ONIX ENCLACE P. LTD, MUMBAI V. ITO 13(1)(3), MUMBAI

ITA 6331/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4178 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 27-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARTIKEYAN
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Unexplained cash credit; Additional evidence; Non-deduction of tax; TDS; Set aside
• Section: 43B; 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENCH M UMBAI BEFORE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER & SHRI RAM LAL NEGI, JUDICIAL MEM BER ITA NO.6331/MUM/2016 ( ASSESSMENT YEAR :2013-14 ) M/S ONIX ENCLAVE PVT.LTD. 703/B, VASANT SAGAR SOCIETY, KEISHNA BLDNG, ALIYAVAR JUNG MARG, KANDIVALI (EAST) MUMBAI-400 101 VS. ITO-13(1)(2) AAYKAR BHAWAN M.K.ROAD MUMBAI-400 020 PAN/GIR NO.AABCO2284L APPELLANT ) .. RESPONDENT ) ASSESSEE BY M. SUBRAMANIAN REVENUE BY ABI RAMA KARTIKEYAN DATE OF HEARING 2 5 / 07 /201 9 DATE OF PRONOUNCEMENT 23/08/2019 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)21, MUM BAI, DATED 22/08/2016 AND IT PERTAINS TO THE ASSESSMENT YEAR 2 013-14. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. AO ERRED IN DISALLOWING THE AND ADDING BACK A SUM OF RS. 1,7 7,888/- BEING THE INTEREST PAID TO NBFC ON VEHICLE LOANS. 2. ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF T HE CASE THE LD.AO ERRED IN DISALLOWING AND ADDING BACK A SUM OF RS. 2 ,60,000/- BEING LOAN TAKEN FROM MR. SUNIL MISHRA. ITA NO.6331/MUM/2016 ONIX ENCLAVE PVT.LTD. 2 3. ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF T HE CASE, TEHLD.AO ERRED IN ADDING A SUM OF RS. 3,03,467/- AND RS. 25, 16,428/- BEING AMOUNT OF MVT AND SERVICE TAX PAYABLE SHOWN IN THE BALANCE SHEET. 4. ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF T HE CASE, THE LD.AO ERRED IN DISALLOWING A SUM OF RS. 2,41,182/- BEING THE AMOUNT OF LABOR CHARGES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF CONTRACTOR FOR LAYING A ND INSTALLATION OF GAS PIPELINE, SEWERAGE PIPELINE AND TELEPHONE CABLE LAYING ETC., FILED ITS RETURN OF INCOME FOR AY 2013-14 ON 20/09/2013, DECLARING TOTAL INCOME AT RS. 25,19,221/-. THE CASE WAS SELECTED F OR SCRUTINY AND THE ASSESSMENT HAS BEEN COMPLETED U/S 143(3) OF THE I.T.ACT, 1961, DETERMINING THE TOTAL INCOME AT RS. 63,99,843/- BY MAKING VARIOUS ADDITIONS, INCLUDING ADDITIONS TOWARDS INTEREST PAI D ON VEHICLE LOANS U/S 40A(IA) OF THE ACT, FOR FAILURE TO DEDUCT TAX A T SOURCE U/S 194A OF THE I.T.ACT, 1961, ADDITIONS TOWARDS DISALLOWANCES OF UNPAID SERVICE TAX AND VAT AND ALSO ADDITIONS TOWARDS UNEXPLAINED CASH CREDIT TOWARDS LOANS TAKEN FROM SHRI SUNIL MISHRA, FOR FAI LURE TO PROVE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDIT WO RTHINESS OF THE PARTIES. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A) , THE ASSESEE ITA NO.6331/MUM/2016 ONIX ENCLAVE PVT.LTD. 3 SUBMITTED THAT THE QUESTION OF TDS ON INTEREST PAYM ENT DOES NOT ARISE, BECAUSE THE ASSESEE HAS REPAID LOAN ON MONTH LY INSTALMENTS BY POST DATED CHEQUES TO NON BANKING FINANCE COMPA NIES. THEREFORE, THERE IS NO OCCASION FOR DEDUCTION OF TD S ON INTEREST PAYMENTS. SIMILARLY, THE ASSESEE HAS SUBMITTED THAT IT HAS FILED VARIOUS DETAILS, IN RESPECT OF LOANS TAKEN FROM SHR I SUNIL MISHRA. HOWEVER, THE AO HAS DISREGARDED ALL EVIDENCES FILED BY THE ASSESSEE. SIMILARLY, IN RESPECT OF DISALLOWANCES O F UNPAID LIABILITY OF VAT AND SERVICE TAX U/S 43B, IT WAS STATED THAT THE SAID LIABILITY WAS NOT TAKEN INTO ACCOUNT TO PROFIT AND LOSS ACCOUNT A ND HENCE, WHEN SUCH LIABILITY IS NOT TAKEN INTO PROFIT AND LOSS AC COUNT AND CORRESPONDING PAYMENT IS NOT CLAIMED AS DEDUCTION, THE QUESTION OF DISALLOWANCES OF UNPAID LIABILITY U/S 43(B) DOES NO T ARISE. THE LD. CIT(A), AFTER CONSIDERING RELEVANT SUBMISSIONS OF T HE ASSESSEE AND ALSO TAKEN NOTE OF FACTS BROUGHT OUT BY THE AO, DIS MISSED APPEAL FILED BY THE ASSESSEE AND SUSTAINED ADDITIONS MADE BY THE AO TOWARDS DISALLOWANCES OF INTEREST PAID ON VEHICLE L OANS U/S 40A(IA) R.W.S. 194A OF THE ACT, ADDITIONS TOWARDS UNEXPLAIN ED CASH CREDIT BEING LOAN TAKEN FROM SHRI SUNIL MISHRA, AND ALSO U NPAID LIABILITY TOWARDS VAT AND SERVICE TAX. AGGRIEVED BY THE LD.CI T(A) ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.6331/MUM/2016 ONIX ENCLAVE PVT.LTD. 4 5. THE LD. AR FOR THE ASSESSEE, AT THE TIME OF HEAR ING, SUBMITTED THAT THE ASSESSEE HAS FILED ADDITIONAL EVIDENCES UN DER RULE 29 OF THE I.T.RULES, 1963, IN RESPECT OF ADDITIONS MADE B Y THE AO TOWARDS DISALLOWANCES OF INTEREST U/S 40A(IA) FOR FAILURE T O DEDUCT TAX AT SOURCE U/S 194A, ADDITIONS MADE BY THE AO TOWARDS UNEXPLAINED CASH CREDIT BEING LOAN TAKEN FROM SHRI SUNIL MISHR A AND ALSO ADDITIONS MADE BY THE AO TOWARDS UNPAID LIABILITY O F VAT AND SERVICE TAX U/S 43B OF THE ACT. THE ASSESEE HAS ALS O FILED ADDITIONAL EVIDENCES IN RESPECT OF DISALLOWANCES OF LABOUR CHA RGES. THEREFORE, THE ADDITIONAL EVIDENCES FILED BY THE ASSESEE MAY B E ADMITTED AND THE ISSUE MAY BE SET ASIDE TO THE AO FOR RE-VERIFIC ATION. THE LD. DR, ON THE OTHER HAND, STRONGLY SUPPORTED ORDER OF THE LD.CIT(A). HOWEVER, FAIRLY ACCEPTED THAT THE ISSUE MAY BE SET ASIDE TO THE FILE OF THE AO TO VERIFY FACTS WITH REGARD TO THE ADDITIONA L EVIDENCES FILED BY THE ASSESEE, IN RESPECT OF VARIOUS ADDITIONS MADE B Y THE AO. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED MATERIAL AVAILABLE ON RECORD AND GONE THOUGH ORDERS OF THE AUTHORITIES BE LOW. THE FIRST AND FOREMOST ARGUMENTS OF THE LD. AR FOR THE ASSESEE IN LIGHT OF ADDITIONAL EVIDENCES FILED UNDER RULE 29 OF THE I.T .RULES, 1963 IS THAT THE ADDITIONAL EVIDENCES WERE NOT BEFORE THE LD.AO AND ALSO SAID ADDITIONAL EVIDENCES ARE RELEVANT TO DECIDE T HE ISSUES IN ITA NO.6331/MUM/2016 ONIX ENCLAVE PVT.LTD. 5 QUESTION. THEREFORE THE SAME MAY BE ADMITTED AND SE T ASIDE TO THE FILE OF THE AO. WE FIND THAT THE ASSESEE HAS FILED A PAPER BOOK CONTAINING VARIOUS ADDITION EVIDENCES, INCLUDING DE TAILS OF INTEREST PAID TO NBFC, IN RESPECT OF VEHICLE LOANS AND ALSO ARGUED THAT THE PAYEE OF INTEREST HAD ADMITTED SUCH INTEREST IN THE RETURN OF INCOME AND PAID TAXES, CONSEQUENTLY, THE SAME CANNOT BE S UBJECTED TO DISALLOWANCES U/S 40A(IA) OF THE ACT, FOR FAILURE T O DEDUCT TAX AT SOURCE U/S 194A OF THE ACT. NO DOUBT, WHEN PAYEES ARE INCLUDED SUM SO PAID WITHOUT DEDUCTION OF TAX IN THEIR INCOM E TAX RETURNS AND PAID CONSEQUENT TAXES THEREON THEN, THE SAME CANNOT BE DISALLOWED IN THE HANDS OF THE ASSESSEE U/S 40A(IA) OF THE ACT . BUT, FACTS WITH REGARD TO PAYEES HAVE PAID TAXES ON SAID INTEREST I NCOME IN THEIR RETURN OF INCOME IS NOT CLEAR FROM THE RECORDS. THE REFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUES NEEDS TO BE GO BACK TO THE FILE OF THE AO FOR, FURTHER VERIFICATION OF FACTS IN LIGHT OF CLAIM OF THE ASSESSEE. AS REGARDS, ADDITIONS TOWARDS UNEXPLAINED CASH CREDIT BEING LOAN TAKEN FROM SHRI SUNIL MISHRA, AMOUNTING TO RS. 2,60,000/- THE CLAIM OF THE ASSESEE IS THAT IT HAS OBTAINED NE CESSARY CONFIRMATION AND OTHER EVIDENCES FROM THE CREDITOR TO DISCHARGE, THE ONUS CAST UPON U/S 68 OF THE ACT, 1961. LIKEWISE, T HE ASSESSEE CLAIMS THAT DISALLOWANCES OF UNPAID LIABILITY, IN R ESPECT OF MVAT AND SERVICE TAX PAYABLE IS INCORRECT, BECAUSE SAID LIAB ILITY HAS NOT BEEN ITA NO.6331/MUM/2016 ONIX ENCLAVE PVT.LTD. 6 CLAIMED AS DEDUCTION IN THE PROFIT AND LOSS ACCOUNT . SIMILARLY, THE ASSESSE CLAIMS THAT IT HAS FILED ADDITIONS EVIDENCE S, IN RESPECT DISALLOWANCES OF LABOUR CHARGES. NO DOUBT, THE ASSE SSEE HAS FILED A PAPER BOOK, WHICH CONTENTS VARIOUS ADDITIONAL EVIDE NCES, IN RESPECT OF ADDITIONS MADE BY THE AO TOWARDS DISALLOWANCES O F INTEREST, ADDITIONS TOWARDS UNEXPLAINED CASH CREDIT, DISALLOW ANCES OF UNPAID LIABILITY U/S 43B AND DISALLOWANCES OF LABOUR CHARG ES. THESE ADDITIONAL EVIDENCES CANNOT BE VERIFIED AT OUR END. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUES INVOLVED IN THIS APPEAL NEEDS TO GO BACK TO THE AO FOR FURTHER VERIFICATION IN LI GHT OF VARIOUS ADDITIONAL EVIDENCES FILED BY THE ASSESEE AND HENCE , WE SET ASIDE THE APPEAL FILED BY THE ASSESSEE TO THE FILE OF THE AO AND DIRECT HIM TO CAUSE NECESSARY ENQUIRIES, IN RESPECT OF VARIOUS ADDITIONS CHALLENGED BY THE ASSESSEE BEFORE US. NEEDLESS TO S AY, THE ASSESEE IS DIRECT TO FILE NECESSARY EVIDENCES BEFORE THE AO FOR HIS VERIFICATION. 7. IN THE RESULT, APPEAL FILED BY THE ASSESEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 /08/2 019 ITA NO.6331/MUM/2016 ONIX ENCLAVE PVT.LTD. 7 SD/- ( RAM LAL NEGI ) SD/- ( G. MANJUNATHA ) J UDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 23/08/2019 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//