Income Tax Appellate Tribunal - Mumbai
Jalaram Enterprises Co. P. Ltd., Mumbai vs Acit Cent Cir. 3, Mumbai on 29 August, 2019
आयकर अपीलीय अधिकरण "F" न्यायपीठ मुंबई में।
IN THE INCOME TAX APPELLATE TRIBUNAL " F" BENCH, MUMBAI
श्री महावीर स हिं , न्याययक दस्य एविं श्री राजेश कुमार लेखा दस्य के मक्ष।
BEFORE SRI MAHAVIR SINGH, JM AND SRI RAJESH KUMAR, AM
Aayakr ApIla saM . / ITA No. 4988/Mum/2016
(inaQa- a rNa baYa- / Assessment Year 2011-12)
Jalaram Enterprises Co. P. Ltd. The Asst. Commissioner of
7, Pathai Niwas, N.S. Road, Mulund Income Tax, Central Circle -3,
Vs.
(West), Mumbai-400 080 Old CGO Building, 9 t h Floor, M.K.
Road, Mumbai
(ApIlaaqaI- / Appellant) .. (p`%yaqaaI- / Respondent)
स्थायी ले खा िं . / PAN No. AABCJ6334N
अपीलाथी की ओर े / Appellant by : Shir Ritika Aggarwal, AR
प्रत्यथी की ओर े / Respondent by : Shri Rajeev Gubgotra, DR
न
ु वाई की तारीख / Date of hearing: 29.08.2019
घोषणा की तारीख / Date of pronouncement : 29.08.2019
AadoSa / O R D E R
महावीर स हुं , न्याययक दस्य/
PER MAHAVIR SINGH, JM:
This appeal of assessee is arising out of the order of Commissioner of Income Tax (Appeals)-47, Mumbai in Appeal No. CIT(A)-36/AP.10/14- 15 dated 28.06.2016. The Assessment was framed by the Asst. Commissioner of Income Tax-Circle 3, Mumbai (in short ACIT/ITO/ AO) for AY 2011-12 vide dated 29.03.2014, under section 143(3) of the Income-tax Act, 1961 (hereinafter 'the Act').
2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in disallowing the claim of
2|Page I T A s N o . 4 9 8 8 / MU M/ 2 0 1 6 deduction under section 36(1)(iii) of the Act, amounting to ₹ 8,13,316/- on account of interest. For this, assessee has raised the following two grounds, which are revised grounds: -
"(i) BECAUSE, Id. CIT(A) has erred in law and on facts in upholding the disallowance of ₹ 8,12,315/- under section 36(1)(iii) ignoring the fact that the appellant has not claimed deduction under section 36(1)(iii) of the Act, and that the total amount of ₹ 10,80,897.45 showing in Profit and loss account has been written back in computation of income.
1(ii) Because, the CIT(A) has erred in law and on facts in ignoring the fact the out of ₹ 7,73,734/-, ₹ 4,05,663/- and ₹ 2,01,477/- have already been allowed by her under section 24(b) and disallowance of ₹ 1,66,574 has been accepted in first appellate proceedings."
3. We have heard the rival contentions and gone through the facts and circumstances of the case. We noted that the assessee has claimed the interest expenses in the profit and loss account amounting to ₹ 8,13,316/- by debiting the same to the profit and loss account according to AO this interest is not for the purpose of business and this is in respect of capital borrowed for the purpose of advancing the funds for non- business purposes. Hence, he disallowed the interest claimed by assessee. Aggrieved, assessee preferred the appeal before CIT(A) who also confirmed on the same reasoning. Aggrieved, assessee came in appeal before us.
4. Before us, assessee's counsel Ms. Ritika Aggarwal first of all took us through, the profit and loss account for the year ended 31.03.2011 at
3|Page I T A s N o . 4 9 8 8 / MU M/ 2 0 1 6 page 29 and 30 of assessee's paper book, wherein the interest on Apna Sahakari Bank Loan amounting ₹ 1,66,574/-, interest on ICICI bank loan of ₹ 2,01,476/- and interest on Religare Finvest ltd. of ₹ 4,05.653/- was claimed. She then took us through the computation of income filed at page 3 of assessee's PB, and stated that the interest claimed and total in regard to the same interest is added back to the income of the assessee at ₹ 10,89,785/-, which includes the above interest. It means that, according to her, the assessee already offered this interest in the returned of income and by adding back to the total income of the assessee. It means that this amount has already been added and if this addition is upheld by us the same will tantamount to double addition of the same amount. When these facts were confronted to the learned Sr. DR, he could not controvert any of the factual aspect of the case. He simply relied on the assessment order and the order Commissioner of Income Tax (Appeals). As the facts are clear that the assessee has claimed these interest expenses in the profit and loss account and subsequently added back in the computation of income to the total income of the assessee for the assessment year 2011-12, incase this addition is upheld, the same will be double addition which is not permissible in law. Hence, we delete the addition and allow this appeal of the assessee.
5. In the Result, the appeal of the assessee is allowed.
Order pronounced in the open court on 29.08.2019.
Sd/- Sd/-
(राजेश कुमार / RAJESH KUMAR) (महावीर स हिं /MAHAVIR SINGH)
(लेखा दस्य / ACCOUNTANT MEMBER) (न्याययक दस्य/ JUDICIAL MEMBER)
मुिंबई, ददनािंक/ Mumbai, Dated: 29.08.2019 दीप रकार, व.यिजी धिव / Sudip Sarkar, Sr.PS
4|Page I T A s N o . 4 9 8 8 / MU M/ 2 0 1 6 आदे श की प्रयिसलपप अग्रेपिि/Copy of the Order forwarded to :
1. अपीलाथी / The Appellant
2. प्रत्यथी / The Respondent.
3. आयकर आयुक्त(अपील) / The CIT(A)
4. आयकर आयुक्त / CIT
5. ववभागीय प्रयतयनधि, आयकर अपीलीय अधिकरण, मुिंबई / DR, ITAT, Mumbai
6. गार्ड फाईल / Guard file.
आदे शाि ार/ BY ORDER, त्यावपत प्रयत //True Copy// उप/ हायक पुंजीकार (Asstt. Registrar) आयकर अपीलीय अधिकरण, मुिंबई / ITAT, Mumbai