DEEPAK DHAR GUPTA,NEW DELHI vs. ACIT, NEW DELHI

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ITA 2340/DEL/2017Status: DisposedITAT Delhi07 January 2020AY 2011-122 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee should be given an opportunity to submit details regarding the loan and its utilization before the CIT(A). This would allow the revenue to take a considered decision based on the submitted evidence.

What were the facts?

The assessee appealed an addition of Rs. 9,01,670/- confirmed by the CIT(A). The issue involved the disallowance of interest claimed under Section 36(1)(iii) due to a lack of supporting documents regarding loan utilization for business purposes.

What were the issues?

Whether the disallowance of interest claimed under Section 36(1)(iii) was justified without providing the assessee an opportunity to submit evidence regarding loan utilization for business purposes.

Which sections of the Income-tax Act were involved?

Section 36(1)(iii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI

Before: Sh. H. S. SidhuDr. B. R. R. Kumar

For Respondent: Ms. Ashima Neb, Sr. DR
Hearing: 10.12.2019Pronounced: 07.01.2020

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by the assessee against the order of ld. CIT (A)-10, New Delhi dated 28.02.2017.

2.

During the course of hearing today, nobody was present on behalf of the assessee, neither any adjournment was sought, hence the matter being decided on merits based on the facts available on record.

3.

Following grounds have been raised by the assessee:

“On the facts and circumstances the ld. CIT (A) has erred by confirming the addition of Rs.9,01,670/-. The ld. CIT (A) has not appreciated the facts applicable to the case.

The ld. CIT (A) has not considered the deduction of payment of interest out of interest income.”

4.

The moot issue pertains to disallowance of interest claimed by the assessee u/s 36(1)(iii) of the Income Tax Act, 1961. The said disallowance

2 Deepak Dhar Gupta has been confirmed by the ld. CIT (A) owing to lack of supporting documents regarding the loan and utilization thereof for the purpose of business. The assessee could not prove the nexus between the receipt of the loan and repayment of any earlier loans. The ld. DR fairly argued that the matter needs to be examined by the revenue and the assessee may be directed to provide necessary evidences before the authorities. We find that interest of justice would be met, if the assessee is given an opportunity to submit the details regarding the loan and utilization thereof before the ld. CIT (A) so that a considered decision can be taken up by the revenue based on the evidences submitted. The assessee is directed to comply to the notices issued by the revenue authorities and we hope that the assessee would not misuse the trust reposed upon him.

5.

In the result, the appeal of the assessee is allowed for statistical purpose. Order Pronounced in the Open Court on 07/01/2020.

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