ACIT 2(3), MUMBAI V. SHRINIWAS COMPANY P. LTD, MUMBAI

ITA 759/MUM/2010

• Counselvise Citation: 75919914 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 28-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 01-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MAHAPATRA
• Assessee Lawyers: DR SHIVRAM
• Keywords: Recovery proceedings
• Section: 43B; 133(6); 131; 56; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI D. MANMOHAN, V.P. AND SHRI R.K. PANDA, A.M. ITA NO.759/MUM /2010 ASSESSMENT YEAR : 2006-07 DCIT 2(3), ROOM NO. 555, AAYAKAR BHAWAN, MUMBAI-400 020. VS. M/S SHRINIWAS COMPANY PVT. LTD. 1391), SURYODAYA ESTATE, 136 TARDEO ROAD, MUMBAI 34. P.A. NO.: AAACS6098K (APPELLANT) (RESPONDENT) C.O. NO. 189/MUM /2010 ARISING OUT OF ITA NO. ITA NO. 759/MUM/2010 ASSESSMENT YEAR : 2006-07 M/S SHRINIWAS COMPANY PVT. LTD. 1391), SURYODAYA ESTATE, 136 TARDEO ROAD, MUMBAI 34. P.A. NO.: AAACS6098K VS. DCIT 2(3), ROOM NO. 555, AAYAKAR BHAWAN, MUMBAI-400 020. (CROSS OBJECTOR) (RESPONDENT) ASSESSEE BY : DR. SHIVRAM & MR. RAHUL HAKANI DEPARTMENT BY : MR. S.K. MAHAPATRA O R D E R PER R.K. PANDA. THIS APPEAL FILED BY THE REVENUE AND C.O. FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 11.11.2009 OF THE CIT(A)- 6, MUMBAI RELATING TO ASSESSMENT YEAR 2006-07. FOR THE SAKE OF CONVENI ENCE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER. ITA 759/M/10 & CO 189/M/10, M/S SHRINIWAS CO. P. LTD. 2 ITA NO. 759/MUM/2010 (BY REVENUE, A.Y. 2006-07) 2. GROUNDS OF APPEAL NO. 1 & 5 BEING GENERAL IN NAT URE ARE DISMISSED. 3. GROUNDS OF APPEAL NO. 2 READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF ` 5,10,233/- BEING COMMISSION INCOME RECEIVED BY THE ASSESSEE AS PER T DS CERTIFICATES. 3.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAS EARNED COMMISSION INCOME OF ` 15,14,500/- FROM PERMANENT MAGNETS LTD. WHEREAS IT HAD SHOWN ONLY ` 10,04,277/- IN ITS PROFITS AND LOSS ACCOUNT. HE F URTHER NOTED THAT THE ASSESSEE HAS CLAIMED TDS CREDIT ON THE WHOLE AMOUNT OF ` 15,14,500/- DURING THE IMPUGNED FINANCIAL YEAR. ACCORDINGLY, HE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE DIFFERENCE AMOUNT OF ` 5,10,223/- SHOULD NOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IT WAS EXPLAI NED THAT IN THE COURSE OF BUSINESS ACTIVITIES WITH THE SAID PARTY, AS AND WHE N FUNDS ARE REQUIRED, THE ASSESSEE REQUESTS M/S PERMANENT MAGNETS LTD. FOR PA YMENT AND ACCORDINGLY RECEIVED CHEQUES FROM THEM. ALTHOUGH THE INCOME ON ACCOUNT OF COMMISSION EARNED IS ONLY ` 1004277/-, M/S PERMANENT MAGNETS LTD. HAD DEDUCTED TAX ON THE WHOLE AMOUNT OF PAYMENT OF ` 15,14,500/-. THE ASSESSEE HAS RECEIVED AN AMOUNT OF ` 5,10,223/- ON ACCOUNT OF EXCESS PAYMENT WHICH IS SHOWN AS REPAYABLE IN THE BALANCE SHEET UNDER THE HEAD CURRE NT