THE DCIT 1(1), MUMBAI v. M/S. GOLCHA CINETALC P. LTD, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI PRAMOD KUMAR A.M. AND SHRI V. DURGA RA O J.M. ITA NO. 1581/MUM/2009 ASSESSMENT YEAR: 2005-06 DY. COMMISSIONER OF INCOME-TAX APPELLANT 1(1) ROOM NO. 579 AAYAKAR BHAVAN MUMBAI 400 020. VS. M/S GOLCHA CINETALC PVT. LTD. RESPONDENT 9 RAJMAHAL 84 VEER NARIMAN ROAD MUMBAI 400 020. APPELLANT BY : MR. A.K. NAYAK RESPONDENT BY : MR. SUNIL HIRAWAT ORDER PER V. DURGA RAO J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)- 1 MUMBAI PASSED ON 31/12/2008 FOR THE ASS ESSMENT YEAR 2005-06. 2. GROUND NO. 1 IS DIRECTED AGAINST THE ACTION OF T HE CIT(A) IN DELETING THE DISALLOWANCE OF EXCESS CLAIM OF DEPREC IATION OF RS. 61 907/- ON ELECTRICAL FITTING. 3. THE AO NOTICED THAT THE ASSESSEE HAD CLAIMED DEP RECIATION @ 25% ON ELECTRICAL FITTINGS AND EPBX AS AGAINST 15% ALLOWED ON FURNITURE AND FIXTURES WHICH INCLUDE ELECTRICAL FIT TINGS. ON BEING ASKED TO EXPLAIN THE ASSESSEE EXPLAINED THAT THE E LECTRIC INSTALLATION IS PART OF THE PLANT AND MACHINERY AND DEPRECIATION @ 25% IS ALLOWABLE ON SUCH PLANT AND MACHINERY. THE AO HAD N OT SATISFIED WITH ITA NO. 1581/MUM/2009 GOLCHA CINETALC P. LTD. 2 THE EXPLANATION OFFERED BY THE ASSESSEE AND HELD TH AT IN THE ABSENCE OF DETAILS OF WDV AND THE DEPRECIATION CLAIMED BY T HE ASSESSEE ON ELECTRICAL FITTINGS THE CLAIM COULD NOT BE ACCEPTE D. HENCE THE AO ALLOWED DEPRECIATION ON ELECTRICAL INSTALLATION @ 1 5% AS AGAINST THE CLAIM OF THE ASSESSEE AT 25% WHICH RESULTED IN DIS ALLOWANCE OF RS. 61 907/-. BEFORE THE CIT(A) THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT DEPRECIATION @ 25% HAD BEEN CLAIMED NOT ON ELE CTRICAL FITTINGS BUT ON ELECTRICAL INSTALLATION WHICH IS PART OF ASS ESSEES PLANT AND MACHINERY. TO THIS EFFECT A REFERENCE WAS MADE TO THE AUDIT REPORT IN FORM NO. 3CD WHEREIN DEPRECIATION ON FURNITURE AND FIXTURES INCLUDING ELECTRICAL FITTINGS WAS CLAIMED ONLY @ 15 %. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE CIT(A) DELETED THE DISALLOWANCE BY OBSERVING AS UNDER:- 3.3 I HAVE GONE THROUGH THE SUBMISSIONS. THE AO HAS NO REASON TO TREAT THE ELECTRICAL INSTALLATIONS INCLUDED IN T HE PLANT AND MACHINERY AS FURNITURE AND FIXTURES AND DOUBT THE R ATE OF DEPRECIATION CLAIMED ON THE SAME. SUCH ELECTRICAL I NSTALLATIONS FORM PART OF PLANT AND MACHINERY AND ARE ENTITLED T O DEPRECIATION @ RATE APPLICABLE TO THE PLANT AND MACHINERY. ACCOR DINGLY THE DISALLOWANCE OF DEPRECIATION OF RS. 61 907/- ON ELE CTRICAL INSTALLATIONS IS DELETED. 4. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE IS IN APPEAL BEFORE THE ITAT. 5. THE LEARNED DR HAS STRONGLY RELIED UPON THE ORDE R OF THE AO WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE HAS PL ACED RELIANCE ON THE ORDER OF CIT(A). 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. WE FIND THAT AS PER THE AUDIT R EPORT IN FORM NO. 3CD THE ASSESSEE CLAIMED DEPRECIATION ON FURNITURE AND FIXTURE INCLUDING ELECTRICAL FITTINGS WAS ONLY @ 15% AND HE CLAIMED DEPRECIATION @ 25% ON ELECTRICAL INSTALLATIONS WHIC H IS PART OF ASSESSEES PLANT AND MACHINERY. THE AO WAS OF THE V IEW THAT ELECTRICAL INSTALLATION COMES UNDER FURNITURE AND FIXTURES TH EREFORE HE ALLOWED ITA NO. 1581/MUM/2009 GOLCHA CINETALC P. LTD. 3 ONLY 15% OF DEPRECIATION. THE CIT(A) AFTER CONSIDER ING THE SUBMISSIONS AND FACTS OF THE CASE DELETED THE DISAL LOWANCE MADE BY THE AO. THEREFORE WE FIND NO INFIRMITY IN THE ORDE R OF THE CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF ELECTRICAL INSTALLATION AND THE SAME IS HEREBY CONFIRMED. 7. GROUND NO. 2 IS DIRECTED AGAINST THE ACTION OF T HE CIT(A) IN DELETING THE ADDITION OF RS. 3 33 180/- ON ACCOUNT OF JOB CHARGES. 8. THE AO NOTICED THAT AS PER TDS CERTIFICATES THE CONTRACT RECEIPTS RECEIVED BY THE ASESSSEE COMES TO RS. 25 32 305/- HOWEVER THE ASSESSEE HAD DISCLOSED ONLY RS. 21 99 125/- UNDER T HE HEAD JOB WORK CHARGES. THE ASSESSEE PRODUCED THE STATEMENT SHOWIN G COMPLETE DETAILS OF TDS AND SUBMITTED THAT THE SUM OF RS. 3 33 180/- WAS ON ACCOUNT OF JOB CHARGES REVERTED DUE TO RATE DIFFERE NT. THE AO HAS NOT SATISFIED WITH THE SAID SUBMISSIONS AND OBSERVED TH AT THE ASSESSEE HAD NOT EXPLAINED THE DIFFERENCE OF RS. 3 33 180/- WITH COMPLETE DOCUMENTARY EVIDENCE. THEREFORE THE AO MADE THE AD DITION OF RS. 3 33 180/- ON THE GROUND THAT MERE FILING OF LEDGER PRINT OUT WILL NOT BE CONSIDERED AS SUFFICIENT DOCUMENTARY EVIDENCE. A GGRIEVED BY THE ORDER OF AO THE ASSESSEE CARRIED THE MATTER IN APP EAL BEFORE THE CIT(A). 9. BEFORE THE CIT(A) THE LEARNED AR OF THE ASSESSE E SUBMITTED THAT THE ASSESSEE HAD RECEIVED JOB CHARGES FOR THE YEAR UNDER CONSIDERATION ARE FROM UDAIPUR MINERAL DEVELOPMENT SYNDICATE P. LTD.(UMDS) OF RS. 20 34 300/- AND FROM GOLCHA PLAST OCHEM P. LTD.(GPPL) OF RS. 1 64 825/- TOTALING TO RS. 21 99 125/-. AS ACCORDING TO THE LEARNED AR THERE IS NO DISPUTE RE GARDING THE JOB CHARGES RECEIVED FROM GPPL AND THE DISPUTE IS ONLY IN RESPECT OF JOB CHARGES RECEIVED FROM UMDS. HE FURTHER SUBMITTED TH AT THE LEDGER ACCOU8NT FOR JOB CHARGES WHERE THERE WAS A TOTAL CR EDIT OF RS. 25 32 305/- AND ONE DEBIT OF RS. 3 33 180/-. THE BA LANCE OF RS. ITA NO. 1581/MUM/2009 GOLCHA CINETALC P. LTD. 4 21 99 125/- DT. 08/05/04 IS WHAT THE ASSESSEE HAD D ISCLOSED AS INCOME. IT WAS POINTED OUT THAT THE FIRST TWO BILLS ENTERED IN THIS ACCOUNT DT. 8/5/04 AND 31/5/04 FOR RS. 5 05 440 AND 4 94 100 RESPECTIVELY WERE JOB GRINDING CHARGES @ 1800 PMT F OR THE MONTHS OF APRIL & MAY04 HOWEVER ON NEGOTIATION THE JOB CHA RGES WAS FIXED @ 1200 PMT INSTEAD OF 1800 PMT AND THE EXCESS JOB CHA RGES AMOUNTING TO RS. 3 33 180 HAD BEEN DEBITED. IT WAS FURTHER PO INTED OUT THAT WHILE THE TAX WAS DEDUCTED ON FULL AMOUNT OF RS. 9 99 540/- WHICH WAS @ 1800 PMT A SUM OF RS. 3 33 180/- WAS SUBSEQUE NTLY DEBITED AS THE RATE WAS REVERSED @ 1200 PMT SO THE ASSESSEE H AD DISCLOSED THE ENTIRE JOB CHARGES RECEIVED. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE CIT(A) DELETED THE ADDITION MADE BY O BSERVING AS UNDER:- 4.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. AR AND GONE THROUGH THE EVIDENCE BROUGHT TO RECORD. FR OM THE COPY OF THE LEDGER ACCOUNTS THE FACTS BECOME OBVIOUS. TH E AO WAS NOT CORRECT TO SAY THAT NO DOCUMENTARY EVIDENCE OTHER T HAN THE LEDGER ACCOUNT WAS PRODUCED. THE ENTRIES IN THE LEDGER ARE SELF EXPLANATORY. THE TWO BILLS TOTALING RS. 9 99 540/- HAS BEEN CREDITED TO THIS ACCOUNT WHICH IS JOB CHARGES @ 180 0 PMT. THE DEBIT OF RS. 3 33 180 WORKS OUT TO 1/3 RD OF THIS AMOUNT WHICH IS WORKED OUT AS EXCESS BY APPLYING THE RATE OF 1200 P MT. THE NET CREDIT AMOUNT IN THIS ACCOUNT IS RS. 21 99 125 WHIC H HAS BEEN DISCLOSED BY THE APPELLANT AND THERE IS NO REASON T O ADD THE BALANCE AMOUNT OF RS. 3 33 180/- TO ITS INCOME ON T HE BASIS OF THE TDS CERTIFICATE SINCE THE FACTS AND CIRCUMSTAN CES HAS BEEN EXPLAINED. ACCORDINGLY THE ADDITION IS DELETED AND THE GROUND OF APPEAL IS ALLOWED. 10. THE LEARNED DR HAS STRONGLY RELIED UPON THE ORD ER OF THE AO WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE HAS PL ACED RELIANCE ON THE ORDER OF CIT(A). 11. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF TH E PARTIES AND PERUSED THE RECORD. THE ASSESSEE RECEIVED CONTRACT RECEIPTS OF RS. 25 32 305/- BUT THE ASSESSEE HAD DISCLOSED ONLY RS. 21 99125/- UNDER THE HEAD JOB CHARGES AND HE EXPLAINED TO AO T HAT THE DIFFERENCE OF RS. 3 33 180/- AROSE DUE TO RATE DIFFERENCE. THE ASSESSEE FILED ITA NO. 1581/MUM/2009 GOLCHA CINETALC P. LTD. 5 DETAILS OF TDS AND COPY OF LEDGER. THE AO HAS NOT S ATISFIED AND MADE THE ADDITION OF RS. 3 33 180/- BEING THE DIFFERENCE SHOWN IN THE TDS AND DISCLOSURE. THE CIT(A) GAVE A FINDING THAT THE COPY OF LEDGER ACCOUNTS THE FACTS BECOME OBVIOUS AND THE DETAILS IN THE LEDGER ARE SELF EXPLANATORY AND THE AO WAS NOT CORRECT TO SAY THAT NO DOCUMENTARY EVIDENCE OTHER THAN THE LEDGER ACCOUNT WAS PRODUCED. WE FIND THAT THE ASSESSEE HAS CLEARLY EXPLAINED THE DIFFERENCE OF RS. 3 33 180/- BY WAY OF DOCUMENTARY EVIDENCE WHICH W AS REJECTED BY THE AO WHEREAS THE CIT(A) HAS RIGHTLY APPRECIATED T HE FACTS ON RECORD AND DELETED THE ADDITION MADE IN THIS REGARD. HENCE WE CONFIRM THE ORDER OF THE CIT(A) ON THIS COUNT AND DISMISS THE G ROUND RAISED BY THE REVENUE. 12. GROUND NO. 3 IS DIRECTED AGAINST THE ACTION OF THE CIT(A) IN DELETING THE DISALLOWANCE OF BAD DEBT OF RS. 2 45 8 84/-. 13. THE AO NOTICED THAT THE ASSESSEE HAD CLAIMED DE DUCTION OF A SUM OF RS. 2 45 584/- TOWARDS BAD DEBT. THE EXPLANA TION OF THE ASSESSEE THAT IT FAILED TO COLLECT THE DEBTS WHICH WERE ACCORDINGLY WRITTEN OFF WAS NOT ACCEPTED BY THE AO ON THE GROU ND THAT THE ASSESSEE HAD NOT SATISFIED ALL THE CONDITIONS FOR A LLOWABILITY OF THE CLAIM FOR DEDUCTION OF BAD DEBT AS PER SEC. 36(1)(V II) R.W.S. 36(2) OF THE ACT. HENCE HE DISALLOWED THE BAD DEBTS CLAIM OF TH E ASSESSEE. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE CARR IED THE MATTER IN APPEAL BEFORE THE CIT(A). 14. BEFORE THE CIT(A) THE LD. AR OF THE ASSESSEE S UBMITTED THAT THE DEBTORS WERE IN RESPECT OF THE CINEMA EXHIBITION BU SINESS. ALL THESE AMOUNTS WERE OUTSTANDING FOR MORE THAN 3-5 YEARS AN D HAVE BEEN WRITTEN OFF ONLY WHEN THERE WAS NO CHANCE OF RECOVE RY WHICH HAVE BEEN WRITTEN OFF IN THE BOOKS OF ACCOUNT. THE LEARN ED AR RELIED UPON THE DECISION OF HONBLE ITAT MUMBAI BENCH IN THE CA SE OF DCIT VS. OMAN INTERNATIONAL BANK 100 ITD 285. AFTER CONSIDE RING THE ITA NO. 1581/MUM/2009 GOLCHA CINETALC P. LTD. 6 SUBMISSIONS OF THE ASSESSEE THE CIT(A) HELD THAT T HE ASSESSEE HAS FULLY JUSTIFIED THE CLAIM OF DEDUCTION TOWARDS BAD DEBTS. HE FURTHER HELD THAT SINCE THE AMOUNTS WERE GIVEN DURING THE C OURSE OF BUSINESS AND HAS NO POSSIBILITY OF RECOVERY AND HAVE BEEN AC TUALLY WRITTEN OFF IN THE BOOKS OF ACCOUNT. HENCE HE DELETED THE DISA LLOWANCE MADE BY THE AO ON ACCOUNT OF BAD DEBTS. AGGRIEVED BY THE OR DER OF CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 15. THE LEARNED DR HAS STRONGLY RELIED UPON THE ORD ER OF THE AO WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE HAS PL ACED RELIANCE ON THE ORDER OF CIT(A). 16. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF TH E PARTIES AND PERUSED THE RECORD. WE FIND THAT IN THE CASE OF TRF LIMITED V. CIT 323 ITR 397 (SC) THE HONBLE SUPREME COURT HELD THAT AFTER THE AMENDMENT OF SECTION 36(1)(VII) OF THE INCOME-TAX ACT 1961 WITH EFFECT FROM APRIL 1 1989 IN ORDER TO OBTAIN A DEDUCTION IN RELATION TO BAD DEBT S IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT IN FACT H AS BECOME IRRECOVERABLE IT IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF AS IRRECOVERA BLE IN THE ACCOUNTS OF THE ASSESSEE. IN VIEW OF THE LAW LAID DOWN BY THE HONBLE SUPREME COURT THE CIT(A) WAS RIGHT IN DELETING THE DISALLOWANCE M ADE BY THE AO HOLDING THAT SINCE THE AMOUNTS WERE GIVEN DURING TH E COURSE OF BUSINESS AND HAS NO POSSIBILITY OF RECOVERY AND HAV E BEEN ACTUALLY WRITTEN OFF IN THE BOOKS OF ACCOUNT BY THE ASSESSEE . THEREFORE WE CONFIRM THE ORDER OF CIT(A) ON THIS ISSUE AND DISMI SS THE GROUND RAISED BY THE REVENUE. 17. GROUND NO. 4 IS DIRECTED AGAINST THE ACTION OF THE CIT(A) IN DELETING THE DISALLOWANCE OF RS. 1 34 337/- BEING I NTEREST ON DELAYED PAYMENT OF SALES TAX. 18. THE AO NOTICED THAT THE ASSESSEE HAD CLAIMED EX PENSES OF RS. 1 34 337/- TOWARDS INTEREST ON DELAYED PAYMENT OF S ALES TAX ETC. HE ITA NO. 1581/MUM/2009 GOLCHA CINETALC P. LTD. 7 HELD IT TO BE PENAL IN NATURE NOT ALLOWABLE AS EXPE NDITURE IN VIEW OF THE PROVISIONS OF SEC. 37 OF THE ACT AND THEREFOR E DISALLOWED THE SAID EXPENSES. BEFORE THE CIT(A) THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE AMOUNT REPRESENTS THE INTEREST FOR DELAYED PAYMENT OF SALES TAX AND NOT ANY PENALTY FOR ANY BREACH OF LAW. HE A RGUED THAT IT IS WELL SETTLED POSITION OF LAW THAT ANY PAYMENT WHICH IS COMPENSATORY IN NATURE IS ALLOWABLE AS DEDUCTION FOR WHICH HE R ELIED UPON THE DECISION OF RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. WESTERN INDIAN STATE MOTORS 174 ITR 116. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESEE THE CIT(A) DIRECTED THE AO TO ALLOW THE CLAIM OF THE ASSESSEE BY OBSERVING THAT THE THE AMOUNT HAS BEEN PAID AS INTEREST FOR DELAYED PAYMENT ON SALES TAX WHICH WILL NOT AMO UNT TO A PAYMENT FOR INFRINGEMENT AND THE DECISION RELIED UPON BY TH E ASSESSEE IN THE CASE OF WESTERN INDIAN STATE MOTORS SUPPORTS THE CA SE OF THE ASSESSEE. 19. AGGRIEVED BY THE ORDER OF THE CIT(A) THE REVEN UE IS IN APPEAL BEFORE THE ITAT. 20. THE LEARNED DR HAS STRONGLY RELIED UPON THE ORD ER OF THE AO WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE HAS PL ACED RELIANCE ON THE ORDER OF CIT(A). 21. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF TH E PARTIES AND PERUSED THE RECORD. THE AO HAD DISALLOWED THE CLAIM OF EXPENSES OF RS. 1 34 337/- PAID BY THE ASSESSEE TOWARDS INTERES T ON DELAYED PAYMENT OF SALES ETC ON THE GROUND THAT THE PAYMENT WAS IN PENAL NATURE NOT ALLOWABLE AS EXPENDITURE IN VIEW OF THE PROVISIONS OF THE SEC. 37 OF THE ACT. THE SUBMISSION OF THE ASSESSEE IS THAT THE AMOUNT PAID BY THE ASSESSEE REPRESENTS FOR DELAYED PAYMENT OF SALES TAX AND NOT ANY PENALTY FOR BREACH OF LAW AS THIS WAS THE N ATURE OF COMPENSATION AND NOT A PENALTY LEVIABLE ON INFRINGE MENT OF LAW. THE CIT(A) HELD THAT THE AO HAS CONSIDERED THIS AMOUNT AS A PENALTY PAID ITA NO. 1581/MUM/2009 GOLCHA CINETALC P. LTD. 8 FOR ANY INFRINGEMENT OF LAW WHICH IS NOT CORRECT A ND DELETED THE DISALLOWANCE OF RS. 1 34 337/-. WE FIND NO INFIRMIT Y IN THE ORDER OF THE CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE AO AND THE SAME IS HERE BY UPHELD. 22. GROUND NO. 5 IS DIRECTED AGAINST THE ACTION OF THE CIT(A) IN DELETING THE ADDITION OF RS. 65 LAKHS. 23. THE AO NOTICED FROM THE TAX AUDIT REPORT IN FOR M NO. 3CD THAT THE ASSESSEE HAD RECEIVED A SUM OF RS. 65 LAKHS FRO M SHRI S.K. GOLCHA AS LOAN DURING THE YEAR UNDER CONSIDERATION. THE AO ASKED THE ASSESSEE TO FURNISH THE CONFIRMATION FROM SHRI S.K. GOLCHA INDICATING THE COMPLETE ADDRESS AND PAN. IN COMPLIANCE THE ASS ESSEE FILED A CONFIRMATION LETTER FROM SHRI S.K. GOLCHA. THE AO N OTICED FROM THE CONFIRMATION LETTER THAT THE OPENING BALANCE AS ON 01/04/04 WAS RS. 65 69 420/- AND THE CLOSING BALANCE WAS RS. 67 04 0 60/-. HE HELD THAT SHRI GOLCHA HAD NOT CONFIRMED IN THIS CONFIRMA TION LETTER THAT HE HAD GIVEN A SUM OF RS. 65 LACS DURING FY 04-05 AND ALSO OBSERVED THAT THE ASSESSEE HAD NOT PRODUCED BANK STATEMENT O F SHRI GOLCHA REFLECTING THE