Commissioner Of Income Tax, Ludhiana v. Amrik Singh

IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA No.347 of 2013 (O&M)Date of decision:29 042015 Commissioner of Income Tax, Ludhiana| Versus ....Appellant Amrik Singh, Proprietor M/s Nexo Products (India), Ludhiana ...... Responden CORAM:HON'BLE MR.JUSTICE S.J.VAZIFDAR, ACTING CHIEF JUSTICEHON'BLE MR.JUSTICE G.S.SANDHAWALIAHON'BLE MR.JUSTICE G.S.SANDHAWALIA Present:Mr.Rajesh Katoch, Advocate, for the appellant, Mr.Rajiv Sharma, Advocate, for the respondent. 0000 S.J.Vazifdar, Acting Chief Justice(Oral): The appellant has raised the following questions of law: “() Whether on the facts and circumstances of the case, theHon'ble ITAT was justified in law, in deleting the addition ofRs. 1,25,00,000/- made u/s 2(22)(e) of the Income Tax Act, 1961which was partly confirmed by the CIT(A) to the tune ofRs. 20,42, /25/- (li) Whether on the facts and circumstances of the case, theHon'ble ITAT was justified in law in upholding the order of the Ld.CIT(A) in which disallowance of Rs. 1,12,073/- made u/s 40A(2)(b)being excess interest paid at 15% to specified persons as againstaverage rate of interest at 12% being paid to banks and otherfinancial institutions was deleted. (iii) Whether on the facts and circumstances of the case, theHon'ble ITAT was justified in law in upholding the order of theCIT(A) deleting the disallowance of Rs. 87,220/- made u/s 36(1 )(iilof the Income Tax Act, 1961 in respect of proportionate interest onborrowed funds used for capital work in progress.”Hon'ble ITAT was justified in law in upholding the order of theCIT(A) deleting the disallowance of Rs. 87,220/- made u/s 36(1 )(iilof the Income Tax Act, 1961 in respect of proportionate interest onborrowed funds used for capital work in progress.” 2 The first question has already been answered in favour of therespondent-assessee, in this very appeal, by the order of the Division Bench dated ~). SAILESH RANJAN2015.05.01 10:03I attest to the accuracy andintegrity of this document onThe second question raised is not a substantial question of law. It ispurely a question of fact. The Commissioner of Income Tax (Appeals) and theIncome Tax Appellate Tribunal rightly held that the mere fact that the assesseeobtained loans @ 12% per annum does not belie the assessee's contention that theloans are from the family, which are at 15% per annum. It was a question ofappreciation of fact and thus, no question of law arises, 4The third question is also, admittedly, a question of fact, namely, asto whether the amounts borrowed were used for capital work in progress. Evenin the previous years, the assessee's case has been upheld, Thus, no substantial question of law arises tor consideration and theappeal is, accordingly, dismissed. (S.J.Vazifdar)Acting Chief Justice 29. 04 7205)+9352 (G.S.Sandhawalia)Judge