Sureshbhai Boghajibhai Patel, Bhavnagar V. ITO, Awrd-2(5), Bhavnagar

ITA 1742/AHD/2019

AI Insights

This case involves an appeal by Sureshbhai Boghajibhai Patel against the order passed by the CIT(A)-6, Ahmedabad, for the Assessment Year 2013-14. The primary disputes in the appeal pertain to disallowances made by the Income Tax Officer (ITO) under Section 143(3) of the Income Tax Act, 1961, which included disallowances of interest expenses and car expenses, as well as an addition under Section 68 concerning unexplained cash credits. The Tribunal found that certain issues, particularly the applicability of Section 40(a)(ia) regarding TDS defaults and the verification of cash deposits, required further examination and thus remanded these issues back to the Assessing Officer.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129290 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 26-02-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 19-11-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; TDS
• Section: 68; 143(3); 40(a)(ia); 143(1)

Judgement Text

ITA No.1742/Ahd/2019 Assessment Year: 2013-14 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.1742/Ahd/2019 Assessment Year: 2013-14 Sureshbhai Boghajibhai Patel, vs. Income Tax Officer, Motivadi Turkha, Ward – 2(5), Bhavnagar. B/h. Jalmeen Cinema, Botad – 364 710. [PAN – ADFPP 9282 P] (Appellant) (Respondent) Assessee by : Shri Vipul Khandhar, AR Revenue by : Shri Sanjay Jain, Sr. DR Date of hearing : 27.02.2023 Date of pronouncement : 01.03.2023 O R D E R This appeal is filed by the Assessee against order dated 28.08.2019 passed by the CIT(A)-6, Ahmedabad for the Assessment Year 2013-14. 2. The Assessee has raised the following grounds of appeal :- “1. The learned ITO erred in law and on facts in passing the order under Section 143(3) of IT Act, 1961 which is requested to be quashed. 2. The learned ITO erred in law and on facts in passing the order under Section 143(3) of the Income Tax Act, 1961 by making addition of Rs.17,507/- being disallowance of interest expenses on which TDS was not deducted. 3. The learned ITO erred in law and on facts in passing the Oder under Section 143(3) of the Income Tax Act, 1961 by making addition of Rs.19,941/- being disallowance of 10% of car expenses on adhoc basis. 4. The learned ITO erred in law and on facts in passing the order under Section 143(3) of the Income Tax Act, 1961 by making addition of Rs.17,02,501/- being addition u/s.68 of the IT Act, 1961. 3. The assessee filed return of income on 07.10.2013 declaring total income of Rs.5,19,308/- and the same was processed under Section 143(1) of the Income Tax Act, 1961. The assessee is trading in cotton and refined oil, trading in shares, earns commission income from LIC and also having agricultural income. As per audit report, the assessee has shown Gross Profit at 0.72% and Net Profit at 0.45% during the ITA No.1742/Ahd/2019 Assessment Year: 2013-14 Page 2 of 3 year under consideration. The Assessing Officer made disallowance of interest of Rs.17,507/-, disallowance of expenditure of Rs.19,941/- being personal in nature and addition under Section 68 of the Act amounting to Rs.1,70,250/-. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that ground no.3 is not pressed and hence ground no.3 is dismissed. 6. As regards to ground no.1, the same is general in nature and, therefore, is not adjudicated upon. 7. As regards to ground no.2, the Ld. AR submitted that the expenses towards interest paid to Shri Gunvantrai M. Gosalia which was added by the Assessing Officer needs to be verified as the amounts in question had already been paid to Shri Uday Kumar Shetty and no amounts were payable as on 31.03.2005. Ld. AR submitted that Shri Uday Kumar Shetty had accounted for the payment of Rs.1,53,78,795/- in his books of account and had offered the same in his return of income for A.Y. 2005- 06.and paid taxes thereon. Therefore, there was no loss to the Revenue. 8. Ld. DR relied upon the Assessment Order and the order of the CIT(A). 9. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the details which have been filed before the Tribunal by the assessee needs verification as the contention of the Ld. AR that Section 40(a)(ia) is applicable only in respect of TDS defaults if amount payable. If the amount is actually paid and tax is not deducted under the respective sections and hence Section 40(a)(ia) of the Act is not applicable. In the present case, the assessee has contended that the other party has paid the tax which needs to be verified and, therefore, this issue needs verification and thus it is remanded back to the file of Assessing Officer for proper verification and adjudication. Needless to say the assessee be given opportunity of hearing by following the principles of natural justice. Thus, ground no.2 is partly allowed for statistical purpose. ITA No.1742/Ahd/2019 Assessment Year: 2013-14 Page 3 of 3 10. As regards to ground no.4, the Ld. AR submitted that the assessee has withdrawn the amount from the salary account maintained at SBI and then deposited the said amount in his HDFC Bank account. Therefore, the Ld. AR submitted that the details filed should have been taken into account by the Assessing Officer. 11. Ld. DR relied upon the Assessment Order and the order of the CIT(A). . 12. Heard both the parties and perused all the relevant material available on record. On the basis of cash deposited in Bank account, the assessee has shown amount from his salary account and the particular date on which the amount was withdrawn there is a difference while depositing the amount in HDFC Bank Account which needs verification. Therefore, this issue also needs verification and, therefore, remanded back to the file of the Assessing Officer for proper adjudication and verification. Needles to say the assessee be given opportunity of hearing by following the principles of natural justice. Ground no.4 is partly allowed for statistical purpose. 13. In the result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open Court on this 1 st day of March, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 1 st day of March, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad