DCIT, CHENNAI V. M/s. Ranaq Steel Trading P Ltd., CHENNAI

ITA 446/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5201 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 07-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: G BASKAR
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI U.B. BEDI, J.M. AND SHRI N.S. SAINI, AM .. I.T.A. NO. 446/MDS/2011 ASSESSMENT YEARS 2006-07 THE DY. C.I.T COMPANY CIRCLE V(3) CHENNAI VS. M/S RAUNAQ STEEL TRADING P. LTD 45(24) VENKATA MAISTRY STREET MANNADI, CHENNAI (PAN NO. AACCR 2710 B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G. BASKAR DEPARTMENT BY : SHRI P. B. SEKARAN O R D E R PER N.S. SAINI, A.M :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER PASSED BY THE LD. CIT(A)-V, CHENNAI DATED 26.11.201 0 FOR ASSESSMENT YEAR 2006-07. PAGE 2 OF 4 I.T.A. NO. 446/MDS/2011 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT T HE COMMISSIONER OF INCOME-TAX [APPEALS] ERRED IN ACCEPTING THE CLAI M OF THE ASSESSEE AND DELETING THE ADDITION OF ` 17,91,096/- ON ACCOUNT OF INTEREST PAID TO LOAN CREDITORS WHICH WERE TREATED BY THE AS SESSING OFFICER AS UNEXPLAINED CASH CREDITS U/S 68 OF THE INCOME-T AX ACT, 1961 [IN SHORT, THE ACT] IN THE EARLIER ASSESSMENT YEAR 2004 -05. 3. AT THE VERY OUTSET, THE LD. A.R. OF THE ASSESSE E SHRI BASKAR SUBMITTED THAT THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITS CONSOLIDATED ORDER IN ITA NOS. 1347 & 1348/MDS/2009 IN THE ASSESSMENT YEARS 2003-04 AND 2004-05 VIDE ORDER DAT ED 30.03.2010 DISMISSED THE APPEAL OF THE REVENUE ON THE GROUND T HAT IN THE CASE OF APPEAL OF SHRI SUDHARSHAN KUMAR RUNGTA IN ITA NO . 1346/MDS/2009 IN THE ASSESSMENT YEAR 2003-04 THE OR DER OF THE COMMISSIONER OF INCOME-TAX [APPEALS] DELETING THE A DDITION IN HIS HANDS WAS UPHELD AND CONSISTENT WITH THE DECISION I N THE CASE OF SHRI SUDHARSHAN KUMAR RUNGTA CASH CREDITS COULD NO T BE CONSIDERED AS INCOME OF THE ASSESSEE. FURTHER AS THE CASH CRE DITS WERE ALL TAKEN OVER BALANCES, THEREFORE, THE COMMISSIONER OF INCOME-TAX [APPEALS] HAD RIGHTLY DELETED SUCH ADDITION. HE, T HEREFORE, PAGE 3 OF 4 I.T.A. NO. 446/MDS/2011 SUBMITTED THAT AS THE CASH CREDITS ITSELF WERE HELD TO BE GENUINE IN THE EARLIER YEARS, THEREFORE, THE DISALLOWANCE OF I NTEREST PAID ON SUCH CASH CREDITS WAS TO BE DELETED. 4. THE LD. D.R. SHRI P.B. SEKARAN ALSO CONCURRED WI TH THE ABOVE SUBMISSIONS OF THE LD. A.R. OF THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER DISALLOWED INTE REST PAYMENT OF ` 17,91,096/- PAID TO THE CREDITORS ON ` 57,11,756/- FOR THE REASON THAT THE CREDITS WERE DISALLOWED IN THE EARLIER YEA RS. THE LD. A.R. HAS SUBMITTED BY FILING COY OF THE ORDER OF THE TRI BUNAL FOR ASSESSMENT YEAR 2004-05 IN ITA NOS. 1347 & 1348/MDS /2009 AND CO. NO. 155/MDS/09 WHEREIN, VIDE CONSOLIDATED ORDER DAT ED 30.3.2010 THE TRIBUNAL HAS CONFIRMED THE ORDER OF THE COMMISS IONER OF INCOME-TAX [APPEALS] DELETING THE ADDITION OF LOAN OF ` 57,11,756/- AS UNEXPLAINED CASH CREDIT. AS THE LOANS HAVE BEEN HELD TO BE GENUINE, THEREFORE, THE DISALLOWANCE OF INTEREST OF ` . 17,191,067/- ON SUCH LOANS BY THE ASSESSING OFFICER ON THE GROUN D THAT THE CREDITS PAGE 4 OF 4 I.T.A. NO. 446/MDS/2011 WERE DISALLOWED IN EARLIER YEARS, HAS BEEN RIGHTLY DELETED BY THE COMMISSIONER OF INCOME-TAX [APPEALS]. WE, THEREFOR E, CONFIRM THE ORDER OF THE COMMISSIONER OF INCOME-TAX [APPEALS] A ND DISMISS THE APPEAL OF THE REVENUE. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE STAND S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER THE CONCL USION OF HEARING ON 10.5.2011. SD/- SD/- (U.B.S BEDI ) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 10 TH MAY, 2011. VL COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE