MORPHEUS HUMAN CONSULTING P. LTD, MUMBAI V. ITO 8(2)(4), MUMBAI

ITA 5430/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4091 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 08-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D C JAIN
• Keywords: Unexplained cash credit; Capital asset; Capital expenditure
• Section: 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN, AM AND PAWAN SINGH, JM ./ I.T.A. NO . 5430 / MUM/ 2013 ( / ASSESSMENT YEA R : 2008 - 09 ) M/S MORPHEUS HUMAN CONSULTING PVT.LTD, C/O D C JAIN AND CO., 75, BOMBAY MUTUAL BUILDING, 1 ST FLOOR, DR. D N ROAD, FORT, MUMBAI - 400001 / VS. THE INCOME TAX OFFICER 8(2)(4), AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN. : AAFCM2128M / APPELLANT BY SHRI D C JAIN / RESPONDENT BY SHRI NAVIN GUPTA / DATE OF HEARING : 18.1.2016 / DATE OF PRONOUNCEMENT: 3. 2 . 201 6 / O R D E R P ER B R BASKARAN, AM : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 19.3.2013 PASSED BY THE LD.CIT(A) - 17 , MUMBAI FOR THE ASSESSMENT YEAR 2008 - 09 ON THE FOLLOWING ISSUE S: A ) ADDITION OF UNEXPLAINED CASH CREDIT OF 14,67,650/ - ; B ) DISALLOWANCE MADE U/S 40(A)(IA) OF RS.3,35,120/ - ; AND C ) DISALLOWANCE MADE UNDER SECTION40(A)(3) OF THE ACT AMOUNTING TO RS.1,50,000/ - 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE LD. C OUNS EL APPEARING FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT FOR THE YE A R UND E R CONSIDERATION WAS COMPLETED EX - PATE BY T HE AO U/S 144 OF THE ACT. ITA NO. 5430 / MUM/ 13 2 HOWEVER , THE ASSESSEE FURNISHED THE DETAILS BEFORE THE LD.CIT(A) AND HENCE , THE LD. CIT(A) CALLED FOR THE REMA ND FROM THE AO. IN THE REMAND ORDER, THE AO ERRONEOUSLY, TOOK THE VIEW THAT THE ASSESSEE HAD REPAID A SUM OF RS.4,26,794/ - OUT OF THE LOAN AMOUNT OF RS.14,67,649/ - AND ACCORDINGLY EXPRESSED THE VIEW THAT THERE IS DISCREPANCY IN THE ACCOUNTS MAINTAINED BY T HE ASSESSEE. THE LD.AR SUBMITTED THA T THE ASSESSEE DID NOT REPAY THE LOAN AS PRESUMED BY THE ASSESSING OFFICER. HE FURTHER SUBMITTED THAT THE ASSESSEE WOULD BE IN A POSITION TO CLARIFY THE MATTER, IF THIS ISSUE IS SET ASIDE TO THE FILE OF THE AO . 3 . WITH REGARD TO THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE ACT, THE LD. AR PLACED RELIANCE ON THE DECISION RENDERED BY THE KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF DCIT V/S FIVE STAR SHIPPING AGENCY (P) LTD (2015) 66 (II) ITCL 431 (KOL B T RIB) AND SUBMITTED THAT THE AMENDMENT BROUGHT IN IN TO SECTION 40(A)(IA) OF THE ACT BY THE FINANCE ACT, 2012 IS CURATIVE IN NATURE AND ACCORDINGLY, APPLICABLE TO THE YEAR UNDER CONSIDERATION. 4 . WITH REGARD TO THE DISALLOWANCE MADE U/S 40 A(3) OF THE AC T , THE LD A.R SUBMITTED THAT THE ASSESSEE HAD PAID MONEY FOR PURCHASE OF CAPITAL ASSETS IN THE FORM OF FURNITURE AND FITTINGS AND IT HAS BEEN HELD BY THE AHMEDABAD BENCH OF TRIBUNAL IN THE CASE OF PRIYA BLUE INDUSTRIES PVT. LTD. V/S ADDL.CIT IN IT A NO.629/ AHD/2010(AY - :2006 - 07 ) DATED 06 - 07 - 2012 THAT THE PAYMENT MADE BY WAY OF CASH IN RESPECT OF CAPITAL EXPENDITURE SHALL NOT ATTRACT THE PROVISIONS OF SECTION 40 A(3) OF THE ACT. 5 . ON THE CONTRARY, THE LD. DR SUBMITTED THAT ALL TH E S E ISSUE S MAY BE S ET ASIDE TO THE FILE OF THE AO FOR EXAMINING THE CLAIM OF THE ASSESSEE. ITA NO. 5430 / MUM/ 13 3 6 . HAVING HEARD THE RIVAL CONTENTIONS, WE FIND MERIT IN THE CONTENTION OF THE PARTIES AND ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORE ALL THE ABOVE SAID ISSUE S TO TH E FILE OF THE AO WITH A DIRECTION TO EXAMINE T HEM AFRESH BY DULY CONSIDERING THE INFORMATION AND EXPLANATION S THAT MAY BE FURNISHED BY THE ASSESSEE AND THE CASE LAW S RELIED UPON BY THE PARTIES IN THE RE - ASSESSMENT PROCEEDINGS. NEEDLESS TO MENTI ON THAT TH E ASSESSEE WILL EXTEND FULL CO - OPERATION TO THE AO BY FURNISHING ALL THE DETAILS AND EXPLANATION S THAT MAY BE CALLED FOR BY THE AO . 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 3 RD FEB , 2 01 6 . 3RD FEB, 2 01 6 SD SD ( PAWAN SINGH ) ( B.R. BASKARAN) JUDIC IAL MEMBER ACCOUNTANT MEMBER MUMBAI: 3RD FEB , 2 01 6 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDEN T. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI