Income Tax Appellate Tribunal - Ahmedabad
Rghupati Tex Creation Pvt.Ltd.,, Surat vs Assessee on 19 November, 2013
आयकर अपीलीय अिधकरण,
अिधकरण, अहमदाबाद Ûयायपीठ 'डȣ
डȣ',
डȣ , अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD BENCH " D" BENCH, AHMEDABAD
सम¢ ौी एन.एस.सैनी, लेखा सदःय एवं ौी कुल भारत, Ûयाियक सदःय ।
BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER And
SHRI KUL BHARAT, JUDICIAL MEMBER
आयकर अपील सं./I.T.A. No.1959/Ahd/2010
( िनधा[रण वष[ / Assessment Year : 2007-08)
M/s.Raghupati Tex बनाम/ The Income Tax Officer
Creation Pvt.Ltd. Vs. Ward-4(2), Surat
501, Rohit A/c.Market
Ring Road, Surat`
ःथायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AADCR 3616 H
(अपीलाथȸ /Appellant) .. (ू×यथȸ / Respondent)
अपीलाथȸ ओर से / Appellant by : Shri Rasesh Shah, A.R.
ू×यथȸ कȧ ओर से/Respondent by : Shri K.C. Mathews, Sr.DR
सुनवाई कȧ तारȣख /
Date of Hearing : 19/11/2013
घोषणा कȧ तारȣख /Date of Pronouncement : 28/11/2013
आदे श / O R D E R
PER SHRI KUL BHARAT, JUDICIAL MEMBER :
This appeal by the Assessee is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-IV, Surat ('CIT(A)' for short) dated 08/03/2010 pertaining to Assessment Year (AY) 2007-08. The assessee has raised the following grounds of appeal:-
1. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.15,00,000/- by treating third parties fixed deposit in bank as security in respect of loan availed by assessee company as unexplained investment.
2. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.20,157/- on account of capitalization of interest expense on bank loan availed for purchase of machinery.
3. It is therefore prayed that above addition/treatment made by Assessing Officer and confirmed by CIT(Appeals) may please be deleted.ITA No.1959/Ahd/2010
M/s.Raghupati Tex Creation Pvt.Ltd. vs. ITO Asst.Year - 2007-08 -2-
4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.
2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 29/12/2009 pertaining to AY 2007-08. While framing the assessment, the AO made addition of Rs.15 lacs on account of the security given by five parties; namely, Shri Rakesh Rameshchandra Sheth, Smt.Sangeeta Ramesh Sheth, Shri Brijmohan Lakshminaryan Sheth, Shri Gaurang Rakesh Sheth & Shri Omkarnath Pandey. He also made addition of Rs.20,157/- on account of capitalization of interest. Against this, the assessee carried the matter before the ld.CIT(A), who after considering the submissions of the assessee, dismissed the appeal.
3. Ground No.1 is against the confirmation of addition of Rs.15 lacs by treating third parties fixed deposit in bank as security in respect of loan availed by assessee-company as unexplained investment. The ld.counsel for the assessee submitted that both the authorities below failed to appreciate the facts in right perspective. He submitted that the ld.CIT(A) has not considered the facts as well as the judgements. He submitted that before the ld.CIT(A) as well as the AO detailed submissions were made and both the authorities failed to appreciate the fact that this was the first year of the business of assessee- company and the Revenue has not placed anything on record suggesting that the assessee-company was carried out any activity thereby earning the income. He also submitted that the assessee has submitted the PANs, income-tax returns of the persons who had given the security in the form of its deposits. Therefore, the assessee has discharged its primary onus. He submitted that the AO has made addition merely on the ground that the depositors were not ITA No.1959/Ahd/2010 M/s.Raghupati Tex Creation Pvt.Ltd. vs. ITO Asst.Year - 2007-08 -3- produced. He submitted that the ld.CIT(A) has failed to consider the decision as relied upon before him. He drew our attention towards statement of facts furnished before the ld.CIT(A), wherein he placed reliance on the following judicial pronouncements.
1. CIT vs. Bharat Engg.&Construction Co. 83 ITR 187 (SC)
2. CIT vs. Smt.P.K.Noorjahan 237 ITR 570 (SC)
3. Mitesh Rolling Mills Pvt.Ltd. vs. CIT 258 ITR 278 (Guj.)
4. India Rice Mills vs. CIT 218 ITR 508 (All.) 3.1. On the contrary, ld.Sr.DR supported the orders of the authorities below. He submitted that it was the duty of the assessee to furnish the relevant evidence in support of its claim.
4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has decided this ground vide his order dated 03/03/2010, by observing as under:-
"I have considered the rival submissions. The fact of the matter is that the A.O. has discussed at length in his order the inadequacy of evidence, explanation and information furnished by the AR of the assessee/appellant which forced the A.O. to assume leading to addition. Inspite of that, even during the appellate proceedings the A.R. has not filed any written submission nor has made any oral arguments. The only brief defence is laid out is one and half page statement of facts. Details like date of incorporation, opening of bank account, dates of receipts of loan or repayment, if any, sharing holding pattern, copy of return filed to ROC - nothing has been furnished. Not even a shred of paper produced before me to ascertain genuineness of the claims made by the A.R./appellant. Same is the story of defence on other grievance. I find myself totally handicapped to interfere in the matter only on account of absence any credible evidence regarding various contentions. Even basic facts are not made available to me by the appellant."
4.1. The ld.CIT(A) has rejected the ground on the basis that the assessee has not furnished the details like date of incorporation, opening of bank account, dates of receipts of loan or repayment, if any, share holding pattern and copy of return filed to ROC and not even a shred of paper produced to ascertain the ITA No.1959/Ahd/2010 M/s.Raghupati Tex Creation Pvt.Ltd. vs. ITO Asst.Year - 2007-08 -4- genuineness of the claims made by the A.R. of the appellant. Same is the story of defence on other grievance. Therefore, ld.CIT(A) was totally handicapped to interfere in the matter only on account absence any credible evidence regarding various contentions. We find that the AO has recorded his finding that the assessee did not produce any supporting proof in support of its claim except furnishing the copies of income-tax returns along with computation and balance-sheet of the depositors. Therefore, the income-tax returns as well the computation were before both the authorities. The ld.CIT(A) decided this issue on the basis that no details have been furnished in respect of incorporation of the assessee-company and the return filed before the Registrar of Company. In our considered view, the order of the ld.CIT(A) on this issue is not a speaking order as he has not considered the judicial pronouncements as well as the evidence produced by the assessee in the form of income-tax returns of the depositors. Therefore, this issue is remitted back to the file of ld.CIT(A) to decide it afresh, after providing reasonable opportunities of being heard to both the parties. Thus, this ground of assessee's appeal is allowed for statistical purposes only.
5. Ground No.2 is against the addition of Rs.20,157/- on account of capitalization of interest expense on bank loan availed for purchase of machinery. The ld.counsel for the assessee submitted that a detailed submission was made before the ld.CIT(A), but ld.CIT(A) has not decided this issue. On the contrary, ld.Sr.DR supported the orders of the authorities below.
6. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has not given any specific finding on this issue. He has merely recorded the submissions made by the assessee. Under these circumstances, ITA No.1959/Ahd/2010 M/s.Raghupati Tex Creation Pvt.Ltd. vs. ITO Asst.Year - 2007-08 -5- this issue is also restored back to the file of ld.CIT(A) for decision afresh. The ld.CIT(A) is directed to pass a speaking order on this ground as well. Hence, this ground is also allowed for statistical purposes.
7. Ground Nos.3 & 4 are general in nature require no independent adjudication.
8. In the result, the appeal of the assessee is allowed but for statistical purposes.
Order pronounced in Court on the date mentioned hereinabove at caption page Sd/- Sd/-
(एन.एस.सैनी) (कुल भारत)
लेखा सदःय Ûयाियक सदःय
( N.S. SAINI ) ( KUL BHARAT )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 28/11/2013
टȣ.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS
आदे श कȧ ूितिलǒप अमेǒषत/Copy
षत of the Order forwarded to :
1. अपीलाथȸ / The Appellant
2. ू×यथȸ / The Respondent.
3. संबिं धत आयकर आयुƠ / Concerned CIT
4. आयकर आयुƠ(अपील) / The CIT(A)-IV, Surat
5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड[ फाईल / Guard file.
/ आदे शानुसार BY ORDER, स×याǒपत ूित //True Copy// उप/ उप/सहायक पंजीकार ( Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अिधकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation .. 25.11.13(dictation-pad 11-pages attached at the end of this File)
2. Date on which the typed draft is placed before the Dictating Member ......26.11.13
3. Date on which the approved draft comes to the Sr.P.S./P.S.................
4. Date on which the fair order is placed before the Dictating Member for pronouncement......
5. Date on which fair order placed before Other Member............
6. Date on which the fair order comes back to the Sr.P.S./P.S.......28.11.13
7. Date on which the file goes to the Bench Clerk.....................28.11.13
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................