JALAN FORGINGS LIMITED ( IN LIQN.),AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-4(2), AHMEDABAD

This assessee’s appeal for A.Y. 2012-13, arises from order of the CIT(A)-7, Ahmedabad dated 30-08-2015, in proceedings under section 144 r.w.s. 147 of the Income Tax Act, 1961; in short “the Act”.

All the grounds of appeal

The fact in brief is that assessee has not filed return of income for assessment year 2012-13, therefore, a notice u/s. 148 of the act was issued on 12th Nov, 2013 upon the official liquidator as the assessee company was under liquidation. During the course of assessment, the assessing officer has issued show cause notice stating that on verification of form no. 26AS, it is seen that assessee has shown interest income of Rs. 85,16,140/- under the head income from other sources, therefore, the assessee was asked to explain why not the interest income of Rs. 85,16,140/- should be treated as undisclosed income during the year under consideration. The official liquidator of the assessee company submitted that difference in interest income as per receipt and payment account reported in 26AS form was on account of mistake in quoting single PAN for deducting tax of two companies i.e. Jalan Forging Ltd. and Jalan Ispat Casting Ltd. both were in liquidation. It was further explained that this matter was reported to the bank and the bank had given assurance to revise the TDS return by correcting the mistake in quoting PAN of these companies in liquidation. The assessing officer has not accepted the explanation of the assessee and stated that assessee company has received interest of Rs. 75,63,663/- from PNB and Rs. 9,52,477/- from Union Bank of India and the assessee company has shown interest receipt of Rs. 27,66,125/- against Rs. 85,16,140/- reflected in the form 26AS.

The assessee has filed appeal before the ld. CIT(A) The ld. CIT(A) has dismissed the appeal of the assessee reiterating the facts reported by the assessing officer.

We have heard the rival contentions and perused the material on record. The assessing officer has treated the amount of interest expenditure of Rs. 85,16,140/- reported in the form 26AS as income from other source in the hand of the assessee as the same was not disclosed by the assessee as its income. The assessee company has taken up the matter with the bank and the bank has given assurance to revise the TDS return after correct reporting of PAN of these companies in liquidation. We have gone through the paper book furnished by the assessee comprising detail and submission made before the lower authorities and noticed that official liquidator of the assessee company has written letter to the bank on 31st October, 2014 stating there was FD account in respect of two companies in liquidation i.e. M/s. Jalan Forging Ltd. (in liqn.) and M/s Jalan Casting Ltd. (in liqn.) and single PAN No. was referred in the bank record for the two companies. Therefore, the bank was requested to update the correct PAN Nos. to two companies as under:- i. M/s. Jalan Forgings Ltd. (in liqn.) PAN No. AACCJ1326P ii. M/s. Jalan Ispat Casting Ltd. (in liqn.) PAN No. AADCJ2236R After considering the above facts and circumstances, it is observed that the assessing officer has not verified the contention of the assessee that because of quoting single PAN, the interest income of the other company M/s. Jalan Ispat Casting Ltd. which was also in liquidation mistakenly reported as Page No 4 Jalan Forgings Ltd. vs. ITO income of the assessee. In view of above facts, we consider that it is appropriate to restore this case to the file of the assessing officer for deciding the impugned issue afresh after verification and examination of the claim of the assessee of incorrect reporting of PAN and the interest income actually pertained to M/s. Jalan Ispat Casting Ltd. Accordingly, the case is restored to the file of assessing officer as directed above for de-novo assessment after providing adequate opportunity to the assessee.