Shri Vinod Bansal, Mhow V. The ITO 5(3), Indore

CO 8/IND/2010

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6208 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 1999-2000
• Appeal Filed On: 18-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARUN DEEWAN
• Assessee Lawyers: RAVI SARDA
• Keywords: Depreciation; Tax effect
• Section: 260A; 148

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 NOS.275 AND 276/IND/2010 A.Y. 1999-2000 INCOME TAX OFFICER 5(3), INDORE APPELLANT VS SHRI VINOD BANSAL MHOW RESPONDENT PAN ABQPB-0169G CO NOS.08 AND 9/IND/2010 (ARISING OUT OF ITA NO. 275 AND 276/IND/2010 , RESPECTIVELY) SHRI VINOD BANSAL MHOW OBJECTOR VS INCOME TAX OFFICER 5(3), INDORE RESPONDENT DEPARTMENT BY : SHRI ARUN DEEWAN, SR. DR ASSESSEE BY : SHRI RAVI SARDA, ADVOCATE 2 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE HAS PREFERRED THE APPEALS FOR THE ASSESSMENT YEARS 1999-00 AND 2000-01 AND CROSS OBJE CTIONS BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CO MMISSIONER OF INCOME TAX (APPEALS) DATED IST FEBRUARY, 2010. I N ITA NO. 275/IND/2010 THE REVENUE HAS CHALLENGED THE DELETIO N OF ADDITION OF RS. 6,05,330/- MADE ON ACCOUNT OF DIFFE RENCE IN SUPPLIER/CREDITORS ACCOUNT FOR THE ASSESSMENT YEAR 1999-00. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE CONTEN DED THAT THE TAX EFFECT IN THE PRESENT APPEAL IS BELOW THE PRESC RIBED MONETARY LIMIT, THEREFORE, IT WAS PRAYED THAT ON TH IS COUNT ALSO THE APPEAL OF THE REVENUE MAY BE DISMISSED. THE FA CTUM OF TAX EFFECT WAS NOT CONTROVERTED BY THE REVENUE. 2. ON PERUSAL OF RECORD AND AFTER HEARING THE RIVAL SUBMISSIONS, AS CLAIMED, THE TAX EFFECT IS RS.1,55, 600/- WHICH IS WITHIN THE PRESCRIBED LIMIT, THEREFORE, AS PER T HE INSTRUCTIONS ISSUED BY CBDT, THE DEPARTMENT IS NOT PERMITTED TO FILE THE APPEAL. OUR VIEW IS SUPPORTED BY THE DECISION OF TH E TRIBUNAL IN 3 THE CASE OF RAJAN CLOTH STORES (ITA NO. 365/IND/201 0) ORDER DATED 31.5.2011. THE RELEVANT PORTION OF THE SAME I S REPRODUCED HEREUNDER :- THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A)-I, INDORE, DATED 4.3.2010 ON THE GROUND THAT THE LD. CIT(A) ERRED IN OVERLOOKING THE PROVISION O F SEC. 275(1A) OF I.T. ACT AND DELETING PENALTY U/S 271(1) (C) FOR RS.2,32,780/-. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I PRADEEP KUAMR MITRA, LD. SR. DR FOR THE REVENUE AND SHRI S.S. DESHPANDE, LD. COUNSEL FOR THE ASSESSEE. AT TH E OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TAX EFFECT IN THE PRESENT APPEAL IS BELOW PRESCRIBED MONETARY LIMIT, THEREFORE, STRAIGHT WAY, THE APPEAL OF THE REVENUE MAY BE DISMISSED. THE LD. SR. DR FAIRLY ADMITTED THAT THE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSIO N, ON THE ISSUE OF TAX EFFECT, THE BENCH IN THE CASE OF ACIT VS. M/S. SHRIRAM NUTRIENTS LTD. IN ITA NO.123/IND/2010 (A.Y. 2002- 03) VIDE ORDER DATED 28.10.2010 HELD AS UNDER: THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER O F THE LEARNED CIT(A)-UJJAIN, DATED 16.12.2009 ON THE GROU ND WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN TREATING THE ASSESSMENT MADE BY THE A.O. A S INFRUCTUOUS, WITHOUT APPRECIATING THE FACT THAT OTH ERWISE ON 6.3.2006 (THE DATE OF ISSUE OF NOTICE) THE A.O. WAS EMPOWERED TO ISSUE NOTICE U/S 148 FOR THE A.Y. 2002 -03, IN VIEW OF THE PROVISIONS OF SECTION 149(1)(A) READ WI TH SECTION 151(1) OF THE IT ACT, 1961? 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I S.S. DESHPANDE, LD. COUNSEL FOR THE ASSESSEE AND SHRI P. K. MITRA, LEARNED SENIOR DR. THE CRUX OF ARGUMENT IS THAT THE TAX EFFECT IN THE PRESENT APPEAL IS BELOW MONETARY PRESCRIBED LIMIT, THEREFORE, STRAIGHT WAY THE APPEAL OF THE REVENUE M AY BE DISMISSED. THE LD. SR. DR SHRI P.K. MITRA FAIRLY AD MITTED THAT THE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT. 4 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. IN THE PRESENT APPEAL, THE INC OME ASSESSED IS RS.1,37,880/- AND THE TAX INVOLVED IS R S.40,611/- ONLY, THEREFORE, WITHOUT GOING INTO MERITS OF THE C ASE ON THE PRIMARY OBJECTION OF MONETARY LIMIT, THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. OUR VIEW IS SUPPORTED BY THE DECISION OF THE TRIBUNAL IN HIMANSHU FLOUR MILLS (I TA NO.506/IND/2009, ORDER DATED 26.5.2010). THE RELEVA NT PORTION OF THE SAME IS REPRODUCED HEREUNDER: THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 26.8.2009 ON THE GROUND THAT T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS NO T JUSTIFIED IN DELETING THE ADDITION OF RS. 5,46,831/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF DE PRECIATION ON FIXED ASSETS AND ALSO IN DIRECTING THE ASSESSING OFFICER TO ALLOW CARRY FORWARD OF BROUGHT FORWARD LOSSES OF EA RLIER YEARS. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD THE LEARNED COUNSELS FROM BOTH THE SIDES AND CONSIDERED THE ARGUMENTS ADVANCED BY THEM. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE RAISED A PRELIMINARY OBJECTION THA T SINCE THE TAX EFFECT IS BELOW THE PRESCRIBED MONETARY LIMIT, THEREFORE, THE DEPARTMENT IS NOT PERMITTED TO FILE THIS APPEAL AND THE SAME DESERVES TO BE DISMISSED ON THIS SHORT GROUND ITSEL F. HOWEVER, THE LEARNED SR. DR FAIRLY AGREED THAT THE TAX EFFEC T IS BELOW PRESCRIBED MONETARY LIMIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. IN VIEW OF THE ABOVE ASSERTI ON OF THE LEARNED RESPECTIVE COUNSELS, WE ARE OF THE CONSIDER ED OPINION THAT THIS APPEAL OF THE REVENUE DESERVES TO BE DISM ISSED. OUR VIEW FINDS SUPPORT FROM THE DECISION DATED 2 ND DECEMBER, 2009 OF THE TRIBUNAL IN THE CASE OF HIMANSHU FLOOR MILLS (ITA NO. 507/IND/2009). THE RELEVANT PORTION OF THE SAM E IS REPRODUCED HEREUNDER :- THIS APPEAL IS BY THE REVENUE CHALLENGING THE ORD ER OF THE CIT(A) DATED 26.8.2009. DURING HEARING OF THIS APP EAL, I HAVE HEARD SMT. APARNA KARAN, LEARNED SENIOR DR, AND NO- BODY WAS PRESENT FOR THE ASSESSEE. REGISTERED NOTICE OF HEA RING WAS SENT TO THE ASSESSEE ON 11.11.2009. THE ASSESSEE NEITHER P RESENTED ITSELF NOR MOVED ANY APPLICATION FOR ADJOURNMENT, THEREFOR E, I HAVE NO OPTION BUT TO PROCEED EX-PARTE QUA THE ASSESSEE AND DISPOSE OF THIS 5 APPEAL ON THE BASIS OF MATERIAL AVAILABLE IN THE FI LE. 2. THE FIRST GROUND RAISED IS THAT THE LEARNED FIRS T APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF RS.4,26 ,936/- MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON THE FIXE D ASSETS. ON QUESTIONING FROM THE BENCH ABOUT THE TAX EFFECT, IT WAS FAIRLY POINTED OUT THAT THE TAX EFFECT IS BELOW THE PRESCRIBED MON ETARY LIMIT. I HAVE CONSIDERED THE SUBMISSIONS PUT-FORTH BY THE LEARNED SENIOR DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. BRIEF FACTS ARE THAT THE ASSESSEE CLAIMED DEPREC IATION OF RS. 8,53,871/- ON THE FIXED ASSETS. THE LEARNED ASSESS ING OFFICER BASED UPON THE COMMENTS OF THE AUDITORS IN THE NOTES TO A CCOUNTS AND THE NATURE OF THE BUSINESS, DISALLOWED 50% OF THE DEPRE CIATION CLAIMED BY THE ASSESSEE WHICH WAS WORKED OUT AT RS.4,26,936 /-. BEFORE THE LEARNED FIRST APPELLATE AUTHORITY THE SUBMISSION OF THE ASSESSEE WAS THAT THE FIXED ASSETS WERE DULY REFLECTED IN THE BA LANCE SHEET DURING THE RELEVANT PERIOD AND THERE WAS NO NEW ADDITION I N THE ASSETS. THE DEPRECIATION ON ALL THE ASSETS WAS REGULARLY ALLOWE D SINCE THE DATE OF INCLUSION IN THE BALANCE SHEET. EVEN IN THE IMP UGNED ORDER THERE IS A FACTUAL FINDING THAT THE ASSESSEE FROM THE DAT E OF INCLUSION HAS NOT SHOWN IN ADDITION TO THE BLOCK OF ASSETS AS THE WDV AS ON 31.3.2002 WAS TAKEN AS BASIS AFTER REDUCING THE SAL E OF SOME ASSETS FOR THE CALCULATION OF ALLOWABLE DEPRECIATION FOR T HE ASSESSMENT YEAR 2003-04 AND THE ASSESSEE WAS ALLOWED DEPRECIATION F OR THE ASSESSMENT YEAR 2002-03. THE REVENUE HAS NOT ADDUC ED ANY EVIDENCE CONTROVERTING THE FACTUAL FINDING MENTIONE D IN THE IMPUGNED ORDER, THEREFORE, THE DISALLOWANCE IS DESI RABLE IN THE IMPUGNED APPEAL. EVEN OTHERWISE ON THE TAX EFFECT THIS APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. THIS VIEW FINDS SUPPORT FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF R.K. HOTELS (ITA NO.383/IND/09). THE RELEVANT PORTION OF THE ORDER I S REPRODUCED HEREUNDER :- THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER O F LD. CIT- (A)-II, BHOPAL, DATED 31.3.2009 FOR THE AY 2005-06 ON THE GROUND THAT THE LD. FIRST APPELLATE AUTHORITY ERRED IN DEL ETING THE ADDITION OF 6,37,206/- MADE BY THE AO BY APPLYING THE PROVISION S OF SEC. 154(3) ON ACCOUNT OF INCORRECTNESS AND INCOMPLETENE SS OF BOOKS OF ACCOUNT.. 2. DURING HEARING OF THE APPEAL, WE HAVE HEARD SMT. APARNA KARAN, LD. SR. DR AND SHRI H.P. VERMA ALONG WITH SH RI ASHISH GOYAL, LD. COUNSEL FOR ASSESSEE. AT THE OUTSET, IT WAS POINTED OUT THAT THERE IS TYPOGRAPHICAL ERROR IN MENTIONING THE FIGURE OF RS.6,37,206/- IN THE GROUND OF APPEAL AS THE CORRE CT FIGURE IS 6 RS.3,94,732/-. THE ASSERTION OF THE ASSESSEE WAS CO NSENTED TO BE CORRECT BY THE LD. SR. DR. FURTHER, IT WAS POINTED OUT THAT THE TAX EFFECT IS ALSO BELOW MONETARY LIMIT, THEREFORE, THE APPEAL OF THE REVENUE MAY BE DISMISSED. THE LD. SR. DR FAIRLY AGR EED TO THE SUBMISSION OF THE ASSESSEE TO THE EXTENT THAT THE T AX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT FOR FILING THE APPE AL BEFORE THE TRIBUNAL. S.NO. AUTHORITY MONETARY LIMIT (IN RS.) 1 ITAT 2,00,000/ - 2 APPEAL UNDER SECTION 260A BEFORE HIGH COURT 4,00,000/ - 3 SUPREME COURT 10,00,000/ - THE BOARD FURTHER CLARIFIED THE TAX EFFECT, WHICH M EANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSE SSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE, HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE I SSUE AGAINST WHICH APPEAL IS INTENDED TO BE FILED. HOWEVER, TH E TAX WILL NOT INCLUDE ANY INTEREST THEREON. IN CASES OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDU CED IN THE ORDER TO BE APPEALED AGAINST. IN THE PRESENT APPE AL, THE TOTAL DISPUTED ADDITION IS RS.3,94,732/-, THEREFORE, AS A GREED/CANVASSED BY LD. REPRESENTATIVES FROM BOTH SIDES, THE TAX EFF ECT IS BELOW RS.2 LAKHS, THE LIMIT PRESCRIBED FOR FILING APPEAL BEFOR E THE TRIBUNAL, THEREFORE, APPEAL OF THE REVENUE DESERVES TO BE DIS MISSED. OUR VIEW FINDS SUPPORT FROM THE DECISION OF THE CHANDIG ARH BENCH OF THE TRIBUNAL IN THE CASES OF SHRI J.S. LUTHRA (ITA NO.712 TO 715/CHD/2009) AND ITO, WARD 2(2), ROPAR VS. THE JHA LLIAN KALAN PRI. COOP MILK PRODUCE SOCIETY LTD., JHALLIAN KALAN DISTT. ROPAR (ITA NO.721/CHD/2009). THEREFORE, WITHOUT GOING INT O THE MERITS OF THE CASE, FACTS AND THE JUDICIAL PRONOUNCEMENTS (SUPRA), THIS APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES ON 6.10.2009. IN THE LIGHT OF THE ABOVE, THIS GROUND OF THE REVEN UE IS HAVING NO MERIT, THEREFORE, THE STAND OF THE LEARNED CIT(A) I S AFFIRMED CONSEQENTLY, THIS GROUND OF THE REVENUE IS DISMISSE D. 4. THE NEXT GROUND RAISED IS THAT THE LEARNED FIRST APPELLATE 7 AUTHORITY ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW CARRY FORWARD OF BROUGHT FORWARD LOSSES OF EARLIER YEARS WITHOUT ANY BASIS. THE CONTENTION RAISED ON BEHALF OF THE REVE NUE IS THAT IN COMING TO A PARTICULAR CONCLUSION, NO BASIS HAS BEE N ADDUCED BY THE LEARNED FIRST APPELLATE AUTHORITY AND IT WAS RIGHTL Y DISALLOWED BY THE ASSESSING OFFICER IN THE ABSENCE OF PROOF FURNISHED BY THE ASSESSEE. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON RECORD. THE STAND OF THE REV ENUE IS THAT PROOF OF LAST YEARS LOSSES WAS NOT FURNISHED BY THE ASSE SSEE CONSEQUENTLY THESE ARE NOT ALLOWABLE WHEREAS BEFORE THE LEARNED FIRST APPELLATE AUTHORITY THERE IS A FACTUAL FINDING THAT IN ALL PR EVIOUS YEARS RETURNS WERE DULY FILED BY THE ASSESSEE AND THE SAME WERE A VAILABLE ON RECORD OF THE ASSESSING OFFICER. IN THE IMPUGNED OR DER THE LEARNED FIRST APPELLATE AUTHORITY HAS DIRECTED THE ASSESSIN G OFFICER TO ALLOW CARRY FORWARD OF BROUGHT FORWARD LOSSES OF EARLIER YEARS WHICH WERE NOT SET OFF AFTER VERIFICATION OF RECORDS OF EARLIE R YEARS. EVEN OTHERWISE, IT IS A CASE OF ASSESSED LOSS WHICH HAS NOT BEEN SET OFF. CONSEQUENTLY, WE ARE IN AGREEMENT THAT IN VIEW OF T HE PROVISIONS OF SECTION 72 IT SHOULD BE ALLOWED. CONSEQUENTLY, THE RE IS NO GRIEVANCE TO THE REVENUE SINCE IT HAS BEEN REMANDED BACK TO T HE FILE OF THE ASSESSING OFFICER TO DO THE NEEDFUL AFTER VERIFICAT ION OF RECORDS OF EARLIER YEARS. MY VIEW FINDS SUPPORT FROM THE RATI O LAID DOWN IN CIT V. J.H. GOTLA; 156 ITR 323 (SC); TARA DEVI BEHL V. CIT; 218 ITR 541 (P&H). THE HONBLE APEX COURT IN THE CASE OF C IT V. MAHALAXMI SUGAR MILLS CO. LTD.; 160 ITR 920 EVEN W ENT TO THE EXTENT THAT ITO MUST ALLOW SET OFF EVEN IF IT IS NO T CLAIMED BY THE ASSESSEE BECAUSE A DUTY IS CAST UPON THE ITO TO APP LY THE RELEVANT PROVISIONS OF THE INDIAN INCOMETAX ACT FOR THE PURP OSE OF DETERMINING THE TRUE FIGURE OF ASSESSEES TAXABLE I NCOME AND THE CONSEQUENTIAL TAX LIABILITY. MERELY BECAUSE THE ASS ESSEE FAILS TO CLAIM THE BENEFIT OF SET OFF CANNOT RELIEVE THE ITO OF HIS DUTY TO APPLY SECTION 72 IN AN APPROPRIATE CASE. IN VIEW OF THES E FACTS AND JUDICIAL PRONOUNCEMENTS, I HAVE FOUND NO INFIRMITY IN THE IM PUGNED ORDER, CONSEQUENTLY, THIS GROUND OF THE REVENUE ALSO FAILS . 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF HEARING ON 1.12.2009. IN THE AFORESAID CASE, THE TRIBUNAL HAS PASSED A DE TAILED ORDER, THEREFORE, WITHOUT GOING INTO THE MERITS OF THE CAS E AND RESPECTFULLY FOLLOWING THE AFORESAID DECISION, THIS APPEAL OF TH E REVENUE IS DISMISSED. 8 ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CO NCLUSION OF HEARING ON 26 TH MAY, 2010. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 28.10.2010. 4. HOWEVER, THE CBDT VIDE INSTRUCTION NO.3/2011 DAT ED 9.2.2011 REVISED/RAISED THE MONETARY LIMIT FOR FILI NG THE APPEAL BY THE DEPARTMENT AS UNDER: S.NO. AUTHORITY MONETARY LIMIT (IN RS.) 1 ITAT 3,00,000/ - 2 APPEAL UNDER SECTION 260A BEFORE HIGH COURT 10,00,000/ - 3 SUPREME COURT 25,00,000/ - THE ABOVE INSTRUCTIONS ARE APPLICABLE TO THE APPEAL S FILED ON OR AFTER 9.2.2011, ISSUED U/S 268A(1) OF THE I.T. A CT, 1961. AS FAR AS THE MERIT OF THE CASE IS CONCERNED, IT HAS A LREADY BEEN EXAMINED BY THE LD. CIT(A) BY KEEPING THE PROVISION S OF SEC. 275(1)(A) OF THE ACT. SINCE THE APPEAL OF THE ASSES SEE WAS DECIDED BY THE LD. CIT(A) VIDE ORDER DATED 4.11.200 4, CONSEQUENTLY, THE PENALTY PROCEEDINGS WERE SUPPOSED TO BE DISPOSED OF BY 31.3.2006 WHEREAS THE SAME WAS DECID ED VIDE ORDER DATED 22.4.2009. IN VIEW OF THIS FACT, THE OR DER WAS RIGHTLY QUASHED, CONSEQUENTLY, WE FIND NO INFIRMITY IN THE STAND OF THE LD. CIT(A). THE SAME IS UPHELD. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLU SION OF THE HEARING ON 31.5.2011.. 3. IN THE PRESENT APPEAL I.E. ITA NO. 275/IND/2010, SINCE THE TAX EFFECT IS WITHIN THE PRESCRIBED MONETARY LIMIT, THEREFORE, BY 9 FOLLOWING THE AFORESAID DECISION AND THE REASONING CONTAINED THEREIN, THIS APPEAL OF THE REVENUE IS DISMISSED. 4. SO FAR AS THE CROSS OBJECTION NO. 8/IND/2010 IS CONCERNED, THE FIRST GROUND PERTAINS TO APPROVAL OF THE ACTIO N U/S 148 OF THE ACT WAS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSE SSEE, THEREFORE, THIS GROUND IS DISMISSED AS NOT PRESSED. 5. THE NEXT GROUND IN THE CROSS OBJECTION IS THAT L D. FIRST APPELLATE AUTHORITY ERRED IN MAINTAINING THE DISALL OWANCE OF INTEREST U/S 40A(2)(B) OF THE ACT. THE CRUX OF ARGU MENTS ON BEHALF OF THE ASSESSEE IS THAT THE INTEREST WAS PAI D AT THE RATE OF 24%. THIS FACTUAL MATRIX WAS NOT CONTROVERTED B Y THE REVENUE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. BRIEF FACTS ARE THAT THE DI SALLOWANCE OF RS. 1,25,000/- WAS MADE OUT OF RS.2,24,480/- BY THE ASSESSING OFFICER UNDER SECTION 40A(2)(B) BY CLAIMING THAT TH E INTEREST AT EXCESSIVE RATE WAS PAID. OUR ATTENTION WAS INVITED TO THE INTEREST PAID TO VARIOUS PARTIES AND THE CONFIRMATI ON BY THE PARTIES AT PAGES 113 TO 120 OF THE PAPER BOOK. ALL THE LENDERS 10 ARE ASSESSED IN THE SAME WARD AND THE INTEREST WAS PAID AS PER THE COPY OF ACCOUNTS, CONSEQUENTLY, ON THE FACT S AVAILABLE ON RECORD, NO DISALLOWANCE SHOULD HAVE BEEN MADE BE CAUSE NORMALLY WHILE GETTING THE AMOUNT FROM THE BANK LOT OF FORMALITIES IS REQUIRED TO BE FULFILLED. THE RATIO LAID DOWN IN THE DECISIONS IN BIRLA GWALIOR PRIVATE LIMITED; 43 ITR 847 (MP), EAST INDIA INDUSTRIES LIMITED; 31 ITR 803 (SC) AND ITO VS. CHAMBAMAL RUPCHAND; 70 TTJ 43 (ASR) SUPPORTS THE CA SE OF HE ASSESSEE, THEREFORE, THIS GROUND OF THE ASSESSEE IN THE CROSS OBJECTION IS ALLOWED. THIS CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALL OWED. 4. IN THE APPEAL FOR THE ASSESSMENT YEAR 2000-01 (I TA NO. 276/IND/2010) THE FIRST GROUND IS GENERAL IN NATURE , THEREFORE, REQUIRES NO DELIBERATION. 5. THE SECOND GROUND RAISED BY THE REVENUE IS THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CO MMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDIT ION OF RS.8,16,000/- MADE ON ACCOUNT OF DIFFERENCE IN CLOS ING STOCK. BRIEF FACTS ARE THAT THE ASSESSEE DECLARED TOTAL IN COME OF 11 RS.2,49,460/- FROM THE BUSINESS OF TRADING IN ELECT RONIC ITEMS IN ITS RETURN FILED ON 23.10.2000. DURING THE COURSE OF SURVEY, AS PER PHYSICAL VERIFICATION OF THE STOCK, ON 8. 3.200 0 THE STOCK OF RS.20,57,172/- WAS FOUND WHEREAS AS PER THE BOOKS I T WAS RS.29,73,501/-. AS PER THE REVENUE, THE STOCK WAS S HORT BY RS.9,16,329/-. THE ALLEGED VARIATION WAS CLAIMED TO BE EXPLAINED AND THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) DELETED THE ADDITION OF RS.8,16,329/- WHI CH IS UNDER CHALLENGE BEFORE THE TRIBUNAL. ON PERUSAL OF RECOR D AND AFTER HEARING THE RIVAL SUBMISSIONS, WE FIND THAT THE ASS ESSING OFFICER MADE THE ADDITION OF THE ALLEGED DIFFERENCE S IN BALANCES FROM 13 PARTIES AGGREGATING TO RS.6,05,330/- FOR TH E ASSESSMENT YEAR 1999-00 AND SIMILARLY THE ADDITION WAS MADE IN RESPECT OF 15 PARTIES AGGREGATING TO RS.3,97,375 /- FOR THE ASSESSMENT YEAR 2000-01. MOST OF THE PARTIES ARE CO MMON AND EVEN THE BENEFIT OF SET OFF WAS NOT GIVEN TO THE AS SESSEE. KEEPING IN VIEW THE FACTUAL FINDING CONTAINED IN TH E IMPUGNED ORDER, WE DO NOT FIND ANY INFIRMITY IN THE SAME ESP ECIALLY WHEN THE REMAND REPORT FROM THE ASSESSING OFFICER WAS DU LY 12 CONSIDERED BY THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) AND NO CONTRARY MATERIAL WAS FOUND AGAINS T THE ASSESSEE, THEREFORE, THERE IS NO MERIT IN THIS GROU ND OF THE REVENUE. THE SAME IS DISMISSED. 6. THE NEXT GROUND PERTAINS TO DELETING THE ADDITIO N OF RS.3,97,375/- MADE ON ACCOUNT OF DIFFERENCE IN SUPPLIER/CREDITORS ACCOUNT. AFTER HEARING THE RIVA L SUBMISSIONS WE FIND THAT THIS ISSUE HAS BEEN DEALT WITH BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AT PAGE 5 (PAR A 4.5) AND PAGE 7 (PARA 5.4) OF THE IMPUGNED ORDER. WE FI ND THAT THE ADDITION OF THE IMPUGNED AMOUNT WAS MADE WITHOUT CO NFRONTING THE ASSESSEE. THE ASSESSEE USED TO MAKE PURCHASES FROM THE WHOLESALERS AND CREDITED TO THEIR ACCOUNTS ON RECEI PT OF THE GOODS. THE SUPPLIERS WERE DEBITED TO THE ASSESSEES ACCOUNT THE SAME DAY BUT THE ASSESSEE DID NOT CREDIT THEIR ACCOUNT FOR WANT OF RECEIPT OF GOODS AND MANY TIMES THE SUPPLIE RS ISSUED CREDIT NOTES AGAINST THE SUPPLIES MADE BEFORE THE E ND OF THE FINANCIAL YEAR. WE HAVE PERUSED THE FACTUAL FINDIN G CONTAINED 13 IN PARA 4.5 OF THE IMPUGNED ORDER AND FIND NO INFIR MITY IN THE SAME, THEREFORE, THIS GROUND OF THE REVENUE IS DISM ISSED. THE APPEAL OF THE REVENUE IS, THEREFORE, DISMISSED . 8. IN CROSS OBJECTION NO. 9/IND/2010, THE ASSESSEE HAS RAISED THE APPROVAL OF ACTION U/S 148 OF THE ACT. THIS GRO UND WAS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE AND DIS MISSED AS SUCH. FINALLY, THE APPEALS OF REVENUE ARE DISMISSED. C.O. NO.8/IND/2010 IS PARTLY ALLOWED AND C.O. NO.9/IND/2010 IS DISMISSED AS NOT PRESSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JUNE, 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22 ND JUNE, 2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GUARD FILE DN/-