What did the Tribunal hold?

The Tribunal set aside the impugned order and restored the matter to the Assessing Officer. The AO is directed to decide the issue afresh after considering the additional evidence proposed to be filed by the assessee.

The assessee claimed a deduction for interest paid on a loan used to purchase a flat. The Assessing Officer disallowed the entire interest payment, considering the interest received by the assessee from another source.

What were the issues?

Whether the disallowance of interest paid by the assessee should be reduced by the interest income received, and the admissibility of additional evidence.

Sadhana Gajendra Vasa, Kolhapur vs ITO | ITAT Pune 2022

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri S.N. Puranik

For Respondent: Shri M.G. Jasnani

PER R.S.SYAL, VP : This appeal by the assessee is directed against the order dated 04-11-2019 passed by the ld. CIT(A)-2, Kolhapur, in relation to the assessment year 2016-17. 2. The only issue raised in this appeal is against the confirmation of addition of Rs.9,31,624 (out of total addition sustained at Rs.19,32,313) towards interest. 3. Briefly stated, the facts of the case are that the assessee is an individual, who is partner in several firms. She filed return declaring total income at Nil. During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee claimed deduction towards interest paid to Thakarshi Devshi AIM Association amounting to Rs.19,32,313. In addition, the assessee had also received interest from RECPL amounting to Rs.9,31,624. The AO observed that the interest payment by the assessee to Thakarshi Devshi AIM Association was towards the amount withdrawn from the firm used for purchasing a flat. He, therefore, disallowed the entire amount. The assessee‟s contention that only net interest of Rs.10,00,689 (Rs.19,32,313 – Rs.9,31,624) should be disallowed was repelled. No relief was allowed in the first appeal.

At the outset, the ld. counsel for the assessee submitted certain additional evidence in support of his contention that the disallowance of interest should be reduced by Rs.9,31,624. Such additional evidence was requested for admission as the same could not be filed earlier because of reasons beyond control of the assessee. Without going into the merits of sustenance or deletion of addition to this extent in the light of the additional evidence that the assessee is proposing to file, we are of the considered opinion that it would be just and fair if the impugned order on this score is set aside and the matter is restored to the file of the AO. We order accordingly and direct him to decide this issue afresh as per law, after considering the additional evidence that the assessee proposes to file in support of her claim. Needless to say, the assessee will be allowed opportunity of hearing by the AO.

In the result, the appeal is allowed for statistical purposes. Order pronounced in the Open Court on 16th November, 2022.

Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; नदिधांक Dated : 16th November, 2022 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to:

1. 1. अपीलधर्थी / The Appellant; प्रत्यर्थी / The Respondent; 2.

3. The CIT(A)-2, Kolhapur 4. The Pr.CIT, Kolhapur नवभधगीय प्रनिनिनर्, आयकर अपीलीय अनर्करण, पुणे “B” / DR 5. „B‟, ITAT, Pune 6. गधर्ा फधईल / Guard file आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अनर्करण ,पुणे / ITAT, Pune

Date 1. Draft dictated on 16-11-2022 Sr.PS 2. Draft placed before author 16-11-2022 Sr.PS 3. Draft proposed & placed before the JM second member 4. Draft discussed/approved by Second JM Member. 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *

SADHANA GAJENDRA VASA,KOLHAPUR vs. ITO, WARD 2(2), KOLHAPUR

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