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TMI Blog2017 (2) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance u/s.40(a)(ia) - non deduction of tds on interest expenses - submission of Form No. 15 G - Held that:- We are of the view that as the assessee has filed form no.15G in the cases of 9 parties to whom interest of ₹ 3,00,348/- was paid there was no liability of deducting tax at source at assesse’s behest and, therefore, ld. Commissioner of Income Tax(A) has rightly deleted the disallowance. We find no substance in this ground raised by Revenue against ld. Commissioner of Income Tax(A)’s order for admitting additional evidence in violation of Rule 46A as from the perusal of the assessment order it is well evident that the details, names and addresses, PAN, bank statement, income-tax returns were all placed before the assessing authority and as regards form no.15G in relation to non-payment of ₹ 3,00,348/- record was very much available with the assessing authority as these forms were filed on 4.4.2009 with ITO, TDS-3, Ahmedabad. Therefore, we find that ld. Commissioner of Income Tax(A) has not admitted any additional evidence in violation of Rule 46A. We, therefore, dismiss this ground of Revenue.- Decided in favour of assessee - ITA No. 2248/Ahd/2012 - - - Dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy of accounts, confirmations and proof of creditworthiness. Assessee filed necessary details of the unsecured loans. On verification of the same ld. Assessing Officer observed that in the case of 24 parties from whom total of unsecured loans of ₹ 1,20,21,020/- was received during the year, assessee has failed to prove the creditworthiness of the depositors because the income of the loan creditors was very meager as shown in the income-tax returns in comparison to the loans given by them to the assessee. Accordingly, addition u/s 68 of the Act for unexplained cash credit of ₹ 1,20,21,020/- was made. Ld. Assessing Officer also observed that an interest of ₹ 7,06,261/- was paid to the impugned cash creditors of ₹ 1,20,21,020/- and therefore, disallowed the same loan by treating them as non-genuine expenditure. This interest payment of ₹ 7,06,261/- inter alia included an amount of ₹ 3,00,348/- on which TDS has not been deducted u/s 194C of the Act. Ld. Assessing Officer brushed aside the submissions of the assessee that form 15G from the parties to whom interest of ₹ 3,00,348/- has been paid and applying the provisions of section 40(a)(ia) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, bank statement etc. there remains no case for addition u/s 68 of the Act and more so no enquiry has been carried out against any of the cash creditor by ld. Assessing Officer. 7. Aggrieved, Revenue is now in appeal before the Tribunal and ld. Departmental Representative vehemently argued supporting the order of Assessing Officer. 8. On the other hand, ld. Authorised Representative following the order of ld. Commissioner of Income Tax(A) contended that all necessary evidences were placed before the Assessing Officer which are sufficient to prove the identity, genuineness and creditworthiness of the loan creditors. Ld. Authorised Representative referred and relied on the judgment of Hon. Gujarat High Court in the case of Commissioner of Income Tax vs. Ranchhod Jivabhai Sakhava in Tax Appeal No.50 of 2011, decision of the Co-ordinate Bench in the case of ITO vs. Arihant X-ray Sonography Clinic (P) Ltd. in ITA No.4133/Ahd/2003 dated 14.11.2006 and another decision of the Coordinate Bench in the case of ACIT vs. M/s Amik Printers in ITA No.3059/Ahd/2010 vide order dated 21.04.2015. 9. We have heard the rival contentions and perused the material placed on record and gone th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,50,000/- 21. Anilkumar Dayaldas HUF 1,10, 000/- 22. Veena Balumal 1,00,000/- 23. Balumal Thanwardas HUF 50,000/- 24. Amit Balumal 50,000/- Total 1,20,21,020/- 10. We further observe that during the course of assessment proceedings assessee gave names, addresses PAN of all the 24 parties and copy of bank statements, income-tax return and confirmation account of 23 parties and for the remaining one assessee gave necessary documents before ld. Commissioner of Income Tax(A). The only reason for which ld. Assessing Officer was not convinced and the reply of assessee was that the income shown by the loan creditors was NIL or very less in comparison to loan given by them and ld. Assessing Officer s observation can be more clear with the help of the following chart:- Sl.No Name of the Unsecured loan persons Amount of loan given Retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erani Rs. l/91/462/- ₹ 2,84,690/- 19. Hassanand Gurumal ₹ 1,79,889/- ₹ 40,784/- 20. Balumal Thanwardas ₹ 1,63,900/- ₹ 1,27,890/- 21. Anilkumar Dayaldas HUF Rs, 1/17/302/- Rs. lf33,066/- 22. Veena Balumal ₹ 1,09,267/- ₹ 2, 06,630/- 23. Balumal Thanwardas HUF ₹ 54,663/- ₹ 47,320/- 24. Am it Balumal ₹ 54,633/- ₹ 1,32,180/- 11. When the matter travelled before ld. Commissioner of Income Tax(A) the impugned addition was deleted by him by observing as follows :- 5. I have perused the facts of the case and details so filed by appellant. I have considered the contention of the A.O. as well as of appellant in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of jurisdictional high court is very clear and if applied to the facts of the appellant, Then the conclusion arrived at by A.O. will be unsustainable and addition so made will become unwarranted. The appellant submitted a chart (paper book page 16 to 18) in respect of parties from whom appellant received loans showing various details submitted before A.O. This chart is appended with this appeal order as part of order. This chart clearly reflects that appellant has adduced all necessary evidences to discharge its burden as contemplated u/s 68 of the Act. As relied on by appellant, Hon'ble ITAT Ahmedabad in the case of Shri Ankit Maheshwari , surat(supra) examined in details various aspects related to section 68 of the Act and after considering various propositions in respect of lenders with that of appellant submission held in favor of appellant that once contra account with confirmation are filed with PAN and other details like states of latest return of income, Bank statement etc. Then there is no case for addition u/s 68 of the Act. As per established legal proposition the borrower need not to prove source of the source or credit worthiness of sub creditor. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are unable to accept her contention that in this case the Revenue has discharged its onus and it was for the assessee to further prove the genuineness and creditworthiness of the creditors. In our view, once the assessee has established that he has taken money by way of accounts payee cheques from the lenders who are all income tax assessees whose PAN have been disclosed, the initial burden under Section 68 of the Act was discharged. It further appears that the assessee had also produced confirmation letters given by those lenders. Once the Assessing Officer gets hold of the PAN of the lenders, it was his duty to ascertain: from the Assessing Officer of those lenders, whether in their respective return they had shown existence of such amount of money and had further shown that those amount of money had been lent to the assessee. If before verifying of such fact from the Assessing Officer of the lenders of the assessee, the Assessing Officer decides to examine the lenders and asks the assessee to further prove the genuineness and creditworthiness of the transaction, in our opinion, the Assessing Officer did not follow the principle laid down under Section 68 oflhe Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had received gift from Shri Vinod Shah, whose address, P.A. / number bank passbook and copies of IT returns, were also given. Similarly, the identity of Dr. Asim V. Shah was / proved, he appeared before the AO, his copy of contra accounts were produced, the address, P.A. number and copies of IT returns were also furnished. In these circumstances, in our opinion, the CIT(A) was justified in allowing the claim of the assessee and the matter stands covered by the Gujarat High Court (decision) in the case of CIT vs. Rohini Builders (2003) 182 CTR (Guj) 373 : (2002) 256 ITR 360 (Guj) wherein the Court placing reliance on the decisions of the Supreme Court in the cases of CIT vs. Orissa Corporation (P) Ltd. (1986) 52 CTR (SC) 138 : (1986) 159 ITR 78 (SC) and CIT vs. Daulat Ram Rawatmul! 1972 CTR (SC) 411 : (1973) 87 ITR 349 (SC), deleted the addition by observing that the Tribunal found that the assessee had discharged the initial onus which lay on it in terms of s. 68 by proving the identity of the creditor and complete address, GIR number/PA number and the copies of assessment orders wherever readily available, that it had also proved the capacity of the creditor showing the amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analyzing the detail of each creditor. Ld. First Appellate Authority is of the opinion that identity of creditor has to be proved. Similarly, the transaction has to be proved as genuine as well as creditors should be creditworthiness. While examining the detail of the first creditor namely Gurumukhdas Dulhanomal A Pritmani, Ld. First Appellate Authority has observed that money was paid through account payee cheque. Shri Gurumukhdas Dulhanomal A Pritmani had not received any money from the assessee before issuance of a cheque to the assessee. He was a income tax payer and the copy of the return was also submitted. It is pertinent to mention that there are 13 creditors. Ld. CIT(A) has confirmed the addition qua four, meaning thereby, additions have been deleted qua 9 creditors. Revenue is challenging the deletion qua five creditors only. The grievance of the revenue is that discussion was not made by the Ld. First Appellate Authority with respect to five. In our opinion, when Ld. First Appellate Authority has made observation about 13 creditors then it is to be appreciated that Ld. First Appellate Authority must have a glance on all the details. It is the Assessing Officer who did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, in respect of interest expenses of ₹ 3,00,3487- paid without compliance to provision of Section 194A of the Act. . 18. From perusal of records, we find that on the loan amount of ₹ 1,20,21,020/- assessee credited/paid interest of ₹ 7,06,621/-. Out of the interest amount of ₹ 7,06,621/-, ₹ 4,05,913/- was subjected to deduction of tax at source and for the remaining amount of ₹ 3,00,348/-, individual amounts were either below the prescribed limit of non-deduction of TDS or form no.15G were issued by the loan creditors with their total income for the year was below the taxable limit. It seems that during the course of assessment proceedings ld. Assessing Officer failed to enquire from ITO TDS regarding form no.15G submitted in the cases of loan creditors coming under list of interest of ₹ 3,00,348/- and accordingly he made disallowance u/s 40(a)(ia) of the Act for non-deduction of TDS. 19. Aggrieved, assessee raised the ground against ld. Assessing Officer s order and succeeded as ld. Commissioner of Income Tax(A) deleted the impugned disallowance u/s 40(a)(ia) of the Act. In appeal before the Tribunal, Revenue is supporting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been deducted because all these parties submitted Form No. 15 G to appellant. Since no show cause/explanation was asked from appellant this detail was not submitted before A.O. I have examined the details and found the same in order. The A.O. out of abundant precaution while framing the asstt. order included this issue without proper verification. In view of these facts and appellant's submission, the additions u/s 40 (a)(ia) of the Act for interest of ₹ 3,00,348 are unwarranted though not made by A.O. to avoid duplicating of addition. The same is directed to be deleted. The appellant gets relief accordingly. 21. We observe that ld. Commissioner of Income Tax(A) has deleted the disallowance in the right perspective in view of his views as reproduced above and, therefore, in the given facts, we find no reason to call for any interference with the order of ld. Commissioner of Income Tax(A). We dismiss this ground of Revenue. 22. We find no substance in this ground raised by Revenue against ld. Commissioner of Income Tax(A) s order for admitting additional evidence in violation of Rule 46A as from the perusal of the assessment order it is well evident that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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