KUBER HOUSING INVESTMENT AND FINANCE P.LTD, MUMBAI V. ITO 9(2)(2), MUMBAI

ITA 2485/MUM/2012

• Counselvise Citation: 248519914 RSA 2012
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 13-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAGHUVEER MADNAPPA
• Assessee Lawyers: RAJENDRA C THAKKAR

Judgement Text

, ' INCOME TAX APPELLATE TRIBUNAL,MUMBAI - A,BENCH , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMB ER & SANJAY GARG,JUDICIAL MEMBER /. ITA NO. 2485 /MUM/201 2 , / ASSESSMENT YEAR - 20 05 - 06 KUBER HOUSING INVESTMENT & FINANCE PVT. LTD. GC - 1, C - WING, GINDECHA ENCLAVE KAIRANI ROAD, SAKINAKA ANDHERI - E), MUMBAI - 400 072. PAN: AABCK 8649 K VS INCOME TAX OFFICER - 9(2)(2) ROOM NO.261, AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 0 20 . ( / APPELLANT ) ( / RESPONDENT ) /ASSESSEE BY :SHRI RAJENDRA C. TH AKKAR / REVENUE BY : SHRI RAGHUVEER MADNAPPA / DATE OF HEARING : 09 - 0 9 - 2015 / DATE OF PRONOUNCEMENT : 09 - 09 - 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER,DATED 21.1.2010,OF THE CIT(A) - 20,MUMBAI , THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACTS ON RECORDS IN NOT ADJUDICATING VARIOUS (FOUR) GROUNDS OF APPEAL AS STATED IN THE APPEAL MEMO (FORM NO. 35) EVEN THOUGH RELEV ANT FACTS WERE NARRATED ALONGWITH FORM NO. 35 AS WELL AS IN THE ASSESSMENT ORDER. HE HAS DISMISSED THE APPEAL BY CONFIRMING THE ASSESSMENT MERELY ON ACCOUNT OF NON ATTENDANCE BY A.O. AS WELL AS APPELLANT, WHICH THE APPELLANT SUBMITS WAS DUE TO CIRCUMS TANCES BEYOND THE CONTROL. THE APPELLANT SUBMITS THAT SINCE ALL THE RELEVANT FACTS WERE ALREADY THERE IN HIS RECORDS, THE LD. C.I.T. (APPEALS) OUGHT TO HAVE ADJUDICATED AND DISPOSED OFF BY TAKING JUDICIOUS DECISION IN THE INTEREST OF JUSTICE. 2. IN VIEW OF THE ABOVE, THE APPELLANT'S MAIN GROUND OF APPEAL, RELATING TO A.O.'S TREATMENT OF UNSECURED LOAN RS.16,95,071/ - AS INCOME U/S 41(1), GOT CONFIRMED BY THE SAID APPELLATE ORDER, WHICH IS TOTALLY UNJUSTIFIED, SPECIALLY WHEN THIS ISSUE IS ALMOST SETTLED I N FAVOUR OF THE ASSESSEE BY SEVERAL DECISIONS INCLUDING JURISDICTIONAL HIGH COURT AND TRIBUNALS. THE APPELLANT PRAYS THAT THE APPEALS PRAYED FOR BE ADMITTED AND ALLOWED AND THE GROUNDS MAY KINDLY BE ADJUDICATED OR THE SAME MAY BE SENT BACK TO THE C.LT. (APPEALS) IN THE INTEREST OF JUSTICE. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR TO AMEND ANY OF THE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING. ASSESSEE - COMPANY, ENGAGED IN THE BUSINESS OF FACTORING AND FINANCE , F ILED ITS RETURN OF INCO ME ON 30.8.06 DECLARING INCOME OF RS. 5.08 LACS. ASSESSING OFFICER ( AO ) COMP L ETED THE ASSESSMENT ON 26.7.07,U/S.143(3)OF THE ACT, DETERMINING INCOME OF ASSESSEE AT RS.21,51,350/ - . 2. E FFECTIVE G ROUND OF APPEAL IS ABOUT TREATMENT OF UNSECURED LOAN OF RS.16,95 ,071/ - A S INCOME U/S. 41(1) OF THE ACT. DURING THE ASS ESSMEN T PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD OUTSTANDING LOAN FROM M/S. OJAS H OUSING FINANCE P VT . LTD.(OHFPL) AM OUNTING TO RS. 16.95 LACS. HE DIRECTED THE ASSESSEE TO EXPLAIN AS TO WHEN THE SAID AM OUN T WAS RETURN ED BACK TO OHFPL . 2485 /M/1 2 KUBER 2 V IDE ITS LETTER,DT. 12 . 12.07, THE ASSESSEE STATED THAT DUE TO FREEZING OF ACCOUNT OF OHFPL BY GOV ERNMENT AUTHORITIES AND RESIGNATION OF DIRECTORS FROM THE BOARD SAID LOAN WAS NOT PAID. CONSIDERING THESE FACTS , THE AO HELD TH AT THE ASSESSEE HAD NOT MADE ANY PAYMENT TO OHFPL, THAT THE LIABILITY HAD CEASED TO EXIST.HE MADE AN ADDITION OF R S.16.95 LACS TO THE INCOME OF THE ASSESSEE .A GGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFOR E THE FIRST APPELLATE AUTHORITY( FAA).BEFORE HIM, NOBODY APPEARED THOUGH HE HAD FIXED THE CASE ON SEVERAL OCCASIONS. THEREFORE , HE UPHELD THE ORDER OF THE AO WITHOUT DECIDING THE ISSUE ON MERITS. 3. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORISED REPRESENTATIVE(AR) CONTENDED THAT OHFP L HAD GRANTED LOAN TO THE ASSESSEE IN ACCORDANCE WITH AN AGREEMENT ENTERED INTO, THAT OUT OF RS.20.00 LACS LOAN RS.16.95 LAC S WAS OUTSTANDING ON 31.3.2005, THAT THE ASSESSEE COULD NOT REPAY THE LOAN AS THE ACCOUNTS OF OHFPL WERE FREEZED, THAT AMOUNT WAS ALWA YS PAYABLE TO THE PARTY CONCERNED, THAT THE AO HAD DISREGARDED THE ABOVE FACTS, THAT THE ASSESSEE H AD FILED A CONFIRMATION LETTER OF OHFPL, THAT IT HAD FURNISHED THE EXTRACT FROM THE WEBSITE OF THE R EGISTRAR OF THE COMPANY, THAT THE AMOUNT WAS PAYABLE AT THE END OF THE ASSESSEE COMPANY, THAT IT COULD NOT BE TREATED AS CESSATION OF TRADING LIABILITY WITHIN THE MEANING OF S.41(1) OF THE ACT. H E FURTHER INFORMED THAT ASSESSEE HAD PAID THE AMOUNT TO OHFPL ON 31.3.2011 AMOUNTING TO R S.18.79 LACS, THAT IT HAD PAID INTEREST TO OHFPL FROM 01.04.2005 TO 31.03.2011, THAT THE PAYMENT WAS MADE THROUGH BANKING CHANNELS.DEPARTMENTAL REPRESENTATIVE (DR) LEFT THE ISSUE TO THE DISCRETION OF THE BENCH. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE AO HAD TREATED THE LOAN AMOUNT TO OHFPL AS CESSATION OF LIABILITY , THAT THE FAA HAD N OT DECIDED THE ISSUE ON MERITS, THAT THE ASSESSEE HAD PAID THE AMOUNT TO OH FPL ON 31.3.2011, THAT IT HAD ALSO PAID INTEREST FOR THE ENTIRE PERIOD, THAT THE PAY MENT OF THE PRINCIPLE AMOUNT AND THE INTEREST WAS THROUGH BANKING CHANNELS. CONSIDERING THESE FACTS, WE ARE OF THE OPINION THAT THE AO WAS NOT JUSTIFIED IN INV O KING PROVISIONS OF S.41(1) OF THE ACT.THEREFORE, WE ARE DECIDING EFFECTIVE G ROUND OF APPEAL IN FA VOUR OF THE ASSESSEE . AS A RESULT,APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. . ORDER PRONO UNCED IN THE OPEN COURT ON 9 TH SEPTEMBER,2015. 9 , 2015 SD/ - SD/ - ( / SANJAY GARG) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI, /DATE: 09 .09.2015 . . . JV. SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 2485 /M/1 2 KUBER 3 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI.