M/s. Sun On Peak Hotels Pvt.Ltd., Anand V. The ACIT.,Anand Circle, Anand

CO 317/AHD/2010

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 9024 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 28-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J P JANGID
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Capital asset; Business income; Depreciation; Business expenditure; Opportunity of being heard
• Section: 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI G.C.GUPTA , VICE PRESIDENT AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 2601/AHD/2010 ASSESSMENT YEAR :2007-08 ASSISTANT COMMISSIONER OF INCOME TAX, ANAND CIRCLE, ANAND V/S . M/S. SUN ON PEAK HOTELS PVT. LTD., 401, MILESTONE, ANAND- V. V. NAGAR ROAD, ANAND. PAN NO. AACCS7265C (APPELLANT) .. (RESPONDENT) C.O. NO. 317/AHD/2010 ASSESSMENT YEAR : 2007-08 M/S. SUN ON PEAK HOTELS PVT. LTD., 401, MILESTONE, ANAND- V. V. NAGAR ROAD, ANAND. V/S . ASSISTANT COMMISSIONER OF INCOME TAX, ANAND CIRCLE, ANAND (APPELLANT) .. (RESPONDENT) BY REVENUE SHRI J.P. JANGID, SR. D.R. /BY ASSESSEE SHRI SUNIL H. TALATI, A.R. /DATE OF HEARING 2 3 .08 .201 3 /DATE OF PRONOUNCEMENT 13.11.2013 O R D E R PER : SHRI T.R.MEENA, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE REVENUE AND C.O. FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2007-08 AGAINST THE ORDER OF CIT(A) -IV, BARODA, DATED 16.06. 2010. THESE ARE BEING DECIDED IN THIS CONSO LIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 2601/AHD/10 & C.O. NO. 317/AHD/10, A.Y. 07- 08 PAGE 2 2. THE EFFECTIVE GROUNDS OF REVENUES APPEAL AND A SSESSEES C.O. ARE AS UNDER: GROUNDS OF REVENUES APPEAL IN ITA NO. 2601/AHD/201 0 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN TREATING INCOME OF RS.3,86,62,976/- AS SHORT TERM CAPITAL GAIN ON THE GROUND THAT NO DEPRECIATIO N WAS CLAIMED U/S 32(1)(I), BUT WAS CLAIMED U/S 32(1)(II) AND HENCE SECTION 41(2)(B) HAS NO APPLICATION, COMPLETELY OVE RLOOKING THE FACT THAT SECTION 41(2)(B) REFERS TO CLAUSE (I) OF SUB-SECTION (1) OF SECTION 32 WHICH ONLY REFERS TO THE RATES OF DEPRECIATION PRESCRIBED IN RESPECT OF DIFFERENT USAGE OF ASSETS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS.10,00,0 00/- BEING PAYMENT TO SHAREHOLDERS IN CHPL, IGNORING THE FACT THAT CHPL HAS PURCHASED PROPERTY FROM THE ASSESSEE AND H AS GIVEN MONEY FOR THE SAME, HENCE THERE WAS NO OBLIGA TION ON THE PART OF THE ASSESSEE TO MAKE PAYMENT TO THE SHA REHOLDERS OF THE PURCHASING COMPANY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS.16,40,9 01/- MADE ON ACCOUNT OF INTEREST EXPENSES WITHOUT APPRECIATIN G THE FACT THAT THE ASSESSEE HAS RECEIVED SUBSTANTIAL AND SIZE ABLE FUNDS FROM THE PURCHASER OF THE PROPERTY THROUGHOUT THE Y EAR AND THE SAME WERE RECEIVED IN THE BEGINNING OF THE YEAR. ITA NO. 2601/AHD/10 & C.O. NO. 317/AHD/10, A.Y. 07- 08 PAGE 3 GROUNDS OF ASSESSEES C.O. NO. 317/AHD/2010 1. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN NOT AP PRECIATING THE FACT THAT AN AMOUNT OF RS.30,46,473/- REPRESENTED B Y VARIOUS SECURITY DEPOSITS TO A.E.C., A.M.C., INDIAN TELEPHO NE INDUSTIRES, WERE PART AND PARCEL OF THE ASSETS OF T HE HOTEL, WHICH WAS SOLD BY THE APPELLANT. IT IS SUBMITTED T HAT SUCH DEPOSITS WERE PART AND PARCEL OF THE COST OF THE BU ILDING AND WERE REQUIRED TO BE DEDUCTED WHILE WORKING OUT THE PROFIT U/S. 50 OF THE INCOME TAX ACT. IT IS SUBMITTED THAT THE SAME BE HELD SO NOW. 2. THE LEARNED C.I.T.(APPEALS) HAS ERRED IN NOT APP RECIATING THE FACT THAT AN AMOUNT OF RS. 1 LAKH PAID TO MR. VARMA AT THE TIME OF CONSTRUCTION OF THE HOTEL BUILDING WAS PART OF T HE ASSET/BLOCK SOLD AND THE SAME OUGHT TO HAVE BEEN CO NSIDERED WHILE WORKING OUT THE PROFIT U/S.50 OF THE INCOME T AX ACT. IT IS SUBMITTED THAT THE SAME BE HELD SO NOW. 3. THE FIRST GROUND OF APPEAL OF THE REVENUE IS AGA INST TREATING THE INCOME OF RS.3,86,62,976/- AS SHORT TERM CAPITAL GAIN ON T HE GROUND THAT NO DEPRECIATION WAS CLAIMED U/S. 32(1)(I), BUT WAS CLA IMED U/S 32(1)(II) AND HENCE SECTION 41(2)(B) HAS NO APPLICATION. THE A.O. OBSE RVED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY HAS SOLD ITS HOTEL PROJECT AS A RUNNING AND GOING CONCERN TO ONE COMFORT HOSPITALIT Y PVT. LTD. (CHPL). THE CONVEYANCE DEED FOR THE PROPERTIES UNDER CONSIDERAT ION I.E. LAND & BUILDING WAS EXECUTED ON 17.03.2007 AND THE CONSIDERATION WA S SHOWN AT RS.5,42,00,000/-. IN THE SAME DEED, THE VALUE OF T HE LAND HAS BEEN TAKEN AT ITA NO. 2601/AHD/10 & C.O. NO. 317/AHD/10, A.Y. 07- 08 PAGE 4 RS. 2 CRORES WHEREAS THE VALUE OF THE BUILDING HAS BEEN TAKEN AT RS.3,42,00,000/-. THE A.O. FURTHER HELD THAT PROFI T EARNED ON SALE OF LAND HAS BEEN SHOWN AS INCOME FROM CAPITAL GAIN. ACCORDINGL Y, IN THE P&L ACCOUNT, THE PROFIT AND SALE OF LAND TO THE EXTENT OF RS.1,36,67 ,348/- HAS BEEN SHOWN AS INCOME. BUT IN THE RETURN OF INCOME, THE SAME HAS BEEN SHOWN AS INCOME FROM CAPITAL GAIN ON DEPRECIABLE ASSETS RS.3,86,62, 796/-, LONG TERM CAPITAL GAIN FULL VALUE OF CONSIDERATION RS.1,79,80,848/-, LESS: DEDUCTION U/S.48 RS. 86,43,654/-, NET 93,37,194/- AND TOTAL CAPITAL GAIN RS.4,79,99,990/-. THE ASSESSEE HAS SET-OFF RS.2,03,81,592/- BEING THE AMO UNT OF BROUGHT FORWARD LONG TERM AND SHORT TERM CAPITAL LOSSES AND FURTHER SET-OFF OF BROUGHT FORWARD DEPRECIATION/INVESTMENT ALLOWANCE AND INCOME HAS BE EN SHOWN BY THE ASSESSEE NIL. HOWEVER, U/S.115JB, IT HAS BEEN SHOW N AT RS.2,91,230/-. THE A.O. FURTHER HELD THAT THE ASSESSEE HAD EARNED INCO ME/PROFIT ON SALE OF DEPRECIABLE ASSETS AT RS.3,86,62,796/-, WHICH HAS B EEN SHOWN BY THE ASSESSEE UNDER THE HEAD SHORT TERM CAPITAL GAIN U /S.50 OF THE ACT. THE A.O. HELD THAT THE ASSESSEE HAD CLAIMED DEPRECIATION U/S . 32(1)(I) OF THE IT ACT AND ASSESSEES CASE IN COVERED U/S.41(2) OF THE IT ACT. AS PER A.O., THE OVER AND ABOVE RECEIVED BY THE ASSESSEE HAD WRITTEN DOWN VAL UE INCLUDES BALANCING CHARGE U/S.41(2) AND CAPITAL GAINS U/S.45. HE ALSO RELIED IN CASE OF HONBLE GUJARAT HIGH COURT IN CASE OF AHMEDABAD COTTON MFG. CO. LTD. VS. CIT 95 ITR 639 . ACCORDINGLY, HE ASSESSED RS.3,86,62,790/- INCOME IN FORM OF BALANCING CHARGE AS A BUSINESS INCOME. THE PAYMENT TO THE SHARE HOLDER TO THE TUNE OF RS.10 LACS, VARIOUS DEPOSITS OF RS.30,4 6,473/- AND RS.1 LAC ITA NO. 2601/AHD/10 & C.O. NO. 317/AHD/10, A.Y. 07- 08 PAGE 5 PAYMENT TO MR. VERMA WERE ALSO CONSIDERED AS PART O F BALANCING CHARGE U/S.41(2). THUS, HE MADE TOTAL ADDITION OF RS.4,28 ,09,269/-. 4. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAD OBSERVED AS UNDER: THIS LEGAL POSITION IS ALSO CONFIRMED BY ITAT, MUM BAI BENCH IN THE CASE OF RAJHANS METALS PVT. LTD. (2008) 115 TTJ (MU M) 779 AND ITAT, AHMEDABAD BENCH IN CASE OF POWERBUILD LTD. IN ITA NO.291/AHD/2006, I.E. THAT SECTION 41(2) IS APPLICA BLE ONLY IN RESPECT OF INDIVIDUAL DEPRECIABLE ASSETS OF UNDERTAKINGS EN GAGED IN GENERATION AND DISTRIBUTION OF POWER. APPELLANT IS NOT ENGAGED IN THE BUSINESS OF GENERATING AND DISTRIBUTION OF POWE R AND ASSETS IN QUESTION WERE PART OF BLOCK OF ASSETS ON WHICH DEPR ECATION HAD BEEN ALLOWED UNDER CLAUSE (II) OF SECTION 32(1). IT IS HELD THAT PROVISIONS OF SECTION 41(2) WERE NOT APPLICABLE IN APPELLANTS CASE AND THE APPELLANT CORRECTLY OFFERED TO TAX, PROFIT ON SALE OF THE DEPRECIABLE ASSETS U/S.50 AS CAPITAL GAINS ARISING OUT OF TRANS FER OF SHORT TERM CAPITAL ASSETS. HE FURTHER HELD THAT RS.10 LACS BEING PAYMENT TO TH E SHARE HOLDER OF CHPL HAS BEEN REDUCED FROM THE PROFIT ON SALE OF FURNITU RE FIXTURE BLOCK AS PER THE ABOVE AMOUNT TO ARRIVE AT RS.54,75,331/- AS AGAINST RS.64,65,331/-. HE DID NOT FIND ANY JUSTIFICATION FOR MAKING ADDITION OF R S. 10 LACS TO THE PROFIT U/S. 50. HOWEVER, THE ASSESSEE DID NOT FURNISH ANY DETAILS F OR DEPOSITS AND MAKING CLAIM AS DEDUCTION AT RS.30,46,473/- AND NO EVIDENC E FOR PAYMENT OF MR. VERMA FOR RS. 1 LAC. HE CONFIRMED BOTH THE ADDITIO NS AND ALLOWED THE GROUND OF APPEAL PARTLY. ITA NO. 2601/AHD/10 & C.O. NO. 317/AHD/10, A.Y. 07- 08 PAGE 6 5. NOW THE REVENUE FOR NOT CONFIRMING ADDITION U/S. 41(2)(B) AND PAYMENT MADE TO SHARE HOLDERS AT RS.10 LACS WHEREAS THE ASS ESSEE AGAINST CONFIRMING OF ADDITION OF RS.30,46,473/- IN RESPECT OF VARIOUS SECURITY DEPOSITS TO AEC, AMC, INDIAN TELEPHONE INDUSTRY AND RS.1 LAC PAID TO MR. VERMA ARE BEFORE US. LD. SR. D.R. VEHEMENTLY RELIED UPON THE ORDER OF THE A.O. AND SUPPORTED THE ORDER OF THE A.O. HOWEVER, LD. COUNSEL FOR THE APPELLANT HAS SUBMITTED THAT THE ASSESSEE HAS SOLD HOTEL BUSINESS AS GOING CONCERN OR TRADING AS PER THE AGREEMENT DATED 17.03.2007 AND ALSO RECEIVED SO ME ADVANCED FROM THE PURCHASER AGAINST VARIOUS ASSETS AND ACCORDINGLY, T HE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN ON LAND AND SHORT TERM CAPIT AL GAIN OF DEPRECIABLE ASSETS. THE ASSESSEES CASE IS NOT COVERED U/S. 32 (1)(I) OF THE IT ACT. THEREFORE, FULL VALUE CONSIDERATION RECEIVED AS A R ESULT OF TRANSFER OF ASSETS FOLLOWING WITH THE BLOCK OF ASSETS EXCEEDS AGGREGAT E ON EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRAN SFER, WRITTEN DOWN VALUE OF BLOCK ASSETS AT THE BEGINNING OF THE PREVIOUS YEAR AND ACTUAL COST OF ANY ASSETS FOLLOWING WITHIN THE BLOCK ACQUIRED DURING T HE PREVIOUS YEAR SHALL BE DEEMED TO BE THE CAPITAL GAIN ARISING FROM THE TRAN SFER OF SHORT TERM CAPITAL ASSETS. THE LAND IS NOT A DEPRECIABLE ASSET. THER EFORE, THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN ON IT. HE FURTHER ARG UED THAT THE ASSESSEE HAD PAID 50% ON STAMP DUTY ON TRANSFER OF LAND. THEREF ORE, RS.20,40,152/- HAS BEEN REDUCED FROM THE SALE CONSIDERATIONS OF RS.2 C RORE AND RIGHTLY CALCULATED LONG TERM CAPITAL GAIN AT RS.93,37,194/-. HE FURTH ER RELIED IN CASE OF POWER BUILD LTD. VS. ACIT, ANAND CIRCLE, IN ITA NO. 291/A HD/2006 FOR A.Y. 1999- ITA NO. 2601/AHD/10 & C.O. NO. 317/AHD/10, A.Y. 07- 08 PAGE 7 2000, WHEREIN IT WAS HELD THAT SECTION 32(1)(I) IS APPLIC ABLE ON UNDERTAKING ENGAGED IN THE GENERATION OR GENERATION DISTRIBUTIO N OF POWER AND SECTION 41(2)(B) IS APPLICABLE ON IT. HE FURTHER HAS DRAWN OUR ATTENTION ON PAGE NO.43 OF THE PAPER BOOK ON SCHEDULE J TO THE BALANCE SHEE T WHERE DEPOSIT WITH AEC, AMC AND TELEPHONE DEPARTMENT IN TOTAL RS.30,40 ,473/- HAS BEEN SHOWN WHICH HAS BEEN TRANSFERRED IN THE NAME OF PUR CHASER. THEREFORE, THE APPELLANT HAD RECEIVED THIS AMOUNT THROUGH THIS SAL E CONSIDERATION WHICH HAS RIGHTLY BEEN REDUCED FROM THE SALE CONSIDERATION. THEREFORE, HE PRAYED TO ACCEPT THE LONG TERM CAPITAL GAIN ON SALE OF LAND, SHORT TERM CAPITAL GAIN ON BUILDING AND OTHER ASSETS OF THE HOTEL U/S.50 AND A LLOW THE DEPOSIT BY THE ASSESSEE COMPANY WITH OTHERS FROM THE SALE CONSIDER ATION AT RS.30,40,473/-. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAD CLAIMED DEPRECIATION U/S. 32(1)(II) ON BLOCK OF ASSETS WHICH HAS BEEN SOLD BY THE ASSESSEE AND ON W HICH SECTION 50 IS APPLICABLE AS BEING DEPRECIABLE ASSETS. THE ASSESS EE IS IN HOTEL BUSINESS AND CASE IS NOT COVERED U/S. 32(1)(I) OF THE IT ACT . THE ASSESSEE HAD ALSO RECOVERED VARIOUS DEPOSITS MADE WITH THE AMC, AEC A ND TELEPHONE DEPARTMENT TO THE TUNE OF RS.30,46,473/- THROUGH TH IS SALE CONSIDERATION WHICH HAS RIGHTLY BE REDUCED FROM THE TOTAL RECEIPT S. THE ASSESSEE HAS SUBMITTED THE COPY OF M/S. CHPL LTD. ALONGWITH RECO NCILIATION WHICH SHOWS THAT THE ASSESSEE HAS RECEIVED RS.9,02,00,000/- AGA INST THE SALE OF VARIOUS ASSETS OF THE HOTEL BUT HE HAS ONLY SHOWN IN AGREEM ENT RS.5.42 CRORE WHICH INCLUDES RS. 2 CRORE FOR LAND AND 3.42 CRORE FOR CO NSTRUCTION. THE COMPUTATION ITA NO. 2601/AHD/10 & C.O. NO. 317/AHD/10, A.Y. 07- 08 PAGE 8 OF CAPITAL GAIN HAS BEEN VERIFIED BY THE LD. SR. D. R. ITEMWISE ON THE BASIS OF BOOKS OF ACCOUNT AND COPY OF THE AGREEMENT AND NO D ISCREPANCY WAS FOUND BY HIM. THEREFORE, WE DO NOT FIND ANY REASON TO IN TERFERE IN THE ORDER OF CIT(A) FOR HOLDING LONG TERM CAPITAL GAIN IN CASE O F LAND AND SHORT TERM CAPITAL GAIN U/S. 50 ON DEPRECIABLE ASSET AND ALSO ASSESSEE S CLAIM OF VARIOUS DEPOSITS IS FOUND JUSTIFIED ON THE BASIS OF EVIDENC E. THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE REGARDING PAYMENT OF RS.1 LA C TO MR. VERMA. THUS, WE CONFIRM THE ORDER OF CIT(A) FOR RS. 1 LAC. 7. IN THE RESULT, REVENUES APPEAL IN GROUND NO.1 & 2 AND ASSESSEES C.O. IN GROUND NO.2 ARE DISMISSED AND ASSESSEES C.O. IN GROUND NO.1 IS ALLOWED. 8. GROUND NO. 3 OF THE REVENUES APPEAL IS AGAINST DELETING THE ADDITION OF RS.16,40,901/- MADE ON ACCOUNT OF INTEREST EXPENSES . THE A.O. OBSERVED THAT THE ASSESSEE HAD SUBSTANTIALLY BORROWED FUND F ROM ONE WEST VIEW HOTELS PVT. LTD. AND PAID INTEREST OF RS.16,40,901/-. DUR ING THE YEAR TOTAL BORROWING WAS RS.9.17 CRORE WHICH WAS MADE FOR FRAGMENTED PER IOD. THE A.O. GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE . AFTER CONSIDERING THE ASSESSEES REPLY, HE DID NOT FIND ANY NEXUS WITH IN COME GENERATED IN BUSINESS ACTIVITY OF THE ASSESSEE COMPANY. THUS, HE MADE AD DITION OF RS.16,40,901/-. 9. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ) WHO HAD ALLOWED THE APPEAL BY OBSERVING AS UNDER: 4.2 I HAVE CAREFULLY CONSIDERED THE MATTER. AS EX PLAINED BY THE APPELLANT WITH THE BOOKS OF ACCOUNTS, THE FUNDS BOR ROWED FROM WEST VIEW HOTELS PVT. LTD. WERE UTILIZED TO REPAY OTHER OUTSTANDINGS OF BUSINESS. THE BALANCE AS ON 31.3.2007 ALSO SHOWS R EDUCTION OF ITA NO. 2601/AHD/10 & C.O. NO. 317/AHD/10, A.Y. 07- 08 PAGE 9 TOTAL BORROWINGS FROM RS.10.93 CR. AS ON 31.3.2006 TO RS.5.42 CR. AS ON 31.3.2007. AS PER BOOKS OF ACCOUNTS, FUNDS BORR OWED FROM WEST VIEW HOTELS PVT. LTD. WERE UTILIZED FOR REPAYMENT O F LOANS OF HDFC BANK AND NAS PACKING PVT. LTD. ASSESSING OFFICERS OBSERVATION ABOUT FUNDS BORROWED FROM WEST VIEW HOTELS PVT. LTD . BEING NOT UTILIZED FOR THE PURPOSE OF BUSINESS IS WITHOUT ANY VERIFICATION AND IS CONTRARY TO THE ACTUAL STATE OF AFFAIRS REFLECTED T HROUGH BOOKS OF ACCOUNTS. THERE IS NO BASIS FOR DISALLOWING INTERE ST OF RS.16,40,901/- AND THE DISALLOWANCE IS CANCELLED. 10. NOW, THE REVENUE IS BEFORE US. LD. SR. D.R. VE HEMENTLY RELIED UPON THE ORDER OF THE A.O. AND ARGUED THAT NO BUSINESS R ELEVANCY HAS BEEN ESTABLISHED BY THE ASSESSEE TO CLAIM THE INTEREST E XPENSES. AT THE OUTSET, LD. A.R. OF THE APPELLANT SUPPORTED THE ORDER OF THE CI T(A) AND ARGUED THAT SUBSTANTIAL FUNDS WERE RECEIVED FROM PURCHASER OF H OTEL I.E. CHPL THROUGHOUT THE YEAR. THESE FUNDS WERE UTILIZED TO REPAY THE L OAN TAKEN FROM WEST VIEW HOTELS PVT. LTD. FOR THE PURPOSE OF BUSINESS. HE A LSO HAS DRAWN OUR ATTENTION ON THE COPY OF THE ACCOUNT OF WEST VIEW HOTELS PVT. LTD. WHICH SHOWS THAT FUND BORROWED WERE UTILIZED FOR REPAYMENT OF LOAN O F HDFC BANK AND NAS PACKING PVT. LTD. FROM WHOM THE COMPANY HAS TAKEN L OAN FOR THE PURPOSE OF BUSINESS. THUS, IT IS A BUSINESS EXPENDITURE AND A LLOWED. 11. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE INTEREST PAYMENT WAS MADE FOR THE LOANS TAKEN F ROM WEST VIEW HOTELS PVT. LTD., WHICH WAS UTILIZED TO REPAY THE OUTSTAND INGS OF BUSINESS. THE BORROWINGS WERE UTILIZED REPAYMENT OF LOAN OF HDFC BANK AND NAS PACKING ITA NO. 2601/AHD/10 & C.O. NO. 317/AHD/10, A.Y. 07- 08 PAGE 10 PVT. LTD. THEREFORE, WE UPHOLD THE ORDER OF THE CI T(A) AND THE REVENUES APPEAL ON THIS GROUND IS DISMISSED. 12. IN THE COMBINED RESULT, REVENUES APPEAL IS DIS MISSED AND ASSESSEES C.O. IS PARTLY ALLOWED. THESE ORDERS PRONOUNCED IN OPEN COURT ON 13.11.2013 SD/- SD/- (G.C.GUPTA) (T.R. ME ENA) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. $%$& ' '( / CONCERNED CIT 4. ' '(- + / CIT (A) 5. -.+' &, ' ++' &, 01 % / DR, ITAT, AHMEDABAD 6. .34 56 / GUARD FILE. BY ORDER/ , 7/0' $+ ' ++' &, 01 % 9