EXPRESS EQUIPMENT RENTAL LOGISTICS PVT LTD., MUMBAI V. DCIT 1 (1)(2), MUMBAI

ITA 6844/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8954 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 06-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR MENON
• Keywords: Additional evidence
• Section: 40(a)(ia); 201(1); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , E BENCH MUMBAI BEFORE : SHRI C.N. PRASAD, JM & SHRI M.BALAGANESH, AM ITA NO. 6844 /MUM/ 20 19 ( ASSESSMENT YEAR : 2011 - 12 ) M/S. EXPRESS EQUIPMENT RENTAL LOGISTICS PVT. LTD., 2 ND FLOOR, KULKARNI P ATIL BHAVAN OPP. NEW EMPIRE CINEMA 14, MURZBAN ROAD, FORT, MUMBAI 400 001 VS. DCIT - 1(1)(2), ROOM NO.533, 5 TH FLOOR, AAYAKAR BHAVAN MUMBAI - 400020 PAN/GIR NO. AAACE8327Q (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI RAJESH REVENUE BY SHRI VIJAY KUM AR MENON DATE OF HEARING 22 /0 3 /2021 DATE OF PRONOUNCEMENT 24 / 03 /202 1 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 6844/MUM/2019 FOR A.Y. 2011 - 12 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APP EALS) - 6, MUMBAI IN APPEAL NO. CIT(A) - 6/IT - 12/130/2016 - 17 DATED 09/08/2019 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 24/03/2014 ITA NO . 6844/MUM/2019 M/S. EXPRESS EQUIPMENT RENTAL LOGISTICS PVT. LTD., 2 BY THE LD. DY. COMMISSIONER OF IN COME TAX - 1(1), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). 2. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPEAL, WE FIND THAT THE ONLY EFFECTIVE ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING THE DISAL LOWANCE OF INTEREST MADE IN THE SUM OF RS.2,70,000/ - BY THE LD. AO (CORRECT FIGURE IS RS.2,34,000/ - ) IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ASSESSEE COMPAN Y IS ENGAGED IN THE BUSINESS OF HIRING OF CRANES AND ALLIED MACHINES FOR INDUSTRIAL CONSTRUCTION. IT HAD FILED ITS RETURN OF INCOME FOR A.Y.2011 - 12 ON 26/09/2011 DECLARING TOTAL INCOME OF RS.1,35,26,250/ - . IN THE ASSESSMENT, THE LD. AO MADE DISALLOWANCE OF INTEREST PAID ON UNSE C URED LOANS IN THE SUM OF RS.2,70,000/ - AMONG OTHER ADDITIONS /DISALLOWANCES . WE FIND THAT ASSESSEE HAD STATED THAT IT HAD BORROWED FUND S FROM THE RELATIVES OF THE SHAREHOLDERS OF THE ASSESSEE COMPANY FOR MEETING ITS WORK ING CAPITAL RE QUIREMENTS ON WHICH INTEREST @12% PER ANNUM WAS PAID. IT WAS DULY SUBMITTED THAT THE FUNDS RAISED IN THE EARLIER YEAR AND UTILISE D FOR THE PURPOSE OF BUSINESS. IN TH E YEAR IN WHICH THE BORROWINGS WERE RAISED AND UTILISED , THE SAME WERE ACCEPTED BY THE REVE NUE IN SCRUTINY ASSESSMENT PROCEEDINGS FOR A.Y.2010 - 11. DURING THIS YEAR INTEREST WAS PAID ON SUCH LOANS. THE ASSESSEE ALSO PLEADED THAT THE CORRECT AMOUNT OF INTEREST PAID ON UNSECURED LOANS WAS RS.2,34,000/ - AND NOT RS.2,70,000/ - A S DISALLOWED BY THE LD. AO. THE DETAILS OF INTEREST PAID ON LOANS BY THE ASSESSEE ARE AS UNDER: - ITA NO . 6844/MUM/2019 M/S. EXPRESS EQUIPMENT RENTAL LOGISTICS PVT. LTD., 3 S.NO. NAME OF PERSON INTEREST PAID 1 SUDHA JITENDRA SHAH 30,000/ - 2. LATA SURESH SHAH 42,000 / - 3. GOKULDAS SHAH (HUF) 54,000 / - 4. JITENDRA SHAH(HUF) 54,000/ - 5. SURESH SHAH (HUF) 54,000 / - TOTAL: 2,34,000/ - 3.1. THE ASSESSEE PLEADED THAT THE AFORESAID INTEREST WAS PAID TO FIVE PARTIES WITHOUT DEDUCTION OF TAX AT SOURCE AND THOSE PARTIES HAD ALSO FURNISHED FORM NO S .15H & 15G BEFORE THE ASSESSEE. HOWEVER, T HE SAME WERE NOT SUBMITTED BY THE ASSESSEE BEFORE THE LD. AO SINCE NO QUESTIONS WERE RAISED REGARDING THE SAME IN THE ASSESSMENT PROCEEDINGS. ACCORDINGLY, THE SAME WERE SUBMITTED BY THE ASSESSEE BEFORE THE LD. CIT(A) AS ADDITIONAL EVIDENCES UNDER RULE 46A OF THE RULES. THE LD. CIT(A) REFUSED TO ADMIT THOSE ADDITIONAL EVIDENCES ON THE GROUND THAT ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITY BEFORE THE LD. AO TO MAKE ALL THE SUBMISSIONS AND ACCORDINGLY , DENIED THE ADMISSION OF ADDITIONAL EVIDENCES. IT WAS ALSO P LEADED BY THE ASSESSEE BEFORE THE LD. CIT(A) THAT IN VIEW TO SECOND PROVISO TO SECTION 40(A)(IA) R.W.S. 201, THE PAYEES HAD DULY PAID TAXE S INCLUDING THE INTEREST INCOME RECEIVED FROM THE ASSESSEE AND HENCE, NO DISALLOWANCE OF INTEREST U/S.40(A)(IA) OF THE ACT COULD BE MADE IN THE HANDS OF THE ASSESSEE. THIS SUBMISSION OF THE ASSESSEE WAS REJECTED BY THE LD. CIT(A) BY STATING THAT THE SAID SECOND PROVISO TO SECTION 40(A)(IA) WAS INTRODUCED ONLY W.E.F. 01/07//2012 AND CANNOT BE MADE APPLICABLE FOR A.Y.2011 - 1 2. WE FIND THAT THE ADDITIONAL EVIDENCES ITA NO . 6844/MUM/2019 M/S. EXPRESS EQUIPMENT RENTAL LOGISTICS PVT. LTD., 4 FILED BY THE ASSESSEE CONTAINING FORM15G & 15H OUGHT TO HAVE BEEN ADMITTED BY THE LD. CIT(A) AS ASSESSEE WAS GENUINELY PREVENTED FROM FILING THE SAME BEFORE THE LD. AO AS NO QUESTIONS WERE RECEIVED BY THE LD. AO REG ARDING THE SAME. ONCE FORM NO. 15G & 15H ARE DULY SUBMITTED BY THE ASSESSEE BEFORE THE DEPARTMENT, THEN ASSESSEE CANNOT BE FASTENED WITH THE DISALLOWANCE U/S.40(A)(IA) OF THE ACT FOR NON - DEDUCTION OF TAX AT SOURCE. HOWEVER, THESE FORMS I.E. FORM 15G & 15H HAVE NOT BEEN SUBJECTED TO VERIFICATION BY THE LD. AO. HENCE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE DEEM IT FIT AND APPROPRIATE TO REMAND THIS ISSUE TO THE FILE OF THE LD. AO FOR EXAMINING THE FORM 15G & 15H SUBMITTED BY THE ASSESSEE AND DECIDE THE ISSUE OF DISALLOWANCE OF INTEREST ON UNSECURED LOANS AFRESH IN ACCORDANCE WITH LAW. THE LD. AO IS ALSO DIRECTED TO GIVE A SPECIFIC FINDING WITH REGARD TO APPLICABILITY OF SECOND PROVISO OF SECTION 40(A)(IA) R.W.S. 201(1) OF THE ACT WHILE DECIDING THE ISSUE . ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 24 / 03 /202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( C N PRASAD ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 24 / 03 / 2021 KARUNA , SR.PS ITA NO . 6844/MUM/2019 M/S. EXPRESS EQUIPMENT RENTAL LOGISTICS PVT. LTD., 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDE NT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//