NARSAIAH LINGAIAH BYNDLA ( PROP M.S, JEEVA PRINTS), MUMBAI V. ITO WD 18(2)(1), MUMBAI

ITA 3641/MUM/2012

• Counselvise Citation: 364119914 RSA 2012
• Duration Of Justice: 3 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.3641/M/2012 ASSESSMENT YEAR: 2008-09 SHRI NARSAIAH LINGAIAH BYNDLA, PROP: M/S. JEEV PRINTS, 31, MAMTA APTS, C WING, MARATHE MARG, NEW PRABHADEVI, NEW BAJAJ INSURANCE OFFICE, PRABHADEVI, MUMBAI - 400026 PAN: ABJPB 3046K VS. INCOME TAX OFFICER, WARD 18(2)(1), MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI DEEPAK TRALSHAWALA, A.R. REVENUE BY : SHRI YOGESH KAMAT, D.R. DATE OF HEARING : 08.06.2015 DATE OF PRONOUNCEMENT : 08.06.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 05.03.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2008-09. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING REVISED GRO UNDS OF APPEAL: REVISED GROUNDS OF APPEAL: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-29 HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE MADE BY THE LD . ASSESSING OFFICER (AO) OF INTEREST PAID OF RS.2,73,907/- ON BORROWED FUND FOR HOUSING LOAN TAKEN FROM STATE BANK OF PATIALA WITHOUT APPRECIATING THE FACT THAT DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAD SUBMITTED BEFORE THE HON'BLE CIT(APPEALS) THE HOUSING LOAN CERTIFICATE AS A PROOF OF PAYMENT ON H OUSING LOAN INTEREST ALONG WITH ITA NO.3641/M/2012 SHRI NARSAIAH LINGAIAH BYNDLA 2 BANK'S STATEMENT OF ACCOUNT, AND HAD ALSO REQUESTED FOR ADMITTING THE ADDITIONAL EVIDENCE U/R 46A. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-29 H AS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION MADE BY THE LD. AO OF LOAN CREDITORS OF RS.20,75,000/- FOR FRESH LOAN TAKEN AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT WITHOUT APPRECIATING THE FACT THAT DURING THE COURS E OF APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED BEFORE THE HON'BLE CIT(APPEALS) THE LOAN CONFIRMATION STATEMENT OF ALL LOAN CREDITORS AS A PROOF OF GENUI NENESS OF LOAN PARTIES, AND HAD ALSO REQUESTED FOR ADMITTING THE ADDITIONAL EVIDENC E U/R 46A. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-29 H AS ERRED IN LAW AND ON FACTS IN NOT ADJUDICATING THE THIRD GROUND OF APPEA L FILED BEFORE HIM IN FORM 35 IN RESPECT OF ADDITION OF AD-HOC INTEREST @ 12% TO THE TUNE OF RS.2,49,000/- ON ABOVE MENTIONED UNSECURED LOANS OF RS. 20,75,000/-. 4. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-29 H AS ERRED IN LAW AND ON FACTS IN NOT ADJUDICATING THE FOURTH GROUND OF APPE AL FILED BEFORE HIM IN FORM 35 IN RESPECT OF AD-HOC DISALLOWANCE @ 20% I.E RS.1,45,58 6/- OF VARIOUS EXPENSES DEBITED TO PROFIT & LOSS A/C TO THE TUNE OF RS.7,27,931/-. 5. THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-29 HAS ERRED LAW AND ON FACTS IN NOT CONSIDERING THE ADDITIONAL EVIDENCE U/ R 46A OF THE ACT SUBMITTED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS . 6. THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-29 HAS ERRED IN LAW AND ON FACTS IN PASSING THE APPELLATE ORDER MERELY ON THE BASIS OF THE REMAND REPORT SUBMITTED BY THE LD. AO, ALTHOUGH THE DETAILS WERE SUBMITTED TO THE AO AS WELL AS THE LD CIT(APPEALS). 7. YOUR APPELLANT CRAVES LEAVE TO ADD, AMEND, DELET E, OR ALTER ANY OF THE FOREGOING GROUNDS OF APPEAL. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS PROPRIETOR OF M/S. JEEVA PRINTS AND ENGAGED IN THE BUSINESS OF PRINTING PRES S AND RELATED WORKS. HE HAD FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION DECLARING TOTAL INCOME AT RS.7,85,292/-. THE ASSESSEE DURING THE Y EAR HAD DERIVED INCOME FROM BUSINESS, INCOME FROM HOUSE PROPERTY AND INCOM E FROM OTHER SOURCES. THE ASSESSEE HAD DECLARED THE INCOME FROM HOUSE PRO PERTY IN LOSS ON ACCOUNT OF INTEREST PAID ON LOAN TAKEN FOR HOUSE PROPERTY. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) OBSERVED THAT T HE ASSESSEE COULD NOT FURNISH ANY DOCUMENTARY EVIDENCE IN RESPECT OF SUCH INTERE ST EXPENDITURE OF RS.2,73,907/- PAID ON LOAN TAKEN FOR HOUSE PROPERTY . THE AO FURTHER OBSERVED THAT THE ASSESSEE HAD ALSO FAILED TO FURNISH EVIDEN CE IN RESPECT OF NEW LOAN TAKEN OF RS.20,75,000/- DURING THE YEAR. HE THEREFO RE, ADDED THE SAME AS ITA NO.3641/M/2012 SHRI NARSAIAH LINGAIAH BYNDLA 3 UNEXPLAINED INCOME OF THE ASSESSEE U/S 68 OF THE AC T. BASED ON THE SAME OBSERVATIONS AS NARRATED ABOVE, THE AO ALSO DISALLO WED AN AMOUNT OF RS.2,49,000/-, BEING INTEREST PAID @ 12% BY THE AS SESSEE ON THE ABOVE STATED PRINCIPAL AMOUNT OF RS. 2075000/- AND ADDED THE SAM E BACK TO THE INCOME OF THE ASSESSEE. HE FURTHER OBSERVED THAT USE OF VEHIC LE AND TELEPHONE FOR PERSONAL PURPOSE COULD NOT BE RULED OUT, HENCE HE DISALLOWED 20% OF THE SAID EXPENSES WHICH WERE WORKED OUT AT RS.1,45,586/-. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) CONFIRMED THE FINDINGS OF THE AO IN RESPECT OF INTEREST EXPEN DITURE ON LOAN FOR HOUSE PROPERTY AND IN RESPECT OF ADDITION U/S 68 OF THE A CT. HE HOWEVER FAILED TO ADJUDICATE THE ISSUES IN RELATION TO OTHER DISALLOW ANCES. ASSESSEE HAS THUS COME IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORDS. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THOUGH THE LD. CIT(A) HAS CALLED FOR THE REMAND REPORT OF THE AO IN RELAT ION TO THE EVIDENCES SOUGHT TO BE FURNISHED BY THE ASSESSEE TO PROVE THE GENUIN ENESS OF THE TRANSACTIONS, HOWEVER THE LD. AO GAVE VERY SHORT TIME TO THE ASSE SSEE TO FURNISH THE REQUIRED EVIDENCES. BY THE TIME THE ASSESSEE WAS ABLE TO FUR NISH THE NECESSARY EVIDENCES, THE AO HAD ALREADY SENT HIS REMAND REPOR T TO THE LD. CIT(A). THE ASSESSEE THEREAFTER FURNISHED THE EVIDENCES BEFORE THE CIT(A), BUT HE REFUSED TO CONSIDER THE SAID EVIDENCES AS THE ASSESSEE COUL D NOT FURNISH THE SAME BEFORE THE AO DURING THE REMAND PROCEEDINGS. THE LD. AR HA S FURTHER SUBMITTED THAT THE DOCUMENTS WHICH WERE PRODUCED BEFORE THE AO AS WELL AS THE LD. CIT(A) WERE COPY OF CERTIFICATE FROM BANK MENTIONING ALL T HE DETAILS IN RESPECT OF HOUSING LOAN, LOAN PARTIES LEDGER ACCOUNTS AND LOA N CONFIRMATIONS, MONTH WISE DETAILS OF EXPENSES, COPIES OF BANK STATEMENTS HIGH LIGHTING THE RECEIPT OF LOANS AND ADVANCES, COPY OF BANK BOOK PROVING A DIRECT NE XUS BETWEEN RECEIPT OF LOANS AND PAYMENTS MADE TO CREDITORS FOR GOODS AND EXPENSES ETC. THE LD. ITA NO.3641/M/2012 SHRI NARSAIAH LINGAIAH BYNDLA 4 A.R. HAS FURTHER RELIED UPON THE AFFIDAVIT OF THE A SSESSEE WHEREIN THE ASSESSEE HAS STATED THAT EVEN DURING THE COURSE OF ASSESSMEN T PROCEEDINGS THE ASSESSEE HAD ASSERTED THAT HE HAD TAKEN A LOAN FROM STATE BA NK OF PATIALA, HOWEVER, THE ASSESSEE COULD NOT SUBMIT THE HOUSING LOAN CERTIFIC ATE AS THE SAME WAS MISPLACED. HE ALSO EXPLAINED THAT HE COULD NOT PRO DUCE THE LOAN CONFIRMATIONS DURING THE ASSESSMENT PROCEEDINGS BECAUSE HE COULD NOT CONTACT THE PARTIES. HOWEVER, DURING THE REMAND PROCEEDINGS, THE SAME CO ULD NOT BE PRODUCED ON THE DATE OF HEARING BECAUSE OF THE INSUFFICIENCY OF TIME. THE AO VIDE LETTER DATED 15.02.12 WHICH WAS SERVED UPON THE ASSESSEE O N 16.02.12, WHICH HAPPENED TO BE A THURSDAY DIRECTED THE ASSESSEE TO FURNISH THE DETAILS BY 20.02.12 (MONDAY). IT HAS BEEN STATED IN THE AFFID AVIT THAT LETTER WAS RECEIVED AT 5 P.M. ON 16.02.12; 18TH AND 19TH OF FEBRUARY WE RE SATURDAY AND SUNDAY RESPECTIVELY; THE ASSESSEE, THUS, WAS LEFT WITH ON E WORKING DAY I.E. 17.02.12 ONLY. THE ASSESSEE THEREFORE COULD NOT FURNISH THE REQUIRED DETAILS ON MONDAY 20.2.2012, BUT HAD FURNISHED THE SAME ON 22.02.12. 5. WE FIND THAT THOUGH THERE APPEARS TO BE SOME NEG LIGENCE ON THE PART OF THE ASSESSEE IN PRODUCING THE RELEVANT EVIDENCE BEF ORE THE LOWER AUTHORITIES, HOWEVER, WE FIND THAT THE DOCUMENTS RELIED UPON BY THE ASSESSEE ARE VERY MUCH NECESSARY FOR THE JUST AND PROPER DECISION OF THE CASE. EVEN THE DOCUMENTS SUCH AS BANK CERTIFICATE, BANK ACCOUNT DE TAILS ETC. ARE EVIDENCES WHICH ARE MAINTAINED BY THE INDEPENDENT AUTHORITIES IN REGULAR COURSE OF BUSINESS AND SUCH TYPE OF EVIDENCES CANNOT BE SAID TO HAVE BEEN CREATED BY THE ASSESSEE AFTERWARDS AND NEITHER THE SAME CAN BE SAI D TO AN AFTERTHOUGHT VERSION OF THE ASSESSEE. IT IS ALSO UNDISPUTED THAT THE ASS ESSEE, DURING THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), HAD PRODUCED THE ABOVE STATED EVIDENCES RELATING TO THE INTEREST EXPENDITURE ON LOAN TAKEN FOR HOUSE PROPERTY AND ALSO IN RESPECT OF CONFIRMATIONS AND CREDITWORTHINESS OF T HE CREDITORS IN RELATION TO THE TRANSACTION LOANS IN QUESTION. THERE IS NO DOUBT AB OUT THE LEGAL POSITION THAT IF ITA NO.3641/M/2012 SHRI NARSAIAH LINGAIAH BYNDLA 5 ANY DOCUMENT FURNISHED BY THE ASSESSEE BEFORE THE L D. CIT(A) IS IN THE NATURE OF CLINCHING EVIDENCE WHICH GOES TO THE ROOT OF THE CASE THEN IN THE INTEREST OF JUSTICE SUCH TYPES OF EVIDENCE SHOULD NOT BE REJECT ED. EVEN UNDER RULE 46A(4) OF THE INCOME TAX RULES, THE LD. CIT(A) HAS BEEN GI VEN POWER TO CALL FOR PRODUCTION OF ANY DOCUMENT OR THE EXAMINATION OF AN Y WITNESSES TO ENABLE HIM TO DISPOSE OF THE APPEAL. WE, THEREFORE, SET ASIDE THE FINDINGS OF THE CIT(A) AND REMAND BACK THE ENTIRE MATTER TO HIM WITH A DIRECTION TO ADMIT THE ADDITIO NAL EVIDENCES SOUGHT TO BE FURNISHED BY THE ASSESSEE, DECIDE THE ISSUES AFRESH AS PER LAW AFTER AFFORDING REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEA RD AND SUBMIT THE NECESSARY DOCUMENTS ETC. THE LD. CIT(A) IS ALSO DI RECTED TO GIVE REASONED FINDINGS IN RELATION TO THE ISSUES TAKEN BEFORE HIM , RAISED VIDE GROUND NO.3 & 4 BEFORE US, WHICH HE HAS FAILED TO ADJUDICATE IN T HE IMPUGNED ORDER. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TREAT ED AS ALLOWED IN THE TERMS INDICATED ABOVE. THE O RDER WAS PRONOUNCED IN THE OPEN COURT ON 08.06.2015 . SD/- SD/- (G.S. PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.09.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.