WITHDRAWAL TOWARDS THE PAYMENT OF LO AN TO THE ASSESSEE. IN VIEW OF THE ABOVE THE AO HELD THAT THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS OF THE LOAN OF RS. 65 LAKHS RECEIVE D FROM SHRI GOLCHA AND ADDED THE SAME U/S 68 OF THE ACT. AGGRIEVED TH E ASSSSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 24. BEFORE THE CIT(A) THE LEARNED AR OF THE ASSESS EE HAD SUBMITTED THAT THE AOS INFERENCE FROM THE ANNEXURE TO FROM N O. 3CD OF THE AUDIT REPORT IS ERRONEOUS AND POINTED OUT THAT THER E IS NOTHING MENTIONED IN THIS ANNEXURE TO SUGGEST THAT THE SUM OF RS. 65 LAKHS HAS BEEN RECEIVED BY THE ASSESSEE FROM SHRI GOLCHA. THE LEARNED AR SUBMITTED THAT IN THE AUDIT REPORT THE AUDITORS HAV E ALSO GIVEN REMARK THAT THE MAXIMUM AMOUNT OUTSTANDING IN THIS ACCOUNT DURING THE ITA NO. 1581/MUM/2009 GOLCHA CINETALC P. LTD. 9 YEAR WAS RS. 67 04 060/- WHICH IS WHAT HAS BEEN SHO WN IN THE BALANCE SHEET AS ON 31/03/05. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE CIT(A) DELETED THE ADDITION MADE B Y THE AO. 25. THE LEARNED DR HAS STRONGLY RELIED UPON THE ORD ER OF THE AO AND CONTENDED THAT SHRI GOLCHA HAS NOT CONFIRMED IN THE CONFIRMATION LETTER THAT HE HAD GIVEN A SUM OF RS. 65 LAKH DURIN G THE FY 2004-05. 26. ON THE OTHER HAND THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE ORDER OF CIT(A). 27. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF TH E PARTIES AND PERUSED THE RECORD. THE GRIEVANCE OF THE AO IN MAKI NG THE ADDITION IS THAT SHRI GOLCHA HAS NOT CONFIRMED IN THE CONFIRMAT ION LETTER THAT HE HAD GIVEN A SUM OF RS. 65 LAKH DURING THE FY 2004-0 5 AND THE ASSESSEE HAS NOT PRODUCED THE BANK STATEMENT OF SHR I GOLCHA REFLECTING THE WITHDRAWAL TOWARDS THE PAYMENT OF LO AN TO THE ASSESSEE. MOREVER THE AO POINTED OUT THAT THERE IS NOTHING M ENTIONED IN THE ANNEXURE E TO FORM 3CD TO SUGGEST THAT THE SUM OF R S. 65 LAKH HAS BEEN RECEIVED BY THE ASSESSEE FROM SHRI GOLCHA IN T HE ACCOUNTING PERIOD RELEVANT TO AY 2005-06. WE FIND THAT THE CIT (A) WHILE DELETING THE ADDITION MADE BY THE AO HAS NOT PROPERLY LOOKED INTO THE GRIEVANCES RAISED BY THE AO. IN THIS VIEW OF THE MA TTER WE REMIT THE MATTER BACK TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE AFRESH AFTER EXAMINING ALL THE DETAILS AND IN ACCORDANCE W ITH LAW. THE ASSESSEE IS DIRECTED TO PRODUCE ALL THE RELEVANT MA TERIAL TO PROVE THE GENUINENESS OF THE LOAN OBTAINED FROM SHRI GOLCHA I N SUPPORT OF HIS CASE. HENCE THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1581/MUM/2009 GOLCHA CINETALC P. LTD. 10 28. IN THE RESULT THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF FEBRUAY 2011. SD/- SD/- (PRAMOD KUMAR) (V. DURGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI DATED: 25 TH FEBRUARY 2011. COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE G BENCH I.T .A.T. MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR I.T.A.T. MUMBAI. KV