DCIT, CHENNAI V. Madanlal Forge Pvt. Limited, CHENNAI

ITA 330/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5802 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 26-07-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 06-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN

Judgement Text

, B/ , IN THE INCOME TAX APPELLATE TRIBUNAL B/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NO.330 /MDS./2017 & C.O.43/MDS./2017 ( ASSESSMENT YEAR : 2012-13 ) THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORTE CIRCLE -4(1), CHENNAI. VS. M/S. MADANLAL FORGE PVT. LTD ., 7, MORISON STREET,ALANDUR, CHENNAI-16. PAN AAFCM 0239 F ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MR.B.SAGADEVAN, JCIT, D.R / RESPONDENT BY : NONE ! ' / DATE OF HEARING : 09.11.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 20.11.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE AND THE CROS S OBJECTIONS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF T HE LEARNED COMMISSIONER OF INCOME TAX(A)-8, CHENNAI DATED 21. 11.2016 PERTAINING TO ASSESSMENT YEAR 2012-13. 2. THE MAIN GRIEVANCE OF THE REVENUE IN ITS APPEAL IS WITH REGARD TO DELETING THE DISALLOWANCE OF ` 87,18,425/- MADE BY THE AO AS ITA NO.330/MDS/2017 2 UNEXPLAINED INCREASE IN UNSECURED LOANS AND DELETIN G THE CLAIM OF INTEREST OF ` 7,49,958/- 3. THE FACTS OF THE CASE ARE THAT DURING THE ASSES SMENT YEAR UNDER CONSIDERATION, THERE WAS AN INCREASE IN UNSEC URED LOANS FROM THE FOLLOWING PARTIES. NAME ` ADARSHJALAN A/C 6,03,500/- ADARSHJALAN A/C 50,000/- TAMILNADU ROLLING MILLS LTD 80,64,925/- THE AO FOUND THAT THE ASSESSEE CLAIMED AN AMOUNT OF ` 25,96,253/- AS INTEREST AND KEEPING IN VIEW THE AVERAGE SECURED LOANS OF ` 1,53,85,790/- (AVERAGE OF OPENING BALANCE OF ` 1,83,00,589/- AND CLOSING BALANCE OF ` 1,24,70,990/-) FOR THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION, RESTRICTED TH E INTEREST TO ` 18,46,295/- BEING 12% OF THE AVERAGE SECURED LOANS. THE BALANCE AMOUNT OF ` 7,49,948/- WAS BROUGHT TO TAX OBSERVING THAT THE RE ASONS TO SUBSTANTIATE THE CLAIM WERE NOT FURNISHED BY THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICER, TH E ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). ON APPEAL, LD.CI T(A) ADMITTED THAT PAN DETAILS AND THE RELEVANT LEDGER EXTRACTS IN SUP PORT OF ITS CLAIM ON ITA NO.330/MDS/2017 3 INCREASE IN UNSECURED LOANS ARE NOT PRODUCED BEFORE THE LD. ASSESSING OFFICER. BESIDES IT, THE LD.CIT(A) ADMIT TED THAT THE COPIES OF BANK STATEMENT WAS PRESENTED FIRST TIME BEFORE THE LD.CIT(A) IN SUPPORT OF THE CLAIM OF INTEREST CHARGES. LD.CIT(A) OBSERVED THAT IN VIEW OF FURNISHING THE ABOVE SAID DOCUMENTS WITH RE GARD TO TRANSACTIONS THE ASSESSEE COMPANY WITH CANARA BANK AND FOLLOWING THE DECISION OF DELHI BENCH IN THE CASE OF GANPATI ENTERPRISES LTD. (142 ITD 118), THE ABOVE SAID TWO DISALLOWANCES MAD E BY THE LD. ASSESSING OFFICER WERE DELETED. AGAINST THE ORDER OF LD.CIT(A), NOW THE REVENUE IS IN APPEAL BEFORE US. 4. BEFORE US, THE LD.D.R SUBMITTED THAT THE DOCUME NTS PRODUCED FIRST TIME BEFORE THE LD.CIT(A) ARE NOT CO NFRONTED TO THE LD. ASSESSING OFFICER AND LD.CIT(A) DECIDED WITHOUT CAL LING OF REMAND REPORT FROM THE AO. 5. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. I TOOK UP THE CASE FOR ADJUDICATION AFTER HEARING THE LD.D.R. IN MY OPINION, THERE IS MERIT IN THE ARGUMENT OF TH E LD.D.R. AS PER RULE-46A OF INCOME TAX RULES, 1962, THE LD.CIT(A) SHOULD HAVE CONFRONTED THE DOCUMENTS TO THE LD. ASSESSING OFFIC ER, WHICH WERE ITA NO.330/MDS/2017 4 PRODUCED FIRST TIME BEFORE HIM. THE LD.CIT(A) CONS IDERED THIS PLEA OF THE ASSESSEE WITHOUT CALLING FOR A REMAND REPORT FR OM THE AO. AS SUCH THERE IS VIOLATION OF RULE 46A. ACCORDINGLY, IN MY OPINION IT IS APPROPRIATE TO REMIT THE ISSUE TO THE FILE OF AO TO CONSIDER THE SAME AFRESH AFTER AFFORDING REASONABLE OPPORTUNITY OF HE ARING TO THE ASSESSEE, AND LD. ASSESSING OFFICER SHALL CONSIDER THE SAME IN ACCORDANCE WITH LAW AND DECIDE IT AFRESH. 5.1 THE CROSS OBJECTIONS FILED BY THE ASSESSEE IS TIME BARRED BY 134 DAYS, AND NO CONDONATION PETITION HAS BEEN FILE D FOR BELATEDLY FILING THE APPEAL, WHICH IS DEFECTIVE. ACCORDINGLY, I HEREBY DISMISS THE CROSS OBJECTIONS FILED BY THE ASSESSEE IN LIMINE . 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 20 TH NOVEMBER, 2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 20 TH NOVEMBER, 2017 . ITA NO.330/MDS/2017 5 K S SUNDARAM. ' ()!*+,+%! / COPY TO: 1 . / APPELLANT 3. '' -!./ / CIT(A) 5. +0 )!)23 / DR 2. / RESPONDENT 4. '' -! / CIT 6. 45 6 / GF