M/s KGN Electricals, Tumkur V. ACIT, Tumkur

ITA 1304/BANG/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9395 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 11-07-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 02-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR AGARWAL JT
• Keywords: Opportunity of being heard; Non-deduction of tax; Assessment record
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.1304/BANG/2013 ASSESSMENT YEAR : 2007-08 M/S. KGN ELECTRICALS, NO.144, RAILWAY STATION ROAD, TUMKUR. PAN: AADFK 4853C VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, TUMKUR. APPELLANT RESPONDENT APPELLANT BY : SHRI G. VENKATESH, ADVOCATE RESPONDENT BY : SHRI SUNIL KUMAR AGARWAL, JT. CIT(DR) DATE OF HEARING : 11.07.2016 DATE OF PRONOUNCEMENT : 08.09.2016 O R D E R PER VIJAY PAL RAO, JUDICIAL MEMBER THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 2 4.06.2013 OF THE CIT(APPEALS)-II, BANGALORE ARISING FROM THE ASSESSM ENT ORDER PASSED U/S. 143(3) R.W.S. 263 OF THE INCOME-TAX ACT, 1961 ['THE ACT'] FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE AUTHORITIES BELOW IN SO FAR A S IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY, FACTS, WEI GHT OF EVIDENCE, PROBABILITIES AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS - 11) (HEREINAFTER REFERRED TO AS THE CIT (A)), ERRED IN CONFIRMING THE ITA NO.1304/BANG/2013 PAGE 2 OF 11 ADDITIONS MADE BY THE AO WITHOUT GOING INTO THE MER ITS OF THE CASE. 3. THE LEARNED CIT(A), ERRED IN CONFIRMING THE ADDI TION OF RS 17,60,000/- AS UNCONFIRMED CREDITORS DESPITE THE FACT THAT ALL THE CREDITORS HAD BEEN SUMMONED DURING THE TIME OF ORIGINAL ASSESSMENT AND BALANCE CONFIRMATIONS FROM THE SAME WERE OBTAINED INDEPENDENTLY AND THE SAME WERE AVAILABLE ON RECORD DURING THE COURSE OF ORIGINAL ASSESSMENT. HAVING, T AKEN THE CONFIRMATION INDEPENDENTLY, THE ASSISTANT COMMISSIO NER IS PRECLUDED FROM MAKING ANY FURTHER ADDITION ON THIS ACCOUNT. 4. THE LEARNED CIT(A) , ERRED IN CONFIRMING A SUM OF RS.73,937 / - BEING INTEREST PAID ON VARIOUS LOANS BORROWED BY TH E COMPANY. THE A.O. FAILED TO APPRECIATE THAT THE INTEREST PAID IS ON ACCOUNT OF BORROWING FOR THE PURPOSE OF BUSINESS AN D WARRANTS FULL ALLOWANCE IN TERMS OF SECTION 36(1) (III) OF T HE INCOME-TAX ACT, 1961. 5. THE HON'BLE CIT (APPEALS) CONTENDED THAT THE ME RITS OF THE CASE CANNOT BE CONSIDERED BY HER IN AN APPEAL, AGAINST THE COMPLIANCE BY THE AO WITH THE DIRECTIONS OF HIS HIG HER AUTHORITY AND ADVISED THE APPELLANT TO APPROACH THE ITAT FOR RELIEF, IGNORING THE FACT THAT THE APPELLANT HAD A CASE BOT H ON FACTS AND IN LAW. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D, SUBSTITUTE, CHANGE, DELETE ANY OF THE GROUNDS OF APPEAL. 7. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEALS MAY BE ALLOWED AND JUSTICE RENDERED. 3. THE ORIGINAL ASSESSMENT WAS COMPLETED U/S. 143(3 ) ON 15.10.2009 WHEREIN THE TOTAL INCOME WAS DETERMINED AT RS.1,05, 64,186. THE ASSESSMENT WAS ALSO SUBSEQUENTLY RECTIFIED U/S. 154 OF THE ACT GIVING CREDIT OF TAX OF RS.4,05,800. THEREAFTER, THE COMMISSIONE R OF INCOME-TAX [THE CIT] ON VERIFICATION OF THE ASSESSMENT RECORD, NOT ICED THAT THE ORDER ITA NO.1304/BANG/2013 PAGE 3 OF 11 PASSED BY THE ITO IS ERRONEOUS SO FAR AS IT IS PREJ UDICIAL TO THE INTERESTS OF REVENUE FOR THE REASONS RECORDED IN HIS SHOW CAUSE NOTICE AS UNDER:- (I) DURING THE COURSE OF ASSESSMENT PROCEEDINGS Y OU HAVE VIDE YOUR LETTER DATED 27.04.2009 OFFERED A SUM OF RS.17,60,000/- TOWARDS UNCONFIRMED CREDITORS FOR TAXATION PURPOSE AND YOU HAVE FILED REVISED STATEME NT OF INCOME SHOWING TAXABLE INCOME AT RS.1,06,03,940/-. HOWEVER, WHILE COMPLETING THE ASSESSMENT THIS SUM O F RS.17,60,000/- HAS BEEN OMITTED TO BE INCLUDED IN T HE COMPUTATION OF TOTAL TAXABLE INCOME AND THUS IT RES ULTED IN UNDER ASSESSMENT TO THE EXTENT OF RS.17,60,000/- . (II) IT IS SEEN THAT YOU HAVE 'RECEIVED BANK INTER EST TO THE TUNE OF RS.9,18,957/ - WHEREAS YOU HAVE SHOWN IN TH E PROFIT AND LOSS ACCOUNT THE RECEIPT OF BANK INTERES T TO THE TUNE OF RS.8,45,020/-. THUS, THE SUM OF RS.73,937/- HAS ESCAPED ASSESSMENT WHICH HAS TO BE BROUGHT INTO TAX NET. (III) YOU HAVE INCURRED A SUM OF RS.29,19,000/- TO WARDS JCB HIGHER CHARGES BUT AS PER SECTION 194-I, YOU HA VE NOT MADE ANY TDS. NON-DEDUCTION OF TAX ON THE ABOVE SAID AMOUNT CALLS FOR DISALLOWANCE OF THE ENTIRE AM OUNT U/S 40(A)(IA) OF THE ACT. 4. THUS, THE CIT PROPOSED TO REVISE THE ASSESSMENT ORDER ON THREE ISSUES COMPRISING THE INCOME OFFERED BY THE ASSESSE E OF RS.17,60,000 TOWARDS UNCONFIRMED CREDITORS WAS NOT ADDED WHILE C OMPLETING THE ASSESSMENT, THE BANK INTEREST RECEIVED BY THE ASSES SEE WAS SHOWN IN THE PROFIT & LOSS ACCOUNT LESSER TO THE EXTENT OF RS.73 ,937 AND THE EXPENDITURE INCURRED ON JCB HIRE CHARGES WITHOUT DEDUCTION OF T AX AT SOURCE WAS REQUIRED TO BE DISALLOWED U/S. 40(A)(IA) OF THE ACT . THE CIT VIDE REVISION ORDER DATED 16.02.2012 SET ASIDE THE ASSESSMENT ORD ER TO THE EXTENT OF THESE THREE ISSUES AND DIRECTED THE AO TO REDO THE SAME AFRESH AS PER THE ITA NO.1304/BANG/2013 PAGE 4 OF 11 OBSERVATIONS MADE IN THE REVISION ORDER, AFTER AFFO RDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE ASSESSMENT ORDER PASSED PURSUANT TO THE R EVISION ORDER OF THE CIT, THE AO MADE THE ADDITIONS ON ACCOUNT OF INCOME OF RS.17,60,000 OFFERED BY THE ASSESSEE TOWARDS UNCONFIRMED CREDITO RS AS WELL AS THE DIFFERENCE OF RS.73,937 BEING THE SHORT AMOUNT OF I NTEREST CREDITED TO THE PROFIT & LOSS ACCOUNT. AS REGARDS THE DISALLOWANCE U/S. 40(A)(IA) TOWARDS THE JCB HIRE CHARGES FOR NON-DEDUCTION OF TDS, THE AO ACCEPTED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT PAYMENTS WERE NO T MADE EXCEEDING RS.20,000 IN EACH CASE. THUS, OUT OF THREE ISSUES WHICH WERE SUBJECT MATTER OF REVISION, THE AO MADE THE ADDITIONS ON AC COUNT OF TWO ISSUES. THERE IS NO DISPUTE THAT THE ASSESSEE DID NOT CHALL ENGE THE REVISION ORDER PASSED U/S. 263 AND CONSEQUENTLY THE SAID ORDER PAS SED BY THE CIT U/S. 263 ATTAINED FINALITY. 6. THE ASSESSEE CHALLENGED THE ACTION OF THE AO IN MAKING THE ADDITIONS IN PURSUANCE OF THE REVISION ORDER BEFORE THE CIT(APPEALS), BUT COULD NOT SUCCEED. AS REGARDS THE ADDITION OF RS.1 7,60,000 AS UNCONFIRMED CREDITORS, THE LD. AR OF THE ASSESSEE H AS SUBMITTED THAT THOUGH THE ASSESSEE OFFERED THIS AMOUNT IN THE ORIG INAL ASSESSMENT PROCEEDINGS, HOWEVER, THE AO DID NOT ACCEPT THE SAI D OFFER OF THE ASSESSEE AND PROCEEDED TO CONDUCT AN INDEPENDENT ENQUIRY. T HE AO AFTER VERIFICATION OF THE CONFIRMATIONS FROM THE CREDITOR S FOUND THAT THE CLAIM OF THE ASSESSEE IS GENUINE AND THEREFORE DID NOT MAKE ANY ADDITION ON ITA NO.1304/BANG/2013 PAGE 5 OF 11 ACCOUNT OF SUNDRY CREDITORS. HOWEVER, THE AO PROP OSED TO MAKE AN ADDITION OF 5% OF THE TOTAL EXPENDITURE ON THE GROU ND THAT SOME OF THE EXPLANATIONS ARE NOT SUPPORTED BY PROPER VOUCHERS, RATHER THE ASSESSEE HAS PRODUCED ONLY SELF-MADE VOUCHERS. THEREFORE, T HE AO PROPOSED TO MAKE AN ADDITION OF RS.17,20,000 BEING 5% OF THE EX PENDITURE WHICH WAS ACCEPTED BY THE ASSESSEE. 7. THE LD. AR HAS POINTED OUT THAT DURING THE REVIS ION PROCEEDINGS BEFORE THE CIT, THE ASSESSEE POINTED OUT THAT THE A DDITION OF RS.17,60,000 WAS NOT MADE BY THE AO, WHEN ON AN INDEPENDENT ENQU IRY THE AO WAS SATISFIED WITH THE GENUINENESS OF THE CREDITORS AND THEREFORE THERE IS NO ERROR IN THE ASSESSMENT ORDER. ALTERNATIVELY, THE ASSESSEE ACCEPTED THE ADDITION PROPOSED BY THE AO 5% OF RS.17,20,000. TH EREFORE, THERE WAS NO QUESTION OF MAKING TOTAL ADDITION OF RS.17,60,000 O N ACCOUNT OF UNCONFIRMED CREDITORS. THE LD. AR THUS CONTENDED T HAT AFTER CONSIDERING THIS EXPLANATION OF THE ASSESSEE, THE CIT HAS DIRE CTED THE AO TO REDO THE ASSESSMENT AFRESH AND THUS THE AO WAS REQUIRED TO C ONDUCT A FRESH ENQUIRY IN THE PROCEEDINGS PURSUANT TO THE REVISION ORDER. THE LD. AR HAS SUBMITTED THAT THE AO DID NOT CONDUCT ANY ENQUIRY I N THE PROCEEDINGS PURSUANT TO THE REVISION ORDER AND HAS JUST MADE TH E ADDITION OF THE SAID AMOUNT OF RS.17,60,000. HE HAS CONTENDED THAT EVEN THE EXPLANATION AND SUBMISSION MADE BY THE ASSESSEE HAS NOT BEEN RECONS IDERED BY THE AO WHILE MAKING THE ADDITION. THE LD. AR HAS ;POINTED OUT THAT EVEN THE CIT(APPEALS) HAS NOT GONE INTO THE MERITS OF THE IS SUE AND CONFIRMED THE ITA NO.1304/BANG/2013 PAGE 6 OF 11 ADDITION ON THE REASON THAT ONCE AN ADDITION WAS SU BJECT MATTER OF THE REVISION ORDER WHICH HAS NOT BEEN CHALLENGED BY THE ASSESSEE, THEN HE HAS NO JURISDICTION TO DECIDE THE SAID ISSUE. 8. HENCE THE LD. AR OF THE ASSESSEE HAS SUBMITTED T HAT WHEN THE ASSESSEE HAS POINTED OUT TO THE AO THAT A PROPER EN QUIRY WAS CONDUCTED BY THE AO IN THE ORIGINAL ASSESSMENT PROCEEDINGS AN D AO WAS SATISFIED WITH THE CLAIM OF CREDITORS, THEN NO ADDITION CAN B E MADE ON THIS ACCOUNT. 9. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE CIT HAS PROPOSED TO REVISE THE ASSESSMENT BY RECORDING THE REASON THAT THE AO HAS NOT MADE ADDITION OF RS.17,60,000 WHICH WAS ORI GINALLY OFFERED BY THE ASSESSEE AND THEREFORE THE ORDER OF AO WAS FOUND TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. HE HAS TH US CONTENDED THAT THE CIT HAS GIVEN A FINDING ON THIS ISSUE AND THEREFORE IN THE ABSENCE OF ANY CHALLENGE TO THE REVISION ORDER, THE FINDINGS OF TH E CIT HAS REACHED FINALITY AND CANNOT BE CHALLENGED IN THE SUBSEQUENT PROCEEDI NGS. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. VIDE ITS LETTER DATED 27.4.200 9, THE ASSESSEE OFFERED A SUM OF RS.17,60,000 TOWARDS UNCONFIRMED BALANCES OF CREDITORS AND ACCORDINGLY AGREED TO PAY TAX. IT APPEARS THAT THE AO DID NOT ACCEPT THE SAID INCOME OFFERED BY THE ASSESSEE ON ACCOUNT OF U NCONFIRMED BALANCES OF CREDITORS AND PROCEEDED TO CONDUCT AN ENQUIRY BY CALLING THE NECESSARY RECORD FROM THE CREDITORS. ITA NO.1304/BANG/2013 PAGE 7 OF 11 11. IT IS BROUGHT TO OUR NOTICE THAT A NOTE IS APPE NDED AT THE BOTTOM OF ASSESSMENT ORDER IN RESPONSE TO THE INTERNAL AUDIT. A COPY OF THE SAID NOTE ALONG WITH THE ASSESSMENT ORDER HAS BEEN FILED BY T HE ASSESSEE AT PAGES 38 & 39 OF THE PAPER BOOK. FOR READY REFERENCE, WE REPRODUCE THE NOTE MADE BY THE AO AS UNDER:- THE ASSESSEE WAS ASKED TO FURNISH THE NAME AND AD DRESSES OF SUNDRY CREDITORS SHOWN IN THE BALANCE SHEET. HE HAS FURNISHED THE NAME AND ADDRESSES OF SUNDRY CREDITORS ALONGWIT H THE CONFIRMATIONS WHICH ARE PLACED ON RECORD. THERE AR E NO VARIATIONS IN CONFIRMATIONS FURNISHED. MY PREDECES SOR HAS EXAMINED SOME OF THE CREDITORS ON OATH AND FOUND NO DISCREPANCIES. THE CREDITORS SHOWN IN THE BALANCE S HEET ARE TREATED AS GENUINE. THE EXPENSES DISALLOWED ON ESTIMATED BASIS ON THE SELF MADE VOUCHERS. THERE IS NO CONCEALMENT OF INCOME BY THE ASSESSEE AND PENALTY PROCEEDINGS U/S. 271(1)(C) IS NOT INITIATED. 