LIABILITIES AS CREDITORS FOR OTHERS. THE, A.O., HOWEVER, WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND ISSUED NOTICE U/S 133(6) IN THE NAME OF M/S PERMANENT MAGNETS LTD. BY CALLING FOR SOME DETAILS. HOWEVER, THE NOTICE WAS RETURNED UN-SERVED WITH THE REMARKS LEFT. THE A.O. CONFRO NTED THE SAME TO THE ASSESSEE AND ASKED THE ASSESSEE TO PRODUCE THE SAID PARTY FOR RECORDING ITS STATEMENT. IN RESPONSE TO THIS, WRITTEN SUBMISSION WAS FILED BY IT IN THE TAPAL OF THE A.O. WHERE THE SUBMISSIONS AS MADE B Y THE ASSESSEE WERE REITERATED. NOT BEING SATISFIED WITH THE EXPLANATI ON GIVEN BY THE ASSESSEE, THE A.O. DISALLOWED THE AMOUNT OF ` 5,10,233/- AND ADDED THE SAME TO THE TOTAL ITA 759/M/10 & CO 189/M/10, M/S SHRINIWAS CO. P. LTD. 3 INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT(A) DELETED THE ADDITION. WHILE DOING SO, HE FOUND FORCE IN THE SUBMISSION OF THE A SSESSEE THAT IT WAS FOLLOWING ACCRUAL BASIS OF ACCOUNTING, THEREFORE, I NCOME ON ACCOUNT OF COMMISSION COULD BE TAXED ONLY ON ACCRUAL BASIS. AC CORDING TO LD. CIT(A) THIS IS ESPECIALLY TRUE IN VIEW OF THE CONFIRMATION FILE D BY THE PERMANENT MAGNETS LTD. BEFORE THE A.O. 3.2 AGGRIEVED BY SUCH ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 4. THE LD. D.R. SUBMITTED THAT THERE IS A DIFFERENC E OF INCOME IN THE TDS CERTIFICATE ISSUED BY THE PARTY AND CREDIT OF COMMI SSION IN THE P&L ACCOUNT. THEREFORE, THE A.O. WAS JUSTIFIED IN MAKING THE ADD ITION. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND SINCE THE TDS CERTIFICATE IS NOT ON ACCRUAL OF INCOME BUT ON THE WHOLE AMOUNT OF THE PAYMENT AND SINCE THE ASSESSEE HAS FILED THE ACCOUNT STATEMENT OF THE OTH ER PARTY AND THE COPY OF THE AGREEMENT ETC. AND SINCE THE BALANCE AMOUNT HAS BEEN OFFERED FOR TAX IN THE SUBSEQUENT YEAR, THEREFORE, THE ORDER OF THE LD . CIT(A) SHOULD BE UPHELD. HE ALSO DREW THE ATTENTION OF THE BENCH TO THE STAT EMENT OF FACTS FILED BEFORE THE LD. CIT(A) WHERE COMMISSION INCOME AND TDS CERT IFICATES WERE EXPLAINED BEFORE THE A.O. HE, ACCORDINGLY, SUBMITTED THAT TH E ORDER OF THE LD. CIT(A) SHOULD BE UPHELD. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF A.O. AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE A.O. MADE THE ADDITION O F ` 5,10,223/- SINCE THE COMMISSION INCOME DISCLOSED IN THE P&L ACCOUNT AT ` 10,04,277/- IS LESS THAN THE AMOUNT OF COMMISSION MENTIONED IN THE TDS CERTIFICATES AT ` 15,14,500/-. IT IS THE SUBMISSION OF THE LD. COUNS EL FOR THE ASSESSEE THAT THE TAX HAS BEEN DEDUCTED ON THE WHOLE AMOUNT WHEREAS T HE COMMISSION EARNED AS PER CREDIT NOTES FOR THE YEAR IS SHOWN AT ` 10,04,277/- AND THE BALANCE ITA 759/M/10 & CO 189/M/10, M/S SHRINIWAS CO. P. LTD. 4 AMOUNT HAS BEEN OFFERED TO TAX IN THE SUBSEQUENT YE AR. IN OUR OPINION, THE MATTER NEEDS VERIFICATION AT THE LEVEL OF A.O. AS T O HOW MUCH COMMISSION HAS BEEN CLAIMED AS EXPENDITURE BY M/S PERMANENT MAGNET S LTD. DURING A.Y. 2006-07 ON ACCOUNT OF PAYMENT TO THE ASSESSEE. THI S ASPECT HAS NEITHER BEEN EXPLAINED BY THE ASSESSEE NOR VERIFIED BY THE A.O. OR CIT(A) ESPECIALLY WHEN THE DEDUCTOR HAS ISSUED TDS CERTIFICATE DISCLO SING TDS ON ` 15,14,500/- AND THE NATURE OF PAYMENT BEING UNDER S ECTION 194 H. WE, THEREFORE, DEEM IT PROPER TO RESTORE THE ISSUE TO T HE FILE OF THE A.O. FOR ADJUDICATION OF THE SAME AFRESH IN THE LIGHT OF THE ABOVE DISCUSSION. WE HOLD AND DIRECT ACCORDINGLY. THIS GROUND OF THE REVENUE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 7. GROUND NO. 3 BY THE REVENUE READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF ` 28,35,990/- BEING THE INTEREST PAYABLE TO THE BANK WITHOUT APPRECIATING T HE FACT THAT THE SAID EXPENSES RELATED TO PRIOR PERIOD AND HAD TO BE ALLOWED AS DEDUCTION ONLY ON ACCRUAL PAYMENT IN THE YEAR IN WH ICH IT WAS PAID. 7.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAD INCURRED INTEREST EXPENSES PAID TO BANK OF RAJASTHAN AMOUNTING TO ` 69,47,411/-. HOWEVER, THE MAJOR PORTION OF THE SAME PERTAINS TO PRIOR YEA RS. HE, THEREFORE, ASKED THE ASSESSEE TO JUSTIFY THE CLAIM OF INTEREST EXPEN DITURE SINCE THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. HE FURT HER NOTED THAT THE COMPANY HAS ALSO PROVIDED INTEREST EXPENSES IN ITS BOOKS OF ACCOUNT UPTO 31.3.2000 AMOUNTING TO ` 27.84 LAKHS ON ACCRUAL BASIS. HOWEVER, AFTER THAT THE COMPANY HAS DELIBERATELY FAILED TO PROVIDE SUCH INTEREST EXPENSES. HE, THEREFORE, ASKED THE ASSESSEE AS TO WHY SUCH INTERE ST EXPENSES, WHICH ARE RELATED TO PRIOR PERIOD, BE NOT DISALLOWED AND INTE REST EXPENSES BETWEEN 1.4.05 TO 5.12.05BE ONLY ALLOWED. IT WAS EXPLAINED BY THE ASSESSEE THAT THE INTEREST PAID DURING THE YEAR IS BASED ON THE ORDER PASSED BY THE DRT. IT WAS ALSO SUBMITTED THAT IN VIEW OF THE PROVISIONS OF SE CTION 43B(E) SUCH PAYMENT OF INTEREST ARE ALLOWABLE. HOWEVER, THE A.O. NOTED THAT THE ASSESSEE COULD NOT ITA 759/M/10 & CO 189/M/10, M/S SHRINIWAS CO. P. LTD. 5 PRODUCE ANY DETAILS REGARDING THE TERMS AND CONDITI ONS OF THE AGREEMENT GOVERNING SUCH LOANS AND ADVANCES ACCORDING TO WHIC H THE PAYMENT OF INTEREST EXPENSES WAS TO BE PAID AS PER THE DIRECTI ONS OF THE DRT. THE A.O., THEREFORE, DISALLOWED THE INTEREST AMOUNT OF ` 69,47,411/- AND ALLOWED INTEREST EXPENSES OF ` 8,91,703/- ONLY BEING INTEREST ATTRIBUTABLE TO TH E PERIOD FROM 1.4.05 TO 5.12.05. 7.2 BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT TH E A.O. DISALLOWED INTEREST EXPENSES OF ` 60,55,708/- AS AGAINST THE CLAIM OF ` 42,14,549/- . IT WAS SUBMITTED THAT THE SAID CLAIM OF ` 42,14,549/- WAS COVERED BY THE PROVISIONS OF SECTION 43B SINCE AN AMOUNT OF ` 13,78,559/- WAS PAID DURING THE PREVIOUS YEAR AND A FURTHER SUM OF ` 28,35,990/- WAS PAID AFTER 1.4.2006 BUT BEFORE THE DUE DATE OF FILING OF RETURN. THE PROVI SIONS OF SECTION 43B AND CBDT CIRCULAR NO. 7 OF 2006 WERE BROUGHT TO THE NOT ICE OF THE LD. CIT(A). IN ITS ALTERNATE CONTENTION, IT WAS SUBMITTED THAT IN CASE THE SAME ARE NOT ALLOWED U/S 43B, THE ENTIRE INTEREST AS PROVIDED DU RING THE YEAR WAS ALLOWABLE SINCE THE SAME HAS ACCRUED DURING THE YEA R SINCE THE ISSUE REGARDING THE CLAIM WAS SETTLED DURING THE YEAR UND ER CONSIDERATION. RELIANCE WAS PLACED ON THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF CIT VS. SWADESHI COTTON AND FLOOR MILLS P. LTD. 53 ITR 134. IT WAS FURTHER SUBMITTED THAT THE ENTIRE AMOUNT OF ` 60,55,708/- IS ALLOWABLE AS EXPENDITURE. 7.3 BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE , THE LD. CIT(A) HELD THAT SINCE THE ASSESSEE HAS PAID AN AMOUNT OF ` 28,35,990/- BEFORE THE DUE DATE OF FILING OF RETURN, THE SAME SHOULD BE ALLOWE D AS DEDUCTION IN THE COMPUTATION OF INCOME IN VIEW OF PROVISIONS OF SECT ION 43B(E), THE CBDT CIRCULAR CITED BY THE ASSESSEE AND IN TERMS OF SETT LEMENT OF DRT. 7.4 AGGRIEVED BY SUCH ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. ITA 759/M/10 & CO 189/M/10, M/S SHRINIWAS CO. P. LTD. 6 8. WE HAVE CONSIDERED THE RIVAL SUBMISSION MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF A.O. AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US INCLUDING THE COPY OF THE ORDER OF THE DRT WHICH IS PLACED ON RECORD AT PAGE NO. 60 OF THE PAPER BOOK. WE FIND MERIT IN THE SUB MISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE THE MATTER WAS PENDING BEFORE THE DRT, NO PROVISION OF INTEREST COULD HAVE BEEN MADE. UNDOUB TEDLY, THE ASSESSEE HAS NOT PROVIDED ANY INTEREST IN ITS BOOKS OF ACCOUNT F ROM 1.4.2000 TILL 31.3.2004, SINCE THE RECOVERY PROCEEDINGS WAS FILED BY THE BEN CH BEFORE THE DRT, WE FIND THE PROVISIONS OF SECTION 43-B(E) READS AS UNDER:- SEC. 43B. NOTWITHSTANDING ANYTHING CONTAINED IN AN Y OTHER PROVISION OF THIS ACT, A DEDUCTION OTHERWISE ALLOWABLE UNDER THIS ACT IN RESPECT OF (E) ANY SUM PAYABLE BY THE ASSESSEE AS INTEREST ON ANY [LOAN OR ADVANCES] FROM A SCHEDULED BANK IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AGREEMENT GOVERNING SUCH LOAN [OR ADVANCES] [PROVIDED] THAT NOTHING CONTAINED IN THIS SECTION S HALL APPLY IN RELATION TO ANY SUM, WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR B EFORE THE DUE DATE APPLICABLE IN HIS CASE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 IN RESPECT OF THE PREVIOUS YEAR IN WHIC H THE LIABILITY TO PAY SUCH SUM WAS INCURRED AS AFORESAID AND THE EVIDENCE OF S UCH PAYMENT IS FURNISHED BY THE ASSESSEE ALONG WITH SUCH RETURN. SINCE