TMI Blog2019 (9) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... nd when the same was paid to the assessee. AO has not carried out any such exercise to rebut the contention of the assessee that they have not received any higher sum than what has been reported in its books of account. AO has the power to pass on the information to the Assessing Officer having jurisdiction over PRMPL to find out the correctness of claim of interest expenditure of the PRMPL and if not found to be correct, the same could be added to the income of the PRMPL. The mere fact that TDS has been deducted on a particular amount cannot ipso facto lead to an inference that assessee has a right to receive and has in fact, received the corresponding amount when the assessee disputes the correctness of the said figure. The presumption is applicable when the deduction of TDS is followed-up by the actual payment to the party and not applicable in cases wherein there is no receipt of amount by the parties as there is no right to receive the said amount. AIR and ledger of the PRMPL reflects higher amount, no addition can be made based on the said evidence when the AO has not rebutted the contention of the assessee that no amount over and above what is recorded in the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has been duly accounted; iv. an affidavit produced in support of the contention is not additional evidence. 3. Briefly put, the relevant facts are that the assessee is a company incorporated under the provisions of the Companies Act, 1956 and is, inter alia, engaged in the business of finance and investment activities. It filed its return of income on 31.10.2005 declaring loss of ₹ 4,40,52,562/- which was revised on 06.07.2006 declaring Nil income. Thereafter, again a revised return was filed on 13.10.2006 declaring total income of ₹ 92,14,925/-. The assessment of the assessee was finalised u/s 143(3) of the Act assessing total income of ₹ 3,14,25,700/-. In the course of assessment proceedings the Assessing Officer noted that the assessee had given loans to the companies viz. M/s. Pyramid Retails Merchandising Pvt. Ltd. (hereinafter referred to as PRMPL ) and M/s. Zivon Marketing Pvt. Ltd. (hereinafter referred to as ZMPL ) from which assessee earned income by way of interest of ₹ 41,72,766/- and ₹ 19,837/-, respectively and the same was credited to the Profit Loss Account of the assessee whereas as per AIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 47,365/- as interest income from ZMPL. 4. Before CIT(A), assessee reiterated the submissions made before Assessing Officer and further submitted the affidavits of its CA and Vice-President to contend that the assessee has not received any amount over and above ₹ 41,72,766/- from PRMPL towards interest and, therefore, no further income should be taxed in the hands of the assessee. The CIT(A) treated the affidavits of the CA and Vice-President of assessee as additional evidence and noting that nothing prevented the assessee from filing this evidence before the Assessing Officer and, in view of Rule 46A of the Income Tax Rules, 1962 did not admit the affidavits filed by the assessee. Aggrieved by the said decision of the CIT(A), assessee is in appeal before us. 5. Before us, the Ld. Representative for the assessee submitted that the Assessing Officer has proceeded on a wrong footing that ₹ 2,57,37,730/- has actually been received by the assessee. However, there is no finding in the orders of lower authorities that assessee has in fact received anything over and above ₹ 41,72,766/-. The burden is on the Department to prove tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected in the AIR and in the ledger of PRMPL, when no such amount was actually received by the assessee. 6. On the other hand, the ld. DR has reiterated the stand of the Assessing Officer on the basis of the reasoning contained in the assessment order, which has already been noted by us in the earlier part of this order, and is not being repeated for the sake of brevity. 7. We have carefully considered the rival submissions and perused the material on record. The limited issue before us is whether addition can be made on the basis of the information contained in AIR and on the basis of the ledger of the payer when assessee disputes the correctness of the details contained in the said documents. Admittedly, the assessee has offered interest income of ₹ 41,72,766/- from PRMPL. The AIR reflected the interest income from PRMPL of ₹ 2,57,37,730/-. Thus, there was difference of ₹ 2,15,64,964/- between the amount reported in AIR and the account books of the assessee. Further, the ledger of assessee in the books of PRMPL reflected interest income credited in the name of the assessee at ₹ 2,26,90,300/-. Thus, there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation to the Assessing Officer having jurisdiction over PRMPL to find out the correctness of claim of interest expenditure of the PRMPL and if not found to be correct, the same could be added to the income of the PRMPL. The mere fact that TDS has been deducted on a particular amount cannot ipso facto lead to an inference that assessee has a right to receive and has in fact, received the corresponding amount when the assessee disputes the correctness of the said figure. The presumption is applicable when the deduction of TDS is followed-up by the actual payment to the party and not applicable in cases wherein there is no receipt of amount by the parties as there is no right to receive the said amount. We find that though the AIR and ledger of the PRMPL reflects higher amount, no addition can be made based on the said evidence when the Assessing Officer has not rebutted the contention of the assessee that no amount over and above what is recorded in the books of the assessee have been ever received by the assessee. We accordingly set-aside the order of CIT(A) and direct the Assessing Officer to delete the addition of ₹ 2,15,64,964/-, being difference in interest income repor ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
