Loading judgment…
No AI summary yet for this case.
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, DELHI BENCHES : SMC-II : NEW DELHI
Before: SHRI J. SUDHAKAR REDDY
ORDER This is an appeal by the assessee directed against the order of the CIT(A)-12, New Delhi, dated 25.02.2015 for the assessment year 2009- 10.
I have heard Shri K.R. Manjani, the ld. counsel for the assessee and Mrs. Rakhi Vimal, the ld. DR. The assessee is the proprietor of M/s A.K.
Motors which is engaged in trading of auto parts. The issues that arise for my consideration are dealt with ground-wise.
Ground No.1 is against the disallowance of depreciation, interest and repair and running expenses of cars amounting to Rs.2,23,620/-, telephone expenses of Rs.13,298/- and Rs.425/- being short payment received from clients. The ld. counsel for the assessee pleads that 10% disallowance would be justified under the facts and circumstances of the case. As the assessee does not deny the use of the above vehicles for non-business purposes, in my view, the disallowance made by the AO, as confirmed by the first appellate authority, does not call for any interference.
In the result, this ground of the assessee is dismissed.
Ground No.2 is against the disallowance of Rs.90,123/- on the ground that interest bearing funds have been diverted for non-interest bearing purposes. The assessee claims that it has interest free funds available and submitted that the Hon’ble Bombay High Court in CIT vs. Reliance Utilities and Power Ltd. (2009) 313 ITR 340 (Bom), has held that if there are interest free funds available with the assessee sufficient to meet its investment and, at the same time, loan has been raised, it can be presumed that the investments were from interest free funds and, resultantly, no disallowance of interest can be made. It was also submitted that recently, the Hon’ble Bombay High Court in CIT vs. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom), has held that no disallowance of interest can be made u/s 14A if the assessee’s own capital is more than the investments fetching exempt income. The assessee filed the balance sheet to demonstrate the availability of interest free funds. As this aspect has not been examined by the ld. AO, I deem it fit to restore this issue to the file of the AO for fresh adjudication in accordance with the law. The AO shall follow the proposition laid down by the Hon’ble Bombay High Court in the case of Reliance Utilities and Power Ltd.(supra)
This ground is allowed for statistical purposes.
Ground No.3 is against the disallowance of deduction u/s 80C and 80D. As the assessee alleges that the receipts filed by the assessee were not considered by the revenue authorities, I deem it fit to set aside the issue to the file of AO. The AO shall verify the receipts and dispose of this issue in accordance with the law.
No other issue has been argued before us.
In the result, the appeal of the assessee is allowed in part.
The order pronounced in the open court on 04.11.2015.