Fathima Steels, CHENNAI V. ITO, CHENNAI

ITA 1305/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9231 (ITAT-CHENNAI)
• Duration Of Justice: 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 11-05-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: K RAVI
• Section: 143(3); 142(1)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 13 0 5 /MDS/2016 / ASSESSMENT YEAR :20 12 - 13 M/S. FATHIMA STEELS, NO. 55, LINGHI CHETTY STREET, CHENNAI 600 0 0 1 . [PAN: A A A F F5892R ] VS. THE INCOME TAX OFFICER , BUSINESS CIRCLE VI I (4)/ NON CORPORATE CIRC LE 11(1), CHENNAI 600 006. ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI K. RAVI , ADVOCATE / RESPONDENT BY : SHRI A. V. SREEKANTH , J CIT / DATE OF HEARING : 2 5 . 0 5 .201 6 / DATE OF P RONOUNCEMENT : 31 . 0 5 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH I S APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 13 , CHENNAI , DATED 02 . 03 .20 1 6 RELEVANT TO THE ASSESSMENT YEAR 20 12 - 13 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS WITH REGARD TO DISALLOWANCE OF EXPENDITURE TOWARDS INTEREST ON LOANS FOR NON DEDUCTION OF TAX. I.T.A. NO . 1 305 /M/ 16 2 2. THE ASSESSEE IS A PARTNERSHIP FIRM EN GAGED IN THE BUSINESS OF TRADING OF IRON AND STEELS AND THEIR ALLIED PRODUCTS. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012 - 13 ON 29.11.2012 ADMITTING TOTAL INCOME OF .2,88,316/ - AND THE SAME WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT]. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY TO VERIFY THE GENUINENESS OF UNSECURED LOANS AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED AND SERVED ON 30.09.2013. FURTHER NOTICE UNDER SECTION 142(1) OF THE ACT DATED 15.05.2014 WAS ALSO SERVED ON THE ASSESSEE. ACCORDINGLY, THE DETAILS FURNISHED BY THE ASSESSEE WERE CONSIDERED BY THE ASSESSING OFFICER AND COMPLETED THE ASSESSME NT UNDER SECTION 143(3) OF THE ACT BY DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT . 9,67,956/ - AFTER MAKING ADDITIONS. 3 . THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) SUSTAINED THE ADDITIONS MADE BY THE ASSESSING OFFICER BY FOLLOWING THE DECISIONS I N THE CASE OF CIT V. CRESENT EXPORT SYNDICATE [216 TAXMAN 258 (CAL)] AND CIT V. SIKANDARKHAN N. TUNVAR [2013] 357 ITR 312 (GUJ). I.T.A. NO . 1 305 /M/ 16 3 4 . ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMIT TED THAT THE ISSUES INVOLVED IN THE APPE AL ARE SQUARELY COVERED BY VARIOUS DECISIONS OF THE COORDINATE BENCH OF THE TRIBUNAL INCLUDING THE DECISION IN THE CASE OF SHRI N. PALANIVELU V. ITO IN [2015] 40 ITR (TRIB) 325 (CHENNAI) AND THE SAME SHOULD BE FOLLOW ED IN THE PRESENT CASE ALSO. 5 . PER CONTRA, BY RELYING ON THE DECISION OF THE COORDINATE BENCH IN THE CASE OF DSM SOFT PVT. LTD. V. ACIT IN I.T.A. NOS. 1897 & 1898/MDS/2015, THE LD. DR HAS STRONGLY SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 6 . WE HAV E HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSING OFFICER, BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, DISALLOWED THE EXPENDITURE INCURRED TOWARDS INTEREST ON LOANS FOR NON D EDUCTION OF TAX. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ORDER PASSED BY THE ASSESSING OFFICER BY FOLLOWING THE DECISIONS IN THE CASE OF CIT V. CRESENT EXPORT SYNDICATE [216 TAXMAN 258 (CAL)] AND CIT V. SIKANDARKHAN N. TUNVAR [2013] 357 ITR 312 (GUJ). NOW THE CASE OF THE ASSESSEE IS THAT IT HAS I.T.A. NO . 1 305 /M/ 16 4 ALREADY PAID ALL THE AMOUNTS AND NO AMOUNT IS PENDING. ONCE ALREADY AMOUNTS ARE PAID, THE SPECIAL BENCH DECISION OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS V. ADDL.CIT (SUPRA) SQUARELY APPLIES TO THE CASE OF THE ASSESSEE. AGAINST THE DECISION OF THE HON BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. VECTOR SHIPPING SERVICES P. LTD. 357 ITR 642(ALL), WHEREIN, THE DECISION IN THE CASE OF MER I L Y N SHIPPING AND TRANSPORTS V. ADDL.CIT (SUPRA) HAS BEEN CO NSIDERED AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, THE DEPARTMENT HAS PREFERRED SLP BEFORE THE HON BLE SUPREME COURT AND THE HON BLE SUPREME COURT HAS DISMISSED THE SLP IN CC NO. 8068/2014 VIDE ORDER DATED 02.07.2014. IN VIEW OF THE DISMISSAL OF THE SLP FILED BY THE DEPARTMENT, THE ORDER PASSED BY THE HON BLE ALLAHABAD HIGH COURT HAS BECOME FINAL. THEREFORE, IT CAN BE SAFELY CONCLUDED THAT THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 7 . UNDER THE ABOVE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE DECISION IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS V. ADDL.CIT (SUPRA), THE SECTION 40(A)(IA) IS NOT APPLICABLE WHEN THERE IS NO OUTSTANDING BALANCE AT THE END OF THE CLOSE OF THE YEAR RELEVANT TO THE ASSESSMENT YEAR IN RESPECT OF THESE PAYMENTS. HOWEVER, THE ASSESSEE HAS NOT BROUGHT ON RECORD, THE DETAILS OF OUTSTANDING I.T.A. NO . 1 305 /M/ 16 5 EXPENSES OR SCHEDULE OF SUNDRY CREDITORS SHOWING WHETHER THE IMPUGNED AMOUNT IS OUTSTANDING AT THE END OF THE CLOSE OF THE PREVIOUS YEAR RELEVANT TO T HE ASSESSMENT YEAR EITHER IN THE NAME OF THE PARTY OR OUTSTANDING EXPENSES. HENCE, IN THE INTEREST OF JUSTICE, WE REMIT HE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO VERIFY THE CLAIM OF THE ASSESSEE AND THE ASSESSEE SHALL PLACE NECES SARY EVIDENCE IN SUPPORT OF HIS CLAIM. 8 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THE 31 ST MAY , 201 6 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIA L MEMBER CHENNAI, DATED, THE 31 . 0 5 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.