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Income Tax Appellate Tribunal, ‘B’ BENCH : CHENNAI
Before: SHRI ABRAHAM P. GEORGE & SHRI DUVVURU RL REDDY]
आदेश / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
In this appeal filed by the Revenue, which is directed against an order dated 19.12.2017 of Commissioner of Income-tax (Appeals)-12, Chennai, it is aggrieved that the ld. Commissioner of Income Tax (Appeals) deleted a disallowance of �3,61,07,920/-,
ITA No.676 /2018 :- 2 -: made by the ld. Assessing Officer on a repayment of loan to Assessee’s namesake in, Bangalore.
Ld. Counsel for the Revenue submitted that assessee a 2. trader in steel, had repaid a loan of �7,65,76,906/- to another concern named M/s. Jindal Steels, Bangalore. According to the ld. Departmental Representative, assessee was required to explain the source for the funds used for making the above repayment. As per the ld. Departmental Representative, assessee had through a letter dated 29.02.2016, explained the source for the loan repayment and this included a sum of �3,61,07,920/- claimed as coming out of capital of like amount introduced by one of its partners Shri. Mohanlal Jindal on 22.05.2012. However, as per the ld. Departmental Representative, the said Shri. Mohanlal Jindal had introduced �3,00,00,000/- only and not �3,61,07,920/-. Contention of the ld. Departmental Representative was that assessee could not justify the source for the sum of �3,61,07,920/-, claimed to have received from its partner Shri. Mohanlal Jindal, and could not file any records like income tax return, memo, capital account, balance sheet or any supporting schedules. Contention of the ld. Departmental Representative was that assessee could only produce his acknowledgement for having filed an I.T. return. As per the ld.
ITA No.676 /2018 :- 3 -:
Departmental Representative, ld. Assessing Officer had made the addition of �3,61,07,920/- due to the inability of the assessee to substantiate its claim that �3,61,07,920/- was received from its partner Shri. Mohanlal Jindal. Contention of the ld. Departmental Representative, was that ld. Commissioner of Income Tax (Appeals) took an erroneous view that repayments to M/s. Jindal Steels, Bangalore had come out of funds introduced by Shri. Mohanlal Jindal.
According to the ld. Departmental Representative, amount introduced by Shri. Mohanlal Jindal was only �3,00,00,000/- and assessee could not substantiate the source of �3,61,07,920/- out of the total loan repayment of �7,65,76,906/-.
Per contra, ld. Authorised Representative strongly supporting the order of the ld. Commissioner of Income Tax (Appeals) submitted that assessee had a overdraft account with State Bank of India bearing account No.00000010886073792 with its SME Branch, at Chennai. As per the ld. Authorised Representative, assessee had a drawing power of �13,00,00,000/-. Relying on the statement of this account placed at paper book pages 2 to 4, ld. Authorised Representative submitted that payment to M/s. Jindal Steels, Bangalore was made through RTGS transfer from this overdraft account. According to him, even if the credit from Shri. Mohanlal
ITA No.676 /2018 :- 4 -:
Jindal was not considered, assessee was having sufficient source for explaining the repayments.
We have considered the rival contentions and perused the orders of the authorities below. Addition made by the ld. Assessing Officer was for a sum of �3,61,07,920/- being, part of the repayment of an earlier loan taken by the assessee to M/s. Jindal Steels, Bangalore. Ld. Assessing Officer himself states in his order that assessee had repaid �7,65,76,906/- to M/s. Jindal Steels, Bangalore.
However, according to the ld. Assessing Officer, assessee could not produce sufficient source for the sum of �3,61,07,920/- out of the above. Ld. Assessing Officer noted that Shri. Mohanlal Jindal from whom assessee had claimed receipt of �3,61,07,920/- had actually given only �3,00,00,000/-. However, a perusal of the overdraft account statement of the assessee with State Bank of India for the period from 01.4.2012 to 22.05.2012, placed at paper book pages 2 to 4 clearly show that assessee had an overdraft limit of �13,00,00,000/- and had made a transfer of �3,61,07,920/- from the said account to M/s. Jindal Steels, Bangalore on 22.05.2012. The payment was effected from overdraft account even before assessee received the sum of �3,00,00,000/- from its partner Shri. Mohanlal Jindal. Relevant entries in the overdraft account appearing on 22.05.2012 are reproduced hereunder:-
ITA No.676 /2018 :- 5 -:
Txn Value Description Ref No. Branch Debit Credit Balance Date date Cheque No. code 22 22 Cheque Transfer from 9930 2,59,875 -8,32.96.727.60 May, May, WDL-Jindal 10404414793/ 12 12 13241/SAIL 490663 9930-490663 22 22 CHQ 10051 13241 3,61,07,970 -11,96,04,697.60 May, May, Transfer- 12 12 RTGS, SBINH12143 319345, Jindal Steels 10051 22 22 To Debit 491011 13241 13,47,974 -12,09,52,671.60 May, May,12 through 12 cheque SBI TFR 491011 22 22 By transfer Transfer from 13241 3,00,00,000 -9,09,52,671.60 May, May,12 GRPT 2399484044302 12 SBM2205120 783860- Mohanlal Jindal 22 22 To debit 491012 10666 12,040 -9,09,64,711.60 May, May,12 through 12 cheque SBI A/c. No.31360832 085-491012 In our opinion, it is clear that repayment done by the assessee was from its overdraft account and there was no use of any funds from its partner for such repayment. In such circumstances, we feel that the addition was made on a wrong presumption by the ld. Assessing Officer. The said addition in our opinion was rightly deleted by the ld. Commissioner of Income Tax (Appeals). We do not find any reason to interfere with the order of the ld. Commissioner of Income Tax
ITA No.676 /2018 :- 6 -: (Appeals). In the result, the appeal of the Revenue stands dismissed. 5. Order pronounced on Tuesday, the 7th day of August,2018, at Chennai.