Ankur Goyal Vs ITO (ITAT Delhi)
Income Tax Appellate Tribunal (ITAT), Delhi Bench, recently adjudicated on an appeal filed by Mr. Ankur Goyal concerning the Assessment Year 2012-13. The appeal contested two primary additions upheld by the Commissioner of Income Tax (Appeals): the treatment of Rs. 33,92,975 received from his mother as unexplained investment under Section 69 of the Income Tax Act, 1961, and the disallowance of a Rs. 3,96,500 interest claim under Section 24 related to a co-owned property. The case arose from Mr. Goyal’s investment in a residential flat in Mumbai, co-purchased with his mother, Smt. Sudha Goyal, and brother, Shri Anuj Goyal.
The Assessing Officer (AO) initially made the Section 69 addition by questioning the creditworthiness of Smt. Sudha Goyal, the source of the Rs. 33.93 lakh funds used by Mr. Goyal towards the property purchase. Mr. Goyal argued before the ITAT that his mother’s own income tax assessment for the same year, although reopened subsequently, was concluded by her Assessing Officer (ACIT, Ghaziabad) accepting her returned income. This, he contended, implicitly validated her creditworthiness regarding investments and advances made during that year. If any amount were unexplained, it should have been assessed in her hands, not his.
The ITAT accepted Mr. Goyal’s argument regarding the Section 69 addition. The Tribunal noted that since Smt. Sudha Goyal’s assessing officer had accepted her financial position in her own assessment proceedings after scrutinizing her investments/advances, her creditworthiness could no longer be considered questionable by Mr. Goyal’s AO for the same transaction. Consequently, the ITAT reversed the findings of the lower authorities on this issue and deleted the addition of Rs. 33,92,975 made in Mr. Goyal’s assessment. No specific judicial precedents were cited by the ITAT in this part of the decision.
Regarding the second issue, the disallowance of the Rs. 3.96 lakh interest claim under Section 24, the AO and CIT(A) had based the decision on the grounds that interest was not actually paid and the funds borrowed were not used for acquiring Mr. Goyal’s specific 45% share, especially since he invested significantly more than his proportionate share. The ITAT observed the disproportionate investments by co-owners but focused on the principle for allowing interest deduction. It directed the AO to re-examine the claim specifically to verify whether borrowed funds, on which interest was payable, were utilized to finance Mr. Goyal’s required investment corresponding to his ownership share (calculated as Rs. 55,91,977). The Tribunal clarified that interest should be allowed only to the extent that borrowed funds were used for acquiring this initial proportionate share. Any interest pertaining to borrowed funds used for investment exceeding this share would not be deductible under Section 24. This issue was therefore remanded back to the AO for limited verification. The appeal was thus partly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
