MRS. CHANDRIKABEN K. PATEL,,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-2(1)(1),, AHMEDABAD

When the matter was called for hearing, the learned AR for the assessee submitted at the outset that the assessee had obtained lands from two parties namely; (i) Jitendra R. Parikh (HUF) and (ii) Chirag V. Patel, which was not found to be genuine by the AO in AY 2012- 13. As a corollary, interest thereon amounting to Rs.1,69,687/- in aggregate claimed during the AY 2014-15 in question was also disallowed.

The learned AR for the assessee thereafter submitted that the aforesaid issue on bonafides / genuineness of loan from the above referred two parties was carried before the Tribunal in the preceding AY 2012-13. The ITAT in ITA No. 3638/Ahd/2015 concerning AY 2012-13 set aside the issue to the file of the AO. The learned AR thereafter referred to the order of the AO passed under s.143(3) r.w.s. 254 of the Act dated 17.12.2018 and submitted that the genuineness of loan from the aforesaid two parties were accepted after verification and no addition on this count has been sustained by the AO in the second round of proceedings. In this background, the learned AR submitted that once the genuineness of loan in the preceding AY 2012- 13 has been ultimately accepted, the interest expenses incurred by the assessee in the subsequent assessment year on these loans requires to be accepted as claimed and no disallowance therewith is called for.

The learned DR relied upon the orders of the lower authorities.

We have carefully considered the rival submissions. In view of the narrative drawn on behalf of the assessee, we do not see any justifiable reason for disallowance of interest expenditure where the

In the result, appeal of the Assessee is allowed.