Vaibhavi Bandekar, V. ITO, Ward-1(2), Bhubaneswar, Bhubaneswar

ITA 139/CTK/2013

• Counselvise Citation: 13922114 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 27-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: D DAS
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 139/CTK/2013 : (ASST. YEAR : 2008 - 09) VAIBHAVI BANDEKAR C/401, BHUSHAN PARK VIEW, PADMA NAGAR, BLDG. NO. 4, CHIKU WADI, BORIVALI (W), MUMBAI 400 092 (APPELLANT) PAN : AHUPB7327C VS. INCOME TAX OFFICER, WARD - 1(2), BHUBANESWAR (RESPONDENT) ASSESSEE BY : D. DAS REVENUE BY : S.C. MOHANTY, DR DATE OF HEARING : 01/05/2014 DATE OF PRONOUNCEMENT : 30 /05/2014 O R D E R PER P.K. BANSAL : 1. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - I, BHUBANESWAR DT. 4.12.2012 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS IN CONFORMING THE ACTION OF THE AO DISALLOWING UNSECURED LOAN OF RS. 2,00,000/ - RAISED IN FY 2007 - 08. 3. THAT THE LEARNED CIT(A) HAS ER RED IN LAW AND FACTS IN CONFIRMING THE ACTION OF THE AO DISALLOWING TRANSACTION ERROR LOSS OF RS.1,61,921/ - . 2. GROUND NOS. 1 AND 4 ARE GENERAL IN NATURE AND THEREFORE DO NOT REQUIRE ANY ADJUDICATION. 3. GROUND NO. 2 RELATES TO THE ADDITION OF RS. 2 ,00,000/ - . THE AO FOUND THAT THE ASSESSEE HAS AVAILED FRESH UNSECURED LOAN AMOUNTING TO RS. 2,17,123/ - WHICH INCLUDES A SUM OF RS. 2 LACS FROM SHRI RAJEN TRIPATHY. THE ASSESSEE EXPLAINED THAT THE AMOUNT WAS TRANSFERRED THROUGH BANK ACCOUNT ON 13.9.2007 2 ITA NO. 139/CTK/2013 (ASST. YEAR : 2008 - 09) B UT EXPRESSED HIS INABILITY TO SUBMIT ANY CONFIRMATION AS THE PARTY WAS OUT OF COUNTRY. THE AO, THEREFORE, ADDED A SUM OF RS. 2 LACS. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE FILED XEROX COPY OF THE CONFIRMATION STAT ED TO HAVE BEEN SIGNED BY SHRI RAJEN TRIPATHY, LENDER. IN THE ABSENCE OF DETAILS OF CHEQUE AND HOW IT HAS BEEN CREDITED TO THE ASSESSEES ACCOUNT, THE CIT(A) CONFIRMED THE ADDITION. 3.1 BEFORE US, THE LD. AR VEHEMENTLY CONTENDED THAT THE ASSESSEE RECEI VED THE LOAN OF RS. 2 LACS FROM SHRI RAJEN TRIPATHY WHOSE COMPLETE NAME AND ADDRESS AND PAN IS FILED ON RECORD. THE LOAN WAS RECEIVED THROUGH BANK ACCOUNT. AS THE LENDER WAS OUT OF INDIA THEREFORE CONFIRMATION COULD NOT BE SUBMITTED TO THE AO. THE AO CO NDUCTED AN INQUIRY AND VERIFIED THE LOAN TRANSACTION BY ISSUING NOTICE U/S 133(6). THE CONFIRMATION WAS ALSO FILED BY CIT(A) AS AN ADDITIONAL EVIDENCE. THUS, IT WAS CONTENDED THAT THE ASSESSEE HAS DISCHARGED HIS ONUS AND THE ADDITION SHOULD BE DELETED. 3.2 THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORDER OF THE AUTHORITIES BELOW. 3.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONGWITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE HAVE GONE THROUGH PGS. 80 TO 82 OF THE PAPER BOOK ON WHICH THE ASSESSEE HAS RELIED AND WE NOTED THAT THE SAID SUM OF RS. 2 LACS HAS BEEN RECEIVED BY THE ASSESSEE THROUGH BANKING CHANNEL FROM SHRI RAJEN TRIPATHY. THE ASSESSEE HAS FILED THE CONFIRMATION ALSO AS ADDITIONAL EVIDENCE BEFORE CIT(A) STATI NG THE REASON WHY EARLIER THE CONFIRMATION COULD NOT BE FILED. SHRI RAJEN TRIPATHY IS REGULARLY ASSESSED TO INCOME TAX HAVING PAN NO. AAMPT9199F . HIS ADDRESS HAS ALSO DULY BEEN GIVEN. IN VIEW OF THIS FACT, IN OUR OPINION, THE ASSESSEE HAS DISCHARGED HIS ONUS AND THE EXPLANATION RENDERED BY THE ASSESSEE IS A PLAUSIBLE ONE. WE, THEREFORE, DELETE THE ADDITION. THUS, THIS GROUND STANDS ALLOWED. 3 ITA NO. 139/CTK/2013 (ASST. YEAR : 2008 - 09) 4. GROUND NO. 3 RELATES TO DISALLOWING THE TRANSACTION ERROR LOSS OF RS. 1,61,921/ - . THE BRIEF FACTS RELATING TO T HIS GROUND ARE THAT THE ASSESSEE CLAIMED TRANSACTION ERROR LOSS OF RS.1,61,921/ - . DETAILS OF RS.1,13,936/ - FOR 6 CLIENTS WAS SUBMITTED AS GIVEN UNDER PARA 5 OF THE CIT(A) ORDER. THE AO NOTED THAT IN REGARD TO SHRI D.C. SAHU AN AMOUNT OF RS . 90,000/ - HAS BEEN DEBITED ON 3.5.2007 RELATING TO A TRANSACTION MADE EARLIER. THEREFORE, THE TRANSACTION RELATES TO FY 2006 - 07 I.E. A.Y 2007 - 08. IT WAS ALSO NOTED THAT IN THE CASE OF SHRI P.K. SAHOO, AN AMOUNT OF RS. 1,536 AND IN CASE OF SHRI S.K. PATN AIK, AN AMOUNT OF RS.20,000/ - HAS BEEN DESCRIBED AS DELAYED CHARGES. IN CASE OF R.K. MAHESHWARI, THE NARRATION REFERS TO CIPLA AUCTION LOSS. THE AO, THEREFORE, DISALLOWED THE LOSS AMOUNTING TO RS.1,61,921/ - . THE ASSESSEE WENT IN APPEAL BEFORE THE CIT( A) AND EXPLAINED THAT SOMETIMES WRONG DATA IS PUNCHED IN THE WRONG HEAD OR WRONG PUNCHING I.E. WHEN SELLING IS INTENDED, PURCHASE BUTTON IS PUNCHED RESULTING IN LOSS WHEN THE SHARES ARE AUCTIONED BY THE STOCK EXCHANGE. CIT(A) CONFIRMED THE ADDITION BY HOL DING AS UNDER : 5.2 I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT. THE AO HAS MADE A DETAILED DISCUSSION IN REGARD TO TRANSACTION ERROR LOSS. THE AO HAS DISCUSSED EACH OF TRANSACTIONS IN DETAIL. THE MAJOR AMOUNT OF RS.90,000/ - RELATES TO D.C. SAHU WHERE THE LETTER OF D.C. SAHU BEARS NO DATE. IN RESPECT OF LOSS RELATING TO S.K. PATNAIK, THE ASSESSEE COULD NOT EXPLAIN THE LOSS BEFORE THE AO. IN VIEW OF THE DISCUSSION AND FACTUAL FINDING BY THE AO AND GENERAL EXPLANATION SUBMITTED BY THE APPELLANT, THERE IS NO REASON FOR ME TO INTERFERE IN THE ORDER OF THE AO. ACCORDINGLY, THE ADDITION OF RS.1,61,921/ - IS CONFIRMED. 4.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT THE ASSESSEE HAS GIVEN DETAILS OF TRANSACTI ON ERROR LOSS. THIS LOSS CONSISTS OF RS. 1,61,921/ - . E XCEPT THE SUM OF RS.1,082/ - AND RS.46,168/ - , REST OF THE AMOUNT HAS BEEN INCURRED BY THE ASSESSEE THROUGH CHEQUE AND REPRESENTS DELAYED PAYMENT CHARGES OF RS. 20,000/ - IN RESPECT OF S.K. PATNAIK AND P UNCHING ERROR LOSS. DELAYED PAYMENT CHARGE OF RS.1,082/ - HAS ALSO BEEN INCURRED IN CASH RELATING TO SHRI P.K. SAHOO. BALANCE SUM OF RS.46,168/ - REPRESENTS VANDHA LOSS ADJUSTED WITH THE SUB - BROKERAGE ACCOUNT. THE ASSESSEE 4 ITA NO. 139/CTK/2013 (ASST. YEAR : 2008 - 09) IS ENGAGED IN SHARE BROKERAGE BU SINESS. IT IS A FACT THAT A CLIENT IS REQUIRED TO PAY THE OUTSTANDING BILLS WITHIN 2 DAYS OF THE TRANSACTION. IN CASE THE CLIENT DELAYS THE PAYMENT, THEN DELAYED PAYMENT CHARGES ARE DEBITED TO SUCH CLIENTS ACCOUNT. IN THE CASE OF THE ASSESSEE , THE DELAYED CHARGES REPRESENT THE DELAY IN PAYMENT WHICH THE ASSESSEE HAS TO RECOVER FROM THESE PARTIES. THESE PARTIES WOULD HAVE NOT GIVEN THESE CHARGES AND THEREFORE THE ASSESSEE IS BOUND TO MAKE THE PAYMENT AND SUCH LOSS INCURRED, IN OUR OPINION, IS A LOSS INCIDENTAL TO THE BUSINESS AND HAS TO BE ALLOWED U/S 2 9 OF THE INCOME TAX ACT. THE LOSS OF RS. 90,000/ - INCURRED IN RESPECT OF SHRI D.C. SAHU, WE NOTED, WAS DUE TO COMMUNICATION ERROR INCORRECTLY PUNCHING OF TRANSACTION OF 500 SHARES OF STATE BANK OF INDIA DUE TO WHICH THE ASSESSEE EARNED LOSS OF RS.1,05,968/ - . THE CLIENT OF THE ASSESSEE SINCE REFUSED TO MAKE THE PAYMENT TO THE EXTENT OF RS.90,000/ - , THEREFORE, THE ASSESSEE HAD TO MAKE THE PAYMENT. SIMILAR IS THE CASE IN OTHER CASES ALSO. THESE TR ANSACTIONS, IN OUR OPINION, ARE QUITE NATURAL IN SUCH TYPE OF BUSINESS. BOTH THE AO AND CIT(A), IN OUR OPINION, COULD NOT UNDERSTAND THE NATURE OF THE TRANSACTION. IN OUR OPINION, THE EXPENDITURE SO INCURRED BY THE ASSESSEE IS A LOSS INCIDENTAL TO THE BU SINESS AND IS ALLOWABLE U/S 29. WE, ACCORDINGLY, DELETE THE DISALLOWANCE. THUS, THIS GROUND STANDS ALLOWED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 6. ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES, 196 2 BY PUTTING ON NOTICE BOARD OF THE BENCH AT CUTTACK ON 30 / 05 /201 4 . SD/ - (D.T.GARASIA) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI DATED : 30 / 05 /201 4 *SSL* 5 ITA NO. 139/CTK/2013 (ASST. YEAR : 2008 - 09) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER