Bala Chamundeswari Cotton Company, Guntur V. The Assistant Commissioner of Income Tax, Central Circle, , Vijayawada

ITA 69/VIZ/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5545 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 12-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K S RAJENDRA KUMAR
• Keywords: Unexplained cash credit; Tax effect
• Section: 153A; 143(2); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI N.K. CHOUDHRY, HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HON'BLE ACCOUNTANT MEMBER I.T.A. NO. 69 /VIZ/2020 (ASST. YEAR : 20 03 - 04 ) M/S. BALACHAMUNDESWARI COTTON COMPANY, D.NO. 11 - 696, OPP. INDUS T RIAL ESTATE,AMARAVATHI R OAD, GUNTUR. VS. ACIT, CENTRAL CIRCLE, VIJAYAWADA. PAN NO. AAIFS 2875 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI, ADVOCATE. DEPARTMENT BY : SHRI K.S. RAJENDRA KUMAR , CIT DR DATE OF HEARING : 27 / 04 /2021 . DATE OF PRONOUNCEMENT : 07 / 0 5 /2021 . O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 18 /11/2019 IMPUGNED HEREIN PASSED BY THE L D.COMMISSIONER OF INCOME TAX (APPEALS) - 3 [FOR SHORT , LD.COMMISSIONER] , VISAKHAPATNAM U/SEC. 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') FOR THE A.Y. 20 03 - 04 . 2 ITA NO. 69 / VIZ /2020 ( M/S. BALA CHAMUNDESWARI COTTON COMPANY ) 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - SL. NO. GROUNDS OF APPEAL TAX EFFECT RELATING TO EACH GROUND APPEAL 1 THE ORDER OF THE LD. CIT(A) IS CONTRARY TO THE FACTS AND ALSO THE LAW APPLICABLE TO THE FACTS OF THE CASE. ---- 2 THE LD. CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS. 68,572/ - MADE BY THE AO TOWARDS DISALLOWANCE OF INTEREST EXPENDITURE INCURRED DURING THE YEAR ON THE GROUND THAT THE RELATING UNSECURED LOANS WERE TREATED AS UNEXPLAINED CREDITS IN THE EARLIER YE A RS. RS. 25,200/ - 3 ANY OTHER GROUNDS MAY BE URGED AT THE TIME OF HEARING. 3 . T HE ASSESSEE FILED A PETITION FOR ADMISSION OF ADDITIONAL GROUND STATING THAT TH E GROUND WAS NOT TAK E N BEFORE THE LD.COMMISSIONER AS WELL AS IN ORIGINAL APPEAL BEFORE THE ITAT DUE TO INADVERTENT MISTAKE . SINCE THE ADDITIONAL GROUND IS A LEGAL AND NO ENQUIRIES ARE REQUIRED TO BE MADE THE LD.AR REQUESTED FOR ADMISSION OF ADDITIONAL GROUND FOR ADJUDICATION . THE ADDITIONAL GROUND RAISED BY THE ASSESSEE READS AS UNDER: - 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHETHER THE ADDITION OF RS.68,572 / - TOWARDS DISALLOWANCE OF INTEREST IS BEYOND THE SCOPE OF ADDITIONS THAT CAN BE MADE IN AN ASSESSMENT U/S 143(3 ) R.W.S 153A OF THE INCOME TAX ACT, 1961?' 4 . WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE PETITION FILED FOR ADMISSION OF ADDITIONAL GROUND WHICH IS RELATED TO THE LEGAL ISSUE AND GOES TO THE ROOT OF THE ASSESSMENT . AS STATED BY THE LD.AR NO ENQUIRIES ARE REQUIRED TO BE MADE FOR ADJUDICATION OF ADDITIONAL GROUND, HENCE, WE ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE . 5 . THE ADDITIONAL GROUND GOES TO THE ROOT OF THE ASSESSMENT, THEREFORE FIRST WE TAKE UP THE ADDITIONAL GROUND, WHICH IS RELATING 3 ITA NO. 69 / VIZ /2020 ( M/S. BALA CHAMUNDESWARI COTTON COMPANY ) TO VALIDITY OF THE ADDITION MADE U/SEC. 153A WITHOUT HAVING SEIZED MATERIAL IN ABATED ASSESSMENT . LD.AR SUBMITTED THAT THE ASSESSEE FILED THE RETURN OF INCOME ORIGINALLY ON 01/12/2003 , A SEARCH U/SEC. 132 WAS CONDUCTED IN THE INSTANT CASE ON 08/02/2006 AND BY THE TIME OF SEARCH CONDUCTED , THE TIME LIMIT FOR ISSUANCE OF NOTICE U/SEC. 143(2) GOT EXPIRED ON 30/09/2004 . THE ADDITION MADE AMOUNTING TO RS. 68,572/ - WAS TOWARDS THE DISALLOWANCE OF INTEREST IS ON THE BASIS OF BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE BUT NOT ON THE BASIS OF ANY INCRIMINATING MATERIAL. THEREFORE, LD.AR ARGUED THAT THERE IS NO CASE FOR MAKING THE ADDITION IN THE SEARCH ASSESSMENT WITHOUT HAVING THE SEIZED MATERIA L , HENCE, REQUESTED TO DELETE THE ADDITION MADE BY THE AO AND ALLOW THE APPEAL OF THE ASSESSEE. THE ASSESSEE RELIED ON THE DECISION IN ASSESSEES OWN CASE FOR THE A.Y. 2000 - 01 TO 2002 - 03 IN ITA NOS. 569 TO 571/VIZ/2014 , DATED 27/09/2017 . 6 . ON THE OTHER HAND, LD.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND FIND THAT THE ADDITION OF RS. 68,572/ - WAS DISALLOWED ON THE LOANS TAKEN FROM THE ASSESSEE. THE UNSECURED LOANS RELATING TO THE S A I D INTEREST WAS ADDED TO THE INCOME AS UNEXPLAINED CASH CREDITS IN THE A.Y S . 2000 - 01 TO 2002 - 03 AND O N APPEAL , THE TRIBUNAL HAS DELETED THE ADDITIONS MADE BY THE AO IN ASSESSEES OWN C ASE (SUPRA) FOR THE A.Y. 2000 - 01 TO 2002 - 03 . SINCE , THE EXPENDITURE WAS DEBITED TO THE PROFIT & LOSS ACCOUNT AND NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF S EARCH , THERE IS NO CASE FOR MAKING THE ADDITION U/SEC. 153A OF THE 4 ITA NO. 69 / VIZ /2020 ( M/S. BALA CHAMUNDESWARI COTTON COMPANY ) ACT . IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL IN ASSESSEES CASE (SUPRA) FOR THE A.YS. 2000 - 01 TO 2020 - 03 AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN ITA NOS. 569 TO 571/VIZ/2014 (SUPRA) . ACCORDINGLY, WE DELETE THE ADDITION MADE BY THE AO AND ALLOW THE APPEAL OF THE ASSESSEE. 8. SINCE , WE HAVE DELETED THE ADDITION ON LEGAL ISSUE I N ADDITIONAL GROUND, WE CONSIDER IT NOT NECESSARY TO ADJUDICATE THE OTHER GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL. 9 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 0 7 T H DAY OF MAY , 2021 . S D / - S D / - (N.K. CHOUDHRY) (D.S. SUNDER SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 0 7 T H MAY , 20 2 1 . VR/ - COPY TO: 1. THE ASSESSEE - M/S. BALA CHAMUNDESWARI COTTON COMPANY, D.NO. 11 - 696, OPP. INDUSTRIAL ESTATE, AMARAVATHI ROAD, GUNTUR. 2. THE REVENUE ACIT, CENTRAL CIRCLE, VIJAYAWADA. 3. THE PR. CIT (CENTRAL) , VISAKHAPATNAM. 4. THE CIT(A) - 3 , VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.