DCIT 3(3), MUMBAI V. KUONI TRAVELS (I) P.LTD, MUMBAI

ITA 1851/MUM/2013

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6791 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-05-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 07-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained expenditure; Capital asset; Opportunity of being heard; Corroborative evidences; Revenue expenditure
• Section: 69C; 80IB; 37(1); 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI N.K. PRADHAN , ACCOUNTANT MEMBER ITA NO. 1851 / MUM . /201 3 ( ASSESSMENT YEAR : 20 03 04 ) DY. COMMISSIONER OF INCOME TAX RANGE 3( 3 ), MUMBAI (PRESENT IN CHARGE DCIT 3(3)(1) . APPELLANT V/S KUONI TRAVELS INDIA PVT. LTD. (NOW MERGED WITH TRAVEL CORPORATION (INDIA) LTD.) KUONI HOUSE, N.F. ROAD BEHIND TAJ MAHAL HOTEL COLABA, MUMBAI 400 001 PAN AAACS0170L . RESPONDENT ITA NO. 1128 /MUM./2013 ( ASSESSMENT YEAR : 2003 04 ) KUONI TRAVELS INDIA PVT. LTD. (NOW MERGED WITH TRAVEL CORPORATION (I NDIA ) LTD.) KUONI HOUSE, N.F. ROAD BEHIND TAJ MAHAL HOTEL COLABA, MUMBAI 400 001 PAN AAACS0170L . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX RANGE 3 (2 ), MUMBAI (PRESENT IN CHARGE DCIT 3(3)(1) . RESPONDENT ASSESSEE BY : SHRI MADHUR AGARWAL A/W SHRI JAY BHANSALI REVENUE BY : SHRI SUSHIL KUMAR POTDAR A/W SHRI RAJEEV GUBGOTRA DATE OF HEARING 03 . 1 2 .201 8 DATE OF ORDER 28.02.2019 2 KUONI TRAVELS INDIA PVT. LTD. O R D E R PER SAKTIJIT DEY, J.M. THE AFORESAID CROSS APPEALS ARISE OUT OF ORDER DATED 6 TH DECEMBER 2012, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 4, MUMBAI, FOR THE ASSESSMENT YEAR 2003 04. ITA NO.1851/MUM./2013 REVENUES APPEAL 2 . IN GROUND NO.1, THE REVENUE HAS CHALLENGED DELETION OF DISALLOWANCE OF INTEREST AMOUNTING TO ` 12,50,000. 3 . BRIEF FACTS ARE, THE ASSESSEE COMPANY IS IN THE BUSINESS OF TRAVEL AGENT AND TOUR OPERATOR. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 31 ST OCTOBER 2003, DECLARING INCOME OF ` 11,89,46,961. IN THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN A LOAN OF ` 2 CRORE FROM USG BUILDWELL PVT. LTD., NEW DELHI, ON WHICH IT HAS CLAIMED TO HAVE PAID INTEREST @ 15% AMOUNTING TO ` 12,50,000. THEREFORE, HE CALLED UPON THE ASSESSEE TO FURNISH CONFIRMATION OF THE LENDER . AS ALLEGED BY THE ASSESSING OFFICER, THE ASSESSEE COULD NEITHER FURNISH THE LOAN CONFIRMATION NOR OFFERED ANY EXPLANATION ABOUT THE NATURE AND SOURCE OF THE LOAN. ACCORDINGLY, THE ASSESSING OFFICER TREATED THE LOAN AVAILED OF ` 2 CRORE ALONG WITH INTEREST PAID ON IT AMOUNTING TO ` 3 KUONI TRAVELS INDIA PVT. LTD. 12,50,000 AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT AND ADDED BACK TO THE INCOME OF THE ASSESSEE. THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE LEARNED COMMISSIONER (APPEALS). 