M/s Public Clothing (P) Ltd., New Delhi V. ACIT, Ludhiana

CO 38/CHANDI/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8608 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 16-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GE E TINDERMANN
• Keywords: Depreciation; Wrong claim; Revenue expenditure
• Section: 40A(3); 68

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH , ! '# $ % & '# , () BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 1018/CHD/2016 / ASSESSMENT YEAR : 2010-11 THE ACIT, CIRCLE-7, LUDHIANA M/S PUBLIC CLOTHING (P) LTD., F-155, SAINIK FARM, NEW DELHI ./PAN NO: AACCP4429P / APPELLANT /RESPONDENT C.O. NO. 38/CHD/2016 (IN ./ ITA NO. 1018/CHD/2016) / ASSESSMENT YEAR : 2010-11 M/S PUBLIC CLOTHING (P) LTD., F-155, SAINIK FARM, NEW DELHI THE ACIT, CIRCLE-7, LUDHIANA ./PAN NO: AACCP4429P / APPELLANT /RESPONDENT ! /ASSESSEE BY : SH. ASHWANI KUMAR, CA ' ! / REVENUE BY : SMT. GEETINDER MANN, ADDL. CIT # $ % /DATE OF HEARING : 10.12.2018 &'() % / DATE OF PRONOUNCEMENT : 10.12. 2018 (*/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE CAPTIONED ARE THE APPEAL PREFERRED BY THE REVE NUE AND CROSS OBJECTIONS BY THE ASSESSEE AGAINST THE ORDER DATED 8.7.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, LUDHIANA [H EREINAFTER REFERRED TO AS CIT(A)]. 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEA L:- ITA NO. 1018/CHD/2016 & C.O.NO.38/CHD/2016- M/S PUBLIC CLOTHING (P) LTD, LUDHIANA 2 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 2,40,671/- BY IGNORING THE FACT THA T THE CASE OF ASSESSEE IS NEITHER COVERED BY THE EXCEPTIONS GIVEN IN RULE 6DD OF THE INCOME TAX RULES, 1962 NOR IT COULD HAVE MADE A CASE OF BUSINESS EXPEDIENCY BEFORE THE ASSESSING OFFICER 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 8,20,000/- MADE BY THE ASSESSING OF FICER UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961 BY IGNORING THE FACT THAT THE SOURCE, GENUINENESS AND CREDITWORTHINESS OF THE LEN DER WAS NEVER PROVED BEFORE THE ASSESSING OFFICER; ESPECIALLY WHE N THE AMOUNT OF LOAN GIVEN TO THE ASSESSEE COMPANY DID NOT BELONG T O THE LENDER AND THIS FACT IS CLEARLY ADMITTED BY THE ASSESSEE 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 38,000/- IN THE ABSENCE OF THE ANY DOCUMENTARY EVIDENCE FROM M/S. CITY LEAVES MEDIA EVENT PVT. LTD. WHICH COULD PROVE THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE OF RS. 38,000/- HAS ACTUALLY BELONGED TO T HE ASSESSEE COMPANY. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF RS. 17,22,359/- MADE BY THE ASSESSI NG OFFICER U/S 36(L)(III) W.R.T INVESTMENT MADE IN PARSVANATH DEVE LOPERS LIMITED 5. WHETHER ON THE FACTS & CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) WAS JUSTIFIED IN RESTRICTING THE DISALLOWANCE TO 4% AFTER EXCLUDING FINANCIAL EXPENDITURE, INSTEAD OF 10% MAD E BY THE ASSESSING OFFICER ESPECIALLY WHEN THE ASSESSEE HAS NOT PRODUCED BOOKS OF ACCOUNTS BEFORE THE ASSESSING OFFICER. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND O F APPEAL BEFORE IT IS FINALLY DISPOSED OFF 3. GROUND NO.1 : GROUND 1 IS REGARDING THE ACTION OF THE CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFF ICER U/S 40A(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). BRIEF FA CTS ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICE D THAT ASSESSEE HAD ITA NO. 1018/CHD/2016 & C.O.NO.38/CHD/2016- M/S PUBLIC CLOTHING (P) LTD, LUDHIANA 3 MADE CERTAIN PAYMENTS IN CASH EXCEEDING THE PRESCRI BED LIMIT OF RS. 20,000/- . HE, THEREFORE, INVOKED THE PROVISIONS OF SECTION 40A(3) OF THE ACT AND MADE THE IMPUGNED DISALLOWANCE. BEFORE THE CIT(A), THE ASSESSEE PLEADED THAT THE AFORESAID PAYMENTS WERE MADE OUT O F BUSINESS EXPEDIENCY AND FURTHER THAT GENUINENESS OF THE EXPENDITURE WAS NOT DOUBTED BY THE ASSESSING OFFICER. THE LD. CIT(A) WHILE RELYING UPO N THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF GURDAS GARG VS CIT REPORTED IN 63 TAXMAN.COM 289 DELETED THE IMPUGNED ADDITIONS AND OBSERVED THAT SINCE THERE WAS NO DOUBT AS TO THE GE NUINENESS OF THE PAYMENTS AND PAYMENTS WERE MADE DURING THE REGULAR COURSE OF BUSINESS, AND FURTHER THAT THE PURPOSE OF THE PROVISIONS OF S ECTION 40A(3) WAS TO CHECK THE UNACCOUNTED / NON-GENUINE PAYMENTS, HE AC CORDINGLY DELETED THE IMPUGNED DISALLOWANCE. 4. BEFORE US, THE LD. DR HAS SUBMITTED THAT THE JUD GEMENT ARRIVED AT IN THE CASE OF JURISDICTIONAL HIGH COURT IN GURDAS GARG VS CIT (SUPRA ) HAS NOW BEEN RECALLED BY THE HON'BLE HIGH COURT AND THE MATTER HAS BEEN FIXED FOR ADJUDICATION AFRESH. HOWEVER, THE LD. COUNSE L FOR THE ASSESSEE HAS SUBMITTED THAT, EVEN OTHERWISE, THE PAYMENTS WERE M ADE OUT OF BUSINESS EXPEDIENCY AND, HENCE, CONSIDERING THE EXCEPTIONS A S PROVIDED UNDER RULE 6DD OF THE INCOME TAX RULES, NO DISALLOWANCE WAS WA RRANTED. HE HAS INVITED OUR ATTENTION TO THE PARA 3.2 OF THE IMPUGN ED ORDER OF THE CIT(A), WHEREIN, ALL THE PAYMENTS HAVE BEEN MENTIONED IN A CHART AND EIGHT INSTANCES OF PAYMENTS IN CASH AMOUNTING TO MORE THA N RS. 20,000/- HAS BEEN MENTIONED FROM SERIAL NUMBER (A) TO (H). ITA NO. 1018/CHD/2016 & C.O.NO.38/CHD/2016- M/S PUBLIC CLOTHING (P) LTD, LUDHIANA 4 5. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER SUB MITTED THAT SO FAR AS PAYMENT MENTIONED AT S.NO. (B) AND (D) ARE CONCERN ED, THESE WERE DIRECTLY DEPOSITED INTO THE BANK ACCOUNT OF THE PARTIES. HE HAS, FURTHER INVITED OUR ATTENTION TO THE PAYMENT MENTIONED AT SR. NOS. (A) , (B) AND (C) TO SHOW THAT THESE PAYMENTS WERE ON ACCOUNT OF ELECTRIC REP AIR EXPENSES / COMPUTER REPAIR EXPENSES AND FURTHER PLEADED THAT THESE TYPE OF REPAIRS ARE NEEDED ON URGENT BASIS AND GENERALLY THE MECHANICS / SERVICE PROVIDERS INSISTED ON IMMEDIATE CASH PAYMENTS. HOWEVER, NO SPECIFIC DETA ILS HAVE BEEN PROVIDED TO US SO FAR THE PAYMENTS MENTIONED AT SR. NOS. (E) TO (H) ARE CONCERNED. THOUGH, THE PAYMENTS MENTIONED AT SR. N OS. (G) & (H) ARE ALSO ON ACCOUNT OF REPAIRS BUT THE SPECIFIC DETAILS AS T O WHAT TYPE OF REPAIRS WERE GOT DONE FOR WHICH THE AFORESAID PAYMENTS WERE INCURRED HAS NOT BEEN GIVEN. IN VIEW OUR DISCUSSION MADE ABOVE, WE ARE OF THE VIEW THAT SINCE THE PAYMENTS MENTIONED AT SR. NOS. (B) AND (D) WERE IN THE BANK ACCOUNT OF THE RESPECTIVE PARTIES AND FURTHER THE PAYMENTS FROM MENTIONED AT NOS. (A), (B) AND (C) WERE ON ACCOUNT OF BUSINESS E XPEDIENCY, HENCE, THE DISALLOWANCE U/S 40A(3) OF THE ACT IN RESPECTS OF PAYMENTS MENTIONED AT S. NOS. (A), (B), (C) & (D), WE FIND NO INFIRMITY I N THE ORDER OF THE CIT(A). HOWEVER, IN RESPECT OF PAYMENTS MENTIONED AT SR.NO S. (E), (F), (G) AND (H), SINCE BUSINESS EXPEDIENCY IN RESPECT OF THESE PAYME NT HAS NOT BEEN PROVED, THE ORDER OF THE CIT(A) IN RESPECT OF THESE PAYMEN TS IS SET ASIDE AND THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS CONFI RMED. ITA NO. 1018/CHD/2016 & C.O.NO.38/CHD/2016- M/S PUBLIC CLOTHING (P) LTD, LUDHIANA 5 6. GROUND NO.2 VIDE GROUND NO.2, THE REVENUE HAS AGITATED THE ACTION OF THE CIT(A) IN DELETING THE ADDITION OF RS . 8,20,000/- MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT. 7. THE ASSESSING OFFICER OBSERVED THAT DURING THE Y EAR UNDER CONSIDERATION, AN AMOUNT OF RS. 8,20,000/- SHOWN TO HAVE BEEN RECEIVED BY THE ASSESSEE FROM MS. BHAVINI MODI. SINCE THE ASSES SEE COULD NOT PROVE THE CREDITWORTHINESS OF THE MS. BHAVINI MODI, HENCE , THE ASSESSING OFFICER MADE THE IMPUGNED DISALLOWANCE. BEFORE THE LD. CI T(A), IT WAS SUBMITTED THAT MS. BHAVINI MODI WAS MINOR. THE AFOR ESAID PAYMENT WAS DEPOSITED THROUGH BANKING CHANNEL IN HER ACCOUNT BY HER FAMILY MEMBERS NAMELY MR. K.K. MODI, MR. HARSH MODI AND MS. ANURA DHA MODI. THE ASSESSEE ALSO SUBMITTED THE ITRS OF THE AFORESAID F AMILY MEMBERS OF THE MS. BHAVINI MODI AND ALSO THE BANK ACCOUNT MS BHAVI NI MODI , WHEREIN, THE PAYMENTS FOUND DEPOSITED THROUGH BANKING CHANNE L. THE LD. CIT(A) CALLED UPON THE REMAND REPORT FROM THE ASSESSING O FFICER IN THIS RESPECT AND AFTER CONSIDERING THE REMAND REPORT AS WELL AS SUBMISSIONS OF THE ASSESSEE, HE OBSERVED THAT THE ASSESSEE HAD PROVED THE CREDITWORTHINESS OF THE PAYEE MS. BHAVINI MODI, AND ACCORDINGLY MADE THE IMPUGNED ADDITION. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS OF THE P ARTIES, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE CIT(A) AND THE ORDER OF THE CIT(A) ON GROUND NO.2 IS UPHELD. ITA NO. 1018/CHD/2016 & C.O.NO.38/CHD/2016- M/S PUBLIC CLOTHING (P) LTD, LUDHIANA 6 9. GROUND NO.3 : THIS GROUND IS IN RELATION TO THE DISALLOWANCE O F RS. 38,000/- ON ACCOUNT OF BUSINESS PROMOTION EXPENSES. THE AFORESAID PAYMENT OF RS. 38,000/- WAS ALLEGEDLY PAID BY THE ASSESSEE TO M/S CITI LEAVES MEDIA EVENTS (P) LTD FOR BUSINESS PROMOTION EXPENSES. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE AND LOOKING AT THE MEAGER SUM OF THE AMOUNT CLAIMED AS BUSINESS PROMOT ION EXPENSES, HAS DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER . AFTER HEARING THE LD. REPREHENSIVE OF THE PARTIES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE ALSO. 10. GROUND NO.4 : VIDE THIS GROUND THE REVENUE HAS AGITATED THE AC TION OF THE CIT(A) IN DELETING THE DISALLOWANCE OF RS. 1 7,22,359/- MADE BY THE ASSESSING OFFICER U/S 36(1)(III)OF THE ACT. 11. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ADMITTEDLY THE ASSESSEE HAD RAISED LOANS FROM AXIS BANK AND HAD PAID THE INTEREST UPON THE SAID AMOUNT BUT THE SAID INTERES T EXPENDITURE HAD NEVER BEEN CLAIMED BY THE ASSESSEE AS BUSINESS EXPENDITU RE, RATHER, THE SAME WAS CAPITALIZED. THE LD. DR HAS ALSO ADMITTED THIS FACT. IN VIEW OF THIS, SINCE THE ASSESSEE HIMSELF HAS NOT CLAIMED THE AFORESAID AMOUNT AS REVENUE EXPENDITURE , HENCE, TH ERE WAS NO QUESTION OF ANY DISALLOWANCE OF THE SAME. THERE IS NO INFIRMITY IN THE ORDER OF THE CIT(A) IN RESPECT OF THIS ISSUE ALSO. ITA NO. 1018/CHD/2016 & C.O.NO.38/CHD/2016- M/S PUBLIC CLOTHING (P) LTD, LUDHIANA 7 12. GROUND NO.5 . IN GROUND NO.5, THE REVENUE HAS AGITATED THE ACT ION OF THE CIT(A) IN RESTRICTING THE DISALLOWANCE TO 4% OF THE OVERALL EXPENDITURE ON ADHOC BASIS AS AGAINST 10% MADE BY T HE ASSESSING OFFICER, WHEREAS, THE ASSESSEE IN GROUND NO.3 OF ITS CROSS O BJECTIONS HAS AGITATED THE ACTION OF THE CIT(A) IN CONFIRMING THE DISALLO WANCE TO 4%. THE PLEA OF THE ASSESSEE IS THAT NO DISALLOWANCE IS WARRANTE D ON THIS ISSUE. THE ASSESSING OFFICER MADE THE IMPUGNED DISALLOWANCE OB SERVING THAT THE ASSESSEE HAD FAILED TO PRODUCE THE BOOKS OF ACCOU NT, BILLS AND DOCUMENTS TO SUBSTANTIATE THE EXPENDITURE CLAIMED. THE LD. C IT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE RESTRICTED THE DISALLOW ANCE ON ADHOC BASIS @ 4% AS AGAINST 10% MADE BY THE ASSESSING OFFICER. 13. BEFORE US, LD. COUNSEL FOR THE ASSESSEE HAS SU BMITTED THAT THE GENUINENESS OF EACH OF THE EXPENDITURE WAS OTHERW ISE EXAMINED BY THE ASSESSING OFFICER SPECIFICALLY AND CERTAIN DISALLOW ANCES WERE MADE OUT OF EXPENSES CLAIMED. THAT ONCE ASSESSING OFFICER HAD E XAMINED THE INDIVIDUAL DETAILS AND MADE SPECIFIC DISALLOWANCES, THERE WAS NO QUESTION OF FURTHER MAKING THE DISALLOWANCE ON ADHOC BASIS. HE HAS FUR THER SUBMITTED THAT EVEN OTHERWISE CERTAIN EXPENDITURE WAS IN THE NATUR E OF STATUTORY EXPENDITURE AND NEED NOT ANY PRODUCTION OF BILLS / VOUCHERS SUCH AS DEPRECIATION ETC. HE HAS FURTHER SUBMITTED THAT EVEN IN RESPECT OF CE RTAIN ITEMS OF ADMINISTRATIVE AND OTHER EXPENDITURE, DISA LLOWANCE OF INTEREST EXPENDITURE AND OF FOREIGN TRAVELLING EXPENDITURE WERE SPECIFICALLY MADE BY THE ASSESSING OFFICER. EVEN THE BOOK RESULTS DEC LARED BY THE ASSESSEE WERE ACCEPTED BY THE ASSESSING OFFICER, THEREFORE, NO ADHOC DISALLOWANCE ITA NO. 1018/CHD/2016 & C.O.NO.38/CHD/2016- M/S PUBLIC CLOTHING (P) LTD, LUDHIANA 8 WAS WARRANTED IN RESPECT OF PURCHASE AND SALES ETC. IT HAS BEEN FURTHER POINTED OUT THAT IN RESPECT OF FINANCIAL EXPENSES, SINCE THE SAME WERE PAID DIRECTLY TO THE BANK AND THERE WAS NO QUESTION OF A NY BOGUS CLAIM, THE CLAIM REGARDING TO WHICH HAS ALREADY BEEN ALLOWED B Y THE CIT(A), THEREFORE, THE AMOUNT CLAIMED ON FINANCIAL EXPENDI TURE HAS ALREADY BEEN EXCLUDED FROM ADHOC DISALLOWANCE. 14. THE LD. DR ON THE OTHER HAND HAS RELIED UPON TH E FINDINGS OF THE ASSESSING OFFICER. 15. CONSIDERING THE SUBMISSION OF BOTH THE LD. REPR ESENTATIVES OF THE PARTIES, WE ARE OF THE VIEW, THAT NO DISALLOWANCE I S TO BE MADE IN RESPECT OF THE DEPRECIATION AND FINANCIAL EXPENSES. SO FAR AS THE REMAINING EXPENDITURE IS CONCERNED, THE LD. COUNSEL FOR THE A SSESSEE HAS SUBMITTED THAT THE ASSESSING OFFICER HAD MADE DISALLOWANCE OF CERTAIN SPECIFIC EXPENDITURE, THEREFORE, FURTHER ADHOC DISALLOWANCE WAS NOT WARRANTED. HOWEVER, THE LD. DR, ON THE OTHER HAND, HAS SUBMIT TED THAT EVEN MANY ITEMS COULD NOT BE SCRUTINIZED BY THE ASSESSING OFF ICER FOR WANT OF BILLS / VOUCHERS. 16. CONSIDERING THE ABOVE FACTS ON THE FILE AND ALS O CONSIDERING THAT THE ASSESSING OFFICER HAS EXAMINED THE ITEMS OF THE EXP ENDITURE SEPARATELY AND HAD MADE CERTAIN DISALLOWANCE ITEM WISE, WE DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE LOWER AUTHORITIES IN MAKING THE FURTHER DISALLOWANCE ON ADHOC BASIS. ITA NO. 1018/CHD/2016 & C.O.NO.38/CHD/2016- M/S PUBLIC CLOTHING (P) LTD, LUDHIANA 9 IN VIEW OF THIS, WE DO NOT FIND ANY JUSTIFICATION O N THE PART OF THE LOWER AUTHORITIES ON MAKING THE ADHOC DISALLOWANCE ON THIS ISSUE. GROUND NO.5 OF THE APPEAL OF THE REVENUE IS, THEREFORE, DI SMISSED, WHEREAS, THE GROUND NO. 3 OF THE ASSESSEE CROSS OBJECTIONS ON TH IS ISSUE IS ALLOWED. 