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आयकर अपीलीय अिधकरण,च"डीगढ़ "यायपीठ “ए” , च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH "ी संजय गग", "याियक सद"य एवं "ी िव"म "सह यादव, लेखा सद"य BEFORE: SHRI. SANJAY GARG, JM & SHRI. VIKRAM SINGH YADAV, AM आयकर अपील सं./ 2022 िनधा"रण वष" / Assessment Year : 2017-18 Charanjeet Kaur बनाम The DCIT C/o Ajay Jain And Co. Circle, Yamunanagar SCO 80-81 4th Floor Sector 17C Chandigarh "थायी लेखा सं./PAN NO: ABVPK1747L अपीलाथ"/Appellant ""यथ"/Respondent िनधा"रती क" ओर से/Assessee by : Shri Ajay Jain, C.A राज"व क" ओर से/ Revenue by : Smt. Amanpreet Kaur, Sr. DR सुनवाई क" तारीख/Date of Hearing : 20/12/2023 उदघोषणा क" तारीख/Date of Pronouncement : 15/01/2024 आदेश/Order PER VIKRAM SINGH YADAV, A.M. :
This is an appeal filed by the Assessee against the order of the Ld. CIT(A), NFAC, Delhi dt. 31/10/2022 pertaining to Assessment Year 2017-18. 2. In the present appeal, the assessee has raised the following grounds of apepal :
That the Ld. Commissioner of Income Tax- (Appeals) has wrongly upheld the addition of Rs. 4377584 made by DCIT CPC under section 143(1) of Income Tax Act simply on the basis of interest income reflected in 26AS.
That the Ld. Commissioner of Income Tax- (Appeals) has wrongly confirmed the addition of Rs. 4377584 on the basis of interest income reflected in 2AS and he erred by not allowing interest expenses of Rs. 5149167, paid to bank. 3. that the Ld. CIT(A) has erred by not considering the facts, submission and remand report given by assessing officer. 4. That the Assessee craves for permission to add, amend, alter or withdraw any grounds of appeal with approval of the hon’ble bench.
Briefly the facts of the case are that the assessee filed her return of income declaring total income of Rs. 1,25,97,677/- which was processed under section 143(1)(a)(vi) by CPC Bangaluru and an adjustment of Rs. 43,77,584/- was made to the returned income basis review of interest income reflected in Form 26AS and as shown in the return of income.
4. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) who has since sustained the said addition.
Against the said findings and the direction of the Ld. CIT(A), the assessee is in appeal before us.
During the course of hearing, the Ld. AR submitted that the difference between the amount of interest income in Form 26AS amounting to Rs. 52,55,261/- and net taxable income of Rs. 8,77,677/- shown in the return of income which comes to Rs 43,77,584/- has been brought to tax by the CPC, Bengaluru.
6.1 It was submitted that the said difference has arisen on account of interest expenditure of Rs. 51,49,167/- claimed against the interest income from M/s Jasmer Foods Pvt. Ltd. amounting to Rs. 51,49,167/-. It was submitted that the assessee has taken loan from M/s Aditya Birla Capital which was directly advanced to M/s Jasper Foods Pvt. Ltd. and the quantum of interest income equates the quantum of interest expenditure and therefore the assessee has shown net interest income at NIL. In this regard, our reference was drawn to the written submission filed before the Ld. CIT(A) which are contained at pages 1 to 3 of the Paper Book and the contents thereof reads as under:
“Ground No.l to 3 are all relates to addition of Rs.43,77,584/- u/s 143(l)(a) made in the returned income without any basis and facts on record. As already explained Smt. Charanjeet Kaur took a loan of Rs.5.00 crore from M/s Aditya Birla Capital on 17.3.2016 and said loan of Rs.4,98,50,577/- were credited to her saving bank account No.50100018368912 with HDFC bank and from this account, loan of Rs.4,99,00,000/- were advanced to M/s Jasmer Foods Pvt. Ltd. on 18.3.2016 through RTGS. Against this loan the following interest were charged by M/s Aditya Birla Capital from the Appellant. Date Amount of interest charged 15.04.2016 422918.00 15.05.2016 437500.00 15.06.2016 435973.00 15.07.2016 434432.00 15.08.2016 432878.00 15.09.2016 431310.00 15.10.2016 429728.00 15.11.2016 428133.00 15.12.2016 426523.00 15.01.2017 424900.00 15.02.2017 423262.00 15.03.2017 421610.00 TOTAL RS... 5149167.00 Copy of M/s Aditya Birla Capital is being enclosed at page 7 to 9. Copy of saving account of Smt. Charanjeet Kaur with HDFC bank is being enclosed at page 10. Copy of her account with M/s Jasmer Foods Pvt. Limited for financial year 2015-16 and 2016-17 are being enclosed at page 11 to 12. Copy of bank statement of M/s Jasmer Foods Pvt. Limited with State Bank of India in which this loan from Smt. Charanjeet Kaur was credited is also being enclosed at page 13 in proof of our contention.
The same amount of interest was credited by M/s Jasmer Foods Pvt. Ltd. in the account of Smt. Charanjeet Kaur to compensate her for advancing loan.
