ACIT NON CORPORATE CIRCLE 14 , CHENNAI vs. V.V.N.VARADHAN KUMAR, CHENNAI

The cross objection was filed by the assessee with a delay of 48 days. The Ld. AR submitted that the delay had occurred since the auditor of the assessee firm was aged and unwell. Therefore the Ld. AR pleaded that the delay may be condoned. The Ld. DR strongly objected to the submission of the Ld. AR. After hearing both sides, due to the genuine reason cited by the Ld.AR, in the interest of justice, we hereby condone the delay of 48 days in filing the cross objection by the assessee and proceed to hear the appeals on merits.

The Revenue has raised several grounds in its appeal however the crux of the issue is that the Ld.CIT(A) has erred in deleting the disallowance of Rs.87,95,500/- made by the Ld.AO U/s.2(22)(e) of the Act.

The brief facts of the case are that the assessee is an individual engaged in the business of trading in tea, filed his return of income for the assessment year 2009-10 on 23.09.2009 declaring income of

During the course of scrutiny assessment, it was observed by the Ld.AO that the assessee had received loan amounting to Rs.87,95,500/- from M/s. Labcon Technologies Pvt. Ltd., a company in which assessee had substantial shareholding amounting to Rs.88,22,570/-, thereby attracting provisions of Section 2(22)(e) of the Act. On query the Ld.Counsel of the assessee filed a letter dated 26.10.2015 stating that the company owes the assessee Rs.1,17,40,324/- which was borrowed for the purpose of development of the projects of the company and subsequently the company had repaid the amount to the assessee and yet owes to the assessee an amount of Rs.28,50,663/-. It was further explained that in the books of the assessee the loan account was not set-off instead it was accounted in another head and therefore it appears

At the outset, on perusing the detailed order of the Ld.CIT(A), we do not find it necessary to interfere in his order, because the Ld.CIT(A) had made a clear cut finding after examining the books of accounts of the assessee that the amount received by the assessee was only repayment of loan extended by the assessee to the company. It appears that the assessee in his books of account instead of setting-off the repayment of loan against the loan account has accounted the same under a different head of account, which is only a technical error. Since these facts has been verified by the Ld.CIT(A), based on which he has granted relief to the assessee by deleting the addition made by the Ld.AO invoking the provisions of

Since the cross objections raised by the assessee on merits are only in support of the order of the Ld.CIT(A), the same is hereby allowed because we have upheld the order of the Ld.CIT(A). Further we do not find it necessary to adjudicate the issue with respect to reopening of the assessment because on merits we have held the matter in favour of the assessee.

In the result the appeal of the Revenue is dismissed and the cross objections of the assessee stand partly allowed.