12. FROM THE ABOVE NOTE OF THE AO, IT IS CLEAR THAT THE AO FOUND THAT THE ASSESSEE FURNISHED ADDRESSES ALONG WITH THE CONFIRM ATIONS OF THE CREDITORS AND THERE WAS NO VARIATION IN THE CONFIRMATIONS FUR NISHED. THE AO WHO COMPLETED THE ORIGINAL ASSESSMENT EXAMINED SOME OF THE CREDITORS ON OATH AND FOUND NO DISCREPANCIES. THERE IS NO DENIAL THA T THE AO CONDUCTED THE ENQUIRY TO VERIFY THE GENUINENESS OF THE CLAIM OF C REDITORS AND THEREFORE THE CLAIM WAS ALLOWED BY TREATING THE SAME AS GENUINE. THIS EXPLANATION WAS FURNISHED BY THE ASSESSEE BEFORE THE CIT DURING THE REVISION PROCEEDINGS AND AFTER CONSIDERING THIS EXPLANATION, THE CIT FIN ALLY SET ASIDE THE ASSESSMENT ORDER ON THREE ISSUES AS UNDER:- IN THE LIGHT OF THE ABOVE DISCUSSION, I HOLD THAT THE ORDER U/S. 143(3), DTD: 15/10/2009, PASSED BY THE ASSESSING OF FICER IS ITA NO.1304/BANG/2013 PAGE 8 OF 11 ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTER EST OF REVENUE. ACCORDINGLY, INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT, THE ASSESSMENT IS SET ASIDE WITH A DIRECTION TO THE ASSESSING OFFICER TO RE-DO THE SAME AFRESH ON THE ABOVE LINES AND AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. 13. THE CONCLUDING PART OF THE REVISION ORDER LEAVE S NO DOUBT ABOUT A FRESH ASSESSMENT ON THESE THREE ISSUES WHICH WERE S UBJECT MATTER OF THE REVISION TO BE DONE BY THE AO AFTER CONDUCTING A PR OPER ENQUIRY AFTER AFFORDING OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS, THE REVISION ORDER DOES NOT GIVE A CONCLUSIVE FINDING ON ANY OF THE IS SUES. BUT THE AO WAS TO REDO THE ASSESSMENT ON THESE THREE ISSUES AND THERE FORE A DISCRETION WAS AVAILABLE WITH THE AO IN THE ASSESSMENT COMPLETED I N PURSUANCE OF THE REVISION ORDER PASSED U/S. 263, WHICH WAS DONE BY T HE AO BY ACCEPTING THE CLAIM OF DISALLOWANCE U/S. 40(A)(IA), WHEN THE AO F OUND ON VERIFICATION OF THE RECORD THAT THE PAYMENTS WERE NOT EXCEEDING RS. 20,000 IN EACH CASE. ACCORDINGLY, EVEN IF THE ASSESSEE DID NOT CHALLENGE THE REVISION ORDER, IT DOES NOT AFFECT THE SUBSEQUENT PROCEEDING WHEN ALL THE THREE ISSUES WERE LEFT OPEN FOR FURTHER VERIFICATION AND DECISION BY THE AO. 14. WE FIND THAT NEITHER THE AO CONDUCTED ANY ENQUI RY WHILE COMPLETING THE ASSESSMENT PURSUANT TO THE REVISION ORDER NOR T HE CIT(APPEALS) HAS GONE INTO THE MERITS OF THE ISSUE OF RS.17,60,000. THEREFORE, THERE IS NO COMPLIANCE OF THE DIRECTIONS OF THE CIT PASSED IN T HE REVISION ORDER U/S. 263 OF THE ACT. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE THIS ISSUE TO THE RECORD OF CIT(APPEALS) TO DECIDE IT AFRESH ON MERITS AS ITA NO.1304/BANG/2013 PAGE 9 OF 11 THERE WAS NO CONCLUDING FINDING OF THE CIT IN THE R EVISION ORDER, WHICH HAS BEEN WRONGLY PERCEIVED BY THE CIT(APPEALS) IN THE I MPUGNED ORDER. 15. THE NEXT ISSUE IS ADDITION ON ACCOUNT OF DIFFER ENCE IN THE INTEREST INCOME RECEIVED AS PER FORM 16A AS WELL AS THE AMOU NT CREDITED IN THE PROFIT & LOSS ACCOUNT. 16. WE HAVE HEARD THE LD. AR AS WELL AS THE LD. DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. AR OF ASSESSE E HAS REFERRED TO THE EXPLANATION FURNISHED BEFORE THE AO IN THE PROCEEDI NGS IN PURSUANCE OF THE REVISION ORDER AND SUBMITTED THAT THE DIFFERENCE OF INTEREST INCOME CREDITED TO THE PROFIT & LOSS ACCOUNT IS ONLY DUE TO THE REA SON THAT THE ASSESSEE CARRIED THE INTEREST INCOME BEING NET, AFTER REDUCI NG THE INTEREST EXPENDITURE FROM THE GROSS INTEREST RECEIVED DURING THE YEAR. HE HAS REFERRED TO THE DETAILS AT PAGE 28 OF PAPER BOOK AN D SUBMITTED THAT THE CIT NOTED THAT ASSESSEE RECEIVED INTEREST OF RS.9,18,95 7, WHEREAS THE ASSESSEE HAS RECEIVE GROSS INTEREST INCOME OF RS.9, 55,158 AND AN AMOUNT OF RS.1,10,138 HAS BEEN PAID TOWARDS INTEREST ON LO AN, INTEREST ON CAR LOAN, INTEREST ON CURRENT ACCOUNT AND INTEREST ON CASH CR EDIT. THEREFORE, ALL FOUR ITEMS COMES TO A TOTAL AMOUNT OF INTEREST PAYMENT O F RS.1,10,138 WHICH WAS BEEN REDUCED FROM THE GROSS AMOUNT AND THE NET AMOUNT OF RS.8,45,020 HAS BEEN CREDITED TO THE PROFIT & LOSS ACCOUNT. THUS, THE LD. AR HAS SUBMITTED THAT THERE IS NO DISCREPANCY IN THE I NTEREST INCOME CREDITED TO THE PROFIT & LOSS ACCOUNT. ITA NO.1304/BANG/2013 PAGE 10 OF 11 17. ON THE OTHER HAND, THE LD. DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 18. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD, WE FIND THAT AS PER SCHEDULE VI OF BALANCE SHEET, THE ASSESSEE HAS SHOWN THE LOAN AMOUNT OF RS.4,69,595 A S CAR LOAN AND DEPOSIT LOAN OF RS.1,20,000 FROM VYSYA CO-OP. BANK. THEREFORE, IT IS APPARENT FROM THE RECORD THAT THE ASSESSEE HAS PAID INTEREST ON THE LOAN AMOUNT APART FROM THE INTEREST CLAIMED TO HAVE BEEN PAID ON THE CURRENT ACCOUNT AND CASH CREDIT FACILITY AVAILED BY THE ASS ESSEE. THE DETAILS OF GROSS RECEIPTS OF INTEREST AND PAYMENT OF INTEREST DURING THE YEAR HAS BEEN GIVEN BY THE ASSESSEE TO THE AO WHICH HAS BEEN PLAC ED AT PAGE 28 OF THE PAPER BOOK AS UNDER:- ITA NO.1304/BANG/2013 PAGE 11 OF 11 19. THUS, PRIMA FACIE IT APPEARS THAT DISCREPANCY IN THE AMOUNT INTEREST INCOME CREDITED IN THE PROFIT & LOSS ACCOUNT IS ONL Y DUE TO THE REASON THAT ASSESSEE HAS CARRIED THE INTEREST INCOME NET OF THE INTEREST PAID DURING THE YEAR. HOWEVER, THIS FACT HAS NOT BEEN EXAMINED BY THE AUTHORITIES BELOW. ONLY FOR THE LIMITED PURPOSE OF VERIFYING THE DETAI LS EXPLAINED BY THE ASSESSEE, THIS ISSUE IS REMITTED TO THE RECORD OF T HE CIT(APPEALS). 20. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF SEPTEMBER, 2016. SD/- SD/- (INTURI RAMA RAO ) (VIJAY PAL RA O ) ACCOUNTANT MEMBER JUDICI AL MEMBER BANGALORE, DATED, THE 8 TH SEPTEMBER, 2016. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.