M/s.Space Structures, Malappuram V. JCIT, Calicut

CO 21/COCH/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 9048 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 02-09-2013
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: C B M WARRIER
• Keywords: Reasonable cause
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 240/COCH/2013 ASSESSMENT YEAR : 2006-07 THE JT. COMMISSIONER OF INCOME- TAX, RANGE-2, KOZHIKODE. VS. M/S. SPACE STRUCTURES, FAZAL APARTMENTS, NEAR KINFRA PARK, CHELEMBRA, MALAPPURAM. [PAN: ABCFS 3542E] (REVENUE-APPELLANT) (ASSESSEE -R ESPONDENT) C.O. NO. 21/COCH/2013 (ARISING OUT OF I.T.A. NO. 240 /COCH/2013 ASSESSMENT YEAR : 2006-07 M/S. SPACE STRUCTURES, FAZAL APARTMENTS, NEAR KINFRA PARK, CHELEMBRA, MALAPPURAM. [PAN: ABCFS 3542E] VS. THE JT. COMMISSIONER OF INCOME- TAX, RANGE-2, KOZHIKODE. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) REVENUE BY SMT. S. VIJAYAPRABHA, JR. DR ASSESSEE BY SHRI C.B.M. WARRIER, CA DATE OF HEARING 05/09/2013 DATE OF PRONOUNCEMENT 13/11/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJE CTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 25-02-2013 PAS SED BY THE LD. CIT(A), KOZHIKODE AND IT RELATES TO THE ASSESSMENT YEAR 2006-07. I.T.A. NO.240/COCH/2013 & C.O. NO. 21/COCH/2013 2 2. THE REVENUE IS ASSAILING THE DECISION OF THE LD. CIT(A) IN DELETING THE PENALTY LEVIED U/S. 271D OF THE ACT FOR VIOLATION OF THE PR OVISIONS OF SEC. 269SS OF THE ACT. IN THE CROSS OBJECTION, THE ASSESSEE IS CONTENDING THA T THE PENALTY ORDER IS BARRED BY LIMITATION. 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRI EF. THE ASSESSEE IS A PARTNERSHIP FIRM AND IT IS ENGAGED IN THE BUSINESS OF CONSTRUCT ION OF MOBILE TOWERS FOR CELLULAR COMPANIES. DURING THE COURSE OF ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD TAKEN CASH LOANS FROM TEN PERSONS IN EXCESS OF RS.20,000/-, IN VIOLATION OF THE PROVISIONS OF SEC. 269SS OF THE ACT. THE AGGREGATE AMOUNT OF LOANS SO TAKEN WORKED OUT TO RS.23.00 LAK HS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE OFFERED RS.4.0 0 LAKHS OUT OF THE ABOVE SAID AMOUNT OF RS. 23.00 LAKHS AS ITS ADDITIONAL INCOME, SINCE IT COULD NOT EXPLAIN THE SAME TO THE SATISFACTION OF THE ASSESSING OFFICER. WITH REGARD TO THE BALANCE AMOUNT OF RS.19.00 LAKHS, THE ASSESSING OFFICER ACCEPTED THE GENUINENESS OF THE SAME, BUT REFERRED THE MATTER TO THE JOINT COMMISSIONER OF IN COME-TAX FOR INITIATING PENALTY PROCEEDINGS U/S. 271D OF THE ACT. ACCORDINGLY, THE JT. COMMISSIONER ISSUED NOTICE U/S. 274 R.W.S. 271D OF THE ACT ON 17-02-2010. THOUGH T HE ASSESSEE FILED A REPLY ON 03-03- 2010, YET IT DID NOT APPEAR BEFORE THE JT. COMMISSI ONER OF INCOME-TAX. HENCE THE JT. COMMISSIONER PROCEEDED TO DECIDE THE MATTER ON THE BASIS OF THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. IN THE WRITTEN SUBMISSIONS, IT WAS STATED THAT THE ASSESSEE REQUIRED HUGE WORKING CAPITAL FUNDS FOR EXECUTING F RESH WORK ORDERS. SINCE THE ASSESSEE COULD NOT OFFER SECURITY, THE BANK REFUSED TO GIVE WORKING CAPITAL LOANS TO IT AND HENCE IT HAD TO RESORT TO BORROWING FUNDS FROM CLOSE FRIENDS AND RELATIVES. IT WAS SUBMITTED THAT THESE LOANS HAVE NOT BEEN TAKEN AS E ITHER CONCEALED INCOME OR UNEXPLAINED CASH OF THE ASSESSEE. THE ASSESSEE HAS ALSO REFERRED TO CIRCULAR NO. 387 DATED 06-07-1984, WHICH EXPLAINED THE SCOPE AND RAT IONALE BEHIND THE INTRODUCTION OF SEC. 269SS OF THE ACT, WHEREIN IT IS MENTIONED THAT THE PROVISIONS OF SEC. 269SS WAS INTRODUCED TO CURB THE INTRODUCTION OF UNACCOUNTED CASH IN THE GARB OF LOANS OR DEPOSITS. HOWEVER, THE JT. COMMISSIONER WAS NOT CO NVINCED WITH THE CONTENTIONS OF THE ASSESSEE AND ACCORDINGLY, LEVIED A PENALTY OF RS. 1 9.00 LAKHS U/S. 271D OF THE ACT. I.T.A. NO.240/COCH/2013 & C.O. NO. 21/COCH/2013 3 4. THE ASSESSEE CHALLENGED THE PENALTY ORDER BY FI LING APPEAL BEFORE THE LD. CIT(A). THE FIRST APPELLATE AUTHORITY NOTICED THAT THE GENU INENESS OF THE LOANS HAS NOT BEEN DOUBTED EITHER BY THE ASSESSING OFFICER OR BY THE J T. COMMISSIONER OF INCOME-TAX. THE LD. CIT(A) WAS ALSO CONVINCED THAT THERE WAS BUSIN ESS EXIGENCY IN TAKING LOANS BY WAY OF CASH. IT APPEARS THAT THE ASSESSING OFFICER HAS FILED A REMAND REPORT BEFORE THE LD. CIT(A), WHEREIN IT WAS STATED THAT THE BOOKS OF THE ASSESSEE SHOW THAT THE CASH WAS AVAILABLE TO THE TUNE OF RS. 4.00 LAKHS THROUGHOUT THE YEAR AND FURTHER THE LOANS AVAILED WAS LESS THAN RS. 2.00 LAKHS. ACCORDINGLY, IT APPE ARS THAT THE AO HAD DOUBTED ABOUT THE EXISTENCE OF BUSINESS NECESSITY. WITH REGARD T O THE SAID OBSERVATION, THE ASSESSEE HAS SUBMITTED BEFORE LD CIT(A) THAT THE FUNDS WERE REQUIRED TO MEET THE EXPENSES LIKE LABOUR CHARGES, COST OF MATERIALS ETC. AND ALSO FOR UNDERTAKING NEW WORKS. THE LD. CIT(A) ACCEPTED THE SAID CONTENTIONS OF THE ASSESSE E ON THE REASONING THAT THE ASSESSEE HAD TO INCUR EXPENDITURE IN ADVANCE FOR CO NSTRUCTING MOBILE TOWERS AND THE BILLS WERE SETTLED BY THE CELLULAR COMPANIES SUBSEQ UENTLY. ACCORDINGLY, THE LD. CIT(A) HELD THAT THERE WAS REASONABLE CAUSE FOR AVAILING L OANS BY WAY OF CASH AND ACCORDINGLY, DELETED THE PENALTY OF RS. 19.00 LAKHS LEVIED U/S. 271D OF THE ACT. AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE US. THE ASSES SEE HAS FILED CROSS OBJECTION WHEREIN IT IS CONTENDED THAT THE PENALTY ORDER IS BARRED BY LIMITATION. 5. WE SHALL NOW TAKE UP THE LEGAL ISSUE URGED IN TH E CROSS OBJECTION FILED BY THE ASSESSEE. THE LD. AR CONTENDED THAT THE ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER ON 19-11-2008 AND THE GENUINENESS OF LOANS WA S ALSO EXAMINED AT THAT TIME. THE AO, AT THAT POINT OF TIME, HAS REFERRED THE MATTER TO THE JOINT COMMISSIONER OF INCOME TAX. ACCORDING TO LD A.R., THE PROCEEDING RELATING TO THE PENALTY LEVIED U/S 271D HAD COMMENCED AT THE TIME THE ASSESSMENT ORDER WAS PASS ED. THE LD. COUNSEL SUBMITTED THAT, AS PER THE PROVISIONS OF SEC. 275(1)(C) OF TH E ACT, PENALTY SHOULD HAVE BEEN IMPOSED BEFORE THE END OF THE FINANCIAL YEAR IN WHI CH THE PENALTY PROCEEDINGS IS INITIATED (IN THE INSTANT CASE, BY 31-03-2009) OR S IX MONTHS FROM THE DATE OF INITIATION (IN THE INSTANT CASE BY 31 ST MAY 2009), WHICHEVER IS LATER. HE SUBMITTED THAT THE JOINT COMMISSIONER OF INCOME TAX HAS PASSED THE ORDER ONL Y ON 19-08-2010. ACCORDINGLY HE I.T.A. NO.240/COCH/2013 & C.O. NO. 21/COCH/2013 4 CONTENDED THAT THE IMPUGNED PENALTY ORDER IS BARRED BY LIMITATION. WE HAVE ALSO HEARD THE LD. DR ON THIS ISSUE. 6. WE HAVE GONE CAREFULLY THROUGH THE PROVISIONS OF SEC. 275 OF THE ACT. ON A CAREFUL READING OF THE SAME, WE NOTICE THAT SEC. 27 5(1)(C) OF THE ACT IS APPLICABLE TO THE INSTANT CASE, AS PER WHICH NO ORDER IMPOSING PENALT Y SHALL BE PASSED AFTER THE EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMP LETED, OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED, WHICHEVER PERIOD EXPIRES LATER. ACCORDING TO THE ASSESSEE, THE ACTION FOR I MPOSITION OF PENALTY WAS INITIATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER ITSEL F. HOWEVER, A CAREFUL READING OF THE PROVISIONS OF SECTION 271D SHOWS THAT THE PENALTY I MPOSABLE U/S. 271D SHALL BE IMPOSED BY THE JOINT COMMISSIONER. SINCE THE AO DO ES NOT HAVE POWER TO IMPOSE PENALTY U/S 271D OF THE ACT, WE ARE UNABLE TO ACCEP T THE CONTENTIONS OF THE ASSESSEE THAT THE PENALTY PROCEEDINGS HAVE BEEN INITIATED BY THE ASSESSING OFFICER. IN THE INSTANT CASE, WE NOTICE THAT THE JOINT COMMISSIONER OF INCO ME-TAX HAS INITIATED THE PENALTY PROCEEDINGS BY ISSUING A NOTICE U/S. 274 R.W.S. 271 D OF THE ACT ON 17-02-2010. THE JT. COMMISSIONER HAS PASSED THE PENALTY ORDER ON 19-08- 2010, I.E., WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED. HENCE, IN OUR VIEW, THE PENALTY ORDER IS NOT BARRED BY LIMITATION . ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THE CROSS OBJECTION FILED BY THE ASSESSEE. 7. WITH REGARD TO THE MERITS OF THE ADDITION, THE L D. D.R SUBMITTED THAT THE LD. CIT(A) HAS SIMPLY ACCEPTED THE WRITTEN SUBMISSIONS GIVEN BY THE ASSESSEE WITHOUT VERIFYING THE SAME. THE LD. CIT(A) HAS CONSIDERED THE GENUINENESS OF THE LOAN AS ONE OF THE GROUNDS FOR CANCELLING THE PENALTY. THE LD. DR SUBMITTED THAT THE APPLICATION OF PROVISIONS OF SEC. 269SS SHALL COME INTO OPERATION ONLY IN RESPECT OF GENUINE LOANS AND HENCE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CANCELLI NG THE PENALTY ON THAT REASONING. THE LD D.R FURTHER SUBMITTED THAT THE ASSESSEE IS HAVIN G SUFFICIENT CASH BALANCES IN ITS BOOKS OF ACCOUNT, WHICH PROVES THAT THERE WAS NO URGENT B USINESS NECESSITY IN TAKING LOANS BY WAY OF CASH. I.T.A. NO.240/COCH/2013 & C.O. NO. 21/COCH/2013 5 8. ON THE CONTRARY, THE LD. AR SUBMITTED THAT THE L D. CIT(A) HAS ALSO TAKEN INTO CONSIDERATION THE EXPLANATIONS GIVEN BY THE ASSESSE E WITH REGARD TO THE URGENT BUSINESS REQUIREMENT FOR AVAILING LOANS BY WAY OF CASH. THE LD. COUNSEL SUBMITTED THAT THE LD. CIT(A) HAS POINTED OUT THAT THE ASSESSEE HAD TO INC UR ALL EXPENSES IN CONNECTION WITH THE CONSTRUCTION OF MOBILE TOWERS IN ADVANCE AND TH EREAFTER IT HAS TO SUBMIT THE BILLS TO THE CELLULAR COMPANIES, WHICH USUALLY SETTLED THE B ILLS AT A MUCH LATER DATE. THE LD. CIT(A) HAS ALSO NOTICED THAT THE ASSESSEE COULD NOT AVAIL BANK LOANS FOR WANT OF SECURITY AND HENCE, IT HAD TO RESORT TO AVAILING OF FUNDS BY WAY OF CASH FROM CLOSE FRIENDS AND RELATIVES. THE LD COUNSEL SUBMITTED TH AT THE ASSESSEE WAS EXECUTING 83 PROJECTS DURING THIS YEAR AND 53 PROJECTS WERE COMP LETED BEFORE THE RECEIPT OF FIRST BILL. HE SUBMITTED THAT THE CASH BALANCE SHOWN IN THE CAS H BOOK IS THE AGGREGATE AMOUNT OF CASH KEPT IN ALL THE PROJECT SITES AND THE AMOUNT A VAILABLE IN EACH OF THE PROJECT SITE WAS SMALL AMOUNT ONLY. THE LD. COUNSEL ALSO PLACED RELIANCE ON HIS WRITTEN SUBMISSIONS, WHICH IS EXTRACTED BELOW, FOR THE SAKE OF CONVENIENCE:- 2. LOAN AMOUNT TO THE EXTENT OF RS.15.50 LAKHS IS RECEIVED BEFORE 10-09- 2005. THE FIRST BILL IS RECEIVED ON 26-09-2005 FROM M/S. BHARATHI CELLULAR LTD. IS RS.6,72,463/-. TILL THAT DATE RS.50,76,472/- IS SPENT ON THE CONTRACT. WITHOUT THE ABOVE CASH LOANS IT IS NOT POSSIBLE TO INVEST THESE AMOUNTS IN VARIOUS CONTRACTS. THE AMOUNT OF RS. 13 LAKH IS REC EIVED FROM THE CLOSE RELATIVES OF THE PARTNERS AND RS. 2.50 LAKHS FROM M R. SHEFEEQUE ONE OF THE PARTNER OF THE CONCERN. 3. OUT OF THE TOTAL AMOUNT CONSIDERED FOR THE PENAL TY RS.19,00,000/- THE BALANCE AMOUNT IS RECEIVED AS FOLLOWS:- DATE NAME OF LOAN CREDITOR AMOUNT 01.12.2005 SETHUMADHAVAN MATERNAL UNCLE OF 2,00,000/- PARTNER SREEJITH AND MAYA) 10.12.2005 JAYESH (BROTHER OF PARTNER MAYAS 1,50,000/ - HUSBAND MR. RAMESH) 3,50,000/- 4. APART FROM THE ABOVE FOR MEETING THE BUSINESS RE QUIREMENTS LOANS ARE RECEIVED BY PLEDGING GOLD ORNAMENTS ON THE FOLLOWIN G DATES:- I.T.A. NO.240/COCH/2013 & C.O. NO. 21/COCH/2013 6 DATE NAME OF LOAN CREDITOR AMOUNT 11.01.2006 MADHAVAN NAIR (FATHER OF 87,000/- PARTNER P.V. SREEJITH) 11.01.2006 P.V. SREEJITH (PARTNER) 85,000/- 11.01.2006 SREEJA. P.V. (SISTER OF PARTNER 50,000/- SREEJITH P.V.) 2,22,000/- 5. FOR MEETING THE URGENT REQUIREMENTS, JEWELLERY B ELONGING TO CLOSE RELATIVES OF MANAGING PARTNER SRI P.V. SREEJITH ARE PLEDGED AND FUNDS ARE RAISED. THE LOANS ARE RECEIVED FROM CLOSE RELATIVE S OF PARTNERS ONLY DUE TO BUSINESS EXIGENCY AND HENCE PENALTY U/S. 271D SHOUL D NOT BE IMPOSED. 