M/s. V.Swaminatha Iyer & Co., Kumbakonam V. DCIT, Kumbakonam

ITA 1592/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52135 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 26-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A S SRIRAMAN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER I.T.A. NO.1592/MDS/2011 ASSESSMENT YEAR : 2006-07 M/S. V.SWAMINATHA IYER & CO., NO.55, T.S.R.BIG STREET, KUMBAKONAM. PAN: AAAFV5691E VS. THE DEPUTY COMMISSIONER OF OF INCOME TAX, CIRCLE-I, KUMBAKONAM. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. A.S. SRIRAMAN, ADVOCATE RESPONDENT BY : MR. SHAJI P .JACOB, IRS., COMMISSIONER OF INCOME TAX DATE OF HEARING : 8 TH DECEMBER, 2011 DATE OF PRONOUNCEMENT : 8 TH DECEMBER, 2011 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS APPEAL IS FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2006-07. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS ) AT TIRUCHIRAPPALLI DATED 19.07.2011. THIS APPEAL ARISE S OUT OF THE ASSESSMENT COMPLETED UNDER SECTION 143(3) READ WITH 147 OF THE INCOME TAX ACT, 1961. ITA NO.1592/M DS/2011 2 2. IN COMPLETING THE ASSESSMENT, THE ASSESSING AUTH ORITY HAS MADE ADDITION OF ` 49,534/- AS DISALLOWANCE OF INTEREST ATTRIBUTABLE TO LOAN CREDITORS. THE ASSESSEES BOOK S OF ACCOUNTS CONTAINED LOAN CREDITS BROUGHT DOWN FROM T HE EARLIER ASSESSMENT YEAR AND STILL CONTINUING. THE ASSESSEE HAS PROVIDED INTEREST THEREON. IT IS THAT INTEREST WHIC H IS NOW DISALLOWED BY THE ASSESSING AUTHORITY. THE SAME HAS BEEN CONFIRMED BY THE COMMISSIONER OF INCOME TAX(APPEALS ). THE ASSESSEE IS AGGRIEVED AND THEREFORE THE SECOND APPE AL BEFORE THE TRIBUNAL. THE GROUNDS RAISED BY THE ASSE SSEE ARE AS FOLLOWS:- 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS) IS CONTRARY TO THE FACTS AND CIRCUMSTANCES AS ALSO THE LEGAL POSITION OBTAINING IN THE CASE OF THE APPELLANT. 2. THE COMMISSIONER OF INCOME TAX(APPEALS) HAS DISALLOWED THE SALARY PAID TO LADY PARTNERS SINCE BECOME THEY HAD NOT WORKED IN THE SHOP AT THAT TIME OF SURVEY. 3. FOR THESE AND OTHER REASONS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ADDITIONS MADE AS ABOVE BE DELETED. ITA NO.1592/M DS/2011 3 3. WE HEARD SHRI A.S.SRIRAMAN, COUNSEL APPEARING FO R THE ASSESSEE AND SHRI SHAJI P.JACOB, LEARNED COMMISSION ER OF INCOME TAX APPEARING FOR THE REVENUE. 4. ON GOING THROUGH THE FACTS OF THE CASE AND THE G ROUNDS OF APPEAL PLACED BEFORE US, WE FIND THAT THE ASSESS EE IS AGGRIEVED ON TWO COUNTS NAMELY DISALLOWANCE OF INTE REST TO LOAN CREDITORS AND DISALLOWANCE OF SALARY PAID TO LADY PARTNERS. THE ISSUE OF INTEREST TO LOAN CREDITORS I S SPECIFICALLY REFLECTED ONLY IN THE STATEMENT OF FACTS WHEREAS TH E ISSUE OF SALARY PAID TO LADY PARTNERS IS REFLECTED ONLY IN T HE GROUNDS OF APPEAL. WE ARE ALSO CONSTRAINED TO STATE THAT THE A MOUNT OF INTEREST AGITATED BY THE ASSESSEE AS INTEREST TO LO AN CREDITORS AT ` 49,534/- IS NOT CONFIRMED AS THE CORRECT AMOUNT AT THE TIME OF HEARING. AS A LOT OF SUCH MISSING LINKS ARE HERE, WE REMIT BACK THE FILE TO ASSESSING AUTHORITY FOR DE N OVO CONSIDERATION AFTER HEARING THE ASSESSEE. THE ISSU ES AGITATED MAY BE RE-EXAMINED BY THE ASSESSING AUTHOR ITY ESPECIALLY TAKING INTO CONSIDERATION THE FACT THAT LOAN CREDITS ITA NO.1592/M DS/2011 4 ARE BROUGHT DOWN FROM EARLIER ASSESSMENT YEAR ON WH ICH THE ASSESSEE HAS BEEN CLAIMING INTEREST IN A CONSISTENT MANNER. 5. IN RESULT, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON FRIDAY, THE 8 TH DECEMBER, 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 8 TH DECEMBER, 2011. SOMU COPY TO: (1) APPELLANT ( 4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.