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

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ITA 694/AHD/2016Status: DisposedITAT Ahmedabad15 November 2019AY 2012-134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal observed that the AO had not verified the assessee's claim that the interest income was mistakenly reported due to a single PAN being used for two companies. Therefore, the case was restored to the AO for fresh assessment after verifying the claim.

What were the facts?

The assessee, Jalan Forgings Ltd. (in liquidation), did not file its return of income. The Assessing Officer (AO) made an addition of Rs. 85,16,140/- on account of interest income, based on the difference between the interest disclosed and that shown in Form 26AS. The assessee contended this was due to a mistake in quoting a single PAN for two companies in liquidation.

What were the issues?

Whether the addition of interest income based on Form 26AS was justified when the assessee claimed it was due to a PAN quoting error for two companies in liquidation.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH

Before: Shri Rajpal Yadav & Shri Amarjit Singh

For Appellant: Shri Mukund Bakshi, A.R
For Respondent: Shri Mudit Nagpal, Sr. D.R, Shri Mukund Bakshi, A.R

आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-

1.

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”.

2.

All the grounds of appeal

of the assessee are inter connected to the common issue of addition of Rs. 85,16,140/- under the head income from Page No 2. Jalan Forgings Ltd. vs. ITO other sources on the basis of difference between the interest income disclosed as per books and interest income shown in the form 26AS.

3.

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.

Page No 3 Jalan Forgings Ltd. vs. ITO

4.

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.

5.

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.

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