SHRI GIRISHBHAI VADILAL SHAH,,AHMEDABAD vs. THE DCIT, CIRCLE-4(1)(2),, AHMEDABAD

ITA 330/AHD/2020Status: DisposedITAT Ahmedabad15 July 2024AY 2014-15Bench: Ms. SUCHITRA RAGHUNATH KAMBLE, JUDICAL MEMBER, SHRI NARENDRA PRASAD SINHA (Accountant Member)17 pages
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What did the Tribunal hold?

The Tribunal held that the CIT(A)'s disallowance under Section 57(iii) was incorrect. However, it upheld the disallowance of a portion of interest paid to related parties under Section 58(2) r.w.s. 40A(2) as excessive and unreasonable.

What were the facts?

The assessee claimed interest expenses as a deduction. The Assessing Officer (AO) disallowed a portion of these expenses, arguing they were not wholly and exclusively for earning interest income. The CIT(A) restricted the disallowance, invoking Section 40A(2) for excessive interest paid to related parties.

What were the issues?

Whether interest expenses claimed as deduction were wholly and exclusively for earning income, and whether interest paid to related parties was excessive and unreasonable.

Which sections of the Income-tax Act were involved?

Section 57(iii),Section 58(2),Section 40A(2)(b),Section 24(b)

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Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: & SHRI NARENDRA PRASAD SINHA

For Appellant: Ms. Saumya Pandey Jain, Sr. DR
For Respondent: Ms. Saumya Pandey Jain, Sr. DR
Hearing: 26/06/2024Pronounced: 15/07/2024

PER SHRI NARENDRA PRASAD SINHA, AM: These three appeals are filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-8, Ahmedabad, (in short the ‘CIT(A)’), (in short ‘the CIT(A)’) all dated 16.03.2020 for the Assessment Year 2014-15, 2015-16 and 2016-17. As the issues involved in the three appeals are common, they were heard together and are being disposed vide this common order.

ITA Nos. 330, 331 & 332/Ahd/2020 [Shri

The order continues below.

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