THIRUVENKITAM VEERIAH REDDIAR,KOTTAYAM V. THE DEPUTY COMMISSIONER OF INCOME TAX, KOTTAYAM

ITA 269/COCH/2025

AI Insights

The case involves Thiruvenkitam Veeriah Reddiar, who filed an appeal against the order of the Principal Commissioner of Income-tax (PCIT) concerning the assessment year 2020-2021. Initially, the Assessing Officer accepted the returned income of Rs.12,12,4909 without inquiry into the interest claimed on loans as business expenses. However, the PCIT, upon reviewing the assessment records, issued a notice under section 263 of the Income-tax Act, questioning the assessment's correctness. The PCIT's scrutiny led to the finding that the loans were not utilized for business purposes, thus disallowing the interest deduction claimed. The Tribunal dismissed the assessee's appeal, agreeing with the PCIT's decision to re-examine the loan's utilization and interest claims.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397257 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2020-2021
• Laws Referred To: Income-tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUNDARASAN S
• Assessee Lawyers: R. KRISHNAN
• Keywords: Set aside; Business expenditure; Assessment record

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Prakash Chand Yadav, Judicial Member ITA No.269/Coch/2025 : Asst.Year 2020-2021 Thiruvenkitam Veeriah Reddiar (Through L/H Beena Veeriah Reddy) S.Veeriah Reddiar, KK Road Kottayam – 686 001. PAN : ACHPR9611D. v. The Dy.Commissioner of Income-tax, Circle & TPS Kottayam. (Appellant) (Respondent) Appellant by : Sri.R.Krishnan, CA Respondent by : Sri.Sundarasan S, CIT-DR Date of Hearing : 27.05.2025. Date of Pronouncement : 30.05.2025 O R D E R Per Prakash Chand Yadav, JM : The present appeal of the assessee is arising from the order of the Principal Commissioner of Income-tax dated 28th February, 2025 and relates to the assessment year 2020-2021. 2. Brief facts of the case as coming out from the orders of the authorities below are that the assessee has filed his return of income on 15th February, 2021 declaring a total income of Rs.12,12,4909. Thereafter the case of the assessee was selected for scrutiny and assessment u/s.143(3) of the Income- tax Act was passed by the Assessing Officer and accepted the returned income of the assessee. Thereafter the PCIT called for ITA No.269/Coch/2025. Thiruvenkitam Veeriah Reddiar. 2 assessment records and after examination of the assessment records, the PCIT issued notice u/s.263 of the Act asking the assessee as to why the assessment order passed by the AO will not be treated as erroneous and prejudicial to the interest of the revenue. In response to the notice u/s.263 issued by the PCIT, the assessee filed its written submission before the PCIT on 11th February, 2025. Thereafter, the PCIT considering the submissions of the assessee held that the order of the AO is erroneous and prejudicial to the interest of the revenue inasmuch as the AO has not inquired on the interest claimed by the assessee. It is the case of the Revenue that the assessee has claimed the payment of interest of loan as business expenses. The observations of the PCIT were that loan taken by the assessee has not been utilized for the purpose of business and hence the assessee is not entitled for the deduction of interest paid. 3. Aggrieved with the order of the PCIT, the assessee has come up in appeal before us. 4. The learned DR relied upon the orders of the authorities below. 5. After considering the rival submissions, we observe that in this case the PCIT has partly set aside the order of the AO in order to verify the applicability of provisions of sec.14A as well as the utilization of loan borrowed by the assessee. Therefore, we are of the view that no prejudice should be caused to the assessee, in case the assessee substantiate its claim in the ITA No.269/Coch/2025. Thiruvenkitam Veeriah Reddiar. 3 remand proceedings then no addition is warranted. Therefore, we do not find any infirmity in the order of the PCIT, it is accordingly upheld. 6. In the result, the appeal filed by the assessee is dismissed. Order pronounced on this 30th day of May, 2025. Sd/- (Inturi Rama Rao) Sd/- (Prakash Chand Yadav) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin; Dated : 30th May, 2025. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "