9911796707
TMI Blog2014 (4) TMI 1235X X X X Extracts X X X X X X X X Extracts X X X X ..... of survey proceedings under Section 133A as "Income from Other Sources". It is submitted that the appellant during the course of survey proceedings had surrendered a sum of Rs. 1.25 crores as referral and commission income and as such, there is no reason for the Assessing Officer to tax the same as "Income from Other Sources". The conclusion reached by the Commissioner of Income tax (Appeals) and the Assessing Officer is based on presumptions and surmises and is contrary to the facts on record. 2. The Commissioner of Income tax (Appeal) erred in upholding the disallowance of interest of Rs. 37.79 Lacs paid by the Appellant to the Firm in which he is a partner. It is submitted that the appellant had paid interest on debit balances wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of the AO in treating the income so declared by the assessee as income from other sources. Aggrieved from the order of the ld. CIT(A) the assessee is in appeal before us. 4. We have heard the ld. representatives of both the parties and also have gone through the records. At the outset the ld. A.R. of the assessee has contended that in case of Mr. Hansat Maneklal Savani, the other partner of the firm in question i.e. M/s. Savani Transport Ltd., the matter on the identical issue has already been adjudicated by the co-ordinate bench of this Tribunal vide order dated 20.12.13 passed in ITA No.2339/M/2012. The Tribunal, in the case of the other partner, who incidentally is the brother of the assessee, has allowed his claim in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cies, the nature of transaction could not be disclosed at the time of the survey. It is also observed that the assessee has filed an affidavit stating that with the consent of the Investigating Officer, he has declared and offered in his personal capacity an amount of Rs. 75 lakhs as business income. It is relevant to state that the perusal of the aforementioned statement of Shri Nayant Savani recorded during the survey does not provide any rational basis for treating the impugned income under the head 'income from other source' as the said statement does not suggest for the same. Moreover, according to the decision of the Madras High Court in the case of CIT Vs S. Khader Khan Son [2008] 300 ITR 157 (Mad.), which has been confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are not inclined to accept the reasoning of the Ld.CIT(A) that the claim of the assessee is an attempt to cover the income under head 'business' to avail the benefit of accumulated losses of earlier years so that taxability gets substantially reduced. 2.3.2 Further, the decisions relied by the assessee in the cases of J.C. Thakkar Vs. CIT and H.C. Kothari and others Vs. CIT (supra) support the proposition that if an income falls under more than one head, the assessee has the option of choosing for the purpose of income tax, such head which makes the burden on his shoulders lighter. Applying the said ratio to the facts of the assessee, in the absence of any evidence brought by the authorities below to disprove/disbelieve the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artner. The AO rejected the claim of the assessee observing that the assessee had paid interest on debit balances with the firm and further that the said debit balances had arisen due to losses incurred by the firm in the earlier years. The ld. CIT(A) confirmed the disallowance of interest on debit balance. The assessee is thus in appeal before us on this issue. 8. At the outset, the ld. A.R. of the assessee has contended that this issue is also squarely covered in favour of the assessee vide order dated 20.12.13 passed in ITA No.2339/M/2012 in the case of Mr. Hansat Maneklal Savani who is the brother as well as the other partner of the firm M/s. MSN Enterprises. 9. We have gone through the order of the co-ordinate bench of the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he I.T. Act 1961 @ 12%. The partners are also liable to pay interest on the debit balance in capital account on similar basis. It is further submitted that the liability to pay interest arises out of contractual obligation. The perusal of the copy of the Firm's assessment order for Asst. Year 2008-09 available at Paper Book Page 30 reveals that in the case of the firm M/s. MSN Enterprises the said interest has been assessed as income of the firm. Having considered the rival submissions, reasoning of the lower authorities and material on record, we are of the considered view that the claim of the assessee is emanating out of contractual obligation and is in consonance with the provisions of law. We therefore, set aside the order of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
