MURLI HARUMAL SAWLANI,NAGPUR vs. INCOME TAX OFFICER, WARD 5(2), NAGPUR

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ITA 380/NAG/2022Status: DisposedITAT Nagpur30 April 2024AY 2017-18Bench: SHRI SATBEER SINGH GODARA (Judicial Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issue of disallowance of interest expenditure back to the Assessing Officer for fresh adjudication. The assessee was directed to provide all necessary facts and evidence within three effective opportunities of hearing.

What were the facts?

The assessee challenged an addition made by the CIT(A) regarding the disallowance of interest expenditure. The assessee claimed the interest expenditure was incurred for earning interest income, but did not provide all necessary details to the Assessing Officer or the CIT(A).

What were the issues?

Whether the interest expenditure claimed by the assessee was wholly and exclusively for the purpose of earning interest income. Whether the lower appellate authorities erred in disallowing the interest expenditure without providing an opportunity of being heard.

Which sections of the Income-tax Act were involved?

Section 57(iii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH :NAGPUR [VIRTUAL HEARING]

Before: SHRI SATBEER SINGH GODARA

Hearing: 21.03.2024Pronounced: 30.04.2024

ORDER This assessee’s appeal for assessment year 20178- 2018, arise against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/ 250/2022-23/1045070697(1) dated 31.08.2022 involving proceedings u/s.143(3) of the Income Tax Act, 1961 (in short “the Act”).

Heard both the parties. Case file perused.

2.

The assessee pleads the following substantive grounds in the instant appeal :

1.

“That, the Hon'ble CIT(A)-1 erred in not providing opportunity of being heard. The Ld. CIT(A) failed to 2 ITA.No.380/NAG./2022 consider the fact that the appeal hearings are fixed near the audit report filing due dates.

1.

2. That, the addition made by the Ld. CIT(A) in respect to the disallowance of Rs.15,81,980/- is unjustified, unwarranted and bad in law.

3. That the Ld. CIT(A) erred in disallowing the interest expenditure claimed as deduction from the interest earned under the head Income from Other Sources, the amount being Rs.15,81,980/-.

4. The assessee denies liability to pay interest under 234A, 234B and 234C of I.T. Act 1961. Without prejudice, levy of interest under section 234A, 234B and 234C of I.T. Act 1961 is unjustified, unwarranted and excessive.

5.

The Assessee craves leave to, add to alter, amend, modify, substitute, delete and/or rescind any of the ground/grounds of the appeal on or before the final hearing of the appeal.”

3.

The assessee’s sole substantive grievance canvassed in the instant appeal challenges correctness of both the learned lower authorities action making sec.57(iii) interest disallowance of Rs.15,81,980/- claim as “wholly and exclusively expended for the purpose of making or earning the corresponding income assessed under income from other sources”. It is noticed in this factual backdrop that the 3 ITA.No.380/NAG./2022 assessee appears to have not filed all the corresponding details during the course of Assessing Officer’s assessment dated 04.12.2019 herein. The very factual position appears to have continued in the lower appellate proceedings. Faced with this situation, I deem it appropriate to restore this sole substantive issue back to the Assessing Officer for his afresh appropriate adjudication as per law subject to a rider that it shall be the taxpayer’s risk and responsibility only to plead and prove all the necessary facts in consequential proceedings within three effective opportunities of hearing. Ordered accordingly.

4.

This assessee’s appeal is allowed for statistical purposes in above terms.

Order pronounced in the open Court on 30.04.2024.

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