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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
आदेश / O R D E R Per Amarjit Singh (AM): This appeal filed by the assesse is directed against the order passed by the ld. CIT(A) NFAC, dated 01.05.2023 for A.Y. 2013-14. The assessee has raised the following grounds before us:
1. On the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals), NFAC erred in confirming the addition of Rs.1,15,702/- on assumption of household expenses debited in profit and loss account, without appreciating that the appellant had not claimed the said expenses in return of income.
P a g e | Leena Inder Jain Vs. The ITO-41(4)(2) 2. On the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals), NFAC erred in confirming the addition of Rs.3,09,720/-, which was added on notional basis on advance given to M/s Atharva Enterprises.
On the facts and the circumstances of the case and in law, the Commissioner of Income Tax(Appeals), NFAC erred in confirming the addition of Rs.80,000/- without appreciating that the said amount was received from airways corporation, the firm where assessee is partner.
On the facts and the circumstances of the case and in law, the Commissioner of Income Tax (Appeals), NFAC erred in confirming the addition of Rs.8,00,000/- on account of difference in balance confirmation of J. P. Jain Loan Account, without appreciating that, there was no difference as per the confirmation. The appellant craves leaves to add, to delete or amend any of the above grounds of appeal at the time of hearing.”
Fact in brief is that return of income declaring total income of Rs.12,97,840/- was filed on 30.07.2013. The assessment u/s 143(3) of the Act was finalised on 22.02.2016 and total income was assessed at Rs.26,11,345/-. Further fact of the case are discussed while adjudicating the ground of appeal
filed by the assessee as follows: Ground No. 1: Addition of Rs.115,702/- on household expenses:
3. During the course of assessment the assessing officer observed that assesse has included household expenses of Rs.115,702/- in the interest expenses claimed u/s 57 of the Acttherefore, same was disallowed and added to the total income of the assessee.
4. The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.
Heard both the sides and perused the material on record. Before us the ld. Counsel submitted that assessee has not claimed any deduction of household expenses and the same was separately reduced from the capital account of theassessee. Even the assessee had brought these facts before the assessing officer and the ld. CIT(A) that not any deduction of household expenses were claimed out of the taxable income P a g e | Leena Inder Jain Vs. The ITO-41(4)(2) of the assessee and same was reduced from the capital account of the assesse as mentioned at para 4 of the assessment order. In this regard, ld. Counsel has also referred the copy of capital account of the assessee for the year ended 31.03.2021 placed in the paper book showing that household expenses of Rs.1,15,702.00 was reduced from the capital account of the assessee and there was no any document and material referred by the assessing officer which showed that assessee had claimed any deduction of the household expenses from the taxable income of the assessee. Therefore, this ground of appeal of the assessee is allowed. Ground No.2: Addition of Rs.309,720.0as notional interest charged on advance:
During the course of assessment the AO stated that assessee has given advance of Rs.25,81,000/- to M/s Atharva Enterprises on 20.10.2010 on which no interest was earned. Therefore, assessing officer has computed notional interest @ 12% on the said amount to the amount ofRs.309,720/- and added to the total income of the assessee.
The assesse filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.
Heard both the sides and perused the material on record. Before us the AO referred the copy of balance sheet of the assessee placed at page no. 5 of the paper book and submitted that assessee had made investment of Rs.25,81,000/- under the head investment in the balance sheet for acquiring shares and the same was given out of the interest free funds available with the assessee in the balance sheet in the form of capital to the amount of Rs.105,83,489/-. The ld. Counsel also submitted that assesse has charged interest on the loan amount shown under the head loan and advances from other parties i.eRs.328,811/- from Airway Surgical Pvt. Ltd. and Rs.16,55,713/- from P a g e | Leena Inder Jain Vs. The ITO-41(4)(2) AdeshwarRealtors. Considering the aforesaid facts and submission of the assessee the action of the assessing officer of charging notional interest is not justified, therefore, this ground of appeal
of the appeal is also allowed. Ground No. 3: Addition of Rs.80,000/- pertaining to suspense account:
9. During the course of assessment the AO noticed that assessee has shown Rs.80,000/- on the credit side of the suspense account. The assessing officer has disallowed the same as unexplained payment made to M/s Airways Marketing and added to the total income of the assesse.
10. The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assesse.
11. Heard both the sides and perused the material on record. Before us the ld. Counsel submitted that assessee has received the amount of Rs.80,000/- towards remuneration and same was included in the amount of Rs.184,313/- already shown as income in the computation of total income. He referred copy of computation of total income placed in the paper book and copy of bank statement showing receiving of the amount on 09.06.2012 and also referred copy of ledger account of Airways Marketing wherein amount was taken to the suspense account as the same was mistakenly shown in the account of Airways Corporation and also referred page no. 18 of the paper book as copy of suspense account showing that the same amount was credited to the account of Airways Marketing on 31.03.2013 and also referred bank account of Airways Corporation showing that amount of Rs.80,000/- was credited in the bank account. In the light of the above facts and circumstances we don’t find any justification in disallowing the P a g e | Leena Inder Jain Vs. The ITO-41(4)(2) aforesaid amount therefore this ground of appeal of the assessee is allowed. Ground No. 4: Confirming addition of Rs.8,00,000/- on account of difference in balance confirmation on loan account:
12. During the course of assessment the assessing officer noticed that assessee has obtained unsecured loan from J.P. Jain amounting to Rs.44,00,000/-, however in the loan confirmation letter submitted by the assessee the closing balance of the loan amount was shown at Rs.36,00,000/- as on 31.03.2013. Therefore, difference of Rs.8,00,000/- was added to the total income of the assesse.
13. The assesse filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.
14. Heard both the sides and perused the material on record. In this regard, the ld. Counsel submitted that assessee has not received any amount of Rs.8,00,000/- from Shri J.P. Jain and the loan balance outstanding from Shri J.P. Jain was to the amount of Rs.44,00,000/- as on 31.03.2013 and actually the assesse has received an amount of Rs.8,00,000/- on 18.10.2012 from Mrs. Sadhana Rajesh Jain and the brought forward balance in the loan account of Shri J.P. Jain was Rs.44,00,000/-. He also filed reconciled ledger account of Jitendra K. Jain &Sadhana Jain showing correction in the loan entry which was incorrectly shown in the account. We find that these relevant supporting document were not verified by the assessing officer, therefore, we restore this issue to the file of the AO for verification of the claim of the assessee that actually this loan was received from Mrs. Sadhana Jain and not from Shri J.P. Jain as per copies of accounts and documents placed in the paper book. Therefore, this ground of appeal of the assessee is allowed for statistical purposes.
P a g e | Leena Inder Jain Vs. The ITO-41(4)(2)
In the result, the grounds no. 1 to 3 are allowed and ground no. 4 is allowed for statistical purposes.
Order pronounced in the open court on 23.10.2023 Sd/- Sd/- (KuldipSingh) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 23.10.2023 Rohit: PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविवनवध, आयकर अपीलीय अवधकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file.
सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीिीय अतिकरण/ ITAT, Bench, Mumbai. No. Details Date Initials Designation 1 Draft dictated on Sr.PS/PS 2 Draft Placed before author Sr.PS/PS 3 Draft proposed & placed before the Second JM/AM Member 4 Draft discussed/approved by Second Member JM/AM 5 Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date on which file goes to the AR P a g e | Leena Inder Jain Vs. The ITO-41(4)(2)
10 Date of Dispatch of order