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TMI Blog2019 (12) TMI 1359X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance of consequent interest paid on unsecured loans u/s 68 and related commission expenditure incurred in relation to said unsecured loans, but the Tribunal has by inadvertent mistake omitted to consider and adjudicates those grounds. Further, the issue of addition towards unsecured loans, consequnet interest paid on said loan and related commission and brokerage expenses are interrelated and interconnected, because the findings of one ground may have bearing on the other ground and hence all grounds needs to be considered together. If, one ground is considered and other ground is not adjudicated, then certainly it constitutes a mistake on face of the order - non consideration of specific ground taken by the assessee constitutes a mistake apparent on record, which can be rectified u/s 254(2) - MP of assessee allowed. - M.A. Nos.413 /Mum/2019 (Arising out of ITA No.4434/Mum/2018) & M.A. Nos.414/Mum/2019 (Arising out of ITA No.4435/Mum/2018) & M.A. Nos.415 /Mum/2019 (Arising out of ITA No.4436/Mum/2018) - - - Dated:- 9-12-2019 - Shri MAHAVIR SINGH (JUDICIAL MEMBER) AND Shri G MANJUNATHA (ACCOUNTANT MEMBER) For the Applicant : Shri.Suchet Anchaliya,AR For the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The Ld. CIT(A) erred in confirming the disallowance of unsecured loans taken of ₹ 20,958/- and thereby erred m confirming and treating the same as unexplained cash credits in view of section 68 of the Income Tax Act. 1961. 8. The Ld. CIT(A} erred in confirming the disallowance of genuine commission/ brokerage of ₹ 350,000/- and thereby erred in treating The same as unexplained expenditure and added the same in view of section 69C of the Income Tax Act, 1961r 9. The Ld. C1T(A) erred in confirming the disallowance of the expenses of ₹ 2,24,3987-attributed for exempt income as per section 14A r. w.r 8D of the Income Tax, 1961. 10. The Ld. CIT(A) erred in confirming charging of interest under section 234A, 234B, 234C and 234D of the income Tax Act 1961. 11 The Ld. CIT(A) erred in confirming the initiation of the penalty proceeding under section 274 r.w.s. 271(1)(c) of the Income Tax Act, 1961. 12. The Assessee craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing. 3. In the aforesaid order, the Hon ble ITAT has enlisted the grounds of appeal as under: The assesses has raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st under section 234A, 234B, 234C and 234D of the Income Tax Act 1961. 11. The Ld. CIT(A) erred in confirming the initiation of the penalty proceeding under section 274 r.w.s. 271(1)(c) of the Income Tax Act. 4. The Hon'ble ITAT disposed the aforesaid appeals by way of a common order dated 27.03.2019. The relevant operative part of the said order is reproduced below: 10. In this view of the matter and consistent with the view taken by the coordinate benches in number of cases in alleged bogus purchases' cases, we are not inclined to interfere with the order of the Ld.CIT(A) and hence, reject ground taken by the assessee. 11. The next issue that came up for our consideration is addition towards unsecured haft taken from M/s Amit Diamonds, M/s Jewel Diam and M/s Money Diam for ₹ 1.50 crores. The facts with regard to this issue are identical to facts which we have already discussed in respect of alleged bogus purchases from firms / companies controlled by Shri Bhanwarlal Jain group of companies. The assesses has obtained unsecured loans from three companies belonging to Shri Bhanwarlal Jain group of companies. The assesses claims to have filed various detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited direct expenses on account of denial charges and STT into the capital account. No other expenditure including salary, telephone and other administrative charges has been incurred fir earning exempt income. Therefore, the AO was incorrect in determining the disallowances of ₹ 2,24,398 u/s I4A of the I. T. Act, 1961. 13. We have heard both the parties and perused material available on record. There is no dispute with regard to the fact that the assesses has earned exempt income. It is also an admitted fact (hat the assessee has not made suo moto disallowance of expenditure incurred in relation to exempt income. The AO has determined disallowance of expenditure including interest u/r 8D(2}(ii) and 8D(2){iii) of I.T, Rules, 1962. The assesses claims that no interest bearing funds have been used for investment- therefore, interest expenditure cannot be disallowed u/r 8D(2)(ii). We find that the assessee has filed complete details in order to prove availability of interest free funds. We find that She assessee 's capital is more than the amount of investments in shares which yielded exempt income. Therefore, we are of the considered view that the AO was erred in quantif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. No reassessment can be made just to make an enquiry or verification, b. Reassessment proceedings cannot be initiate merely on the information received from investigation wing, c. Reassessment proceeding cannot be initiated when the Ld.CIT(A) have reason to suspect and not reason to believe. Ground No. 3 On the Facts and circumstances of case and law the Ld CIT(A) erred in confirming the assessment order under section 143 sub section 3 r w s 147 of income lax Act which is passed against the principal of natural justice. Ground No. 4 The Ld CIT(A) erred in confirming and rejecting the books of accounts under section 145 of the Income Tax Act, Ground No, 8 'The Ld, CJT(A) erred in confirming the disallowance of genuine commission/ brokerage of ₹ 350000/- and thereby erred in treating the same as unexplained expenditure and added the same in view of section 69C of the Income Tax. Act, 1961. 7. As can be seed, there are various grounds which were vehemently argued and pressed by the appellant at the time of hearing, but w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context of the material available an record, to be a nonspeaking order as it gives no reasons to reject the appeal in the context of the decisions admittedly relied upon at the heating by the petitioners. 8. In the above view the petition is allowed in 9. Accordingly mistakes apparent from record have crept in. 10. In the view of the above factual position it is respectfully submitted that the Hon'ble Tribunal may amend its order to rectify the aforesaid mistakes, which are apparent from record. 2. The Ld. AR for the assesee, at the time of hearing submitted that there is an error in the order of the Tribunal, dated 27/03/2019 in ITA No.4434/Mum/2018 to ITA.No.4436/Mum/2018, inasmuch as, the Tribunal has recorded erroneous facts, without considering arguments of the assesee, insofar as, ground No.5 relates to alleged non genuine purchases. The Ld. AR, further, submitted that although, the assesee has taken specific grounds challenging initiation of reassessment proceedings u/s 147, in light of certain judicial precedents, but the Tribunal has inadvertently omitted to consider and adjudicate said ground. Further, the assessee has challenged rejection of books of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of law, once there is a specific ground in an appeal, the same needs to be adjudicated irrespective of the fact that whether, said ground is pressed or not . Therefore, we are of the considered view that insofar as, grounds No.1 to 3 of assessee appeal regarding initiation reassessment proceedings u/s. 147. There is an error in the order of the Tribunal in not adjudicating specific ground taken by the assesee, which constitute mistake apparent on record, which can be rectified u/s 254(2) of the I.T.Act, 1961. 5. Coming back to another objection of the assessee in its miscellaneous application filed for all three years. The AR for the assesse submitted that although, there is a specific ground in relation to disallowances of interest and commission paid on loans, but there is no specific adjudication on those grounds in the order of the Tribunal. We find that although, the assesee has taken specific grounds challenging additions made by the Ld. AO towards disallowances of consequent interest paid on unsecured loans u/s 68 and related commission expenditure incurred in relation to said unsecured loans, but the Tribunal has by inadvertent mistake omitted to consider and adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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