6. THE FIRMS CASH BALANCE IS THE CASH BALANCE DIST RIBUTED AT VARIOUS PROJECT SITES. THE PROJECTS ARE DISTRIBUTED IN THE DISTRIC TS OF MALAPPURAM, THRISSUR, PALAKKAD, ERNAKULAM AND KANNUR. TOTAL NUMBER OF CON TRACTS IS 83 DURING THE PREVIOUS YEAR AND THE CASH BALANCE FROM THE CASH BO OD IS DISTRIBUTED IN THE PROJECT SITES AND THE CASH AT EACH SITE IS CONSIDER ABLE A LOWER AMOUNT. 7. THE FIRST BILL IS RECEIVED ON 26.09.2005 AND 58 CONTRACTS ARE IN PROGRESS IN THAT PERIOD THE BILL AMOUNTS RECEIVE IS ONLY 6,72,4 64/- FROM M/S. BHARATHI CELLULAR LTD. AFTER INVESTING RS. 50,76,472/-. THE CASH BALANCE AS PER THE CASH BOOK IS DISTRIBUTED AT VARIOUS WORK SITES TO M EET THE EXPENDITURE AND THE CASH BALANCE AS PER CASH BOOK IS ONLY SUM TOTAL OF ALL THE CASH BALANCES AT THE SITES OF CONTRACTS. IN THESE CIRCUMSTANCES IT IS ONLY A WRONG UNDERSTANDING THAT CASH LOANS ARE RECEIVED WHEN SUB STANTIAL AMOUNTS OF CASH BALANCE IS AVAILABLE WITH THE FIRM. 8. THIS IS THE FIRST YEAR OF THE BUSINESS OF FIRM A ND AT THE CLOSE OF THE YEAR AS ON 31.03.2006, THE TOTAL BILL SENT TO M/S. BHARATHI CELLULAR LTD. IN RESPECT OF 83 CONTRACTS IS RS. 1,90,32,223/- AND THE BILL AMOU NT RECEIVED TILL THE DATE 31.03.2006 IS RS. 1,35,94,418/- AND EXPENDITURE INC URRED UPTO 31.03.2006 IS RS. 1,53,95,848/- (EXCLUDING CREDIT BILLS). NO ADV ANCE PAYMENT IS RECEIVED FROM THE CLIENT M/S. BHARATHI CELLULAR LTD. AND THE BILLS AMOUNTS ARE RECEIVED AFTER CONSIDERABLE TIME. FOR THESE REASONS THE CON TENTION OF REVENUE THAT THE CASH LOANS ARE RECEIVED WHEN SUBSTANTIAL CASH IS AV AILABLE IS MISPLACED AND IS LIABLE TO BE REJECTED. 9. THE LOANS ARE REPAID DURING THE YEAR ENDED 31.03 .2007, 31.03.2008 AND 31.03.2009 THROUGH THE BANK ACCOUNTS. IN THE ABOVE CIRCUMSTANCES IT IS SUBMITTED THAT TH E RESPONDENT FIRM RECEIVED LOANS IN CASH FROM PARTNERS AND CLOSE REL ATIVES OF THE PARTNERS ONLY FOR MEETING THE WORKING CAPITAL REQUIREMENTS IN THE ABSENCE OF LOAN FROM ANY BANK AND DUE TO DELAYED PAYMENT OF BILLS BY M/S. BHARATHI I.T.A. NO.240/COCH/2013 & C.O. NO. 21/COCH/2013 7 CELLULAR LTD. THE CASH LOANS ARE RECEIVED FOR MEE TING THE CASH REQUIREMENT FOR THE CONTRACT. IN VIEW OF THE LARG E NUMBER OF CONTRACT AT DIFFERENT SITES IN DISTANT AREAS CASH AVAILABILITY IS REQUIRED AT THE WORK SITES. THE BALANCE OF CASH AS PER THE CASH BOOK SH OULD NOT BE CONSIDERED AS CASH AVAILABLE READILY WITH THE PARTNERS OF THE FIRM SINCE THE CASH AVAILABLE IN THE CASH BOOK IS DISTRIBUTED IN 83 WO RK SITES AND THE CASH AVAILABLE IN EACH WORK SITES IS ONLY A NOMINAL AMO UNT. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. IN THE WRITTEN SUBMISSIONS, THE ASSESSEE HAS REITERATED THE CONTEN TIONS THAT THE LOANS WERE RECEIVED IN CASH DUE TO URGENT BUSINESS REQUIREMENTS. IT IS POINTED OUT THAT THE ASSESSEE HAS EXECUTED 83 PROJECTS, IN WHICH 53 PROJECTS WERE COM PLETED BEFORE THE RECEIPT OF FIRST BILL. ACCORDING TO THE ASSESSEE, IT COULD NOT AVAI L BANK LOANS, SINCE IT COULD NOT COMPLY WITH THE TERMS AND CONDITIONS OF BANK AND HENCE IT WAS CONSTRAINED TO AVAIL LOANS FROM FRIENDS AND RELATIVES. IT IS ALSO THE SUBMISSION O F THE ASSESSEE THAT IT HAS EXECUTED ABOUT 83 PROJECTS AT DIFFERENT LOCATIONS AND IT DID NOT GET ANY ADVANCE FROM THE CELLULAR COMPANY. THE LD A.R ALSO SUBMITTED THAT THE ASSESS EE HAD COMPLETED 53 PROJECTS BEFORE THE RECEIPT OF FIRST BILL AMOUNT. ACCORDINGL Y, IT WAS SUBMITTED THAT THE CASH REQUIREMENT WAS HIGH. FURTHER, IT WAS SUBMITTED TH AT THE AVAILABLE CASH BALANCE WAS DISTRIBUTED AT DIFFERENT LOCATIONS AND THE CASH BAL ANCE AVAILABLE IN EACH OF THE LOCATION WAS LESSER AMOUNT ONLY. ACCORDING TO THE ASSESSEE , THE CASH RECEIVED THROUGH LOANS WERE ALSO DISTRIBUTED TO DIFFERENT LOCATIONS. ACCO RDINGLY, IT WAS SUBMITTED THAT THE ASSESSEE WAS CONSTRAINED TO TAKE LOANS BY WAY OF CA SH DUE TO URGENT BUSINESS REQUIREMENTS TO MEET THE CASH DEMAND EMANATING FROM VARIOUS PROJECT SITES. 10. WE NOTICE THAT THE ASSESSEE HAS GIVEN DETAI LED WRITE UP AND PRESENTED THE CASE BEFORE US IN AN ELABORATE MANNER. HOWEVER, WE NOTI CE THAT THE ASSESSEE SEEMS TO HAVE NOT GIVEN THIS EXPLANATION BEFORE THE JOINT CO MMISSIONER OF INCOME TAX. WE NOTICE THAT THE DEPARTMENTS CASE IS ALSO THAT THE LD CIT(A) HAS ACCEPTED THE EXPLANATIONS OF THE ASSESSEE WITHOUT CARRYING OUT A NY VERIFICATION. ACCORDINGLY, IT WAS SUGGESTED BY THE BENCH THAT THE MATTER MAY BE RE-EX AMINED BY THE JOINT COMMISSIONER OF INCOME TAX BY DULY CONSIDERING THE EXPLANATIONS OF THE ASSESSEE. BOTH THE PARTIES AGREED WITH THE SAID SUGGESTION. ACCORDINGLY, WE S ET ASIDE THE ORDER OF THE LD CIT(A) I.T.A. NO.240/COCH/2013 & C.O. NO. 21/COCH/2013 8 AND RESTORE THE MATTER TO THE FILE OF THE JOINT COM MISSIONER OF INCOME TAX WITH THE DIRECTION TO EXAMINE THE ISSUE AFRESH BY DULY CONSI DERING THE INFORMATION AND EXPLANATIONS THAT MAY BE FILED BY THE ASSESSEE AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 11. IN THE RESULT, THE APPEAL FILED BY THE REVE NUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 13-11-2013. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 13TH NOVEMBER, 2013 GJ COPY TO: 1. M/S. SPACE STRUCTURES, FAZAL APARTMENTS, NEAR KI NFRA PARK, CHELEMBRA, MALAPPURAM. 2.THE JT. COMMISSIONER OF INCOME-TAX, RANGE-2, KOZH IKODE. 3.THE COMMISSIONER OF INCOME-TAX(APPEALS)- KOZHIKOD E. 4.THE COMMISSIONER OF INCOME-TAX, KOZHIKODE. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN