Venkat Ratnam Sambari, Hyderabad V. Income Tax Officer, Ward-4(1), Hyderabad

ITA 2173/Hyd/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8191 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 02-12-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 19-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained cash credit; TDS; Set aside
• Section: 142(1); 40(a)(ia); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER ITA NO. 2173 / HYD /201 7 (ASST. YEAR : 20 12 - 13 ) SRI VENKAT RATNAM SAMBARI , 1 - 7 - 659/A, RAMNAGAR, HYDERABAD. V S . IT O , WARD - 4 (1), HYDERABAD . PAN NO. AFVPS 6870 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.V. RAGHURAM A R . DEPARTMENT BY : SHRI SUNKU SRINIVAS SR. DR DATE OF HEARING : 02 / 12 /201 9 . DATE OF PRONOUNCEMENT : 22 / 0 1 /20 20 . O R D E R TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , GUNTUR , DATED 10 /0 6 /201 7 FOR THE ASSESSMENT YEAR 20 12 - 13 . 2. THE FIRST GROUND OF APPEAL RELATES TO ADDITION OF RS. 11,55,870/ - . IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT AS SEEN FROM THE BALANCE SHEET , IT IS NOTICED THAT THE ASSESSEE IS SHOWING SUNDRY CREDITORS UNDER THE HEAD CURRENT LIABILITIES AMOUNTING TO RS. 11,55,870/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED SPECIFICALLY VIDE ORDER SHEET NOTINGS DATED 04/02/2015, 2 ITA NO. 2173 / HYD /2017 (SRI VENKAT RATNAM SAMBARI ) 12/02/2015 & 18/02/2015 AND ALSO IN THE NOTICE ISSUED U/SEC. 142(1) DATED 12/02/2015 TO FURNISH LEDGER EXTRACTS OF THE SUNDRY CREDIT ORS ALONG WITH THEIR CONFIRMATIONS. IN SPITE OF NUMBER OF OPPORTUNITIES PROVIDED, THE ASSESSEE NEITHER PRODUCED THE LEDGER EXTRACTS NOR CONFIRMATIONS. THE ASSESSEES AR EXPRESSED HIS INABILITY TO PRODUCE THE SAME WHICH WAS RECORDED IN THE ORDER SHEET ON 23/02/2015 . ACCORDINGLY, SUNDRY CREDITORS SHOWN BY THE ASSESSEE HAS BEEN TREATED AS UNEXPLAINED CASH CREDITS AND A D DED TO THE INCOME RETURNED. 3 . ON APPEAL BEFORE THE LD. CIT(A) , NO DETAILS WERE FILED. EVEN BEFORE ME, NO DETAILS ARE FILED, THEREFORE I FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A) ON THIS ISSUE. THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 4 . THE SECOND ISSUE INVOLVED IN THIS APPEAL RELAT ES TO SECTION 40(A)(IA) OF THE ACT. 5. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS DEBITED AN AMOUNT OF RS. 20,01,871/ - TOWARDS INTEREST ON CRANE LOANS . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF LOANS AND INTEREST PAID THEREON AND TDS MADE ON SUCH INTEREST. IN RESPONSE , THE ASSESSEE EXPLAINED THAT THE LOAN S HAVE BEEN TAKEN FROM BAJAJ FINSERV AND FILED THE STATEMENTS. WHEN THE ASSESSEE WAS ASKED T O EXPLAIN AS NO TDS 3 ITA NO. 2173 / HYD /2017 (SRI VENKAT RATNAM SAMBARI ) WE MADE ON T HE PAYMENTS TO THE SAID BAJAJ FINSERV AND ASKED TO EXPLAIN AS TO WHY DISALLOWANCE U/SEC. 40(A)(IA) SHOULD NOT BE MADE. THE ASSESSEE EXPLAINED THAT THE EMI ON CRANE LO A NS TAKEN FROM BAJAJ FINSERV WAS DEDUCTED FROM THE BANK ACCOUNT AND NO TDS WAS MADE ON SUCH INTEREST PAYMEN TS . AS THE INTEREST PAYMENTS TO SUCH FINANCIAL INSTITUTION ATTRACTS THE TDS AND AS THE ASSESSEE FAILED TO DEDUCT THE TDS, THE INTEREST AMOUNT OF RS.20,01,871/ - DEBITED TO THE PROFIT & LOSS ACCOUNT IS DISA LLOWED U/SEC. 40(A)(IA) AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 6 . ON APPEAL BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT PAYMENTS MADE TO BAJAJ FINSERV HAS BEEN ADMITTED AS THE INCOME OF THE PAYEE , HENCE, NO DISALLOWANCE CAN BE MADE U/SEC.40(A) (IA) OF THE ACT. THE LD. CIT(A) HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE FOR THE REASON THAT IF AT ALL PAYEE ADMITTED THE SAME AS ITS INCOME , IT HAS TO FILE A CERTIFICAT E FROM THE CHARTERED ACCOUNTANT IN A PRESCRIBED FORM AND CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 7 . ON APPEAL BEFORE ME, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ISSUE MAY BE REMITTED BACK TO THE ASSESSING OFFICER TO EXAMINE WHETHER PAYEE HAS ADMITTED THE SAME AS ITS INCOME OR NOT AND ACCORDINGLY IT HAS TO BE DECIDED. I FIND THAT 4 ITA NO. 2173 / HYD /2017 (SRI VENKAT RATNAM SAMBARI ) REQUEST MADE BY THE ASSESSEE HAS TO BE ADDRESSED THEREFORE I SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND REMIT THE ISSUE BACK TO THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE BAJAJ FINSERV HAS INCLUDED THE AMOUNTS RECEIVED FROM THE ASSESSEE AS ITS INCOME AND PAID TAX THEREON AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW . THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 8 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON TH IS 2 2 N D DAY OF JAN. , 20 20 . S D / - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 2 2 N D JANUARY , 20 20 . VR/ - COPY TO: 1. THE ASSESSEE SRI VENKAT RATNAM SAMBARI, 1 - 7 - 659/A, RAMNAGAR, HYDERABAD. 2. THE REVENUE ITO, WARD - 4(1), HYDERABAD. 3. THE P R. CIT - 1, HYDERABAD. 4. THE CIT(A) - 1, HYDERABAD. 5. THE D.R . , HYDERABAD. 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.