Shri Rajeev Kumar, v. ITO, Meerut

ITA 5875/DEL/2010 | 2006-2007
Pronouncement Date: 25-10-2013 | Result: Partly Allowed

Appeal Details

RSA Number 587520114 RSA 2010
Assessee PAN ABNPK4210A
Bench Delhi
Appeal Number ITA 5875/DEL/2010
Duration Of Justice 2 year(s) 10 month(s) 2 day(s)
Appellant Shri Rajeev Kumar,
Respondent ITO, Meerut
Appeal Type Income Tax Appeal
Pronouncement Date 25-10-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 25-10-2013
Date Of Final Hearing 22-10-2013
Next Hearing Date 22-10-2013
Assessment Year 2006-2007
Appeal Filed On 23-12-2010
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 F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL D.AGRAWAL D.AGRAWAL D.AGRAWAL VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI U.B.S. BEDI U.B.S. BEDI U.B.S. BEDI U.B.S. BEDI JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.5875/DEL/2010 5875/DEL/2010 5875/DEL/2010 5875/DEL/2010 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2006 2006 2006 2006- -- -07 0707 07 SHRI RAJEEV KUMAR SHRI RAJEEV KUMAR SHRI RAJEEV KUMAR SHRI RAJEEV KUMAR 214 214 214 214- -- -A GANJ BAZAR A GANJ BAZAR A GANJ BAZAR A GANJ BAZAR MEERUT CANTT. MEERUT CANTT. MEERUT CANTT. MEERUT CANTT. PAN : PAN : PAN : PAN : A AA ABNPK4210A. BNPK4210A. BNPK4210A. BNPK4210A. VS. VS. VS. VS. INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER WARD WARD WARD WARD- -- -2(2) 2(2) 2(2) 2(2) MEERUT. MEERUT. MEERUT. MEERUT. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI O.P. SAPRA ADVOCATE. RESPONDENT BY : MS. Y. KAKKAR SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL D.AGRAWAL D.AGRAWAL D.AGRAWAL VP VPVP VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A) MEERUT DATED 18 TH OCTOBER 2010 FOR THE AY 2006-07. 2. THE ASSESSEE HAS RAISED AS MANY AS SIX GROUNDS. HOWEVER THEY ARE ALL AGAINST THE DISALLOWANCE OF INTEREST AMOUNT ING TO ` 1 35 191/-. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSING OFF ICER HAS DISALLOWED THE INTEREST ON THE GROUND THAT DURING T HE YEAR UNDER CONSIDERATION THE ASSESSEE HAS GIVEN INTEREST FREE ADVANCE OF ` 67 00 000/- TO M/S RAJ SNEH AUTO (INDIA) IN WHICH T HE ASSESSEE IS A DIRECTOR. INITIALLY THE ASSESSEE CLAIMED THE ADVA NCE FOR THE PURPOSE OF BUSINESS BUT WHEN HE WAS NOT ABLE TO SUBSTANTIATE T HE SAME IT WAS CONTENDED THAT THE ASSESSEE HAD ENOUGH NON-INTEREST BEARING FUNDS AND WHICH WERE UTILIZED FOR GIVING ADVANCES TO THE SAID COMPANY. 4. ON THE OTHER HAND IT WAS CONTENDED BY THE LEARN ED DR THAT THE BORROWED MONEY HAS BEEN UTILIZED FOR GIVING ADVANCE TO M/S RAJ SNEH ITA-5875/DEL/2010 2 AUTO (INDIA). SHE ALSO STATED THAT DURING THE YEAR UNDER CONSIDERATION THE BORROWED MONEY HAS CONSIDERABLY INCREASED. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. UNDER S ECTION 36(1)(III) OF THE INCOME-TAX ACT 1961 THE DEDUCTION IS ALLOWABL E FOR THE AMOUNT OF INTEREST PAID IN RESPECT OF CAPITAL BORROWED FOR TH E PURPOSE OF BUSINESS OR PROFESSION. THEREFORE THE CRUCIAL TEST IS THE UTILIZATION OF THE BORROWED MONEY. ADMITTEDLY DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS BORROWED SUBSTANTIAL AMOUNT. NEITHER THE ASSESSEE HAS EXPLAINED THE UTILIZATION OF THE BORROWED MONEY NOR THE ASSESSING OFFICER EXAMINED THE SAME. THE ASSESSING OFFICER M ADE THE DISALLOWANCE ON THE BASIS OF INTEREST FREE ADVANCE GIVEN BY THE ASSESSEE AND THEN HE PRESUMED THAT THE BORROWED MON EY HAS BEEN UTILIZED FOR SUCH PURPOSES WITHOUT ACTUAL VERIFICAT ION OF THE FACTS. IN VIEW OF THE ABOVE FACTS IN OUR OPINION THE MATTER NEEDS FURTHER EXAMINATION AT THE END OF THE ASSESSING OFFICER IN THE LIGHT OF THE PROVISION OF SECTION 36(1)(III) OF THE ACT. WE TH EREFORE SET ASIDE THE ORDERS OF AUTHORITIES BELOW ON THIS POINT AND RESTO RE THE MATTER TO THE FILE OF THE ASSESSING OFFICER. WE DIRECT HIM TO RE -EXAMINE THE ISSUE AS PER PROVISION OF SECTION 36(1)(III) AND THEREAFTER READJUDICATE IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT HE W ILL ALLOW ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DEE MED TO BE ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER 2013. SD/- SD/- ( (( (U.B.S. BEDI U.B.S. BEDI U.B.S. BEDI U.B.S. BEDI) )) ) (G.D.AGRAWA (G.D.AGRAWA (G.D.AGRAWA (G.D.AGRAWAL) L)L) L) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 25.10.2013 VK. ITA-5875/DEL/2010 3 COPY FORWARDED TO: - 1. APPELLANT : SHRI RAJEEV KUMAR 214 SHRI RAJEEV KUMAR 214 SHRI RAJEEV KUMAR 214 SHRI RAJEEV KUMAR 214- -- -A GANJ BAZAR MEERUT CANTT. A GANJ BAZAR MEERUT CANTT. A GANJ BAZAR MEERUT CANTT. A GANJ BAZAR MEERUT CANTT. 2. RESPONDENT : INCOME TAX OFFICER WARD INCOME TAX OFFICER WARD INCOME TAX OFFICER WARD INCOME TAX OFFICER WARD- -- -2(2) MEERUT. 2(2) MEERUT. 2(2) MEERUT. 2(2) MEERUT. 3. CIT 4. CIT(A) 5. DR ITAT ASSISTANT REGISTRAR