THE ACIT,CIRCLE - 1, Rajahmundry V. Sri Ramanlal Chopra, Rajahmundry

ITA 167/VIZ/2013

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9712 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 22-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M NARAYANA RAO
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

ITA NO.167/VIZAG/2013 SRI RAMANLAL CHOPRA, RAJAHMUNDRY 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.167/VIZAG/2013 ( / ASSESSMENT YEAR: 2009-10) ACIT, CIRCLE - 1, RAJAHMUNDRY VS. SRI RAMANLAL CHOPRA, RAJAHMUNDRY [PAN: ACLPC 1716A ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI M. NARAYANA RAO, DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 17.11.2016 / DATE OF PRONOUNCEMENT : 25.11.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY REVENUE IS DIRECTED AGAINST O RDER OF THE CIT(A)-11, MUMBAI DATED 11.1.2013 FOR THE ASSESSMEN T YEAR 2009-10. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS IN THE B USINESS OF TRADING IN CLOTHS, FILED HIS RETURN OF INCOME BY ADMITTING TOT AL INCOME OF ITA NO.167/VIZAG/2013 SRI RAMANLAL CHOPRA, RAJAHMUNDRY 2 ` 18,40,263/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE A.O. HAS OBSERVED THAT DURING THE YEAR THERE IS AN INCRE ASE IN UNSECURED LOANS TO THE TUNE OF ` 20,65,963/-. THE A.O. HAS FURTHER OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION, CERTAIN ADDITI ONS WERE MADE TO ASSETS TO THE TUNE OF ` 4,66,315/- BUT NO DETAILS WERE FILED, WHICH WAS ADDED TO THE TOTAL INCOME AND DISALLOWED THE DEPREC IATION. THE ASSESSEE FAILED TO PRODUCE TDS PARTICULARS ON RENT PAYMENT O F ` 1,20,480/- AND THE SAME IS ALSO ADDED TO THE TOTAL INCOME OF THE A SSESSEE. THE ASSESSEE HAS CLAIMED INTEREST OF ` 45,22,010/- AT 18%, WHICH SEEMS TO BE ON HIGHER SIDE, ACCORDINGLY, THE INTEREST IS RES TRICTED AT 9% WHICH WORKS OUT TO ` 22,61,005/- WHICH IS DISALLOWED AND ADDED TO THE I NCOME OF THE ASSESSEE. THE ASSESSEE SHOWN EXPENDITURE UN DER THE HEAD SALARIES OF ` 6,02,450/-. IN THE ABSENCE OF SALARY REGISTER, VO UCHERS, 50% OF THE SALARIES CLAIMED WERE DISALLOWED AND ADD ED TO THE INCOME OF THE ASSESSEE. BEFORE A.O., THE ASSESSEE HAS NOT FI LED ANY DETAILS AND ALSO NOT ABLE TO SUBSTANTIATE HIS CASE. ACCORDINGL Y, A.O. HAS COMPLETED ASSESSMENT U/S 143(3) R.W.S. 144 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT'). 3. THE ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE LD. CIT(A) AND HE HAS SUBMITTED ALL THE DETAILS IN RESPECT OF THE UNSECURED LOANS, ITA NO.167/VIZAG/2013 SRI RAMANLAL CHOPRA, RAJAHMUNDRY 3 ADDITIONS TO ASSETS DEPRECIATION, RENT, EXCESS INTE REST AND DISALLOWANCE ON SALARIES. THE LD. CIT(A) FORWARDED THE SAME TO A.O. FOR VERIFICATION AND RECEIVED THE REMAND REPORT FROM THE A.O. AFTER RECEIVING THE REMAND REPORT, THE LD. CIT(A) DIRECTED THE A.O. TO DELETE THE ADDITIONS, EXCEPT BANK BALANCE IN HDFC BANK OF ` 72,922/-. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS UNDER: 4. THE REPORT WAS RECEIVED FROM THE AO VIDE LETTER DTD.23.02.2012 THAT READS AS UNDER: 'REGARDING THE UNSECURED LOANS THE ASSESSEE HAS OBT AINED RS. 38,56,000/- AS FRESH LOANS DURING THE YEAR FOR WHIC H CONFIRMATION LETTERS ONLY WERE FURNISHED. THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE THE NEW LOAN CREDITORS IN RESPECT OF S/SRI/ SMT. BALWANTH CHOWDARY, INDIRA DEVI, MADANLAL HASTIMAL, SUMAN SAR AF, FROM WHOM AN AMOUNT OF RS. 15,50,000/- WAS TAKEN. HOWEVE R, THEY FILED THE CONFIRMATION LETTERS WHICH ARE TAKEN ON R ECORD. THE ASSESSEE HAS FURNISHED THE LEDGER COPIES OF INTERES T PAYMENTS, SALARIES, GODOWN