Kanha Ram Agarwal Huf, Jaipur vs Assessee

Shri Kanha Ram Agarwal HUF cuke The D.C.I.T. 129-E, Govind Nagar, Dusherra Vs. Central Circle-3, Kothi, Jaipur. Jaipur.

LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AACHK 9251 R vihykFkhZ@Appellant izR;FkhZ@Respondent

fu/kZkfjrh dh vksj ls@ Assessee by : Shri S.L.Poddar, Advocate jktLo dh vksjr ls@ Revenue by: Shri Rajesh Ojha, (JCIT)

lquokbZ dh rkjh[k@ Date of Hearing : 27/01/2015 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 29/01/2015

vkns'k@ ORDER

PER: R.P. TOLANI, J.M.

This is an appeal filed by the assessee against the order dated

11/11/2013 by the learned CIT(A), Central, Jaipur for A.Y. 2009-10. The

sole ground of appeal raised is as under:-

2 ITA 988/JP/2013_ Kanha Ram Agarwal HUF Vs. DCIT

"1. Under the facts and circumstances of the case, the learned CIT(A) has erred in confirming the addition of Rs. 90,683/-

on account of "Interest paid to Bank" without consideration the submission of the assessee and material evidences submitted during the assessment proceedings."

2 Learned counsel for the assessee contends that while explaining

the allowability of interest before the Assessing Officer proper details of

utilization of overdraft facility were submitted. The assessee has an

overdraft of Rs. 21 lacs, which has been sparingly used is as evident

from the yearly interest paid at Rs. 96,830/-. Complete details of

utilization of overdraft are given on pave No. 4 of the learned CIT(A)'s

order are as under:-

Interest payment of overdraft 90638 Short term capital gain income 38130 Interest from parties 134980 Investment in IPO (average per month) 38000 Investment in shares 0

Investment in IPO is at the average of Rs. 38,000/- per month. The

assessee has huge own funds a surplus, which have also been utilized

for the purposes of investment in IPOs. The small element of interest

attributable to purchase of IPO shares will become part of cost of such 3 ITA 988/JP/2013_ Kanha Ram Agarwal HUF Vs. DCIT

shares, as the income thereof is also offered as short term capital gains,

consequently no adverse view can be adopted in this regard.

3. The learned CIT(A) without rebutting the overdraft interest

utilization break up, summarily held that nexus is not proved by

assessee, which is contrary the his own observation about filing of

details as tabulated. Further reliance is placed on the order passed by

the ITAT in the case of the assessee's own brother Shri Satish Agarwal

in ITA No. 970/JP/2013 order dated 05/03/2014 wherein the Hon'ble

ITAT on the similar facts and circumstances deleted similar addition by

following observations:-

2.5 .... "In the given case, the facts are entirely different. The assessee had his own funds which he utilized in such a manner that he has earned net income from interest and by not making any fresh investment in IPOs but has earned income on capital gain as discussed above. Accordingly, we are left with no option but to hold that this addition deserves to be deleted. We order to delete this addition and allow the appeal of the assessee on merits."

4. Learned DR supported the orders of the lower authorities.

5. I have heard the rival submissions of both the parties and

perused the material available on the record. It emerges from the

record that the assessee provided breakup of overdraft interest 4 ITA 988/JP/2013_ Kanha Ram Agarwal HUF Vs. DCIT

utilization before lower authorities. Without rebutting the same, it has

been held that the assessee has not established the nexus. Thus, this

finding of the lower authorities is not borne out from record. On merits

also the assessee is eligible for overdraft interest qua the interest

earned, availability of assessee's surplus funds is also not disputed.

Looking into the entirety of the facts and circumstances of the case and

the ITAT's judgment in assessee's brother's case, I am of the

considered view that the interest paid by the assessee on overdraft

facility is allowable as expenditure.

6. In the result, the assessee's appeal is allowed.

Order pronounced in the open court on 29/01/2015.

Sd/-

¼vkj-ih-rksykuh½ (R.P.Tolani) U;kf;d lnL;@Judicial Member

Tk;iqj@Jaipur fnukad@Dated:- 29th January, 2015 *Ranjan

vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:

1. vihykFkhZ@The Appellant- Shri Kanha Ram Agarwal HUF, Jaipur.

2. izR;FkhZ@ The Respondent- The D.C.I.T. Central Circle-3, Jaipur.

3. vk;dj vk;qDr@ CIT(A), Central, Jaipur

4. vk;dj vk;qDr@ CIT, Jaipur 5 ITA 988/JP/2013_ Kanha Ram Agarwal HUF Vs. DCIT

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur

6. xkMZ QkbZy@ Guard File (ITA No. 988/JP/2013)

vkns'kkuqlkj@ By order,

lgk;d iathdkj@Asst. Registrar