Shri Ajaykumar Jahvantlal shah, Ahmedabad V. The Income Tax Officer, Ward-2(2)(1), Ahmedabad

ITA 705/AHD/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4967 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 22-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R MAKWANA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD (CONDUCTING THROUGH VIRTUAL COURT) BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ITA NO.705/AHD/2017 (ASSESSMENT YEARS: 2012-13) SHRI AJAYKUMAR JAHVANTLAL SHAH A/2, VASU APARTMENT, PALIYADNAGAR, NARANPURA, AHMEDABAD-380013 VS. ITO WARD-2(2)(1) AHMEDABAD [PAN NO. ABJPS1271K] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI MAHESH CHHAJED, AR RESPONDENT BY: SHRI R. R. MAKWANA, SR. DR DATE OF HEARING: 27/09/2021 DATE OF PRONOUNCEMENT: 28/09/2021 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER DATED 26.12.2016 PASSED BY THE LD. CIT(A)-10, AHMEDABAD A RISING OUT OF THE ORDER DATED 25.03.2015 PASSED BY THE ITO, WARD-2(2)(1), AHMEDAB AD UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO T HE ACT) FOR A.Y. 2012-13 WITH THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITION OF OPENING CASH BALANCE OF RS. 16,00,952/-. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE DISALLOWANCE OF INTEREST EXPENSE OF RS. 24,75,921/-. 3. APPELLANT CRAVES LIBERTY TO ADD, AMEND, ALTER OR MODIFY ALL OR ANY GROUNDS OF APPEAL BEFORE FINAL APPEAL. 2. THERE IS 19 DAYS DELAY IN FILING THE INSTANT APP EAL BEFORE US BY THE ASSESSEE. THE REASON FOR SUCH DELAY HAS BEEN DULY EXPLAINED B Y THE ASSESSEE BY FILING AN AFFIDAVIT AFFIRMED ON 30.06.2021 WHICH WAS BROUGHT TO OUR NOTICE BY THE LD. AR. THE REASON THEREOF SEEMS TO BE GENUINE AND HENCE THE DE LAY IS CONDONED. - 2 - ITA NO.705/AHD/2017 SHRI AJAYKUMAR JAHVANTLAL SHAH VS. I TO A.Y. 2012-13 GROUND NO. 1:- 3. THE LD. AO TREATED THE OPENING BALANCE FOR THE A .Y. 2012-13 OF RS. 16,00,952/- AS UNEXPLAINED AND ADDED THE SAME TO TH E TOTAL INCOME OF THE ASSESSEE WHICH WAS, IN TURN, CONFIRMED BY THE LD. CIT(A). H ENCE, THE INSTANT APPEAL BEFORE US. 4. THE ASSESSEE IS A SALARIED PERSON AND ALSO HAVIN G INCOME FROM OTHER SOURCES MAINLY INTEREST INCOME. IT IS ALSO THE CASE OF THE ASSESSEE THAT IT DOES NOT MAINTAIN THE BALANCE SHEET OR PROFIT AND LOSS ACCOUNT BUT THE CA SH STATEMENT HAS BEEN PLACED ON RECORD BEFORE US. AT THE TIME OF HEARING OF THE IN STANT APPEAL THE LD. ADVOCATE APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE OPENING BALANCE CANNOT BE ADDED IN THE CURRENT YEAR ASSESSMENT SINCE THE SAME AROSE OUT OF THE TRANSACTION OF THE PREVIOUS YEAR WHICH IS THE SUBJECT MATTER OF THE AS SESSMENT. FURTHER THAT THE GENUINENESS OF SOURCE OF SUCH OPENING BALANCE HAS N OT BEEN VERIFIED BY THE REVENUE AS ALSO THE ARGUMENT ADVANCED BY THE LD. AR. IN TH IS REGARD, HE HAS DRAWN OUR ATTENTION TO THE DOCUMENTS ANNEXED TO THE PAPER BOO K CLARIFYING THAT THE TRANSACTION OUT OF WHICH THOSE OPENING CASH BALANCE AROSE WAS R OOTED THROUGH BANKING CHANNEL. THE LD. DR RELIED UPON THE ORDER PASSED BY THE AUTH ORITIES BELOW. 5. WE HAVE HEARD THE RESPECTIVE PARTIES AND ALSO PE RUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD INCLUDING THE CASH FLOW STATEME NT ANNEXED TO THE PAPER BOOK. IT APPEARS FROM THOSE RELEVANT DOCUMENTS THAT THE TRAN SACTIONS WERE ROUTED THROUGH BANKING CHANNEL WHICH HAS NOT SEEN TO HAVE BEEN VER IFIED BY THE REVENUE. THUS, UPON CONSIDERING THE ENTIRE ASPECT OF THE MATTER WE FIND IT FIT AND PROPER TO REMIT THE ISSUE TO THE FILE OF THE LD. AO TO VERIFY THE GENUI NENESS OF THE TRANSACTION I.E. THE SOURCE OF THE OPENING BALANCE OF THE ASSESSMENT YEA R IN CONSIDERATION AND TO PASS ORDERS IN ACCORDANCE WITH LAW UPON GRANTING AN OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE AND UPON TAKING INTO CONSIDERATION THE EVI DENCE WHICH THE ASSESSEE MAY RELY - 3 - ITA NO.705/AHD/2017 SHRI AJAYKUMAR JAHVANTLAL SHAH VS. I TO A.Y. 2012-13 UPON AT THE TIME HEARING OF THE MATTER. THIS GROUN D OF APPEAL IS, THUS, ALLOWED FOR STATISTICAL PURPOSE. GROUND NO. 2:- 6. IT RELATES TO DISALLOWANCE OF INTEREST EXPENSE A MOUNTING TO RS. 24,75,921/-. 7. THE FACT RELATING TO THE ISSUE IS THIS THAT THE LD. AO DISALLOWED INTEREST EXPENDITURE PAID TO ONE SHIV CORPORATION TO THE TUN E OF RS. 16,21,114/- AND RS. 8,54,807/- PAID TO ONE LAXMI CORPORATION. THE ASSE SSEE HAS NOT PRODUCED THE BALANCE SHEET OR THE STATEMENT OF ACCOUNTS OR EVIDENCE WITH REGARD TO THE ACTIVITIES CARRIED OUT BY HIM, THE INTEREST CHARGED ON LOAN GIVEN BY THE A SSESSEE, PURPOSE OF LOAN TAKEN, BUSINESS ACTIVITIES CARRIED OUT. IN THE ABSENCE OF SUCH DETAILS IN SUPPORT TO INTEREST PAYMENT TO THESE ENTITIES THE INTEREST PAYMENT SHOW N TO THE TUNE OF RS. 24,75,921/- WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE WHICH WAS, IN TURN, CONFIRMED BY THE FIRST APPELLATE AUTHORITY. 8. AT THE TIME OF HEARING OF THE INSTANT APPEAL THE LD. COUNSEL APPEARING FOR THE ASSESSEE DREW OUT ATTENTION TO THE LEDGER ACCOUNT O F THE CONCERNED PARTIES WHICH SHOWS THAT THE PAYMENT WAS MADE THROUGH BANKING CHA NNEL WHICH WAS FURTHER NOT BEEN PLACED BEFORE THE AUTHORITIES BELOW. 9. THE CASE OF THE ASSESSEE IS THIS THAT THE ASSESS EE PAID INTEREST ON BORROWED AMOUNT AND EARNED INTEREST ON THE LOAN GIVEN BUT ON LY THE INTEREST EARNED HAS BEEN TAKEN INTO CONSIDERATION BY THE REVENUE AND THE INT EREST PAID HAS NOT BEEN DEDUCTED. SINCE THE VERIFICATION ON THIS ASPECT HAS NOT BEEN DONE BY THE REVENUE UNDER THIS FACTS AND CIRCUMSTANCES OF THE CASE WE FIND IT FIT AND PR OPER TO REMIT THE ISSUE TO THE FILE OF THE LD. AO TO VERIFY SUCH DETAILS AND THE GENUINENE SS OF THE INTEREST PAID AND TO PASS ORDERS IN ACCORDANCE WITH LAW UPON GRANTING AN OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE AND UPON TAKING INTO CONSIDERATION THE DOC UMENTS TO BE FILED BY THE ASSESSEE - 4 - ITA NO.705/AHD/2017 SHRI AJAYKUMAR JAHVANTLAL SHAH VS. I TO A.Y. 2012-13 AT THE TIME OF HEARING OF THE ISSUE. ASSESSEES AP PEAL IS, THEREFORE, DISPOSED OF BY STATISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 28/09/2021 SD/- SD/- (AMARJIT SINGH) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 28/09/2021 TANMAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE PCIT- AHMEDABAD. 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY // / ( DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 27.09.2021 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.09.2021 3. OTHER MEMBER. 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 28.09.2021 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 29.09.2021 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER