Udai Parnami vs. Income Tax Officer, Ward 5(2), Jaipur

Parties Involved

Facts Summary

The assessee, Udai Parnami, filed his return of income for the assessment year 2019-20 on 24.10.2019. The income declared comprises of income from Salary of Rs. 38,60,000/-, income from partnership business of Rs. 48,94,609/- and income from Other sources of (-) Rs. 28,98,271/-. The loss arrived at by the assessee under the head “Income from other sources” was set off against income earned under the head “Salaries”, and total income of Rs. 7,94,110/- was offered to tax by the assessee after claiming deduction under chapter VIA amounting to Rs. 1,67,620/-. The case of the assessee was selected for complete scrutiny under CASS. Accordingly, notice under section 143(2) of the IT Act, 1961 was issued on 31.03.2021. Further, notices under section 142(1) were issued calling for details with respect to issues in hand to be verified. The assessee submitted relevant details through e-proceedings. On verification of the income declared under the head “Income from other sources”, it was noticed by the AO that the assessee had declared interest income earned from others at Rs. 7,66,842/-. The said receipt tallied with the interest receipts reflected in Form 26AS statement of the assessee. However, it was noticed by the AO that the assessee had claimed expenses of Rs. 42,10,841/- deductible under section 57 of the IT Act. As per AO, the expenses claimed under section 57 of the IT Act were not commensurate with the income declared under the head “ Other sources”, the assessee was required …

Legal Issues

• 1. CIT (A) has erred in facts and law on upholding the disallowance made by ld. AO on account of interest expenses amounting to Rs. 34,44,000/-
• 2. CIT (A) has erred in facts and law passing the order without giving opportunity of being heard.
• 3. Consequential levy of interest u/s 234A and 234B is bad in law.
• 4. Consequential initiation of penalty proceedings u/s 270A of Income Tax Act, 1961 is bad in law.
• 5. The appellant craves to add/alter grounds of appeal before or at the time of hearing.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

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