Rabindra Kumar Lenka, Cuttack V. ITO, Ward-2(4), Cuttack, Cuttack

ITA 210/CTK/2013

• Counselvise Citation: 21022114 RSA 2013
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 01-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: S N SAH OO

Judgement Text

I.T.A. NO. 210 / CTK ./20 1 3 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI S .V. MEHROTRA (ACCOUNTANT MEMBER) , AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 210 / CTK / 20 1 3 ASSESSMENT YEAR : 200 8 - 20 0 9 SHRI RABINDRA KUMAR LENKA, ................ .... ....... .. .APP ELL ANT PROP.: M/S. JAYRAM LENKA GARMENTS, CUTTACK, MANGALABAG H , CUTTACK - 753 001 [PAN : A AVPL 3106 F ] - VS. - INCOME TAX OFFICER,................................. .... . RESPONDENT WARD - 2(4), CUTTACK , CUTTACK APPEARANCES BY: SH RI S.N. SAH OO , A .R. , FOR THE ASSESSEE SHRI S.C. MOHANTY , D.R, FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : OCTOBER 1 6 , 2 01 4 DATE OF PRONOUNCING THE ORDER : OCTOBER 20 , 201 4 O R D E R PER GEORGE MATHAN : TH IS IS AN APPEAL FILED BY THE ASS ESSE E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) , CUTTACK IN I.T. APPEAL NO. 0 464 / 1 0 - 1 1 DATED 14 . 02 .20 1 3 FOR THE ASSESSMENT YEAR 200 8 - 0 9 . 2 . SHRI S.N. SAHOO , A DVOCATE , REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI S.C. MOHANTY , D.R, RE PRESENTED ON BEHALF OF THE REVENUE . 3 . AT THE TIME OF HEARING, I T WAS SUBMITTED BY THE LD. A.R. THAT HE DID NOT WISH TO PRESS GROUNDS NO. 1, 2, 6 & 7. CONSEQUENTLY THE SAME ARE DISMISSED AS NOT PRESSED. I.T.A. NO. 210 / CTK ./20 1 3 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 2 OF 3 4. IN RESPECT OF THE GROUNDS NO. 3, 4 & 5, IT WAS S UBMITTED BY THE A.R. ON BEHALF OF THE ASSESSEE THAT THE ASSESSEE HAS IN HIS BALANCE - SHEET RECORDED AN ENTRY AS ADVANCE PAID FOR PURCHASE OF A PROPERTY AT RS.30,00,000/ - IN CUTTACK. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HELD THAT THE ADVANCE WAS GIVEN FOR PURCHASE OF THE PROPERTY AND WAS NOT FOR THE PURPOSE OF BUSINESS OF ASSESSEE AND CONSEQUENTLY HELD THAT INTEREST BEARING FUNDS HAD BEEN DIVERTED FOR NON - BUSINESS PURPOSES AND CONSEQUENTLY DISALLOWED INTEREST @ 12% ON THE SAID AMOUNT OF RS.30,00,0 00/ - BY INVOKING THE PROVISIONS OF SECTION 36(III) OF THE ACT TO AN EXTENT OF RS.3,60,000/ - . IT WAS THE SUBMISSION BY THE LD. A.R. THAT THE AMOUNT FOR PURCHASE OF THE LAND WAS GIVEN TO THE ASSESSEE BY HIS WIFE THROUGH A BANKERS CHEQUE. LD. AR DREW OUR ATT ENTION TO PAGE 4 OF THE PAPER BOOK, WHICH WAS THE COPY OF THE BANK ACCOUNT OF SMT. SANTOSHI LENKA , WHEREIN ON 12.11.2007 AN AMOUNT OF RS.30,00,000/ - HAS BEEN SHOWN TO HAVE BEEN PAI D. HE FURTHER DREW OUR ATTENTION TO PAGE 8 OF THE PAPER BOOK , WHICH WAS A CO NFIRMATION LETTER OF SMT. SANTOSHI LENKA, WHEREIN HE SPECIFIED THE CHEQUE TO BE CHEQUE BEARING NO. 025564 DATED 12.11.2007 FROM THE BANK OF BARODA. FURTHER LD. AR DREW OUR ATTENTION TO PAGE 36 OF THE PAPER BOOK WHICH WAS PAGE 6 OF THE SALE DEED OF THE SAID PROPERTY, THE SALE DEED DATED 12.11.2007, WHEREIN THE SAID CHEQUE BEARING NO. 025564 DATED 12.11.2007 IS MENTIONED. IT WAS THUS THE SUBMISSION THAT NO INTEREST BEARING FUND HAD BEEN USED FOR THE PURPOSE OF GIVING ADVANCE FOR THE PROPERTY AND CONSEQUENTLY NO DISALLOWANCE OF INTEREST WAS CALLED FOR. 5. IN REPLY, LD. CIT (D.R.) SUBMITTED THAT INTEREST BEARING FUND IS WITHDRAWN AS IS EVIDENT FROM THE BALANCE - SHEET AND CONSEQUENTLY THE INTEREST HAD BEEN RIGHTLY ADDED BY INVOKING THE PROVISIONS OF SECTION 36(I) (III) OF THE ACT. IT WAS THE FURTHER SUBMISSION BY THE LD. A.R. THAT HE HAD NO OBJECTION IF THE ISSUES WERE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION. I.T.A. NO. 210 / CTK ./20 1 3 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 3 OF 3 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. A PERUSAL OF THE BALANCE - SHEET OF THE AS SESSEE SHOWS THE ADVANCE FOR PURCHASE OF LAND AT BHUBANESWAR IS RECORDED AT RS.30,00,000/ - . THE ASSESSEE HAS ALSO PRODUCED SUBSTANTIAL EVIDENCE TO SHOW THAT THE AMOUNT OF RS.30,00,000/ - HAS BEEN RECEIVED FROM THE ASSESSEES WIFE. HOWEVER, EVEN WITHOUT GOIN G INTO THIS EVIDENCE FROM A PLAIN PERUSAL OF THE BALANCE - SHEET, IT IS EVIDENT THAT THE ASSESSEE DOES NOT HAVE ANY UNSECURED LOAN. THE SECURED LOAN IS PRACTICALLY CASH CREDIT ACCOUNT WITH THE BANK OF BARODA FOR AN AMOUNT OF RS.1,30,00,000/ - . THIS AMOUNT OF RS.1,30,00,000/ - STANDS SUPPORTED BY STOCK IN TRADE OF RS.1.21 CRORES IN THE CURRENT ASSETS AND CASH IN HAND OF RS.9,41,000/ - . EVEN OTHERWISE, THE ASSESSEE HAS A NET PROFIT OF RS.15,34,667/ - FOR THE RELEVANT ASSESSMENT YEAR, THEREFORE, OBVIOUSLY THIS AMOUN T OF RS.30,00,000/ - COULD NOT BE OUT OF INTEREST BEARING FUNDS. HOWEVER, IN THE INTEREST OF JUSTICE, THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AND RE - ADJUDICATION. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH OCTOBER , 2014. SD/ - SD/ - S .V. MEHROTRA GEORGE MATHAN ( ACCOUNTANT MEMBER) ( JUDICIAL MEMBER) KOLKATA, THE 20 TH D AY OF OCTO BER , 2 01 4 COPIES TO : (1) THE ASSESSEE (2) THE DEPARTMENT (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL CUTTACK B ENCH, CUTTACK LAHA/SR. P.S.