The ITO, Ward-9(1), Ahmedabad V. M/s. Riddhi Siddhi Corporation, Ahmedabad

ITA 2248/AHD/2012

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9170 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 08-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAMES KURIEN
• Keywords: Unexplained cash credit; Additional evidence; TDS
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 142(1); 40(a)(ia); 194C; 143(2); 43; 194A; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV, JM & SHRI MANISH BORAD, AM. ITA NO. 2248/AHD/2012 ASST. YEAR: 2009-10 ITO, WD-9(1), AHMEDABAD. VS. M/S RIDDHI SIDDHI CORPORATION, C/O ANIL DAYABHAI MITERANI, 8, GOKUL PARK, SARDAR NAGAR, AHMEDABAD. APPELLANT RESPONDENT PAN AAIFR 5620B APPELLANT BY SHRI JAMES KURIEN, SR.DR RESPONDENT BY SHRI P. F. JAIN, AR DATE OF HEARING: 08/02/2017 DATE OF PRONOUNCEMENT: 20/02/2017 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THIS APPEAL OF REVENUE FOR ASST. YEAR 2009-10 IS D IRECTED AGAINST THE ORDER OF LD. CIT(A)-XV, AHMEDABAD, DATE D 2 ND JULY, 2012 VIDE APPEAL NO.CIT(A)-XV/406/ITO-9(1)/11-12 ARISING OUT OF THE ORDER U/S 143(3) OF THE IT ACT, 1961 (IN SHORT THE ACT), FRAMED ON 23/12/2011 BY ITO, 9(1), AHMEDABAD. FOLLOWING GROUN DS HAVE BEEN RAISED BY THE REVENUE :- 1). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,20,21,020/- MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 2 2). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS )-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.7,06,261/- MADE ON ACCOUNT OF INTEREST EXPENSES. J 3) WITHOUT PREJUDICE TO THE GROUND NO.2, IT IS SUBM ITTED THAT THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE U/S.40{A) (IA) OF THE ACT, IN RESPECT OF INTEREST EXPENSES OF RS.3,00,3487- PAID WITHOUT COMPLIANCE TO PROVISION OF SECTION 194A OF THE ACT. . 4) THE LD. COMMISJSIONER OF INCOME-TAX (APPEALS)-XV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS JIN ADMITTING ADDITIONAL EVIDENCES IN VIOLATION OF RULE 46A. 5) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. : 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF BUILDIN G CONSTRUCTION. RETURN OF INCOME FOR ASST. YEAR 2009-10 WAS FILED O N 23.07.2009 DECLARING TOTAL LOSS OF RS.10,19,380/-. CASE WAS SE LECTED FOR SCRUTINY ASSESSMENT AND NOTICE U/S 143(2) OF THE ACT FOLLOW ED BY NOTICE U/S 142(1) OF THE ACT WAS ISSUED ALONG WITH DETAILED QU ESTIONNAIRE. IN RESPONSE THERETO NECESSARY DETAILS WERE FILED. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, LD. ASSESSING OFFICER ON VE RIFICATION OF BALANCE SHEET OBSERVED THAT ASSESSEE HAS TAKEN UNSE CURED LOANS OF RS.1,35,53,985/- AND ACCORDINGLY CALLED FOR DETAILS OF UNSECURED LOAN OUTSTANDING AS ON FIRST DAY OF PREVIOUS YEAR, LOAN TAKEN DURING THE YEAR AND SQUARED UP ALONG WITH COPY OF ACCOUNTS, CO NFIRMATIONS AND PROOF OF CREDITWORTHINESS. ASSESSEE FILED NECESSARY DETAILS OF THE UNSECURED LOANS. ON VERIFICATION OF THE SAME LD. AS SESSING OFFICER OBSERVED THAT IN THE CASE OF 24 PARTIES FROM WHOM T OTAL OF UNSECURED LOANS OF RS.1,20,21,020/- WAS RECEIVED DURING THE Y EAR, ASSESSEE ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 3 HAS FAILED TO PROVE THE CREDITWORTHINESS OF THE DEP OSITORS BECAUSE THE INCOME OF THE LOAN CREDITORS WAS VERY MEAGER AS SHO WN IN THE INCOME-TAX RETURNS IN COMPARISON TO THE LOANS GIVEN BY THEM TO THE ASSESSEE. ACCORDINGLY, ADDITION U/S 68 OF THE ACT F OR UNEXPLAINED CASH CREDIT OF RS.1,20,21,020/- WAS MADE. LD. ASSES SING OFFICER ALSO OBSERVED THAT AN INTEREST OF RS.7,06,261/- WAS PAID TO THE IMPUGNED CASH CREDITORS OF RS.1,20,21,020/- AND THEREFORE, DISALLOWED THE SAME LOAN BY TREATING THEM AS NON-GENUINE EXPENDITU RE. THIS INTEREST PAYMENT OF RS.7,06,261/- INTER ALIA INCLUDED AN AMO UNT OF RS.3,00,348/- ON WHICH TDS HAS NOT BEEN DEDUCTED U/ S 194C OF THE ACT. LD. ASSESSING OFFICER BRUSHED ASIDE THE SUBMIS SIONS OF THE ASSESSEE THAT FORM 15G FROM THE PARTIES TO WHOM INT EREST OF RS.3,00,348/- HAS BEEN PAID AND APPLYING THE PROVIS IONS OF SECTION 40(A)(IA) OF THE ACT DISALLOWED THE SAME. BUT AS AD DITION OF RS.7,06,261/- WAS ALREADY MADE ON ACCOUNT OF NON-GE NUINE EXPENDITURE NO SEPARATE ADDITION OF RS.3,00,348/- W AS MADE. AFTER MAKING ADDITION OF RS.1,27,27,281/- INCOME OF THE A SSESSEE WAS ASSESSED AT RS.1,17,07,900/-. 3. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE LD. CO MMISSIONER OF INCOME TAX(A) AND SUCCEEDED IN FULL. 4. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFORE THE T RIBUNAL BASICALLY RAISING THREE ISSUES AGAINST LD. COMMISSI ONER OF INCOME TAX(A)S ORDER FOR ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 4 1) DELETING ADDITION OF RS.1,20,21,020/- MADE BY AS SESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 6 8 OF THE ACT. 2) DELETING THE DISALLOWANCE OF RS.7,06,261/- ON AC COUNT OF INTEREST EXPENSES. 3) DELETING DISALLOWANCE U/S 40(A)(IA) OF THE ACT I N RESPECT OF INTEREST EXPENDITURE OF RS.3,00,348/- WITHOUT APPLY ING THE PROVISIONS OF SECTION 194A OF THE ACT. 5. WE WILL FIRST TAKE UP THE ISSUE RAISED BY REVENU E AGAINST DELETION OF ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF RS.1,20,21,020/-. 6. BRIEF FACTS RELATING TO THIS ISSUE ARE THAT OUT OF THE UNSECURED LOANS OF RS.1,35,53,985/- LD. ASSESSING OFFICER CAL LED FOR DETAILS ABOUT THE LOANS TAKEN DURING THE YEAR WHICH STOOD AT RS.1 ,20,21,020/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS BEFORE LD. COMMISSIONER OF INCOME TAX(A) ASSESSEE IN ORDER TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS SUBMITTE D COMPLETE DETAILS CONTAINING THE NAMES, ADDRESSES, PANS, COPI ES OF BANK STATEMENTS, INCOME-TAX RETURNS OF CASH CREDITORS AL ONG WITH FINANCIAL STATEMENT AND CONFIRMATION OF ACCOUNTS. HOWEVER, LD . ASSESSING OFFICER ON THE BASIS OF HIS OBSERVATION THAT MOST O F THE CASH CREDITORS HAVE SHOWN A MEAGER INCOME WHEREAS THEY HAVE GIVEN A SUBSTANTIAL AMOUNT OF LOAN TO THE ASSESSEE AND ON THIS BASIS FR AMED A VIEW THAT ASSESSEE HAS BEEN UNABLE TO PROVE THE CREDITWORTHIN ESS OF THE LOAN CREDITORS. IN APPEAL BEFORE LD. COMMISSIONER OF INC OME TAX(A) ACTION OF LD. ASSESSING OFFICER WAS BRUSHED ASIDE BY LD. C OMMISSIONER OF INCOME TAX(A) FOLLOWING THE JUDGMENT OF HON. GUJAR AT HIGH COURT IN THE CASE OF DCIT VS. ROHINI BUILDERS 256 ITR 360 (G UJ) AND IN THE ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 5 LIGHT OF DOCUMENTS PLACED ON RECORD BY THE ASSESSEE HELD THAT ONCE THE CONTRA ACCOUNTS WITH CONFIRMATION ARE FILED WIT H PAN AND OTHER DETAILS ALONG WITH COPIES OF INCOME-TAX RETURN, BAN K STATEMENT ETC. THERE REMAINS NO CASE FOR ADDITION U/S 68 OF THE AC T AND MORE SO NO ENQUIRY HAS BEEN CARRIED OUT AGAINST ANY OF THE CAS H CREDITOR BY LD. ASSESSING OFFICER. 7. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFORE THE T RIBUNAL AND LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED S UPPORTING THE ORDER OF ASSESSING OFFICER. 8. ON THE OTHER HAND, LD. AUTHORISED REPRESENTATIVE FOLLOWING THE ORDER OF LD. COMMISSIONER OF INCOME TAX(A) CONTENDE D THAT ALL NECESSARY EVIDENCES WERE PLACED BEFORE THE ASSESSIN G OFFICER WHICH ARE SUFFICIENT TO PROVE THE IDENTITY, GENUINENESS A ND CREDITWORTHINESS OF THE LOAN CREDITORS. LD. AUTHORISED REPRESENTATI VE REFERRED AND RELIED ON THE JUDGMENT OF HON. GUJARAT HIGH COURT I N THE CASE OF COMMISSIONER OF INCOME TAX VS. RANCHHOD JIVABHAI SA KHAVA IN TAX APPEAL NO.50 OF 2011, DECISION OF THE CO-ORDINATE B ENCH IN THE CASE OF ITO VS. ARIHANT X-RAY & SONOGRAPHY CLINIC (P) LT D. IN ITA NO.4133/AHD/2003 DATED 14.11.2006 AND ANOTHER DECIS ION OF THE CO- ORDINATE BENCH IN THE CASE OF ACIT VS. M/S AMIK PRI NTERS IN ITA NO.3059/AHD/2010 VIDE ORDER DATED 21.04.2015. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL PLACED ON RECORD AND GONE THROUGH THE JUDGMENT AND DECISIONS RELIED ON BY THE LD. AUTHORISED REPRESENTATIVE. THROUGH TH IS GROUND ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 6 REVENUE HAS CHALLENGED THE ORDER OF LD. COMMISSIONE R OF INCOME TAX(A) DELETING THE ADDITION OF RS.1,20,21,020/- MA DE U/S 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH CREDIT. WE OBSER VE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, LD. ASSESSING OFFICER SHOW CAUSED THE ASSESSEE TO PROVE THE IDENTITY, GENUINEN ESS AND CREDITWORTHINESS OF FOLLOWING PARTIES :- SR. NO. NAME OF THE UNSECURED LOAN PERSONS AMOUNT OF LOAN GIVEN 1. JAYA ARJANDAS DAMLA 3,00,000/- 2. RUKMANI KANAIYALAL 61,000/- 3' RANJANA SURAJ BHOJAVANI 28,00,000/- .4. LATABEN BHAGWANDAS MITERANI 8,70,000/- 5. VINODKUMAR DAYALDAS HUF 6,65,000/- 6. DAYALDAS SANTUMAL HUF 6,28,000/- 7. BALARAM SADHURAM GOLANI 4,70,000/- 8. PRIYANKA VINODKUMAR MITERANI 4,15,000/- 9. KOMAL ANILKUMAR MITERANI 7,00,000/- 10. MOHINI RAMESH KRIPLANI 4,00,000/- 11. MAMTABEN BALRAM GOLANI 3,97,020/- 12. VARSHABEN SHYAMAL SATDEV 3,6Q,000/- 13. THAKURIBAI GURALMAL SATDEV 3,20,000/- 14. KISHAN BHAGWANDAS MITERANI 2,66,000/- 15. BHAGWANDAS SANTUMAL HUF 2,29,000/- 16. INDRABEN DAYALDAS MITERANI 3,35,000/- 17. HASSANAND GURUMAL HUF 1,97,000/- 18. HEMABEN VIRUMAL MITERANI 19,70,000/- 19. HASSANAND GURUMAL 1,78,000/- 20. BALUMAL THANWARDAS 1,50,000/- 21. ANILKUMAR DAYALDAS HUF 1,10, 000/- 22. VEENA BALUMAL 1,00,000/- 23. BALUMAL THANWARDAS HUF 50,000/- 24. AMIT BALUMAL 50,000/- TOTAL 1,20,21,020/- ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 7 10. WE FURTHER OBSERVE THAT DURING THE COURSE OF A SSESSMENT PROCEEDINGS ASSESSEE GAVE NAMES, ADDRESSES & PAN OF ALL THE 24 PARTIES AND COPY OF BANK STATEMENTS, INCOME-TAX RET URN AND CONFIRMATION ACCOUNT OF 23 PARTIES AND FOR THE REMA INING ONE ASSESSEE GAVE NECESSARY DOCUMENTS BEFORE LD. COMMIS SIONER OF INCOME TAX(A). THE ONLY REASON FOR WHICH LD. ASSESS ING OFFICER WAS NOT CONVINCED AND THE REPLY OF ASSESSEE WAS THAT TH E INCOME SHOWN BY THE LOAN CREDITORS WAS NIL OR VERY LESS IN COMPA RISON TO LOAN GIVEN BY THEM AND LD. ASSESSING OFFICERS OBSERVATION CA N BE MORE CLEAR WITH THE HELP OF THE FOLLOWING CHART:- SL.NO . NAME OF THE UNSECURED LOAN PERSONS AMOUNT OF LOAN GIVEN RETURN INCOME FOR THE A.Y. 2009-10 1. JAYA ARJANDAS DAM/A RS. 3,00,000/- NOT FILED 2. RUKMANL KANAIYALAL RS. 61,000/- NOT FILED 3. RANJANA SURAJ BHOJAVANI RS. 29,67,111/- RS. 1,79,360/- 4 LATABEN BHAGWANDAS MITERANI RS, 7,61 F 351/- RS.NIL 5. VINODKUMAR DAYALDAS HUF RS. 7 F 30 F 110/- RS. 65,910/- 5. DAYALDAS SANTUMAL HUF RS. 6,67,479/- RS. NIL 7. BALARAM SADHURAM GO/AN/ RS. 4,57,493/- RS. 1,00,000/- ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 8 8. PRIYANKA VINODKUMAR MITERANI RS. 4,53,810/- RS. 1,53,0/- 9. KOMAL ANILKUMAR MITERANI RS. 4 / 43 / 133/- RS. 1,52,978/- 10. MOHINI RAMESH KRIPLANI RS.4,00,000/- RS. 1,60,730/- 11. MAMTABEN BALRAM GOLANI RS. 3,97,020/- RS. 89,567/- 12. VARSHABEN SHYAMAL SATDEV RS. 3,28,069/- RS. NIL 13. THAKURIBAI GURALMAL SATDEV RS. 3,22,127/~ RS. NIL 14. KISHAN BHAGWANDAS MITERANI RS. 2,69,168/- RS. 2,66,170/- 15. BHAGWANDAS SANTU MAL HUF RS. 2,31,426/- RS. NIL 16. INDRABEN DAYALDAS MITERANI RS. 2,23,620/- RS. 98,140/- 17. HASSANAND GURUMAL HUF RS. 1,98,854/- RS. 65,000/- 18. HEMABEN VIRUMAL MITERANI RS. L / 91 / 462/- RS. 2,84,690/- 19. HASSANAND GURUMAL RS. 1,79,889/- RS. 40,784/- 20. BALUMAL THANWARDAS RS. 1,63,900/- RS. 1,27,890/- 21. ANILKUMAR DAYALDAS HUF RS, 1 / 17 / 302/- \ RS. L F 33,066/- 22. VEENA BALUMAL RS. 1,09,267/- RS. 2, 06,630/- 23. BALUMAL THANWARDAS HUF RS. 54,663/- RS. 47,320/- ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 9 24. AM IT BALUMAL RS. 54,633/- RS. 1,32,180/- 11. WHEN THE MATTER TRAVELLED BEFORE LD. COMMISSION ER OF INCOME TAX(A) THE IMPUGNED ADDITION WAS DELETED BY HIM BY OBSERVING AS FOLLOWS :- 5. I HAVE PERUSED THE FACTS OF THE CASE AND DETAIL S SO FILED BY APPELLANT. I HAVE CONSIDERED THE CONTENTION OF THE A.O. AS WELL AS OF APPELLANT IN RESPECT OF VARIOUS ISSUES FOR WHICH ADDITIONS ARE MADE. I HAVE PERUSED THE CASE LAWS AS RELIED ON BY THE APPELLANT. AFTER CAREFUL CONSIDERATION OF FA CTS, SUBMISSION AND RATIO OF VARIOUS CASE LAWS, I AM INCLINED TO ACCEPT THE CONT ENTION OF THE APPELLANT THAT THE ONUS AS BESTOWED ON HIM TO PROVE, IDENTITY, GENUINE LY AND CREDIT WORTHINESS OF THE PERSON FROM WHOM LOANS TAKEN AS REQUIRED U/S 68 OF THE ACT IS PROPERLY AND SATISFACTORILY DISCHARGED. THE A.O. WITHOUT MAKING ANY IOTA OF INQUIRY FROM ANY OF SUCH PERSON ONLY ON THE BASIS OF DETAILS FURNISHED BY APPELLANT AND ON THE BASIS OF ONE YEAR'S RETURN OF INCOME OR BANK STATEMENT UN IFORMLY HELD IN MOST OF THE CASE THAT 'LOOKING TO THE DEPOSITOR'S BANK STATEMEN T & R.O.I, AND BALANCE SHEET, CREDIT WORTHINESS IS NOT PROVED'. IN NONE OF THE CA SE A.O. DISCUSSED OR ELABORATED OR MADE ANY INDEPENDENT INQUIRY. IN ALMO ST EVERY CASE, A.O. HELD SO IN A MECHANICAL MANNER, DESPITE OF THE FACTS THAT A LL OF THEM GIVEN CONFIRMATION AND PAN WITH DETAILS OF THEIR LATEST RETURN FILED. THE APPELLANT DURING THE COURSE OF APPELLANT PROCEEDINGS APART FROM RELYING VARIOUS CA SE LOWS AS DISCUSSED IN EARLIER PARAS ALSO RELIED ON HON'BLE GUJARAT HIGH C OURT RECENT JUDGMENT IN THE CASE OF CIT V/S RANCHOD JIVABHAI NAKHAVA (TAX APPEA L NO. 50 OF 2011 JUDGMENT ORDER DT. 20/03/12) (2012) 21 TAX MAN. COM 159 (GUJ ARAT) WHEREIN HON'BLE GUJARAT HIGH COURT HELD (AS PER HEAD NOTES) 'SECTION 68 OF THE INCOME TAX ACT, 1961-CASH CREDIT S ASSTT. YEAR 06-07 -WHETHER ONCE ASSESSEE HAS ESTABLISHED THAT HE WAS TAKEN MON EY BY WAY OF ACCOUNT PAYEE CHEQUES FROM LENDER WHO ARE ALL INCOME TAX AS SESSEE WHOSE PAN HAVE BEEN DISCLOSED INITIAL BURDEN U/S 68 IS DISCHARGED AND THEN, IT IS ASSESSING OFFICER'S DUTY TO ASCERTAIN FROM ASSESSING OFFICER OF THOSE LENDERS, WHETHER IN THEIR RESPECTIVE RETURNS THEY HAVE SHOWN EXISTENCE OF SUC H AMOUNT OF MONEY AND HAVE FARTHER SHOWN THAT THOSE AMOUNT OF MONEY HAD B EEN LENT TO ASSESSEE - HELD YES - WHETHER IF A.O. OF THOSE CREDITORS ARE S ATISFIED WITH EXPLANATION GIVEN BY CREDITORS AS REGARDS THOSE TRANSACTIONS REFLECTE D IN ACCOUNT OF CREDITORS - HELD YES -WHETHER IF BEFORE VERIFYING SUCH FACT FROM A.O . OF LENDERS OF ASSESSEE, A.O. DECIDES TO EXAMINE LENDERS AND ASK ASSESSEE TO FURT HER PROVE GENUINENESS AND CREDITWORTHINESS OF TRANSACTION, IT WOULD BE AGAINS T PRINCIPLES LAID DOWN U/S 68 - HELD YES.' THE RATIO OF THIS JUDGMENT OF JURISDICTI ONAL HIGH COURT IS VERY CLEAR AND IF APPLIED TO THE FACTS OF THE APPELLANT, THEN THE CON CLUSION ARRIVED AT BY A.O. WILL BE UNSUSTAINABLE AND ADDITION SO MADE WILL BECOME U NWARRANTED. THE APPELLANT SUBMITTED A CHART (PAPER BOOK PAGE 16 TO 18) IN RES PECT OF PARTIES FROM WHOM ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 10 APPELLANT RECEIVED LOANS SHOWING VARIOUS DETAILS SU BMITTED BEFORE A.O. THIS CHART IS APPENDED WITH THIS APPEAL ORDER AS PART OF ORDER. THIS CHART CLEARLY REFLECTS THAT APPELLANT HAS ADDUCED ALL NECESSARY E VIDENCES TO DISCHARGE ITS BURDEN AS CONTEMPLATED U/S 68 OF THE ACT. AS RELIED ON BY APPELLANT, HON'BLE ITAT AHMEDABAD IN THE CASE OF SHRI ANKIT MAHESHWARI , SURAT(SUPRA) EXAMINED IN DETAILS VARIOUS ASPECTS RELATED TO SECTION 68 OF THE ACT AND AFTER CONSIDERING VARIOUS PROPOSITIONS IN RESPECT OF LENDERS WITH THA T OF APPELLANT SUBMISSION HELD IN FAVOR OF APPELLANT THAT ONCE CONTRA ACCOUNT WITH CONFIRMATION ARE FILED WITH PAN AND OTHER DETAILS LIKE STATES OF LATEST RETURN OF I NCOME, BANK STATEMENT ETC. THEN THERE IS NO CASE FOR ADDITION U/S 68 OF THE ACT. AS PER ESTABLISHED LEGAL PROPOSITION THE BORROWER NEED NOT TO PROVE SOURCE O F THE SOURCE OR CREDIT WORTHINESS OF SUB CREDITOR. IN VIEW OF THE ABOVE -R EASON AND FOLLOWING RATIO OF VARIOUS CASE LAWS AS RELIED ON BY APPELLANT AS WELL AS DISCUSSED, THE ADDITION SO MADE BY A.O. OF RS.1 20 21 020 IS DIRECTED TO BE DE LETED. THE APPELLANT GETS RELIEF ACCORDINGLY. 12. ON GOING THROUGH THE ABOVE DISCUSSION THE FA CT IS UNDISPUTED THAT ASSESSEE HAS FILED THE DETAILS OF NAMES, ADDRE SSES, PERMANENT ACCOUNT NUMBER (PAN), BANK STATEMENT, INCOME-TAX RE TURNS AND FINANCIAL STATEMENTS OF ALL THE ALLEGED LOAN CREDI TORS AND NO ANOMALY OR MISTAKE HAS BEEN OBSERVED BY THE REVENUE AUTHORI TIES EXCEPT FOR THE LOW OR NIL INCOME SHOWN DURING THE YEAR. FURTHE R NO ENQUIRY HAS BEEN CONDUCTED IN ANY OF THE LOAN CREDITOR SO AS TO DISPROVE THE EVIDENCES AND DOCUMENTS PLACED BY ASSESSEE WITH RES PECT TO PROVING IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE LOAN CREDITOR. IN THE COURSE OF PROCEEDINGS BEFORE US, W E EXAMINED TWO OF THE LOAN CREDITORS NAMELY RANJANA SURAJ BHOJAVANI A ND HEMABEN VIRUMAL MITERANI FROM WHOM LOAN OF RS.28,00,000/- & RS.19,70,000/- RESPECTIVELY WAS TAKEN DURING THE YEAR. THESE TWO A MOUNTS WERE THE TWO HIGHEST AMOUNT AMONG 24 LOAN CREDITORS, W ITH THE HELP OF LD. AUTHORISED REPRESENTATIVE WE WENT THROUGH THE CONFI RMATIONS A/C. BANK STATEMENT, INCOME-TAX RETURN AND BALANCE SHEET OF THESE TWO CREDITORS AND OBSERVED THAT NO CASH WAS DEPOSITED B EFORE THE ISSUE ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 11 OF CHEQUE TO THE ASSESSEE AND THE TRANSACTIONS WERE ENTERED THROUGH ACCOUNT PAYEE CHEQUES ONLY WHEREIN SOME FUNDS CAME THROUGH THIRD PARTY INTO THE ACCOUNT OF LOAN CREDITOR AND THEREAF TER ACCOUNT PAYEE CHEQUES OF LOAN AMOUNT WERE GIVEN TO THE ASSESSEE. FROM THE RECORDS OF THESE TWO PARTIES WE WERE SATISFIED THAT ASSESSEE HAS SUBSTANTIAL EVIDENCES TO PROVE THE IDENTITY, GENUIN ENESS AND CREDITWORTHINESS AS ENVISAGED IN THE PROVISIONS OF SECTION 68 OF THE ACT. WE FURTHER OBSERVE THAT SIMILAR DETAILS OF BAN K STATEMENT, INCOME-TAX RETURN AND FINANCIAL STATEMENT ALONG WIT H CONFIRMATION WERE PLACED ON RECORD WITH RESPECT TO ALL OTHER 22 PARTIES. WE FIND IT PERTINENT TO OBSERVE THE LUCID FINDING OF HON. JURI SDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RANCH HOD JIVABHAI NAKHAVA (SUPRA) ADJUDICATING SIMILAR ISSUE AND ALMO ST SIMILAR FACTS WHEREIN HON. COURT OBSERVED AS FOLLOWS :- AFTER HEARING MRS. BHATT, THE LEARNED ADVOCATE APP EARING ON BEHALF OF THE APPELLANT AND AFTER GOING THROUGH THE MATERIALS ON RECORD, WE ARE UNABLE TO ACCEPT HER CONTENTION THAT IN THIS CASE THE REVENUE HAS DISCHARGED ITS ONUS AND IT WAS FOR THE ASSESSEE TO FURTHER PROVE T HE GENUINENESS AND CREDITWORTHINESS OF THE CREDITORS. IN OUR VIEW, ONCE THE ASSESSEE HAS ESTABLISHED THAT HE HAS TAKEN MONEY BY WAY OF ACCOUNTS PAYEE CHEQUES FROM THE LENDERS W HO ARE ALL INCOME TAX ASSESSEES WHOSE PAN HAVE BEEN DISCLOSED, THE IN ITIAL BURDEN UNDER SECTION 68 OF THE ACT WAS DISCHARGED. IT FURTHER AP PEARS THAT THE ASSESSEE HAD ALSO PRODUCED CONFIRMATION LETTERS GIVEN BY THO SE LENDERS. ONCE THE ASSESSING OFFICER GETS HOLD OF THE PAN OF THE LENDERS, IT WAS HIS DUTY TO ASCERTAIN: FROM THE ASSESSING OFFICER OF TH OSE LENDERS, WHETHER IN THEIR RESPECTIVE RETURN THEY HAD SHOWN EXISTENCE OF SUCH AMOUNT OF MONEY AND HAD FURTHER SHOWN THAT THOSE AMOUNT OF MONEY HA D BEEN LENT TO THE ASSESSEE. IF BEFORE VERIFYING OF SUCH FACT FROM THE ASSESSING OFFICER OF THE LENDERS OF THE ASSESSEE, THE ASSESSING OFFICER DECI DES TO EXAMINE THE ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 12 LENDERS AND ASKS THE ASSESSEE TO FURTHER PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION, IN OUR OPINION , THE ASSESSING OFFICER DID NOT FOLLOW THE PRINCIPLE LAID DOWN UNDER SECTIO N 68 OFLHE INCOME TAX ACT. IF ON VERIFICATION, IT WAS FOUND THAT THOSE LENDERS DID NOT DISCLOSE IN THEIR INCOME TAX RETURN THE TRANSACTION OR THAT THEY HAD NOT DISCLOSED THE AFORESAID AMOUNT, THE ASSESSING OFFICER COULD CALL FOR FURTHER EXPLANATION FROM THE ASSESSEE TO PROVE THE GENUINENESS OF THE T RANSACTION OR CREDITWORTHINESS OF THE SAME. HOWEVER, WITHOUT VERI FYING SUCH FACT FROM THE INCOME TAX RETURN OF THE CREDITORS, THE ACTION TAKE N BY THE ASSESSING OFFICER IN EXAMINING THE LENDERS OF THE ASSESSEE WA S A WRONG APPROACH. MOREOVER, WE FIND THAT THOSE LENDERS HAVE MADE INCO NSISTENT STATEMENT AS POINTED OUT BY THE COMMISSIONER OF INCOME TAX (APPE ALS) AND IN SUCH CIRCUMSTANCES, WE FIND THAT BOTH THE COMMISSIONER O F INCOME TAX (APPEALS) AND THE TRIBUNAL WERE JUSTIFIED IN SETTIN G ASIDE THE DELETION AS THE ASSESSING OFFICER, WITHOUT TAKING STEP FOR VERI FICATION OF THE INCOME TAX RETURN OF THE CREDITORS, TOOK UNNECESSARY STEP OF F URTHER EXAMINING THOSE CREDITORS. IF THE ASSESSING OFFICERS OF THOSE CREDI TORS ARE SATISFIED WITH THE EXPLANATION GIVEN BY THE CREDITORS AS REGARDS THOSE TRANSACTIONS, THE ASSESSING OFFICER IN QUESTION HAS NO JUSTIFICATION TO DISBELIEVE THE TRANSACTIONS REFLECTED IN THE ACCOUNT OF THE CREDIT ORS. IN OTHER WORDS, THE ASSESSING OFFICER HAD NO AUTHORITY TO DISPUTE THE C ORRECTNESS OF ASSESSMENTS OF THE CREDITORS OF THE ASSESSEE WHEN A CO-ORDINATE ASSESSING OFFICER IS SATISFIED WITH THE TRANSACTION. WE THUS, FIND THAT IN THE CASE BEFORE US THE TRIBUN AL BELOW RIGHTLY SET- ASIDE THE DELETION MADE BY THE ASSESSING OFFICER, B ASED ON ERRONEOUS APPROACH BY WRONGLY SHIFTING THE BURDEN AGAIN UPON THE ASSESSEE WITHOUT VERIFYING THE INCOME TAX RETURN OF THE CREDITORS. T HE POSITION, HOWEVER WOULD HAVE BEEN DIFFERENT IF THOSE CREDITORS WERE NOT INC OME TAX ASSESSEES OR IF THEY HAD NOT DISCLOSED THOSE TRANSACTIONS IN THEIR INCOM E TAX RETURNS OR IF SUCH RETURNS WERE NOT ACCEPTED BY THEIR ASSESSING OFFICE RS.* 13. WE FURTHER OBSERVE THAT CO-ORDINATE BENCH IN TH E CASE OF ITO VS. ARIHANT X-RAY & SONOGRAPHY CLINIC (P) LTD. (SU PRA) ADJUDICATING SIMILAR ISSUE ALLOWED ASSESSEES CLAIM OBSERVING AS FOLLOWS :- 4 . WE HAVE HEARD THE PARTIES AND CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY, SMT. VIMLABEN S. SHAH IS AN ] INCOME-TAX ASSESSEE, HER ADDRESS AND P.A. ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 13 NUMBER WERE GIVEN ALONG WITH PASSBOOK OF THE DEPOSI TOR. SHE ALSO /ATTENDED BEFORE THE AO AND EXPLAINED THAT SHE HAD RECEIVED G IFT FROM SHRI VINOD SHAH, WHOSE ADDRESS, P.A. / NUMBER BANK PASSBOOK AND COPI ES OF IT RETURNS, WERE ALSO GIVEN. SIMILARLY, THE IDENTITY OF DR. ASIM V. SHAH WAS / PROVED, HE APPEARED BEFORE THE AO, HIS COPY OF CONTRA ACCOUNTS WERE PRO DUCED, THE ADDRESS, P.A. NUMBER AND COPIES OF IT RETURNS WERE ALSO FURNISHED . IN THESE CIRCUMSTANCES, IN OUR OPINION, THE CIT(A) WAS JUSTIFIED IN ALLOWING T HE CLAIM OF THE ASSESSEE AND THE MATTER STANDS COVERED BY THE GUJARAT HIGH COURT (DE CISION) IN THE CASE OF CIT VS. ROHINI BUILDERS (2003) 182 CTR (GUJ) 373 : (2002) 2 56 ITR 360 (GUJ) WHEREIN THE COURT PLACING RELIANCE ON THE DECISIONS OF THE SUPREME COURT IN THE CASES OF CIT VS. ORISSA CORPORATION (P) LTD. (1986) 52 CTR ( SC) 138 : (1986) 159 ITR 78 (SC) AND CIT VS. DAULAT RAM RAWATMUL! 1972 CTR (SC) 411 : (1973) 87 ITR 349 (SC), DELETED THE ADDITION BY OBSERVING THAT TH E TRIBUNAL FOUND THAT THE ASSESSEE HAD DISCHARGED THE INITIAL ONUS WHICH LAY ON IT IN TERMS OF S. 68 BY PROVING THE IDENTITY OF THE CREDITOR AND COMPLETE A DDRESS, GIR NUMBER/PA NUMBER AND THE COPIES OF ASSESSMENT ORDERS WHEREVER READILY AVAILABLE, THAT IT HAD ALSO PROVED THE CAPACITY OF THE CREDITOR SHOWIN G THE AMOUNTS WERE RECEIVED BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUE DRAWN FROM THE CREDITORS AND THE ASSESSEE WAS NOT EXPECTED TO PROVE THE GENUINENESS OF THE CASH DEPOSITS IN THE BANK ACCOUNTS OF THOSE CREDITORS BECAUSE UNDER LAW THE ASSESSEE CAN BE ASKED TO PROVE THE SOURCE OF THE CREDITS IN ITS BOOKS OF ACCOUNT BUT NOT THE SOURCE OF THE SOURCE. WE, ACCORDINGLY, ALLOW THE CLAIM OF THE ASS ESSEE BY UPHOLDING THE ORDER OF THE CIT(A). 5. IN THE RESULT, THE APPEAL STANDS DISMISSED. 14. WE FURTHER OBSERVE THAT IN THE CASE OF ACIT VS. M/S AMIK PRINTERS (SUPRA) TRIBUNAL HAS DECIDED SIMILAR ISSUE BY OBSERVING AS UNDER :- 5. WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE H AVE GONE THROUGH THE RECORD CAREFULLY. SECTION 68 OF THE ACT CONTEMPLATE S THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAIN ED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT T HE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, I N THE OPINION OF THE AO, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. NO DO UBT, CREDIT ENTRIES ARE AVAILABLE AGAINST THE NAMES OF 13 PERSONS IN THE BO OKS OF ASSESSEE, THEREFORE, HE IS SUPPOSED TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BOOKS. SECTION 68 OF THE ACT PUTS AN OBLIGATION UPON THE A SSESSEE TO PROVE IDENTITY OF THE CREDITOR, HIS CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. IN ORDER TO DISCHARGE THE ONUS CAST UP ON THE ASSESSEE, HE HAS ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 14 FILED NAMES AND ADDRESS, PAN NO., COPY OF BANK ACCO UNT, COPY OF INCOME TAX RETURN FOR THE CORRESPONDING PERIODS OF THE CRE DITORS. THE L_D. FIRST APPELLATE AUTHORITY HAS CALLED FOR A REMAND REPORT FROM THE AO. LD. CIT(A) HAS EXAMINED THE FACTS OF INDIVIDUAL CREDITOR IN SE RIATIM. LD. CIT(A) ON AN ANALYSIS OF THE FACTS WAS NOT SATISFIED WITH REGARD TO THE CREDITWORTHINESS AS WELL AS GENUINENESS OF THE TRANSACTION QUA FOUR CREDITORS AND CONFIRMED THE ADDITIONS. 6. THE GRIEVANCE OF THE REVENUE IS THAT NO DISCUSSI ON HAS BEEN MADE AS FAR AS FIVE CREDITORS ARE CONCERNED NAMELY SURESH L ALCHAND, R.V. FINANCE, MOHANLAL ROCHIRAM (HUF), MENGHIBEN DULHANOMAL PRITM ANI AND PINKI RAMESHCHANDRA PRITMANI WE FIND THAT AS FAR AS APPRO ACH OF LD. FIRST APPELLATE AUTHORITY IS CONCERNED, IT IS IN CONSONAN CE WITH THE REQUIREMENT PROVIDED IN SECTION 68. THERE IS NO CONFUSION IN TH E MIND OF FIRST APPELLATE AUTHORITY WHILE ANALYZING THE DETAIL OF EACH CREDIT OR. LD. FIRST APPELLATE AUTHORITY IS OF THE OPINION THAT IDENTITY OF CREDIT OR HAS TO BE PROVED. SIMILARLY, THE TRANSACTION HAS TO BE PROVED AS GENU INE AS WELL AS CREDITORS SHOULD BE CREDITWORTHINESS. WHILE EXAMINING THE DET AIL OF THE FIRST CREDITOR NAMELY GURUMUKHDAS DULHANOMAL A PRITMANI, LD. FIRST APPELLATE AUTHORITY HAS OBSERVED THAT MONEY WAS PAID THROUGH ACCOUNT PA YEE CHEQUE. SHRI GURUMUKHDAS DULHANOMAL A PRITMANI HAD NOT RECEIVED ANY MONEY FROM THE ASSESSEE BEFORE ISSUANCE OF A CHEQUE TO THE ASS ESSEE. HE WAS A INCOME TAX PAYER AND THE COPY OF THE RETURN WAS ALS O SUBMITTED. IT IS PERTINENT TO MENTION THAT THERE ARE 13 CREDITORS. L D. CIT(A) HAS CONFIRMED THE ADDITION QUA FOUR, MEANING THEREBY, ADDITIONS H AVE BEEN DELETED QUA 9 CREDITORS. REVENUE IS CHALLENGING THE DELETION QUA FIVE CREDITORS ONLY. THE GRIEVANCE OF THE REVENUE IS THAT DISCUSSION WAS NOT MADE BY THE LD. FIRST APPELLATE AUTHORITY WITH RESPECT TO FIVE. IN OUR OP INION, WHEN LD. FIRST APPELLATE AUTHORITY HAS MADE OBSERVATION ABOUT 13 C REDITORS THEN IT IS TO BE APPRECIATED THAT LD. FIRST APPELLATE AUTHORITY M UST HAVE A GLANCE ON ALL THE DETAILS. IT IS THE ASSESSING OFFICER WHO DID NO T MAKE SPECIFIC OBJECTIONS TO THE DETAILS SUBMITTED BY THE ASSESSEE, IN HIS RE MAND REPORT IN RESPECT OF THESE FIVE CREDITORS. THEREFORE, AFTER GOING THROUG H THE ORDER OF LD. CIT(A), WE ARE OF THE VIEW THAT LD. CIT(A) HAS APPRECIATED THE FACTS IN RIGHT PERSPECTIVE AND NO INTERFERENCE IS CALLED FOR. THIS APPEAL IS DEVOID OF ANY MERIT. IT IS DISMISSED. 15. RESPECTFULLY FOLLOWING THE JUDGMENT OF HON. JURISDICTIONAL HIGH COURT AND THE DECISIONS OF THE CO-ORDINATE BENCH RE FERRED ABOVE, AND DISCUSSION MADE IN THE PRECEDING PARAGRAPHS AND EXAMINING THE ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 15 FACTS OF THE CASE IN THE LIGHT OF ABOVE DECISIONS, WE ARE OF THE VIEW THAT ASSESSEE HAS IN ITS PERMISSIBLE LIMIT HAS PROV ED BEYOND DOUBT THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF T HE LOAN CREDITORS AND IT COULD NOT BE DISPUTED BY THE REVENUE AT ANY STAGE NOR ANY ENQUIRY WAS MADE IN CASE OF ANY OTHER LOAN CREDITOR , WHICH COULD DISPROVE THE EVIDENCE PLACED BY ASSESSEE. WE THEREF ORE, FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. COMMISSIO NER OF INCOME TAX(A) DELETING THE IMPUGNED ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF RS.1,20,21,020/-. WE ACCORDINGLY, DI SMISS THIS GROUND OF REVENUE. 16. WE NOW TAKE UP GROUND NO.2 RAISED BY REVENUE AGAINST LD. COMMISSIONER OF INCOME TAX(A)S ORDER DELETING THE DISALLOWANCE OF RS.7,06,261/- MADE ON ACCOUNT OF INTEREST EXPENSES ON CASH CREDIT OF RS.1,20,21,020/-. AS WE HAVE ALREADY DECIDED ADJUDI CATING GROUND NO.1 OF REVENUE WHEREIN WE HAVE CONFIRMED THE ORDER OF LD. COMMISSIONER OF INCOME TAX(A) DELETING THE IMPUGNED ADDITION U/S 68 OF THE ACT AT RS.1,20,21,020/- AND AS HAVE ACCOR DINGLY HELD THAT ASSESSEE HAS PROVED THE IDENTITY, GENUINENESS AND C REDITWORTHINESS OF THE CASH CREDITORS. THEREFORE, THE INTEREST PAID ON SUCH GENUINE LOAN CREDITORS CANNOT BE TREATED AS NON-GENUINE. TH EREFORE, WE ARE OF THE VIEW THAT LD. COMMISSIONER OF INCOME TAX(A) HAS RIGHTLY DELETED THE IMPUGNED ADDITION TOWARDS DISALLOWANCE OF INTER EST OF RS.7,06,621/- BY OBSERVING THAT IT HAS BEEN PAID TO THE GENUINE PARTIES WHO ARE REGULARLY FILING RETURNS OF INCOME AND HAVE SHOWN INTEREST INCOME IN THEIR RESPECTIVE INCOME-TAX RETU RNS. ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 16 17. GROUND NO.3 READS AS UNDER :- 3) WITHOUT PREJUDICE TO THE GROUND NO.2, IT IS SUBM ITTED THAT THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE U/S.40{A) (IA) OF THE ACT, IN RESPECT OF INTEREST EXPENSES OF RS.3,00,3487- PAID WITHOUT COMPLIANCE TO PROVISION OF SECTION 194A OF THE ACT. . 18. FROM PERUSAL OF RECORDS, WE FIND THAT ON THE LOAN AMOUNT OF RS.1,20,21,020/- ASSESSEE CREDITED/PAID INTEREST OF RS.7,06,621/-. OUT OF THE INTEREST AMOUNT OF RS.7,06,621/-, RS.4,0 5,913/- WAS SUBJECTED TO DEDUCTION OF TAX AT SOURCE AND FOR THE REMAINING AMOUNT OF RS.3,00,348/-, INDIVIDUAL AMOUNTS WERE EITHER BE LOW THE PRESCRIBED LIMIT OF NON-DEDUCTION OF TDS OR FORM NO.15G WERE I SSUED BY THE LOAN CREDITORS WITH THEIR TOTAL INCOME FOR THE YEAR WAS BELOW THE TAXABLE LIMIT. IT SEEMS THAT DURING THE COURSE OF ASSESSMEN T PROCEEDINGS LD. ASSESSING OFFICER FAILED TO ENQUIRE FROM ITO TDS RE GARDING FORM NO.15G SUBMITTED IN THE CASES OF LOAN CREDITORS COM ING UNDER LIST OF INTEREST OF RS.3,00,348/- AND ACCORDINGLY HE MADE D ISALLOWANCE U/S 40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TDS. 19. AGGRIEVED, ASSESSEE RAISED THE GROUND AGAIN ST LD. ASSESSING OFFICER S ORDER AND SUCCEEDED AS LD. COMMISSIONER OF INCOME TAX(A) DELETED THE IMPUGNED DISALLOWANCE U/S 40(A)( IA) OF THE ACT. IN APPEAL BEFORE THE TRIBUNAL, REVENUE IS SUPPORTING T HE ASSESSING OFFICER S ORDER AND LD. AUTHORISED REPRESENTATIVE IS RELYING ON THE ORDER OF LD. COMMISSIONER OF INCOME TAX(A). 20. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE RECORD. THROUGH THIS GROUND REVENUE IS CHALLENGING LD. COMM ISSIONER OF ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 17 INCOME TAX(A)S ACTION DELETING THE DISALLOWANCE MA DE BY LD. ASSESSING OFFICER U/S 40(A)(IA) OF THE ACT AT RS.3, 00,348/-. WE OBSERVE THAT IN THE PRECEDING PARAGRAPHS, WE HAVE H ELD THAT LD. ASSESSING OFFICER ERRED IN MAKING ADDITION U/S 68 O F THE ACT FOR UNEXPLAINED CASH CREDIT OF RS.1,20,21,020/- AND ALS O ERRED IN DISALLOWING INTEREST OF RS.7,00,261/- . LD. ASSESSI NG OFFICER IN HIS ASSESSMENT ORDER MADE AN ALTERNATE DISALLOWANCE U/S 40(A)(IA) OF THE ACT ON THE INTEREST OF RS.3,00,348/- FOR NON-DEDUCT ION OF TDS. ON PERUSAL OF THE PAPER BOOK FROM PAGES 254 TO 263 WE OBSERVE THAT ASSESSEE FILED FORM NO.15G IN THE CASE OF 9 PARTIES TO WHOM TOTAL INTEREST OF RS.3,00,348/- WAS PAID. THESE 9 FORM 1 5G WERE SUBMITTED TO ITO, TDS WELL WITHIN THE STATUTORY LIMIT PROVIDE D UNDER THE ACT FOR FILING FORM NO.15G. IT SEEMS THAT LD. ASSESSING OFF ICER COULD NOT LAY HIS HANDS ON THESE DOCUMENTS DURING ASSESSMENT PROC EEDINGS. WE ARE OF THE VIEW THAT AS THE ASSESSEE HAS FILED FORM NO.15G IN THE CASES OF 9 PARTIES TO WHOM INTEREST OF RS.3,00,348/ - WAS PAID THERE WAS NO LIABILITY OF DEDUCTING TAX AT SOURCE AT ASSE SSES BEHEST AND, THEREFORE, LD. COMMISSIONER OF INCOME TAX(A) HAS RI GHTLY DELETED THE DISALLOWANCE BY OBSERVING AS FOLLOWS :- IN RESPECT OF DISALLOWANCE OF INTEREST OF RS. 3,00, 348 MADE U/S 40(A)(IA) OF THE ACT OUT OF TOTAL DISALLOWANCE OF INTEREST OF RS. 7, 06,261 SINCE IT IS CONTENDED THAT APPELLANT HAS NOT DEDUCTED TDS OUT OF IT, I AM INCL INED TO ACCEPT THE CONTENTION OF THE APPELLANT THAT THOUGH NO SEPARATE ADDITION W AS MADE FOR THE SAME BUT FOR SUCH ADDITION, APPELLANT WAS NOT ASKED/SHOW CAUSED HENCE APPELLANT WAS NOT GIVEN ANY OPPORTUNITY TO REPLY/EXPLAIN ITS POSITION . CONSIDERING THE FACT THAT APPELLANT'S BOOKS OF ACCOUNTS ARE AUDITED AND TAX A UDITOR HAS NOT MENTIONED ANY OF SUCH DEFICIENCY IN TAX AUDIT REPORT IS SUFFICIEN T TO REFLECT ON THE PART OF APPELLANT THE SUFFICIENT COMPLIANCE OF TDS PROVISIONS WERE MA DE. THE APPELLANT FILED A COPY OF LETTER WITH DETAILS SUBMITTED BEFORE THE IT O TDS - 3 AHMEDABAD DATED 5.4.2009 IN RESPECT OF ALL THESE PARTIES IN WHOSE C ASE TDS HAS NOT BEEN DEDUCTED BECAUSE ALL THESE PARTIES SUBMITTED FORM N O. 15 G TO APPELLANT. SINCE ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 18 NO SHOW CAUSE/EXPLANATION WAS ASKED FROM APPELLANT THIS DETAIL WAS NOT SUBMITTED BEFORE A.O. I HAVE EXAMINED THE DETAILS A ND FOUND THE SAME IN ORDER. THE A.O. OUT OF ABUNDANT PRECAUTION WHILE FRAMING T HE ASSTT. ORDER INCLUDED THIS ISSUE WITHOUT PROPER VERIFICATION. IN VIEW OF THESE FACTS AND APPELLANT'S SUBMISSION, THE ADDITIONS U/S 40 (A)(IA) OF THE ACT FOR INTEREST OF RS. 3,00,348 ARE UNWARRANTED THOUGH NOT MADE BY A.O. TO AVOID DUPLIC ATING OF ADDITION. THE SAME IS DIRECTED TO BE DELETED. THE APPELLANT GETS RELIE F ACCORDINGLY. 21. WE OBSERVE THAT LD. COMMISSIONER OF INCOME T AX(A) HAS DELETED THE DISALLOWANCE IN THE RIGHT PERSPECTIVE I N VIEW OF HIS VIEWS AS REPRODUCED ABOVE AND, THEREFORE, IN THE GIVEN FA CTS, WE FIND NO REASON TO CALL FOR ANY INTERFERENCE WITH THE ORDER OF LD. COMMISSIONER OF INCOME TAX(A). WE DISMISS THIS GROUND OF REVENUE . 22. WE FIND NO SUBSTANCE IN THIS GROUND RAISED BY REVENUE AGAINST LD. COMMISSIONER OF INCOME TAX(A)S ORDER FOR ADMIT TING ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A AS FROM THE PERUS AL OF THE ASSESSMENT ORDER IT IS WELL EVIDENT THAT THE DETAIL S, NAMES AND ADDRESSES, PAN, BANK STATEMENT, INCOME-TAX RETURNS WERE ALL PLACED BEFORE THE ASSESSING AUTHORITY AND AS REGARDS FORM NO.15G IN RELATION TO NON-PAYMENT OF RS.3,00,348/- RECORD WAS VERY MUC H AVAILABLE WITH THE ASSESSING AUTHORITY AS THESE FORMS WERE FILED O N 4.4.2009 WITH ITO, TDS-3, AHMEDABAD. THEREFORE, WE FIND THAT LD. COMMISSIONER OF INCOME TAX(A) HAS NOT ADMITTED ANY ADDITIONAL EVIDE NCE IN VIOLATION OF RULE 46A. WE, THEREFORE, DISMISS THIS GROUND OF REVENUE. 23. GROUND NOS.5 IS OF GENERAL IN NATURE, WHICH NEEDS NO ADJUDICATION. ITA NO. 2248/AHD/2012 ASST. YEAR 2009-10 19 24. IN THE RESULT, APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH FEBRUARY, 2017 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 20/02/2017 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 17/02/2017 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 20/02/2017 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 21/2/17 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: