Shri Parasmal Gopawat S/o. Sh. Madanlal Gopawat, Neemuch V. The I.T.O., Neemuch

CO 5/IND/2010

• Counselvise Citation: [2010] 122 COUNSELVISE.COM (IT) 5509 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-12-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-12-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 16-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Keywords: Notional interest
• Section: 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.117/IND/2010 A.Y. 2000-01 ITO, NEEMUCH APPELLANT VS PARASMAL GOPAWAT, NEEMUCH PAN AATPJ 4205 D RESPONDENT AND, CO NO.5/IND/2010 (ARISING OUT OF ITA NO.117/IND/2010) A.Y. 2000-01 PARASMAL GOPAWAT, NEEMUCH PAN AATPJ 4205 D APPELLANT VS ITO, NEEMUCH RESPONDENT DEPARTMENT BY : SH. P.K. MITRA, SR. DR ASSESSEE BY : NONE O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER 2 THE APPEAL BY THE REVENUE AND CROSS-OBJECTION BY AS SESSEE ARE AGAINST THE ORDER OF THE LEARNED CIT(A)-UJJAIN, DAT ED 14.12.2009. THE GROUND RAISED BY THE REVENUE IS THAT WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN REDUCING THE INTEREST RATE OF 12 % INSTEAD OF 18% APPLIED BY THE ASSESSING OFFICER ON THE AMOUNT OF A DVANCES AS ON 1.4.1999 TO THE TUNE OF RS.2,36,72,060/- ESPECIALLY WHEN THE INTEREST RATE OF 18% WAS APPLIED FOR ASSESSMENT YEAR 1998-99 AND WAS CONFIRMED BY THE LD. CIT(A) VIDE ORDER DATED 9.11.2 007. 2. DURING HEARING OF THIS APPEAL, SHRI P.K. MITRA, LD. SR. DR WAS PRESENT FOR THE REVENUE WHEREAS NOBODY WAS PRESENT FOR THE ASSESSEE INSPITE OF SERVICE OF NOTICE THROUGH THE DEPARTMENT AS IS EVIDENT FROM THE LETTER OF THE DEPARTMENT DATED 6.12.2010. IN VIEW O F THESE FACTS, WE HAVE NO OPTION BUT TO PROCEED EXPARTE QUA-ASSESSEE AND T O DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON THE FILE. THE LD. SR. DR RELIED UPON THE ASSESSMENT ORDER AND ADVANCED HIS ARGUMENTS WHI CH ARE IDENTICAL TO THE GROUNDS RAISED. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. SR. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BRIEF FAC TS ARE THAT THE ASSESSEE DECLARED NIL INCOME IN ITS RETURN FILED ON 23.11.2000. AS PER THE REVENUE, THE ASSESSEE ADVANCED HUGE AMOUNTS TO VARIOUS PERSONS ON LOANS AS WAS EVIDENT FROM THE ACCOUNTS OF THE AS SESSEE. AS PER THE 3 LD. ASSESSING OFFICER, AS ON 1.4.1999, THE TOTAL AD VANCES TO THE TUNE OF RS.2,36,72,060/- WERE ADVANCED WHICH WAS NOT RECEIV ED BACK THROUGHOUT THE YEAR AS ON 31.3.2000, THE SAME AMOUN T STANDS. AS PER THE LD. SR. DR, THE IMPUGNED AMOUNT REMAINED LENT O UT ON LOANS TO VARIOUS PERSONS THROUGHOUT THE YEAR. THE ASSESSING OFFICER LEVIED INTEREST @18% WHICH CAME TO RS.42,60,970/- ON THE B ASIS OF INTEREST INCOME OF EARLIER YEARS. THE INTEREST @18% PER ANNU M WAS LEVIED BY THE ASSESSING OFFICER TO THE TOTAL INCOME. ON APPEA L, THE IMPUGNED ADDITION WAS DELETED, WHICH IS UNDER CHALLENGE BEFO RE THIS TRIBUNAL. THERE IS A FACTUAL FINDING IN THE IMPUGNED ORDER TH AT FOR ASSESSMENT YEAR 1994-95 TO 1998-99, THE ASSESSMENT ORDERS WERE COMP LETED U/S 144. IN REDUCING THE RATE OF INTEREST TO 12% BY THE LD. CIT (A) WAS ON THE REASON THAT IT IS TOWARDS HIGHER SIDE. ADMITTEDLY, THE ASS ESSING OFFICER CHARGED NOTIONAL INTEREST FOR WHICH THE REASONING MENTIONED IN THE ASSESSMENT ORDER IS NOT PLAUSIBLE BECAUSE FIRSTLY, THE EACH YE AR IS INDEPENDENT AND SECONDLY, THE BASIS OF EARLIER YEARS MADE BY THE AS SESSING OFFICER IS ALSO NOT CORRECT BECAUSE IN THOSE ASSESSMENT YEARS, THE ASSESSMENTS WERE FRAMED U/S 144 OF THE ACT. THERE IS ANOTHER FI NDING IN THE IMPUGNED ORDER THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 23.11.2000 DECLARING NIL INCOME AS THE IMPUGNED AMOUNT WAS REC EIVED BACK IN THE PAST ITSELF. THE BUSINESS OF THE ASSESSEE WAS CLOSE D AND AS PER THE BALANCE-SHEET, NOTHING WAS OUTSTANDING AND IN THE B ANK A/C, THERE WAS 4 NO TRANSACTION. IN VIEW OF THIS UNCONTROVERTED FIND ING, THE STAND OF THE LD. CIT(A) IS AFFIRMED, CONSEQUENTLY, THIS APPEAL OF TH E REVENUE IS HAVING NO MERIT. SAME IS DISMISSED. 4. AS FAR AS THE CROSS-OBJECTION OF THE ASSESSEE IS CONCERNED, SINCE INSPITE OF SERVICE OF NOTICE, THE ASSESSEE NE ITHER PRESENTED HIMSELF NOR MOVED ANY ADJOURNMENT PETITION, IT SEEMS THAT A SSESSEE HAS NOTHING TO SAY ON ITS CROSS-OBJECTION, THEREFORE, THE GROUN DS TAKEN IN THE CROSS- OBJECTION ARE DISMISSED. FINALLY, THE APPEAL OF THE REVENUE AS WELL AS THE C ROSS-OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF L EARNED SR. DR AT THE CONCLUSION OF HEARING ON 9 TH DECEMBER, 2010. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10.12.2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE !VYAS!