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Income Tax Appellate Tribunal, HYDERABAD ‘ SMC ’ BENCH, HYDERABAD.
Before: SHRI S.S. GODARAShri Chanbasha Shaik,
O R D E R This assessee’s appeal for Asst. Year 2016-17 arise from the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi’s order dt.13.09.2021 passed in the case No. ITBA/NFAC/S/250/2021-22/1035520654(1) involving proceedings under Section 143(3) of Income Tax Act, 1961 (‘the Act’).
Heard both the parties. Case file perused.
The assessee raises the following substantive ground in the instant appeal :
2 ITA 487/Hyd/2021
Learned CIT(A)’s detailed lower appellate discussion affirming the Assessing Officer’s action making interest disallowance reads as under :
“4. Decision The facts of the submission of the appellant have duly been considered Ground No.1 to 4 are related to disallowance of interest of Rs.13,31,950. The A.O. has disallowed interest of Rs.13,31,950/- u/s.36(1)(iii). The A.O. has given the finding that in loan account No.2, the interest expense included interest payment pertaining to A.Y. 2015- 16, even though the appellant follows mercantile system of 3 ITA 487/Hyd/2021 accounting. The A.O. has held that expense pertaining to the relevant A.Y. can only be allowed. He has proceeded to compute eligible interest payable at Rs.9,44,550/- at the rate of 18% for the relevant A.Y. 2016-17 in respect of loan account No.2 and the remaining interest claim of Rs.13,31,950/- was disallowed. The appellant has taken the plea that since interest was paid by cheque, the same should be allowed. The appellant has not furnished any other document etc. in support of his grounds of appeal. In view of the above, I don’t find any reason to differ with the findings of the A.O. Hence ground No.1, 2 and 3 are dismissed.”
4. Suffice to say, both the learned representatives reiterate their respective stands against and in favour of correctness of the impugned disallowance. It is an admitted fact that neither the Assessing Officer nor the CIT(A) have examined the corresponding relevant facts and circumstances of the assessee having claimed the impugned interest expenditure in Assessment Year 2016-17 wherein at the rate of 18% than the earlier assessment year 2015-16; as the case may be.
5. Coupled with this, the fact remains that the CIT(A) has passed his lower appellate order during covid-19 pandemic outbreak only involving all lockdown restrictions. Faced with this situation, I deem it appropriate to restore the instant appeal back to the Assessing Officer for his afresh adjudication as per law within three effective opportunities of hearing.
4 ITA 487/Hyd/2021 6. This assessee's appeal is allowed for statistical purposes in above terms. Order pronounced in the open court on 16th Mar., 2021.