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Income Tax Appellate Tribunal, ‘D’ (SMC
Before: SHRI ABRAHAM P. GEORGE]
आदेश / O R D E R
In this appeal filed by the assessee, which is directed against an order dated 24.07.2017 of ld. Commissioner of Income Tax (Appeals)-5, Chennai, it has raised the following grounds:-
The order of the Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case and is opposed to the principle of equity, natural justice and fair play.
2. The Commissioner of Income Tax (Appeals) has failed to appreciate the order of the Assessing Officer, as bad in Law.
The Commissioner of Income Tax (Appeals) has failed to accept the contention of the appellant that the Books of accounts, Documents, Bank Statement etc. were furnished by tile appellant and were examined by the Learned Assessing Officer during the assessment proceedings.
4. Tile Commissioner of Income Tax (Appeals) has never called for the books of accounts elm in g the Appeal proceedings.
The Commissioner of Income Tax (Appeals) erred by upholding the addition made by the Learned Income Tax Officer without considering the fact that the appellant is regular in filing the return of income tax with income being reported under the head "Profit & Gain from Business and Profession".
6.The Commissioner of Income Tax (Appeals) has failed to note that the Appellant has submitted the return of earlier years to establish the fact that the intention of the Appellant was always to do Money lending Business and earn interest thereon.
The Commissioner of Income Tax (Appeals) has failed to accept the contention that the appellant has used certain portion of loan funds to advance to the customers and earn i merest income and did not consider the details of source and application of funds over a period of time submitted by the appellant.
The Commissioner of Income Tax (Appeals) upheld the action of the learned Income Tax Officer, thus rejected the appeal’’.
Ld. Counsel for the assessee submitted that grounds 1, 2 and 8 could be treated as general. Accordingly, these grounds do not need any adjudication.
3. As per the ld. Authorised Representative, grounds 3 & 4 assailed treatment of assessee’s income from money lending business under the head ‘’income from other sources’’. As per the ld. Authorised Representative, grounds 5 & 6 related to treatment of interest income from money lending business under the head income from other sources. Again as per the ld. Authorised Representative, ground No.7, related to disallowance of interest of loans raised by the assessee for the purpose of lending in its money lending business. As
per the ld. Authorised Representative, the ld. Assessing Officer had for no reason shifted the ‘’income from business’’ to ’’income from other sources’’.
Per contra, ld. Departmental Representative submitted that assessee could not produce any books of accounts in support of its contention that it was doing a money lending business. As per the ld. Departmental Representative, ld. Assessing Officer was justified in treating the income under the head ‘’income from other sources’’.
I have considered the rival contentions and perused the 5. orders of the authorities below. Assessee admittedly, declared in its return of income that it was doing a business of money lending. Ld. Assessing Officer himself has noted at page 1 of the assessment order that assessee was maintaining books of accounts and these were produced during the course of assessment proceedings. Relevant para as it appears in the assessment order is reproduced hereunder:-
In response to the notice, the assessee’s representative Shri. Ketan K. Jain, A.C.A. & Shri. Sunil Sethia, C.A., of M/s. Sunil Sethia & Associates, appeared and filed the power of attorney. Subsequently notice u/s.142(1) dt. 20.05.2015 and letter were issued calling for details. The books of accounts, documents, bank statement etc., furnished by the assessee were examined and the assessment is completed as under:-
However, ld. Assessing Officer refused to consider the claim of the assessee that interest receipt of �23,43,545/-, interest payment of �19,53,516/- and interest payable �9,95,050/- were of its business of money lending. Ld. Assessing Officer in para 3 of its order says that assessee had not furnished any books of accounts nor furnished any documentary evidence for any source of income. Ld. Commissioner of Income Tax (Appeals) confirmed the view taken by the ld. Assessing Officer despite assessee pointing out that it was carrying on money lending business since a decade and was filing form ITR-4 which was designated for assessees having business income. As per the ld. Commissioner of Income Tax (Appeals) assessee had not furnished books of accounts relating to its money lending business before ld. Assessing Officer. However, as already mentioned by me, ld. Assessing Officer on the facing sheet of the assessment order has stated that books of accounts were furnished by the assessee and these were examined. However, in the very next para, ld. Assessing Officer inter-alia states as under:-
‘’The AR of the assessee has not furnished any books of accounts and has not furnished any documentary evidences for any source of his income’’.
Observations of the ld. Assessing Officer as contained in para 2 and as contained in para 3 are contradictory to each other. One of the contention of the assessee is that bank loan raised by it from City Bank was for the purpose of money lending business and such amount was advanced in the course of such business. In the facts and circumstances of the case, I am of the opinion that question whether assessee had carried on a money lending business requires a fresh look by the ld. Assessing Officer. Assessee has to produce its loan documentation to prove that bank loan raised was for the purpose of its money lending business. I therefore set aside the orders of the lower authorities and remit the case back to the file of the ld. Assessing Officer for consideration denovo.
In the result, appeal of the assessee is allowed for statistical 6. purpose. Order pronounced on Tuesday, the 26th day of June, 2018, at Chennai.