DCIT CC-1, MUMBAI V. CAPETOWN MERCANTILE CO. P.LTD, MUMBAI

ITA 5957/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8574 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-10-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 25-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A K GHOSH
• Keywords: Business income; Business expenditure; Question of law; Accommodation entries
• Section: 133A; 133(6); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL (J.M.) AND SHRI D. KARUNAKARA RAO (A.M.) ITA NO. 6037/MUM /2011 ASSESSMENT YEAR : 2008-09 M/S CAPETOWN MERCANTILE CO. PVT. LTD., 626, PANCHRATNA BUILDING, OPERA HOUSE, MUMBAI 400 004. PAN AACCC 7400M VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -1, AAYAKAR BHAVAN, MUMBAI 400 020. (APPELLANT) (RESPONDENT) ITA NO. 5957/MUM /2011 ASSESSMENT YEAR : 2008-09 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -1, R.NO. 902, 9 TH FLOOR, OLD CGO BUILDING ANNEXE, M.K. ROAD, MUMBAI 400 020. VS. M/S CAPETOWN MERCANTILE CO. PVT. LTD., 626, PANCHRATNA BUILDING, OPERA HOUSE, MUMBAI 400 004. PAN AACCC 7400M. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI RAJIV KHANDELWAL & SHRI A.K. GHOSH DEPARTMENT BY : SHRI RAJARSHI DWIVEDY DATE OF HEARING 11-10-2012 DATE OF PRONOUNCEMENT 19-10-2012 O R D E R PER DINESH KUMAR AGARWAL, J.M. THESE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE ORDER DTD. 10-06-2011 PASSED BY THE LD. CIT(A) FOR THE A.Y. ITA NO. 6037/MUM/2011 & 5957/MUM/2011 2 2008-09.BOTH THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TRADING OF GOODS. A SEA RCH/SURVEY OPERATION U/S 132(1) AND 133A OF THE INCOME TAX ACT, 1961 (TH E ACT) WERE CONDUCTED IN THE CASES OF SHRI PRAVIN KUMAR JAIN GR OUP AND PERSONS/ENTITIES CONNECTED WITH HIM ON 31-03-2008. THE ASSESSEE COMPANY IS AN ASSOCIATE CONCERN OF SHRI PRAVIN KUMA R JAIN GROUP. THE DIRECTORS OF THIS COMPANY ARE SHRI PRAVIN KUMAR JAI N AND SHRI PANKAJ KUMAR JAIN, BROTHER OF SHRI PRAVIN KUMAR JAIN. THE ASSESSEE HAS FILED E- RETURN OF INCOME ON 30-09-2008 DECLARING TOTAL INCO ME OF RS. NIL. HOWEVER, THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS. 62,85,950/- VIDE ASSESSMENT ORDER DTD. 31-12-2010 PASSED U/S 14 3(3) OF THE ACT. ON APPEAL THE LD. CIT(A) PARTLY ALLOWED THE APPEAL. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE AND THE REVENUE BOTH ARE IN APPEAL BEFORE US. ITA NO. 6037/MUM/2011 (BY ASSESSEE) 4. ALL THE GROUNDS TAKEN BY THE ASSESSEE ARE AGAINS T THE REJECTION OF BOOK RESULTS U/S 145(3) OF THE ACT AND SUSTENANCE O F ADDITION. ITA NO. 6037/MUM/2011 & 5957/MUM/2011 3 5. THE ASSESSEE VIDE LETTER DTD. 8-10-2012 HAS ALSO FILED ADDITIONAL GROUND OF APPEAL THAT THE LD. CIT(A) ERRED IN CONFI RMING THE DISALLOWANCE OF RS. 40,42,634/-. 6. THE ASSESSEE FOR THE ADMISSION OF THE ADDITIONAL GROUND OF APPEAL RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. VS. CIT (1998) 229 ITR 383 (SC). 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. LARGE R BENCH OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERM AL POWER CO. LTD. (SUPRA) OBSERVED THAT THE QUESTION OF LAW WHICH ARO SE FROM THE FACT AS FOUND BY THE INCOME-TAX AUTHORITY ANY LEGAL ISSUE C AN BE RAISED AT ANY STAGE. THE HONBLE SUPREME COURT OBSERVED THAT (PA GE 387) : WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS WHICH ARE ON RECORD IN THE ASSESSMEN T PROCEEDINGS WE FAIL TO SEE WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER THAT QUESTION IN ORDER TO COR RECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. RESPECTFULLY FOLLOWING THE ABOVE DECISION, WE ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. 8. DURING THE ASSESSMENT PROCEEDINGS IT WAS, INTER ALIA, OBSERVED BY THE A.O. THAT DURING THE COURSE OF SEARCH/SURVEY PR OCEEDINGS CONDUCTED AT RESIDENTIAL AND BUSINESS PREMISES OF SHRI PRAVIN KUMAR JAIN, CHEQUE BOOKS OF MANY CONCERNS, BANK LETTER HEADS, SIGNED A ND UNSIGNED CHEQUES AND BANK STATEMENTS OF VARIOUS CONCERNS ETC . WERE FOUND. ITA NO. 6037/MUM/2011 & 5957/MUM/2011 4 DURING THE SEARCH PROCEEDINGS, STATEMENT OF SHRI PR AVIN KUMAR JAIN WAS RECORDED U/S 132(4) OF THE ACT ON 31-3-2008. IN HI S STATEMENT SHRI PRAVIN KUMAR JAIN WAS SPECIFICALLY ASKED ABOUT HIS RELATIONSHIP WITH THE CONCERNS IN WHOSE NAMES BLANK LETTER HEADS WERE FOU ND. THE RELEVANT PORTION OF HIS STATEMENT IS REPRODUCED BELOW:- Q.9. I AM SHOWING YOU THE FOLLOWING BUSINESS CONCER NS EMPTY LETTER HEAD PAPERS WHICH ARE FOUND DURING THE COURSE OF SE ARCH ACTION U/S. 132 AT YOUR PREMISES NO. 512, C-WING, OSTWAL ONYZ BLDG. , BHAYANDER. PLEASE EXPLAIN THE SAME. 1) SHAH INDUSTRIES 2) H. VINAY & CO. 3) NEW PLANET TRADING CO. PVT. LTD. 4) DIAMOND STAR 5) KANAK GEMS 6) P.P. IMPEX 7) N.R. CORPORATION ANS. IN THE ABOVE COMPANY NAMES I HAVE BEEN GIVING ACCOMMODATION BILLS IN THE YEARS 2003,2004 AND 2005 TO VARIOUS PA RTIES LIKE ARIHANT CORPORATION, ANTRIX DIAMOND, JAYPEE TEXTILE, TIRUPA TI SYNTHETICS ETC. GOSALIA DIAMOND, MUMBAI. ALL THIS TRANSACTION WERE MADE THROUGH FOLLOWING BA NKS: 1) A.P. MAHESH CO.OP. BANK BHULESHWAR, MUMBAI 2) ABN AMRO BANK-FORT, MUMBAI 3) UNION BANK OF INDIA, KALBADEVI, MUMBAI THE A/C NOS ARE NOT IN MY MEMORY RIGHT NOW, I WILL FURNISH IN TWO DAYS TIME. AGAIN ON 17.5.2008, SHRI PRAVIN JAIN WAS CONFRONTED ON THE EVIDENCES SEIZED AND STATEMENT U/S. 132(4) RECORDED EARLIER. Q.9. FROM YOUR STATEMENT RECORDED ON THE DATE OF SEARCH AT YOUR RESIDENT I.E. ON 31.3.2008, I AM REPRODUCING THE QU ESTION NO. 9 AND ITS ANSWER AS BELOW: Q.9. I AM SHOWING YOU THE FOLLOWING BUSINESS CONCER NS EMPTY LETTER HEAD PAPERS WHICH ARE FOUND DURING THE COURSE OF SEARCH ACTION U/S. 132 AT YOUR PREMISES NO. 512, C-WING, OSTWAL ONYZ BLDG., B HAYANDER. PLEASE EXPLAIN THE SAME. ITA NO. 6037/MUM/2011 & 5957/MUM/2011 5 8) SHAH INDUSTRIES 9) H. VINAY & CO. 10) NEW PLANET TRADING CO. PVT. LTD. 11) DIAMOND STAR 12) KANAK GEMS `13) P.P. IMPEX 14) N.R. CORPORATION ANS. IN THE ABOVE COMPANY NAMES I HAVE BEEN GIVING ACCOMMODATION BILLS IN THE YEARS 2003,2004 AND 2005 TO VARIOUS PA RTIES LIKE ARIHANT CORPORATION, ANTRIX DIAMOND, JAYPEE TEXTILE, TIRUPA TI SYNTHETICS ETC. GOSALIA DIAMOND, MUMBAI. ALL THIS TRANSACTION WERE MADE THROUGH FOLLOWING BA NKS: 4) A.P. MAHESH CO.OP. BANK BHULESHWAR, MUMBAI 5) ABN AMRO BANK-FORT, MUMBAI 6) UNION BANK OF INDIA, KALBADEVI, MUMBAI THE A/C NOS ARE NOT IN MY MEMORY RIGHT NOW, I WILL FURNISH IN TWO DAYS TIME. FROM YOUR ABOVE STATEMENT AND FROM THIS STATEMENT I T IS CLEAR THAT YOU ARE NOT DOING ANY BUSINESS EXCEPT PROVIDING ACCOMMO DATION BILLS TO THE PARTIES. PLEASE OFFER YOUR COMMENT. THERE IS NO ANSWER FROM SHRI PRQAVIN KUMAR JAIN FO R 10 MINUTES. Q. NO.10. I AM ASKING THE SAME QUESTION AS ASKED I N Q. NO.9. PLEASE OFFER YOUR COMMENT. ANS. NO COMMENTS. THE A.O. AFTER REPRODUCING THE INVENTORIES OF CHEQU E BOOKS FOUND AND SEIZED IN THE LOCKER NO. 2105 AT NAYAN SAFE DEPOSIT VAULT AT PRASAD CHAMBER COMPOUND, OPERA HOUSE, MUMBAI -4 STANDING IN THE NAMES OF SHRI PANKAJ H. JAIN AND OTHERS AND THE NAME OF ASSO CIATE CONCERN OF SHRI PRAVIN KUMAR JAIN AND SHRI PANKAJ KUMAR JAIN AND OTHERS AT PAGE 4 TO 6 OF THE ASSESSMENT ORDER OBSERVED THAT SHRI P RAVIN KUMAR JAIN AND ASSOCIATED PERSONS/CONCERNS ARE ENGAGED IN THE BUSI NESS OF PROVIDING ITA NO. 6037/MUM/2011 & 5957/MUM/2011 6 ACCOMMODATION/BILL ENTRIES TO THE PARTIES BY USING THE LETTER HEADS, CHEQUE BOOKS OF VARIOUS PERSONS/CONCERNS. THE A.O. ALSO NOTED THAT THE ASSESSEE HAS SHOWN PURCHASES FROM SEVEN CONCERNS AN D SOLD TO TEN PARTIES. FROM THE ABOVE EVIDENCES AND TRANSACTIONS , THE A.O. FURTHER OBSERVED THAT IT IS ESTABLISHED THAT THE ASSESSEE C OMPANY IS ALSO ENGAGED IN THE ACTIVITIES OF PROVIDING ACCOMMODATION BILLS. THE ASSESSEE WAS ASKED TO FILE THE EXPLANATION AS TO WHY THE ENTIRE BUSINESS CONDUCTED SHOULD NOT BE CONSIDERED AS PROVIDING ACCOMMODATION BILLS/CIRCULAR TRANSACTIONS AND WHY THE COMMISSION EARNED ON THE S AID ACTIVITIES SHOULD NOT BE TAXED IN ASSESSEES HANDS. IN REPLY, IT WAS STATED BY THE ASSESSEE THAT IT IS NOT ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION BILLS AND, HENCE, THE QUESTION OF MAK ING ANY ADDITION ON ACCOUNT OF COMMISSION ON THE ALLEGED BUSINESS OF PR OVIDING ACCOMMODATION BILLS DOES NOT ARISE. HOWEVER, THE A .O. DID NOT ACCEPT THE ASSESSEES EXPLANATION AND HELD THAT THE STATE OF AFFAIRS IS NOTHING BUT THE ACTIVITIES OF PROVIDING ACCOMMODATION BILLS /ENTRIES AND ACCORDINGLY THE A.O. WHILE REJECTING THE BOOKS OF A CCOUNTS U/S 145(3) OF THE ACT ESTIMATED THE INCOME FROM COMMISSION/BROKER AGE/CONSIDERATION AT RS. 47,20,929/- BEING 1% (NET OF EXPENSES) ON TH E TOTAL TURNOVER OF RS. 47,20,92,885/- AND ASSESSED THE SAME AS BUSINESS IN COME. 9. ON APPEAL, THE LD. CIT(A) WHILE OBSERVING THAT T HE ADDITION HAS BEEN MADE ON ESTIMATED BASIS WITHOUT POINTING OUT A NY SPECIFIC DEFECT IN ITA NO. 6037/MUM/2011 & 5957/MUM/2011 7 THE BOOKS OF ACCOUNTS, REDUCED THE PROFIT RATE TO 0 .5% AS AGAINST 1% APPLIED BY THE A.O. AND ACCORDINGLY REDUCED THE IN COME BY RS. 23,60,464/-. 10. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITS THAT BOTH THE ISSUES ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN GROUP CONCERN OF TH E ASSESSEE M/S EASY MERCANTILE PVT. LTD. VS. DCIT IN ITA NO. 6035/MUM/2 011 FOR A.Y. 2008- 09 AND M/S SBJ TRADING (I) PVT. LTD. VS. DCIT IN IT A NO. 6038/MUM/2011 FOR A.Y. 2008-09 VIDE ORDER DTD. 27-7 -2012, THEREFORE, THE ADDITION/DISALLOWANCE SUSTAINED BY THE LD. CIT( A) BE DELETED. 11. ON THE OTHER HAND, THE LD. D.R. WHILE RELYING O N THE ORDER OF THE A.O. STRONGLY RELIED ON THE ANSWER TO QUESTION NO. 9 OF THE STATEMENT DTD. 31-3-2008 AND ANSWER TO QUESTION NO. 9 & 10 OF THE STATEMENT DTD. 17-5- 2008 OF SHRI PRAVIN KUMAR JAIN AND THE MATERIAL FOU ND DURING THE COURSE OF SEARCH. HE FURTHER SUBMITS THAT FOR THE REASONS AS MENTIONED IN THE ASSESSMENT ORDER, THE INCOME ESTIMATED BY TH E A.O. IS MORE THAN REASONABLE, THEREFORE, THE RELIEF ALLOWED BY THE LD . CIT(A) BE REVERSED AND THAT THE ADDITION MADE BY THE A.O. BE RESTORED. ITA NO. 6037/MUM/2011 & 5957/MUM/2011 8 12. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUT E THAT THE TRIBUNAL IN THE CASE OF M/S EASY MERCANTILE PVT. LTD. (SUPRA) A FTER CONSIDERING THE SIMILAR QUESTIONS AND ANSWERS GIVEN BY SHRI PRAVIN KUMAR JAIN, THE SAME SEIZED MATERIAL, ASSESSMENT ORDER AND ORDER OF THE LD. CIT(A) WHILE ACCEPTING THE RETURNED INCOME HAS HELD VIDE PARA 8 OF THE ORDER AS UNDER:- 8. IT IS ALSO A FACT THAT WHILE EXAMINING THE SALE S MADE BY THE ASSESSEE COMPANY, THE AO ISSUED NOTICE U/S. 133(6) OF THE AC T TO THE PARTIES WHO CONFIRMED THE TRANSACTION MADE WITH THE ASSESSEE. A DMITTEDLY, NO INCRIMINATING MATERIAL FROM ANY OF THE PARTIES HAVI NG DEALINGS WITH THE ASSESSEE COMPANY WERE EITHER BROUGHT ON RECORD OR W ERE AVAILABLE TO SUBSTANTIATE THE ALLEGATION OF PROVIDING ACCOMMODAT ION BILLS, ONLY BECAUSE ONE SHRI PRAVIN KUMAR JAIN IN HIS STATEMENT HAS ACCEPTED OF PROVIDING ACCOMMODATION BILLS CANNOT IPSO FACTO MAK E THE ASSESSEE COMPANY ALSO TO BE ENGAGED IN THE SAME KIND OF BUSI NESS. WE HAVE ALSO PERUSED THE AUDITED STATEMENT OF ACCOUNTS FILED BY THE ASSESSEE. ON A CAREFUL CONSIDERATION OF THE BALANCE SHEET, WE FIND THAT THERE ARE UNSECURED LOANS TO THE TUNE OF RS. 8,01,00,000/-. T HE GENUINENESS OF WHICH HAS NOT BEEN DOUBTED BY THE AO. UNDER THE HEA D CURRENT ASSETS LOANS AND ADVANCES, THERE IS AN ITEM OF VAT RECEIVA BLE AMOUNTING TO RS. 16,738/- WHICH HAS ALSO NOT BEEN QUESTIONED BY THE AO AND THERE ARE OTHER ADVANCES INCLUDING SUNDRY CREDITORS. THE AO H AS ESTIMATED A COMMISSION INCOME FROM THE ALLEGED BUSINESS OF PROV IDING ACCOMMODATION BILLS. THE AO HAS TAKEN THE TURNOVER OF THE ASSESSEE SHOWN IN ITS AUDITED STATEMENT OF ACCOUNTS I.E. RS. 3,55,08,600/-. THOUGH THE ASSESSING OFFICER HAS TREATED THIS ENTIR E SALE AS ACCOMMODATION ENTRIES BUT AT THE SAME TIME, GROSSLY FAILED INTO BRINGING ANY COGENT MATERIAL EVIDENCE ON RECORD TO SHOW THAT THE ASSESSEE WAS ACTUALLY ENGAGED IN THE BUSINESS OF PROVIDING ACCOM MODATION BILLS/ENTRIES. EVEN REFERENCE OF THE STATEMENT OF S HRI PRAVIN KUMAR JAIN WOULD NOT HELP AO BECAUSE IN HIS ENTIRE STATEMENT A LONGWITH NAME OF THE CONCERN TO WHOM HE HAS ACCEPTED OF GIVING ACCOMMODA TION BILLS, THERE IS NO REFERENCE OF THE NAME OF THE ASSESSEE COMPANY. A S NOTHING HAS BEEN BROUGHT ON RECORD TO HOLD THAT THE ASSESSEE IS ENGA GED IN PROVIDING ACCOMMODATION BILLS, MERELY ON THE BASIS OF THE STA TEMENT OF SHRI PRAVIN KUMAR JAIN, WHICH HAS NO BEARING/REFERENCE TO THE A SSESSEE COMPANY, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSE E. IN FACT THE ENTIRE ITA NO. 6037/MUM/2011 & 5957/MUM/2011 9 ASSESSMENT HAS BEEN FRAMED ON IRRELEVANT FACTS THER EFORE THE ASSESSMENT MADE BY THE AO CANNOT BE ACCEPTED. THE LD. CIT(A) H AS ERRED IN CONFIRMING THIS ASSESSMENT. AS WE HAVE HELD THAT CO MMISSION INCOME IS NOT ASSESSABLE IN THE HANDS OF THE ASSESSEE, ITS RE TURN AS PER ACCOUNT IS ACCEPTED AND THE ADDITION MADE WITH RESPECT TO COMM ISSION IS DELETED. AS THE RETURNED INCOME HAS BEEN ACCEPTED, THE ADDIT IONAL GROUND RAISED BY THE ASSESSEE FOR ALLOWABILITY OF EXPENSES AGAINS T COMMISSION HAS BECOME INFRUCTUOUS, THEREFORE NEED NOT BE ADJUDICAT ED SEPARATELY. 13. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BR OUGHT ON RECORD BY THE LD. D.R., WE RESPECTFULLY FOLLOWING THE CONSIST ENT VIEW OF THE TRIBUNAL AND KEEPING IN VIEW THAT THE LD. D.R. HAS NOT BROUG HT ON RECORD ANY NEW MATERIAL WHICH HAS NOT BEEN CONSIDERED BY THE TRIBU NAL (SUPRA) WE ARE OF THE VIEW THAT THE ESTIMATED ADDITION MADE BY THE A. O. AT 1% OF THE TOTAL TURNOVER WITHOUT BRINGING ANY SUPPORTING MATERIAL O N RECORD AND REDUCED BY THE LD. CIT(A) TO 0.5% WITHOUT ANY BASIS IS NOT SUSTAINABLE IN LAW AND ACCORDINGLY WE HOLD THAT THE COMMISSION INC OME IS NOT ASSESSABLE IN THE HANDS OF THE ASSESSEE AND, HENCE, WE DELETE THE ADDITION SUSTAINED BY THE LD. CIT(A) IN THIS REGARD . SINCE WE HAVE DELETED THE ENTIRE ADDITION MADE BY THE A.O. UNDER THE HEAD BUSINESS INCOME AND IN THE ABSENCE OF ANY MATERIAL TO SHOW AS TO HO W THE BUSINESS EXPENDITURE OF RS. 40,42,634/- IS ALLOWABLE, THE AD DITIONAL GROUND RAISED BY THE ASSESSEE IS, THEREFORE, REJECTED. ITA NO. 5957/MUM/2011 (BY REVENUE) 14. GROUND NO. 1 IS AGAINST THE PART RELIEF ALLOWED BY THE LD. CIT(A) IN RESPECT OF BUSINESS INCOME. ITA NO. 6037/MUM/2011 & 5957/MUM/2011 10 15. AFTER HEARING THE RIVAL PARTIES AND PERUSING TH E MATERIAL AVAILABLE ON RECORD AND KEEPING IN VIEW OF OUR FINDING RECORD ED IN ASSESSES APPEAL (SUPRA) WHEREIN WE HAVE DELETED THE ENTIRE ADDITION MADE BY THE A.O. AND PARTLY SUSTAINED BY THE LD. CIT(A), THEREFORE, FOLL OWING THE SAME WE REJECT THE GROUND TAKEN BY THE REVENUE. 16. GROUND NO. 2 IS AGAINST THE DELETION OF ADDITIO N OF INTEREST INCOME OF RS. 15,61,615/-. 17. BRIEF FACTS OF THE ABOVE ISSUE ARE THAT BEFORE THE LD. CIT(A) IT WAS STATED BY THE ASSESSEE THAT THE INTEREST RECEIVED W AS SEPARATELY ASSESSED BY THE A.O. WITHOUT CONSIDERING THE INTEREST PAID B Y THE ASSESSEE OF RS. 31,60,783/-. IT WAS FURTHER SUBMITTED BY THE ASSES SEE THAT IN THE ASSESSMENT ORDER NO REASONS ARE GIVEN FOR THIS ADDI TION. ACCORDING TO THE ASSESSEE SINCE IT HAS BORROWED THE AMOUNT DURIN G THE YEAR ON WHICH IT HAS PAID INTEREST OF RS. 31,60,783/- WHICH IS MO RE THAN THE INTEREST RECEIVED, THEREFORE, NO ADDITION IS CALLED FOR. TH E LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE WHILE OB SERVING THAT THE ASSESSMENT ORDER IS SILENT ABOUT THE IMPUGNED ADDIT ION HELD THAT SINCE THE INTEREST PAYMENT IS MORE THAN THE INTEREST RECE IVED, THE A.O. IS DIRECTED TO DELETE THE ADDITION OF RS. 15,61,615/-. 18. AT THE TIME OF HEARING THE LD. D.R. SUPPORTS TH E ORDER OF THE A.O. ITA NO. 6037/MUM/2011 & 5957/MUM/2011 11 19. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE RELIED ON THE ORDER OF THE LD. CIT(A). 20. AFTER HEARING BOTH THE SIDES AND PERUSING THE M ATERIAL AVAILABLE ON RECORD AND IN THE ABSENCE OF ANY CONTRARY MATERIAL PLACED ON RECORD BY THE REVENUE AGAINST THE FINDING OF THE LD. CIT(A), WE ARE OF THE VIEW THAT SINCE THE PAYMENT OF INTEREST IS MORE THAN THE INTE REST RECEIVED, THE A.O. WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 15, 61,615/- AND, HENCE, THE LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE SAME. THE GROUND TAKEN BY THE REVENUE IS, THEREFORE, REJECTED. 21. IN THE RESULT, ASSESSEES APPEAL STAND PARTLY A LLOWED AND REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON 19-10-2012 SD/- (D. KARUNAKARA RAO ) ACCOUNTANT MEMBER SD/- (DINESH KUMAR AGARWAL) JUDICIAL MEMBER MUMBAI, DATED : 19-10-2012. RK ITA NO. 6037/MUM/2011 & 5957/MUM/2011 12 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- 36, MUMBA I 4. COMMISSIONER OF INCOME TAX CENTRAL -1, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH C, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI