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Income Tax Appellate Tribunal - Chennai

S.Sakunthala, Erode vs Acit Circle 1, Erode on 9 June, 2020

                  आयकर अपीलीय अधिकरण, 'ए' न्यायपीठ, चेन्नई।
               IN THE INCOME TAX APPELLATE TRIBUNAL
                       'A' (SMC) BENCH: CHENNAI

                        श्री जॉजज माथन, न्याधयक सदस्य के समक्ष

         BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER

                   आयकर अपील सं./ITA No.2127/Chny/2018
                   धनिाज रण वर्ज /Assessment Year: 2013-14

Smt. S. Sakunthala,                           The Assistant Commissioner of
No.48, Kandappa Street,                       Income Tax,
Erode - 638 001                           Vs. Circle - 1, Income Tax Office,
Tamil Nadu                                    Gandhiji Road,
                                              Erode - 638 001.
[PAN: AIZPS 4933P]

         (अपीलार्थी/Appellant)                        (प्रत्यथी/Respondent)

अपीलाथी की ओर से/ Appellant by              :   Mr. S. Sridhar, Erode, Advocate
प्रत्यथी की ओर से /Respondent by            :   Mr. A.R.V. Sreenivasan, JCIT

सुनवाई की तारीख/Date of Hearing             :    09.06.2020
घोर्णा की तारीख /Date of Pronouncement      :    09.06.2020


                                 आदे श / O R D E R


PER GEORGE MATHAN, JUDICIAL MEMBER:

This is an appeal filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-3, Coimbatore in appeal No.61/16-17 dated 08.06.2018 for the Assessment Year 2013-2014.

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2. Mr. S. Sridhar, Erode, Advocate represented on behalf of the Assessee and Mr. A.R.V. Sreenivasan, JCIT represented on behalf of the Revenue.

3. It was submitted by the learned Authorized Representative that the only issue in the assessee's appeal is in respect of the confirmation of the disallowance of the interest expenses to an extent of Rs.11,37,571/-. It was a submission that on the ground that the assessee had diverted the interest bearing funds to its sister concerns, the Assessing Officer had disallowed the amount of Rs.11,37,571/- out of the interest expenses claimed by the assessee by computing the disallowance at the rate of 13.5% being the rate of interest that the assessee was paying on his loans to the banks. It was a submission that the advances given to the sister concerns were from the existing cash balance and the internal accruals only and not from the amount which had been taken by the assessee as loans from the banks.

4. The learned Authorized Representative had placed before me a chart containing seven pages giving the details of the amounts transferred to each of the sister concerns and the opening and closing cash balances as also the day book entries and remarks. It was a submission that these details had unfortunately not been presented by ITA No.2127/Chny/2018 :- 3 -:

the assessee before the Assessing Officer or the learned Commissioner of Income Tax (Appeals). It was a submission that the assessee may be granted an opportunity to substantiate his claim and produce evidences before the lower authorities.

5. In reply, the learned Departmental Representative vehemently supported the order of the learned Commissioner of Income Tax (Appeals). He drew my attention to para 7.1 of the order of the learned Commissioner of Income Tax (Appeals) . It was a submission that the assessee had not produced any of the evidences before the lower authorities. It was a prayer that the order of the learned Commissioner of Income Tax (Appeals) be upheld.

6. I have heard the rival submissions through Video-Conferencing and perused the materials available on record.

7. A perusal of the chart now filed shows the details of the funds transferred to the sister concerns and its entries in the corresponding cash book and the opening and closing cash balances. Admittedly, the assessee had not produced the evidences before the lower authorities.

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In these circumstances, as the evidences are now being produced before the Tribunal, in the interest of justice, I am of the view that the assessee must be granted an opportunity to substantiate its claim before the Assessing Officer. In the circumstances, the issues in this appeal are restored to the file of the learned Assessing Officer for re-adjudication after granting the assessee adequate opportunity of being heard.

8. In the result, the appeal of the assessee in I.T.A. No.2127/Chny/2018 is partly allowed for statistical purpose.

Order pronounced in the open Court on 9th June, 2020 in Chennai.

Sd/-

(जॉजज माथन) (GEORGE MATHAN) न्याययक सदस्य/JUDICIAL MEMBER चेन्नई/Chennai, धदनाां क/Dated: 9th June, 2020 IA, Sr. PS आदे श की प्रधतधलधप अग्रेधर्त/Copy to:

1. अपीलाथी/Appellant 2. प्रत्यथी/Respondent 3. आयकर आयुक्त (अपील)/CIT(A) 4. आयकर आयुक्त/CIT 5. धवभागीय प्रधतधनधि/DR 6. गार्ज फाईल/GF