IN THE ITAT DELHI BENCH

KUL BHARAT, J.M. & M. BALAGANESH, A.M.

Design Forum International v. JCIT

ITA No. 8615/Del/2019

9 April, 2024

Assessee by: Ved Jain, Adv, Shri Amang Garg, CA

Revenue by: Vivek Kumar Upadhyay, Sr. DR

M. Balaganesh, A. M.

The appeal in ITA No.8615/Del/2019 for assessment year 2014-15, arises out of the order of the Commissioner of Income Tax (Appeals)-20, New Delhi (hereinafter referred to as learned Commissioner (Appeals), in short) in Appeal No. 10772/2016-17 dated 28-8-2019 against the order of assessment passed under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act) dated 30-12-2016 by the Joint Commissioner of Income Tax, Range-61, New Delhi (hereinafter referred to as learned assessing officer).

2. The Ground Nos. 1 & 4 raised by the assessee are general in nature and does not require specific adjudication.

3. The Ground No.2 raised by the assessee is challenging the disallowance of interest under section 36(1)(iii) of the Act.

4. We have heard the rival submissions and perused the materials available on record. The assessee firm is engaged in the business of providing architectural services for housing and commercial projects. The learned assessing officer observed that the assessee had paid interest of Rs 1,76,23,321 on its loans. The learned assessing officer observed that on one hand, assessee is paying interest on its loans borrowed and on the other hand, it had given interest free loans to some parties. Accordingly, the learned assessing officer proceeded to disallow the interest payment on proportion basis under section 36(1)(iii) of the Act in the sum of Rs 19,24,311. This action of the learned assessing officer was upheld by the learned Commissioner (Appeals).