Shashikant S. Sidnal., Belgaum V. Asst. Commissioner of Income Tax, Circle-2, Belgaum

ITA 414/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93454 (ITAT-PANAJI)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 08-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEHBOOB ALI KHAN
• Assessee Lawyers: J D KALPAVRIKSHA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI GEORGE MATHAN , HONBLE JUDICIAL MEMBER AND SHRI N.K. BILLAIYA , HONBLE ACCOUNTANT MEMBER ITA NO. 414 /PNJ/2014 (ASST. YEAR : 20 1 0 - 1 1 ) SHRI SHASHIKANT SHANAMUKHAPPA SIDNAL, 7309, SUSHILA SADAN, MAHANTESH NAGAR, BELGAUM VS. D CIT, CIRCLE - 2, BELGAUM . PAN NO. AIHPS 5466 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI J.D. KALPAVRIKSHA - CA DEPARTMENT BY : SHRI MEHBOOB ALI KHAN - DR DATE OF HEARING : 1 8 / 0 6 /2015 . DATE OF PRONOUNCEMENT : 18/ 0 6 /201 5 . O R D E R PER N.K. BILLAIYA THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF L D.CIT (A), BELGAUM , DATED 0 3 /0 9 /201 4 PERTAINING TO A.Y. 20 1 0 - 1 1 . 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITIONS MADE U/S. 40(A)(IA) OF THE ACT BY THE ASSESSING OFFICER. 3 . ASSESSEE IS A TRANSPORTER CARRYIN G ON BUSINESS OF TRANSPORTATION AND LOGISTICS . WHILE SCRUTINIZING THE RETURN OF INCOME, THE ASSESSING 2 ITA NO. 414 /PNJ/2014 OFFICER NOTICED THAT THE ASSESSEE HAS DEBITED A SUM OF RS. 23,64,535/ - ON ACCOUNT OF INTEREST PAID ON LOAN BORROWED . THE ASSESSEE WAS A SKED TO FURNISH THE DETAILS OF PAYMENT OF INTEREST ON LOAN BORROWED. ON PERUSING THE DETAILS FURNISHED, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE INTEREST PAYMENT TO FINANCIAL INSTITUTIONS LIKE TATA MOTORS LTD. AND SUNDRAM FINANCE. THE ASSESSEE WAS ASKED TO FURNISH THE AMOUNT OF INTEREST PAID TO THESE FINAN CIAL INSTITUTIONS ALONG WITH THE DETAILS OF TAX DEDUCTED AT SOURCE. THE ASSESSEE EXPLAINED THAT SINCE THE INTEREST HAS BEEN PAID TO NON - BANKING FINANCIAL COMPANIES , NO TAX HAS BEEN DEDUCTED AT SOURCE ON SUCH INTEREST PAYMENTS. THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE REPLY OF THE ASSESSEE , INVOKING THE PROVISIONS OF SEC. 40(A)(IA) OF THE ACT, THE ASSESSING OFFICER MADE DISALLOWANCE OF RS. 10,01,929/ - . AGGRIEVED BY THIS, ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), BUT WITHOUT ANY SUCCE SS. 4 . BEFORE US, COUNSEL FOR THE ASSESSEE FOR THE FIRST TIME STATED THAT THE INTEREST HAS BEEN PAID DURING THE YEAR UNDER CONSIDERATION AND NO AMOUNT IS FOUND TO BE PAYABLE ON THE LAST DAY OF THE ACCOUNTING YEAR. THEREFORE, THE FACTS OF THE CASE ARE SIMILAR TO THE FACT S OF VECTOR SHIPPING SERVICES (P) LTD. REPORTED IN 38 TAXMANN.COM 77 (ALL.) . 3 ITA NO. 414 /PNJ/2014 COUNSEL FURTHER STATED THAT A SPECIAL LEAVE PETITION PREFERRED BY THE REVENUE AGAINST THE DECISION OF HONBLE ALLAHABAD HIGH COURT HAS BEEN DISMISSED BY THE HO NBLE SUPREME COURT IN C.C.NO. 8068/2014 . 5. LEARNED DR COULD NOT BRING ANY DISTINGUISHING DECISION IN FAVOUR O F THE REVENUE. 6. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE OF PAYMENT MADE DURING THE YEAR UNDER CONSIDERATION ITSELF HAS NOT BEEN CONSIDERED BY THE LOWER AUTHORITIES. WE , THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSEE IS DIRECTED TO DEMONSTRATE THAT ALL THE INTEREST HAVE BEEN PAID DURING THE YEAR UNDER CONSIDERATION ITSELF. THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE AND IF FOUND CORRECT, NO DISALLOWANCE SHOULD BE MADE . IN ALTERN ATIVE, INTEREST FOUND PAYABLE ON THE LAST DAY OF THE ACCOUNTING YEAR COULD ONLY BE DISALLOWED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ( ORDER PRONOUNCED IN THE OPEN COURT ON 1 8 TH JUNE , 201 5 ). SD/ - SD/ - ( GEORGE MATHAN ) ( N.K. BILLA I YA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18 TH JUNE , 201 5 . 4 ITA NO. 414 /PNJ/2014 VR/ - COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE LD. CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 5 ITA NO. 414 /PNJ/2014 DATE INITIAL ORIGINAL DICTATION PAD IS ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 1 8 .06.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 1 8 .06.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 1 8 /06/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 1 8 /06/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1 9 /06/2015 SR.PS 6. DATE OF PRONOUNCEMENT 1 8 /06/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 19 /06/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER