SHRI BHARATBHAI S. SAVALIYA,SURAT vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(3), SURAT

Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2013-14, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-3, Surat [in short “the ld. CIT(A)”] in Appeal No. CAS- 3/471/2015-16 dated 18.08.2017, which in turn arises out of an order passed by the Assessing Officer (AO) u/s 143(3) of the Income Tax Act, 1961 [hereinafter referred to as the “Act”].

Grievances raised by the assessee are as follows: “1. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in making disallowance of Rs.11,42,000/- on account of interest expenses. 2. It is therefore prayed that above addition made by assessing officer and confirmed by Commissioner of Income-tax (Appeals) may please be deleted.

Assessee craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”

On appeal, ld CIT(A) confirmed the action of the assessing officer. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us.

We have heard the rival contentions, perused the material on record and duly considered facts of the case. Shri Sapnesh Sheth, Learned Counsel for the assessee submits before us the acknowledgement Return of Income of Shri Bharatbhai S. Savaliya (assessee) for AY.2013-14. He also submitted computations of total income which is placed at page no. 2 and 3 of paper book. The Learned Counsel also submits the balance sheet of the assessee which is placed at paper book page nos.5 and 6. By relying on these documents, the Learned Counsel submits that assessee made investment in partnership firm out of own fund. Therefore, no addition is warranted. Learned Counsel also submits the copy of income tax return of M/s. N.S. Patel for AY.2013-14 and computation of total income of M/s N.S. Patel for AY.2013-14 and stated that there is no concealment of income at all and the assessee has not diverted its funds for other activities other than business activities, therefore no disallowances is warranted. On the other hand, the Learned Departmental Representative (ld. DR) for the Assessment Year. 2013-14 Shri Bharatbhai S.Savaliya Revenue relied on the stand taken by the assessing officer. We note that funds were invested in other partnership firms being M/s Premier Corporation, M/s Deasya Enterprises, Venus Enterprises, etc. and these investments were made out of own funds, hence no disallowance should be made. Therefore, based on this factual position we delete the addition.

In the result, appeal of the assessee is allowed.