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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy
order : January 10th, 2020 ORDER Per J. Sudhakar Reddy, AM :- This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) – 13, Kolkata, (hereinafter the “ld.CIT(A)”), passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 17/01/2019, for the Assessment Year 2013-14, on the following grounds:- “
l. For that on the facts of the case, the order passed by the Ld. CIT(A) is completely arbitrary, unjustified and illegal.
2. For that on the facts of the case, the Ld·. CIT(A) was wrong in dittoing the order of the A.O. and confirming the addition of Rs.5,26,540/- as interest received from partner which is completely arbitrary, unjustified and illegal.
3. For that on the facts of the case, the Ld. CIT(A) was wrong in not considering the fact that the partner may be capital withdrawn from Firm as per I.T. Rules, but the A.O. has vindictively added @9% of capital withdrawal i.e. Rs.5,26,540/- as interest, therefore, the order passed by the A.O. is completely arbitrary, unjustified and illegal.
4. For that on the facts of the case, the charging interest u/s. 234B & 234C which are mechanically wrong and illegal.
5. For that the appellant reserves the right to adduce any further ground or grounds, if necessary, at or before the hearing of the appeal.”
2. After hearing rival submission, I find that both the Assessing Officer a well as the ld. CIT(A) have committed factual mistakes while making the disallowance that has to be seen is whether the assessee has interest free funds and if so the presumption should be that partners drawing are from these interest free funds as held by the Hon’ble Assessment Year: 2013-14 M/s. Pradeep Trading Company Bombay High Court in the case of Bombay High Court in the case of CIT v. Reliance Utilities & Power Ltd. [2009] 313 ITR Reliance Utilities & Power Ltd. [2009] 313 ITR 340 (Bombay) and in the case of and in the case of HDFC Bank Ltd. v. Deputy Commissioner of Income Bank Ltd. v. Deputy Commissioner of Income-tax - 2(3), Mumbai, [2016] 383 ITR 529 (Bombay) 2(3), Mumbai, [2016] 383 ITR 529 (Bombay). Hence, I set aside to the file of the Assessing Officer with a direction that he may consider all et aside to the file of the Assessing Officer with a direction that he may consider all et aside to the file of the Assessing Officer with a direction that he may consider all the interest free funds available with the assessee including trade creditors and the interest free funds available with the assessee including trade creditors and the interest free funds available with the assessee including trade creditors and thereafter dispose off the case, in accordance with law. thereafter dispose off the case, in accordance with law. the assessee is allowed for statistical purposes.
In the result, appeal of In the result, appeal of the assessee is allowed for statistical purposes.
Kolkata, the Kolkata, the 10th day of January, 2020.