Ranads Fashions P Ltd., CHENNAI V. DCIT Corporate Circle 5(1), CHENNAI

CO 7/CHNY/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3532 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 05-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G BASKAR; NIRANJANI S
• Keywords: Unexplained cash credit; Proportionate interest

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY , JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 2536/CHNY/2017 & CO. NO: 07/CHNY/2018 / ASSESSMENT YEAR : 2004-05 DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE -5(1), CHENNAI 600 034. VS. M/S. RANADS FASHIONS P LTD., NO. 27, CENOTAPH 1 ST STREET, TEYAMPET, CHENNAI 600 031. [PAN: AAACR 8521Q] ( / APPELLANT) ( &') /RESPONDENT & CROSS OBJECTOR) ASSESSEE BY : SHRI. G. BASKAR & SHRI NIRANJANI, ADVOCATES REVENUE BY : SHRI. ARV SREENIVASAN, JCIT 1 /DATE OF HEARING : 27.02.2018 1 /DATE OF PRONOUNCEMENT : 05.03.2018 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE REVENUE FILED THIS APPEAL IN ITA NO. 2536/201 7 AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-3, CH ENNAI IN ITA NO. 38/2008-09/CIT(A)-3 DATED 30.06.2017 FOR ASSESSMENT YEAR 2004-05. THE ASSESSEE FILED A CO IN CO NO. 07/2018 AGAINST THE S AME ORDER. :-2-: ITA NO. 2536/CHNY/2017 & CO NO: 07/CHNY/2018 2. WHILE MAKING THE ASSESSMENT FOR ASSESSMENT YEAR 2004-08 IN THE CASE OF M/S. RANADS FASHIONS P LTD., THE ASSESSEE, THE AO FOUND THAT THE ASSESSEE HAS TAKEN A FRESH LOAN FROM FIVE PERSONS T OTALLING AT RS. 13,72,000/- DURING THE ASSESSMENT YEAR. THE ASSESSEE COULD NO T FURNISH ANY CONFIRMATION LETTER ETC. OUT OF THE FIVE PERSONS, THE CREDITS APPEARING IN TWO PERSONS NAMES WERE DISALLOWED IN THE EARLIER YEAR ALSO. CONSIDERING FACTS AND CIRCUMSTANCES, THE ASSESSING OFFICER ADDED THE ENTIRE 13,72,000/- AS INCOME. FOM THE DETAILS/EVIDENCES FURNISHED FOR SE CURED/UNSECURED LOANS DURING THE COURSE OF ASSESSMENT YEAR 2003-04 AND FO R THIS ASSESSMENT YEAR., THE AO FOUND THAT RS. 29,25,880/- WAS OVER STATED I N THE ACCOUNTS WHICH HE HELD THAT IT REPRESENTED UNEXPLAINED CREDITS AND AC CORDINGLY MADE AN ADDITION. THE ASSESSEE HAD DEBITED RS. 28,000/- TO WARDS INTEREST ON THE LOANS/CREDITS. SINCE, CERTAIN CREDITS WERE ADDED BACK, THE ASSESSING OFFICER DISALLOWED PROPORTIONATE INTEREST AT RS. 20,000/- A ND CONCLUDED THE ASSESSMENT. AGGRIEVED, THE ASSESSEE FILED AN APPEA L BEFORE THE CIT(A). THE CIT(A) DELETED THE ADDITION OF RS. 29,25,880/- AND UPHELD THE OTHER ADDITIONS. 3. AGGRIEVED, THE REVENUE FILED THIS APPEAL PLEADIN G THAT THE LD. CIT(A) FAILED TO NOTE THAT RS. 20 LAKHS HAS RIGHTLY BEEN INCLUDED BY THE AO IN THE CALCULATION OF OVERSTATED BALANCE IN THE ACCOUN TS OF BOTH THE DIRECTORS SHRI R. NADARAJAH AND SHRI JAMAL MOHAMMED MEERAN AND THA T THE NAME OF MR. :-3-: ITA NO. 2536/CHNY/2017 & CO NO: 07/CHNY/2018 JAMMAL MOHAMMED MEERAN HAS BEEN MISSED OUT INADVERT ENTLY. THE LD. CIT(A) OUGHT TO HAVE NOTED THAT RS. 66,12,000/- MEN TIONED AS OPENING BALANCE IS JUST A TYPOGRAPHICAL ERROR AND DOES NOT BEAR ANY EFFECT TO THE CALCULATION OF THE CLOSING BALANCE IN THE LOAN ACCO UNT AS STATED BY THE ASSESSEE ETC. ON THE OTHER HAND, THE ASSESSEE FILE D CO PLEADING THAT THE CIT(A) WENT WRONG IN CONFIRMING THE ADDITION OF RS. 13,72,000/- AS UNPROVED CREDITS AND CONFIRMED THE DISALLOWANCE ON INTEREST OF RS. 20,000/- WITHOUT CONSIDERING THE EVIDENCE FILED IN SUPPORT OF THE GE NUINENESS OF LOANS. THE CIT(A) ALSO WENT WRONG IN NOT DIRECTING THE AO TO C ARRY FORWARD THE SET OF LOSS BROUGHT FORWARD FROM EARLY YEARS, THE DETAILS OF WHICH WERE ELABORATED IN PARA 10 OF WRITTEN SUBMISSION DATED 18.03.2016 FILE D BEFORE HIM ETC. 4. WE HEARD THE RIVAL CONTENTIONS AND FIND THAT THE SE ISSUES REQUIRE PROPER VERIFICATION OF FACTS AND ITS ASSOCIATED CIR CUMSTANCES. IN VIEW OF THAT, WE DEEM IT FIT TO REMIT THESE ISSUES BACK TO THE AO FOR A FRESH EXAMINATION. THE ASSESSEE SHALL PLACE ALL THE MATERIALS IN ITS S UPPORT BEFORE THE AO AND COMPLY TO THE AOS REQUIREMENTS AS PER LAW. THE AO IS FREE TO CONDUCT APPROPRIATE ENQUIRY AS DEEMED FIT, BUT HE SHALL FU RNISH ADEQUATE OPPORTUNITY TO THE ASSESSEE ON THE MATERIAL ETC TO BE USED AGAI NST IT AND DECIDE THE MATTER IN ACCORDANCE WITH LAW . :-4-: ITA NO. 2536/CHNY/2017 & CO NO: 07/CHNY/2018 5. IN THE RESULT, THE REVENUES APPEAL AND ASSESSEE S CO ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON MONDAY, THE 05 TH DAY OF MARCH, 2018 AT CHENNAI. SD/- ( . ) (DUVVURU RL REDDY) '# /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) # /ACCOUNTANT MEMBER /CHENNAI, 6 /DATED: 05 TH MARCH, 2018 JPV 1&89:9 /COPY TO: 1. ) / APPELLANT 2. &') /RESPONDENT 3. < ) ( /CIT(A) 4. < /CIT 5. 9& /DR 6. ? /GF