MAYAVAN SHANTHI ,NAMAKKAL vs. ITO , WARD - 1 , NAMAKKAL

Brief facts of the case are that the assessee filed her return of income for the assessment year 2011-12 on 30.03.2012 admitting an income of ₹.1,66,600/- after deduction under section 80C of the Income Tax Act, 1961 [“Act” in short]. While computing the income, the assessee has claimed large interest expenses paid to the husband of the assessee

On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the issue involved in this appeal is squarely covered in favour of the assessee by the decision of the Tribunal in assessee’s own case for the assessment year 2012-13 and prayed for following the same to delete the addition. It was also contended that the claim of balance of interest amounting to ₹.1,95,600/- without considering the essential facts that the assessment order does not contain any mention/whisper about the same.

On the other hand, the ld. DR has submitted that no details have been filed by the assessee before the Assessing Officer in respect of mode of payments.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. On perusal of the assessment order, in the computation statement, the assessee has claimed interest payments amounting to ₹.10,54,317/- for the assessment year 2011-12 under the head expenses and the same are reproduced as under: Name Amount of interest paid (Rs.) Dr. R. Mayavan 8,58,717/- Mr. Partheeban, NKL 1,20,000/- M/s. Balaji Finance Loan 75,600/- 10,54,317/- The findings of the Assessing Officer in the assessment order at page 2 last para are reproduced as under: Further perusal of entries in the ledger of Smt. M. Shanthi, a sum of ₹.8,58,717/- is debited only by way of journal to Dr. R. Mayavan, which implies that the assessee has not paid any interest to him but only an accommodative entry. In view of the above, it is clear that the major portion of the interest was paid by the assessee though only 50% is her share as per the books of account. Therefore, the entire interest payment of ₹.8,58,717/- to M/s. Sundaram BNP Baripas made by the assessee to her husband Dr. R. Mayavan is not allowed to be deducted from ‘other sources’ as the assessee has failed to satisfy the conditions stipulated under sec. 57(iii) of the Income-tax Act, 1961. 6. The above findings of the Assessing Officer are contradictory. In the first sentence, the Assessing Officer observed that the assessee has

Further, in the assessment order, the Assessing Officer has given findings for the interest payment of ₹.8,58,717/-, whereas, while making disallowance of other interest payments, the Assessing Officer has not discussed anything about the claim of interest payment of ₹.1,20,000/- to Mr. Partheeban, NKL and ₹.75,600/- to M/s. Balaji Finance Loan. However, in the appellate order, the ld. CIT(A) has observed for the above interest payments that the assessee has not furnished the details of such interest, amount of loan and purpose for which the loan has been availed of, etc. and thereby, confirmed the disallowances made by the Assessing Officer.

Under the above facts and circumstances, we are of the considered opinion that the assessee shall be afforded one more opportunity to furnish complete details before the Assessing Officer, who shall consider and decide entire interest payments claimed by the assessee in accordance with law. Thus, we set aside the order of the ld. CIT(A) and

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 10th March, 2023 at Chennai.