Sita Anne Saikumar, Baroda V. The Income tax Officer,Ward-2(5), Baroda

ITA 186/AHD/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5988 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-04-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 20-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: MANISH J SHAH A R
• Keywords: Unexplained cash credit; Opportunity of being heard; Revenue expenditure; Capital expenditure
• Section: 37(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMADABAD , , , , BEFORE SHRI G.C.GUPTA , VICE PRESIDENT AND .., ! '# '# '# '# SHRI T.R. MEENA, ACCOUNTANT MEMBER $%.. , &' ( & ! ) & ! ) & ! ) & ! ) ITA NO. 186/AHD/2010 ASSESSMENT YEAR :2005-06 SITA ANNE SAIKUMAR PROP. M/S. SAILAXMI EXTRUSION ENGG. 284/7, GIDC, MAKARPURA, BARODA. V/S . INCOME TAX OFFICER, WARD 2 (5), BARODA. PAN NO. ADIPA8247N (APPELLANT) .. (RESPONDENT) *+ , - & / BY APPELLANT SHRI MANISH J. SHAH, A.R. ./*+ , - & /BY RESPONDENT SHRI O. P. MEENA, SR. D.R. 0 , 1%' /DATE OF HEARING 24.04.2014 234 , 1%' /DATE OF PRONOUNCEMENT 02.05.2014 O R D E R PER : SHRI T.R.MEENA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE CIT(A)-II, BARODA, ORDER DATED 06.11.2009 FOR A.Y. 2005-06. T HE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER: 1. THE C.I.T.(APPEALS) ERRED IN UPHOLDING THE ADDI TION OF RS.9,95,000/- UNDER SECTION 68 OF THE INCOME TAX ACT BY TREATING THE SAID AMOUNT AS UNEXPLAINED CASH CREDITS IN THE HANDS OF THE ASS ESSEE. 2. THE C.I.T.(APPEALS) FURTHER ERRED IN CONFIRMING THE ADDITION OF RS.4,56,260/- UNDER SECTION 68 ON THE BASIS THAT TH E ASSESSEE COULD NOT EXPLAIN THE SOURCE OF CAPITAL INTRODUCTIO N. 3. THE C.I.T.(APPEALS) ERRED IN CONFIRMING THE DISA LLOWANCE OF AN AMOUNT OF RS.2,50,384/- UNDER SECTION 40(A)(IA) OF THE ACT. 4. THE C.I.T.(APPEALS) ERRED IN DISALLOWING AN AMOU NT OF RS.31,440/- INCURRED BY THE ASSESSEE TOWARDS LOAN PROCESSING CH ARGES WHICH ITA NO. 186/AHD/2010 SITA ANNE SAIKUMAR VS. ITO A.Y. 2005-06 PAGE 2 THE ASSESSEE HAD CLAIMED AS REVENUE EXPENDITURE ALL OWABLE UNDER SECTION 37(1) OF THE ACT. 5. THE C.I.T.(APPEALS) ERRED IN CONFIRMING THE DISA LLOWANCE OF RS.17,396/- BEING 10% OF THE OVERALL TELEPHONE EXPE NSES DEBITED TO PROFIT AND LOSS ACCOUNT BY ASSESSEE ON THE PRETE XT OF IT BEING DISALLOWED AS PERSONAL USE. 6. THE C.I.T.(APPEALS) ERRED IN CONFIRMING THE DISA LLOWANCE OF RS.15,944/- BEING 10% OF THE OVERALL VEHICLE EXPENS ES DEBITED TO PROFIT AND LOSS ACCOUNT BY ASSESSEE ON THE PRETEXT OF IT BEING DISALLOWED AS PERSONAL USE. 7. THE C.I.T.