THE ASSESSEE IN THE INSTANCE CASE HAS PAID AN AMOUNT OF ` 28,35,990/- BEFORE THE DUE DATE OF FILING OF RETURN, THEREFORE, IN VIEW OF THE PROVISIONS OF SECTION 43B(E) THE ASSESSEE IS ENTITLED TO DEDUCTIO N OF ` 28,35,990/- IN THE COMPUTATION OF ITS INCOME. THEREFORE, WE DO NOT FIN D ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN DELETING THE AMOUNT OF ` 28,35,990/-. THE GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 9. GROUND NO. 4 BY THE REVENUE READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF ` 25 LACS ON ACCOUNT OF ITA 759/M/10 & CO 189/M/10, M/S SHRINIWAS CO. P. LTD. 7 BOGUS CREDITS WITHOUT APPRECIATING THE FACT THAT TH E CONFIRMATION FURNISHED FROM THE CREDITOR EXPAT PROPERTIES WAS UN SIGNED AND WAS NOT PRODUCED BY THE ASSESSEE BEFORE THE A.O. 9.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF ` 25 LACS FROM ONE EXPAT PROPERTIES PVT. LTD. ON BEIN G QUESTIONED BY THE A.O.,, IT WAS SUBMITTED THAT SOME OF THE FAMILY MEMBERS AN D RELATIVES OF SHAREHOLDERS AND DIRECTORS OF THE COMPANY ARE HOLDI NG AGRICULTURAL LAND IN PUNE DISTRICT COLLECTIVELY AT ONE PLACE. IT WAS PRO POSED BY THE SAID LAND HOLDERS TO SALE THE SAID AGRICULTURAL LAND. IN THE PROCESS THEY CAME INTO CONTACT WITH EXPAT PROPERTIES (INDIA) LTD. AFTER N EGOTIATIONS, CERTAIN INITIAL PAYMENTS WERE TO BE MADE BY EXPAT PROPERTIES (INDIA ) LTD. TO THE SELLER OF THE LAND. INSTEAD OF RECEIVING INITIAL PAYMENT BY SOME OF THE LAND OWNERS INDIVIDUALLY, IT WAS AGREED THAT THE SAID BUYER WIL L GIVE INITIAL PAYMENT OF ` 25 LACS AS INTEREST FREE TO THE COMPANY. SINCE THE SA ID EXPAT PROPERTIES (INDIA) LTD. DID NOT COMPLY WITH THE UNDERSTANDINGS THEY AR RIVED AT WITH SELLERS OF LAND, AS PER THE REQUEST OF THE LAND HOLDERS, THE S AID AMOUNT WAS WITHHOLD. THE ASSESSEE ALSO FILED COPIES OF THE TWO LETTERS R ECEIVED FROM EXPAT PROPERTIES (INDIA) LTD. CONFIRMING THE PAYMENT MADE BY THEM TO THE COMPANY. 9.2 THE A.O., THEREAFTER ISSUED NOTICES U/S 133(6) IN THE NAME OF EXPAT PROPERTIES (INDIA) LTD., PUNE, BANGALORE & MUMBAI. NOTICES ISSUED U/S 133(6) WITH THE BANGALORE AND MUMBAI ADDRESSES WERE RETURN ED UNSERVED WITH THE REMARK LEFT. THE A.O. CONFRONTED THE SAME TO THE ASSESSEE AND REQUESTED TO PRODUCE THE ABOVE SAID PARTY FOR RECORDING ITS STAT EMENT. THEREAFTER, SOMEBODY FROM EXPAT PROPERTIES (INDIA) LTD. FILED C ERTAIN PAPERS IN TAPAL. SINCE THERE WAS NO DISCUSSION OR EXPLANATION GIVEN TO THE A.O. PERSONALLY, THE A.O. REJECTED THE CLAIM OF ` 25 LACS AND ADDED TO THE INCOME OF THE ASSESSEE. ITA 759/M/10 & CO 189/M/10, M/S SHRINIWAS CO. P. LTD. 8 9.3 BEFORE THE LD. CIT(A), APART FROM VARIOUS SUBMI SSIONS, IT WAS SUBMITTED THAT THE ASSESSEE HAS FILED THE FOLLOWING DETAILS B EFORE THE A.O. (PARA 6.2.2 OF CIT(A)S ORDER). - APPELLANT HAD FILED TWO LETTERS DATED 11.12.20056 C ONFIRMING PAYMENT OF LOAN OF ` 25 LACS TO THE APPELLANT DULY SIGNED BY THE EPL. - APPELLANT FILED PAN OF EPL. - APPELLANT FILED ENTIRE BANK DETAILS INCLUDING DRA FT NO., BANK BRANCH, ADDRESS, AMOUNT ETC. - APPELLANT FILED COPY OF DOCUMENT SUBMITTED IN THE COURT BY THE ADVOCATE OF EXPAT PROPERTIES (INDIA) LTD. CONFI RMING THE PAYMENT OF ` 25 LACS MADE BY THEM TO THE APPELLANT. - APPELLANT SUBMITTED BEFORE A.O. THAT DUE TO CIRCU MSTANCES EXPLAINED ABOVE, IT WILL BE DIFFICULT TO PRODUCE TH E PARTY AS LEGALLY APPELLANT HAS NO ENFORCEABLE RIGHTS, WHEREA S AO HAS ALL THESE RIGHTS. - EPL HAS FILED DETAILS IN COMPLIANCE TO NOTICE OF A.Y. U/S 133(6). - INSPITE OF ALL THESE SUBMISSIONS AO WITHOUT CONSI DERING, THE ABOVE AND WITHOUT ISSUING SUMMONS U/S 131 TO EPL FO R FURTHER ENQUIRY IF ANY REQUIRED (WHEN EVEN SUFFICIE NT TIME WAS AVAILABLE) MADE ADDITION OF ` 25 LACS. 9.4 IT WAS FURTHER SUBMITTED THAT RECOVERY SUIT HAS BEEN FILED BY EPL AGAINST THE ASSESSEE BEFORE THE CIVIL JUDGE, SENIOR DIVISION, PUNE IN RESPECT OF WHICH NOTICE HAS BEEN RECEIVED BY THEM. A COPY O F THE SAME WAS ALSO FILED BEFORE THE LD. CIT(A). IT WAS SUBMITTED THAT THE N AME OF THE COMPANY WAS ALSO APPEARING IN THE SAID NOTICE. ACCORDINGLY, IT WAS SUBMITTED THAT THE LOAN RECEIVED FROM EPL WAS GENUINE AND NO ADDITION IS CA LLED FOR. 9.5 BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE , THE LD. CIT(A) DELETED THE ADDITION OF ` 25 LACS BY HOLDING AS UNDER:- I HAVE CONSIDERED THE FACTS OF THE ISSUE AND THE SU BMISSIONS MADE BY THE AR AND FIND MERIT IN THEM. THE CONFIRMATIONS OF M/S EPL WERE DULY FILED BY THE ASSESSEE REGARDING ADVANCING OF DEPOSIT OF ` 25 LACS AND COPIES OF THE SAME HAVE BEEN FILED IN T HE PAPER BOOK. ITA 759/M/10 & CO 189/M/10, M/S SHRINIWAS CO. P. LTD. 9 REGARDING THE AOS OBJECTION OF THE APPELLANT NOT P RODUCING M/S EPL BEFORE THE A.O. THERE IS MERIT IN THE SUBMISSIO NS OF THE AR THAT IN VIEW OF THE LEGAL ACTION CONTEMPLATED BY EPL, TH EY COULD NOT HAVE ENSURED THE PRODUCTION OF M/S EPL BEFORE THE A.O. AND THE A.O. HAD THE STATUTORY AUTHORITY TO SUMMON M/S EPL U/S 131 OF THE I.T. ACT. THE AR HAS FILED SUFFICIENT MATERIAL TO PROVE THE GENUINENESS OF THE CREDIT OF ` 25 LACS. SINCE THERE IS ALREADY IN SUIT FOR RECOVERY FILED BY M/S EPL AGAINST THE APPELLANT , IT WOULD BE INCORRECT TO HOLD THE CREDITS AS BOGUS. CONSEQUENT LY, THE ADDITION OF ` 25 LACS MADE BY THE A.O. IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 9.6 AGGRIEVED BY SUCH ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE B Y BOTH THE SIDES, PERUSED THE ORDERS OF A.O. AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THE DISPUTE IN THE IMPUGNED GROUND I S REGARDING DELETION OF ` 25 LACS BY THE LD. CIT(A) WHICH WAS ADDED BY THE A. O. U/S 56 OF THE I.T. ACT, 1961. WE FIND THE ASSESSEE HAS MADE REQUEST TO THE A.O. TO ISSUE SUMMONS TO THE SAID PARTY. HOWEVER, NO SUCH SUMMON WAS ISS UED BY THE A.O. WE FIND THE A.O. ISSUED NOTICE U/S 133(6) TO EXPAT PROPERTI ES (INDIA) LTD. WHO HAVE RESPONDED TO THE NOTICE ISSUED U/S 133(6) AND FILED DETAILS IN TAPAL TO THE CONCERNED A.O. AS PER THE PROVISIONS OF SECTION 13 3(6), THE A.O. CAN REQUIRE ANY PERSON INCLUDING A BANKING COMPANY OR ANY OFFIC ER THEREOF TO FURNISH INFORMATION IN RELATION TO SUCH POINTS OR MATTERS O R TO FURNISH STATEMENTS OF ACCOUNTS AND AFFAIRS VERIFIED IN THE MANNER SPECIFI ED BY THE A.O. THERE IS NOWHERE IN THE ACT IT IS MENTIONED THAT THE PERSON TO WHOM NOTICE U/S 133(6) ISSUED HAS TO APPEAR PERSONALLY FOR HEARING BEFORE THE A.O. AND DISCUSS THE MATTER WITH HIM. IT IS SUFFICIENT COMPLIANCE BY THE SAID PERSON IF HE SUBMITS THE REQUISITE DETAILS. SINCE IN THE INSTANT CASE, ASSESSEE HAS ADMITTEDLY FILED THE CONFIRMATION LETTER OF THE SAID PARTY, PAN AND THE BANK DETAILS INCLUDING DRAFT NO. AND AMOUNT ETC. AND SINCE THE MATTER IS A LSO PENDING BEFORE THE CIVIL JUDGE, SENIOR DIVISION, PUNE WHERE THE OTHER PARTY HAS MADE THE ASSESSEE AS A PARTY FOR RECOVERY OF THE AMOUNT OF ` 25 LACS, THEREFORE, WE FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS CASTE ON IT AND PRO VED THE GENUINENESS OF THE AMOUNT OF ` 25 LACS BEYOND REASONABLE DOUBT.. UNDER THESE CIR CUMSTANCES, ITA 759/M/10 & CO 189/M/10, M/S SHRINIWAS CO. P. LTD. 10 WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD . CIT(A) IN DELETING THE ADDITION OF ` 25 LACS. THE GROUND RAISED BY THE REVENUE IS ACCO RDINGLY DISMISSED. C.O. NO. 189/MUM/2010 (BY ASSESSEE) 11. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THE C.O. FILED BY THE ASSESSEE. THE LD. D.R. HAS NO OBJECTION TO THE SAM E. ACCORDINGLY, THE C.O. FILED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. 12. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE C.O. FILED BY THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED ON THIS 31 ST DAY OF MAY, 2011. SD/- (D. MANMOHAN) VICE PRESIDENT SD/- (R.K. PANDA) ACCOUNTANT MEMBER MUMBAI, DATED : 31.5.2011. COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. (A) 6, MUMBAI 4. CIT -2,, MUMBAI 5. THE DR, L - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI R.K. ITA 759/M/10 & CO 189/M/10, M/S SHRINIWAS CO. P. LTD. 11 DATE INITIALS DRAFT DICTATED ON 26.5.11 DRAFT PLACED BEFORE THE AUTHOR 27.5.11 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER AM/JM DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM APPROVED DRAFT COMES TO THE SR. PS KEPT FOR PRONOUNCEMENT ON. FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK DATE ON WHICH FILE GOES TO THE AR DATE OF DISPATCH