NIKHAR TRADING PRIVATE LIMITED,KOLKATA vs. ITO, WARD 12(1),, KOLKATA

The only issue raised by the assessee in the various grounds of appeal is against the order of ld. CIT (A) confirming the addition of ₹9 lacs as made by the ld. AO on account of interest paid on loan to M/s Samarohi Traders Pvt. Ltd.

The facts in brief are that the assessee filed the return of income on 29.09.2019, declaring total income at ₹nil. The case of the assessee was reopened u/s 147 of the Income-tax Act, 1961 (the Act) by issuing notice u/s 148 of the Act on

In the appellate proceedings, the ld. CIT (A) dismissed the appeal of the assessee by upholding the order of the ld. Assessing Officer.

After hearing the rival contentions and perusing the materials available on record, I find that the case of the assessee was reopened on the ground that the assessee has taken loan of ₹80 lacs from Mr. Birendra Kumar Patni, whereas the assessee has not undertaken any loan during the year of ₹80 lacs. I note that the assessee has only taken loan in the preceding assessment year from M/s Samarohi Traders Pvt. Ltd. on which the interest has been paid during the year amount to ₹ 9 lacs after deduction of tax at source. I also note that even the amount of interest paid on the said loan was not charged to the Profit and Loss account but was capitalized during the year. Therefore, the order passed by

In the result, the appeal of the assessee is allowed.