SHRI KRISHNA KANHAIYA MITTAL, Burhanpur V. THE ITO, Burhanpur

ITA 93/IND/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6172 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-04-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 27-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJKUMAR BHATIYA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO.93/IND/2016 A.Y. : 2011-12 SHRI KRISHNA KANHAIYA MITTAL, ITO, BURHANPUR BURHANPUR VS. APPELLANT RESPONDENT PAN NO. ACAPM7984M A PPELLANT S BY : SHRI PANKAJ SHAH, CA RESPONDENT BY : SHRI RAJ KUMAR BHATIYA, DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, INDORE, DATED 19.10.2015 FOR THE ASSE SSMENT YEAR 2011-12. 2. THE ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUN TS AND AUDITED BOOKS OF ACCOUNTS, WHICH IS ACCEPTED BY THE AO. DATE OF HEARING : 26. 0 4 . 20 16 DATE OF PRONOUNCEMENT : 06 .0 5 . 201 6 SHRI KRISHNA KANHAIYA MITTAL, BURHANPUR - I.T.A.NO . 93/IND/2016 A.Y. 2011-12 2 2 THE AO HAS MADE THE ADDITION OF RS. 75,000/- ON EST IMATED BASIS ON ACCOUNT OF WEAVING, FOLDING & HAMMALI AND I NTEREST EXPENSES OF RS. 1,42,692/- WERE MADE. 3. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CI T(A) HAS CONFIRMED THE ORDER OF AO. 4. THE LD.AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A WEAVER. THE ASSESSE E IS MAKING PAYMENT TO WEAVERS. THE PAYMENTS TO WEAVERS A RE USUALLY EFFECTED THROUGH THE REGISTER MAINTAINED AN D SIGNATURE OBTAINED THEREIN. THE SAID EXPENSES WERE NOT VOUCHE D, BUT SOME OF THE EXPENSES ARE KEPT IN REGISTER. THEREFOR E, IT SHOULD BE ALLOWED. THE LD.AUTHORIZED REPRESENTATIVE FOR TH E ASSESSEE FURTHER SUBMITTED THAT THE AO HAS CONFIRMED THE ADD ITION OF RS.1,42,692 ON ACCOUNT OF INTEREST EXPENSES. THE LD.AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMI TTED THAT THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNTS AND T HE BOOKS OF ACCOUNTS ARE NOT REJECTED, BUT WHILE DISALLOWING T HE INTEREST EXPENSES, THE AO HAS NOT CONSIDERED THAT THE ASSESS EE WAS HAVING CLOSING BALANCE OF RS. 37,74,309-61. THEREFO RE, WHEN THE ASSESSEE HAD SUFFICIENT CLOSING BALANCE AND OPE NING SHRI KRISHNA KANHAIYA MITTAL, BURHANPUR - I.T.A.NO . 93/IND/2016 A.Y. 2011-12 3 3 BALANCE, THE ASSESSEE HAD GIVEN THE LOAN FROM HIS O WN CAPITAL. THEREFORE, NO ADDITION IS REQUIRED AND WHILE MAKING THE ASSESSMENT ORDER, THE AO HAS NOT CONSIDERED THE CLO SING BALANCE OF THE ASSESSEE. THEREFORE, THE MATTER MAY BE RESTORED TO THE AO. 5. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PART IES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THE AO HAS OBSERVED THAT THE ASSESSEE HAS NOT MAINT AINED BILLS AND VOUCHERS IN SUCH A WAY TO MAKE IT VERIFIAB LE. IT WAS ALSO OBSERVED THAT NO PROPER RECORDS REGARDING EXPE NSES HAVE BEEN KEPT BY THE ASSESSEE. THE AO HAS MADE ADDITION OF RS. 75,000/- OUT OF RS. 1.63 CRORES DEBITED WHICH COMES TO 45%. THEREFORE, THE LD. CIT(A) HELD THAT THIS IS JUSTIFI ABLE DISALLOWANCE ON AD HOC BASIS. DURING THE COURSE OF H EARING THE LD.AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE DID N OT POINT OUT ANYTHING CONTRARY TO THE FINDING OF THE CIT(A). THE REFORE, WE CONFIRM THE ADDITION OF RS. 75,000/- 6. IN RESPECT OF ADDITION OF RS. 1,42,692/-, I HAVE GO NE THROUGH THE ORDER OF AO AND CIT(A). I FIND FROM THO SE ORDERS THAT BOTH THE AUTHORITIES FAILED TO CONSIDER THAT T HE ASSESSEE SHRI KRISHNA KANHAIYA MITTAL, BURHANPUR - I.T.A.NO . 93/IND/2016 A.Y. 2011-12 4 4 WAS HAVING OWN CAPITAL FUND I.E. RS. 37,74,309.61 PS. AS PER SCHEDULE A. THE ASSESSEE HAS GIVEN THIS LOAN OF R S. 19 LAKHS TO JDM BUILDERS AND DEVELOPERS AND AMOUNT OF RS. 12 .75 LAKHS TO M/S. SHREE ANJANI DEVELOPERS. THEREFORE, WH EN THE ASSESSEE WAS HAVING INTEREST FREE FUNDS, THE ASSESSE E IS AT LIBERTY TO GIVE THIS FUNDS TO PARTIES WITHOUT CHARGI NG THE INTEREST. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, I AM OF THE VIEW THAT THE AO AND CIT(A) HAS NOT CONSIDERE D THIS ASPECT. THEREFORE, I REVERSE THE FINDING OF AO AND CIT(A) AND RESTORE THIS ISSUE BACK TO THE FILE OF AO TO DECIDE THE ISSUE AFRESH. 7. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 6 TH MAY , 2016, SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 6TH MAY, 2016. SHRI KRISHNA KANHAIYA MITTAL, BURHANPUR - I.T.A.NO . 93/IND/2016 A.Y. 2011-12 5 5 CPU*