M/s. Isha Corporation, Ahmedabad V. Pr. CIT-6, Ahmedabad

ITA 862/AHD/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3861 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 09-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKARSR
• Keywords: TDS; Set aside
• Section: 143(3); 68; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER M/S. ISHA CORPORATION, B/H, MOSCOW HOTEL, NR. MANINAGAR RAILWAY STATION, MANINAGAR, AHMEDABAD-380008 PAN: AADFI7880B (APPELLANT) VS PR. CIT-6, AHMEDABAD (RESPONDENT) REVENUE BY: SHRI MOHD. USMAN, CIT-D.R. SHRI PURUSHOTTAM KUMAR ASSESSEE BY: SHRI S.N. SOPARKAR, SR . A.R. & SHRI PARIN SHAH , A.R. DATE OF HEARING : 28-09-2021 DATE OF PRONOUNCEMENT : 07-10-2021 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THESE TWO APPEALS FILED BY ASSESSEE FOR A.Y. 2013-1 4, ARISE FROM ORDER OF THE CIT(A)-6, AHMEDABAD DATED 21-03-2018, IN PROCEEDINGS UNDER SECTION 263 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NOS. 862/AHD/2018 & 1745/AHD/2019 ASSESSMENT YEAR 2013-14 I.T.A NOS. 862/AHD/2018 & 1745/AHD/2019 A.Y. 2013-14 PAGE NO M/S. ISHA CORPORATION VS. PR. CIT 2 2. IN THIS APPEAL, THE ASSESSEE HAS CONTESTED TWO G ROUNDS OF APPEAL: (I) ADDITION OF RS. 52 LACS ON ACCOUNT OF UNSECURED LOA N TAKEN FROM SHRI DEELIP L. PATEL U/S. 68 OF THE ACT AND (II) ADDITION OF R S. 4,02,448/- ON ACCOUNT OF DISALLOWANCE ON INTEREST U/S. 36(1)(III) OF THE I.T . 3. THE FACT IN BRIEF IS THAT ASSESSEE HAS FILED RE TURN OF INCOME ON 20 TH SEP, 2013 DECLARING TOTAL INCOME OF RS. 16,13,790/- ORDER, U/S. 143(3) OF THE ACT WAS PASSED ON 29 TH FEB, 2016 ASSESSING THE TOTAL INCOME AT RS. 16,94,100/-. SUBSEQUENTLY, LD. PR. CIT HAS PASSED O RDER U/S. 263 OF THE ACT ON 21 ST MARCH, 2018 AND SET ASIDE THE ASSESSMENT ORDER OF THE ASSESSING OFFICER TO BE FRAMED DE-NOVO. ASSESSMENT ORDER U/S . 143(3) R.W.S. 263 OF THE ACT WAS FINALIZED ON 21 ST DECEMBER, 2018. THE REMAINING FACTS PERTAINING TO THE ISSUE CONTESTED IN THIS APPEAL AR E DISCUSSED WHILE ADJUDICATING THE GROUNDS OF APPEAL OF THE ASSESSEE AS FOLLOWS:- GROUND NO. 1 (ADDITION OF RS. 52 LACS ON ACCOUNT OF UNSECURED LOAN TAKEN FROM SHRI DEELIP L. PATEL U/S. 68 OF THE ACT ) 4. DURING THE COURSE OF ASSESSMENT U/S. 143(3) R.W. S. 263 OF THE ACT, THE ASSESSING OFFICER STATED THAT ASSESSEE HAS PURCHASE D AN IMMOVABLE PROPERTY FOR A CONSIDERATION OF RS. 3.20 CRORES. THE ASSESS EE HAS SHOWN PART OF THE PAYMENT TOWARDS AFORESAID PROPERTY TO THE AMOUNT OF RS. 52 LACS FROM THE UNSECURED LOAN OBTAINED FROM SHRI DILIP L. PATEL. DURING THE COURSE OF ASSESSMENT, THE ASSESSEE WAS ASKED TO EXPLAIN THE T RANSACTION OF AFORESAID UNSECURED LOAN. IN THIS REGARD, THE ASSESSEE HAS S UBMITTED COPY OF LEDGER ACCOUNT OF DILIP L. PATEL FROM THE BOOKS OF ASSESSE E, BANK ACCOUNT, STATEMENT OF ASSESSEE REFLECTING THE CREDIT AND DEB IT ENTRY OF UNSECURED LOAN I.T.A NOS. 862/AHD/2018 & 1745/AHD/2019 A.Y. 2013-14 PAGE NO M/S. ISHA CORPORATION VS. PR. CIT 3 OBTAINING FROM DILIP L. PATEL BY ACCOUNT PAYEE CHE QUE DATED 9 TH OCTOBER, 2012. THE ASSESSING OFFICER HAS NOT ACCEPTED THE E XPLANATION OF THE ASSESSEE STATING THAT RS. 52 LACS WHICH WAS CLAIMED TO BE UNSECURED LOAN WAS NOTHING BUT ASSESSEES OWN FUNDS WHICH WERE CIRCULA TED, THEREFORE, THE AFORESAID AMOUNT WAS ADDED TO THE TOTAL INCOME OF T HE ASSESSEE AS UNSECURED CREDIT. 5. THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT (A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 6. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E US, THE LD. COUNSEL HAS CONTENDED THAT ASSESSEE HAS PURCHASED PROPERTY FROM SHRI DILIP L. PATEL AND PART OF THE PAYMENT WAS MADE OUT OF THE LOAN OF RS. 52 LACS OBTAINED BY THE ASSESSEE FROM SHRI DILIP L. PATEL. HE HAS FURT HER SUBMITTED THAT DURING THE COURSE OF ASSESSMENT AND APPELLATE PROCEEDINGS THE ASSESSEE HAS FURNISHED RELEVANT SUPPORTING DOCUMENTS I.E. COPIES OF LEDGER ACCOUNT, COPIES OF BANK ACCOUNT, LOAN CONFIRMATION LETTER IN SUPPORT OF GENUINENESS OF THE TRANSACTION. HOWEVER, THE LOWER AUTHORITIES HA VE UNREASONABLY MADE THE ADDITION WITHOUT CONTROVERTING THE SUPPORTING DOCUM ENTS AND EVIDENCES FURNISHED BY THE ASSESSEE. IN THIS REGARD, THE LD. COUNSEL HAS REFERRED PAGE NO. 55 OF THE PAPER BOOK COMPRISING COPY OF BANK ST ATEMENT OF THE ASSESSEE SHOWING LOAN OBTAINED FROM SHRI DILIP L. PATEL BY C HEQUE ON 16 TH MAY, 2012 AND 21 ST MAY, 2012. HE ALSO REFERRED PAGE NO. 56-57 OF THE COPY OF BANK STATEMENT AND PAGE NO. 69 TO 70 OF THE PAPER BOOK C OMPRISING COPIES OF BANK STATEMENT SHOWING TRANSACTION OF LOAN OBTAINED AND REPAYMENT OF LOAN MADE BY THE ASSESSEE. THEN, HE REFERRED THE VARIOUS PAG ES OF PAPER BOOK SHOWING I.T.A NOS. 862/AHD/2018 & 1745/AHD/2019 A.Y. 2013-14 PAGE NO M/S. ISHA CORPORATION VS. PR. CIT 4 COPIES OF LEDGER ACCOUNT OF DILIP L. PATEL SHOWING THE TRANSACTION OF OBTAINING OF LOAN AND REPAYMENT OF LOAN ALONG WITH PAYMENT OF INTEREST ON THE LOAN AMOUNT OBTAINED. ON THE OTHER HAND, LD. D EPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LOWER AUT HORITIES. 7. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER ASKED T HE ASSESSEE TO EXPLAIN THE UNSECURED LOAN OF RS. 52 LACS OBTAINED FROM SHRI DI LIP L. PATEL. IN THIS REGARD, THE ASSESSEE HAS SUBMITTED THE COPIES OF LE DGER ACCOUNTS OF SHRI DILIP L. PATEL, BANK ACCOUNT STATEMENT OF ASSESSEE REFLEC TING CREDIT AND DEBIT ENTRY IN SUPPORT OF OBTAINING LOAN AND REPAYMENT OF UNSEC URED LOAN FROM SHRI DILIP L. PATEL. WITH THE ASSISTANCE OF LD. AUTHOR IZED REPRESENTATIVES, WE HAVE PERUSED THE COPIES OF BANK STATEMENT OF THE AS SESSEE PLACED IN THE PAPER BOOK. IN THE BANK STATEMENT, THE DETAIL OF TRANSA CTION OF UNSECURED LOAN OBTAINED AND REPAID ARE REPRODUCED AS UNDER:- DILIP L. PATEL HAS GIVEN UNSECURED LOAN TO APPELLA NT AS UNDER: AMOUNT CHEQUE NUMBER BANK DATE RS.25,00,000/- 671483 DENA BANK 01/08/2012 RS.27,00,000/- 671484 DENA BANK 09/08/2012 UNSECURED LOAN WAS GIVEN AT INTEREST RATE OF 15% P. A. THE ABOVE CHEQUE ARE REFLECTED IN BANK STATEMENT OF DILIP L PATEL AS WEL L AS IN BANK STATEMENT OF APPELLANT.