From the facts given above, it is clear that interest received by Smt. Charanjeet Kaur from M/s Jasmer Foods Pvt. Ltd. was earned on account of amount of loan taken from M/s Aditya Birla Capital which was directly advanced to M/s Jasmer Foods Pvt. Ltd. and hence net interest income of Smt. Charanjeet Kaur was NIL after paying interest to M/s Aditya Birla Capital. In view of above submission your good self is requested to delete the addition made by CPC while processing the return of income.” 6.2 It was further submitted that the case of the assessee for A.Y 2018-19 was also taken up for scrutiny for the similar reason wherein the assessee has claimed the interest expenditure against the interest income and which has been accepted by the Revenue and in this regard, copy of the assessment order passed under section 143(3) dt. 08/03/2021 was placed on record.
6.3 It was further submitted that during the course of appellate proceedings, the Ld. CIT(A) also called for the remand report from the AO and on perusal of the remand report which found mention in the impugned order, it may be noted that no adverse finding has been recorded by the AO, the contents of the remand report are as under:
"2. In this regard, it is to submit that on perusal of the documents filedas additional evidence, it is noted that while processing the ITR u/s143(1)(a) for A.Y. 2017-18 of the assessee Smt. Charanjeet Kaur, theCPC added Rs.43,47,584/- in her taxable income which was the difference of amount shown in Form-26AS i.e. Rs.52,55,261/-&taxable income ofRs.8,77,677/- shown in return of income.
3. However, the assessee has stated that a loan of Rs. 5 Crore was taken from M/s Aditya Birla Capital on 17.03.2016 as “ Loan Against Property” & the said loan of Rs. 4.99 Crores was advance to M/s Jasmer Foods (P) Ltd. on dated 18.03.2016 through RTGS. Accordingly, the interest earned on account of loan given to M/s Jasmer Foods(P) Ltd. was reduced from the interest paid to M/s Aditya Birla Capital & hence the net interest was shown as Nil under the head income from the other sources. The assessee has also filed relevant documents pertaining to these transactions.
In this regard, it is to submit that the same issue of deduction from income from other sources was taken up under scrutiny for A.Y. 018-19 & it is noted that the assessment order was passed by the National Faceless Assessment Centre vide order dated 08.03.2021 & no adverse inference has been taken by the Assessing Officer. In view of the above facts, it is to submit that the issue may be accordingly decided on merits.”
6.4 It was accordingly submitted that the assessee be provided necessary relief by deleting the adjustment so made by the CPC, Bengaluru and upheld by the Ld. CIT(A).
Per contra, the Ld. DR has relied on the orders passed by the lower authorities and our reference was drawn to the findings of the Ld. CIT(A) which read as under:
“It is an undisputed fact that the appellant had filed her return of income in ITR-2 for AY 2017-18 on 01.08.2017 declaring salary income at Rs. 1,18,80,000/- and income from other sources at Rs. 8,77,677/- (interest of Rs. 1,25,991/- + Dividend of Rs. 7,51,686/-) only. It is also a fact that the appellant had claimed TDS on interest of Rs. 5,25,379/- and TDS on salary of Rs. 39,60,972/-.With these details/information, the CPC processed the return of income of the appellant and found that the appellant failed to disclose the interest income of Rs. 43,77,584/-. Since, the provision of 143(1)(a)(vi) clearly mandates the AO to make the adjustment in total income on a/c of addition of income appearing in 26AS, which has not been included in computing the total income in the return, the CPC issued communication twice for proposed adjustment in compliance to second proviso below to sub- section (1) of section 143 of the Act. Since there was no reply to these communication, the CPC made the adjustment. After examination of details available in ITR & TDS Statement, I find that the interest income of Rs. 52,55,261/- and TDS of Rs. 5,25,378/- thereon are appearing in the 26AS statement but the appellant didn't disclosed the entire interest income in her return of Income under the head “ Income from Other Sources” but claimed the entire TDS amount. Further, the appellant didn't claimed any expenditure u/s 57 of the Act in the return of income. However, she is submitting during the appellate proceedings that the interest expenditure against interest income should be allowed as in scrutiny assessment u/s 143(3) of the Act for AY2018-19. To examine the similarity of facts for both assessment years, I find that the appellant had declared interest income (Rs. 56,62,765/-) as well as interest expenses (Rs. 54,83,120) in the ITR for AY 2018-19 and therefore, no addition was made in AY 2018-19. However, the appellant had declared lesser interest income in comparison to the interest income appearing in 26AS Statement and no interest expenditure was claimed in the ITR for the present AY 2017-18, Thus, the plea of the appellant that since the same has been accepted in the scrutiny order for AY 2018-19 and therefore, no addition can be made in the present AY 2017-18, is not correct. Since the appellant failed to disclose the interest income in the ITR, the adjustment in the ITR u/s 143(1)(a)(vi) of the Act is correctly made. Keeping in view the above facts of the case, I don't find any infirmity in the intimation order keeping in view the information available in ITR as well as 26AS for AY 2017-18. Thus, all the grounds of appeal is dismissed.”