The ITO,Vapi Ward-4, Nani Daman V. M/s. Royal Packaging, Daman

ITA 1363/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6719 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 29-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 29-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA SRDR
• Keywords: Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI T.K. SHARMA, JUDICIAL MEMBER AND SHRI A.K.GARODIA, ACCOUNTANT MEMBER ITA NO.1363/AHD/2010 ASSESSMENT YEAR:2005-06 DATE OF HEARING:29.4.11 DRAFTED:.29.4.11 INCOME TAX OFFICER, VAPI WARD-4, DAMAN V/S. M/S. ROYAL PACKAGING GALA NO.G-5,/F-5, SURVEY NO.143/1, VEERA INDUSTRIAL ESTATE, DABHEL, DAMAN PAN NO.AAEFR3893G (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI R.K. DHANESTA, SR-DR RESPONDENT BY:- SHRI RAJESH M UPADHYAY, AR O R D E R PER T.K. SHARMA, JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DA TED 24-11-2009 OF COMMISSIONER OF INCOME(APPEALS)-VALSAD FOR ASSESSME NT YEAR 2008-09. 2. GROUND NO.1 RAISED IN THIS APPEAL IS AS UNDER:- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MADE OF R S.7 LAKHS ON ACCOUNT OF UNSECURED LOAN AS THE ONUS TO PROVE THE GENUINENESS OF THE TRANSACTION LIES ON THE ASSESSEE BUT IT HAS FAILED TO DISCHARGE THE SAME. 3. AT THE TIME OF HEARING SHRI R.K.DHANESTA, LD. SR -DR APPEARED ON BEHALF OF REVENUE AND POINTED OUT THAT IN RESPECT OF UNSERUCE D LOAN RS.7 TAKEN FROM ALLIED TRADERS-LIKE HUNDI NO CONFIRMATION WAS FILED BEFORE ASSESSING OFFICER. HOWEVER, BEFORE LD. CIT(APPEALS), THE ASSESSEE FURNISHED THE CONFORMATION AND LD. CIT(APPEALS) WITHOUT CONFRONTING THE SAME TO THE AS SESSING OFFICER DELETED THE ADDITION OF RS.7 LAKH. HE ACCORDINGLY POINTED OUT T HAT ORDER OF LD. CIT(A) BE SET ASIDE AND MATTER BE REMITTED BACK TO THE FILE OF AS SESSING OFFICER. ITA 2511/AHD/2010 A.Y. 2008-09 DCIT CIR-5 ABD V. M/S. RAAJRATNA METAL INDS. LTD. PAGE 2 4. SHRI RAJESH M UPADHYAY, LD. AR APPEARED ON BEHAL F OF ASSESSEE OBJECTED TO THE AFORESAID PRAYER OF LD. DR AND HE POINTED OUT T HAT NO LOAN WAS TAKEN FROM ALLIED TRADERS. BUT ONLY BILL OF SALE MADE TO LYKA LAB WAS DISCOUNTING FROM ALLIED TRADERS. AS AGAINST THIS LD. DR DREW OUR ATTENTION TO AUDITE D ACCOUNT, WHEREIN IN ANNEXURE-V IT IS CLEARLY MENTIONED THAT ASSESSEE HAS ACCEPTED THE LOAN OF RS.7 LAKH (BILL DISCOUNTING). 5. HAVING HEARD BOTH SIDES WE HAVE CAREFULLY GONE T HROUGH THE ORDER OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT IN ANNEXURE-V BEING PARTICULARS OF LOAN DEPOSITED ACCEPTED OR REPAID THE NAME AND ADDRESS O F ALLIED TRADERS IS MENTIONED. IT IS ALSO CLEARLY MENTIONED THAT THE LONE OF RS.7 LAKHS IS TAKEN FROM ALLIED TRADERS (BILL DISCOUNTING) IS MENTIONED WITH THE NARRATION THAT AMOUNT RECEIVED IS RS.7 LAKH OUT OF WHICH RS.8,84,953/- WAS REPAID. THE OPENING BALANCE WAS AT RS.1,41,229/- AND CLOSING BALANCE WAS (-) RS.43,724/-. UNDER THIS CIRCUMSTANCES, THE ASSESSING OFFICER WAS RIGHT IN ASKING THE ASSESSEE TO FURNISH THE CONFIRMATION OF LOAN OF RS.7 LAKH OR CONFIRMED COPY OF ACCOUNT FROM M/S ALLIED T RADERS (BILL DISCOUNTING) WITH PAN NO.. THIS WAS NOT FURNISHED BEFORE AO BUT WAS FURNI SHED BEFORE LD. CIT(A). ADMITTEDLY, NO OPPORTUNITY WAS ALLOWED BY LD. CIT(A ) BEFORE ADMITTING THIS FRESH EVIDENCE. THEREFORE IN THE INTEREST OF JUSTICE WE S ET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF ASSE SSING OFFICER. THE ASSESSEE IS DIRECTED TO FURNISH THE CONFIRMATION/CONFIRMED COPY OF ACCOUNT WITH PAN OF ALLIED TRADERS TO AO WHO WILL VERIFY THE SAME AND RE-ADJUD ICATE THE ADDITION OF RS.7 LAKH AFRESH IN ACCORDANCE WITH LAW. 6. THE ONLY OTHER GROUND OF APPEAL IS AS UNDER:- (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MADE OF R S.11,676/- ON ACCOUNT OF INTEREST PAID ON LATE PAYMENT OF TDS AS THE INTERES T ON TDS IS NOT ALLOWABLE DEDUCTION AS PER INCOME TAX LAW. 7. WE HAVE HEARD BOTH THE SIDES. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER DISALLOWED INTEREST OF RS.11,676/- ON THE GROUND TH AT INTEREST ON TDS IS NOT ALLOWABLE EXPENSE. THE REASONING GIVING BY ASSESSING OFFICER IS THAT WHEN TDS IS NOT ALLOWABLE, HOW INTEREST ON SAME IS ALLOWABLE. HOWEV ER, IN THE IMPUGNED ORDER LD. CIT(A) ACCEPTED THE CONTENTION OF ASSESSEE THAT WHE N ASSESSEE RECEIVED INTEREST ON ITA 2511/AHD/2010 A.Y. 2008-09 DCIT CIR-5 ABD V. M/S. RAAJRATNA METAL INDS. LTD. PAGE 3 TAX REFUND THE SAME IS TAXABLE IN SAME MANNER THE I NTEREST ON LATE PAYMENT OF TDS IS ALLOWABLE EXPENSE. IT IS PERTINENT TO NOTE THAT IT IS NOT THE CASE OF ASSESSEE THAT BENEFIT OF NETTING OF INTEREST PAID TO THE DEPARTME NT AND RECEIVED FROM THE DEPARTMENT BE ALLOWED. IT APPEARS THAT ASSESSEE DED UCTED TDS AND DEPOSITED THE SAME LATE WITH THE INCOME-TAX DEPARTMENT. AS A RESU LT OF THIS, IT PAID INTEREST OF RS.11,676/-. THE HONBLE SUPREME COURT INCOME BHARAT COMMERCE & INDUSTRIES V. CIT (1998) 230 ITR 733 (SC) HELD THAT INTEREST FOR LATE PAYMENT OF DIRECT TAXES IS NOT DEDUCTIBLE. THEREFORE DISALLOWANCE OF INTEREST OF R S.11,676/- IS RESTORED. THIS GROUND OF APPEAL IS ALLOWED. 8. IN THE RESULT FOR THE STATISTICAL PURPOSES THE APPE AL OF REVENUE IS TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 29/04/2011 SD/- SD/- (A.K.GARODIA) (T.K. SHA RMA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 29/04/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-XI, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD