DINESH V BAHIRWANI,MUMBAI vs. INCOME TAX OFFICER-24(1)(5), MUMBAI

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ITA 5853/MUM/2017Status: DisposedITAT Mumbai31 January 2018AY 2013-143 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issue to the file of the Assessing Officer for fresh examination. This was based on the Tribunal's previous decision in the assessee's own case for the preceding assessment year.

What were the facts?

The Assessing Officer disallowed interest paid to a bank on a loan facility amounting to Rs. 6,40,827/-. The assessee's appeal to the CIT(A) was dismissed.

What were the issues?

Whether the disallowance of interest expenditure on a bank loan was justified. The issue required fresh examination by the Assessing Officer.

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, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI D.T. GARASIA

For Appellant: Shri Satya Prakash Singh, A.R
For Respondent: Ms. N. Hemalatha, D.R
Hearing: 08.01.2018Pronounced: 31.01.2018

Per D.T. Garasia, Judicial Member:

1.

The present appeal has been preferred by the assessee against the order dated 23.06.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2013-14.

2.

The short facts of the case are that assessee is an individual and is a proprietor of firm M/s. Satya Tex and Trinity Trading engaged in the business of trading fabrics and textile materials. During the assessment proceedings the Assessing Officer (hereinafter referred to as the AO) disallowed interest paid to bank on account of loan facility available to the tune of Rs.6,40,827/-.

4.

During the course of hearing before me, the Ld. A.R. submitted that issue in controversy is covered by the decision of Tribunal in the assessee’s own case in A.Y. 2012-13 wherein the Tribunal has set aside the issue by observing as under: “8. I heard learned Departmental Representative and perused the record. I am of the view that this issue also requires fresh examination at the end of the Assessing Officer in view of the submissions made by learned AR. Accordingly I set aside the order passed by the learned CIT(A) on this issue and restore the same to the file of the Assessing Officer with the direction to examine this issue afresh by duly considering the explanations and information that may be furnished by the Assessing Officer and also by considering the decision relied upon by the assessee. Accordingly the AO may take appropriate decision in accordance with the law.

9.

Last issue relates to disallowance of Z 5,36,277/- made out of interest expenditure. Learned AR submitted that this issue is connected with the disallowance made u/s. 14A of the Act. He submitted that the Assessing Officer had already disallowed a part of interest expenditure and hence he was not right in making addition u/s 36(1)(iii) again. He submitted that the AO has made identical disallowance out of interest expenditure in AY 2013-14 only as an alternative addition. In view of the said submissions, I am of the view that this issue also requires examination at the end of the Assessing Officer. Accordingly, I set aside the order passed by the learned CIT(A) on this issue and restore the same to the file of the Assessing Officer for examining it afresh.” 5. Respectfully following the same, I restore this issue back to the file of AO.

6.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 31.01.2018.

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