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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-2, Jalandhar dated 13.02.2018 in respect of Assessment Year 2014-15.
Guru Nanak Dev C. Trust v. ITO 2. The assessee has raised the following grounds of appeal:
“The learned commissioner appeal has confirmed the addition of Rs. 155000/- on account of interest on car loan. The assessee is running homeopathic college and has bought Fortuner Car. The trustees of the trust are running their own business and are having their personal car also. Copy of registered certificate of cars was submitted to the learned income tax officer as well as commissioner of income tax (appeal). It has also win submitted even if interest is deducted from expenses. The assessee has spent more than 85% of its receipts during the year. So addition of interest of Rs.155000/- paid to bank for purchase of car is not justified and should be deducted.”
The issue disputed before us is regarding addition of expenses claimed towards interest of Rs.155000/- paid to bank on account of purchase of car. Admittedly, the car was purchased in the preceding assessment year and depreciation was added in in the computation itself and hence no disallowance on account of purchase of car amounting depreciation could be made in this year as rightly decided by the Ld. CIT (A) while granting relief to the assesse. The appellant contended that trustees are having their own cars and no disallowance is justified interest on car loan of Rs. 1,55,500. It is further stated that 85% of the funds have been spend even if disallowance on account of interest is up held. The CIT(A) has also considered the submission of the assesse and addressed the grievance of the appellant raised in the ground as regards to the interest expense claim of Rs.155000/- paid to bank on account of purchase
Guru Nanak Dev C. Trust v. ITO of car. In our view, the Ld. CIT(A) has been justified in directing the AO to verify the contention of the appellant that 85% of the funds have been spent even if disallowance on account of interest is up-held and compute the tax liability accordingly.
In view of above, we find no infirmity in the order of the Ld. CIT(A) and direct the AO to verify the contention of the appellant that 85% of the funds have been spent even if disallowance on account of interest is up- held and compute the tax liability as per law.
In view of aforesaid discussion, the appeal of the assesse is disposed of in the terms indicated as above.
Order pronounced under rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 on 31.01.2023.