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Income Tax Appellate Tribunal, “SMC-3” BENCH, AHMEDABAD
Before: SHRI P.M. JAGTAP, VICE-
आदेश/O R D E R
PER P.M. JAGTAP, VICE-PRESIDENT :
This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-5, Vadodara [“CIT(A) in short]” dated 12.01.2017 and the grounds raised by the assessee therein read as under:-
“1. On the facts and in the circumstances of your Appellant’s case and in law, the Honorable CIT(A)-5, Vadodara has erred by confirming the addition made by ld. AO of an amount of Rs.2,40,000/- u/s 68 of the Act, on the ground that appellant has not proved the identity and creditworthiness of the depositor and genuineness of transaction of the loan taken.
On the facts and in the circumstances of your Appellant’s case and in law, the Honorable CIT(A)-5, Vadodara has erred by confirming disallowance made by ld. AO of Rs.43,017/- u/s 40(a)(ia) of the Act, on the ground that tax deductible is not deducted u/s 194J of the Act.
On the facts and in the circumstances of your Appellant’s case and in law, the Honorable CIT(A)-5, Vadodara has erred by confirming disallowance made by thd ld. AO of Rs.25,23,060/- at ad-hoc 12% as interest on the aggregate loans of Rs.2,10,25,500/- in respect of five parties, on the ground that interest bearing funds
ITA No. 1975/Ahd/2018 Late Shri Bhimraj P. Gupta Vs. ITO AY : 2012-13 2
are utilized for advancing interest-free loans to the said parties and the appellant has not furnished any explanation with regard to business expediency of advancing the said loans.”
At the time of hearing before us, the learned Counsel for the assessee has not pressed Ground Nos. 1 & 2 raised by the assessee in this appeal; the same are accordingly dismissed as not pressed.
As regards the issue involved in Ground No.3 relating to the disallowance of Rs.25,23,060/- made by the Assessing Officer and confirmed by the learned CIT(A) on account of interest allegedly attributable to the loans of Rs.2,10,25,500/- given to five parties for non-business purpose, the learned Counsel for the assessee has invited our attention to the balance-sheet of the assessee as on 31.03.2012 to submit that sufficient own funds in the form of partners’ capital as well as interest free loans were available with the assessee for giving interest free loans to the concerned five parties. He has contended that the said loans thus were given by the assessee from his own funds as well as interest free loans and since the interest bearing loans were not utilized for giving the said loans, the disallowance of interest made by the Assessing Officer and confirmed by the learned CIT(A) is not sustainable. The learned DR, on the other hand, has submitted that this explanation regarding the availability of own funds and interest free funds to give interest free loans now being offered before the Tribunal was never offered by the assessee either during the course of assessment proceedings before the Assessing Officer or during the course of appellate proceedings before the learned CIT(A) inspite of sufficient opportunity afforded to him. He has contended that this matter may, therefore, be sent back to the Assessing Officer for giving him an opportunity to verify the claim of the assessee. We find merit in this contention of the learned DR. We, therefore, set aside the impugned order of learned CIT(A) on this issue and restore the matter to the file of the Assessing Officer for deciding the same afresh after verifying the claim of
ITA No. 1975/Ahd/2018 Late Shri Bhimraj P. Gupta Vs. ITO AY : 2012-13 3
the assessee that the interest free loans to the concerned five parties were given from his own funds and interest free loans as available at the relevant time.
In the result, the appeal of the assessee is treated as partly allowed for statistical purposes.
Order pronounced in the open Court on 20th July, 2022 at Ahmedabad.
Sd/- Sd/-
(MADHUMITA ROY) (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad, Dated 20/07/2022 *Bt
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त ( अपील ) / The CIT(A)- 5. �वभागीय ��त�न�ध आयकर अपील�य अ�धकरण/DR,ITAT, Ahmedabad, , 6. गाड� फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपील�य अ�धकरण ITAT, Ahmedabad 1. Date of dictation- 18.07.2022……….three pages dictation pad attached …… 2. Date on which the typed draft is placed before the Dictating Member …19.07.2022 ………… Other member.…19.07.2022………. 3. Date on which the approved draft comes to the Sr.P.S./P.S. - ……19.07.2022………… 4. Date on which the fair order is placed before the Dictating Member for Pronouncement …20.07.2022…. 5. Date on which the file goes to the Bench Clerk…20.07.2022……… 6. Date on which the file goes to the Head Clerk……………………………. 7. The date on which the file goes to the Assistant Registrar for signature on the order………………… 8. Date of Despatch of the Order………………