Anil Kumar R. Agarwal v. Income-tax Officer, Ward-9(4), Ahmedabad - 2016-LL-0929-19

Citation	2016-LL-0929-19
Appellant Name	Anil Kumar R. Agarwal
Respondent Name	Income-tax Officer, Ward-9(4), Ahmedabad
Court	ITAT-Ahmedabad
Relevant Act	Income-tax
Date of Order	29/09/2016
Assessment Year	2010-11
Judgment	View Judgment
Keyword Tags	payment of interest • interest free loan • business purpose • disallowance of interest • credit for tax deducted at source
Bot Summary:	Firstly, the assessee is aggrieved by the addition of Rs. 1,40,839/- made on account of interest payment and secondly, the assessee is aggrieved by the denial of the credit of TDS of Rs. 32,442/-. The return for the year was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. While scrutinizing the return of income, the A.O. noticed that the assessee has given interest of Rs. 1,40,839/- to various parties and on the other hand the assessee has advanced interest free loan to the HUF of the assessee and one Ritu Agarwal. The assessee strongly objected for the proposed disallowance of interest. The explanation of the assessee did not find favour with the A.O. who was of the firm belief that the assessee has utilized the interest bearing loan for making advances to his family members. Coming to the second grievance of the assessee relating to the denial of credit of TDS. We find that the ld. CIT(A) has directed the A.O. to examine the claim of the assessee and allow the same after verification.

IN INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. No: 829/AHD/2014 (Assessment Year: 2010-11) Shri Anil Kumar R. V/S Income Tax Officer, Ward- Agarwal 311, Vanijya 9 (4), Ahmedabad Bhavan, Diwan Ballubhai School, Kankaria, Ahmedabad-380022 (Appellant) (Respondent) PAN: ADYPA6685J Appellant by : Shri Pradeep G. Tulsian, A.R. Respondent by : Shri Prasoon Kabra, Sr. D.R. ORDER Date of hearing : 28-09-2016 Date of Pronouncement : 29 -09-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. With this appeal, assessee has challenged correctness of order of Ld. CIT(A)-II, Ahmedabad dated 27.01.2014 pertaining to A.Y. 2010-11. 2 ITA No. 829/Ahd/2014 . A.Y. 2010-11 2. grievance of assessee is twofold. Firstly, assessee is aggrieved by addition of Rs. 1,40,839/- made on account of interest payment and secondly, assessee is aggrieved by denial of credit of TDS of Rs. 32,442/-. 3. assessee is in business of Transportation. return for year was selected for scrutiny assessment and accordingly statutory notices were issued and served upon assessee. 4. While scrutinizing return of income, A.O. noticed that assessee has given interest of Rs. 1,40,839/- to various parties and on other hand assessee has advanced interest free loan to HUF of assessee and one Ritu Agarwal. assessee was asked to show cause why interest payment of Rs. 1,40,839/- should not be disallowed as assessee has not charged any interest on loans and advances made to HUF and Ritu Agarwal. 5. assessee filed detailed reply explaining payment of interest of Rs. 1,40,839/- and same can be understood by following chart:- Name of Party Purpose of Loan Loan Obtained on Interest Paid Kotak Mahindra Business Purpose 15.01.2008 75029 Bank Ltd. HDFC Bank Ltd. Business Purpose 18.12.2007 41712/- LIC Business Purpose Prior to 01.04.2007 13598 Jagatnarayan Business Purpose 06.02.2009 10500 Kothari Total 140839 3 ITA No. 829/Ahd/2014 . A.Y. 2010-11 6. It was explained that impugned advances were given by assessee prior to aforementioned loans taken by him. assessee strongly objected for proposed disallowance of interest. explanation of assessee did not find favour with A.O. who was of firm belief that assessee has utilized interest bearing loan for making advances to his family members. A.O. accordingly disallowed Rs. 1,40,839/-. 7. Assessee carried matter before ld. CIT(A) but without any success. 8. Before us, ld. counsel for assessee reiterated what has been stated before lower authorities. 9. We have given thoughtful consideration to orders of authorities below and relevant documentary evidences brought on record. We find that Rs. 16,97,492/- was advanced to Anil Agarwal HUF during financial year 2007-08 and Rs. 15,04,550/- was advanced to Ritu Agarwal in same financial year 2007-08. comparison of these advances with borrowings as mentioned elsewhere clearly shows that advances were made much earlier than loans borrowed. This proves that loans were not borrowed for making interest free advances. Further, since these advances/borrowings are brought forward balances from earlier years and no such disallowance has been made in earlier years. Therefore, we do not find any reason for making impugned disallowance for year under consideration. We, accordingly, set aside findings of ld. CIT(A) and direct A.O. to delete addition of Rs. 1,40,839/-. 4 ITA No. 829/Ahd/2014 . A.Y. 2010-11 10. Coming to second grievance of assessee relating to denial of credit of TDS. We find that ld. CIT(A) has directed A.O. to examine claim of assessee and allow same after verification. Directions of ld. CIT(A) are very specific, therefore, calls for no interference. 11. In result, appeal filed by Assessee is partly allowed. Order pronounced in Open Court on 29 - 09- 2016. Sd/- Sd/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: True Copy Rajesh Copy of Order forwarded to:- 1. Appellant. 2. Respondent. 3. CIT (Appeals) 4. CIT concerned. 5. DR., ITAT, Ahmedabad. 6. Guard File. By ORDER Deputy/Asstt.Registrar ITAT,Ahmedabad Anil Kumar R. Agarwal v. Income-tax Officer, Ward-9(4), Ahmedabad

Metadata

Judgment