Income Tax Appellate Tribunal - Chennai
Acit Non Corporate Circle 10(1), ... vs Jindal Steels, Chennai on 7 August, 2018
आयकर अपील य अ
धकरण, 'बी' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL, 'B' BENCH : CHENNAI
ी अ ाहम पी. जॉज , लेखा सद य एवं
ी ध$ु व%
ु आर.एल रे &डी, या)यक सद य के सम+ ।
[BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER]
आयकर अपील सं./I.T.A. No.676/CHNY/2018.
नधा रण वष /Assessment year : 2013-2014.
The Assistant Commissioner Vs. M/s. Jindal Steels,
of Income Tax, No.45-A, Barnaby Road,
Non Corporate Circle 10(1) Kilpauk,
Chennai 600 034. Chennai 600 010.
[PAN AADFJ 7711J]
(अपीलाथ./Appellant) (/0यथ./Respondent)
अपीलाथ क ओर से/ Appellant by : Shri. Srinivasa Rao Vana, JCIT
यथ क ओर से /Respondent by : Shri. T. Banusekar, C.A.
सन
ु वाई क तार ख/Date of Hearing : 06-08-2018
घोषणा क तार ख /Date of Pronouncement : 07-08-2018
आदे श / O R D E R
PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
In this appeal filed by the Revenue, which is directed against an order dated 19.12.2017 of Commissioner of Income-tax (Appeals)-12, Chennai, it is aggrieved that the ld. Commissioner of Income Tax (Appeals) deleted a disallowance of C3,61,07,920/-, :- 2 -: ITA No.676 /2018 made by the ld. Assessing Officer on a repayment of loan to Assessee's namesake in, Bangalore.
2. Ld. Counsel for the Revenue submitted that assessee a trader in steel, had repaid a loan of C7,65,76,906/- to another concern named M/s. Jindal Steels, Bangalore. According to the ld. Departmental Representative, assessee was required to explain the source for the funds used for making the above repayment. As per the ld. Departmental Representative, assessee had through a letter dated 29.02.2016, explained the source for the loan repayment and this included a sum of C3,61,07,920/- claimed as coming out of capital of like amount introduced by one of its partners Shri. Mohanlal Jindal on 22.05.2012. However, as per the ld. Departmental Representative, the said Shri. Mohanlal Jindal had introduced C3,00,00,000/- only and not C3,61,07,920/-. Contention of the ld. Departmental Representative was that assessee could not justify the source for the sum of C3,61,07,920/-, claimed to have received from its partner Shri. Mohanlal Jindal, and could not file any records like income tax return, memo, capital account, balance sheet or any supporting schedules. Contention of the ld. Departmental Representative was that assessee could only produce his acknowledgement for having filed an I.T. return. As per the ld. :- 3 -: ITA No.676 /2018 Departmental Representative, ld. Assessing Officer had made the addition of C3,61,07,920/- due to the inability of the assessee to substantiate its claim that C3,61,07,920/- was received from its partner Shri. Mohanlal Jindal. Contention of the ld. Departmental Representative, was that ld. Commissioner of Income Tax (Appeals) took an erroneous view that repayments to M/s. Jindal Steels, Bangalore had come out of funds introduced by Shri. Mohanlal Jindal. According to the ld. Departmental Representative, amount introduced by Shri. Mohanlal Jindal was only C3,00,00,000/- and assessee could not substantiate the source of C3,61,07,920/- out of the total loan repayment of C7,65,76,906/-.
3. Per contra, ld. Authorised Representative strongly supporting the order of the ld. Commissioner of Income Tax (Appeals) submitted that assessee had a overdraft account with State Bank of India bearing account No.00000010886073792 with its SME Branch, at Chennai. As per the ld. Authorised Representative, assessee had a drawing power of C13,00,00,000/-. Relying on the statement of this account placed at paper book pages 2 to 4, ld. Authorised Representative submitted that payment to M/s. Jindal Steels, Bangalore was made through RTGS transfer from this overdraft account. According to him, even if the credit from Shri. Mohanlal :- 4 -: ITA No.676 /2018 Jindal was not considered, assessee was having sufficient source for explaining the repayments.
4. We have considered the rival contentions and perused the orders of the authorities below. Addition made by the ld. Assessing Officer was for a sum of C3,61,07,920/- being, part of the repayment of an earlier loan taken by the assessee to M/s. Jindal Steels, Bangalore. Ld. Assessing Officer himself states in his order that assessee had repaid C7,65,76,906/- to M/s. Jindal Steels, Bangalore. However, according to the ld. Assessing Officer, assessee could not produce sufficient source for the sum of C3,61,07,920/- out of the above. Ld. Assessing Officer noted that Shri. Mohanlal Jindal from whom assessee had claimed receipt of C3,61,07,920/- had actually given only C3,00,00,000/-. However, a perusal of the overdraft account statement of the assessee with State Bank of India for the period from 01.4.2012 to 22.05.2012, placed at paper book pages 2 to 4 clearly show that assessee had an overdraft limit of C13,00,00,000/- and had made a transfer of C3,61,07,920/- from the said account to M/s. Jindal Steels, Bangalore on 22.05.2012. The payment was effected from overdraft account even before assessee received the sum of C3,00,00,000/- from its partner Shri. Mohanlal Jindal. Relevant entries in the overdraft account appearing on 22.05.2012 are reproduced hereunder:-
:- 5 -: ITA No.676 /2018
Txn Value Description Ref No. Branch Debit Credit Balance Date date Cheque No. code 22 22 Cheque Transfer from 9930 2,59,875 -8,32.96.727.60 May, May, WDL-Jindal 10404414793/ 12 12 13241/SAIL 490663 9930-490663 22 22 CHQ 10051 13241 3,61,07,970 -11,96,04,697.60 May, May, Transfer-
12 12 RTGS, SBINH12143 319345, Jindal Steels 10051 22 22 To Debit 491011 13241 13,47,974 -12,09,52,671.60 May, May,12 through 12 cheque SBI TFR 491011 22 22 By transfer Transfer from 13241 3,00,00,000 -9,09,52,671.60 May, May,12 GRPT 2399484044302 12 SBM2205120 783860-
Mohanlal Jindal 22 22 To debit 491012 10666 12,040 -9,09,64,711.60 May, May,12 through 12 cheque SBI A/c.
No.31360832 085-491012 In our opinion, it is clear that repayment done by the assessee was from its overdraft account and there was no use of any funds from its partner for such repayment. In such circumstances, we feel that the addition was made on a wrong presumption by the ld. Assessing Officer. The said addition in our opinion was rightly deleted by the ld. Commissioner of Income Tax (Appeals). We do not find any reason to interfere with the order of the ld. Commissioner of Income Tax :- 6 -: ITA No.676 /2018 (Appeals).
5. In the result, the appeal of the Revenue stands dismissed. Order pronounced on Tuesday, the 7th day of August,2018, at Chennai.
Sd
(ध$ु व%
ु आर.एल रे &डी) (अ ाहम पी. जॉज )
(DUVVURU RL REDDY) (ABRAHAM P. GEORGE)
या)यक सद य/JUDICIAL MEMBER लेखा सद य /ACCOUNTANT MEMBER
चे#नई/Chennai
$दनांक/Dated: 7th August, 2018.
KV
आदे श क त'ल(प अ)े(षत/Copy to:
1. अपीलाथ /Appellant 3. आयकर आयु*त (अपील)/CIT(A) 5. (वभागीय त न/ध/DR
2. यथ /Respondent 4. आयकर आयु*त/CIT 6. गाड फाईल/GF