M/s. Ajmer Singh & Co., KOTKAPURA v. The DCIT, Ferozepur

ITA 667/ASR/2013 | 2008-2009
Pronouncement Date: 15-04-2014 | Result: Partly Allowed

Appeal Details

RSA Number 66720914 RSA 2013
Assessee PAN AAHFA4353K
Bench Amritsar
Appeal Number ITA 667/ASR/2013
Duration Of Justice 5 month(s) 2 day(s)
Appellant M/s. Ajmer Singh & Co., KOTKAPURA
Respondent The DCIT, Ferozepur
Appeal Type Income Tax Appeal
Pronouncement Date 15-04-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 15-04-2014
Date Of Final Hearing 08-04-2014
Next Hearing Date 08-04-2014
Assessment Year 2008-2009
Appeal Filed On 12-11-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU JUDICIAL MEMBER AND SH. B.P.JAIN ACCOUNTANT MEMBER I.T.A. NO.667(ASR)/2013 ASSESSMENT YEAR:2008-09 PAN :AAHFA4353K M/S. AJMER SINGH & CO. VS. DY. COMMR. OF INCOMETA X KOTKAPURA. RANGE-III FEROZPUR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.S.K.KATARIA ADVOCATE RESPONDENT BY:SH.TARSEM LAL DR DATE OF HEARING:08/04/2014 DATE OF PRONOUNCEMENT:15/04/2014 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A) BATHINDA DATED 01.08.2013 FOR THE ASSESSMENT YEAR 2008-09.THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT AS PER PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ASSESSMENT ORDER OF LD. DCIT PASSED U/S 143(3) AMONGST OTHERS ON THE FOLLOW ING POINTS. ITA NO.667(ASR)/2013 2 2. LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY LD. DCIT ON ACCOUNT OF NON CHARGING OF INTEREST FROM SI STER CONCERN AT RS.74951/- ON DEBIT BALANCE OUTSTANDING DURING THE YEAR WITHOUT ANY BASIS OR MATERIAL. THE DEBIT BALA NCE WAS NOT GIVEN DURING THE YEAR. NEITHER THE SISTER CONCERN A LLOWED THE INTEREST NOR THE APPELLANT FIRM HAD CHARGED THE IN TEREST. THERE WAS NO INCOME DEBITED IN THE HAND AND CREDIT IN THE OTHER. THE ADDITION OF RS.74951/- DESERVE TO BE DELETED AS PE R FACTS AND CIRCUMSTANCES OF THE CASE. 3. LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY LD. DCIT WHEREIN ADDITION OF RS.19494/- HAS BEEN CONFI RMED ON ACCOUNT OF INTEREST SHOW ON IN FORM 16-A BY CENTURI ON BANK OF PUNJAB ON THE FDR WHEREAS THIS INTEREST INCOME STO OD DECLARED IN PREVIOUS YEAR. IN THIS WAY THIS INTEREST INCOME OF RS.19 494/- HAS BEEN SUFFERED TAX WISE ONCE IN AY 2007-08 AS P ER BANK STATEMENT AND AGAIN IN AY 2008-09 AS PER FORM 16-A . ASSESSEE PRAYS THAT INCOME BE ASSESSED ONCE AND NOT TWICE. 4. THAT THE APPELLANT BEGS TO CRAVES ANY OTHER ADDI TIONAL GROUND/S OF APPEAL BEFORE OR AT THE TIME OF THE HEARING OF THE APPEAL WITH PERMISSION OF CHAIR. 2. GROUNDS NO. 1 4 ARE GENERAL IN NATURE AND THERE FORE DO NOT REQUIRE ANY ADJUDICATION. 3. AS REGARDS GROUND NO.2 THE BRIEF FACTS AS ARISI NG FROM THE ORDER OF THE A.O. ARE REPRODUCED FOR THE SAKE OF CONVENIENCE AS UNDER: THE SCRUTINY OF THE ACCOUNTS HAS REVEALED THAT THE ASSESSEE HAS SHOWN INTEREST FREE DEBIT BALANCES AT RS.6 24 596/- (RS.4 00 000/- + RS.2 24 596/_) RECEIVABLE FROM M/S. ASA SINGH COTTO N FACTORY KORKAPURA. THIS AMOUNT WAS OUTSTANDING AS ON 01.04. 2007 AND CONTINUED TO BE OUTSTANDING AGAINST THE DEBTOR THRO UGHOUT THE YEAR UNDER CONSIDERATION. THE REASON FOR NON-CHARGING OF INTEREST HAS BEEN EXPLAINED BY THE ASSESSEE AS THAT THE DEBTOR IS UNA BLE TO REPAY EVEN THE ORIGINAL AMOUNT. THIS PLEA OF THE ASSESSEE HAS NOT BEEN FOUND ACCEPTABLE AS IT IS THE SISTER CONCERN OF THE ASSES SEE AND ONE OF THE ITA NO.667(ASR)/2013 3 PARTNERS OF THIS SISTER CONCERN NAMELY SMT. HARJIT KAUR. FURTHER M/S. ASA SINGH COTTON FACTORY KOTKAPURA IS AN ALIVE FI RM SHOWING INCOME FROM LEASE MONEY AND IS A REGULAR INCOME TAX ASSESSEE. AS SUCH THE AMOUNT ADVANCED BY THE ASSESSEE TO M/S. A SA SINGH COTTON FACTORY IS JUST DIVERSION OF INTEREST BEARING FUND S TOWARDS THE INTEREST FREE ADVANCE. THE ASSESSEE HAS DEBITED RS.20 00 131 /- ON ACCOUNT OF INTEREST INCLUDING INTEREST PAID TO THE PARTNERS AN D THE INTEREST CHARGEABLE FROM M/S. ASA SINGH COTTON FACTORY KOT KAPURA IS TO BE DISALLOWED OUT OF THE INTEREST SO DEBITED BY THE AS SESSEE. THE ASSESSEE HAS RECEIVED AND PAID INTEREST AT THE @ 12% AND THE INTEREST CHARGEABLE FROM M/S. ASA SINGH COTTON FACTORY KOTK APURA WORKS OUT OF RS.74951/- (6 24 596/- X 12%). THIS AMOUNT OF IN TEREST IS BEING DISALLOWED OUT OF THE INTEREST AMOUNT DEBITED BY TH E ASSESSEE AND AS SUCH ADDED TO THE INCOME RETURNED BY IT. 4. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. 5. THE LD. COUNSEL FOR THE ASSESSEE MR. S.K.KATARI A ADVOCATE ARGUED THAT ASSESSEE IS A PARTNERSHIP FIRM CONSISTING OF T HREE BROTHERS FAMILIES OF S.NIRANJAN SINGH AJMER SINGH AND JAGDISH SINGH SON S OF S. ASA SINGH OF KOTKAPURA AND ARE ENGAGED IN THE BUSINESS OF COMMI SSION AGENTS (KATCHI AHRAT). SMT. HARJIT KAUR W/O SH. AJMER SINGH IS PAR TNER SINCE 1991 AND S.AJMER SINGHS FAMILY ONE OF THE BROTHERS SH. AJM ER SINGH WAS RUNNING HIS COTTON FACTORY M/S. ASA SINGH COTTON FACTORY KOTKAPURA SINCE 1998 AND THEY HAD CASH CREDIT AND TRADE ACCOUNT WITH ASS ESSEE FIRM. SH. AJMER SINGH HAD SUDDENLY EXPIRED IN 2004 AND AT THE TIME OF HIS DEATH THIS DEBIT BALANCE WAS OUTSTANDING. ASSESSEE FIRM HAD A DEBIT BALANCE OF RS.624596- WITH SISTER CONCERN M/S. ASA SINGH COTTON FACTOR Y KOTKAPURA. THE BALANCE ITA NO.667(ASR)/2013 4 IS ADMITTEDLY OLD B/F BALANCE SINCE AY 2004-05. ASS ESSEE FIRM HAD NOT CHARGED ANY INTEREST DURING THE YEAR. 6. THE LD. DR SH.TARSEM LAL ON THE OTHER HAND RE LIED UPON THE ORDERS OF BOTH THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THERE IS A DEB IT BALANCE WITH THE SISTER CONCERN M/S. ASA SINGH COTTON FACTORY KOTKAURA AND ADMITTEDLY THIS IS AN OLD BALANCE. IT WAS ARGUED THAT THE MONEY HAS BEEN ADVANCED TO THE SISTER CONCERN AS PER COMMERCIAL EXPEDIENCY AND NO PERSONA L BENEFIT IS DERIVED THEREFROM. IN THE FACTS AD CIRCUMSTANCES THE MATTE R GETS SUPPORTS FROM THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF S. A. BUILDERS LTD. VS. CIT (APPEALS) & ANOTHER REPORTED IN (2007) 288 ITR 1 AN D THEREFORE THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ACTION O F THE A.O. THUS INTEREST SO CHARGED AS INCOME IS DIRECTED TO BE DELETED. HENC E GROUND NO.2 OF THE ASSESSEE IS ALLOWED. 8. AS REGARDS GROUND NO.3 THE BRIEF FACTS AS ARISI NG FROM THE AOS ORDER ARE REPRODUCED FOR THE SAKE OF CONVENIENCE AS UNDE R: THE ASSESSEE HAS RECEIVED AT RS.19 494/- FROM CENTU RION BANK OF INDIA AS PER THE BANK STATEMENT BUT THIS AMOUNT HAS BEEN CANCELLED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS EXPLAINING TH AT THIS CREDIT ENTRY OF INTEREST PERTAINS TO THE ASSESSMENT YEAR 2007-08 AND DULY STANDS ACCOUNTED THERE. HOWEVER NO PROOF OF CREDIT OF THI S ENTRY IN THE ASSESSMENT YEAR 2007-08 HAS BEEN PRODUCED BY THE AS SESSEE. AS SUCH ITA NO.667(ASR)/2013 5 THIS AMOUNT OF RS.19 494/- IS BEING ADDED TO THE IN COME RETURNED BY THE ASSESSEE. 9. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. 10. THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT TH E ASSESSEE HAD DECLARED BANK INTEREST INCOME FROM FDR IN EARLIER YEAR WHEN THE BANK STAFF REPORTED THE SAME TO OUR ACCOUNTANT BUT IN THE FORM NO.16 AS UPLOADED BY BANK THE DISPUTED INTEREST INCOME WAS SHOWN IN THIS YEARS R ETURN. DETAILS HAVE BEEN FURNISHED BEFORE A.O. IN THE ASSESSMENT PROCEEDINGS AND AFTER ASSESSMENT U/S 154 AND IT IS PRAYED THAT APPROPRIATE INSTRUCT IONS MAY BE GIVEN TO AO FOR ALLOWING THE CLAIM IF THE FACTS AND CIRCUMSTANCES EXIST IN FAVOUR OF ASSESSEE. 11. THE LD. DR SH.TARSEM LAL ON THE OTHER HAND R ELIED UPON THE ORDERS OF BOTH THE AUTHORITIES BELOW. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ASSESSEE SUBMITTED THAT INTEREST HAS BEEN DECLA RED IN THE PRECEDING YEAR AND THEREFORE CHARGING OF INTEREST IN THE IMPUGNED YEAR WILL TANTAMOUNT TO DOUBLE ADDITION. IN THE FACTS AND CIRCUMSTANCES AND IN THE ABSENCE OF ANY EVIDENCE BROUGHT ON RECORD THE MATTER IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER WHO WILL EXAMINE THE ISSUE AND I F THE INTEREST IS FOUND TO HAVE BEEN INCLUDED IN THE PRECEDING YEAR THEN THE SAME CANNOT BE INCLUDED IN THE IMPUGNED YEAR. THE AO IS DIRECTED TO DECIDE THE ISSUE ON EXAMINING ITA NO.667(ASR)/2013 6 THE FACTS AS PER LAW BUT AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS THIS GROUND OF APPEAL OF TH E ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 13. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IN ITA NO.667(ASR)/2013 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15TH APRIL 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15TH APRIL 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. AJMER SINGH & CO. KOTKAPURA. 2. THE DCIT R-III FEROZEPUR. 3. THE CIT(A) BATHINDA. 4. THE CIT BATHINDA. 5. THE SR DR ITAT AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR