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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: Shri Rajpal Yadav & Shri Amarjit Singh
आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This assessee’s appeal for A.Y. 2010-11, arises from order of the CIT(A), Gandhinagar, Ahmedabad dated 01-07-2014, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.
The assessee has raised following grounds of appeal:- “1. The Id. C.I.T. (A) has erred in law and on facts in confirming the addition of Rs.5,71,200/- made u/s. 50C of the I.T. Act on the ground that the appellant has not pressed this ground during the course of appellate proceedings.
I.T.A No. 3046/Ahd/2014 A.Y. 2010-11 Page No 2 Alkaben Gauravbhai Patel vs. ITO
The Id. C.I.T. (A) has erred in law and on facts in confirming the addition of Rs.4,97,684/- out of adjustment of interest expenditure against interest income.” 3. The brief fact of the case is that assessee has filed return of income declaring income of Rs. 5,77,000/- on 28th December, 2010. Subsequently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the act on 29th August, 2011. During the course of assessment proceedings, the assessing officer noticed that assessee has sold two plots of land by two separate deeds dated 21st July, 2009 for Rs. 70,0000. In addition to stamp duty of Rs. 33,000/- for each of the plot the assessee has also paid additional stamp duties of Rs. 13995/- for each plot on 20th July, 2009. Therefore, the assessing officer has applied the provision of section 50C of the act and computed the sale considerations according to the additional stamp duty paid by the assessee. Accordingly, an amount of Rs. 5,71,200/- was added to the total income of the assessee. During the course appellate proceedings before ld. CIT(A) the ground of appeal was rejected on the reason that during the course of appellate proceedings, the assessee has not pressed for this ground of appeal.
3.1 The second issue is pertaining to addition of Rs. 4,97,684 out of adjustment of interest expenditure against interest income. During the course of assessment proceedings on the basis of AIR information, the assessing officer has noticed that assessee has shown interest income of Rs. 5,88,073/-. However in the profit and loss account, she had debited interest expenses of Rs. 5,16,845/-. On verification, the assessing officer has noticed that assessee has shown capital of Rs. 2,28,70,662/- and unsecured loan of Rs. 1,84,40,390/- in the balance sheet. He has also noticed that in asset side of the balance sheet the assessee has shown investment in agricultural land and investment in shares to the amount of Rs. 3,77,01,445/-. Considering the above details, the assessing officer has allowed interest expenses of Rs. 90,389/- against the interest income of Rs. 5,88,073/- and added the balance interest income of Rs. 4,97,684/- to the total income of the assessee.
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The Ld. CIT(A) has sustained the additions made by the assessing officer.
5.. We have heard both the rival contentions sides and perused the material on record carefully.
Regarding the 1st ground of appeal of confirming the addition of Rs. 5,71,200/- made u/s. 50C of the act the assessee has not pressed this ground of appeal before the ld. CIT(A). It is noticed that this issue is pertained to the assessing of income u/s. 50C of the act on the additional stamp duty of Rs. 13,995/- paid for two plots by the assessee on 20/07/2009. During the course of appellate proceedings, the ld. counsel could not controvert the impugned addition with any relevant material therefore this ground of appeal of the assesse is dismissed.
6.1 Regarding second issue of the disallowance of Rs. 4,97,684/- out of interest expenditure the assessing officer observed that assessee has shown investment in agricultural land and investment in shares of Rs. 3,77,01,445/- and stated that against interest income of Rs. 5,88,073/- expenses of Rs. 90,389/- was to be allowed. In this connection, we have examined the contention of the assessee claiming that her own capital as on 31-03-2010 was to the amount of Rs. 22870663/- and investment in the fixed assets and shares and LIC were to the amount of Rs.3,95,54,837/-. It was demonstrated that 58% of the investment was made from her own fund and remaining 42% investment was made from the borrowed funds. In view of the above facts it was contended that 42% of the interest expenses out of the total interest expenses of Rs. 11,06,847/- can be disallowed. It is noticed that the above facts was not disproved at the time of the appellate proceedings by the ld. CIT(A), therefore, we find merit in the contention of the ld. counsel and restrict the disallowance of interest expenses to the amount of Rs. 4,64,876/- and the remaining interest payment of Rs. 6,41,971/- is
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to be set off against the interest income. Accordingly, the appeal of the assessee is partly allowed.
In the result, the appeal of the assesse is partly allowed.
Order pronounced in the open court on 31-10-2018
Sd/- Sd/- (RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 31/10/2018 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद
I.T.A No. 3046/Ahd/2014 A.Y. 2010-11 Page No 5 Alkaben Gauravbhai Patel vs. ITO
Strengthened preparation & delivery of orders in the ITAT 1) Date of dictation 31/10/2018 2) Date on which the typed draft is placed before the 31/10/2018 Dictating Member & Other Member 3) Date on which the approved draft comes to the Sr. 31 /10/2018 P.S./P.S. 4) Date on which the fair order is placed before the 31 /10/2018 Dictating Member for pronouncement 5) Date on which the fair order comes back to the Sr. 02 /11/2018 P.S./P.S. 6) Date on which the file goes to the Bench Clerk 02 /11/2018 7) Date on which the file goes the Head Clerk 8) Date on which the file goes to the Assistant Registrar for signature on the order 9) Date of Dispatch of the order a.k