Urjaa Metalics P.Ltd, New Delhi V. ACIT, Central Circle-29, New Delhi

ITA 679/DEL/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 9242 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 26-12-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 13-03-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B; 143(3); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H” DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.679/DEL/2023 Assessment Year 2018-19 Urjaa Metalics Pvt. Ltd., 405, Nirmal Tower 26, Barakhamba Road, Connaught Place, S.O. New Delhi. Vs. ACIT Central Circle-29 Delhi TAN/PAN: AALCA0192M (Appellant) (Respondent) Appellant by: Shri Ved Jain, Adv. Ms. Supriya Mehta, CA Respondent by: Shri Amit Katoch, Sr.DR Date of hearing: 27 12 2023 Date of pronouncement: 08 01 2024 O R D E R PER PRADIP KUMAR KEDIA-A.M. : T he capt ione d a ppeal has bee n file d by t he assess ee a gainst the orde r o f the Com miss ioner of Income T ax (A ppeals ) -X XX, N ew D elhi ( ‘C IT (A )’ i n s hor t) da te d 06. 02. 2023 a rising fr om the assess me nt orde r dat ed 07. 06. 20 21 pass ed by th e Assessing O fficer (A O) unde r Sect ion 143(3) of t he Inc ome T ax A ct, 19 61 (t he Act ) co ncerning AY 2018-1 9. 2. T he grou nds of appea l ra ised b y the assesse e read as unde r: “ 1 . O n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e , t h e o rd e r p a s s e d b y t h e l e a r n e d C I T ( A ) i s b a d b o t h i n t h e e y e o f l a w a n d o n f a c t s . 2 . ( i ) O n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e , t h e l e a r n e d C I T ( A ) h a s e r r e d b o t h o n f a c t s a n d i n l a w i n c o n f i r m i n g t he p a y m e n t o f R s . I.T.A. No.679/Del/2023 2 9 0 , 3 3 ,5 6 5 / - m a d e b y t h e A O o n a c c o u n t o f d e d u c t i o n o f i n t e r e s t t o B a n k a s c l a i m e d b y t h e a s s e s s e e u n d e r t h e p r o v i s i o n s o f s e c t i o n 4 3 B o f t h e I n c o m e - t a x A c t h o l d i n g t h e s a m e a s u n p a i d o n o r b e fo r e t h e d u e d a t e o f f i l i n g o f r e t u r n o f i n c o m e . ( i ) T h a t t h e d i s a l l o w a n c e h a s b e e n c o n f i r m e d r e j e c ti n g t h e d e t a i l e d s u b m i s s i o n a n d e x p l a n a t i o n g i v e n b y t h e a s s e s s e e a lo n g w i t h t h e e v i d e n c e s a v a i l a b l e o n r e c o r d w h i c h p ro v e s t h a t t h e p a y m e n t s h a v e b e e n m a d e b e f o r e t h e d u e d a t e o f f i l i n g o f r e t u r n o f i n co m e . 3 . O n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e , t h e l e a rn e d C I T (A ) h a s e r r e d b o t h o n f a c t s a n d i n l a w i n c o n f i r m i n g t h e a bo v e s a i d d i s a l l o w a n c e i g n o r i n g t h e c o n t e n t i o n o f t h e a s s e s s e e t h a t t h e A O h a s e r r e d i n m a k i n g t h e a b o v e d i s a l l o w a n c e w i t h o u t e x e r c i s i n g t h e p o w e r u n d e r s e c t i o n 1 3 3 ( 6 ) o f t h e A c t . ” 3. A s per t he grou nds of ap peal, the assessee has cha l le nge d the disallow ance of R s. 90, 33, 565/- o n accoun t of inte rest paid on loan t o ba nk u nder Section 43B of th e A ct. 4. When the matter w as calle d fo r hearin g, the ld. couns el for the ass essee s ubmi tte d as u nde r: 4. 1 T he assess ee is e nga ge d in the bus iness of ma nuf act uri ng, processin g, import and ex port of a ll kind of s teel products. T he assessee file d ret urn of income on 3 1. 10. 201 5 dec laring a los s of Rs. 54, 70,57, 984/ -. 4. 2 T he assess ee had clai m ded ucti on under Sec ti on 4 3B in its co mputati on o f inco me at Rs. 93, 64, 05 1/ -. Ou t of tota l d educti on cla imed unde r Section 43B, Rs. 90,33, 565 /- pe rta in s to bank inte res t w hic h was outs ta nding a s at the be gi nni ng of the f in ancial ye ar, re levant t o A ssess ment Y ear 2018-19 under co nsi derati on and w hic h w as dul y paid durin g t he Fi nancia l Yea r 2017- 18 re le vant t o A ssess me nt Yea r 2 018-19. A refe re nce w as made to Tax A udit R epo rt i n this r egar d wherei n at row nu mbe r 26( i) (A )(a)( 4), suc h fact clearl y e me rges on reco rd. T he c ase of the assess ee was selected for scr uti ny. D eta ils of interes t a lo ng w ith ex trac t o f bank sta te me nt and loa n acc ount s tatement w ere I.T.A. No.679/Del/2023 3 pro vi ded in the cou rs e of the as sess ment p rocee di ngs. The A ssessi ng O ff icer how ever di sal lo wed the cl aim under Sect i on 43B ha ving rega rd to t he no n-des cript na rrat ions of the entr ies in the loan acc ount a nd he ld tha t s uch pa yments a re in the nature of re ba te or disc ount rec eived b y th e as sessee w hich was cred ite d i n the loa n acc ount st atement. 4. 3 A gg rieve d, the ass essee pre fe rre d appeal be for e the C IT(A). 4. 4 I t w as poi nt ed out b efore t he CIT (A ) t ha t the l iabil ity pre- existe d at the be ginni ng of t he Fina ncial Year 2017- 18 and w as not al low ed i n the tax comput ati on of the preceding previous yea r. The lia bili t y t ow ards in te res t has been act ual l y paid du ring the ye ar as vouc he d by the Ta x A udi t R epor t. It was further e xplai ned to t he C IT (A ) that this interest of Rs. 90, 33, 565 /- pe rt ain s to ‘ter m loans ’ and ‘bu ye rs credi t’ from An dhra B ank, brea kup of w hic h is sta ted t o be (i ) i nte res t on term loa n - Rs. 70,6 0, 808/ - and; (i i ) inte res t on buye rs credi t -1 9, 72, 757/- aggregat ing to Rs. 90, 33,565/-. 4. 5 A s rega rds in te res t on te rm loan of Rs. 70, 60, 808/-, it is the case of t he assess ee that s uch interest comp one nt was pai d a lo ng w ith repa yme nt of Rs. 70 lakhs, there b y a to ta l repayment of Rs. 1, 40, 60, 808/- h as been made b y the as sesse e to the bank. Th e date -w ise e ntr ies were prov id ed t o the C IT (A ) aggrega ti ng to Rs. 1, 40, 60, 808/-. 4. 6 A s rega rds i nt eres t of buye rs c re di t of R s. 19, 72, 757/-, it is the case of t he as sessee t ha t suc h inte rest co mpon ent was paid alon g w it h other sum of R s. 19, 56,030/ -, th ereb y maki ng t otal re pa yme nts of Rs. 39,2 8, 787/-. D ate -w ise brea kup of such trans ac tion has a ls o been provi de d t o the C IT (A) as t abulate d at I.T.A. No.679/Del/2023 4 page no. 19 of the appe llate order. 4. 7 T he l d. Counse l th us cont ends t hat c redi t ent ries i n the loa n account a re dul y a ppe aring in the bank s tate me nt of t he assessee w hich w ould mean t ha t repa ymen ts ha ve been made b y the assessee during t he year under co ns iderati on t o j usti f y th e c la i m of deducti on under Secti on 43B of t he A ct. 4. 8 T he l d. counse l asserted t ha t the CIT (A) has howeve r ignored the det ail ed s ubmiss ions a nd e vi dences furnis hed b y th e assessee a nd confir me d t he ad di tions ma de b y t he asse ssee w hil e inte rp reting t he nar rati on o f t he ent ri es in t he l oan accoun t. 4. 9 T he l d. co uns el s ubmit ted that the assessee has furnis he d detai le d submissi on t o su bs tant iat e i ts cl ai m of deduct io n u nder Sect ion 4 3B of the A ct. Such deduction i s reenforced and co rro bora ted b y T ax Audit Re por t, r ef lec ti ng tha t pa yme nts w ere ma de d uri ng the year as c lai med. T he ex trac t of bank statement evidenc ing de tails of pa yment ma de fro m bank qua loan acc ount sta tement als o a ffi rms t he c lai m of t he ass essee. Dat e-w ise deta il s of re pa yme nt w er e also s ubmi t te d and no defec t has be en poin ted out. In the abse nc e of an y adverse repor t f rom the Ta x A udit or, the R even ue A ut hor ities w ere not j ust i fi ed i n taking a di fferent sta nce. 4. 10 T he l d. co unse l s ubmitted t ha t the A O as wel l as C IT( A) h as acted merel y on the bas is of i na dequate narrati ons appe ari ng i n the l oa n a cc ount s tate ment and ha ve i gnored a ll the e xplanat i ons and e vi dences fur nis hed by t he a ss essee. T he ld. C ouns el t hus submit ted t ha t the disal l ow ance carried out by t he AO and confi rmed b y t he C IT (A) cal ls f or i ts reversal an d res to ra ti on o f the pos it i on taken by the asses see. I.T.A. No.679/Del/2023 5 5. T he ld. D R fo r t he R even ue, o n t he ot he r hand, st rongl y re li ed u pon the f indings g iven in t he asse ss ment order a nd the endorse me nt t he re of ma de i n t he f ir s t appel lat e or de r. T he ld. D R for the Revenue refer re d to the ba nk statement s ought t o be re lied upon a nd s ub mi tte d th at the na rra t ion such as ‘2% cut back t i ll 11. 04.2012 amount ing to Rs. 2, 02, 0 00/-‘ and si mi l ar entries in the bank ac count does no t provi de a n y confidence t hat th e assesse e has ac t ual l y r epa i d t he in te res t duri ng the yea r a s requi red u nde r Sect ion 43B of the Act. T he o nus lies on the a ssessee t o subs tantia te i ts c laim b y the cli nc hing e vi de nce. It was f urt he r pointed out that t here are ma ny entri es w hich are not reflecte d i n the tabula t io n a nd ther ef ore, i t is d if ficu lt to gauge the bona f ides of the cla im made in t he ret urn of inco me. The ld. D R furt he r submit ted tha t the de duc t ion all ow ed i n the Ta x A udi t R eport is the s ol e basis to s ubs ta nt ia te the clai m. Th e AO is enti tle d in l aw to verif y the c lai m and the pa rticular s men ti oned in t he Tax Au dit Report are not conclus ive and a me na bl e t o inqui ries a nd ve ri fica tions. T he ld. D R thus su bmi tte d that w here t he pri ma r y onus w hich l ay upon the ass essee w as di scharged, no f ault c an be fou nd w it h t he order of the low er aut ho rities. 6. We have ca re ful l y c onsi de re d t he rival s ub mi ss ion s and pe rus ed t he mat eri al avai lable on record. 7. T he di sal lowanc e of c lai m of R s.9 0, 33, 565/- cla imed unde r Sect ion 43B of the A ct is in cont rovers y. 8. A s note d in th e p rece ding paragraphs, the ass essee has att empted to j usti fy t he cor rect ness of the clai m base d on entri es in t he ban k st atem ent a nd th e T ax A udit R epo rt. The c ase of the assessee is that t he bank has de duct ed 2% of the a mo unt r eceived I.T.A. No.679/Del/2023 6 agains t s al es to re coup t he pr incipa l a mount of the l ia bi lit y a nd inte res t t hereon. The ent ri es, if a ggr egated, as tabul ate d i n th e submiss ions, w oul d gi ve rise to the co nclus ion that i nterest has act ua ll y been paid indeed w hi le c lai mi ng de duct ion un der Secti on 43B of the A ct. While w e obse rve t hat the t ra nsact io n, as poin ted out, a re re flec ted in the bank s tate me nt, it is n ot ver y c lea r as to w het he r s uch tr ansac ti on of d ed ucti on on 2% etc. rela tes t o re pa yme nt o f loa n and i nte rest th er eon and not an ything di fferent. Simulta ne ousl y howeve r, the e ffect of 2% c ut ba ck cr edit ent ries etc. i n t he books of acc ount als o requi res t o be under stood. T he issu e is fac t ual i n nat ure. A ban k ce rtif ica te s howing re pa yme nt of loan and inte res t att ri buta ble t o Fina nc ia l Y ear 201 8-19 i n que st ion could be hand y to c linch the clai m o f t he asses see. 9. While the mann er of entri es pass ed b y the bank ers i s not w ithi n the co ntr ol of t he as sessee, it is t he dut y of t he assesse e t o pro vi de requisi te corrob ora ti on w hil e maki ng i ts cla im. T he A O is als o expected to make i nq uir ies fr om the ban k if so needed. 10. T hus, i n t he total it y of the ci rc umsta nces, w e consider it exped ie nt t o se t aside the f irst app ell at e orde r and restore the ma tter back to t he fil e of the A O for e xami nat ion of the iss ue af res h. I t shal l be ope n to the assess e e to fur nish s uch e vi dence as ma y be re qui re d to j ust if y the deducti on cl aimed under Sect ion 43B of the A ct. T he A O ma y also ma ke suitable i nquir ies f rom the bank t o a sce rt ain the p ropriet y of cl aim ma de under S ection 4 3B of t he Act. 11. Withou t a ny e xpression o n me ri t, w e thus rest ore t he issue back to th e f il e of the A O fo r adj udica tion of th e iss ue af res h i n accorda nce w ith la w . I.T.A. No.679/Del/2023 7 12. In the r esu lt, the appeal of t he a ssessee is all ow ed f or sta tis ti ca l purpos es . Order pronounced in the open Court on 08/01/2024 Sd/- Sd/- (SAKTIJIT DEY) [PRADIP KUMAR KEDIA] VICE PRESIDENT ACCOUNTANT MEMBER DATED: /01/2024 Prabhat