4 . ON THE BASIS OF SUBMISSIONS MADE BY THE ASSESSEE AND EVIDENCES FILED, LEARNED COM MISSIONER (APPEALS) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. IN HIS REMAND REPORT, THE ASSESSING OFFICER BEING SATISFIED WITH ASSESSEES EXPLANATION THAT THE AMOUNT OF ` 2 CRORE RECEIVED FROM USG BUILDWELL PVT. LTD. IS NOT A LOAN BUT ADVANCE FOR SALE OF LAND , OBSERVED THAT THE TRANSACTION RELATING TO THE AMOUNT OF ` 2 CRORE RECEIVED BY THE ASSESSEE STOOD EXPLAINED. LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE OBSE RVATIONS OF THE ASSESSING OFFICER IN THE REMAND REPORT HELD THAT SINCE THE NATURE AND SOURCE OF RECEIPT OF ` 2 CRORE HAS BEEN ACCEPTED BY THE ASSESSING OFFICER , DISALLOWANCE OF INTEREST COMPONENT ON SUCH LOAN AMOUNTING TO ` 12,50,000 LAKH HAS TO BE DELETED . 5 . THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , SINCE THE ASSESSEE HAS RECEIVED THE ADVANCE FOR SALE OF LAND THERE WAS NO QUESTION OF PAYING INTEREST. WITHOUT PREJUD ICE TO THE AFORESAID SUBMISSION , THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , SI NCE THE AMOUNT WAS RECEIVED BY THE ASSESSEE TOWARDS SALE OF LAND WHICH IS A CAPITAL ASSET, THE INTEREST PAID ON THE ADVANCE RECEIVED FOR SALE OF 4 KUONI TRAVELS INDIA PVT. LTD. LAND CANNOT BE ALLOWED AS REVENUE EXPENDITURE. 6 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , DUE TO SLOW DO WN OF BUSINE SS AND TO MEET INVESTMENT NEEDS THE ASSESSEE DECIDE D TO SELL ITS PROPERTY IN DELHI. T HEREFORE, IT ENTERED INTO AN AGREEMENT WITH USG BUILDWELL PVT. LTD. FOR SALE OF THE PROPERTY AND IN TERMS OF THE AGREEMENT THE ASSESSEE RECEIVED THE ADVANCE OF ` 2 CRORE. HOWEVER , THE POSSESSION OF THE PROPERTY COULD BE HANDED OVER TO THE BUYER ONLY AFTER THE FINAL AGREEMENT WAS EXECUTED IN JANUARY 2004. HE SUBMITTED , DUE TO DELAY IN HANDING OVER THE POSSESSION OF THE PROPERTY , WHICH WAS COMPLETELY ON ACCOUNT OF THE ASSESSEE, THE ASSESSEE HAD TO PAY THE INTEREST IN TERMS OF THE AGREEMENT. THUS, HE SUBMITTED , ONCE IT IS ACCEPTED THAT THE AMOUNT WAS RECEIVED TOWARDS SALE OF LAND , THE INTEREST PAID FOR DELAY IN HANDING OVER THE POSSESSION IS ALLOWABLE AS EXPENDITURE MORE SO WHEN THE ASSESSING OFFICER HAS NOT DISPUTED THAT THE MONEY WAS UTILIZED FOR BUSINESS PUR POSE. THUS, HE SUBMITTED , THE DISALLOWANCE WAS RIGHTLY DELETED BY THE LEARNED COMMISSIONER (APPEALS). 7 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. AS COULD BE SEEN, THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT HAS TREATED THE AMOUNT RECEIVED OF ` 2 CRORE AS UNEXPLAINED CASH CREDIT. ACCORDINGLY, NOT ONLY HE ADDED IT BACK T O THE 5 KUONI TRAVELS INDIA PVT. LTD. INCOME OF THE ASSESSEE, BUT HE ALSO DISALLOWED THE INTEREST PAID OF ` 12,50,000 ON THE SAID AMOUNT. HOWEVER, DURING REMAND PROCEEDINGS, THE ASSESSING OFFICER AFTER EXAMINING THE NATURE AND SOURCE OF THE AMOUNT OF ` 2 CRORE RECEIVED BY THE ASSESSEE HAVING FOUND THAT IT WAS AN ADVANCE AGAINST SALE OF LAND ACCEPTED ASSESSEES CLAIM. IT IS EVIDENT, ASSESSEE WANTED TO SELL ONE OF ITS PROPERTY IN DELHI TO USG BUILDWELL PVT. LTD. SINCE IT NEEDED FINANCE FOR ITS BUSINESS ACTIVITIES. IT IS ALSO A FACT ON RECORD THAT SINCE THE ASSESSEE COULD NOT HAND OVER THE POSSESSION OF THE PROPERT Y WITHIN THE AGREED PERIOD , IT PAID THE INTEREST ON THE ADVANCE RECEIVED AS PER THE TERMS OF THE AGREEMENT. THEREFORE, THERE IS FACTUALLY NO DISPUTE ON THE ISSUE OF PAYMENT OF INTEREST BY THE ASSESSEE. THEREFORE, ONCE THE NATURE AND SOURCE OF AMOUNT OF ` 2 CRORE RECEIVED BY THE ASSESSEE IS ACCEPTED, THE DISALLOWANCE OF INTEREST MADE BY THE ASSESSING OFFICER BY TREATING THE ADVANCE RECEIVED AS UNEXPLAINED CASH CREDIT HAS TO BE DELETED . THEREFORE , WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED COMMISSIO NER (APPEALS) ON THIS ISSUE. THIS GROUND IS DISMISSED. 8 . IN GROUND NO.2, THE REVENUE HAS CHALLENGED DELETION OF DISALLOWANCE MADE ON ACCOUNT OF PAYMENT OF CLUB ENTRY FEE AMOUNTING TO ` 3,60,000. 9 . BRIEF FACTS ARE, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING 6 KUONI TRAVELS INDIA PVT. LTD. OFFICER NOTICING THAT THE ASSESSEE HAD DEBITED AN AMOUNT OF ` 3,60,000 ON ACCOUNT OF CLUB ENTRANCE FEE , CALLED UPON THE ASSESSEE TO FURNISH THE DETAILS AND JUSTIFY THE CLAIM. THOUGH, THE ASSESSEE SUPPORTED ITS CLAIM OF DEDUCTION, HOWEVER, THE ASSESSING OFFICER HELD THAT THE EXPENDITURE INCURRED BEING OF CAPITAL NATURE CANNOT BE ALLOWED. 10 . WHILE DECIDING ASSESSEES APPEAL, LEARNED COMMISSIONER (APPEALS) DELETED THE DISALLOWANCE BY FOLLOWING THE DEC ISION OF THE TRIBUNAL IN DCIT V/S BANK OF AMERICA SECURITIES (INDIA) PVT. LTD., [2011] 136 TTJ 441 (MUM.). 11 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER. 12 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , NOW THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HON'BLE SUPREME COURT IN CIT V/S UNITED GLASS MANUFACTURING CO. LTD. [2012] (9) EMI 914 (SC). 13 . HAVING CONSIDERED RIVAL SUBMISSIONS, WE FIND THAT THE ISSUE HAS BEEN SETTLED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HON'BLE SUPREME COURT IN UNITED GLASS MANUFACTURING CO. LTD. (SUPRA) , WHEREIN , THE HON'BLE SUPREME COURT HAS HELD THAT CLUB MEMBERSHIP FEE INCURRED BY THE ASSESSEE FOR ITS EMPLOYEES IS PURELY A BUSINESS 7 KUONI TRAVELS INDIA PVT. LTD. EXPENDITURE, HENC E, ALLOWABLE UNDER SECTION 37(1) OF THE ACT. IN VIEW OF THE AFORESAID, WE DISMISS THE GROUND RAISED BY THE REVENUE. 14 . IN GROUND NO.3, THE REVENUE HAS CHALLENGED THE DECISION OF THE FIRST APPELLATE AUTHORITY IN EXCLUDING THE AMOUNT OF ` 27,10,05,528, FROM THE TOTAL RECEIPT FOR COMPUTATION OF DEDUCTION UNDER SECTION 80HHD OF THE ACT. 15 . BRIEF FACTS ARE, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER WHILE EXAMINING ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80HHD OF THE ACT FOUND THAT DURING THE RELEVANT PREVIOUS YEAR, ASSESSEE HAS TRANSFERRED RECEIPT OF ` 27,10,05,528, TO OTHER HOTELIER S . RELYING UPON THE ASSESSMENT ORDER PASSED IN CASE OF ASSESSEE FOR THE ASSESSMENT YEAR 2002 03, THE ASSESSING OFFICER HELD THAT THE SAID AMOUNT H AS TO BE INCLUDED IN THE TOTAL RECEIPT FOR COMPUTATION OF DEDUCTION UNDER SECTION 80HHD OF THE ACT. THE ASSESSEE CHALLENGED THE AFORESAID DECISION OF THE ASSESSING OFFICER BEFORE THE FIRST APPELLATE AUTHORITY. 16 . THE LEARNED COMMISSIONER (APPEALS) NOTICING T HAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY HIM IN ASSESSMENT YEAR S 2002 03 AND 2004 05 ALLOWED ASSESSEES CLAIM FOR EXCLUSION OF THE AMOUNT OF ` 27,10,05,528, FROM THE TOTAL RECEIPTS FOR COMPUTATION OF DEDUCTION UNDER SECTION 80HHD OF THE ACT. 8 KUONI TRAVELS INDIA PVT. LTD. 17 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. AS COULD BE SEEN, THE ASSESSING OFFICER RELYING UPON THE ASSESSMENT ORDER PASSED IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2002 03 HAS INCLUDED THE PAYMENT MADE TO OTHER HOTELIER S IN THE TOTAL RECEIPTS FOR COMPUTING DEDUCTION UNDER SECTION 80HHD OF THE ACT. HOWEVER, WHEN IDENTICAL ISSUE ARISING IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2002 03 CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN ITA NO.1924/MUM./2007, DATED 19 TH JANUA RY 2018, THE TRIBUNAL HAS HELD AS UNDER: 26. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF AUTHORIZES BELOW. THE AO INCLUDED FIRST RECEIPT I.E. RS. 30.31 (APPROX) CRORE IN RECEIPT OF BUSINESS HOLDING THAT THE RE IS NOT EXPRESS PROVISION IN SECTION 80HHD FOR EXCLUSION FROM THE TOTAL RECEIPT. RECEIPT NO.2 OF RS. 66.39 LAKHS WAS INCLUDED BY AO HOLDING THAT ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND THESE RECEIPT ACCRUED TO THE ASSESSEE DURING THE PR EVIOUS YEAR RELEVANT TO AY 2001 - 02. THE LD. CIT(A) AFTER EXAMINING THE FACT AND SUBMISSION OF THE ASSESSEE CONCLUDED THAT THE AMOUNT CHARGED BY ASSESSEE FROM FOREIGN TOURIST INCLUDES PAYMENT FOR LODGING, BOARDING AND LOCAL TRANSPORTATION. THE PAYMENT RECE IVED FROM FOREIGN TOURIST, THE ASSESSEE MAKES PAYMENT TO THE HOTELS AND TRAVEL AGENTS FOR LODGING AND BOARDING AND TRANSPORTATION. THESE PAYMENTS ARE TO BE TREATED AS RECEIPT OF CONCERN HOTEL OR TRAVEL AGENT FOR THE PURPOSE OF CLAIMING DEDUCTION UNDER SECT ION 80HHD BY VIRTUE OF PROVISIONS IN EXPLANATION - 1 TO SUB - SECTION (2) OF SECTION 80HHD OF THE ACT. IT WAS FURTHER CONCLUDED THAT AS PER SUB - SECTION (2A), THE ASSESSEE HAD ISSUED CERTIFICATE IN FORM 10CCAC TO RECIPIENT TO ENABLE THEM TO CLAIM DEDUCTION. FRO M THE FORMULA GIVEN IN SUBSECTION (3), THE PAYMENTS MADE TO HOTEL, TRAVEL AGENT IN RESPECT OF WHICH CERTIFICATE IN FORM 10CCAC HAS BEEN ISSUED ARE TO BE EXCLUDED FROM THE RECEIPT RECEIVED FROM RENDERING OF SERVICES TO FOREIGN TOURIST. THE ASSESSEE EXCLUDED RS. 31,30,99,313/ - FROM ITS INCOME RECEIVED FROM RENDERING SERVICES TO THE TOURIST. BY FOLLOWING THE DECISION OF LOTUS TRANS TRAVELS 9 KUONI TRAVELS INDIA PVT. LTD. (SUPRA) WHEREIN IT WAS HELD THAT FOR THE AMOUNTS, THE ASSESSEE HAS ISSUED CERTIFICATE IN FORM 10CCAC CANNOT BE TREATED AS A RECEIPT FOR THE PURPOSE OF TOTAL BUSINESS AND ACCORDINGLY DIRECTED THE AO TO EXCLUDE THE RECEIPT OF RS. 31,30,99,313/ - PASSED ON BY THE ASSESSEE TO OTHER HOTEL AND TRAVEL AGENT. FOR SECOND/OTHER RECEIPT OF RS. 66,39,877/ - IT WAS HELD THAT THE SAID AMOUNT OF FOREIGN CURRENCY REALIZED AFTER 30.09.2009 HAVE NOT ENTERED THE NUMERATOR I.E. RECEIPT EARNED BY ASSESSEE FROM RENDERING SERVICE TO