Balkrishna Textile Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-1(1)(3), Ahmedabad

CO 10/AHD/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3835 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 28-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Depreciation; Earning of tax free income
• Section: 143(3); 14A

Judgement Text

ITA N.3462/AHD 2015 & CO NO.10/AHD/2016 ASSESSMENT YEAR: 2011-12 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MAHAVIR PRASAD JM] ITA NO.3462/AHD/2015 ASSESSMENT YEAR: 2011-12 INCOME TAX OFFICER, WARD 1(1)(3), AHMEDABAD. ..................APPELLANT VS. BALKRISHNA TEXTILE PVT. LTD., ............................RESPONDENT BOMBAY HIGHWAY, NAROL, AHMEDABAD 382 405. [PAN : AABCB 5213 G] C.O. NO.10/AHD/2016 (IN ITA NO.3462/AHD/2015) ASSESSMENT YEAR: 2011-12 BALKRISHNA TEXTILE PVT. LTD., ..................APPELLANT BOMBAY HIGHWAY, NAROL, AHMEDABAD 382 405. [PAN : AABCB 5213 G] VS. INCOME TAX OFFICER, WARD 1(1)(3), AHMEDABAD. ............................RESPONDENT APPEARANCES BY V.K. SINGH FOR THE REVENUE ASEEM L. THAKKAR FOR THE ASSESSEE HEARING CONCLUDED ON: 26.03.2018 ORDER PRONOUNCED ON : 15.06.2018 O R D E R PER PRAMOD KUMAR, AM: 1. THE APPEAL BY THE REVENUE AND THE CROSS OBJECTIO N BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 21 ST SEPTEMBER, 2015 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF TH E INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2011-12. ITA N.3462/AHD 2015 & CO NO.10/AHD/2016 ASSESSMENT YEAR: 2011-12 PAGE 2 OF 4 2. WE WILL FIRST TAKE UP APPEAL FILED BY THE ASSESS ING OFFICER. 3. IN THE FIRST GROUND OF APPEAL, THE ASSESSING OFF ICER HAS RAISED THE FOLLOWING GRIEVANCE :- (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE DISALLOWANCE MADE U/S 14A OF THE ACT. 4. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THE IS SUE IS NOW COVERED BY THE JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT IN T HE CASE OF CIT VS. CORRTECH ENERGY (P) LTD., 372 ITR 97, INASMUCH AS, ONCE THERE IS NO EXEMPT INCOME, THERE CANNOT BE ANY QUESTION OF DISALLOWANCE UNDER SECTION 14A OF T HE ACT AND UNDISPUTEDLY THERE IS NO EXEMPT DIVIDEND INCOME IN THE PRESENT YEAR. IN THI S VIEW OF THE MATTER, WE CONFIRM THE FINDING OF THE LEARNED CIT(A) AND DECLINE TO INTERF ERE IN THE MATTER. 5. GROUND NO.1 IS DISMISSED. 6. IN GROUND NO.2, THE ASSESSING OFFICER HAS RAISED THE FOLLOWING GRIEVANCE: (2) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE DISALLOWANCE OF DEPRECIATION OF RS.28,11,797/- ON M OTOR CAR AND RS.8,05,843/- ON MOTOR CAR EXPENSES. 7. ON THIS ISSUE ALSO LEARNED REPRESENTATIVES FAIRL Y AGREE THAT THIS ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE INASMUCH AS IN TH E A.Y. 2009-10 WHEREIN SIMILAR DISALLOWANCES WERE MADE WHICH WAS SET ASIDE BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL VIDE ORDER DATED 25 TH OCTOBER, 2013 AND IN THE SET ASIDE PROCEEDINGS, TH E CLAIM OF THE ASSESSEE NOW STANDS ACCEPTED VIDE ASSESSING OFFICER S ORDER UNDER SECTION 254 READ WITH SECTION 143(3) DATED 30 TH JUNE 2014. RESPECTFULLY FOLLOWING THE STAND TAKEN BY THE CO-ORDINATE BENCH AND TAKING NOTE OF THE SUBSEQUENT ORDER PASSED BY THE ASSESSING OFFICER, WE APPROVE THE CONCLUSIONS ARRIVED AT BY T HE LEARNED CIT(A) IN THIS REGARD AND DECLINE TO INTERFERE IN THE MATTER. 8. GROUND NO.2 IS ALSO DISMISSED. 9. IN GROUND NO.3, THE ASSESSING OFFICER HAS RAISED THE FOLLOWING GRIEVANCE :- (3) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE DISALLOWANCE OF INTEREST EXPENSES OF RS.18,63,600/- BEING INTEREST ON INTEREST FREE ADVANCES. 