VEDANT WEALTH MANAGEMENT P.LTD, MUMBAI V. ITO WD 8(3)(4), MUMBAI

ITA 4029/MUM/2013

• Counselvise Citation: 402919914 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 20-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SINGH
• Assessee Lawyers: S S JHUNJHUNWALA
• Keywords: Opportunity of being heard

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./I.T.A. NO.4029/MUM/2013 ( / ASSESSMENT YEAR :2010-11) VEDANT WEALTH MANAGEMENT PVT.LTD., 301/306, NEELKANTH COMMETRCIAL CENTRE, SAHAR ROAD, ANDHERI (E), MUMBAI-400099 / VS. INCOME TAX OFFICER 8(3)(4), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( / APPELLANT) .. ( !' / RESPONDENT) ./ $% ./ PAN/GIRNO.: AACCV7533J & / APPELLANT BY : SHRI S S JHUNJHUNWALA !' ' & /RESPONDENT BY : SHRI P K SINGH ( ) ' * + / DATE OF HEARING : 28.8.2014 ,- ' * + / DATE OF PRONOUNCEMENT : 10.9.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER DATED 16.4.2013 PASSED BY LD CIT(A)-18, MUMBAI AND IT REL ATES TO THE ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION RENDER ED BY THE LD. CIT(A) IN RESPECT OF FOLLOWING TWO ISSUES : A) DISALLOWANCE MADE U/S 40A(2)(A); B) ADDITION OF UNACCOUNTED INTEREST INCOME. I.T.A. NO.4029/MUM/2013 2 3. WE HEARD BOTH THE PARTIES ON BOTH THE ISSUES. T HE FIRST ISSUE PERTAINS TO DISALLOWANCE MADE U/S 40A(2)(A) OF THE INCOME TAX ACT, 1961(THE ACT). THE AO NOTICED THAT THE ASSESSEE HAS PAID INTEREST TO THE FOLLOWING PERSONS AND CLAIMED THE SAME AS DEDUCTION: I) SHRI MADHUSUDAN MAHESHWARI RS.32,25,821/- II) FORMOKEM INDIA CORPORATION RS.19,74,914 /- THE ASSESSEE CLAIMED BEFORE THE AO THAT HE HAS GIVE N INTEREST AT THE RATE OF 12% TO SHRI MADHUSUDAN MAHESHWARI. HOWEVER, THE INT EREST ACTUALLY PAID BY THE ASSESSEE WORKED OUT TO MORE THAN 12%. WHEN QUESTIO NED ABOUT THIS CONTRADICTION, THE ASSESSEE HAS SUBMITTED THAT IT H AD TAKEN LOAN FROM TWO DIFFERENT PERSONS, VIZ., SHRI MADHUSUDAN MAHESHWAR I AND PIYUSH MAHESHWARI. IT WAS FURTHER SUBMITTED THAT THE INTEREST AMOUNT P ERTAINING TO BOTH THE LENDERS WAS INADVERTENTLY CREDITED TO THE ACCOUNT OF SHRI M ADHUSUDAN MAHESHWARI ONLY. THE AO NOTICED THAT SHRI MADHUSUDAN MAHESHWARI HAS FILED THE RETURN OF INCOME DECLARING ENTIRE INTEREST INCOME AT RS.32,25,821/- REFERRED ABOVE. HENCE, AO DID NOT ACCEPT THE EXPLANATIONS OF THE ASSESSEE. A CCORDINGLY, THE AO DETERMINED THAT THE AMOUNT OF INTEREST PAID TO SHRI MADHUSUDAN MAHESWARI IS EXCESSIVE BY RS.7,29,319/- AND DISALLOWED THE SAME U/S 40A(2)(A) OF THE ACT. THE LD. CIT(A) ALSO CONFIRMED THE ABOVE ADDITION O N THE REASONING THAT THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE TO REBUT THE FINDINGS GIVEN BY THE AO. 4. BEFORE US, THE LD. AR SUBMITTED THAT THE ASSESS EE HAS FILED ALL THE DETAILS TO SUBSTANTIATE ITS CLAIM BUT THEY WERE NOT PROPERL Y LOOKED INTO BY TAXING AUTHORITIES. ACCORDINGLY, THE LD. AR PRAYED THAT T HE ASSESSEE MAY BE PROVIDED ONE MORE OPPORTUNITY TO EXPLAIN HIS FACTUAL DETAILS TO THE AO, TO WHICH THE LD. DR ALSO DID NOT OBJECT. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH A DIRECTION TO EXAMINE THE ISSUE I.T.A. NO.4029/MUM/2013 3 AFRESH AFTER CONSIDERING ALL THE EXPLANATIONS AND INFORMATION FURNISHED BY THE ASSESSEE AND AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND TAKE APPROPRIATE DECISION IN ACCORDANC E WITH LAW. 5. THE NEXT ISSUE RELATES TO THE ADDITION OF RS.3,9 1,962/- AS UNDISCLOSED INTEREST INCOME. THE LD. COUNSEL SUBMITTED THAT TH E ASSESSEE HAS RECONCILED THE INTEREST INCOME AND IF THE RECONCILIATION STATEMENT IS PROPERLY APPRECIATED BY TAXING AUTHORITY, THIS ADDITION WOULD BE LIABLE TO BE DELETED. HOWEVER, THE LD. DR SUBMITTED THAT RECONCILIATION STATEMENT GIVEN BY TH E ASSESSEE NEEDS TO BE VERIFIED AT THE END OF THE AO. AFTER HEARING BOTH THE PARTIES ON THE ISSUE, WE ARE OF THE CONSIDERED OPINION THAT FACTS AND RECONCILIA TION STATEMENT SUBMITTED BY THE ASSESSEE NEED TO BE EXAMINED AT THE END OF AO. THE REFORE, WE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF AO WITH A DIRECTION TO CONSIDER THE ISSUE AFRESH BY DULY EXAM INING THE RECONCILIATION STATEMENT AND EXPLANATIONS FURNISHED BY THE ASSESSE E AND THEN DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 10TH SEPT, 2014 . ,- ( . /0 1 2 10 TH SEPT , 2014 - ' 3) 4 SD SD ( . . / H.L. KARWA ) ( . . , / B.R. BASKARAN) / PRESIDENT / ACCOUNTANT MEMBER / ( ) MUMBAI : 10 TH SEPT, 2014 . . . ./ SRL , SR. PS I.T.A. NO.4029/MUM/2013 4 ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. ( 9* ( ) / THE CIT(A)- CONCERNED 4. ( 9* / CIT CONCERNED 5. 6. :; 3 !*< , + < , / ( ) / DR, ITAT, MUMBAI CONCERNED 3 = ) / GUARD FILE. > ( / BY ORDER, TRUE COPY ? $ (ASSTT. REGISTRAR) + < , / ( ) /ITAT, MUMBAI