FOREIGN TOURIST WHICH WOULD NOT ENTER THE DENOMINATOR IN THE FORMULA AND DIRECTED THE AO TO EXCLUDE THE SAME. WE HAVE NO TED THAT FINDING OF LD. CIT(A) IN ACCORDANCE WITH EXPLANATION 1 TO SUB - SECTION (2), SUB - SECTION (2) AND SUB - SECTION (3) OF SECTION 80HHD. NO CONTRARY MATERIAL IS BROUGHT TO OUR NOTICE TO TAKE ANY CONTRARY VIEW. THUS, WE DO NOT FIND ANY ILLEGALITY OR INFIRM ITY IN THE ORDER PASSED BY LD. CIT(A). IN THE RESULT, GROUND NO.5 & 6 OF THE APPEAL ARE DISMISSED. 18 . FACTS BEING IDENTICAL, RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE CO ORDINATE BENCH IN ASSESSEES OWN CASE, WE UPHOLD THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. GROUND RAISED IS DISMISSED. 19 . IN GROUND NO.4, THE REVENUE HAS CHALLENGED THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN DIRECTING THE ASSESSING OFFICER TO ALLOW ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80HHD OF TH E ACT IN RESPECT OF FOREIGN EXCHANGE FLUCTUATION GAIN AMOUNTING TO ` 1,42,03,378. 20 . BRIEF FACTS ARE, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICING THAT THE ASSESSEE HAS INCLUDED FOREIGN EXCHANGE FLUCTUATION GAIN OF ` 1,42,03,378, IN THE TOTAL RECEIPTS FOR COMPUTING DEDUCTION UNDER SECTION 80HHD OF THE ACT , CALLED UPON THE ASSESSEE TO 10 KUONI TRAVELS INDIA PVT. LTD. JUSTIFY THE CLAIM. ULTIMATELY, THE ASSESSING OFFICER HAVING NOTICED THAT IN THE ASSESSMENT ORDER PASSED FOR ASSESSMENT YEAR 2002 03, SIM ILAR CLAIM MADE BY THE ASSESSEE WAS DISALLOWED , FOLLOWED THE SAME AND DISALLOWED THE CLAIM OF THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR AS WELL. 21 . WHILE DECIDING THE AFORESAID ISSUE, LEARNED COMMISSIONER (APPEALS) ALLOWED ASSESSEES CLAIM BY FOLLOWING H IS DECISION IN CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2002 03. 22 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. IT IS NOTICED THAT IDENTICAL ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.1924/MU M./2007, DATED 19 TH JANUARY 2018. THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE HOLDING AS UNDER: 24. WE HAVE CONSIDERED THE SUBMISSION OF THE PARTIES AND PERUSED THE ORDERS OF AUTHORITIES BELOW. THE AO DISALLOWED THE DEDUCTION ON GAIN FROM FOREIGN EXCHANGE FLUCTUATION HOLDING THAT IT DOES NOT EMANATE FROM THE SERVICES PROVIDED BY THE ASSESSEE TO FOREIGN T OURIST. THE LD. CIT(A) ALLOWED THE DEDUCTION HOLDING THAT FOREIGN EXCHANGE GAIN FORMS PART AND PARTIAL OF FOREIGN EXCHANGE SALE PROCEED AND CANNOT BE EXCLUDED WHILE COMPUTING DEDUCTION UNDER SECTION 80HHD. THE HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS. S YNTEL LIMITED HELD THAT WHEN ASSESSEE RECEIVED SALE CONSIDERATION IN DOLLARS, WHICH WERE TO RECEIVE ON DATE OF SALE. BUT ON ACCOUNT OF FLUCTUATION IN CONVERSION RATE, THE ASSESSEE RECEIVED MORE IN TERM OF RUPEE. THUS, THE SAME CANNOT BE WITHIN THE TEETH OF LAW LAID DOWN BY HONBLE APEX COURT IN LIBERTY INDIA VS. CIT. IN RACHANA UDYOG (SUPRA), THE HONBLE BOMBAY HIGH COURT HELD THAT EXCHANGE RATE DIFFERENCE IS ALLOWABLE DEDUCTION UNDER SECTION 80IB OF THE ACT WHICH IS 11 KUONI TRAVELS INDIA PVT. LTD. DIRECTLY RELATED TO THE TRANSACTION INVO LVING THE EXPORT OF GOODS OF ELIGIBLE INDUSTRIAL UNDERTAKING. FURTHER, THE HONBLE HIGH COURT IN CIT VS. UNITED RICELAND LTD., WHILE RELYING UPON THE RACHANA UDHYOG (SUPRA) AND SYNTEL LIMITED (SUPRA) ALSO ALLOWED THE CURRENCY EXCHANGE GAIN. THUS, IN VIEW O F THE ABOVE FACTUAL AND LEGAL DISCUSSION, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER PASSED BY LD. CIT(A). IN THE RESULT, GROUND NO.4 OF THE APPEAL IS DISMISSED. 23 . FACTS BEING IDENTICAL, RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE CO ORDINATE BENCH IN ASSESSEES OWN CASE, WE UPHOLD THE DECISION OF LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. GROUND RAISED IS DISMISSED. 24 . GROUNDS NO.5 AND 6, BEING GENERAL IN NATURE ARE DISMISSED. 25 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NO.1851/MUM./2013 ASSESSEE S APPEAL 26 . THE ONLY ISSUE ARISING IN THIS APPEAL FILED BY THE ASSESSEE RELATES TO ADDITION OF ` 77,24,237, UNDER SECTION 68 OF THE ACT. 27 . BRIEF FACTS ARE, FROM THE DETAILS OF CREDITORS FURNISHED BY THE ASSESSEE , THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF ` 77,24,237, PAYABLE UNDER THE HEAD GOA . ALLEGING THAT IN SPITE OF SEVERAL OPPORTUNITIES THE ASSESSEE COULD NOT EXPLAIN THE NATURE OF EXPENDITURE, HE DISALLOWED THE AMOUNT BY TREATING IT AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE INCOME TAX ACT, 1961 (FOR SHORT 12 KUONI TRAVELS INDIA PVT. LTD. THE ACT ). WHILE DECIDING THE ISSUE RELATING TO THE AFORESAID DISALLOWANCE, LEARNED COMMISSIONER (APPEALS) THOUGH AGREED WITH THE ASSESSEE THAT THERE BEING NO UNEXPLAINED EXPENDITURE , DISALLOWANCE UNDER SECTION 69C OF THE ACT CANNOT BE MADE, HOWEVER, HE HELD THAT APART FROM FILING COPY OF LEDGER ACCOUNT S, WHICH WERE NOT AUTHENTICATED BY THE CREDITOR , THE ASSESSEE COULD NOT EXPLAIN THE NATURE AND SOURCE OF THE AM OUNT OF ` 77,24,237, CREDITED IN THE BOOKS OF ACCOUNT. ACCORDINGLY, HE TREATED IT AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT AND SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. 28 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , ASSESSEE MA INTAINS RUNNING ACCOUNT WITH VARIOUS HOTELS AT GOA FOR BOOKING ROOMS ON BEHALF OF THE CUSTOMERS. HE SUBMITTED, THE AMOUNT PAYABLE TO THE HOTEL IS SHOWN AS TRADE CREDITORS IN THE BOOKS OF ACCOUNT. HE SUBMITTED , WHILE THE ASSESSING OFFICER TREATED IT AS UNEX PLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT, LEARNED COMMISSIONER (APPEALS) TREATED IT AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT , THAT TOO , WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THAT THE INGREDIENTS OF SECTION 68 OF THE ACT ARE NOT APPLICABLE. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE ASSESSEE HAS FURNISHED ALL EVIDENCES TO PROVE THE GENUINENESS OF THE OUTSTANDING TRADE CREDITORS. THE LEARNED AUTHORISED REPRESENTATIVE DRAWING OUR 13 KUONI TRAVELS INDIA PVT. LTD. ATTENTION TO TH E LEDGER ACCOUN T COPIES OF THE H OTELS AT GOA MAINTAINED IN ASSESSEES BOOKS OF ACCOUNT SUBMITTED THAT THE DEPARTMENTAL AUTHORITIES HAVE ACCEPTED ALL OTHER PAYMENTS MADE TO THE HOTELS EXCEPT THE OUTSTANDING BALANCE OF ` 77,24,237. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , ONCE IT IS ACCEPTED THAT THE CONCERNED PARTIES ARE TRADE CREDITORS , THE AMOUNT CANNOT BE TREATED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. IN SUPPORT OF SUCH CONTENTION, LEARNED AUT HORISED REPRESENTATIVE RELIED UPON THE THIRD MEMBER DECISION OF THE TRIBUNAL, LUCKNOW BENCH, IN ITO V/S ZAZSONS EXPORTS LTD., [2016] 158 ITD 001. 29 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER (APPEALS). 30 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. UNDISPUTEDLY, WHILE THE ASSESSING OFFICER HAS DISALLOWED THE AMOUNT OF ` 77,24,237, BY TREATING IT AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT, LEARNED COMMISSIONER (APPEALS) HAS SUSTAINED THE DISALLOWANCE ON A DIFFERENT REASONING BY TREATING IT AS UNEXPLAINED CASH CREDIT UNDER SECTION 69 OF THE ACT. HOWEVER, THE D EPARTMENTAL AUTHORITIES HAVE REFUSED TO ACCEPT ASSESSEES CLAIM ALLEGING NON FURNISHING OF SUPPORTING EVIDENCE / CONFIRMATIONS BY THE 14 KUONI TRAVELS INDIA PVT. LTD. ASSESSEE. THOUGH, WE AGREE WITH THE LEARNED AUTHORISED REPRESENTATIVE THAT BEFORE SUSTAINING THE DISALLOWANCE UNDER SECTIO N 68 OF THE ACT, LEARNED COMMISSIONER (APPEALS) SHOULD HAVE PROVIDED ADEQUATE OPPORTUNITY TO THE ASSESSEE TO PROVE ITS CASE THAT PROVISIONS OF SECTION 68 OF THE ACT ARE NOT ATTRACTED, HOWEVER, IT HAS TO BE SAID THAT THE PRIMARY ONUS IS ON THE ASSESSEE TO E XPLAIN THE NATURE AND SOURCE OF CREDITS / DEBITS APPEARING IN ITS BOOKS OF ACCOUNT. THOUGH, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED BEFORE US THAT THE OUTSTANDING AMOUNT OF ` 77,24,237, APPEARING IN THE BOOKS OF ACCOUNT REPRESENT THE AMOUNT PAYABLE TO THE HOTELS AT GOA ON ACCOUNT OF BOOKING OF BOOKS ON BEHALF O F CUSTOMERS AND IN THIS CONTEXT HE HAS DRAWN OUR ATTENTION TO THE STATEMENT OF ACCOUNTS OF THE HOTELS PLACED AT PAGE 25 TO 36 OF THE PAPER BOOK, HOWEVER, THE ASSESSEE HAS TO SUBSTANTIATE ITS C LAIM THROUGH PROPER SUPPORTING DOCUMENTARY EVIDENCES. CONSIDERING THE ALLEGATION OF THE DEPARTMENTAL AUTHORITIES THAT THE ASSESSEE HAS NOT FURNISHED ANY SUPPORTING EVIDENCE TO SUBSTANTIATE ITS CLAIM, WE ARE INCLINED TO RESTORE THE ISSUE TO THE ASSESSING OF FICER FOR DE NOVO ADJUDICATION FOR ENABLING THE ASSESSEE TO SUBSTANTIATE ITS CLAIM THROUGH PROPER DOCUMENTARY EVIDENCES. NEEDLESS TO MENTION, THE ASSESSING OFFICER MUST AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE ISSUE. GROUNDS RAISED ARE ALLOWED FOR STATISTICAL PURPOSES. 15 KUONI TRAVELS INDIA PVT. LTD. 31 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 32 . TO SUM UP, REVENUES APPEAL IS DISMISSED AND ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28.02.2019 SD/ - N.K. PRADHAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 28.02.2019 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI