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TMI Blog2023 (5) TMI 699X X X X Extracts X X X X X X X X Extracts X X X X ..... ections of the JCIT issued u/s. 144A - assessment order framed by the Assessing Officer is on the basis of directions issued by the JCIT u/s. 144A of the Act and further, said directions is prejudicial to the assessee, the JCIT ought to have given an opportunity to the assessee to be heard before issuing such directions. Since, the JCIT had issued directions u/s. 144A of the Act, without providing an opportunity to the assessee to be heard as provided under proviso to section 144A of the Act, in our considered view the whole proceedings including assessment proceedings is vitiated and consequent assessment order passed by the Assessing Officer is liable to be quashed. Argument of the ld. DR since the Assessing Officer did not refer to the directions issued by the JCIT u/s. 144A of the Act, it cannot be presumed that the assessment framed is in pursuant to directions u/s. 144A of the Act - We find that although, the Assessing Officer did not specifically referred to the directions of the JCIT issued u/s. 144A in the assessment order, but if you go through the directions and the assessment order, the directions issued by the JCIT is in lines on which the investigation connected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the claim of the interest expenditure is also to be disallowed. 4. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the ld. CIT(A) be set aside and that of the Assessing Officer be restored. 3. The brief facts of the case are that, the assessee company is engaged in the business of trading in Iron and Steel Scrap. The assessee filed their return of income for the assessment year 2013-14 on 03.10.2013, admitting total income of Rs. 3,77,770/-. During the course of assessment proceedings, the Assessing Officer noticed that there is an increase in Trade payables when compared to previous financial year, even though there is no activities carried out by the assessee for the impugned assessment year. Therefore, the Assessing Officer called upon the assessee to file necessary details and justification for increase in trade payables. In response, the assessee has submitted relevant ledger extract of sundry creditors and argued that the company has received funds from M/s. Ruchika Global Interlinks Pvt. Ltd., through proper banking channels and the same has been remitted back to the SLO Steel Ltd and SLO Industries and fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business activity, ignoring the fact that all amounts have been received through proper banking channel and further, the assessee had also explained reasons for receiving funds from M/s. Ruchika Global Interlinks Pvt. Ltd and transferring to SLO Industries Ltd. Therefore, deleted additions made by the Assessing Officer towards sundry creditors u/s. 68 of the Act. Being aggrieved by the CIT(A) order, the revenue is in appeal before us. 5. The ld. CIT-DR, Shri. S. Senthil Kumaran, submitted that the ld. CIT(A) erred in accepting the claim of the assessee that amount shown as trade payable is reflected in the financial statement of the assessee and certified by the auditor ignoring the fact that the assessee could not explain as to how huge amount has been received from M/s. Ruchika Global Interlinks Pvt. Ltd, even though there is no business activity for the impugned assessment year. The ld. DR, further submitted that the ld. CIT(A) has failed to notice that the assessee has shown amount received from creditors under the head trade payable and claims that said amount is loan received from the party without any documentary evidence. However, ld. CIT(A) without appreciating relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd and finally transferred to SLO Industries Ltd. According to the explanation of the assessee, it was in the business of trading in steel and iron scrap in the earlier years and further, it has two sister concerns which are engaged in the business of manufacturing and trading of steel and iron products and declared huge turnover. There is a financial transaction between M/s. Ruchika Global Interlinks Pvt. Ltd and SLO Industries Ltd and SLO Steel Ltd. Since, the assessee is a group company managing financials of other group companies, M/s. Ruchika Global Interlinks Pvt. Ltd has routed amount payable to other two group companies through account of assessee and finally said amount has been transferred to SLO Industries Ltd by passing journal entries in the books of assessee and other parties and adjusted against dues payable by M/s. Ruchika Global Interlinks Pvt. Ltd to SLO Industries Ltd. The said explanation of the assessee was supported by necessary confirmation letters filed by M/s. Ruchika Global Interlinks Pvt. Ltd, SLO Industries Ltd and SLO Steel Ltd. It was further supported by ledger extract of all three parties in their respective books of accounts. From the above, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng totality of facts and circumstances of case, especially fact that Assessing Officer had not disallowed interest claimed/ paid in relation to those credits in assessment year under consideration or even in subsequent assessment years, and tax at source had been deducted out of interest paid/ credited to creditors, Tribunal was justified in deleting addition made Held, yes whether as there was no substance in appeal and no substantial question of law arose, appeal was liable to be dismissed Held, yes. 9. In this view of the matter and considering facts and circumstances of the case, we are of the considered view that the assessee has explained trade payables appearing in their books of accounts with necessary evidences and the ld. CIT(A), after considering relevant facts has rightly deleted additions made by the Assessing Officer towards trade payables u/s. 68 of the Act. Thus, we are inclined to uphold the findings of the ld. CIT(A) and dismiss appeal filed by the revenue. CO.No: 1/Chny/2021: 10. The assessee has raised the following grounds of cross objection: 1. On the facts and circumstances of the case, the order of the Learned Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghtly rejected arguments of the assessee for annulment of assessment. 13. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. We have also carefully considered provisions of section 144A and proviso provided therein and we find that as per the provisions of section 144A of the Act, the Joint Commissioner may, on his own motion or on a application of an assessee, call for and examine the record of any proceedings in which an assessment is pending and, if he considers that having regard to the nature of the case or the amount involved or for any other reason, it is necessary or expedient so to do, he may issue such directions as he thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment and such directions shall be binding on the Assessing Officer. Proviso provided to section 144A makes it very clear that no directions which are prejudicial to the assessee shall be issued before an opportunity is given to the assessee to be heard. Further, Explanation provided therein also clarifies that for the purpose of this section no direction as to the lines on which an investigation con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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