ACIT, Circle-30, Kolkata, Kolkata V. Shri Shubh Gautam, Kolkata

ITA 414/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2644 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2010
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 07-04-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 25-02-2010
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA
• Section: 43B

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH - A , KOLKATA ( ) BEFORE . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND . . , , SHRI C.D. RAO, ACCOUNTANT ME MBER . / I.T.A.NO. 414/KOL/2010 / ASSESSMENT YEAR 2004 - 05 ACIT, CIRCLE 30, KOLKATA - - - VERSUS - . SRI SHUBH GAUTAM, 106, SOUTHERN AVENUE, KOLKATA 700 029. ADXPG 1620 Q ( / A PPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI P.K.MISHRA, DR / FOR THE RESPONDENT : NONE / ORDER . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. THE DEPARTMENT HAS FILED THIS APPEAL FOR THE ASSESSMENT YEAR 2004 - 0 5 AGAINST ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) DT.30.11.2009 ON THE FOLLOWING GROUND . 1) THE LD. CIT(A) - XIV, KOLKATA HAS ERRED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE BY DELETING THE ADDITION OF RS. 6,84,860/ - . THE AMOUNT O F RS. 6,84,860/ - WAS THE INTEREST RELATED TO OD A/C. WITH SYNDICATE BANK, SSI NOIDA NOT ACTUALLY PAID BY THE ASSESSEE DURING THE PREVIOUS YEAR UNDER CONSIDERATION AND HENCE SHOULD BE DISALLOWED UNDER CLAUSE (E) OF SECTION 43B READ WITH EXPLANATION 3D. MORE OVER, THE ASSESSEE DID NOT FILE ANY CERTIFICATE FOR PAYMENT OF THE INTEREST BEFORE THE DUE DATE OF FILING OF THE RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. 3. CONSIDERING THE FACTS OF THE CASE, WE DE CIDED TO DISPOSE OF THE APPEAL BY CONSIDERING THE SUBMISSIONS OF THE LEARNED DR AND THE ORDERS OF THE AUTHORITIES BELOW. / I.T.A.NO.414/KOL/2010 2 4. THE LEARNED DR IN HIS SUBMISSIONS RELIED ON THE ORDER OF THE ASSESSING OFFICER. 5. WE OBSERVE THAT THE ASSESSING OFFICER HAS DISAL LOWED THE INTEREST OF RS.6,84,860 CLAIMED BY THE ASSESSEE ON THE GROUND THAT THE SAID INTEREST WAS NOT PAID BY THE ASSESSEE IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND ACCORDINGLY DISALLOWED THE SAME UNDER CLAUSE (E) OF SECTION 43B READ WITH EXPLANATION 3D OF THE I NCOME - TAX ACT,1961 . HOWEVER, THE LEARNED CIT(A), AFTER CONSIDERING THE ENTRIES IN THE OVER - DRAFT ACCOUNT OF THE ASSESSEE IN SYNDICATE BANK FOUND THAT INTEREST AMOUNTS WERE DEBITED IN THE OVER - DRAFT ACCOUNT OF THE ASSESSEE AND THE ASSESSEE ALSO DEPOSITED SUFFICIENT AMOUNT IN HIS ACCOUNT. THEREFORE, THE OBSERVATION OF THE ASSESSING OFFICER THAT THE SAID INTEREST WAS NOT PAID BY THE ASSESEE BUT IT WAS DEBITED TO THE ASSESSEES ACCOUNT BY CONVERTING INTO LOAN IS NOT FACTUALLY CORRECT. WE CONSIDER IT PRUDENT TO REPRODUCE THE SUBMISSIONS OF THE ASSESSEE MADE BEFORE THE LEARNED CIT(A) AND THE ORDER OF THE LEARNED CIT(A) AS MENTIONED IN PARAGRAPHS 3.2 AND 3.3 OF THE IMPUGNED ORDER RESPECTIVELY, WHICH READ AS FOLLOWS. 3.2 ON THIS ISSUE THE AR OF THE ASS ESSEE MADE FOLLOWING SUBMISSION. 4. THE INTEREST DISALLOWED IN THE ASSESSMENT RELATES TO OVERDRAFT ACCOUNT OF THE APPELLANT WITH SYNDICATE BANK THE APPELLANT WAS SANCTIONED A LIMIT OF RS. 60 LAKHS AGAINST HYPOTHECATION OF STOCK & BOOK DEBTS. THE SAID LI MIT WAS ENHANCED TO RS. 90 LAKHS FROM JANUARY 2004. BOTH THESE LIMITS ARE DULY REFLECTED IN THE BANK STATEMENT. THE SAID ACCOUNT IS MAINTAINED AS A CURRENT ACCOUNT AND REGULAR BUSINESS TRANSACTIONS ARE CARRIED ON THROUGH THIS ACCOUNT. CASH/CHEQUES ARE DEPO SITED REGULARLY INTO THE ACCOUNT AND SUCH DEPOSITS SUBSEQUENT TO THE CHARGE OF INTEREST BY THE BANK ARE CONSIDERED AS PAYMENT TOWARDS INTEREST DEBITED BY THE BANK IN THE SAID ACCOUNT. HENCE, THE OBSERVATION OF THE LD. A. O . THAT INTEREST HAS BEEN DEBITED I N THE ACCOUNT BUT NOT ACTUALLY PAID IS NOT MAINTAINABLE. 5. THE BALANCE IN THE ACCOUNT AS ON 31.03.2004 FOR RS.89,91,664.53 WAS WELL WITHIN THE SANCTION LIMIT OF RS.90 LAKHS. IN CASE OD LIMIT OF RS.90 LAKHS IS CONSIDERED TO BE A SEPARATE LOAN ACCOUNT, TH ERE WAS A CREDIT BALANCE OF RS.8,335/47 IN THE ACCOUNT WITH SYNDICATE BANK. WE GIVE HEREIN BELOW THE DETAILS OF CREDIT IN THE SAID ACCOUNT AFTER THE DEBIT ENTRY RELATING TO INTEREST DISALLOWED IN THE ASSESSMENT. / I.T.A.NO.414/KOL/2010 3 6. A CER TIFI CATE TO THE EFFECT THAT THE AMOUNT OF INTEREST AS DISALLOWED IN THE ASSESSMENT WAS DULY PAID HAS ALSO BEEN OBTAINED FROM THE BANK AND ENCLOSED HEREWITH. 3.3 . I HAVE CONSIDERED THE ABOVE SUBMISSION OF THE AR. FROM THIS SUBMISSION IT IS SEEN THAT ON ALL THE TEN OCCASIONS WHEN TH E INTEREST HAS BEEN DEBITED IN THE OD ACCOUNT OF THE ASSESSEE, WITHIN NEXT FEW DAYS SUFFICIENT AMOUNT HAS BEEN DEPOSITED IN THIS ACCOUNT WHICH IS AN INDICATION THAT THE INTEREST HAS BEEN PAID BY THE ASSESSEE. THE DETAILS OF SUCH CREDIT ENTRIES HAVE BEEN GI VEN BY THE AR IN HIS SUBMISSION MENTIONED ABOVE. THE A.O, HAS CONCLUDED THAT THE INTEREST HAS BEEN CONVERTED INTO LOAN WITHOUT PAYMENT OF THE INTEREST ON THE GROUND THAT THE BALANCE IN THE OD ACCOUNT HAS ALWAYS REMAINED A DEBIT BALANCE. IN THIS RESPECT THE AR HAS EXPLAINED THAT IN THIS OD ACCOUNT INITIALLY THE LIMIT SANCTIONED BY THE BANK WAS RS. 60,00,000/ - BUT THIS LIMIT WAS RAISED TO RS. 90,00,000/ - FROM JANUARY, 2004. IT IS SEEN THAT THROUGH OUT THE PREVIOUS YEAR THE BALANCE IN THIS OD ACCOUNT HAS BEEN LESS THAN RS.90,00,000/ - ONLY. THIS FACT ALSO SHOWS THAT THE OUTSTANDING AMOUNT IN THIS 01) ACCOUNT AT THE END OF THE PREVIOUS YEAR IS ON ACCOUNT OF THE PRINCIPAL LOAN AND NOT ON ACCOUNT OF ANY OUTSTANDING INTEREST. OVER AND ABOVE ALL THIS, DURING THE APP ELLATE PROCEEDINGS THE AR HAS FILED A CERTIFICATE FROM THE SYNDICATE BANK IN WHICH IT IS CLEARLY MENTIONED THAT THE WHOLE OF THE INTEREST OF RS.6,84,860/ - WAS RECOVERED BY THE BANK DURING THE PREVIOUS YEAR ITSELF . 6. SINCE THE LEARNED DR HAS NOT DISPUTED THE ABOVE FACTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) TO DELETE THE SAID ADDITION OF RS.6,84,860 MADE BY THE ASSESSING OFFICER AS PER SECTION 43B(E) OF THE INCOME - TAX ACT,1961.HENCE, GROUND TAKEN BY THE DEPARTMENT IS REJECTED. / I.T.A.NO.414/KOL/2010 4 7 . IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 09.04.2010 ( . . ) (C.D. RAO), ACCOUNTANT MEMBER ( . . ), ( B.R.MITTAL ), JUDICIAL MEMBER ( ) DATE : 09.04.2010 - COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : ACIT, CIRCLE 30, KOLKAT A 2 / THE RESPONDENT - SRI SHUBH GAUTAM, 106, SOUTHERN AVENUE, KOLKATA 700 029. 3. / THE CIT, 4. ( )/ THE CIT(A), 5. / DR, KOLKATA BENCH 6. GUARD FILE . / TR UE COPY , / BY ORDER , / DEPUTY REGISTRAR . ( /) H.K.PADHEE / SNR.PRIVATE SECRETARY.