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Income Tax Appellate Tribunal, MUMBAI BENCH “ E”, MUMBAI
आदेश/ ORDER
This appeal by the assessee is directed against the order of order Commissioner of Income Tax(Appeals)-25, Mumbai [in short 'the CIT(A)’] dated 28/02/2020 for the assessment year 2015-16.
The brief facts of the case as emanating from records are: The assessee is a Limited Liability Partnership (LLP) engaged in the business of builders and developers. In scrutiny assessment proceedings for the impugned assessment year, interest expenditure of Rs.3,27,79,977/- claimed by the assessee was disallowed u/s. 36(1)(iii)/37(1) of the Income Tax Act,1961 ( in short 'the Act'). Aggrieved by the assessment order dated 19/12/2017, the assessee filed appeal before the CIT(A). The assessee remained unsuccessful before the First Appellate Authority, hence, the present appeal before the Tribunal.
Shri Mandhar Vaidya appearing on behalf of the assessee submitted that the assessee was having sufficient interest free funds for advancing loans to the partner. The authorities below have erred in making addition of interest expenditure u/s. 36(1)(iii)/37(1) of the Act. The ld. Counsel for the assessee made a prayer to admit additional ground of appeal in respect of the aforesaid addition. The ld. Counsel for the assessee submitted that if additional ground is adjudicated in favour of the assessee, the original grounds raised in appeal would become academic. The ld. Counsel for the assessee further submitted that for adjudication of the additional ground no fresh documentary evidence is required to be adduced. The documents already on record would suffice to substantiate the contention raised in the additional ground.
4. Per contra, Shri Abhijeet Chaudhary representing the Department opposed the admission of additional ground at this stage.
5. The submissions made by both sides on the limited issue of admission of additional ground heard. The additional ground raised by the assessee reads as under:-
“The Ld. Commissioner (Appeals) erred in ignoring that the Appellant/asseesee had sufficient interest-free funds to cover the amount of capital withdrawn by its partner and hence a presumption arises, as held by the Hon'ble Apex Court in CIT V/s. Reliance Industries Ltd. {2019} 410 ITR 466,(SC), that the said amount is paid out of own/interest- free funds and therefore, no disallowance is called for u/s. 36(1)(iii) of the Act.”
For adjudication of aforementioned additional ground no additional evidence is required to be furnished. The ld. Departmental Representative has not controverted this fact. In the facts of the case additional ground raised by the assessee is admitted. Since, the contention raised in additional ground has been made for the first time before the Tribunal, we deem it appropriate to restore the issue back to the file of Assessing Officer to examine the same after affording reasonable opportunity of hearing to the assessee, in accordance with law.
In the result, appeal by the assessee is allowed for statistical purpose in the terms aforesaid.
Order pronounced in the open court on Thursday the 10th day of March, 2022.