Smt. R.Santha, CHENNAI V. ITO, CHENNAI

MA 126/CHNY/2010

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 3733 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-07-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 24-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SRINIVAS
• Assessee Lawyers: N DEVANATHAN
• Keywords: Proportionate interest; Commercial expediency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI (BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) M.A. NO. 126/MDS/2010 (IN I.T.A. NO. 1499/MDS/2005) ASSESSMENT YEAR : 2001-02 SMT. R. SANTHA, 29, KANNUPILLAI STREET, NEW WASHERMENPET, CHENNAI - 600 081. PAN : AANPS9380A (APPLICANT) V. THE INCOME TAX OFFICER, WARD VII(1), CHENNAI - 600 034. (RESPONDENT) APPLICANT BY: SHRI N. DEVANATHAN RESPONDENT BY: SHRI B. SRINIVAS O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : GRIEVANCE RAISED BY THE ASSESSEE IN THIS MISCELLAN EOUS APPLICATION IS THAT THE TRIBUNAL DID NOT CONSIDER I TS GROUNDS THAT INTEREST FREE FUNDS WERE UTILIZED FOR GIVING THE LO ANS ON WHICH THERE WERE DISALLOWANCE OF INTEREST FOR DIVERSION OF BORR OWED FUNDS. ASSESSEE ALSO STATES THAT DECISION OF HON'BLE JURISD ICTIONAL HIGH COURT IN THE CASE OF CIT V. S. MUTHUKARUPAN (2007) 290 IT R 154, THOUGH MENTIONED IN SUPPORT OF HER CONTENTIONS, WAS NOT CO NSIDERED BY THIS TRIBUNAL. M.A. NO. 126/MDS/10 2 2. SHORT FACTS APROPOS ARE THAT ASSESSEE HAD ADVANC ED CERTAIN SUM TO HER HUSBAND FOR WHICH NO INTEREST WAS CHARGE D. ASSESSING OFFICER DISALLOWED PROPORTIONATE INTEREST FOR THE R EASON THAT INTEREST BEARING BORROWED FUNDS WERE UTILIZED FOR THIS AND A LSO COMMERCIAL EXPEDIENCY WAS NOT DEMONSTRATED. THIS WAS CONFIRME D BY THE CIT(APPEALS) IN ASSESSEES APPEAL AND LATER BY THIS TRIBUNAL THROUGH THE IMPUGNED ORDER. 3. NOW, REGARDING THE FIRST GRIEVANCE OF THE ASSESS EE THAT INTEREST FREE FUNDS WERE UTILIZED FOR GIVING THE ADVANCES AN D THIS ASPECT WAS NOT CONSIDERED, WE FIND THAT THE TRIBUNAL HAS MADE SPECIFIC MENTION THEREOF AT PAGE 4 OF ITS ORDER. THE TRIBUNAL HAS G IVEN A FINDING THAT THE CIT(APPEALS) HAD FOUND THAT THE ADVANCES TO HAV E BEEN MADE OUT OF BORROWED FUNDS. VIS--VIS THE SECOND GRIEVA NCE REGARDING NON- CONSIDERATION OF CITED DECISION, WE FIND THAT IN PA RA 8 OF ITS ORDER, THE TRIBUNAL HAD SPECIFICALLY CONSIDERED THE DECISION O F HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT V. S. MUTHUKARUPAN (S UPRA) AND DEALT WITH IT IN PARA 12 REPRODUCED HEREUNDER, WHICH IS S ELF-EXPLANATORY: 12. THE ARGUMENT OF THE ASSESSEE THAT HER HUSBANDS PROPERTIES HAVE BEEN HYPOTHECATED FOR AVAILING CRED IT FACILITIES FROM BANK IS ALSO NOT A VALID GROUND TO ALLOW INTEREST ON FUNDS NOT UTILIZED BY THE ASSESSEE FOR HER BUSINESS PURPOSE. THE DECISION OF THE MADRAS HIGH COURT RELIED ON BY THE LD. COUNSEL IS CONCERNED, WE DO NO T UNDERSTAND HOW IT IS RELEVANT TO THE PRESENT CASE. THE M.A. NO. 126/MDS/10 3 LD. COUNSEL HAS NOT EVEN ATTEMPTED TO EXPLAIN HOW T HE JUDGEMENT OF THE MADRAS HIGH COURT WOULD BE APPLICA BLE TO THE ASSESSEES CASE. 4. THUS, WE FIND THAT IT WAS ONLY AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, THE TRIBUNAL HELD THE AS SESSING OFFICER TO HAVE BEEN JUSTIFIED IN DISALLOWING A PORTION OF INT EREST PERTAINING TO THE INTEREST FREE ADVANCES GIVEN BY THE ASSESSEE TO HER HUSBAND. 5. THUS, IN THE GUISE OF MISCELLANEOUS APPLICATION THE ASSESSEE IS ONLY SEEKING A REVIEW FOR WHICH THIS TRIBUNAL IS NO T HAVING ANY POWER. ALL THE GRIEVANCES MENTIONED BY THE ASSESSEE HAVE F OUND THE REFERENCE IN THE TRIBUNAL ORDER AND WE CANNOT FIND ANY MISTAKE APPARENT ON THE RECORD. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE ASSESSEE STANDS DISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 30 TH JULY, 2010. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEM BER CHENNAI. DATED THE 30 TH JULY, 2010. KRI. COPY TO: APPLICANT/RESPONDENT/CIT(A)/CIT/D.R./GUARD FILE