17. NOW COMING TO THE REMAINING GROUNDS OF THE CROS S OBJECTIONS (C.O. NO. 38/CHD/2016) OF THE ASSESSEE. 18. GROUND NO.1 IS REGARDING DISALLOWANCE ON FOREIGN TRAVEL EXPENDI TURE AMOUNTING TO RS. 7,01,080/- THE LD. CIT(A) CONFIRME D THE DISALLOWANCE OBSERVING THAT THE ASSESSEE HAD FAILED TO SHOW BUS INESS EXPEDIENCY FOR TRIP TO USA AND INDONASIA. 19. BEFORE US, LD. COUNSEL FOR THE ASSESSEE COULD NOT FURNISH THE RELEVANT EVIDENCE SHOWING ANY BUSINESS EXPEDIENCY F OR THE AFORESAID FOREIGN TRAVEL. IN VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN TH E ORDER OF THE CIT(A) ON THIS ISSUE. THIS GROUND OF THE CROSS OBJE CTION IS ACCORDINGLY DISMISSED. 20. GROUND NO. 2 : IN GROUND NO.2, THE ASSESSEE HAS AGITATED THE ACT ION OF THE CIT(A) IN CONFIRMING THE ADDITION OF PROPORT IONATE INTEREST @ 12% ON THE INTEREST FREE ADVANCES MADE BY THE ASSESSEE TO M/S RAI PACKAGING (P) LTD. THERE ARE TWOFOLD SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE. FIRSTLY, THAT THE AFORESAID ADVANCE WERE MADE OUT OF THE BUSINESS ITA NO. 1018/CHD/2016 & C.O.NO.38/CHD/2016- M/S PUBLIC CLOTHING (P) LTD, LUDHIANA 10 EXPEDIENCY AND FURTHER THAT THERE WAS A RUNNING ACC OUNT OF THE ASSESSEE WITH THE AFORESAID COMPANY M/S RAI PACKAGING (P) L TD. THE SECOND LIMB OF THE SUBMISSIONS IS THAT, EVEN OTHERWISE, IF IT IS ASSUMED THAT THERE WAS NO BUSINESS EXPEDIENCY FOR MAKING THE AFORESAID ADV ANCES, THE ASSESSEE WAS POSSESSED OF SUFFICIENT OWN FUNDS TO MEET THE A FORESAID ADVANCES. THE LD. COUNSEL HAS DEMONSTRATED BEFORE US THAT THE SH ARE CAPITAL OF THE ASSESSEE WAS TO THE TUNE OF RS. 2.36 CRORES AND RES ERVES TO THE TUNE OF RS. 2.43 CORES AND THE ASSESSEE EVEN EARNED PROFITS DU RING THE YEAR OF RS. 42 LACS WHICH SHOWS THAT THE ASSESSEE DURING THE YEAR WAS POSSESSED OF SUFFICIENT FUNDS TO MEET THE INVESTMENT OF RS. 39 L ACS. 21. IN VIEW OF THIS, THERE IS NO JUSTIFICATION IN M AKING THE IMPUGNED DISALLOWANCE. THIS GROUND OF THE CROSS OBJECTION IS THEREBY IS ALLOWED AND DISALLOWANCE MADE ON THIS ISSUE IS ORDERED TO BE DE LETED. NO OTHER GROUND IS TAKEN OR PRESSED. IN VIEW OF TH IS, THE CROSS OBJECTIONS OF THE ASSESSEE ARE ALSO TREATED AS PART LY ALLOWED. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTIONS OF THE ASSESSEE ARE TREATED AS PARTLY ALLOWED. ORDER DICTATED AND PRONOUNCED ON COMPLETION OF HEAR ING IN THE OPEN COURT ON 10.12.2018. SD/- SD/- ( $ % & '# / ANNAPURNA GUPTA) () / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED 10.12.2018 .. ITA NO. 1018/CHD/2016 & C.O.NO.38/CHD/2016- M/S PUBLIC CLOTHING (P) LTD, LUDHIANA 11 '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR