ACIT, New Delhi v. M/s Anil Gupta, New Delhi

ITA 4600/DEL/2009 | 2005-2006
Pronouncement Date: 29-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 460020114 RSA 2009
Assessee PAN AAHPG8980A
Bench Delhi
Appeal Number ITA 4600/DEL/2009
Duration Of Justice 1 year(s) 11 month(s) 25 day(s)
Appellant ACIT, New Delhi
Respondent M/s Anil Gupta, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 29-11-2011
Date Of Final Hearing 29-11-2011
Next Hearing Date 29-11-2011
Assessment Year 2005-2006
Appeal Filed On 04-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI R.P.TOLANI JM AND SHRI R.P.TOLANI JM AND SHRI R.P.TOLANI JM AND SHRI R.P.TOLANI JM AND SHRI SHAMIM YAHYA SHAMIM YAHYA SHAMIM YAHYA SHAMIM YAHYA AM AM AM AM ITA NO. ITA NO. ITA NO. ITA NO.4 44 4600 600 600 600/DEL/20 /DEL/20 /DEL/20 /DEL/2009 0909 09 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 200 200 200 2005 55 5- -- -06 0606 06 ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF INCOME TAX INCOME TAX INCOME TAX INCOME TAX CIRCLE CIRCLE CIRCLE CIRCLE- -- -3 33 32 22 2(1) (1) (1) (1) NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SHRI ANIL GUPTA SHRI ANIL GUPTA SHRI ANIL GUPTA SHRI ANIL GUPTA B BB B- -- -67 DEFENCE COLONY 67 DEFENCE COLONY 67 DEFENCE COLONY 67 DEFENCE COLONY NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : AAHPG8980A. PAN : AAHPG8980A. PAN : AAHPG8980A. PAN : AAHPG8980A. (APPELLANT) (RESPONDENT) APPELLANT BY : MS.Y.S.KAKKAR SR.DR. RESPONDENT BY : NONE. ORDER ORDER ORDER ORDER PER PER PER PER R.P.TOLANI JM R.P.TOLANI JM R.P.TOLANI JM R.P.TOLANI JM : : : : THIS IS REVENUES APPEAL. SOLE GROUND RAISED IS A S UNDER:- WHETHER ON THE FACTS AND UNDER THE CIRCUMSTANCES T HE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.21 10 133/- DISALLOWED BY THE A.O. AFTER APPLYIN G PROVISIONS OF SEC. 57(III) OF THE I.T.ACT 1961. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE THE SERVICE OF NOTICE THROUGH THE DR. THE COPY OF SERVICE IS PLAC ED ON RECORD. LEARNED DR CONTENDS THAT THE ASSESSING OFFICER MADE THE ADDITION BY FOLLOWING OBSERVATIONS:- 5. IN THE COMPUTATION OF THE INCOME UNDER THE HEA D INCOME FROM OTHER SOURCES THE ASSESSEE HAS SHOWN INTEREST RECEIVED DURING THE YEAR AS RS.10 51 085.0 1 AND AGAINST THIS SHOWING RS.21 10 133 AS INTEREST PAID DURING THE YEAR HAS SET OFF THE INTEREST PAID TO THE EXTE NT OF INTEREST RECEIVED AND SHOWN NIL INCOME FROM OTHER SOURCES. FROM THE DETAILS FURNISHED BY THE ASSESSE E IT IS SEEN THAT ASSESSEE HAS GIVEN TOTAL LOAN OF RS.445 3 1 250/- AGAINST THE TOTAL LOAN RECEIPT OF RS.397 60 107. T HE ASSESSEE HAS RECEIVED AN INTEREST OF RS.10 51 085 F ROM TOTAL LOAN GIVEN AT RS.4 45 31 250 BUT PAID INTERE ST OF ITA-4600/DEL/2009 2 RS.21 10 133 FOR GIVEN LOAN OF ONLY RS.3 97 60 107. THUS BOTH TRANSACTIONS DO NOT BEAR ANY RELATION AND ARE MUTUALLY EXCLUSIVE. IT IS CLEAR FROM THE ABOVE TH AT BOTH THESE TRANSACTIONS DO NOT BEAR ANY RELATIONSHIP AND ARE INDEPENDENT ACTIVITIES ON THEIR OWN. SO THE ASSESS EE DOES NOT QUALIFY TO AVAIL THE BENEFIT OF SECTION 57(III) OF THE IT ACT 1961 BECAUSE AS PER SECTION 57(III) THE EXPEN DITURE SHOULD BE LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVE LY FOR THE PURPOSE OF MAKING OR EARNING SUCH INCOME. THUS THE DEDUCTION OF RS.10 51 085.01 CLAIMED AGAINST INTERE ST RECEIVED DURING THE YEAR IS DISALLOWED AND ADDED BA CK TO THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME F ROM OTHER SOURCES. ALSO BEING SATISFIED THAT THE ASSE SSEE HAS CONCEALED/FURNISHED INACCURATE PARTICULARS OF ITS I NCOME PENALTY PROCEEDING U/S 271(1)(C) IS BEING INITIATED ON THIS ACCOUNT. 3. THE ADDITION THUS WAS MADE ON THE GROUND THAT TH E EXPENDITURE OF INTEREST CLAIMED U/S 57(III) WAS NOT ATTRIBUTABL E TO THE INTEREST EARNED BY THE ASSESSEE AND OFFERED UNDER THE HEAD INCOME FROM OTHER SOURCES. CIT(A) HOWEVER FAILED TO APPRECIATE TH E FACTS PROPERLY AND GAVE THE RELIEF BY FOLLOWING OBSERVATIONS:- 7.9 I HAVE CAREFULLY CONSIDERED THE FACTS. THE LD .AO HAS NOT ATTEMPTED TO ESTABLISH AS TO HOW INTEREST PAYME NT HAD NO NEXUS WITH INTEREST RECEIVED. THERE IS NO INFOR MATION ABOUT ANY SINGLE TRANSACTION IN THE ASSESSMENT ORDE R WHICH COULD ESTABLISH THAT A PARTICULAR LOAN WAS NOT GIVE N OUT OF BORROWED MONEY. AO HAS NOT MADE A ONE-TO-ONE MATCH ING OF TRANSACTIONS NOR HAS HE COME OUT WITH OBSERVATIO NS THAT INTEREST BEARING LOANS WERE GIVEN TO RELATED PERSON S AT SUBSIDIZED OR ZERO RATE OF INTEREST OR OUT OF INTER EST FREE FUNDS. UNDER THESE CIRCUMSTANCES MERE STATEMENT B Y AO THAT ENTIRE INTEREST EXPENSES HAVE NOT BEARING ON I NTEREST INCOME IS ARBITRARY WITHOUT EVIDENCE AND HENCE NEE DS TO BE DISREGARDED. ACCORDINGLY ADDITION ON THIS GROUN D IS ALSO DELETED. 4. LEARNED DR CONTENDS THAT THE CIT(A) HAS NOT SPEL T OUT AS TO HOW THE ASSESSEE HAS DISCHARGED ITS BURDEN OF DEMONSTRA TING THAT THE INTEREST CLAIMED TO BE EXPENDITURE U/S 57(III) WAS RELATABLE TO THE INTEREST INCOME EARNED. CIT(A) FURTHER HAS ATTRIBU TED THIS BURDEN TO ITA-4600/DEL/2009 3 ESTABLISH ONE TO ONE MATCHING OF TRANSACTIONS WITHO UT REALIZING THAT THE SAME WAS THE BURDEN OF THE ASSESSEE AND NOT OF THE ASSESSING OFFICER. THEREFORE THE ORDER OF THE CIT(A) SHOULD BE REVERS ED OR ALTERNATIVELY THE ISSUE MAY BE SET ASIDE BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME AFRESH. 5. WE HAVE HEARD THE LEARNED DR AND PERUSED THE REL EVANT MATERIAL ON RECORD. NOBODY APPEARED ON BEHALF OF THE ASSESS EE. SINCE THE NOTICE HAS BEEN SERVED BY THE DEPARTMENT THEREFORE WE HAVE NO OPTION BUT TO DECIDE THE APPEAL OF THE REVENUE EX-P ARTE. WE FIND MERIT IN THE ARGUMENTS OF THE LEARNED DR. IN OUR V IEW THE CIT(A) HAS NOT GIVEN APPROPRIATE REASONS FOR GIVING RELIEF AND HOLDING THAT THE CLAIM OF INTEREST EXPENDITURE AS MADE BY THE ASSESS EE UNDER SECTION 57(III) WAS ALLOWABLE. IN OUR CONSIDERED VIEW IT IS FOR THE ASSESSEE TO DEMONSTRATE THE ALLOWABILITY OF THE EXPENDITURE AND ITS RELATABILITY BY ONE TO ONE TRANSACTION AND NOT OF THE ASSESSING OFF ICER. HOWEVER IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE INCLINED TO SET ASIDE THE ISSUE BACK TO THE FILE OF THE ASSE SSING OFFICER TO DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER AFFORDING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF HEARING ON 29 TH NOVEMBER 2011. SD/- SD/- ( (( (SHAMIM YAHYA SHAMIM YAHYA SHAMIM YAHYA SHAMIM YAHYA) )) ) (R.P.TOLANI (R.P.TOLANI (R.P.TOLANI (R.P.TOLANI) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 29.11.2011 VK. ITA-4600/DEL/2009 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT ASSISTANT REGISTRAR