RENT AND ALSO FURNISHED THE DETAIL S OF ASSETS ADDED DURING THE YEAR ALONGWITH COPIES OF THE BILLS . FROM THE LEDGER ACCOUNT COPIES OF THE LOAN CREDITORS, IT IS EVIDENT THAT INTEREST @18% HAS BEEN PAID AND WHEREVER REQUIRED T AX HAS BEEN DEDUCTED. THE ASSESSEE HAS DEDUCTED AT TAX AT SOURC ES ON THE PAYMENTS MADE TOWARDS LORRY FREIGHT. THE ASSESSEE A LSO FURNISHED DETAILS OF SALARIES PAID IN THE FORM OF LEDGER ACCO UNT COPY. IT IS SEEN THAT THE LOANS HAVE BEEN ACCEPTED BY WAY OF AC COUNT PAYEE CHEQUES WHICH WERE REFLECTED IN THE BANK ACCOUNT OF THE ASSESSEE. VERIFICATION OF THE BANK OD ACCOUNT MAINTAINED AT H DFC BANK SHOWS THAT THE BALANCE WAS OVER STATED BY RS.72,922 /-, WHICH NEEDS TO BE TREATED AS INCOME. REPAYMENT OF LOAN WA S MADE BY ACCOUNT PAYEE CHEQUES AND IT WAS VERIFIED W. R. T. THE BANK ACCOUNT OF THE ASSESSEE AND FOUND TO BE CORRECT. IT IS SUBMITTED THAT THE ASSESSMENT HAS BEEN COMPLET ED U/S. 144 DUE TO NON-COMPLIANCE OF THE ASSESSEE AND INTEREST WAS DISALLOWED AT 50% OF THE CLAIM, IN MY BEST JUDGEMENT. ITA NO.167/VIZAG/2013 SRI RAMANLAL CHOPRA, RAJAHMUNDRY 4 5. SUBSEQUENTLY THE LD. AR MADE ANOTHER SUBMISSION WHICH WAS FORWARDED TO THE AO FOR FRESH VERIFICATION BY LETTE R DTD.21.08.2012. SUBSEQUENT REPORT OF THE AO WAS RECEIVED ON 20.11,2 012 THAT READS AS UNDER: 'IN THE FOUR CASES RELATED TO NEW LOAN CREDITORS, ( I) SMT. INDRA DEVI, W/O RAMESH KUMAR, (II) SRI BALWANT CHOWDARY, S/O MOOLCHANDJI, (III) SRI MADANLAL HASTIMAL, S/O HASTI MAL AND (IV) SMT. SUMAN SARAF, W/O RAJENDRA KUMAR JAIN, AO HAS VERIFI ED THEIR R0I, COMPUTATION SHEET, CONFIRMATION LETTER, BALANCE-SHE ET, TDS AND BANK STATEMENT AND FOUND THEM IN ORDER. HENCE, CLAI M BY THE ASSESSEE IS JUSTIFIED' 6. THE FACTS OF THE CASE, SUBMISSIONS OF THE ASSESS EE AND THE TWO REMAND REPORTS OF THE AO HAVE BEEN CONSIDERED CAREF ULLY. 7. REGARDING THE ADDITION ON ACCOUNT OF LOANS, THE AO HAS CLEARLY MENTIONED THAT CONFIRMATION LETTERS FOR THE FRESH L OANS HAVE BEEN FURNISHED. THE FOUR LOAN CREDITORS WHICH WERE NOT P RODUCED BY THE ASSESSEE HAVE ALREADY BEEN EXAMINED BY THE AO DURIN G THE SUBSEQUENT REMAND PROCEEDINGS AND AO HAS VERIFIED THEIR RETURN S OF INCOME, COMPUTATION SHEET, CONFIRMATION LETTERS, BALANCE-SH EET, TDS AND BANK STATEMENT AND FOUND THEM TO BE IN ORDER. THEREFORE, THE ADDITION MADE BY THE AO ON ACCOUNT OF CASH CREDITS IS DIRECTED TO BE DELETED. 8. DETAILS OF INTEREST PAYMENTS, SALARY, GODOWN REN T AND ADDITIONS TO FIXED ASSETS WERE ALSO PRODUCED BEFORE THE AO DURIN G THE REMAND PROCEEDINGS AND IN THE REMAND REPORT THE AO HAS NOT MADE ANY ADVERSE COMMENTS ON THESE SUBMISSIONS OF THE ASSESSEE. THER EFORE THE ADDITIONS MADE ON ACCOUNT OF ADDITIONS TO FIXED ASSETS, RENT, INTEREST AND SALARY ARE ALSO DIRECTED TO BE DELETED. 3. WE FIND THAT THE LD. CIT(A) HAS DELETED THE ADDITION S MADE BY THE A.O. BASED ON THE REMAND REPORT AFTER EXAMINING EACH AND EVERY ASPECT OF THE ISSUES INVOLVED. WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) AND THE SAME IS CONFIRMED. ITA NO.167/VIZAG/2013 SRI RAMANLAL CHOPRA, RAJAHMUNDRY 5 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED . THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 25 TH NOV16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 25.11.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ACIT, CIRCLE-1, RAJAHMUNDRY 2. / THE RESPONDENT SRI RAMANLAL CHOPRA, PROP: CHOP RA TEXTILES, SHOP NO.174, THADITHOTA, RAJAHMUNDRY 3. ) / THE CIT, RAJAHMUNDRY 4. ) ( ) / THE CIT(A)-11, MUMBAI 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM