Harish Pursottamdas Morwani, A.Y. 2018-19

Parties Involved

Facts Summary

The assessee, engaged in trading activity, filed return of income on 25-10-2018 admitting total income of Rs. 8,24,320/-. During the course of assessment proceedings, the Assessing Officer (AO) noted that the assessee had entered into a transaction of an unsecured loan to the tune of Rs. 80 lakhs with Shri Bhavesh Bhandari, M/s. Simandhar Corporation, out of a cash credit loan of Rs. Two crores availed by him from SBI. The AO further noted that the assessee had earned interest income of Rs. 47,671/- only during the year whereas he incurred bank charges of Rs. 1,00,775/- and loan interest payment of Rs. 2,33,550/- for the relevant period. Consequently, the AO disallowed a sum of Rs. 2, 86,654/- [( 2,33,550/- + 1,00,775/-) - 47,671/- ]. The Commissioner of Income Tax (Appeals) upheld the addition of Rs. 2, 86,654/- being bank interest and bank charges u/s. 36(1)(iii)r.w.s. 37(1) of the Act.…

Legal Issues

• 1. The Ld. CIT(A), NFAC, Delhi was grievously erred in upholding the addition of Rs. 2,86,654/- made by the Ld. A.O. being bank interest and bank charges by partly allowing the appeal is illegal and bad in law.
• 2. The appellant requests the tribunal to delete the above mentioned addition of Rs. 2,86,654/- made by the Ld. AO by upholding the same by the Ld. CIT(A) vide his order, looking to the merits of the case.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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