10. ON THIS ISSUE ALSO LEARNED REPRESENTATIVES FAIR LY AGREE THAT THIS ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE INASMUCH AS IN TH E A.Y. 2009-10 WHEREIN SIMILAR ITA N.3462/AHD 2015 & CO NO.10/AHD/2016 ASSESSMENT YEAR: 2011-12 PAGE 3 OF 4 DISALLOWANCES WERE MADE WHICH WAS SET ASIDE BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL VIDE ORDER DATED 25 TH OCTOBER, 2013 AND IN THE SET ASIDE PROCEEDINGS, TH E CLAIM OF THE ASSESSEE NOW STANDS ACCEPTED VIDE ASSESSING OFFICER S ORDER UNDER SECTION 254 READ WITH SECTION 143(3) DATED 30 TH JUNE 2014. RESPECTFULLY FOLLOWING THE STAND TAKEN BY THE CO-ORDINATE BENCH AND TAKING NOTE OF THE SUBSEQUENT ORDER PASSED BY THE ASSESSING OFFICER, WE APPROVE THE CONCLUSIONS ARRIVED AT BY T HE LEARNED CIT(A) IN THIS REGARD AND DECLINE TO INTERFERE IN THE MATTER. 11. APPEAL FILED BY THE ASSESSING OFFICER IS THUS D ISMISSED. 12. WE NOW COME TO THE CROSS OBJECTION FILED BY THE ASSESSEE. 13. IN THE FIRST GROUND OF CROSS OBJECTION, THE ASS ESSEE HAS RAISED THE FOLLOWING GRIEVANCE :- (1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.5,76,000/- OUT OF DISALLOWANCE OF RS.24,39,600/- MADE BY THE ASSESSING OFFICER ESTIMA TING THE INTEREST AT 12% ON THE ALLEGED INTEREST FREE LOANS OUT OF THE INTER EST EXPENSES CLAIMED BY THE RESPONDENT. 14. SO FAR AS THIS GRIEVANCE OF THE ASSESSEE IS CON CERNED, RELEVANT MATERIAL FACTS ARE LIKE THIS. DURING THE COURSE OF ASSESSMENT PROCEED INGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS ADVANCED INTER ALIA A SUM OF RS.48,00,000/- TO SHREE AMBICA GEO TECHS PVT. LTD. IN RESPONSE TO THE ASSESSING OF FICERS REQUISITION, AS TO WHY RELATABLE INTEREST PAYMENT NOT BE DISALLOWED, IT WA S SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE HAS INTEREST-FREE FUNDS AGGREGATING TO RS. 18,32,72,954/- WHEREAS THE TOTAL INTEREST FREE ADVANCES ARE ONLY RS.2,03,30,000/-. THIS PLEA OF THE ASSESSEE I.E. WITH RESPECT TO AVAILABILITY OF INTEREST FREE FUND WAS D ECLINED. 15. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE LEARNED CIT(A) BUT WITHOUT SUCCESS. ASSESSEE IS NOW IN CROSS OBJECTIO N BEFORE US. 16. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING P ERUSED THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE CONSIDERED VIEW THAT THE IMPU GNED DISALLOWANCE MUST STAND DELETED FOR THE SHORT REASON THAT THE INTEREST FREE FUNDS AVAILABLE TO THE ASSESSEE IS FAR IN EXCESS OF INTEREST-FREE ADVANCE GIVEN BY THE ASS ESSEE. AS THAT IS THE VIEW CONSISTENTLY BEING TAKEN BY THE CO-ORDINATE BENCH O F THIS TRIBUNAL, RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT THE IMPUGNED DISALLOWANCE IS DEVOID OF ANY LEGALLY SUSTAINABLE MERITS AND THUS WE DELETE THE SAME. GRIEVANCE OF T HE ASSESSEE IS THUS UPHELD. ITA N.3462/AHD 2015 & CO NO.10/AHD/2016 ASSESSMENT YEAR: 2011-12 PAGE 4 OF 4 17. IN THE SECOND GROUND OF CROSS OBJECTION, THE AS SESSEE HAS RAISED THE FOLLOWING GRIEVANCE :- (2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFIC ER OF RS.1,80,685/- BY RESTRICTING THE DEPRECIATION ON ELECTRIC INSTALLATI ON TO 10% AS AGAINST THAT CLAIMED BY THE RESPONDED AT 15% ON THE SAME. 18. NO SPECIFIC ARGUMENTS HAVE BEEN ADVANCED IN SUP PORT OF THE GROUND RAISED BY THE ASSESSEE. SINCE THE AMOUNT INVOLVED IS VERY SM ALL AND WE THEREFORE DISMISS THE GROUND AS NOT PRESSED. GROUND NO.2 IS THUS DISMISS ED. 19. CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED. 20. IN THE RESULT, WHILE APPEAL OF THE REVENUE IS D ISMISSED, CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF JUNE, 2018. SD/- SD/- MAHAVIR PRASAD PR AMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 15 TH JUNE, 2018. PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDE NT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD