The ITO, Ward-6(3), Surat V. Shri Rikhabchand Sajjankumar Jain, Surat

ITA 1260/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9223 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 12-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 03-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SAPNESH SHETH
• Keywords: Additional evidence
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 1260/AHD/2013 / ASSESSMENT YEAR : 2008-09 ITO, WARD-6(3), SURAT VS SHRI RIKHABCHAND SAJJANKUMAR JAIN, PROP. M/S. ELEGENT DIAMOND CO., 204, GOPINATH APARTMENT, MAHIDHARPURA, JADAKHADI, SURAT-395003 PAN : ADNPJ 5395 F / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI ASHISH POPHARE, DR ASSESSEE BY : SHRI SAPNESH SHETH, AR DATE OF HEARING : 1 2/01/2017 DATE OF PRONOUNCEMENT IN COURT : 17/02/20 17 / O R D E R THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-I, SUR AT DATED 07.02.2013 FOR ASSESSMENT YEAR 2008-2009. 2. THE SOLITARY GROUND RAISED IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.38,46,438/ - MADE BY THE AO ON ACCOUNT OF DISCREPANCY IN DISCLOSED INCOME. 3. THE BRIEF FACTS ARE - DURING THE COURSE OF ASSES SMENT PROCEEDINGS, THE ASSESSEE COULD NOT PRODUCE THE CERTIFICATE FROM THE AXIS BANK FOR THE INTEREST AMOUNT CLAIMED BY THE ASSESSEE IN RESPECT OF BUYERS CREDIT AVAILED FOR IMPORTS. THE ASSESSING OFFICER ALSO MISQUOTED THE ACCOUNT BIFURCATION IN AY 2008-09 AND 2009-10 AND DUE TO THIS CONFUSION, T HE CLAIM U/S 36(1)(III) WAS DISALLOWED. SMC-ITA NO. 1260/AHD/2013 ITO VS. SHRI RIKHABCHAND SAJJANKUMAR JAIN AY : 2008-09 2 4. AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL W HERE THE LD. CIT(A) DELETED THE ADDITION IN QUESTION. THE RELEVANT PAR AGRAPH NOS. 5.1 TO 5.6 OF THE CIT(A)S ORDER CALLING FOR REMAND REPORT AND AL LOWING THE RELIEF ACCORDINGLY ARE AS UNDER:- 5.1 AS MENTIONED SUPRA, THE TOTAL PAYMENT CLAIMED B Y THE APPELLANT FOR TWO YEARS COMES TO RS.68,73,238/- AGAINST THE AMOUNT OF RS. 66,77,010/- MENTIONED IN THE CERTIFICATE GIVEN BY THE AXIS BANK . THIS DIFFERENCE OF RS.2,00,228/- IS PROCESSING FEE FOR SANCTION OF BUY ERS CREDIT. THEREFORE, THE TOTAL CLAIM OF THE APPELLANT IN ASSTT YEAR 2008-09 OF RS 38,46,438/- INCLUDES THE AMOUNT ACTUALLY PAID OF RS. 4,13,500/- AND THE PRO RATA PROVISION OF RS.34,32,938/- . THE AMOUNT ACTUALLY INCLUDES THE P AYMENT OF PROCESSING FEES OF RS.2,00,228/-, WHICH IS ALLOWABLE U/S 37(1) AND NOT U/S 36(1)(III) OF THE ACT. SINCE THE CERTIFICATE OBTAINED BY THE APPELLAN T FROM AXIS BANK WAS NOT PRODUCED AT THE TIME OF ASSESSMENT PROCEEDINGS, THE MATTER WAS REMANDED TO THE ASSESSING OFFICER VIDE LETTER DATED 12. 06. 201 2. THE REMAND REPORT DATED 05.07.2012 OF THE ASSESSING OFFICER WAS FORWARDED B Y THE JT. CIT, RANGE- 6, VIDE HIS LETTER DATED 06.07.2012. 5.2 IN THE REMAND REPORT, THE ASSESSING OFFICER STA TED THAT THE PRO RATA WORKING OF THE APPELLANT CANNOT BE A BASIS FOR DISA LLOWANCE AND THE CERTIFICATE FROM THE SAID BANK COULD HAVE BEEN OBTAINED AND PRO DUCED DURING THE ASSESSMENT PROCEEDINGS. MOREOVER, THE ASSESSING OFF ICER ALSO STATED THAT THE APPELLANT HAS CLAIMED INTEREST EXPENSES OF RS.1,03, 10,176/- AGAINST THE INTEREST AS PER THE CERTIFICATE OF AXIS BANK MENTIO NED AT RS. 66,77,010/- FOR THE TWO YEARS. 5.3 THE ASSESSING OFFICER'S WORKING GIVEN ON PAGE N O. 5 OF THE REMAND REPORT IS REPRODUCED HEREIN UNDER FOR REFERENCE. AS PER INTEREST CALCULATION SHEET INTEREST UPTO 31.03.2008 (COL. NO. 15) (SHOWN AS OUTSTANDING INTEREST IN P & L ACCOUNT RS. 34,32,938/- ADD: INTEREST FROM 01. 04. 208 (COL. NO. 11) (IE FY 2008-09 RELEVANT TO AY 2009-10) RS. 64,63,738/- TOTAL INTEREST AS PER INTEREST CALCULATION OF SHEET RS. 98, 96,676/- ADD: INTEREST PAID CLAIMED IN P&L ACCOUNT RS. 4, 13, 500 /- TOTAL INTEREST EXPENSES AS PER ASSESSES COMES TO RS. 1,03,10,176/- SMC-ITA NO. 1260/AHD/2013 ITO VS. SHRI RIKHABCHAND SAJJANKUMAR JAIN AY : 2008-09 3 5.4 THE APPELLANT POINTED OUT THAT THERE IS A CALCU LATION MISTAKE IN THE WORKING OF THE ASSESSING OFFICER. AS MENTIONED SUPR A, THE TOTAL OF EXPENDITURE INCLUDING PROCESSING CHARGES COMES TO RS.68,77,238/ - FOR TWO YEARS. WHEN THE PAYMENT MADE OF RS.4,13,500/- IS REDUCED FROM T HIS AMOUNT, WE GET THE AMOUNT PAYABLE AT RS.64,63,7387/-. OUT OF THIS, A PROVISION OF RS.34,32,938/- HAS BEEN MADE IN ASSESSMENT YEAR 2008-09 AND THE RE MAINING AMOUNT HAS BEEN CLAIMED IN ASSESSMENT YEAR 2009-10. HOWEVER, T HE ASSESSING OFFICER HAS ADDED BOTH THESE AMOUNTS, TO ARRIVE AT A FIGURE OF RS.98,96,676/- WHICH IS MATHEMATICALLY INCORRECT. 5.5 THE APPELLANT'S CONTENTION HAS BEEN EXAMINED AN D THE FACTUAL POSITION STATED BY THE APPELLANT IS CORRECT. MOREOVER, THE A PPELLANT COULD NOT OBTAIN THE CERTIFICATE FROM THE AXIS BANK AT THE TIME OF A SSESSMENT PROCEEDINGS AND THEREFORE, THE ADDITIONAL EVIDENCE IS ADMITTED AND THE ADDITION OF RS.38,36,438/- IS DELETED . 5.6 FURTHER, IT IS NOTICED THAT THE APPELLANT HAS C REDITED SUBSTANTIAL INTEREST INCOME IN ITS PROFIT & LOSS ACCOUNT, IN RESPECT OF 'FIXED DEPOSITS' AND LOANS AND ADVANCES. THE TOTAL INTEREST INCOME CRE DITED IS OF RS. 2,21,889/- CONSISTING OF TWO COMPONENTS, IE. RS.1,64,79,937/- AND RS.37,22,479/- WHICH INCLUDES INTEREST OF 'FIXED DEPOSIT AND PARTIES TO WHOM LOANS AND ADVANCES HAVE BEEN GIVEN. THEREFORE, THE ASSESSING OFFICERS ANOTHER ARGUMENT THAT THE APPELLANT HAS NOT SHOWN ANY INTEREST INCOME FROM TH ESE FIXED DEPOSITS IS ALSO INCORRECT. 5. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON TH E ORDER OF THE ASSESSING OFFICER. 6. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, RELIED ON THE ORDER OF THE LD. CIT(A) AND CONTENDED THAT THE AXIS BANK CERTIFICATE, WHICH WAS PART OF THE COPY OF ACCOUNT OF THE ASSESSEE, WA S VALIDLY ADMITTED BY THE LD. CIT(A) AS ADDITIONAL EVIDENCE AND THE REMAND RE PORT WAS CALLED THEREON. THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A ). THE LD. COUNSEL FOR THE ASSESSEE ALSO CONTENDS THAT THERE IS A FACTUAL MIST AKE INASMUCH AS THE RESULTANT AMOUNT OF DISALLOWANCE DELETED BY LD. CIT (A) IS RS.34,32,938/- WHICH IS CALCULATED IN PARAGRAPH 5.3 & 5.4 OF HIS O RDER. 7. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. IN MY SMC-ITA NO. 1260/AHD/2013 ITO VS. SHRI RIKHABCHAND SAJJANKUMAR JAIN AY : 2008-09 4 CONSIDERED VIEW, THE CORRECT AMOUNT OF DISALLOWANCE AT RS.34,32,938/- HAS BEEN RIGHTLY CALCULATED BY LD. CIT(A). THE ASSESSE E PRODUCED NECESSARY AXIS BANK CERTIFICATE. THE REMAND REPORT WAS CALLED THEREON. THE LD. CIT(A), AFTER FACTUALLY VERIFYING THE CLAIM OF INTE REST IN AY 2008-09 AND 2009-10, THE REMAND REPORT AND ADDITIONAL EVIDENCE, HAS RETURNED PROPER FINDING OF FACTS WHICH WILL NOT BE DISLODGED BY THE LD. DR. IN VIEW THEREOF, I FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WH ICH IS UPHELD AND THE REVENUES APPEAL IS ACCORDINGLY DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 17/02/2017 *BIJU T., SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD