HASMUKHLAL HARJIVANDAS SHAH HUF,BHAYANDER WEST THANE vs. INCOME TAX OFFICER WARD 32(1)(5) MUMBAI, MUMBAI

PDF · subscribers
ITA 248/MUM/2024Status: DisposedITAT Mumbai27 June 2024AY 2017-18Bench: SHRI PRASHANT MAHARISHI (Accountant Member)1 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 Assessing Officer assumed the assessee should have earned interest at 15% and added the difference (3%) to the total income. The Tribunal found that the actual interest received was at 12%, supported by loan confirmations and form 26AS. The payers of interest also confirmed payment at 12%. Therefore, the addition made by the AO was deemed incorrect.

What were the facts?

The assessee, a HUF, filed its return of income for AY 2017-18, declaring a total income of ₹8,11,670. The case was selected for limited scrutiny. The assessee offered interest income and claimed deductions, leading to a dispute over the interest rate charged and received.

What were the issues?

Whether the addition made by the Assessing Officer on account of assumed higher interest income is justified when actual interest received and confirmed by parties is at a lower rate.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 57(iii),Section 57(ii),Section 143(2),Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

For Appellant: Shri Satya Prakash Singh, AR
For Respondent: Shri R.R. Makwana, DR
Pronounced: 27.06.2024

Hasmukhlal Harjivan Shah Huf 01. (assessee /appellant) against the appellate order passed by Addl. Commissioner of Income-tax (Appeals)-5 [the learned CIT (A)] Kolkata for A.Y. 2017-18, dated 9th January, 2024, wherein the appeal filed by the assessee against the assessment order dated 23th December, 2019, passed under Section 143(3) of the Income-tax Act, 1961 (the Act) by the Income Tax Ward 32(5), Mumbai (the learned Assessing Officer), was dismissed. The assessee aggrieved with the same has preferred this appeal.

2.

The brief facts of the case shows that the assessee is a HUF filed its return of income declaring total income of ₹8,11,670/- on 27th July, 2017. The case was selected for limited scrutiny and notice under Section 143(2) of the Act was served on 10th August, 2018. During The learned Assessing Officer was of the view that as assessee 03. agreed to charge interest at the rate of 15% but calculated interest only at the rate of 12%. The learned Assessing Officer worked out 3% different of interest and added the sum of ₹9,35,523/- to the total income of the assessee by disallowing deduction under Section 57(ii) of the Act.

The assessment order under Section 143(3) of the Act was passed on 04. 23rd December, 2019, determining the total income of the assessee at ₹17,47,193/-.

Aggrieved assessee preferred the appeal before the learned CIT (A), 05. wherein the order of the learned Assessing Officer was confirmed and therefore, the assessee is in appeal.

We have heard the rival contention. The fact shows that the assessee 06. has earned interest income of ₹37,42,093/- and have incurred Other grounds of appeal are supportive only and hence not 07. adjudicated.

In the result, the appeal of the assessee is allowed. 08.

Order pronounced in the open court on 27.06. 2024.

More judgments on Section 57(iii)

All 716 judgments and leading authorities on Section 57(iii) →

Recent GST High Court judgments

Search GST case law →