CAPITAL GAIN INCOME 38130 INTEREST FROM PARTIES 134980 INVESTMENT IN IPO (AVERAGE PER MONTH) 38000 INVESTMENT IN SHARES 0 INVESTMENT IN IPO IS AT THE AVERAGE OF RS. 38,000/- PER MONTH. THE ASSESSEE HAS HUGE OWN FUNDS A SURPLUS, WHICH HAVE ALS O BEEN UTILIZED FOR THE PURPOSES OF INVESTMENT IN IPOS. THE SMALL EL EMENT OF INTEREST ATTRIBUTABLE TO PURCHASE OF IPO SHARES WILL BECOME P ART OF COST OF SUCH ITA 988/JP/2013_ KANHA RAM AGARWAL HUF VS. DCIT 3 SHARES, AS THE INCOME THEREOF IS ALSO OFFERED AS SH ORT TERM CAPITAL GAINS, CONSEQUENTLY NO ADVERSE VIEW CAN BE ADOPTED IN THIS REGARD. 3. THE LEARNED CIT(A) WITHOUT REBUTTING THE OVERDRAFT INTEREST UTILIZATION BREAK UP, SUMMARILY HELD THAT NEXUS IS NOT PROVED BY ASSESSEE, WHICH IS CONTRARY THE HIS OWN OBSERVATION ABOUT FILING OF DETAILS AS TABULATED. FURTHER RELIANCE IS PLACED ON THE ORDER PASSED BY THE ITAT IN THE CASE OF THE ASSESSEES OWN BROTHER SH RI SATISH AGARWAL IN ITA NO. 970/JP/2013 ORDER DATED 05/03/2014 WHEREI N THE HONBLE ITAT ON THE SIMILAR FACTS AND CIRCUMSTANCES DELETED SIMILAR ADDITION BY FOLLOWING OBSERVATIONS:- 2.5 . IN THE GIVEN CASE, THE FACTS ARE ENTIRELY DIFFEREN T. THE ASSESSEE HAD HIS OWN FUNDS WHICH HE UTILIZED IN SUC H A MANNER THAT HE HAS EARNED NET INCOME FROM INTEREST AND BY NOT MAKI NG ANY FRESH INVESTMENT IN IPOS BUT HAS EARNED INCOME ON CAPITAL GAIN AS DISCUSSED ABOVE. ACCORDINGLY, WE ARE LEFT WITH NO OPTION BUT TO HOLD THAT THIS ADDITION DESERVES TO BE DELETED. WE ORDER TO DELETE THIS ADDITION AND ALLOW THE APPEAL OF THE ASSESSEE ON MERITS. 4. LEARNED DR SUPPORTED THE ORDERS OF THE LOWER AUTH ORITIES. 5. I HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT EM ERGES FROM THE RECORD THAT THE ASSESSEE PROVIDED BREAKUP OF OVERDR AFT INTEREST ITA 988/JP/2013_ KANHA RAM AGARWAL HUF VS. DCIT 4 UTILIZATION BEFORE LOWER AUTHORITIES. WITHOUT REBUT TING THE SAME, IT HAS BEEN HELD THAT THE ASSESSEE HAS NOT ESTABLISHED THE NEXUS. THUS, THIS FINDING OF THE LOWER AUTHORITIES IS NOT BORNE OUT FR OM RECORD. ON MERITS ALSO THE ASSESSEE IS ELIGIBLE FOR OVERDRAFT INTERES T QUA THE INTEREST EARNED, AVAILABILITY OF ASSESSEES SURPLUS FUNDS IS ALSO NOT DISPUTED. LOOKING INTO THE ENTIRETY OF THE FACTS AND CIRCUMST ANCES OF THE CASE AND THE ITATS JUDGMENT IN ASSESSEES BROTHERS CASE, I AM OF THE CONSIDERED VIEW THAT THE INTEREST PAID BY THE ASSESS EE ON OVERDRAFT FACILITY IS ALLOWABLE AS EXPENDITURE. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/01/2015. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 29 TH JANUARY, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI KANHA RAM AGARWAL HUF, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE D.C.I.T. CENTRAL CIRCLE-3, JAIPUR . 3. VK;DJ VK;QDR @ CIT(A), CENTRAL, JAIPUR 4. VK;DJ VK;QDR @ CIT, JAIPUR ITA 988/JP/2013_ KANHA RAM AGARWAL HUF VS. DCIT 5 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 988/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR