M/s Pradeep Trading Company, Kolkata V. I.T.O.,Ward-44(2), Kolkata

ITA 875/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9126 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-12-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 22-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Section: 234B; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA SMC BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER) ITA NO. 875/KOL/2019 ASSESSMENT YEAR: 2013-14 M/S. PRADEEP TRADING COMPANY...............................................................APPELLANT 2, CANAL WEST ROAD KOLKATA WEST BENGAL 700 067 [PAN : AAGFP 9955 R] VS. INCOME TAX OFFICER, WARD-44(2), KOLKATA............................................RESPONDENT APPEARANCES BY: SHRI SOUMITRA CHOUDHURY, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE. SHRI JAYANTA KHANRA, JCIT SR. D/R, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : DECEMBER 12 TH , 2019 DATE OF PRONOUNCING THE ORDER : JANUARY 10 TH , 2020 ORDER PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 13, KOLKATA, (HEREINAFTER THE LD.CIT(A)), PASSED U/S. 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 17/01/2019, FOR THE ASSESSMENT YEAR 2013-14, ON THE FOLLOWING GROUNDS:- L. FOR THAT ON THE FACTS OF THE CASE, THE ORDER PASSED BY THE LD. CIT(A) IS COMPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 2. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A) WAS WRONG IN DITTOING THE ORDER OF THE A.O. AND CONFIRMING THE ADDITION OF RS.5,26,540/- AS INTEREST RECEIVED FROM PARTNER WHICH IS COMPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 3. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A) WAS WRONG IN NOT CONSIDERING THE FACT THAT THE PARTNER MAY BE CAPITAL WITHDRAWN FROM FIRM AS PER I.T. RULES, BUT THE A.O. HAS VINDICTIVELY ADDED @9% OF CAPITAL WITHDRAWAL I.E. RS.5,26,540/- AS INTEREST, THEREFORE, THE ORDER PASSED BY THE A.O. IS COMPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 4. FOR THAT ON THE FACTS OF THE CASE, THE CHARGING INTEREST U/S. 234B & 234C WHICH ARE MECHANICALLY WRONG AND ILLEGAL. 5. FOR THAT THE APPELLANT RESERVES THE RIGHT TO ADDUCE ANY FURTHER GROUND OR GROUNDS, IF NECESSARY, AT OR BEFORE THE HEARING OF THE APPEAL. 2. AFTER HEARING RIVAL SUBMISSION, I FIND THAT BOTH THE ASSESSING OFFICER A WELL AS THE LD. CIT(A) HAVE COMMITTED FACTUAL MISTAKES WHILE MAKING THE DISALLOWANCE THAT HAS TO BE SEEN IS WHETHER THE ASSESSEE HAS INTEREST FREE FUNDS AND IF SO THE PRESUMPTION SHOULD BE THAT PARTNERS DRAWING ARE FROM THESE INTEREST FREE FUNDS AS HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF 340 (BOMBAY) AND IN THE CASE OF 2(3), MUMBAI, [2016] 383 ITR 529 (BOMBAY) I S ET ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION THAT HE MAY CONSIDER ALL THE INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE INCLUDING TRADE CREDITORS AND THEREAFTER DISPOSE OFF THE CASE, IN ACCORDANCE WITH LAW. 3. IN THE RESULT, APPEAL OF KOLKATA, THE DATED : 10.01.2020 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. M/S. PRADEEP TRADING COMPANY 2, CANAL WEST ROAD KOLKATA WEST BENGAL 700 067 2. INCOME TAX OFFICER, WARD- 44(2), KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 2 BOMBAY HIGH COURT IN THE CASE OF CIT V. RELIANCE UTILITIES & POWER LTD. [2009] 313 ITR AND IN THE CASE OF HDFC BANK LTD. V. DEPUTY COMMISSIONER OF INCOME 2(3), MUMBAI, [2016] 383 ITR 529 (BOMBAY) . HENCE, ET ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION THAT HE MAY CONSIDER ALL THE INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE INCLUDING TRADE CREDITORS AND THEREAFTER DISPOSE OFF THE CASE, IN ACCORDANCE WITH LAW. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. KOLKATA, THE 10 TH DAY OF JANUARY, 2020. SD/- [ J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER M/S. PRADEEP TRADING COMPANY 44(2), KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES ITA NO. 875/KOL/2019 ASSESSMENT YEAR: 2013-14 M/S. PRADEEP TRADING COMPANY RELIANCE UTILITIES & POWER LTD. [2009] 313 ITR BANK LTD. V. DEPUTY COMMISSIONER OF INCOME -TAX - ET ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION THAT HE MAY CONSIDER ALL THE INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE INCLUDING TRADE CREDITORS AND THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES