Shri Ketan Chhotalal Bagadia , Chennai V. ACIT,NCC-9(1), Chennai

ITA 583/CHNY/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9986 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 12-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L. JANCY ELIZABETH RANI LD
• Keywords: Tax effect; Tax effect
• Section: 143(3)

Judgement Text

आयकर अपीलीय अिधकरण ‘बी’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI माननीय +ी वी. द ु गा1 राव, ाियक सद3 एवं माननीय +ी मनोज कु मार अ8वाल ,लेखा सद3 के सम:। BEFORE HON’BLE SHRI V. DURGA RAO, JUDICIAL MEMBER AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No.583/Chny/2021 (िनधा1रणवष1 / Assessment Year: 2014-15) Shri Ketan Chhotalal Bagadia No. 28, Amrut Villa, Ritherdon Road, Vepary, Chennai – 600 007 (TN) बनाम/ V s. ACIT Non-Corporate Circle -9(1), Chennai – 34. थायीलेखासं./जीआइआरसं./P AN /GI R No. AAK P K -7 4 1 8 -G (अ पीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri B. Rama Krishnan (FCA) – Ld. AR थ कीओरसे/Respondent by : Ms. L. Jancy Elizabeth Rani (JCIT) – Ld. DR सुनवाईकीतारीख/Date of Hearing : 27-06-2022 घोषणाकीतारीख /Date of Pronouncement : 06-07-2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2014-15 arises out of the order of learned Commissioner of Income Tax (Appeals)-10, Chennai [CIT(A)] dated 28.02.2019 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 30.11.2016.The grounds taken by the assessee read as under: 1. The order of the Learned Commissioner of Income Tax (Appeals) is contrary to the law, facts and circumstances of the case. 2. For that the Learned Commissioner of Income Tax (Appeals) erred in, confirming the disallowances made u/s 57 of the Act amounting to - 2 - ITA No: 583/Chny/2021 Rs.4,50,000/- on account of interest payment to M/s Mukut Gems (Tax effect Rs.1,39,050/-). 3. For that the Learned Commissioner of Income Tax (Appeals) erred in, confirming the disallowances made u/s 57 of the Act amounting to Rs.13,50,000/- on account of interest payment to M/s Sidhi Gems without considering the confirmation letter received. (Tax effect Rs. 4, 17, 150/-). As evident, the assessee is aggrieved by confirmation of certain disallowances u/s 57. 2. The Registry has noted a delay of 959 days in the appeal, the condonation of which has been sought by the assessee on the strength of an affidavit. It has been stated that the impugned order was passed on 28.02.2019. The assessee was a director in an entity namely M/s. Nexus Electro Steel Limited which was passing through insolvency resolution process and the relevant application was admitted by Hon’ble NCLT on 30.03.2021. In the meantime, since March, 2020 nation-wide lockdown was announced due to outbreak of Covid-19 pandemic causing the restriction on the movement of the public thereby affecting the business. In the Month of April, 2020 the accountant of the company who was looking after the accounts, left employment without giving prior notice. All these facts led to the delay in filing of the appeal. The Ld. AR pleaded for condonation of delay which has been opposed by Ld. Sr. DR. After considering the arguments of Ld. AR as well as after considering the ratio laid down by Hon’ble Supreme Court in the case of Land Acquisition vs Msr. Katiji in [1987] 1987 Taxmann.com 1072 (SC) as well as considering the lockdown situation arising out of Covid-19 Pandemic, we condone the delay and admit the appeal for adjudication on merits. - 3 - ITA No: 583/Chny/2021 3. The Ld. AR, at the outset, pleaded for admission of additional evidences as submitted vide letter dated 11.05.2022 along with a petition u/r 29 of the Income Tax (Appellate Tribunal) Rules, 1963. These evidences are in the shape of confirmation letter from M/s. Mukut Gems, Surat and certain extract of bank statement to substantiate the interest payment. The Ld. Sr. DR submitted that the assessee could not substantiate its claim and therefore, the disallowance was justified. 4. We find that the assessee was assessed u/s. 143(3) on 30.11.2016. The assessee earned interest income of Rs.29.29 Lacs and offered the same as income from other sources. The assessee claimed corresponding expenses u/s. 57 for Rs. 41.39 Lacs. The expenditure was in the nature of interest paid to various parties and audit fees. However, the assessee could not produce confirmation from two parties i.e., M/s. Mukut Gems and M/s Sidhi Gems to whom aggregate interest of Rs.18 Lacs was paid. Consequently, the same was disallowed. 5. During appellate proceedings, the assessee filed confirmation letter from M/s Sidhi Gems and pleaded for admission of additional evidence in accordance with Rule 46A of IT Rules. However, rejecting the same, Ld. CIT(A) confirmed the additions. Aggrieved, the assessee is in further appeal before us. 6. We find the impugned disallowance has been made for want of confirmation letters. The assessee is now in possession of these documents. Therefore, considering the principle of natural justice, we direct Ld. AO to consider these additional evidences and re-adjudicate the issue of disallowance of Rs.18 Lacs. The assessee is directed to file the requisite details. - 4 - ITA No: 583/Chny/2021 7. The appeal stand allowed for statistical purposes. Order pronounced on 06 th July, 2022. Sd/- (V. DURGA RAO) ाियक सद3 /JUDICIAL MEMBER Sd/- (MANOJ KUMAR AGGARWAL) लेखासद3 /ACCOUNTANT MEMBER चे*ई/ Chennai ; िदनांक/ Dated : 06-07-2022 JPV आदेशकीUितिलिपअ8ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant2. यथ /Respondent 3. आयकरआयु (अपील)/CIT(A) 4. आयकरआयु /CIT 5. िवभागीय ितिनिध/DR6. गाड फाईल/GF