IFTEKHAR AHMED, MUMBAI v. ACIT-26(1), MUMBAI

ITA 4188/MUM/2019 | 2012-2013
Pronouncement Date: 31-08-2021 | Result: Allowed

Appeal Details

RSA Number 418819914 RSA 2019
Assessee PAN ANOPK2854K
Bench Mumbai
Appeal Number ITA 4188/MUM/2019
Duration Of Justice 2 year(s) 2 month(s) 19 day(s)
Appellant IFTEKHAR AHMED, MUMBAI
Respondent ACIT-26(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 31-08-2021
Last Hearing Date 16-02-2021
First Hearing Date 22-04-2021
Assessment Year 2012-2013
Appeal Filed On 11-06-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI MANISH BORAD (ACCOUNTANT MEMBER) ITA NO. 4188/MUM/2019 ASSESSMENT YEAR: 2012-13 IFTEKAR AHMED KHAN FLAT NO. 502 & 503 A WING SAGAR HEIGHTS ANDHERI KURLA ROAD SAKINAKA ANDHERI-EAST MUMBAI-400072. VS. ACIT - 26(1) 5 TH FLOOR C-10 BANDRA KURLA COMPLEX BANDRA MUMBAI-400021. PAN NO. ANOPK 2854 K APPELLANT RESPONDENT ASSESSEE BY : MR. VIRENDRA JARIWALA AR REVENUE BY : MS. SMITA VERMA DR DATE OF HEARING : 12 /08/2021 DATE OF PRONOUNCEMENT : 31 /08/2021 ORDER PER MANISH BORAD A.M. THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-38 MUMBAI [IN SHORT CIT(A)] FOR THE ASSESSMENT YEAR 2012-13 DATED 28. 02.2019 AND IFTEKAR AHMED ITA NO. 4188/M/2019 2 ARISES OUT OF ASSESSMENT COMPLETED ON 11.03.2015 U/ S 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER : 2. GROUND RELATING TO ORDER ON MERITS: (A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DISALLOWANCE OF INTEREST OF RS.1 46 250/- U/S 36(1) (III) OF THE INCOME TAX ACT 1961 INCURRED ON MONEY BORROWED & INVESTED FOR PURCH ASE OF OFFICE PREMISES. (B) THAT THE APPELLANT SEEKS FRO OPPORTUNITY OF BEIN G HEARD FOR PRODUCING ADDITIONAL EVIDENCE TO PROVE THAT THE INTEREST IS I NCURRED FOR BUSINESS PURPOSES. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF FALSE CEILING. THE RETUR N OF INCOME FOR AY 2012-13 FILED ON 29.09.2012 DECLARING TOTAL INCOME AT RS.20 29 219/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND SERVING NOTICES U/S 143(2) AND 142(1) DULY SERVED. VARIOUS DETAILS CALLED FOR AND THE SUBMISSIONS WERE MADE BY THE ASS ESSEE. THE LD. AO COMPLETED THE ASSESSMENT AFTER MAKING DISALLOWAN CE OF EXPENSES AT RS.58 142/- AND DISALLOWANCE OF INTEREST EXPENDI TURE AT RS.1 46 785/- CLAIMED BY THE ASSESSEE BEING PAID ON LOAN TAKEN FROM HIS BROTHER AND CO-OWNER MR. ASHFAQUE KHAN FOR PURCHASING A PROPERTY FOR BUSINESS PURPOSES. INCOME ASSESSED AT RS.22 34 146/-. 4. AGGRIEVED THE ASSESSEE PREFERRED APPEAL BEFORE L D. CIT(A) AND PARTLY SUCCEEDED. NOW THE ASSESSEE IS IN APPEAL BEF ORE THIS TRIBUNAL IFTEKAR AHMED ITA NO. 4188/M/2019 3 RAISING SOLE ISSUE AGAINST THE FINDINGS OF LD. CIT( A) CONFIRMING THE DISALLOWANCE OF INTEREST EXPENDITURE OF RS.1 46 785 /- U/S 36(1)(III) OF THE ACT. 5. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON WRITT EN SUBMISSION FILED BEFORE THE LOWER AUTHORITIES AND ALSO REFERRE D TO THE PAPER BOOK DATED 06.08.2021 PAGE (1 TO 51). HE ALSO SUBMITTED THAT THE ASSESSEE PURCHASED THE IMMOVABLE PROPERTY FOR BUSINESS PURPO SES. THE ADDRESS OF THE ASSESSEES BUSINESS IS OF THE SAME P ROPERTY WHICH WAS PURCHASED DURING THE YEAR. LOAN WAS TAKEN FROM BROT HER WHO IS ALSO A CO-OWNER OF THE PROPERTY TO PURCHASE THE SAID PRO PERTY. BOOKS OF ACCOUNTS ARE DULY AUDITED. INTEREST EXPENDITURE HAS BEEN CLAIMED IN PROFIT AND LOSS ACCOUNT. TAX DEDUCTED AT SOURCE ON THE ALLEGED INTEREST. HE THUS PRAYED THAT THE ALLEGED INTEREST EXPENDITURE SHOULD BE ALLOWED AS A BUSINESS EXPENDITURE. 6. PER CONTRA THE LD. DEPARTMENTAL REPRESENTATIVE (DR) VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEES SOLE GRIEVANCE IS AGAINST THE DISALLOWANCE IFTEKAR AHMED ITA NO. 4188/M/2019 4 OF INTEREST EXPENDITURE OF RS.1 46 250/- MADE BY TH E ASSESSING OFFICER U/S 36(1)(III) OF THE ACT AND CONFIRMED BY THE LD. CIT(A). 8. WE OBSERVE THAT IN THE AUDITED PROFIT AND LOSS A CCOUNT INTEREST EXPENDITURE OF RS.1 46 785/- HAS BEEN CLAIMED FOR T HE LOAN TAKEN FOR PURCHASE OF MAROL OFFICE. ASSESSEES BROTHER MR. AS HFAQUE AHMED KHAN IS CO-OWNER OF THIS PROPERTY. ASSESSEE HAS CLA IMED THAT HE HAS TAKEN LOAN FROM HIS BROTHER AND PAID INTEREST THERE ON AND SINCE THE PROPERTY HAS BEEN PURCHASED FOR BUSINESS PURPOSES THE SAME DESERVES TO BE ALLOWED AS A BUSINESS EXPENDITURE. 9. WE FIND THAT LD. CIT(A) WHILE DEALING WITH THIS ISSUE HAS MENTIONED IN THE IMPUGNED ORDER THAT THE PROPERTY J OINTLY PURCHASED IS A COMMERCIAL PREMISES LOCATED AT OFFI CE NO. 805 ON THE 8 TH FLOOR OF THE BUILDING KNOWN AS JAY ANTRIKSH SITUAT ED AT ANDHERI KURLA ROAD ANDHERI EAST MUMBAI. THE LD. CIT(A) AL SO OBSERVED THAT THE PAYMENTS WERE MADE THROUGH BANKING CHANNEL TO PURCHASE THE PROPERTY. HE HOWEVER RAISED DOUBT THAT WHY THE PROPERTY HAS BEEN SHOWN UNDER THE HEAD INVESTMENT AND NOT BEING SHOWN AS A FIXED ASSET. THE LD. CIT(A) ALSO RAISED CONCERN THA T WHY THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE TO DEMONS TRATE THAT IFTEKAR AHMED ITA NO. 4188/M/2019 5 MR. ASHFAQUE AHMED KHAN IS THE PROPRIETAR OF M/S LU CKY ENTERPRISES TO WHOM INTEREST HAS BEEN PAID. 10. WE HOWEVER FIND FORCE IN THE CONTENTIONS OF LD . COUNSEL FOR THE ASSESSEE. WE OBSERVE THAT THE ASSESSEES BOOKS OF A CCOUNTS ARE AUDITED. THE ADDRESS OF THE PROPRIETORSHIP CONCERNS OF THE ASSESSEE NAMELY M/S LUCKY FALSE CEILING SYSTEMS IS WORKING F ROM THE SAME PROPERTY REFERRED HEREINABOVE SITUATED AT ANDHERI ( EAST) MUMBAI. THE AMOUNT INVESTED IN THE PROPERTY IS SHOWN UNDER THE HEAD INVESTMENT. IT IS GENERALLY AN ACCEPTED FACT THAT SOMETIMES ADVANCE FOR PURCHASES OF PROPERTY IS GIVEN POSSESSION IS TA KEN BUT THE SALE DEED IS NOT REGISTERED IN THE SAME YEAR WHEN THE PO SSESSION IS TAKEN. BUT THE FACTS REMAIN THAT THESE TRANSACTIONS OF PURCHASES OF PROPERTY IS DULY ACCOUNTED IN THE BOOKS OF ACCOUNT. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE HAS DEDUCTED TAX AT SOURCE OF RS.14 679/- U/S 194A OF THE ACT ON THE INTEREST EXP ENDITURE OF RS.1 46 785/- AND THE NAME OF THE DEDUCTEE IS MR. A SHFAQUE AHMED KHAN. THIS FACT IS VERIFIABLE FROM PAGE 49 AND 50 O F THE PAPER BOOK. THE DETAILS OF THE DEDUCTEE AND ITS PAN NO. IS REFL ECTED THEREIN. IFTEKAR AHMED ITA NO. 4188/M/2019 6 11. WE ALSO FIND THAT IN THE AIR I.E. INDIVIDUAL TR ANSACTION STATEMENT ISSUED BY THE DEPARTMENT WHICH RELATES TO THE DETAILS OF TRANSACTIONS FOR PURCHASES OF IMMOVABLE PROPERTY A LL THE DETAILS OF THE PROPERTY IN QUESTION BEFORE US ALONG WITH DETAI L OF PERSON WHO PURCHASED THE PROPERTY ARE MENTIONED THEREIN. IT C LEARLY SHOWS THAT THE PROPERTY OF ANDHERI (EAST) REFERRED ABOVE WAS P URCHASED BY TWO PERSONS I.E. ASSESSEE AND HIS BROTHER. THE PROPERTY BEING COMMERCIAL IS NOT DISPUTED. 12. THUS UNDER THE GIVEN FACTS AND CIRCUMSTANCES O F THE CASE WE ARE THE CONSIDERED VIEW THAT THE INTEREST OF RS.1 4 6 785/- HAS BEEN RIGHTLY CLAIMED AS BUSINESS EXPENDITURE AS IT HAS B EEN PAID ON THE LOAN TAKEN TO PURCHASE PROPERTY FOR BUSINESS PURPOS ES AND INTEREST EXPENDITURE HAS BEEN CLAIMED AFTER DEDUCTING TAX AT SOURCE AND ALL DOCUMENTARY EVIDENCE PLACED BEFORE US ASSERTS THIS FACT. WE THEREFORE SET ASIDE THE FINDING OF THE LD. CIT(A) AND ALLOW THE GROUND NO. 2(A) RAISED BY THE ASSESSEE. AS REGARDS THE GRO UND NO. 2B THE SAME BECOMES INFRUCTUOUS AS WE HAVE ALREADY DELETED THE DISALLOWANCE OF INTEREST OF RS.1 46 250/- U/S 36(1) (III) OF THE ACT. OTHER GROUNDS ARE GENERAL IN NATURE. IFTEKAR AHMED ITA NO. 4188/M/2019 7 13. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 /08/202 1. SD/- SD/- ( SAKTIJIT DEY ) ( MANISH BORAD ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 31 /08/2021. RAHUL SHARMA SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSISTANT REGISTRAR) ITAT MUMBAI