(APPEALS) ERRED IN CONFIRMING CHARGING OF INTEREST UNDER SEC.234A, 234B, 234C AND 234D OF THE INCOME TAX ACT . 2. GROUND NOS. 1 & 2 ARE AGAINST UPHOLDING THE ADDI TION OF RS. 9,95,000/- AND RS. 4,56,260/- U/S. 68 OF THE IT ACT. THE LD. A.O. HELD THAT ASSESSEE HAS NOT PROVED THE GENUINENESS OF THE TRANSACTION, IDEN TITY OF THE PERSON AND CREDITWORTHINESS OF THE CREDITORS. THUS, HE MADE A DDITION U/S. 68 OF THE IT ACT. THE APPELLANT STAGE ALSO, THE ASSESSEE COULD NOT CO NTROVERT THE FINDING GIVEN BY THE A.O. IN THE ASSESSMENT ORDER. THUS, LD. CIT (A) ALSO CONFIRMED THE ADDITION. BEFORE US, LD. COUNSEL SUBMITTED THAT TH ESE ADDITIONS WERE CONFIRMED IN ABSENCE OF NOT CONSIDERING THE EVIDENC E BY THE LOWER AUTHORITIES. THE LD. A.R. FURTHER CLAIMED THAT ASSESSEE HAS ALL EVIDENCES TO PROVE THE LOAN AS WELL AS CASH INTRODUCED IN THE CAPITAL ACCOUNT A RE GENUINE AND HAVE ALL THE EVIDENCES TO PROVE THE CASE. THEREFORE, HE REQUEST ED TO SET ASIDE THE BOTH ISSUES TO THE A.O. FOR RE-CONSIDERATION, WHICH HAS BEEN ACCEPTED BY THE LD. SR. D.R. IN THE INTEREST OF JUSTICE, WE ALSO FEEL THAT BOTH THE ISSUES REQUIRED TO BE REEXAMINED BY THE A.O. AFRESH. ACCORDINGLY, WE SET ASIDE BOTH THE GROUNDS OF APPEAL TO THE A.O. ITA NO. 186/AHD/2010 SITA ANNE SAIKUMAR VS. ITO A.Y. 2005-06 PAGE 3 3. GROUND NO.3 IS AGAINST DISALLOWANCE U/S. 40(A)(I A) FOR RS.2,50,384/- FOR NOT DEDUCTING THE TDS ON CONTRACTUAL PAYMENTS AND G ROUND NO.4 IS AGAINST CONFIRMING THE ADDITION FOR DISALLOWANCE OF RS.31,4 40/- TO LOAN PROCESSING CHARGES PERTAINED TO PLANT AND MACHINERY AS CAPITAL EXPENDITURE. FURTHER DISALLOWANCE MADE BY THE A.O. UNDER THE HEAD TELEP HONE EXPENSES IN GROUND NO.5 AND VEHICLE EXPENSES AS PER GROUND NO .6 HAS BEEN MADE @ 20% OUT OF TOTAL EXPENSES, WHICH WERE REDUCED THE 1 0% BY THE LD. CIT(A). WE ALSO FEEL THAT AS MAIN GROUND OF APPEAL HAVE BEE N SET ASIDE TO THE A.O., GROUND NO. 4 TO 6 ARE ALSO REQUIRED TO BE RE-EXAMIN ED BY THE A.O. IN THE INTEREST OF JUSTICE. THUS, WE SET ASIDE ALL THE GR OUNDS OF APPEAL TO THE A.O. FOR DE NOVO. NEED NOT TO MENTION HERE THAT ASSESSEE SH OULD BE ALLOWED REASONABLE OPPORTUNITY OF BEING HEARD AT THE TIME O F DECIDING SET ASIDE PROCEEDING. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 02.05.2014 SD/- SD/- (G.C.GUPTA) (T.R. MEENA) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY S.K.SINHA &5 &5 &5 &5 , ,, , .16 .16 .16 .16 7&641 7&641 7&641 7&641 / COPY OF ORDER FORWARDED TO:- 1. *+ / APPELLANT 2. ./*+ / RESPONDENT 3. ## 1 ; / CONCERNED CIT 4. ;- / CIT (A) 5. 6? .1 , , / DR, ITAT, AHMEDABAD 6. A BC / GUARD FILE. BY ORDER/ &5 &, / # , )