THE ACIT, CIRCLE-1, RAJAHMUNDRY, Rajahmundry V. Smt. Mullapudi Renuka, Tanuku

ITA 259/VIZ/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0261 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 18-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K GOPALAKRISHNA
• Keywords: Salary income
• Section: 143(3); 260A

Judgement Text

ITA NO.294/VIZAG/2012 M/S. SANGA MITHRA DEVELOPMENT ASSOCIATION 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , ,, , . . . . , , , , % % % % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER . .. ./ // / I.T.A.NO.259/VIZAG/2012 ( / ASSESSMENT YEAR : 2008-09 ) ACIT CIRCLE - 1 RAJAHMUNDRY VS. M. RENUKA TANUKU [ PAN: ADOPM1838D ] (, , , , / APPELLANT) (-. -. -. -., ,, , / RESPONDENT ) , / / APPELLANT BY : SHRI G.V.N. HARI, AR -., / / RESPONDENT BY : SHRI K. GOPALA KRISHNA , DR / 3 / DATE OF HEARING : 08 .09.2015 / 3 / DATE OF PRONOUNCEMENT : 24.09.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF CIT(A), VISAKHAPATNAM DATED 28.03.2012 FOR THE ASSE SSMENT YEAR 2008- 09. IN THIS APPEAL, THE REVENUE HAS RAISED FOLLOWI NG GROUNDS:- 1. THE CIT(A) ERRED BOTH IN LAW AND ON FACTS OF THE CA SE. 2. THE CIT(A) ERRED IN DELETING THE ADDITION MADE BY T HE ASSESSING OFFICER TOWARDS INTEREST PAYMENT OF RS.25,58,182/- ITA NO.294/VIZAG/2012 M/S. SANGA MITHRA DEVELOPMENT ASSOCIATION 2 3. THE CIT(A) OUGHT TO HAVE MADE DETAILED ENQUIRY/VERI FICATION WITH REGARD TO THE GENUINENESS OF THE INTEREST PAYM ENTS BEFORE RENDERING HIS DECISION ESPECIALLY WHEN THE ASSESSIN G OFFICER HAD NOT GIVEN ANY FINDING REGARDING THE GENUINENESS OF THE EXPENDITURE. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS CARRYING ON THE BUSINESS OF FINANCE IN THE NAME OF VENKATARAYA FINANCE AND IS A LSO TRADING IN COTTON IN THE NAME OF RENUKA GINNING MILL. THE ASSESSEE A LSO DERIVES INCOME FROM SALARY FROM VENKATARAYA COTTON MILLS PVT. LTD. AND VENKATARAYA CHIT FUND PVT. LTD. THE ASSESSEE FILED RETURN OF I NCOME OF RS.19,76,500/-. THE RETURN FILED BY THE ASSESSEE W AS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CAL LED AS ACT). THEREAFTER THE ASSESSEES CASE WAS SELECTED FOR SCR UTINY. AFTER DUE PROCESS, THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE A.O. HAS OBSERVED THAT THE ASSESSEE DEBITED AN INTEREST OF R S.33,13,368/- AND FURNISHED DETAILS OF INTEREST PAYMENT TO THE EXTENT OF RS.8,55,186/- LEAVING A BALANCE OF RS.25,58,182/- FOR WHICH NO DE TAILS WERE GIVEN. THEREFORE, THE A.O. HAS DISALLOWED INTEREST PAYMENT OF RS.25,58,182/- AND THE SAME WAS ADDED TO THE INCOME OF THE ASSESSE E. ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). TH E LD. CIT(A) DIRECTED ITA NO.294/VIZAG/2012 M/S. SANGA MITHRA DEVELOPMENT ASSOCIATION 3 THE A.O. TO DELETE THE ADDITION. ON BEING AGGRIEVE D, REVENUE IS IN APPEAL. 4. THE LD. D.R. HAS SUBMITTED THAT THE LD. CIT(A) D ELETED THE ADDITION MADE BY THE A.O. WITHOUT EXAMINING THE GEN UINENESS OF THE INTEREST PAYMENT MADE BY THE ASSESSEE. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS SUBMITTED THAT THE GENUINENESS WAS NOT DISPUTED BY THE A.O. A ND THE LD. CIT(A) AFTER CALLING REMAND REPORT AND CONSIDERING THE SAM E DELETED THE ADDITION MADE BY THE A.O. AND STRONGLY SUPPORTED TH E ORDER PASSED BY THE CIT(A). 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE ORDERS, GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY ISSU E FOR CONSIDERATION BEFORE US IS WHETHER THE INTEREST PAYMENT MADE BY T HE ASSESSEE IS ALLOWABLE OR NOT. DURING THE COURSE OF THE ASSESSM ENT PROCEEDINGS, THE A.O. AFTER EXAMINING THE DETAILS FILED BY THE ASSES SEE HAS DISALLOWED TO THE EXTENT OF RS.25,58,182/- ON THE GROUND THAT NO DETAILS WERE FILED IN RESPECT OF THE CLAIM MADE BY THE ASSESSEE. WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), THE LD. CIT (A) HAS CALLED FOR THE ITA NO.294/VIZAG/2012 M/S. SANGA MITHRA DEVELOPMENT ASSOCIATION 4 REMAND REPORT FROM THE A.O. THE A.O. AS PER THE DI RECTIONS OF THE LD. COMMISSIONER, VERIFIED THE DETAILS FILED BY THE ASS ESSEE AND SUBMITTED A REMAND REPORT DATED 7.3.2012, WHICH IS REPRODUCED B Y THE LD. CIT(A), WHICH IS AS UNDER:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE, COULD SUBSTANTIATE THE CLAIM OF INTEREST PAYMENT TO FINANCIAL INSTITUTES AMOUNTING TO RS.8,50,186/- AND FOR THE REST OF RS.25,58,182/-, NO DETAILS WERE FILED THOUGH A S HOW CAUSE LETTER WAS ISSUED ON 24.11.2010. HOWEVER, THE ASSE SSEE NOW FILED THE DETAILS OF INTEREST PAID TO THE DEPOSITOR S AT RS.24,57,935/- AND TO OTHERS AT RS.247/- IN THE FOR M OF AN ACCOUNT COPY. A COPY OF THE RETURN FILED U/S 260A BEFORE THE CIT WAS ALSO FURNISHED. FROM THE ABOVE, IT IS NOTICED/FOUND THAT INTEREST O F RS.24,57,935/- WAS PAID/CREDITED TO THE DEPOSITORS OF VENKATARAYA FINANCIERS OF WHICH THE ASSESSEE IS A P ROPRIETRIX. 7. WE FIND THAT THE LD. CIT(A) HAS CALLED THE REMAND REPORT FROM THE A.O. AND AFTER CONSIDERING THE REMAND REPORT AND AL SO THE FINDING GIVEN BY THE A.O. DIRECTED THE A.O. TO DELETE THE ADDITIO N MADE BY HIM. WE FIND THAT THE LD. CIT(A) AFTER CONSIDERING THE ENTI RE FACTS AND ALSO GIVING OPPORTUNITY TO THE A.O. BY CALLING A REMAND REPORT, DELETED THE ADDITION. WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE CIT( A). SO FAR AS ARGUMENT OF THE LD. COUNSEL WITH REGARD TO THE GENU INENESS OF THE TRANSACTION IS CONCERNED, THE A.O. HAS NOT DOUBTED THE SAME, EVEN IN ITA NO.294/VIZAG/2012 M/S. SANGA MITHRA DEVELOPMENT ASSOCIATION 5 THE REMAND REPORT. THEREFORE, WE FIND NO MERIT IN THE ARGUMENT OF THE LD. D.R. THUS, THIS GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED . THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 24 TH SEPT15. SD/- SD/- ( (( ( . . . . ) ( ) ( ) ( ) ( . .. . . . . . ) )) ) ( (( ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 6 / DATED : 24 TH SEPT15 VG/SPS / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT THE ACIT CIRCLE-1, RAJAHMUNDRY 2. -., / THE RESPONDENT SMT. MULLAPUDI RENUKA, 12-69-6, C/O SREE VENKATARAYA COTTON MILLS (P) LTD., INDUSTRIAL AREA ROAD, TANUKU 3. : / THE CIT, VISAKHAPATNAM 4. : () / THE CIT(A), VISAKHAPATNAM 5. -, , / // / DR, ITAT, VISAKHAPATNAM 6 . .. . / GUARD FILE / BY ORDER // TRUE COPY // @A ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM