Smt. Rekha Gupta, New Delhi v. ITO, New Delhi

ITA 6667/DEL/2015 | 2009-2010
Pronouncement Date: 28-10-2016 | Result: Allowed

Appeal Details

RSA Number 666720114 RSA 2015
Assessee PAN AAAPG5119J
Bench Delhi
Appeal Number ITA 6667/DEL/2015
Duration Of Justice 10 month(s) 13 day(s)
Appellant Smt. Rekha Gupta, New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC 2
Tribunal Order Date 28-10-2016
Date Of Final Hearing 30-08-2016
Next Hearing Date 30-08-2016
Assessment Year 2009-2010
Appeal Filed On 15-12-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SM C - II NEW DELHI BEFORE SH. N. K. SAINI A CCOUNTANT M EMBER ITA NO. 6667/DEL/2015 : ASSTT. YEAR : 2009 - 1 0 SMT. REKHA GUPTA A - 11 NIZAMUDDIN WEST NEW DELHI - 110013 VS INCOME TAX OFFICER WARD - 52 ( 4 ) NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A AA PG5119J ASSESSEE BY : SH. P. D. MITTAL CA REVENUE BY : SH. S. K. JAIN SR. DR DATE OF HEARING : 30.08 .201 6 DATE OF PRONOUNCEMENT : 28 . 10 .201 6 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 30.10.2015 OF LD. CIT(A) - 3 GURGAON . 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE CONFIRMATION OF THE ADDITION OF RS. 4 57 500 / - MADE BY THE A O. 3. FACTS OF THE CASE IN BRIEF ARE THAT A SEARCH AND SEIZURE OPERATION WAS HELD ON 29.01.2009 AT THE RESIDENTIAL PREMISES OF THE ASSESSEE AND SURVEY U/S 133A(1) OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) WERE ALSO CONDUCTED IN VAR IOUS PREMISES OF THE OTHER ASSESSEES OF M/S STAR WIRE (I) LTD. GROUP SIMULTANEOUSLY. THE ASSESSEE FURNISHED THE RETURN OF INCOME DECLARING AN INCOME OF RS.7 16 715/ - . ITA NO. 6667 /DEL /201 5 REKHA GUPTA 2 4. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE HAD DEC LARED INTEREST INCOME FROM DEPOSITS MADE WITH M/S STAR WIRE INDIA LTD. AND M/S PSJ INDUSTRIAL CORPOR ATION AND FROM THE TOTAL INCOME T HE ASSESSEE HAD REDUCED RS. 6 55 315/ - AND RS.3 45 920/ - IN RESPECT OF INTEREST PAID ON LOANS TAKEN FROM M/S SITA RAM SURE NDER KUMAR & SH. THAKUR GOVIND DEV JI M.D. SANSTHAN. THE AO ALSO NOTICED THAT THE ASSESSEE HAD ADVANCED A LOAN OF RS.30 50 000/ - TO HER HUSBAND SH. MOHINDER KUMAR GUPTA BUT HAD NOT CHARGED INTEREST FROM HIM. HE ALSO MENTIONED THAT IF THE ASSESSEE HAD RECE IVED BACK THE ADVANCE MONEY GIVEN TO SH. MOHINDER KUMAR GUPTA AND SETTLED THE ACCOUNTS FROM WHERE SHE HAD TAKEN LOAN T HE QUANTUM OF INTEREST PAYABLE BY HER WOULD DEFINITELY REDUCE TO THAT EXTENT . THE AO WAS OF THE VIEW THAT THE ASSESSEE HAD KNOWINGLY NOT CHARGING INTEREST FROM HER HUSBAND ON THE MONEY ADVANCED TO HIM. HE WORKED OUT THE DEEMED INTEREST INCOME OF RS.4 57 500/ - BY APPLYING THE RATE OF INTEREST @ 15% O N RS.30 50 000/ - . 5 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE AMOUNT IN QUESTION WAS NOT ADVANCED OUT OF INTEREST BEARING BORROWED FUNDS AND FURNISHED THE COPIES OF ACCOUNT IN RESPECT OF INTEREST BEARING LOAN RECEIVED FROM M/S SITA RAM SURENDER KUMAR AND SH. THAKUR ITA NO. 6667 /DEL /201 5 REKHA GUPTA 3 GOVIND DEV JI M.D. SANSTHAN. IT WAS STATED THAT THERE WAS NO OTHER INTEREST BEARING FUNDS BORROWED BY THE ASSESSEE . I N SUPPORT OF THE ABOVE THE ASSESSEE FURNISHED THE BALANCE SHEET FOR THE YEAR UNDER CONSIDERATION AND EARLIER TWO YEARS. HOWEVER THE LD. CIT(A) DID NOT FIND MERIT IN THE SUBMISSION OF THE ASSESSEE AND SUSTAINED THE ADDITION MADE BY THE AO BY OBSERVING IN PARA 6 OF THE IMPUGNED ORDER AND UNDER: I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT WITH REGARD TO DISALLOWANCE OF RS. 4 57 500/ - MADE BY THE AO OUT OF THE INTEREST CLAIMED BY THE APPELLANT. THE APPELLANT HAS PAID INTEREST ON LOANS TAKEN AMOUNTING RS. 10 01 265/ - DURING THE YEAR WHICH HAS BEEN REDUCED FROM THE INTEREST INCOME EARNED DURING THE YEAR. THE APPELLANT HAS ALSO ADVANCED INTEREST FREE LOAN AMOUNTING TO RS. 30 50 000/ - TO HER HUSBAND SHRI M.K.GUPTA. IT IS AN UNDISPUTED FACT THAT THE APPELLANT HAD PAID INTEREST ON BORROWED FUNDS. THE UNCONTROVERTED FACT IS ALSO THAT THE BUSINESS FUNDS OF THE APPELLANT WERE ALSO DIVERTED WITHOUT INTE REST FOR LOANS/ADVANCES TO OTHERS. ON THE ONE HAND INTEREST WAS PAID FOR THE BORROWED FUNDS WHILE ON THE OTHER HAND NO INTEREST WAS CHARGED ON LOANS TO OTHERS. THE HON'BLE P&H HIGH COURT HELD IN THE CASE OF CIT VS. ABHISHEK INDUSTRIES LTD 286 ITR 1 THAT O NCE ASSESSEE HAS BORROWED CERTAIN FUNDS ON WHICH LIABILITY TO PAY INTEREST IS BEING INCURRED AND ON THE OTHER HAND CERTAIN AMOUNTS HAVE BEEN ADVANCED TO SISTER CONCERNS OR OTHER WITHOUT CHARGING ANY INTEREST AND WITHOUT BUSINESS PURPOSES THE ITA NO. 6667 /DEL /201 5 REKHA GUPTA 4 INTEREST TO T HE EXTENT THE ADVANCE HAS BEEN MADE WITHOUT CHARGING ANY INTEREST IS TO BE DISALLOWED. 6 . NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT A SUM OF RS .30.50 LAC WAS ADVANCED TO SH. M. K. GUPTA OUT OF INTEREST FREE ADVANCE S AND CAPITAL OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT NO INTEREST BEARING FUNDS WERE RECEIVED DURING THE YEAR UNDER CONSIDERATION AND THE OLD INTEREST BEARING FUNDS WERE CARRIED FORWARD FROM THE EARLIER YEARS. A REFERENCE WAS MADE TO PAGE NOS. 26 27 & 31 OF THE ASSESSEE S PAPER BOOK WHICH ARE THE COPIES OF ACCOUNT OF SH. THAKUR GOVIND DEV JI M.D. SANSTAN M/S SITA RAM SURENDER KUMAR GUPTA AND INTEREST PAID RESPECTIVELY. IT WAS FU RTHER SUBMITTED THAT NO NEXUS WAS PROVED IN BETWEEN THE INTEREST BEARING FUNDS WHICH WERE RECEIVED BY THE ASSESSEE IN THE EARLIER YEARS AND THE INTEREST FREE ADVANCE GIVEN OUT OF THE SURPLUS CAPITAL. THEREFORE THE ADDITION MADE ON ESTIMATE BASIS WAS NOT J USTIFIED. 7 . I N HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW . 8 . I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN ITA NO. 6667 /DEL /201 5 REKHA GUPTA 5 THE PRESE NT CASE IT IS AN ADMITTED FACT THAT THE INTEREST BEARING LOANS TAKEN BY THE ASSESSEE FROM M/S SITA RAM SURENDER KUMAR AND SH. THAKUR GOVIND DEV JI M.D. SANSTAN WERE OLD ONE AND NOT RECEIVED DURING THE YEAR UNDER CONSIDERATION. IT IS NOT THE CASE OF THE DEPARTMENT THAT THOSE INTEREST BEARING FUNDS WERE NOT USED IN THE BUSINESS OF THE ASSESSEE IN EARLIER YEARS. IT WAS ALSO NOT BROUGHT ON RECORD THAT ANY NEW INTEREST BEARING LOANS WAS RAISED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. IT IS ALSO NOTICED THAT THE O PENING CAPITAL BALANCE OF THE ASSESSEE AS ON 01.04.2008 WAS AT RS .1 29 14 761.05 AND THE CLOSING BALANCE IN THE CAPITAL ACCOUNT AS ON 31.03.2009 WAS AT RS.14 187 971.35 WHICH IS APPARENT FROM PAGE NO. 28 OF THE ASSESSEE S COMPILATION I.E. BALANCE SHEET AS ON 31.03.2009 SO IT CANNOT BE SAID THAT THE ASSESSEE WAS NOT HAVING SUFFICIENT SURPLUS CAPITAL TO GIVE THE INTEREST FREE ADVANCE OF RS.30 50 000/ - TO HER HUSBAND. IN THE PRESENT CASE NO NEXUS HAS BEEN ESTABLISHED IN THE INTEREST FREE ADVANCE OF RS.30 50 000 GIVEN TO SH. MOHINDER KUMAR GUPTA AND INTEREST BEARING FUNDS RECEIVED IN EARLIER YEARS . THEREFORE THE ADDITION MADE BY THE AO WAS BASED ON SURMISES AND CONJECTURE WHICH IS NOT TENABLE IN THE EYES OF LAW. ACCORDINGLY THE IMPUGNED ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) I S DELETED. ITA NO. 6667 /DEL /201 5 REKHA GUPTA 6 9 . IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRON OUNCED IN THE COURT ON 28 /10 /2016) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DAT ED: 28 /10 /2016 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR