Smt. Uma Devi Agrawal, Indore V. The Income Tax Officer, 5(2), Indore

ITA 595/IND/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53947 (ITAT-INDORE)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 19-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Keywords: Reasonable cause; TDS

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.595/IND/2010 A.Y. 2004-05 SMT. UMA DEVI AGRAWAL INDORE PAN ABTPA-2305C ... APPELLANT VS INCOME TAX OFFICER 5(2), INDORE ... RESPONDENT APPELLANT BY : SHRI RAM GILDA DEPARTMENT BY : SHRI ARUN DEWAN, SR. DR DATE OF HEARING : 17.10.2011 DATE OF PRONOUNCEMENT : 17.10.2011 O R D E R PER JOGINDER SINGH BY THIS APPEAL THE ASSESSEE CHALLENGES THE ACTION O F THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN CON FIRMING THE DISALLOWANCE OF INTEREST PAYMENT TO THE CREDITO RS . 2 2. THIS APPEAL IS BARRED BY TWO YEARS, 9 MONTHS AND 27 DAYS. THE ASSESSEE HAS MOVED AN APPLICATION FOR CONDONATI ON OF DELAY WHEREIN IT WAS SUBMITTED THAT THE APPEAL WAS PREPARED WELL IN TIME, APPEAL FEE PAYMENT WAS MADE BY WAY OF CHALLAN BUT INADVERTENTLY IT WAS FILED IN THE OFFICE OF THE LEARNED SENIOR DR (I.T.A.T.). IN SUPPORT OF HIS CLAIM, PHOTOCOPIE S OF CHALLAN AND THE ACKNOWLEDGEMENT ISSUED BY THE OFFICE OF THE SR. DR WERE FILED BEFORE US. IT WAS ALSO CONTENDED THAT W HEN THE APPEAL COULD NOT COME UP FOR HEARING, THE MATTER WA S INQUIRED AND THEN THE ASSESSEE CAME TO KNOW ABOUT HIS FAULT. HE ACCORDINGLY MADE AN APPLICATION TO THE OFFICE OF TH E LEARNED SR. DR WHO RETURNED THE APPEAL ON 9.10.2010 FOR WHICH O UR ATTENTION WAS INVITED TO THE COVERING LETTER OF THE SR. DR WHICH IS AVAILABLE ON RECORD. THESE FACTS WERE NOT CONTR OVERTED BY THE LEARNED SENIOR DR. IN VIEW OF THESE FACTS, IT W AS REQUESTED TO CONDONE THE DELAY. WE FIND THAT THERE IS SUFFICI ENT AND REASONABLE CAUSE FOR THE DELAY OCCURRED IN FILING T HE APPEAL BEFORE THE TRIBUNAL, THEREFORE, WE CONDONE THE DELA Y. IN THIS VIEW OF THE MATTER, WE PROCEED TO DECIDE THE APPEAL ON MERIT. 3 3. DURING HEARING WE HAVE HEARD SHRI RAM GILDA, LD . COUNSEL FOR ASSESSEE AND SHRI ARUN DEWAN, LEARNED S ENIOR DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSING OFFICER DISALLOWED THE INTEREST PAYME NT OF RS. 2,95,480/- FOR THE REASON THAT THE ASSESSEE FAILED TO CHARGE INTEREST ON OLD ADVANCES. IT WAS CONTENDED THAT THE ASSESSEE PAID INTEREST OF RS. 4,.98,675/- TO VARIOUS CREDITO RS AS PER INTEREST ACCOUNT AND DEDUCTED TDS THEREON FOR WHICH OUR ATTENTION WAS INVITED TO VARIOUS PAGES. IT WAS FUR THER SUBMITTED THAT MAJOR PORTION OF THESE LOANS WAS TAKEN DURING THE YEAR AND THE ASSESSING OFFICER WRONGLY HELD THAT THE INTERES T PAYMENT WILL NOT BE ALLOWED AS THE ASSESSEE HAS NOT CHARGED IN ON CERTAIN OLD OUTSTANDING AND NON-RECOVERABLE AMOUNTS . IT WAS FURTHER CONTENDED THAT NECESSARY DOCUMENTS/COPY OF ACCOUNTS WERE FILED BEFORE THE ASSESSING OFFICER. 4. ON THE OTHER HAND, THE LEARNED SENIOR DR CONTEN DED THAT THERE WERE INFLOW AND OUTFLOW OF FUNDS THROUGHOUT T HE YEAR WITH THE ASSESSEE AND WHATEVER AMOUNTS WERE RECEIVED BY THE ASSESSEE, THE SAME WERE DEPOSITED IN CANARA BANK OD 4 ACCOUNT AND THE AMOUNTS WERE WITHDRAWN THROUGH CHEQ UE MEANING THEREBY THE ASSESSEE DID NOT HAVE ANY SURPL US FUND AND THE ENTIRE WITHDRAWALS/ADVANCES WERE MADE FROM THE OD ACCOUNT. THE IMPUGNED ORDER WAS DEFENDED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON FILE. THE FACTS IN BRIEF ARE THAT THE ASSESSEE PRODUCED THE INTEREST ACCOUNT WITH THE LEA RNED ASSESSING OFFICER WHICH SHOWS THAT THE ASSESSEE REC EIVED RS. 11,74,870/- AND HE PAID RS.4,98,675/- DURING THE YE AR AND THUS THE ASSESSEE DID NOT RECEIVED ANY INTEREST FROM M/S RADHAMOHAN AGRO ENTERPRISES AND OTHERS DURING THE Y EAR. THE THRUST OF ARGUMENTS ON BEHALF OF THE REVENUE IS THAT THE ASSESSEE FAILED TO CHARGE INTEREST ON ADVANCES WHER EAS HE PAID INTEREST @ 10% TO 12% TO THE FAMILY MEMBERS. THE MAJOR REASON FOR DISALLOWANCE BY THE LEARNED ASSESSING OF FICER IS THAT THE ASSESSEE PAID INTEREST OVER UNSECURED LOAN WHER EAS HE DID NOT CHARGE INTEREST ON HIS OWN AMOUNT KEPT WITH OTH ERS, THEREFORE, HE DISALLOWED RS. 2,95,480/- WHICH WAS P AID AS INTEREST AND WAS ADDED TO THE TOTAL INCOME OF THE A SSESSEE. 5 THE STAND OF THE ASSESSING OFFICER WAS AFFIRMED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND IS UNDER C HALLENGE BEFORE US. WE HAVE PERUSED THE RECORD AND EXAMINED THE MATERIAL AVAILABLE. FROM PAGE 3 OF THE PAPER BOOK WE FIND THAT THE PROPRIETORS CREDIT BALANCE AS ON 31.3.2004 WAS RS. 1,05,24,875/- AND IF THE AMOUNT OF RS.36,93,502/- I S DEBITED WHICH WAS SAID TO BE WITHOUT INTEREST THEN THE CRED IT BALANCE COMES TO RS. 68,31,373/-. THE ASSESSING OFFICER DIS ALLOWED RS.2.95,480/- OUT OF WHICH THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED INTEREST TO THE TUNE O F RS.60,335/- AND THUS SUSTAINED THE INTEREST AT RS. 2,35,145/-. FROM PAGE 4 OF THE PAPER BOOK WE FIND THAT IN CASE OF M/S RADHAMOHAN AGENCIES THE ASSESSEE RECEIVED INTEREST OF RS.11,74,870/- FOR THE YEAR 2003-04 AT THE RATE OF 12% PER ANNUM AND THE INTEREST PAID FOR THE YEAR 2003-04 TO THE TUNE OF RS.4,98,675/- (PAGE 5 OF THE PAPER BOOK ). ALL THESE DOCUMENTS WERE DULY FILED BEFORE THE ASSESSING OFFI CER. ALL THESE LOANS WERE RAISED DURING THE YEARS AND THESE ARE OLD DEBIT BALANCES AS IS EVIDENT FROM TRADING AND PROFI T AND LOSS 6 ACCOUNT FOR THE PERIOD ENDING ON 31.3.2004 (PAGE 19 OF THE PAPER BOOK). THE FACTUM OF OLD DEBIT BALANCES WAS N OT CONTROVERTED BY THE REVENUE. IN VIEW OF THESE FACT S, WE REVERSE THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND ALLOW THIS GROUND OF THE ASSESSEE. ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRES ENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT T HE CONCLUSION OF THE HEARING. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17.10.2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/- 7