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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI GEORGE MATHAN, & SHRI A. MOHAN ALANKAMONY
आदेश / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER:
the Order of Commissioner of Income Tax (Appeals)-2, Chennai, in dated 31.03.2017 for the AY 2012-13.
Ms.S.Vijaya Prabha, JCIT, represented on behalf of the Revenue and Mr. S.Sundararaman, CA, represented on behalf of the assessee.
ITA No.1084/Mds/2017 :- 2 -:
It was submitted by the Ld.AR that in the course of assessment, the AO had disallowed the interest paid to M/s.Super Selectro (P) Ltd (in short “Super Selectro”) and also to M/s.Karur Vysya Bank Ltd. (in short “KVB”).
It was a submission that the assessee is a dealer of white goods. It was a submission that the assessee had taken loan of Rs.95,00,000/- from Super Selectro for the purchase of various white goods for its business.
The assessee had paid interest on the said loan for the AY 2010-11 and the same was also allowed. It was a submission that for the AY 2011-12, the interest paid was disallowed on the ground that the assessee has used the loan for investing in immovable properties. It was a submission that for the AY 2011-12, the assessee had filed under the dispute resolution as there were also other issues in the assessment. For the AY 2012-13, being the assessment year in appeal, the AO had followed the disallowance for the AY 2011-12 and had disallowed the interest paid to Super Selectro and KVB. It was a submission that the loan from KVB had been taken for re-paying part of the loan from Super Selectro. The Ld.AR placed before us the details of the loan taken and the details of the payments made in respect of the purchase of the stock of the white goods. It was a submission that the details have not been verified by the AO, and he had no objection, if the issue was restored to the file of the AO for verification and re-adjudication.
In reply, the Ld.DR vehemently supported the order of the AO and Ld.CIT(A).
ITA No.1084/Mds/2017 :- 3 -:
We have considered the rival submissions. Admittedly, a perusal of the order of the AO showed that the AO has made the disallowance of the interest by following the order for the AY 2011-12 which has been settled under the dispute resolution. A perusal of the Assessment Order also clearly showed that the loan from KVB has been taken for re-paying part of the loan in respect of Super Selectro. Whether this loan taken from Super Selectro has been utilized for buying stock or whether the same has been used for non-business purposes, the facts are not emanating from the Assessment Order clearly. The assessee has placed before us detailed breakup of the usage of the loan taken from Super Selectro. This needs to be examined by the AO. In these circumstances, in the interest of natural justice, the issues in this appeal are restored to the file of the AO for re- adjudication after granting the adequate opportunity to the assessee to substantiate his case. The assessee shall prove to the AO that the loans taken were used for business purposes only.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the Open Court on July 10, 2017, at Chennai.