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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
PER OM PRAKASH KANT, AM
This appeal has been preferred by the assessee against the order dated the 4th October, 2021 passed by the Ld. Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre (NFAC), Delhi [in short, ‘the Ld. CIT(A)’] for A.Y. 2010-11. During the course
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of the hearing on 27.10.2022, the assessee filed revised grounds of of the hearing on 27.10.2022, the assessee filed revised grounds of of the hearing on 27.10.2022, the assessee filed revised grounds of appeal which are reproduced as under: appeal which are reproduced as under:-
Ground no. 1: Disallowance u/s 14A Ground no. 1: Disallowance u/s 14A amounting to amounting to 13,11,430/- 13,11,430/-
a. On the facts and in the circumstances of the case and in law, the a. On the facts and in the circumstances of the case and in law, the a. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the disallowance Rs.13,11,430 / Ld. CIT(A) has erred in confirming the disallowance Rs.13,11,430 / Ld. CIT(A) has erred in confirming the disallowance Rs.13,11,430 /- u/s. 14A of the IT Act read with rule 8D(2) of the Income Tax Rules u/s. 14A of the IT Act read with rule 8D(2) of the Income Tax Rules u/s. 14A of the IT Act read with rule 8D(2) of the Income Tax Rules 1962 subject to partial 1962 subject to partial relief by way of replacing the interest amount relief by way of replacing the interest amount at Rs. 27,75,397/ at Rs. 27,75,397/- for Rs.30,03,417/- for calculation u/r 8D. for calculation u/r 8D.
b. On the facts and in the circumstances of the case and in law, the b. On the facts and in the circumstances of the case and in law, the b. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in completely disregarding the fact that Assessee's Ld. CIT(A) erred in completely disregarding the fact that Assessee's Ld. CIT(A) erred in completely disregarding the fact that Assessee's own interest free funds stood at Rs.15,82,93,419/ est free funds stood at Rs.15,82,93,419/-against the est free funds stood at Rs.15,82,93,419/ investment of Rs.6,22,67,077/ investment of Rs.6,22,67,077/-and therefore no disallowance u/s and therefore no disallowance u/s 14A is called for in the matter. 14A is called for in the matter.
Ground no.2: Addition u/s 68 amounting to Rs.86,000 / Ground no.2: Addition u/s 68 amounting to Rs.86,000 / Ground no.2: Addition u/s 68 amounting to Rs.86,000 /-
On the facts and in the circumstances of the case a On the facts and in the circumstances of the case a On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the addition of Rs. 86,000/ CIT(A) has erred in confirming the addition of Rs. 86,000/ CIT(A) has erred in confirming the addition of Rs. 86,000/- in respect of Income from House property. of Income from House property.
Ground no.3: Addition U/s 68 amounting to Rs.39,43,820 / Ground no.3: Addition U/s 68 amounting to Rs.39,43,820 / Ground no.3: Addition U/s 68 amounting to Rs.39,43,820 /-
a. On the facts and in the circumstances of the case and in law, the a. On the facts and in the circumstances of the case and in law, the a. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the addition of Rs. 39,43,820/ CIT(A) has erred in confirming the addition of Rs. 39,43,820/ CIT(A) has erred in confirming the addition of Rs. 39,43,820/- made by the Ld. AO u/s 68 on account of unexplained cash credit made by the Ld. AO u/s 68 on account of unexplained cash credit made by the Ld. AO u/s 68 on account of unexplained cash credit for unsecured, loan taken by the Assessee from his daughters for unsecured, loan taken by the Assessee from his daughters for unsecured, loan taken by the Assessee from his daughters Parthvi S. Mariwala and Yahvi S. Mariwala. Parthvi S. Mariwala and Yahvi S. Mariwala.
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b. The Ld. CIT Appeal oug b. The Ld. CIT Appeal ought to have held that the amounts of ht to have held that the amounts of respective loans i.e. Rs. 14,16,910/ respective loans i.e. Rs. 14,16,910/- from Parthvi S. Mariwala and from Parthvi S. Mariwala and Rs.24,81,910/ Rs.24,81,910/- from from Yahvi Yahvi S. S. Mariwala Mariwala mentioned mentioned in in the the Assessment order are completely wrong as the same are the amount Assessment order are completely wrong as the same are the amount Assessment order are completely wrong as the same are the amount of outstanding as at 31st March 2 of outstanding as at 31st March 2010 and not the amount of loans 010 and not the amount of loans taken during the year. taken during the year.
c. The Ld. CIT Appeal failed to appreciate that the Assessee has c. The Ld. CIT Appeal failed to appreciate that the Assessee has c. The Ld. CIT Appeal failed to appreciate that the Assessee has taken two loans of Rs. 16,07,910/ taken two loans of Rs. 16,07,910/- each from Parthvi S. Mariwala each from Parthvi S. Mariwala and Yahvi S. Mariwala as per the loan confirmation and bank and Yahvi S. Mariwala as per the loan confirmation and bank and Yahvi S. Mariwala as per the loan confirmation and bank statements submitted during the course of assessment and appeal submitted during the course of assessment and appeal submitted during the course of assessment and appeal proceedings. proceedings.
d. The Ld. CIT Appeal ought to have considered the fact that the d. The Ld. CIT Appeal ought to have considered the fact that the d. The Ld. CIT Appeal ought to have considered the fact that the each loan of Rs 16,07,910/ each loan of Rs 16,07,910/- has been sourced out of the maturity has been sourced out of the maturity proceeds of Tata Mutual Funds as apparent from the Bank proceeds of Tata Mutual Funds as apparent from the Bank proceeds of Tata Mutual Funds as apparent from the Bank Statements of the loan creditors Parthvi S. Mariwala and Yahvi S. ements of the loan creditors Parthvi S. Mariwala and Yahvi S. ements of the loan creditors Parthvi S. Mariwala and Yahvi S. Mariwala.
Briefly stated the facts of the case are that Briefly stated the facts of the case are that the assessee, an the assessee, an individual was engaged in the business of trading in shares and individual was engaged in the business of trading in shares and individual was engaged in the business of trading in shares and leasing properties against rental. For the year under consideration, leasing properties against rental. For the year under leasing properties against rental. For the year under the assessee filed return of income on 15.10.2010 declaring total the assessee filed return of income on 15.10.2010 declaring total the assessee filed return of income on 15.10.2010 declaring total income of Rs. NIL. The return of income was revised subsequently. income of Rs. NIL. The return of income was revised subsequently. income of Rs. NIL. The return of income was revised subsequently. However, the total income remained same at Rs. NIL. The return of However, the total income remained same at Rs. NIL. The return of However, the total income remained same at Rs. NIL. The return of income filed by the assessee was selected f income filed by the assessee was selected for scrutiny assessment or scrutiny assessment
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and statutory notices under the Income Tax Act, 1961 [in short, and statutory notices under the Income Tax Act, 1961 [in short, and statutory notices under the Income Tax Act, 1961 [in short, “the Act”] were issued and complied with. “the Act”] were issued and complied with. In the assessment In the assessment completed u/s. 143(3) of the Act on 28.03.2013, the Assessing completed u/s. 143(3) of the Act on 28.03.2013, the Assessing completed u/s. 143(3) of the Act on 28.03.2013, the Assessing Officer assessed the total income at Rs. ssessed the total income at Rs.56,83,998/ 98/- after making addition to the income from house property, disallowance u/s. 14A addition to the income from house property, disallowance u/s. 14A addition to the income from house property, disallowance u/s. 14A and addition for unexplained cash credit u/s. 68 of the Act. The and addition for unexplained cash credit u/s. 68 of the Act. The and addition for unexplained cash credit u/s. 68 of the Act. The claim of the deduction claim of the deduction for payment of the TDS in respect of the for payment of the TDS in respect of the disallowance made in earlier year was also disallowance made in earlier year was also denied by the Assessing denied by the Assessing Officer. Aggrieved, the assessee filed appeal before the Ld. CIT(A) Officer. Aggrieved, the assessee filed appeal before the Officer. Aggrieved, the assessee filed appeal before the who after considering the submission of the assessee allowed part who after considering the submission of the assessee allowed part who after considering the submission of the assessee allowed part relief to the assessee. Aggrieved with the disallowances sustained, relief to the assessee. Aggrieved with the disallowances sustained, relief to the assessee. Aggrieved with the disallowances sustained, the assessee is in appeal befo the assessee is in appeal before the Income Tax Appellate Tribunal re the Income Tax Appellate Tribunal [ITAT] by way of raising grounds as reproduced above. [ITAT] by way of raising grounds as reproduced above. [ITAT] by way of raising grounds as reproduced above.
Before us, the ld. Counsel of the assessee has filed Before us, the ld. Counsel of the assessee has filed Before us, the ld. Counsel of the assessee has filed a Paper Book containing pages 1 to 46. Book containing pages 1 to 46.
The revised ground no. 1 relates to disallowance of The revised ground no. 1 relates to disallowance of The revised ground no. 1 relates to disallowance of Rs.13,11,430/- u/s. 14A of the Act. u/s. 14A of the Act.
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Brief facts qua this issue are that the assessee h Brief facts qua this issue are that the assessee h Brief facts qua this issue are that the assessee has shown tax free income of Rs.20,32,100/ 20,32,100/- from various sources. The assessee from various sources. The assessee made suo moto disallowance of Rs. disallowance of Rs.4,02,454/- against earning of the against earning of the exempted income. The Assessing exempted income. The Assessing Officer observed various loans Officer observed various loans taken by the assessee and interest paid including interest on taken by the assessee and interest paid including inte taken by the assessee and interest paid including inte overdraft to banks [Rs. overdraft to banks [Rs.55,953/-], interest on loan [Rs. n loan [Rs.27,19,444/-], interest on car loan [Rs. interest on car loan [Rs.2,28,020/-]. The Assessing Officer observed The Assessing Officer observed total investment in partn total investment in partnership firms, shares of listed companies, ership firms, shares of listed companies, mutual funds and ot mutual funds and other investments totaling to Rs. her investments totaling to Rs.6,22,67,077/- as on 31.03.2010. In view of no disallowance made in respect of the In view of no disallowance made in respect of the In view of no disallowance made in respect of the interest expense, the Assessing Officer invoking Rule 8D of the interest expense, the Assessing Officer invoking Rule 8D of the interest expense, the Assessing Officer invoking Rule 8D of the Income Tax Rules, 1962 [in short, “the Rules”] made disallowance 1962 [in short, “the Rules”] made disallowance 1962 [in short, “the Rules”] made disallowance as under:-
i) U/r. 8D(2)(i) U/r. 8D(2)(i) – Rs. NIL ii) U/r. 8D(2)(ii) U/r. 8D(2)(ii) – Rs. 9,88,602/- iii) U/r. 8D(2)(iii) U/r. 8D(2)(iii) – Rs. 3,22,828/-
In this manner, he In this manner, he made total disallowance of Rs. made total disallowance of Rs.13,11,430/- u/s. 14A r.w.r. 8D. On further appeal, the ld u/s. 14A r.w.r. 8D. On further appeal, the ld. CIT(A) directed to . CIT(A) directed to
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reduce the interest on car loan for the purpose of calculation of reduce the interest on car loan for the purpose of calculation of reduce the interest on car loan for the purpose of calculation of disallowance u/r. 8D(2)(ii). 8D(2)(ii).
We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that the assessee has suo moto suo moto made disallowance of Rs. made disallowance of Rs.4,02,454/- u/s. 14A towards expenditure for earning exempted income which are in 14A towards expenditure for earning exempted income 14A towards expenditure for earning exempted income the nature of administrative expenses and therefore no separate the nature of administrative expenses and therefore no separate the nature of administrative expenses and therefore no separate addition of Rs. 3,22,828/ addition of Rs. 3,22,828/- made by the Assessing Officer u/r. made by the Assessing Officer u/r. 8D(2)(iii) is required separately being the disallowance made by the ii) is required separately being the disallowance made by the ii) is required separately being the disallowance made by the assessee assessee assessee on on on the the the administrative administrative administrative expenses expenses expenses higher higher higher than than than the the the computation of the Assessing Officer u/r. 8D(2)(iii). As far as computation of the Assessing Officer u/r. 8D(2)(iii) computation of the Assessing Officer u/r. 8D(2)(iii) interest disallowance u/r. 8D(2)(ii) is concerned, the Ld. Counsel of interest disallowance u/r. 8D(2)(ii) is concerned, the interest disallowance u/r. 8D(2)(ii) is concerned, the the assessee submitted that the assessee was having sufficient assessee submitted that the assessee was having sufficient assessee submitted that the assessee was having sufficient owned funds for investment owned funds for investment towards earning exempted income. The towards earning exempted income. The Ld. Counsel referred to the Balance Sheet filed by the assessee as . Counsel referred to the Balance Sheet filed by the assessee as . Counsel referred to the Balance Sheet filed by the assessee as on 31.03.2010 available on page no. 6 of the Paper Book wherein it on 31.03.2010 available on page no. 6 of the Paper Book wherein it on 31.03.2010 available on page no. 6 of the Paper Book wherein it is seen that the Capital of the assessee stands at Rs.15,82,93,419/- is seen that the Capital of the assessee stands at Rs.15,82,93,419/ is seen that the Capital of the assessee stands at Rs.15,82,93,419/ whereas the investments as on 31.03.2010 is appearing at whereas the investments as on 31.03.2010 is appearing a whereas the investments as on 31.03.2010 is appearing a
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Rs.6,22,67,077/-. Further, the . Further, the Ld. Counsel of the assessee also . Counsel of the assessee also referred to the amount of own capital of Rs. he amount of own capital of Rs.17,39,80,590/ 17,39,80,590/- as on 31.03.2008 .2008 against against investment investment of of Rs.5,16,33,218/ Rs. 5,16,33,218/- as on 31.03.2008 and amount of own capital of Rs. nd amount of own capital of Rs.16,72,31,578/ 16,72,31,578/- as on 31.03.2009 against nst investment investment of of Rs.6,68,64,158/ Rs. 6,68,64,158/- as on 31.03.2009. The Ld. Counsel of the assessee relied on the decision . Counsel of the assessee relied on the decision . Counsel of the assessee relied on the decision of the Hon’ble Supreme Court in the case of South Indian Bank South Indian Bank of the Hon’ble Supreme Court in the case of Ltd. v. CIT (Civil Appeal no. 9606 of 2011) Ltd. v. CIT (Civil Appeal no. 9606 of 2011). The relevant part of . The relevant part of the decision is reproduced as under: on is reproduced as under:-
In a situation where the assessee has mixed fund (made up 17. In a situation where the assessee has mixed fund (made up 17. In a situation where the assessee has mixed fund (made up partly of interest free funds and partly of interest partly of interest free funds and partly of interest partly of interest free funds and partly of interest- bearing funds) and payment is made out of that mixed fund, the investment must and payment is made out of that mixed fund, the investment must and payment is made out of that mixed fund, the investment must be considered to have been made o be considered to have been made out of the interest free fund. To the interest free fund. To put it another way, in respect of payment made out of mixed fund, it put it another way, in respect of payment made out of mixed fund, it put it another way, in respect of payment made out of mixed fund, it is the assessee who has such right of appropriation and also the is the assessee who has such right of appropriation and also the is the assessee who has such right of appropriation and also the right to assert from what part of the fund a particular investment is right to assert from what part of the fund a particular investment is right to assert from what part of the fund a particular investment is made and it may no made and it may not be permissible for the Revenue to make an t be permissible for the Revenue to make an estimation of a proportionate figure. For accepting such a estimation of a proportionate figure. For accepting such a estimation of a proportionate figure. For accepting such a proposition, it would be helpful to refer to the decision of the Bombay proposition, it would be helpful to refer to the decision of the Bombay proposition, it would be helpful to refer to the decision of the Bombay High Court in High Court in Pr. CIT v. Bombay Dyeing and Mfg. Co. Ltd2 y Dyeing and Mfg. Co. Ltd2 where the answer was in favour of the assessee on the question, whether the answer was in favour of the assessee on the question, whether the answer was in favour of the assessee on the question, whether the Tribunal was justified in deleting the disallowance under Tribunal was justified in deleting the disallowance under Tribunal was justified in deleting the disallowance under Section 80M of the Act on the presumption t of the Act on the presumption that when the funds available to hat when the funds available to
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the assessee were both interest free and loans, the investments the assessee were both interest free and loans, the investments the assessee were both interest free and loans, the investments made would be out of the interest free funds available with the made would be out of the interest free funds available with the made would be out of the interest free funds available with the assessee, provided the interest free funds were sufficient to meet the assessee, provided the interest free funds were sufficient to meet the assessee, provided the interest free funds were sufficient to meet the investments. The resultan investments. The resultant SLP of the Revenue challenging the t SLP of the Revenue challenging the Bombay High Court judgment was dismissed both on merit and on Bombay High Court judgment was dismissed both on merit and on Bombay High Court judgment was dismissed both on merit and on delay by this Court. The merit of the above proposition of law of the delay by this Court. The merit of the above proposition of law of the delay by this Court. The merit of the above proposition of law of the Bombay High Court would now be appreciated in the following Bombay High Court would now be appreciated in the following Bombay High Court would now be appreciated in the following discussion.
In the abov 18. In the above context, it would be apposite to refer to a similar e context, it would be apposite to refer to a similar decision in Commissioner of Income Tax (Large Tax Payer Unit) Vs. decision in Commissioner of Income Tax (Large Tax Payer Unit) Vs. decision in Commissioner of Income Tax (Large Tax Payer Unit) Vs. Reliance Industries Ltd3 where a Division Bench of this Court Reliance Industries Ltd3 where a Division Bench of this Court Reliance Industries Ltd3 where a Division Bench of this Court expressly held that where there is finding of fact that interest free expressly held that where there is finding of fact that interest free expressly held that where there is finding of fact that interest free funds available to assessee were sufficient to meet its investment it s available to assessee were sufficient to meet its investment it s available to assessee were sufficient to meet its investment it will be presumed that investments were made from such interest will be presumed that investments were made from such interest will be presumed that investments were made from such interest free funds.
In HDFC Bank Ltd. Vs. Deputy Commissioner of Income Tax4, 19. In HDFC Bank Ltd. Vs. Deputy Commissioner of Income Tax4, 19. In HDFC Bank Ltd. Vs. Deputy Commissioner of Income Tax4, the assessee was a Scheduled Bank and the issue there the assessee was a Scheduled Bank and the issue there the assessee was a Scheduled Bank and the issue therein also pertained to disallowance under pertained to disallowance under Section 14A. In this case, the . In this case, the Bombay High Court even while remanding the case back to Tribunal Bombay High Court even while remanding the case back to Tribunal Bombay High Court even while remanding the case back to Tribunal for adjudicating afresh observed (relying on its own previous for adjudicating afresh observed (relying on its own previous for adjudicating afresh observed (relying on its own previous judgment in same assessee’s case for a different Assessment Year) t in same assessee’s case for a different Assessment Year) t in same assessee’s case for a different Assessment Year) that, if assessee possesses sufficient interest free funds as against that, if assessee possesses sufficient interest free funds as against that, if assessee possesses sufficient interest free funds as against investment in tax free securities then, there is a presumption that investment in tax free securities then, there is a presumption that investment in tax free securities then, there is a presumption that investment which has been made in tax free securities, has investment which has been made in tax free securities, has investment which has been made in tax free securities, has come out of of of interest interest interest free free free funds funds funds available available available with with with assessee. assessee. assessee. In In In such such such situation Section 14A Section 14A of the Act would not be applicable. Similar of the Act would not be applicable. Similar views have been expressed 3 (2019) 410 ITR 466 SC/ (2019) 20 views have been expressed 3 (2019) 410 ITR 466 SC/ (2019) 20 views have been expressed 3 (2019) 410 ITR 466 SC/ (2019) 20 SCC 478. 4 (2 4 (2016) 383 ITR 529 (Bom) / 2016 SCC Online Bom 016) 383 ITR 529 (Bom) / 2016 SCC Online Bom
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1109 by other High Courts in CIT Vs. Suzlon Energy Ltd.5, CIT Vs. by other High Courts in CIT Vs. Suzlon Energy Ltd.5, CIT Vs. by other High Courts in CIT Vs. Suzlon Energy Ltd.5, CIT Vs. Microlabs Ltd.6 and CIT Vs. Max India Ltd.7 Mr. S Ganesh the Microlabs Ltd.6 and CIT Vs. Max India Ltd.7 Mr. S Ganesh the Microlabs Ltd.6 and CIT Vs. Max India Ltd.7 Mr. S Ganesh the learned Senior Counsel while citing these cases from the High learned Senior Counsel while citing these cases from the High learned Senior Counsel while citing these cases from the High Courts have further p Courts have further pointed out that those judgments have attained ointed out that those judgments have attained finality. On reading of these judgments, we are of the considered finality. On reading of these judgments, we are of the considered finality. On reading of these judgments, we are of the considered opinion that the High Courts have correctly interpreted the scope opinion that the High Courts have correctly interpreted the scope opinion that the High Courts have correctly interpreted the scope of Section 14A Section 14A of the Act in their decisions favouring the assessees. n their decisions favouring the assessees.
Applying the same logic, the disallowance would be legally 20. Applying the same logic, the disallowance would be legally 20. Applying the same logic, the disallowance would be legally impermissible for the investment made by the assessees in impermissible for the investment made by the assessees in impermissible for the investment made by the assessees in bonds/shares using interest free funds, under bonds/shares using interest free funds, under Section 14A Section 14A of the Act. In other words, if investments in securities is made out of Act. In other words, if investments in securities is made out of Act. In other words, if investments in securities is made out of common funds and the assessee has available, non common funds and the assessee has available, non common funds and the assessee has available, non-interest-bearing funds larger than the investments made in tax funds larger than the investments made in tax- free secur free securities then in such cases, disallowance under in such cases, disallowance under Section 14A cannot be made. cannot be made.”
7.1 In view of the above discussion, since the assessee has In view of the above discussion, since the assessee has In view of the above discussion, since the assessee has adequate funds to cover the exempt income yielding investments adequate funds to cover the exempt income yielding investments adequate funds to cover the exempt income yielding investments and respectfully following the decision of the Hon’ble Supreme respectfully following the decision of the Hon’ble Supreme respectfully following the decision of the Hon’ble Supreme Court referred above, we allow this ground of appeal accordingly. Court referred above, we allow this ground of appeal accordingly. Court referred above, we allow this ground of appeal accordingly.
Ground no. 2 of the appeal relates to the addition of Ground no. 2 of the appeal relates to the addition of Ground no. 2 of the appeal relates to the addition of Rs.86,000/- under the head under the head – Income from House Property is not Income from House Property is not pressed. Hence, this ground of appeal is dismissed. nce, this ground of appeal is dismissed.
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The ground no. 3 of the appeal relates to the addition of Rs. The ground no. 3 of the appeal relates to the addition of Rs. The ground no. 3 of the appeal relates to the addition of Rs. 39,43,820 u/s. 68 in respect of unsecured loan taken by the 39,43,820 u/s. 68 in respect of unsecured loan taken by the 39,43,820 u/s. 68 in respect of unsecured loan taken by the assessee.
Brief Brief Brief facts facts facts qua qua qua this this this issue issue issue are are are that that that the the the amount amount amount of of of Rs.88,66,131/- was appear was appearing in the balance sheet of the assessee ing in the balance sheet of the assessee and the assessee was asked to explain the nature and source and the assessee was asked to explain the nature and source and the assessee was asked to explain the nature and source thereof. The Assessing Officer observed that The Assessing Officer observed that loans taken from loans taken from 2 parties amounting to amounting to Rs.39,43,820/- were taken during the year were taken during the year under consideration, details of which are as under:-
Sr. No. Name of party Amount (Rs.) Amount (Rs.) 1 Parthvi S Mariwala Parthvi S Mariwala 14,61,910 2 Yahvi S Mariwala Yahvi S Mariwala 24,81,910 Total Total 39,43,820 39,43,820 11. In the assessment completed, the Assessing O In the assessment completed, the Assessing O In the assessment completed, the Assessing Officer made the addition of Rs.39,43,820/ 39,43,820/- on the ground that the assessee failed to on the ground that the assessee failed to prove the genuineness and creditworthiness of the loans taken. On prove the genuineness and creditworthiness of the loans taken. On prove the genuineness and creditworthiness of the loans taken. On further appeal, the ld. CIT(A) confirmed the addition. further appeal, the ld. CIT(A) confirmed the addition. further appeal, the ld. CIT(A) confirmed the addition.
Before us, the Ld Ld. Counsel of the assessee explained that the . Counsel of the assessee explained that the alleged unsecured loans of Rs. loans of Rs.39,43,820/- were taken by the were taken by the assessee from his daughters Partvi S Mariwala and Yahvi S. assessee from his daughters Partvi S Mariwala and Yahvi S. assessee from his daughters Partvi S Mariwala and Yahvi S.
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Mariwala. Further, he clarified that the amounts taken by the ld. Further, he clarified that the amounts taken by the ld. Further, he clarified that the amounts taken by the ld. Assessing Officer for the purpose of making addition were the Assessing Officer for the purpose of making addition were the Assessing Officer for the purpose of making addition were the amounts which stood as amounts which stood as on the balance sheet date of 31.03.2010 on the balance sheet date of 31.03.2010 and not the amounts taken during the year under consideration. In and not the amounts taken during the year under consideration. In and not the amounts taken during the year under consideration. In this regard, the ld. Counsel drew our attention to page no. 38 and this regard, the ld. Counsel drew our attention to page no. 38 and this regard, the ld. Counsel drew our attention to page no. 38 and 39 of the Paper Book wherein the confirmations of both the parties 39 of the Paper Book wherein the confirmations of both the parties 39 of the Paper Book wherein the confirmations of both the parties are placed wherein it is noted that in the case of Yahvi S. Mariwall, in it is noted that in the case of Yahvi S. Mariwall, in it is noted that in the case of Yahvi S. Mariwall, the opening balance of loan reflects at Rs. balance of loan reflects at Rs.8,87,000/- - and amount of loan taken during the loan taken during the year under consideration is Rs. year under consideration is Rs.16,07,910/- and closing balance stood at Rs. nd closing balance stood at Rs.24,81,910/-. As regards Parthvi S. . As regards Parthvi S. Mariwall, riwall, the the opening opening debit debit balance balance of of loan loan appears appears at at Rs.1,33,000/-, loan taken during the year is Rs. an taken during the year is Rs.16,07,910/ 16,07,910/- and the closing balance stood at Rs. he closing balance stood at Rs.14,61,910/-. In regard to the nature In regard to the nature and source of loan, in addition to the confirmations, the ld. Counsel and source of loan, in addition to the confirmations, the ld. Counsel and source of loan, in addition to the confirmations, the ld. Counsel referred to the bank statements at page no. 40 and 42 of the Paper referred to the bank statements at page no. 40 and 42 of the Paper referred to the bank statements at page no. 40 and 42 of the Paper Book and explained the source of the lenders being out of the Book and explained the source of the lenders being out of the Book and explained the source of the lenders being out of the maturity proceeds of Tata Mutual Funds. These facts have been maturity proceeds of Tata Mutual Funds. These facts have been maturity proceeds of Tata Mutual Funds. These facts have been duly verified from the bank statements which was also filed before duly verified from the bank statements which was also filed befor duly verified from the bank statements which was also filed befor the ld. CIT(A) along with the submissions filed 12.09.2019 and the ld. CIT(A) along with the submissions filed 12.09.2019 and the ld. CIT(A) along with the submissions filed 12.09.2019 and
Shyamm Mariwala. 12 ITA No. 2494/M/2021
07.10.2019. In view of above, In view of above, the assessee has discharged his onus the assessee has discharged his onus of proving the identity of the lenders, genuineness of the of proving the identity of the lenders, genuineness of the of proving the identity of the lenders, genuineness of the transaction and creditworthiness of the lenders as required u/s. 68 transaction and creditworthiness of the lenders as required u/s. transaction and creditworthiness of the lenders as required u/s. of the Act. Therefore, we set aside the finding of the ld. CIT(A) on the of the Act. Therefore, we set aside the finding of the ld. CIT(A) on the of the Act. Therefore, we set aside the finding of the ld. CIT(A) on the issue in dispute and delete the addition of Rs. and delete the addition of Rs.39,43,820/ 39,43,820/-. The ground no. 3 of the appeal is accordingly allowed. ground no. 3 of the appeal is accordingly allowed.
In the result, the appeal of the assessee is partly allowed. In the result, the appeal of the assessee is partly allowed. In the result, the appeal of the assessee is partly allowed.
Order pronounced under Rule 34(4) Order pronounced under Rule 34(4) of the ITAT Rules, of the ITAT Rules, 1963 on 22/12/2022. /12/2022. Sd/- Sd/ Sd/- (RAHUL CHAUDHARY RAHUL CHAUDHARY) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 22/12/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, BY ORDER, //True Copy// (Sr. Private Secretary) (Sr. Private Secretary) ITAT, Mumbai ITAT, Mumbai