(EXHIBIT B AND C ABOVE) APPELLANT REPAID THE AMOUNT OF UNSECURED LOAN OF RS .52,00,000/- ALONGWITH INTEREST I.T.A NOS. 862/AHD/2018 & 1745/AHD/2019 A.Y. 2013-14 PAGE NO M/S. ISHA CORPORATION VS. PR. CIT 5 AMOUNT CHEQUE NUMBER BANK DATE RS.25,00,000/- 002327 HDFC BANK 09/10/2012 RS.27,00,000/- 002328 HDFC BANK 11/10/2012 THE APPELLANT HAS PAID INTEREST OF RS.1 ,28,638/- ( NET OF TDS) TO DILIP PATEL. THE SAID AMOUNT IS REFLECTED IN APPELLANT BANK STAT EMENT AS WELL AS DILIP PATEL'S BANK STATEMENT. SHRI DILIP PATEL HAS ALSO O FFERED THE SAID INTEREST INCOME AT RS 1,42,932 ALONQWITH TDS OF RS 14,293 IN HIS RETURN OF INCOME FOR A.Y 2013-14 THE ASSESSEE HAS ALSO FILED COPIES OF LEDGER ACCOUN T OF SHRI SHRI DILIP L. PATEL SHOWING THE TRANSACTION OF RECEIVING OF UNSECURED L OAN AND PAYMENT OF UNSECURED LOAN ALONG WITH PAYMENT OF INT EREST ON THE LOAN AMOUNT. THE ASSESSEE HAS ALSO FILED COPIES OF INCO ME TAX RETURN OF THE LENDER, SHRI DILIP L. PATEL SHOWING TOTAL INCOME A T RS. 82,80,479/- AND ALSO SHOWING DETAIL OF INTEREST RECEIVED ON THE UNS ECURED LOAN ALONG WITH INCOME FROM LONG TERM CAPITAL GAIN ON THE PROP ERTY SOLD. IN SUPPORT, THE ASSESSEE HAS ALSO FILED COPY OF LEDGER ACCOUNT, COPY OF BANK STATEMENT, COPY OF INCOME TAX RETURN OF THE LE NDER TO SUBSTANTIATE THE GENUINENESS OF THE TRANSACTION. AFTER PERUSAL OF THE AFORESAID FACTS AND MATERIAL ON RECORD, IT IS OBSERVED THAT ASSESSI NG OFFICER HAS MADE THE ADDITION OF UNSECURED LOAN OBTAINED BY THE ASSE SSEE ON THE BASIS OF GENERAL OBSERVATION THAT UNSECURED LOAN WAS NOTHING BUT ASSESSEES OWN FUND WHICH WERE CIRCULATED. THE FINDING OF THE ASS ESSING OFFICER WAS NOT SUPPORTED WITH THE RELEVANT MATERIAL AND EVIDEN CES, THE ASSESSING I.T.A NOS. 862/AHD/2018 & 1745/AHD/2019 A.Y. 2013-14 PAGE NO M/S. ISHA CORPORATION VS. PR. CIT 6 OFFICER HAD ALSO FAILED TO CONTROVERT THE SUPPORTIN G DOCUMENTS AND RELEVANT MATERIALS AND THE COPIES OF BANK STATEMENT OF THE LENDER AND THE ASSESSEE DEMONSTRATING THAT TRANSACTION OF LOAN WERE ROUTED THROUGH BANK ACCOUNT AND SAME WERE REPAID DURING THE YEAR U NDER CONSIDERATION. THE ASSESSING OFFICER HAS NEITHER MA DE ANY INVESTIGATION AND VERIFICATION FROM THE LENDER NOR BROUGHT ANY RELEVANT MATERIAL ON RECORD TO PROVE THAT THE UNSECURED LOAN WAS NOT GENUINE. THEREFORE, WE ARE NOT INCLINED WITH THE DECISION OF LD. CIT(A). ACCORDINGLY, THE APPEAL OF THE ASSESSEE ON THIS GRO UND IS ALLOWED. GROUND NO. 2 (ADDITION OF RS. 4,02,448/- ON ACCOUNT OF DISALLOWANCE ON INTEREST U/S. 36(1)(III) OF THE I.T .) 8. DURING THE COURSE OF ASSESSMENT, THE ASSESSING O FFICER NOTICED THAT ASSESSEE HAS PAID INTEREST @ 12%/15% ON THE UN SECURED LOAN OBTAINED DURING THE YEAR UNDER CONSIDERATION AS COM PARED TO INTEREST RECEIVED BY THE ASSESSEE ON FDR MAINTAINED WITH THE BANK @ 8% PER ANNUM. THE ASSESSING OFFICER WAS OF THE VIEW THAT ASSESSEE HAD PAID EXCESS INTEREST TO THE EXTENT OF RS. 5 TO 7% ON TH E UNSECURED LOAN OBTAINED DURING THE YEAR UNDER CONSIDERATION. THER EFORE, THE ASSESSING OFFICER HAS DISALLOWED THE INTEREST EXPENSES OF RS. 4,02,448/- AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 9. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS COMPARED THE I.T.A NOS. 862/AHD/2018 & 1745/AHD/2019 A.Y. 2013-14 PAGE NO M/S. ISHA CORPORATION VS. PR. CIT 7 PAYMENT OF INTEREST @ 12%/15% ON THE UNSECURED LOAN OBTAINED BY THE ASSESSEE WITH THE INTEREST AMOUNT RECEIVED BY THE A SSESSEE @ 8% ON FDR MADE WITH THE HDFC BANK. IN THIS REGARD, THE ASSESSEE EXPLAINED THAT IT HAD KEPT FUND RECEIVED ON BOOKING DEPOSIT T OWARDS SALE OF FLATS IN THE FDR MODE TEMPORARY WITH BANK ON WHICH IT HAD EARNED INTEREST INSTEAD OF KEEPING THE FUNDS IN THE CURRENT ACCOUNT WITHOUT FETCHING ANY INTEREST. AFTER TAKING INTO CONSIDERATION THE ABOVE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT EARNING OF I NTEREST ON SURPLUS FUND MAINTAINED IN FDR CANNOT BE COMPARED WITH THE UNSECURED LOAN OBTAINED BY THE ASSESSEE BECAUSE BOTH ARE OF DIFFER ENT NATURE AS THE INTEREST ON FIXED DEPOSIT IS SPECIFIED BY THE BANK IN THE FORM OF AUTOMATIC SWITCHED OFF FIXED DEPOSIT ACCOUNT WHENEV ER SURPLUS FUND WAS AVAILABLE IN CURRENT YEAR, THE SAME WAS TRANSFE RRED TO FIX DEPOSIT ACCOUNT OTHERWISE THE CURRENT ACCOUNT DID NOT FETCH ANY INTEREST. ON THE OTHER HAND, THE DEFINITE AMOUNT OF INTEREST PAI D ON UNSECURED LOAN USED TO BE ON HIGHER SIDE COMPARED TO THE INTEREST CHARGED ON SECURED LOAN, THEREFORE, WE DO NOT FIND ANY JUSTIFICATION I N THE DECISION OF LD. CIT(A) IN SUSTAINING THE DISALLOWANCE OF INTEREST P AYMENT MADE BY THE ASSESSING OFFICER. THEREFORE, THIS GROUND OF APPE AL OF THE ASSESSEE IS ALSO ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ITA NO. 862/AHD/2018 A.Y. 2013-14 I.T.A NOS. 862/AHD/2018 & 1745/AHD/2019 A.Y. 2013-14 PAGE NO M/S. ISHA CORPORATION VS. PR. CIT 8 11. THIS APPEAL IS DIRECTED AGAINST THE ORDER OF LD . CIT(A) MADE U/S. 263 OF THE ACT FOR SETTING ASIDE THE ORDER PASSED B Y THE ASSESSING OFFICER ON 29 TH FEB, 2016. SINCE THE ASSESSEE HAS NOT PRESSED THI S APPEAL, THEREFORE, THE SAME STANDS DISMISSED. 12. IN THE RESULT, APPEAL ITA 1745/AHD/2019 IS ALLO WED AND APPEAL ITA 862/AHD/2018 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07-10-2021 SD/- SD/- (MAHDUMITA ROY) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 07/10/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,