M/s. shree Steels, Indore V. ITO-2(3), Indore

ITA 25/Ind/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3514 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-05-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 28-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINEET A D UB E
• Assessee Lawyers: S S DESHPANDE
• Keywords: TDS
• Section: 48; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.25/IND/2019 ASSESSMENT YEAR: 2010-11 M/S SHREE STEELS 171, SAKET NAGAR, INDORE / VS. ITO - 2 ( 3 ) INDORE (APPELLANT) (REVENUE) P.A. NO. AAMFS5382F APPELLANT BY SH RI S.S. DESHPANDE , CA RE VENUE BY SMT. VINEETA DUBE , SR. DR DATE OF HEARING: 16.09.2020 DATE OF PRONOUNCEMENT: 21.10.2020 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INCOME TAX APPEALS [CIT(A)]-I , INDORE DATED 03.12.2018 PERTAINING TO THE ASSESSMENT Y EAR 2010-11. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) ERRED IN MAINTAIN THE ACTION OF REOPENING OF THE ASSESSMENT U/S 148 WHEN ALL NECESSARY INFORM ATION WERE FURNISHED IN THE RETURN AND THE CREDITS IN THE NAME OF M/S. EAST WEST FINVEST WERE ACCEPTED. SHREE STEELS INDORE /ITANO.25/IND/2019 2 1.1 SINCE THERE WAS NO FAILURE ON THE PART OF THE A SSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS, THE REOPENING OF THE ASSESSMENT IS BAD IN LAW AND THE ASSESSMENT FRAMED BE ANNULLED. 2. THE LD. CIT(A) ERRED IN MAINTAIN THE ADDITION OF RS.271924/- BEING INTEREST PAID TO M/S. EAST WEST F INVEST WHEN THE EARLIER CREDITS WERE ACCEPTED BY THE LD. A O. 2.1 THAT LD. CIT(A) ERRED IN OBSERVING THAT THE INT EREST ON ACCOMMODATION ENTRY HAS TO BE DISALLOWED WHEN THE ORIGINAL CREDIT HAS BEEN ACCEPTED BY THE DEPARTMENT . 2.2 THE ADDITION OF RS.271924/- MAY PLEASE BE DELET ED. 2. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM DOING THE BUSINESS OF MANUFACTURING AND SALE OF STEELS. THE BOOKS OF ACCOUNT S ARE AUDITED U/S 44AB. THE RETURN OF INCOME WAS FILED DECLARING THE TOTAL INCOME OF RS.9,65,050/-. THE RETU RN WAS PROCESSED U/S 143(1). SUBSEQUENTLY, A NOTICE U/S 1 48 WAS ISSUED ON THE GROUND THAT THE INCOME HAD ESCAPED ASSESSMENT. IN THE REASONS RECORDED FOR REOPENING THE ASSESSMENT, IT WAS STATED THAT IN THE CASE OF M/S. EAST SHREE STEELS INDORE /ITANO.25/IND/2019 3 WEST FINVEST LTD. INQUIRIES WERE CONDUCTED AND IN THE INQUIRIES IT WAS FOUND THAT THE ABOVE COMPANY WAS MERELY A PAPER COMPANY. THE AO ACCORDINGLY MADE AN ADDITION OF RS.2,71,924/- BEING INTEREST PAID TO M/S. EAST WEST FINVEST LTD. 3. AGGRIEVED AGAINST THIS THE ASSESSEE PREFERRED AN APP EAL BEFORE LD. CIT(A), WHO ALSO DISMISSED THE APPEAL. NOW THE ASSESSEE IS BEFORE THIS TRIBUNAL. 4. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSES SEE HAD TAKEN LOAN OF RS.27,63,068/- FROM M/S. EAST WEST FINVEST LTD. DURING THE EARLIER YEARS AND THE SAID LOAN WAS RECEIVED THROUGH PROPER BANKING CHANNELS AND THE TDS WAS ALSO MADE WHICH IS VERIFIABLE FROM BANK STATEMENT OF ASSESSEE WHICH HAD ALREADY BEEN FILED ON RECORD. SINC E THE LOANS WERE RECEIVED IN THE EARLIER YEARS NO ADDIT ION COULD BE MADE DURING THE YEAR UNDER CONSIDERATION FOR DISALLOWANCE OF INTEREST. SHREE STEELS INDORE /ITANO.25/IND/2019 4 5. ON THE OTHER HAND, LD. SR. DR OPPOSED THE SUBMISS ION AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORDS. I FIND THAT LD. COUNSEL F OR THE ASSESSEE CONTENDED THAT THE SAID LOAN WAS RECEIVED THROUGH PROPER BANKING CHANNELS WHICH IS VERIFIABLE FR OM BANK STATEMENT OF THE ASSESSEE AND THE CONFIRMATION FROM THE SAID PARTY WAS ALSO FILED. I FIND THAT THE ASSESSEE HAD FILED COMPLETE DETAILS ALONG WITH THE RETURN OF INCOM E. THE ASSESSEE WAS REGULARLY PAYING INTEREST ON SUCH UNSECUR ED LOAN TO THIS PARTY. THEREFORE, I AM OF THE VIEW THAT S INCE THE LOANS WERE RECEIVED IN THE EARLIER YEARS, NO ADDIT ION COULD BE MADE DURING THE YEAR UNDER CONSIDERATION FOR DISALLOWANCE OF INTEREST. THEREFORE, I DIRECT THE ASSE SSING OFFICER TO DELETE THE ADDITION OF RS.2,71,924/- ON A CCOUNT OF DISALLOWANCE OF INTEREST. SHREE STEELS INDORE /ITANO.25/IND/2019 5 7. IN RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 21 .10.202 0. SD/- (KUL BHARAT) JUDICIAL MEMBER DATED : 21.10.2020 PATEL/PS COPY TO: APPELLANT/RESPONDENT/PR.CIT(A)/PR.CIT/DR, INDORE BY ORDER ASSISTANT REGISTRAR, INDORE