consistency in income tax assessments

[satbir singhwahi]

Sir

If interest expences are allowed in past assessments years u/s 143(3), whether consistency in assessments need to maintained.Pls guide any case laws.

[DR.MARIAPPAN GOVINDARAJAN]

Your query is not to the point. Please furnish your correct query.

[satbir singhwahi]

Sir

During assessment u/s 143(3) , interest paid on loans taken was allowed in Assessment year 2008-09 to 2012-13.Now in assessment year 2013-14 the A.O. disallowed 1/10th of interest expence. The matter is now in appeal. The loan was taken in 2008-09 and deployed in business.So consistency in assessment to be maintained if facts are same. Any case law to help.

[DR.MARIAPPAN GOVINDARAJAN]

What is the reason given by the department in disallowing the interest?

[satbir singhwahi]

Department has done adhoc diallowance of 1/10 th of interest claimed . Wrongly alleged that funds were not fully utilised for business purpose.

[DR.MARIAPPAN GOVINDARAJAN]

Now it is obligation on you to prove the allegation of the Department.

[satbir singhwahi]

Sir

That i will prove. But want some case laws to substantiate to follow past orders if facts are same with previous years.

[DR.MARIAPPAN GOVINDARAJAN]

If you give the facts of your case, then it can be possible to trace out the similar case laws.

[satbir singhwahi]

Sir

The fact of case 2013-14 is A.O. has disallowed 1/10 interest claimed , being not fully utilised for business. Wheras loan taken in 2008-09 and fully utilised for business purpose. No new loan taken. But A.O. has allowed full interest in 2008-09 to 2012-13.

[DR.MARIAPPAN GOVINDARAJAN]

OK I will try for you.

[satbir singhwahi]

Thanks Sir

AI Summary

Consistency in tax assessments: prior acceptance of interest deductions supports continued allowance when facts remain unchanged. Consistency in income tax assessments requires identical treatment where facts are unchanged: earlier allowance of interest supports continued allowance unless the assessing officer points to material change. The taxpayer must rebut allegations that loan proceeds were not utilised for business by producing documents and earlier assessment records; absence of new facts weakens an ad hoc disallowance and is a matter for appeal.