Praveen K. Dedhia, Hyderabad V. ITO, Ward 4(4), Hyderabad

MA 183/HYD/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9376 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 31-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIDISHA KALRA
• Assessee Lawyers: AJAY GANDHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER MA NO. 183/HYD/2012 ARISING OUT OF ITA NO. 1666/HYD/2008 ASSESSMENT YEAR 2004-05 SRI PRAVEEN K. DEDHIA HYDERABAD PAN: AAKPD7695Q VS. INCOME TAX OFFICER WARD-4(4) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI AJAY GANDHI RESPONDENT BY: SMT. VIDISHA KALRA DATE OF HEARING: 02.11.2012 DATE OF PRONOUNCEMENT: 02.11.2012 O R D E R PER CHANDRA POOJARI, AM: THIS MISCELLANEOUS APPLICATION IS BY THE ASSESSEE SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL DATED 12 .11.2010. 2. THE LEARNED AR SUBMITTED THAT THE ASSESSEE RAISED G ROUND NO. 6 FOR THE A.Y. 2004-05 THAT THE CIT(A) HAD ERRED IN UPHOL DING THE DISALLOWANCE OF INTEREST PAID TO IDBI AT RS. 5,83,383. THE AR SU BMITTED THAT THIS GROUND WAS NOT AT ALL ADJUDICATED BY THE TRIBUNAL, THOUGH SIMILAR ISSUE WAS ADJUDICATED FOR A.Y. 2003-04 IN ITA NO. 1665/HY D/2008 IN PARAGRAPH 19 OF THE ORDER, AS FOLLOWS: '19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND THAT THE ASSESSEE BORROWED A SUM OF RS. 60,00,000/- FROM LDB I BANK ON 20-4-2002. THE ASSESSING OFFICER CLEARLY IN HIS ORDER STATED THAT THE SAID AMOUNT OF LOAN WAS ADVANCED TO VARIOU S PERSONS FROM WHOM INTEREST AGGREGATING TO RS. 5,54,127 WAS RECEIVED BY THE ASSESSEE. HENCE, THE UTILIZATION OF THE LOAN OBTAINED FROM LDBI IS NOT IN DISPUTE. ONCE THE UTILIZATION O F THE LOAN OBTAINED FROM LDBI IS NOT DISPUTED, ON OUR CONSIDER ED VIEW, THE PURPOSE OF OBTAINING THE LOAN FROM LDBI IS IMMA TERIAL. THE SAID INTEREST EXPENDITURE WAS LAID OUT AND EXPENDED WHOLLY MA NO. 183/HYD/2012 SRI PRAVEEN K. DEDHIA ================= 2 AND EXCLUSIVELY FOR THE PURPOSE OF EARNING INTEREST INCOME ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES . ACCORDINGLY, THE INTEREST PAID ON THE LDBI LOAN IS ALLOWABLE AS A DEDUCTION FROM THE INTEREST EARNED. THE ASSESSEE HAS FULFILLED THE CONDITION LAID DOWN IN SECTION 57 (III) OF THE ACT. THEREFORE, THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN NOT ALLOWING INTEREST PAID ON LDBI LOAN AGAINST THE INT EREST EARNED. AFTER CONSIDERING THE TOTALITY OF FACTS AND THE CIRCUMSTANCES OF THE CASE, WE FIND FORCE IN THE CON TENTIONS PUT FORTH BY THE LEARNED COUNSEL FOR THE ASSESSEE IN TH IS REGARD. IN VIEW OF THE ABOVE, WE REVERSE THE FINDING OF THE CI T CA) ON THIS ISSUE AND ALLOW THE GROUND RAISED BY THE ASSESSEE,' 3. THE LEARNED AR SUBMITTED THAT THE SAME FINDING MAY BE FOLLOWED FOR A.Y. 2004-05 ALSO. 4. THE LEARNED DR NOT OBJECTED TO THE PROPOSITION OF T HE AR. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. ADMITTEDLY, THERE WAS A GROUND IN THE APPEAL FOR A. Y. 2004-05 WITH REGARD TO DISALLOWANCE OF INTEREST PAID TO IDBI AT RS. 5,8 3,383. SIMILAR GROUND WAS RAISED IN A.Y. 2003-04 REGARDING DISALLOWANCE O F INTEREST PAID TO IDBI AT RS. 6,75,126. THE TRIBUNAL ADJUDICATED THI S GROUND RELATING TO A.Y. 2002-03 IN ITA NO. 1665/HYD/2008. HOWEVER, TH E TRIBUNAL DID NOT ADJUDICATE SIMILAR GROUND FOR A.Y. 2004-05. ADMITT EDLY, THERE IS AN ERROR COMMITTED BY THE TRIBUNAL. IN VIEW OF THIS, WE ARE INCLINED TO HOLD THAT THE GROUND RELATING TO DISALLOWANCE OF INTEREST PAI D TO IDBI IN A.Y. 2004- 05 IS TO BE DECIDED IN ACCORDANCE WITH THE FINDINGS OF THE TRIBUNAL IN PARA 19 OF THE SAID ORDER REPRODUCED ABOVE. ACCORDINGLY , WE ALLOW THE GROUND TAKEN BY THE ASSESSEE FOR A.Y. 2004-05. 6. IN THE RESULT, ASSESSEE'S MA IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND NOVEMBER, 2012. SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 2 ND NOVEMBER, 2012 MA NO. 183/HYD/2012 SRI PRAVEEN K. DEDHIA ================= 3 COPY FORWARDED TO: 1. SRI PRAVEEN K. DEDHI, C/O. M/S. GANDHI & GANDHI, CAS , 1002, PAIGAH PLAZA, BASHEERBAGH, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD - 4(4), AAYAKAR BHAVAN, HYDERABAD. 3. THE CIT(A) - V, HYDER A B AD. 4. THE CIT - IV, HYDERABAD. 5. THE DR B BENCH, ITAT, HYDERABAD. TPRAO