SANDEEP BAGRODIA,KOLKATA vs. ACIT, CIRCLE - 36, KOLKATA, KOLKATA

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ITA 1356/KOL/2018Status: DisposedITAT Kolkata09 November 2018AY 2015-163 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had successfully proved the identity, creditworthiness, and genuineness of the loan transaction. Therefore, the addition made by the Assessing Officer was deemed arbitrary and deleted.

What were the facts?

The assessee took a loan of Rs. 5 lakhs from Smt. Kamla Devi Dudheria, providing details of the lender, her income tax return, and confirmation. The lender had received the funds from Dudhoria Textiles Pvt. Ltd. via RTGS. The Assessing Officer made an addition as the lender did not appear personally, despite her son appearing and confirming the transaction.

What were the issues?

Whether the addition made under Section 68 for a loan was justified when the lender's son confirmed the transaction and the lender was unable to appear due to illness. Whether the disallowance of interest on this loan was also liable to be deleted.

Which sections of the Income-tax Act were involved?

Section 68,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA

Before: Sri J. Sudhakar Reddy

Assessment Year: 2015-16 Sandeep Bagrodia…………….…………………....…………..……………...……..….…….........Appellant Prop: M/s Industrial Sales Corporation 19C, Sarat Bose Road Kolkata – 700 020 [PAN : ACTPJ 8260 C] Vs. Asst. Commissioner of Income Tax, Circle-36, Kolkata….………..……............Respondent Appearances by: Shri Sunil Surana, Advocate, appeared on behalf of the assessee. Shri Saurav Kumar, Addl. CIT, Sr. D/R. appearing on behalf of the Revenue. Date of concluding the hearing : September 25th , 2018 Date of pronouncing the order : November 9th , 2018 ORDER Per J. Sudhakar Reddy, AM :-

This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)–10, Kolkata (hereinafter the ‘Ld. CIT(A)’), passed u/s 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’), dt. 15/05/2018, relating to Assessment Year 2015-16. 2. The assessee is an individual. The addition that is disputed before me is an amount of Rs.5 lakhs/-, u/s 68 of the Act, and disallowance of interest expenditure of Rs.28,480/-, u/s 69C of the Act.

3.

I have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, I hold as follows:- The assessee took loan of Rs. 5 Lakhs/- from Smt. Kamla Devi Dudheria. Details of the lender, including address, income tax return filed and confirmation letter was Assessment Year: 2015-16 Sandeep Bagrodia filed before the Assessing Officer. Copy of the bank statement of the lender Smt. Kamla Devi Dudheria, was also filed. The loan in question was advanced by Smt. Kamla Devi Dudheria, from an amount received from Dudhoria Textiles Pvt. Ltd. on 20th October, 2014, by way of RTGS. Dudhoria Textiles Pvt. Ltd. was repaying loan taken by from Smt. Kamla Devi Dudheria. The Assessing Officer issued notice u/s 131 of the Act, to the loan creditor and as she did not appear, the addition was made. The assessee submits that the loan creditors Smt. Kamla Devi Dudheria, is a senior citizen of more than 67 years of age and as she was ill, she had sent her son, Shri Prashan Kumar Dudhoria, to appear before the Assessing Officer. The deposition of Shri Prashan Kr. Dudhoria, is on record, where he has confirmed the transactions. He also submitted that his mother was weak and could not appear before the Assessing Officer.

3.1. On these facts and circumstances, I am of the considered opinion that the assessee has proved the identity, creditworthiness and genuineness of the transactions and the addition in question is arbitrary and bad in law. Thus, the same is deleted. Consequently, the disallowance made of interest paid on this loan is also deleted.

4.

In the result, appeal of the assessee is allowed.

Kolkata, the 9th day of November, 2018.

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