KRISHNA RAJ EDUCATIONAL SOCIETY,BAREILLY V. ITO (EXEMPTION), BAREILLY

ITA 2356/DEL/2017

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31463 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RINI HANDA
• Assessee Lawyers: SALIL KAPOOR; ANANYA KAPOOR
• Keywords: Onus to prove
• Section: 143(3); 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’, NEW DELHI Before Sh. Satbeer Singh Godara, Judicial Member & Sh. S. Rifaur Rahman, Accountant Member ITA No. 2356/Del/2017 : Asstt. Year: 2013-14 Krishna Raj Educational Society, C/o M/s Satnam Singh Chawla & Associates, L-5/A, Rampur Garden, Near Agarsen Park, Bareilly, U.P.-243001 Vs Income Tax Officer(E), Income Tax Officer, Bareilly, U.P.-243001 (APPELLANT) (RESPONDENT) PAN No. AAAAK5285G Assessee by : Sh. Salil Kapoor, Adv. & Ms. Ananya Kapoor, Adv. Revenue by : Ms. Rini Handa, Sr. DR Date of Hearing: 10.03.2025 Date of Pronouncement: 19.03.2025 ORDER Per Satbeer Singh Godara, Judicial Member: This assessee’s appeal for Assessment Year 2013-14, arises against the CIT(A), Moradabad’s in case No. 307/ITO- (E)/BLY/2015-16 dated 20.02.2017, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”). 2. Heard both the parties at length. Case file perused. 3. The assessee pleads the following substantive grounds in the instant appeal: “1. That the learned Commissioner of Income Tax Appeals has erred in law and facts of the case, by sustaining addition ITA No. 2356/Del/2017 Krishna Raj Education Society 2 on account of interest on unsecured loans to the tune of Rs.996000/- incurred by the assessee, rejecting the contention of the assessee that the same is application of income. 2. That the learned Commissioner of Income Tax Appeals has further erred in law and facts of the case, by sustaining addition on account of discounts given to the students to the tune of Rs.261331/-even when complete details were filed by the assessee as well as few confirmations were also furnished before the Assessing officer. 3. That the learned Commissioner of Income Tax Appeals has further erred in law and facts of the case, by sustaining addition on account of outstanding creditors to the tune of Rs.41,84272/-merely because the notices u/s 133(6) had remained unserved/no compliance made, and when the transactions with such creditors was never doubted at any stage of assessment/remand proceedings.” 4. Learned counsel states very fairly that the assessee does not wish to press for it’s second substantive ground keeping in mind smallness of the disallowance/addition herein subject to a rider that the same is not treated as a precedent in any other assessment year. Rejected in very terms. 5. Next comes the first and foremost issue between the parties wherein both the learned lower authorities have disallowed the assessee interest on unsecured loans to the tune of Rs.9,96,000/-. A perusal of the learned Assessing Officer’s assessment discussion dated 30.03.2016 at page 3 in para 4 indicates that he held that since there was no actual payment made to the party concerned, the claim herein was in the nature of an adjustment entry only. Learned departmental representative fails to dispute that the assessee had taken the ITA No. 2356/Del/2017 Krishna Raj Education Society 3 loans in question in earlier assessment years which had opening balance of Rs.87,48,000/- as on 01.04.2012. The assessee therefore appears to have raised it’s impugned interest claim on accrual than on actual payment basis. 6. Faced with this situation, we hereby quote Chainrup Sampatram Vs. CIT (1953) 24 ITR 461 (SC) and Bharat Earth Movers Vs. CIT (2000) 245 ITR 428 (SC) that even such an anticipated interest liability on accrual basis could very well be claimed as a deduction at the first sight of reasonable probability thereof. The impugned interest disallowance stands deleted therefore. This first and foremost substantive issue raises in the instant appeal is decided in assessee’s favour in very terms. 7. Next comes outstanding creditors liability disallowance/addition of Rs.41,84,272/- which was made by the Assessing Officer to the tune of Rs.63,53,387/- but restricted to the above sum only in the CIT(A)’s order. The Revenue’s case all along is that neither the parties concerned had responded to the relevant notices u/s 133(6) of the Act nor the assessee has discharged it’s onus to prove the same by leading cogent supportive evidence. ITA No. 2356/Del/2017 Krishna Raj Education Society 4 8. Faced with this situation, learned counsel takes us to the assessee’s paper book pages 58 & 59 wherein the major component thereof pertains to M/s Edu Smart Services Pvt. Ltd.; amounting to Rs.31,68,000/-, which stood duly confirmed it’s claim by way of ledger entries in the books of account. All these facts have gone un-rebutted from the Revenue side. We thus deem it appropriate to delete the impugned disallowance/addition of Rs.41,84,272/- in very terms. This assessee’s third substantive ground succeeds accordingly. 9. This assessee’s appeal is partly allowed in above terms. Order Pronounced in the Open Court on 19/03/2025. Sd/- Sd/- (S. Rifaur Rahman) (Satbeer Singh Godara) Accountant Member Judicial Member Dated: 19/03/2025 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR "