Bookzilla, Salem V. ITO, Salem

ITA 1282/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6125 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 22-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: T S LAKSHMI VENKATRAMAN
• Section: 234B

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL , SMC B BENCH, CHENNAI . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1282/MDS/2017 ( / ASSESSMENT YEAR: 2010-11) M/S. BOOKZILLA, NO.5/241F, RATHNA ARCADE, FIVE ROAD, MEYYANUR, SALEM 636 004. VS THE INCOME TAX OFFICER, WARD 1(4), CHENNAI. PAN: AAGFB4143B ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI T.S. LAKSHMIVENKATRAMAN, CA /RESPONDENT BY : SHRI B. SAGADEVAN, JCIT /DATE OF HEARING : 02.08.2017 !' /DATE OF PRONOUNCEMENT : 21 .09.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS), SALEM DATED 23.03.2017 IN ITA NO.43/2013-14 FOR THE ASSESSMENT YEAR 2010-11 PASSED U/S.250(6) R.W.S.143 (3) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS APPEAL, HOWEVER THE CRUXES OF THE ISSUE ARE THAT THE LD.CIT (A) HAS ERRED IN SUSTAINING THE ADDITION MADE BY THE LD.AO AMOUNT ING TO RS.2,26,080/- AND LEVYING INTEREST U/S.234B & 234C OF THE ACT. 2 ITA NO.1282/MDS/2017 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A FIRM, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 ON 30.09.2010 ADMITTING TOTAL INCOME OF RS.2,77,170/-. THE CASE WAS SELECTED FOR SCRUTINY AND FINAL ASSESSMENT ORDE R WAS PASSED U/S.143(3) OF THE ACT ON 11.03.2013, WHEREIN THE LD .AO MADE ADDITION OF RS.4,76,570/-. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT W AS OBSERVED BY THE LD.AO THAT THE NAME OF THE PARTNER OF THE FIRM SHRI RANGANATHA PRABHU WAS SHOWN AS DEBTOR FOR RS.9 ,68,868/- AND TRADE DEBTOR FOR RS.9,31,550/-. IT WAS ALSO NO TICED BY THE LD.AO THAT THE ASSESSEE HAD DEBITED AN EXPENDITURE OF RS.1,56,355/- TOWARDS INTEREST PAID @ 12% ON THE LO AN AMOUNT RECEIVED FROM THE PARTNER SHRI RANGANATHA PRABHU. THEREFORE THE LD.AO QUERIED AS TO WHY THE SAME 12% WAS NOT CH ARGED ON THE LOAN AMOUNT AND TRADE DEBTORS AMOUNT EXTENDED T O SHRI RANGANATHA PRABHU THE PARTNER IN THE ASSESSEE FIRM. THE ASSESSEE HAD SUBMITTED BEFORE THE LD.AO THAT THERE WAS NO NEXUS BETWEEN THE AMOUNT ON WHICH INTEREST IS PAID AND THE AMOUNT WITHDRAWN BY THE PARTNER SHRI RANGANATHA PRA BHU AND HENCE THE INTEREST WAS NOT CHARGED. HOWEVER, THE L D.AO REJECTED THE EXPLANATION OFFERED BY THE ASSESSEE AN D MADE ADDITION OF RS.2,26,080/- BEING THE AMOUNT OF INTER EST WORKED OUT AT 12% ON THE LOAN AND TRADE DEBTS STANDING IN THE NAME OF THE PARTNER SHRI RANGANATHA PRABHU. ON APPEAL, THE LD. CIT(A) SUSTAINED THE ORDER OF THE LD.AO BY BRIEFLY STATING THAT THE ASSESSEE HAD NOT PRODUCED ANY CONVINCING EVIDENCE I N SUPPORT OF HIS CLAIM. 3 ITA NO.1282/MDS/2017 5. BEFORE ME, THE LD.AR SUBMITTED THAT THE AMOUNT A DVANCED TO THE PARTNER OF THE FIRM WHERE OUT OF NON-INTERES T BEARING FUNDS AND THEREFORE ADDITION MADE BY THE LD.REVENUE AUTHO RITIES ARE NOT MAINTAINABLE. HE FURTHER REQUESTED THAT THE MA TTER MAY BE REMITTED BACK TO THE FILE OF LD.AO, SO THAT HE CAN SUBSTANTIATE HIS CLAIM VIVIDLY BEFORE HIM. THE LD.DR COULD NOT RAIS E ANY SERIOUS OBJECTION FOR THE SAME. 6. AFTER HEARING BOTH SIDES, IM ALSO OF THE CONSID ERED VIEW THAT THE MATTER SHOULD BE LOOKED AFRESH AND IN DETA IL BEFORE MAKING ADDITION IN THE HANDS OF THE ASSESSEE. THER EFORE IN THE INTEREST OF JUSTICE, I HEREBY REMIT THE MATTER BACK TO THE FILE OF LD.AO FOR DE-NOVA CONSIDERATION. WITH RESPECT TO TH E OTHER ISSUE IN THE APPEAL BEING LEVY OF INTEREST U/S. 234B & 23 4C OF THE ACT, IT IS CONSEQUENTIAL AND ACCORDINGLY DISPOSED OFF. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 21 ST SEPTEMBER, 2017 AT CHENNAI. SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER #$ /CHENNAI, %& /DATED 21 ST SEPTEMBER, 2017 RSR & () *) /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. - ( )/CIT(A) 4. - /CIT 5. )./ 0 /DR 6. /1 /GF