THEDCIT 1(1) , Indore, Indore V. M/s Ad-Manum Finance Ltd., Indore

ITA 1/Ind/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6481 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 02-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S MANTRI
• Assessee Lawyers: SHALINI MEHTA A RS; AJAY TULSIYAN KAPIL SHAH
• Keywords: Unexplained cash credit; Bogus Share capital; Business expenditure; Search and seizure; Share purchase agreement; Earning of tax free income; Question of law
• Section: 143(3); 14A; 13; 22; 68; 37; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE RAJPAL YADAV, VICE PRESIDENT AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING ITA NO.01/IND/2020 ASSESSMENT YEAR 2011-12 DCIT-1(1) : REVENUE INDORE V/S M/S AD-MANUM FINANCE LTD, 2 ND FLOOR, AGRAWAL HOUSE, 5 Y.N. ROAD, INDORE : RESPONDENT PAN AAABCA4980F C.O NO.01/IND/2020 (ARISING OUT OF ITA NO.01/IND/2020) ASSESSMENT YEAR 2011-12 M/S AD-MANUM FINANCE LTD, 2 ND FLOOR, AGRAWAL HOUSE, 5 Y.N. ROAD, INDORE : APPELLANT PAN AAABCA4980F V/S DCIT-1(1) : RESPONDENT INDORE AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 2 ITA NO.03/IND/2020 ASSESSMENT YEAR 2011-12 DCIT-1(1) : REVENUE INDORE V/S M/S AVAILABLE FINANCE LTD, 2 ND FLOOR, AGRAWAL HOUSE, 5 Y.N. ROAD, INDORE : RESPONDENT PAN AAACF1246F C.O NO.02/IND/2020 (ARISING OUT OF ITA NO.03/IND/2020) ASSESSMENT YEAR 2011-12 M/S AVAILABLE FINANCE LTD, 2 ND FLOOR, AGRAWAL HOUSE, 5 Y.N. ROAD, INDORE : APPELLANT PAN AAACF1246F V/S DCIT-1(1) : RESPONDENT INDORE REVENUE BY SHRI S.S. MANTRI, CIT ASSESSEE BY S/SHRI AJAY TULSIYAN, KAPIL SHAH & MISS SHALINI MEHTA, ARS DATE OF HEARING 24.05.2021 DATE OF PRONOUNCEMENT 29.06.2021 O R D E R AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 3 PER MANISH BORAD, A.M THE ABOVE CAPTIONED APPEALS FILED AT THE INSTANCE OF THE REVENUE AND CROSS OBJECTION RAISED BY THE ASSESSEE( S) FOR ASSESSMENT YEAR 2011-12 ARE DIRECTED AGAINST THE O RDERS OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-I (IN SHORT LD . CIT], INDORE DATED 10.10.2019 AND 11.10.2019 WHICH ARE ARISING OUT OF THE ORDER U/S 143(3) R.W.S 147 OF THE INCOME TAX ACT 1 961(IN SHORT THE ACT) EVENLY DATED 30.12.2016 FRAMED BY DCIT-1 (1), INDORE. 2.AS THE ISSUES RAISED IN THESE APPEALS AND CROSS OBJECTIONS ARE COMMON AND BOTH THE ASSESSEES RELATE TO SAME GROUP, AT THE REQUEST OF ALL THE PARTIES THESE APPEALS AND CROSS OBJECTION WERE HEARD TOGETHER AND ARE BEI NG DISPOSED OF BY THIS COMMON ORDER FOR SAKE OF CONVEN IENCE AND BREVITY. 3. WE WILL FIST TAKE UP REVENUES APPEALS IN CASE O F M/S. AD-MANUM FINANCE & M/S. AVAILABLE FINANCE LIMITED. PERUSAL OF GROUNDS SHOWS THAT THE COMMON ISSUE HAS BEEN RAISED IN BOTH THESE APPEALS WHEREIN LD. CIT(A ) HAS DELETED THE ADDITION WHICH WAS MADE BY THE LD. AO U /S 68 OF THE ACT TREATING THE CASH CREDIT/SHARE CAPITAL A S AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 4 UNEXPLAINED AND ALSO DISALLOWING INTEREST PAID ON T HE UNSECURED LOANS. 4. BRIEF FACTS OF THE CASE ARE THAT BOTH THE ASSESS EES NAMELY M/S. AD-MANUM FINANCE & M/S. AVAILABLE FINANCE LIMITED ARE PRIVATE LIMITED COMPANIES ENGAG ED IN THE BUSINESS. RETURNS OF INCOME FOR A.Y.2011-12 WER E FILED. CASES WERE SELECTED FOR SCRUTINY ASSESSMENT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS LD. ASSESSING OFFICER OBSERVED THAT IN THE CASE OF M/S. AD-MANUM FINANCE RECEIVED SHARE CAPITAL OF RS. 3,31,87,500/- WAS RECEIVED FROM M/S. AERRO DEALCOM PVT. LTD. (IN SHOR T ADPL). SIMILARLY IN THE CASE OF ANOTHER ASSESSEE NA MELY M/S. AVAILABLE FINANCE LIMITED, LD. ASSESSING OFFIC ER OBSERVED THAT ASSESSEE HAS RECEIVED UNSECURED LOAN OF RS.2,05,00,614/- FROM ADPL AND RS.5,72,43,488/- F ROM CHAMAK TREXIM PVT. LTD. (IN SHORT CTPL). IN CASE OF BOTH THE ASSESSEE(S) LD. ASSESSING OFFICER ASKED TO EXPL AIN THE SOURCE OF SHARE CAPITAL/UNSECURED LOAN FROM ABOVE S TATED PARTIES. DETAILED REPLIES WERE FILED IN ORDER TO PR OVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF BOTH THE CREDITORS NAMELY ADPL & CTPL BUT THE SAME WERE NOT AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 5 SUFFICIENT TO SATISFY THE LD. ASSESSING OFFICER. AC CORDINGLY ADDITION U/S 68 OF THE ACT AT RS.3,31,87,500/- WAS MADE TOWARDS UNEXPLAINED SHARE CAPITAL RECEIVED FROM AD PL IN THE CASE OF ASSESSEE NAMELY M/S. AD-MANUM FINANCE L TD. AND ADDITION FOR UNEXPLAINED UNSECURED LOAN U/S 68 OF THE ACT WAS MADE IN THE CASE OF THE ASSESSEE NAMELY M/S. AVAILABLE FINANCE LIMITED FOR UNSECURED LOAN OF RS.2,05,00,614/- FROM ADPL, RS.5,72,43,488/- FROM C TPL & INTEREST OF RS.14,44,102/- WAS MADE FOR THE INTER EST PAID TO ABOVE SAID PARTIES WAS DISALLOWED. 5. THIS ADDITION WAS CHALLENGED BY BOTH THE ASSESSE ES BEFORE LD. CIT(A) AND BOTH SUCCEEDED AS LD. CIT(A) ON THE BASIS OF HIS OBSERVATION OF THE DOCUMENTS WAS SATIS FIED WITH THE IDENTITY AND CREDITWORTHINESS OF THE CASH CREDITORS AND THE GENUINENESS OF TRANSACTION WITH T HE ASSESSEE(S) IN QUESTION AND ALSO ON THE BASIS OF DE CISIONS GIVEN BY THIS TRIBUNAL AGAINST THE REVENUE IN CASE OF OTHER GROUP CONCERNS WHEREIN ALSO SIMILAR TYPE OF ADDITIO NS WAS MADE BY ASSESSING OFFICER FOR CASH CREDIT IN THE FO RM OF SHARE CAPITAL/UNSECURED LOAN RECEIVED FROM ADPL & AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 6 CTPL. 6. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL RAISING FOLLOWING GROUNDS: AD-MANUM FINANCE LTD ITA NO.01/IND/2020 A.Y. 2011-1 2 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN THE LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETIN G THE ADDITION MADE ON ACCOUNT OF UNSECURED LOAN AMOUNTING TO RS.3,31,87,500/- EVEN WHEN THE ASSESSEE COULD NOT E STABLISH GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF LENDER. AVAILABLE FINANCE LTD ITA NO.03/IND/2020 A.Y. 2011 -12 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN THE LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETIN G THE ADDITION ON ACCOUNT OF UNSECURED LOAN AMOUNTING TO RS.7,77,4 4,102/- AND ALSO INTEREST PAID ON UNEXPLAINED UNSECURED LOA N AMOUNTING TO RS.14,44,102/-. 7. LD. DEPARTMENTAL REPRESENTATIVE (DR) VEHEMENTLY ARGUED SUPPORTING THE ORDER OF LD. ASSESSING OFFICE R BUT FAILED TO CONTROVERT THE FACT THAT SIMILAR ISSUE HA S ALREADY BEEN ADJUDICATED BY THIS TRIBUNAL IN THE CASE OF SA ME ASSESSEE(S) IN OTHER ASSESSMENT YEAR AS WELL AS OTH ER GROUP CONCERNS FOR THE VERY SAME ASSESSMENT YEAR. 8. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE DETAILED PAPER BOOK SHOWING VARIOUS AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 7 DOCUMENTS FILED TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE CASH CREDITORS NAMELY ADPL & CTPL AND ALSO VARIOUS DECISIONS TO SUPPORT THE FIND ING OF LD. CIT(A). IT WAS ALSO SUBMITTED THAT ISSUES RAISE D IN BOTH APPEALS OF THE REVENUE ARE SQUARELY COVERED IN FAVO UR OF THE ASSESSEE BY RECENT DECISION OF HONBLE INDORE B ENCH IN THE CASE OF AGRAWAL FUEL CORPORATION PVT. LTD., AD MANUM FINANCE LTD. & AVAILABLE FINANCE LIMITED IN ITANO.651/IND/2019, ITANO.331/IND/2018 & ITANO.985/IND/2019 ORDER DATED 14.10.2020 PERTAINING TO A.Y. 2010-11, 2009-10 & 2014-15 RESPECTIVELY. 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THROUGH ITANO.01/IND/2020 & ITANO.03/IND/2020 THE REVENUE HAS RAISED COMMON ISS UE IN GROUND NO.1 OF EACH APPEALS CONTENDING THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE LD. ASSESSING OFFICER U/S 68 OF THE ACT FOR SHARE CAPITAL OF RS.3,31,87,500/- RE CEIVED FROM ADPL BY THE ASSESSEE COMPANY NAMELY AD-MANUM FINANC E LTD. AND ALSO DELETING THE ADDITION U/S 68 OF THE ACT MA DE FOR UNSECURED LOAN OF RS.2,05,00,614/- RECEIVED FROM M/ S. AEREO AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 8 DEALCOMM PRIVATE LIMITED, RS.5,72,43,488/- RECEIVED FROM M/S CHAMAK TREXIM PRIVATE LIMITED AND ALSO DELETING TH E DISALLOWANCE OF INTEREST EXPENDITURE ON THE UNSECUR ED LOAN OF RS.7,77,44,102/- AT RS. 14,44,10/-. 10. WE NOTE THAT THE LD. ASSESSING OFFICER MADE THE ADDITION U/S 68 OF THE ACT AND ALSO DISALLOWED INTEREST EXPENDIT URE. SECTION 68 OF THE ACT READS AS FOLLOWS: WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESS ING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR : PROVIDED THAT WHERE THE ASSESSEE IS A COMPANY (NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED), AND THE SUM SO CREDITED CONSISTS OF SHARE APPLICATION MONEY, SHARE CAPITAL, SHARE PREMIUM OR ANY SUCH AMOUNT BY WHATEVER NAME CALLED, ANY EXPLANATION OFFERED BY SUCH ASSESSEE-COMPANY SHALL BE DEEMED TO BE NOT SATISFACTORY, UNLESS ( A ) THE PERSON, BEING A RESIDENT IN WHOSE NAME SUCH C REDIT IS RECORDED IN THE BOOKS OF SUCH COMPANY ALSO OFFERS AN EXPLANA TION ABOUT THE NATURE AND SOURCE OF SUCH SUM SO CREDITED; AND ( B ) SUCH EXPLANATION IN THE OPINION OF THE ASSESSING OFFICER AFORESAID HAS BEEN FOUND TO BE SATISFACTORY: PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIRST PROVISO SHALL APPLY IF THE PERSON, IN WHOSE NAME THE SUM REFERRED TO THEREIN IS AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 9 RECORDED, IS A VENTURE CAPITAL FUND OR A VENTURE CA PITAL COMPANY AS REFERRED TO IN CLAUSE ( 23FB )OF SECTION 10. 11. WE OBSERVE THAT THE COMMON ISSUE RAISED IN REVE NUES APPEAL REVOLVES AROUND THE COMMON ASPECT ABOUT THE FULFILMENT OF THE REQUIREMENT OF SECTION 68 OF THE ACT WHICH P ROVIDES THAT THE ASSESSEE NEEDS TO EXPLAIN THE SOURCE OF CREDIT IN ITS BOOKS OF ACCOUNT WHICH CAN BE PROVED BY SHOWING IDENTITY OF THE CREDITORS AND CREDITWORTHINESS OF THE CREDITOR TO PAY SUCH AM OUNT TO THE ASSESSEE AND THE GENUINENESS OF THE TRANSACTION TAK EN PLACE BETWEEN THE ASSESSEE AND THE CASH CREDITOR AND IF T HE ASSESSEE IS UNABLE TO DO THE NEEDFUL THE ASSESSING OFFICER CAN MAKE ADDITION FOR UNEXPLAINED CASH CREDIT. 12. ON PERUSAL OF THE RECORDS SHOWS THAT THE LD. A SSESSING OFFICER WAS SATISFIED WITH THE IDENTITY OF THE CASH CREDITORS NAMELY ADPL & CTPL BUT WAS NOT SATISFIED WITH THE CREDITWORTHINESS OF BOTH THESE COMPANIES AND ALSO T HE GENUINENESS OF TRANSACTION OF BOTH THESE LENDER COM PANIES WITH THE ASSESSEE(S) IN APPEAL. 13. WE, FURTHER OBSERVE WHEN THE MATTER CAME UP BEF ORE LD. CIT(A), HE IN THE LIGHT OF THE VARIOUS DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE, SIMILAR ISSUE ADJUDICATED IN OTHER GROUP AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 10 CONCERNS AND ALSO THE VIEW TAKEN BY THIS TRIBUNAL A DJUDICATING THIS COMMON ISSUE FOR UNEXPLAINED SHARE CAPITA/UNSE CURED LOAN RECEIVED FROM TWO LENDER COMPANIES M/S. AEREO DEALC OMM PRIVATE LIMITED & M/S CHAMAK TREXIM PRIVATE LIMITE D. LD. CIT(A) DELETED THE ALLEGED ADDITION MADE U/S 68 OF THE ACT IN CASE OF BOTH THE ASSESSEES NAMELY AD-MANUM FINANCE LTD & AVAILABLE FINANCE LIMITED. HOWEVER FOR THE SAKE OF CONVENIENCE WE REPRODUCED BELOW THE RELEVANT FINDING OF LD. CIT(A) GIVEN IN PARA 5.1 TO 5.3 OF THE IMPUGNED ORDER THE CASE O F AVAILABLE FINANCE LIMITED: 5. GROUND NOS.5 TO 11: THESE GROUNDS OF APPEALS HA VE BEEN RAISED AGAINST THE ADDITION OF RS.7,77,44,102/- MAD E U/S 68 OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF LOAN RECEIVE D FROM TWO PARTIES NAMELY M/S CHAMAK TREXIM PVT. LTD. FROM WHO M LOAN OF RS.5,72,43,488/- WAS RECEIVED AND M/S AEREO DEALCOM M PVT. LTD. FROM WHOM LOAN OF RS.2,05,00,614/- WAS RECEIVE D BY THE APPELLANT DURING THE YEAR UNDER CONSIDERATION AND T HE CONSEQUENTIAL DISALLOWANCE OF INTERST OF RS.14,44,1 02/- INCURRED IN RESPECT OF THESE LOANS. 5.1 THE ASSESSING OFFICER HAS DISCUSSED THESE ISSUE S AT PARA NO.5.1 TO 5.7 OF THE ASSESSMENT ORDER. THE APPELLAN T WAS REQUIRED TO FILE COPY OF BANK STATEMENT, ITR ACKNOW LEDGEMENT AND TAX AUDIT REPORT OF THE FRESH LOAN DEPOSITORS A LONG WITH COPY OF ACCOUNT AND WAS REQUIRED TO PROVE THE IDENTITY, CREDITWORTHINESS AND TO FURNISH THE DETAILS OF MODE OF TRANSACTIONS. THE APPELLANT WAS ALSO REQUIRED TO EX PLAIN AS AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 11 WHEY THE LOAN TAKEN FROM M/S CHAMAK TREXIM PVT. LTD . AND M/S AEREO DEALCOMM PVT. LTD. BE NOT ADDED BACK U/S 68 OF THE INCOME TAX ACT, 1961. 5.2 THE DETAILED WRITTEN SUBMISSIONS HAVE BEEN FOUN D FILED BY THE APPELLANT IN SUPPORT OF ITS CONTENTIONS DURING ASSESSMENT PROCEEDINGS ALSO. IT IS BROUGHT OUT IN THE ASSESSME NT ORDER THAT BOTH THE COMPANIES HAVE PROVIDED LOAN ENTRIES NOT O NLY TO THE APPELLANT BUT ALSO TO OTHER GROUP COMPANIES OF AGRA WAL GROUP. FURTHER, THE ASSESSING OFFICER HAS REFERRED TO THE INVESTIGIATION CARRIED OUT BY THE INVESTIGATION WING AND DRAWING S UPPORT FROM HIS DETAILED DISCUSSIONS MADE BY THE ASSESSING OFFI CER WHILE REJECTING THE OBJECTIONS RAISED BY THE APPELLANT TO THE REOPENING OF THE ASSESSMENT U/S 147 FO THE ACT. THE ASSESSING OFFICER HAS ALSO OBSERVED THAT BOTH THESE COMPANIES WERE CONTRO LLED AND MANAGED BY THE APPELLANT GROUP TO BRING ITS UNACCOU NTED FUNDS TO THE BOOKS OF ACCOUNTS. THE ASSESSING OFFICER, ON THE BASIS OF THESE OBSERVATIONS AND ALSO DRAWING SUPPORT FROM TH E ASSESSMENT ORDERS PASSED U/S 143(3) R.W.S. 147 OF T HE INCOME TAX ACT 1961 IN THE CASES OF M/S AGRAWAL FUEL CORPO RATION PVT. LTD. AND M/S ADMANUM FINANCE PVT. LTD. FOR A.Y. 200 9-10 AND ALSO THE CASE OF AGRAWAL TRANSPORT CORPORATION PVT. LTD. FOR A.Y. 2010-11 CONCLUDED THAT THE APPELLANT COULD NOT ESTA BLISH GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE LENDERS AND ADDED THE IMPUGNED LOAN AMOUNTS U/S 68 OF THE I NCOME TAX ACT, 1961 AND ALSO DISALLOWED THE INTEREST PAID THEREON. 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WEL L AS THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT CAREFULL Y AND AFTER TAKING INTO ACCOUNT THE ARGUMENTS OF THE APPELLANT AND REASONS BROUGHT OUT BY THE ASSESSING OFFICER IN THE ASSESSM ENT ORDER, THE RELEVANT GROUNDS OF APPEAL ARE ADJUDICATED AS F OLLOWS. IT IS OBSERVED FROM PAGE NO.13 OF THE ASSESSMENT ORDER TH AT THE ADDITION U/S 68 OF THE INCOME TAX ACT AND THE CONSE QUENTIAL AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 12 DISALLOWANCE OF INTEREST MADE BY THE ASSESSING OFFI CER IN THE PRESENT CASE ARE PRIMARILY INFLUENCED BY THE OBSERV ATIONS AND INFORMATION GATHERD DURING THE COURSE OF SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT 1961 ON MIT TAL GROUP OF INDORE AND MR. DEEPAK KALANI ON 04.09.2015, WHEREIN IT WAS OBSERVED THAT HIS COMPANIED M/S AEREO DEALCOMM PVT. LTD. AND M/S CHAMAK TREXIM PVT. LTD. WERE ENTRY PROVIDER COM PANIES. 5.4 IT IS SEEN THAT SIMILAR ADDITIONS WERE MADE ON IDEN TICAL FACTS, IN THE CASE OF M/S AGRAWAL TRANSPORT CORPORA TION PVT. LTD. FOR A.Y. 2010-11 DRAWING SIMILAR ADVERSE INFER ENCES FROM THE SEARCH CONDUCTED ON MR. DEEPAK KALANI, DIRECTOR OF BOTH THE LENDER COMPANIES I.E. M/S CHAMAK AND M/S AERO W ERE ALSO COVERED. THE ADDITIONS MADE IN THE M/S AGRAWA L TRANSPORT CORPORATION PVT. LTD. FOR A.Y. 2010-11, H AVE ALSO BEEN DELETED BY THIS OFFICE IN IT NO.10553/17-18 DA TED 18.03.2019. 14. FURTHER WE NOTE THAT IN PARA 5.4 OF THE IMPUGNE D ORDER OF AVAILABLE FINANCE LTD. LD. CIT(A) HAS REFE RRED TO THE FACTS IN THE CASE OF M/S AGRAWAL TRANSPORT CORPORATION PVT. LTD. FOR A.Y. 2010-11 WHEREIN ALSO ASSESSEE(S) WAS GIVEN RELIEF FOR THE ADDITION MADE BY THE LD. AO DRAWING ADVERSE INFERENCES FROM THE SEARCH CONDUCTED IN THE CASE OF MITTAL GROUP OF INDORE IN WHICH MR. DEEPAK KALANI, DIRECTOR OF TWO LENDER COMPANIES NAMELY M/S. AEREO DEALCOMM PRIVATE LIMITED, & M/S CHAMAK TREXIM PRIVATE LIMITED. WERE ALSO COVERED AND VIDE ORDER DATED AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 13 18.03.2019 LD. CIT(A) DELETED THE ADDITIONS MADE U/ S 68 OF THE ACT FOR THE SUM RECEIVED FROM THESE TWO LENDER COMP ANIES. LD. CIT(A) DRAW THE CONCLUSION IN PARA 5.5 TO 5.12 OF T HE IMPUGNED ORDER OBSERVING AS FOLLOWS: 5.5 IT IS ALSO SEEN THAT SIMILAR ADDITIONS WERE MADE ON IDENTICAL FACTS, IN THE APPELLANT OWN CASE FOR A.Y. 2014-15 DRAWING SIMILAR ADVERSE INFERENCES FROM THE SEARCH CONDUCTED ON MR. DEEPAK KALANI, DIRECTOR OF BOTH THE LENDER C OMPANIES I.E. M/S CHAMAK AND M/S AERO. THE ADDITIONS MADE I N THE APPELLANTS OWN CASE FOR A.Y. 2014-15, HAVE ALSO BE EN DELETED BY THIS OFFICE IN IT NO.10980/16-17 DATED 16.07.201 9. 5.6 TN THE RESENT CASE ALSO THE OBSERVATIONS OF THE A.O IN THE ASSESSMENT ORDER HAVE BEEN FOUND TO BE SAKE, WHICH WERE MADE IN THE ASSESSMENT ORDER OF M/S AGRAWAL TRANSPORT CORPORATION PRIVATE LIMITED AND ADDITION IS ALSO MADE ON THE. S IMILAR LINES ON THE BASIS OF THE INFORMATION GATHERED AND FINDINGS OF THE INVESTIGATION WING IN RESPECT OF THE SEARCH PROCEED INGS CONDUCTED IN THE CASE OF MR. DEEPAK KALANI AND MITTAL GROUP WHEREIN DOCU MENTS RELATED TO AEREO DEALCOMM PVT. LTD AND M /S CHAMAK TREXIM PVT.LTD. WERE FOUND AND SEIZED. IT W AS THE SAME FI N DING OF THE INVESTIGALION WING THAT BOTH THESE COMP ANIES WERE BEING CONTROLLED AND MANAGED BY SHRI DEEPAK KALANI WHO WAS ALSO DIRECTOR OF THESE COMPANIES FOUND INTACT FROM POSSESSION OF MR. DEEPAK KALANI AND ACQUISITION OF THESE COMPANIES BY HIM I N FY 2007-08, CHANGE IN DIRECTORSHIP THEREAFTER, CHANGE IN THE BU SINESS PROFILE AND THE INVESTMENT PATTER, OF BOTH THESE TWO COMPANIES SUBS EQUENT TO THE ACQUISITION OF THESE COMPANIES BY MR. DEEPAK KALANI , THE ISSUE OF-HANDING OVER THE CHEQUES OF AEREO TO THE STAFF O F AGRAWAL GROUP ETC, ON. THE BASIS OF WHICH THE AO DOUBTED TH E CREDITWORTHINESS OF THESE TWO COMPANIES AND ALSO TH E AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 14 GENUINENESS OF THE TRANSACTIONS OF THE APPELLANT WI TH BOTH THESE COMPANIES AND THE SAME WERE CONSIDERED AS DOUBTFUL AND ADDITIONS WERE MADE', 5.7 IT IS SEEN THAT IN THE PRESENT APPEAL ALSO, THE APPELLANT HAS CUMULATIVELY SATISFIED ALL THE PREREQUISITES OF SEC TION 68 OF .THE INCOME TAX ACT, 1961. THE IDENTITY OF BOTH THESE CO MPANIES STANDS ESTABLISHED AND IS NOT EVEN DISPUTED BY THE AO. THE APPELLANT HAS SUCCESSFULLY DEMONSTRATED THE CREDITW ORTHINESS OF BOTH THE COMPANIES THROUGH THEIR FINANCIAL ACCOUNTS AND ALSO THE INCOME TAX RETURNS SHOWING SUBSTANTIAL GROSS REVENU ES. THOUGH BOTH THE COMPANIES HAVE INCURRED ASSES IN THIS PART ICULAR YEAR, YET IT IS SEEN THAT THEY HAVE EARNED SUBSTANTIAL PROFIT S IN OTHER YEARS. BOTH THESE COMPANIES HAD SUFFICIENT NET OWN FUNDS AND THERE WERE NO BORROWINGS IN THEIR BALANCE SHEETS EX CEPT FOR A NOMINAL BANK LOAN, OF RS. 34.73 LACS IN THE BALANCE SHEET OF M/ S AEREO DEALCCOMM PVT. LTD. WHICH TOO WAS AVAILED FRO M HDFC BANK AS OVERDRAFT FACILITY. A PART FROM THIS, THERE IS NO LIABILITY IN THE BALANCE SHEET OF M/S AEREO DEALCOMM PVT. LTD. A LSO. BOTH, THE COMPANIES HAVE DECLARED SUBSTANTIAL TAXABLE INCOME IN VARIOUS YEARS. THE ASSESSMENTS OF THESE COMPANIES WERE COMP LETED BY THE RESPECTIVE AOS FOR VARIOUS YEARS INCLUDING THAT .OF AY 2004-05 IN THE .CASE -OF' M/ S CHAMAK TREXIM PVT. LTD. AND AY 2003-04 IN THE CASE OF M/S_AERRO DEALCOMM 'PVT.LTD. WHEREIN TH E SHARE CAPITAL RAISED BY THEM WERE SPECIFICALLY EXAMINED AND STAND ACCEPTED AS CATEGORICALLY MENTIONED IN THE RESPECTI VE ASSESSMENT ORDERS OF BOTH THE COMPANIES PASSED '-I/ S 143(3) OF THE INCOME TAX ACT, 1961. IT IS AL SO IMPORTANT TO NOTE THAT, THE CASES OF TH ESE LENDER COMPANIES WERE ALSO REOPENED ON THE BASIS OF THE VERY SEARCH PROCEEDINGS CONDUCTED ON MR. DEEPAK KALANI AND WERE COMPLETED AFTER EXAMINING ALL THE ISSUES RAISED BY THE INVESTIGATION WING AS. DISCUSSED IN. THE ASSESSMENT ORDERS, AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 15 WITHOUT ANY ADVERSE OBSERVATIONS/FINDINGS IN RESPEC T OF THE FINDINGS GIVEN BY THE INVESTIGATION WING. THE CASE OF M/S CHAMAK TREXIM PVT. LTD. FOR AY 2011-12 WAS SPECIFICALLY REOPENED CITING THE REASON OF VERIFICATION OF LOANS ADVANCED BY IT TO THE APPELLANT, HOWEVER, NO ADVERSE VIEW WAS TAKEN BY THE AO OF M/S CHAMAK TREXIM PVT. LTD. AND THE ASSESSMENT WAS COMPLETED ACCEPTING THE LOSS RETURNED BY M/S CHAMAK TREXIM PVT, LTD FOR THIS YE AR. THUS, SUBSEQUENT TO THE SEARCH ON MR. DEEPAK KALANI, WHEN THE ASSESSMENTS OF THE LENDER COMPANY FOR VARIOUS YEARS ARE COMPLETED TAKING COGNIZANCE OF THE FINDINGS OF THE SEARCH, THERE REMAINS NO SCOPE FOR MAKING ADDITIONS IN THE HAND O F THE APPELLANT TAKING AN ADVERSE VIEW REGARDING THE LEND ERS COMPANIES ON THE BASIS OF SAME SET OF FACTS. 5.8 DURING THE REGULAR ASSESSMENT PROCEEDINGS FOR A Y 2014-15, THE APPELLANT PRODUCED MR. DEEPAK KALANI, WHOSE STA TEMENTS HAVE BEEN FOUND RECORDED BY THE THEN AO. MR. DEEPAK KALANI EXPLAINED AND SUBSTANTIATED AN THE ISSUES RAISED BY THE INVESTIGATION WING' THROUGH HIS TWO STATEMENTS RECORDED BY THE THEN AO ON 01.12.2016 AND ON 08.12.2016 AND ALS O FILED DETAILED AND ELABORATE WRITTEN SUBMISSIONS FU RTHER EXPLAINING THE VARIOUS ISSUES. HE HAD ALSO PRODUCED THE BOOKS OF ACCOUNTS OF THE COMPANIES AND THE BANK STATEMENTS SINCE FINANCIAL YEARS 2009-10 TO 2016-17 BEFORE THE THEN A O, EXPLAINING THE SOURCES OF FUNDS ADVANCED TO THE APPELLANT AND OTHER GROUP CONCERNS. IN OTHER WORDS HE HAS ALSO SUBSTANT IATE THE SOURCE OF THE SOURCE. THUS, THE REQUIREMENTS OF THE NEWLY INSERTED PROVISO TO SECTION 68 OF THE INCOME TAX ACT, 1961 HAS ALSO BEEN FULFILLED IN THIS CASE. THE APPELLANT, IN THIS CASE HAS ALSO FILED THE FINANCIALS OF THE COMPANIES, ALONG W ITH THE BALANCE SHEETS, REFLECTING THE ET OWNED FUNDS OF BOTH THESE COMPANIES AND ALSO THE GROSS REVENUES AND NET PROFITS EARNED BY U1C AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 16 COMPANIES, WHICH CONCLUSIVELY ESTABLISHED THE CREDI TWORTHINESS. 5.9 FURTHER, THE APPELLANT AS WELL AS MR.DEEPAK KALANI HAVE ALSO ESTABLISHED THE SOURCE OF THE SOURCE BY FILING THE BANK STATEMENTS AND THE LEDGER ACCOUNTS, WHEREBY IT IS CONCLUSIVELY BROUGHT OUT THAT THE FUNDS ADVANCED TO THE APPELLANT BY BOTH THESE COMPANIES DURING THE YEAR UNDER CONSIDERATION W ERE SOURCED FROM REPAYMENT OF EARLIER LOANS BY THE GROUP CONCERNS OF THE APPELLANT. MR. DEEPAK KALANI WAS PRODUCED BEFORE TH E THEN AO AND HIS STATEMENTS WERE RECORDED ON VARIOUS OCCASIO N. HE PRODUCED THE BOOKS OF ACCOUNTS OF BOTH THE COMPANIE S AND ALSO FILED DETAILED AND ELABORATE SUBMISSIONS ALONG WITH DOCUMENTS TO SUBSTANTIATE THAT THE TRANSACTIONS OF BOTH THE C OMPANIES, WITH THE APPELLANT COMPANY ARID ITS GROUP CONCERNS ARE PROPER. ALL THESE FACTS OF THE CASE HAS ESTABLISHED THE CREDITW ORTHINESS OF BOTH THE COMPANIES AS WELL AS THE GENUINENESS OF TH E TRANSACTIONS WITH THE APPELLANT. NO DEFECTS WHATSOE VER WERE POINTED OUT BY THE THEN AO IN THE BOOKS OF ACCOUNTS OF THE LENDER COMPANIES OR IN THE SUBMISSIONS MADE BY MR. DEEPAK KALANI. THE DETAILED SUBMISSIONS FILED BY THE APPELLANT AND DOCUMENT S PLACED ON RECORD BEFORE THE AO WITH REGARD TO SUBS TANTIATE THE CREDITWORTHINESS OF THE LENDERS AND GENUINENE SS OF THE TRANSACTION HAVE REMAINED UNCONTROVERTED IN THE ASS ESSMENT ORDER. 5.10 IT HAS ALSO BEEN OBSERVED THAT VARIOUS CONTENTIONS RAISED BY THE INVESTIGATION WING AND ALSO BY THE AO SUCH AS FINDING OF ORIGINAL SHARE CERTIFICATES OF BOTH THE COMPANIES I NTACT FROM THE POSSESSION OF MR. DEEPAK KALANI, CHANGE IN BUSINESS PROFILE AND THE INVESTMENT PATTERN OF BOTH THESE CCOMPANIES, HANDING OVER OF CHEQUES TO THE STAFF OF AGRAWAL GROUP, M/S AEREO AND CHAMAK WHILE BEING BASED IN KOLKATA HAVE MAINLY AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 17 TRANSACTED WITH AGRAWAL GROUP CONCERNS BASED AT IND ORE, LOSSES INCURRED BY BOTH THESE LENDER COMPANIES' IN THIS YEAR; BOTH THESE COMPANIES WERE CONTROLLED AND MANAGED BY APPELLANT GROUP TO CHANNELIZE ITS UNACCOUNTED INCOM E INTO 'THE BOOKS ETC, ON THE BASIS OF WHICH THE CREDITWORTHINE SS OF THESE TWO COMPANIES AND ALSO THE GENUINENESS OF THE TRANS ACTIONS OF THE APPELLANT WITH BOTH THESE COMPANIES WERE CONSID ERED DOUBTFUL, HAVE BEEN CONCLUSIVELY REBUTTED AND PROPE RLY EXPLAINED BY THE APPELLANT, AS ALREADY DISCUSSED AB OVE AND ALSO IN THE APPEAL ORDERS PASSED BY THIS OFFICE IN THE GROUP CASES. 5.11 IN. THE DETAILED APPEAL ORDER PASSED IN THE CASE -O F- GROUP- COMPANY OF THE APPELLANT I.E. M/ S AGRAWAL TRANSPORT CORPORATION PVT. LTD. FOR AY 201011, THE RELEVANT PORTION OF WHICH IS ALREADY REPRODUCED AS ABOVE, THE ISSUE OF CREDITWORTHINESS OF BOTH THE LENDER COMPANIES HAS B EEN DISCUSSED AT LENGTH AT PARA NOS. 6 TO 6.14 AND 7 TO 7.10 RESPECTIVELY IN SUCH ORDER. SIMILARLY, THE ISSUE OF THE GENUINENESS OF 'THE' TRANSACTIONS HAS BEEN DISCUSSE D AT PARA NOS. 8 TO 8.19 OF THE ORDER. SIMILARLY IN THE APPEAL ORDER PASSED IN THE APPELLANT'S OWN CASE FOR AY 2014-15,' THE ISSUE OF CREDITWORTHINESS OF BOTH THE LENDERS COMPANIES AND ALSO THE GENUINENESS OF THE TRANSACTIONS HAVE BEEN DISCUSSED AT LENGTH AT PARA NOS. 5.4 TO 5.9 IN SUCH ORDER. SINCE THE FA CTS OF THESE CASES ARE IDENTICAL, THE OBSERVATIONS MADE IN THE O RDER OF M/S AGRAWAL TRANSPORT CORPORATION PVT. LTD. FOR AY 2010-11 AND ALSO THE OBSERVATIONS MADE IN THE APPELLANT'S OWN C ASE FOR AY 2014-15, WHILE DELETING THE ADDITIONS ARE SQUARELY APPLICABL E' IN THIS CASE ALSO. IT IS FURTHER OBSERVED THAT THE ADD ITIONS WERE ALSO MADE ON ACCOUNT OF TRANSACTIONS WITH BOTH THES E COMPANIES IN OTHER GROUP CASES IN AY 2008-09 A ND AY 2009-10 AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 18 IN THE REGULAR ASSESSMENTS ORDERS PASSED IN THOSE C ASES, WHICH STAND DELETED BY THE CIT(A) AS WELL AS BY THE HON'BLE ITAT INDORE BENCH, INDORE, THE RELEVANT PARTS OF FI NDINGS HAVE ALSO BEEN-REPRODUCED IN THE ABOVE REFERRED ORDER OF M/S AGRAWAL TRANSPORT PVT. LTD FOR AY 2010-11. IN THE SAID ORDER, I HAVE ALSO REFERRED AND DISCUSSED THE FINDING OF MY PREDECESSOR WHO CONFIRMED THE SIMILAR ADDITIONS IN OTHER GROUP CONCERNS OF THE APPELLANT AND HAVE ALSO EXPLAINED THE REASONS O F TAKING A DIFFERENT VIEW BY ME WHILE DELETING THE SIMILAR ADD ITIONS IN RESPECT OF IDENTICAL ISSUE. 5.12 IN VIEW OF ABOVE DISCUSSION AND KEEPING IN VIE W ENTIRETY OF FACTS AND CIRCUMSTANCES, THE IDENTITY AND CREDITWORTHINES S OF THE LOAN CREDITORS HAVING PROPERLY BEEN ESTABLISHED AND SUBS TANTIATED AND SO ALSO THE GENUINENESS OF THE TRANSACTIONS, IT IS HEL D THAT THE IMPUGNED LOAN TRANSACTIONS OF BOTH THE COMPANIES WITH THE AP PELLANT IS GENUINE AND PROPER AND THE AO WAS NOT JUSTIFIED IN MAKING O F IMPUGNED ADDITIONS U/S 68 OF THE INCOME TAX ACT, 1961. THER EFORE, THE ADDITIONS MADE U/S 68 OF THE INCOME TAX ACT, 1961 AND ALSO TH E CONSEQUENTIAL DISALLOWANCE OF INTEREST ARE DIRECTED TO BE DELETED . THEREFORE, THESE GROUNDS OF APPEAL ARE ALLOWED. 15. WE FURTHER NOTE THAT THIS TRIBUNAL IN THE CASE OF M/S AGRAWAL CORPORATION PVT. LTD, AD MANUM FINANCE LTD AND AVAILABLE FINANCE LTD IN ITA NOS. 651/IND/2019, 331/IND/2018 AND 985/IND/2019 ORDER DATED 14.10.202 0 HAS DEALT WITH THE VERY SAME ISSUE RAISED BY THE RE VENUE CHALLENGING THE FINDING OF LD. CIT(A) DELETING THE ADDITION MADE BY THE LD. AO U/S 68 OF THE ACT FOR UNEXPLAINE D CASH AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 19 CREDIT RECEIVED FROM M/S. AEREO DEALCOMM PRIVATE LIMITED, & M/S CHAMAK TREXIM PRIVATE LIMITED THIS TRIBUNAL AFT ER BEING SATISFIED WITH THE IDENTITY AND CREDITWORTHINESS OF BOTH THE LENDER COMPANIES AND GENUINENESS OF TRANSACTION OF THESE L ENDER COMPANIES WITH THE ASSESSEE(S) HELD AGAINST THE RE VENUE AND IN FAVOUR OF THE ASSESSEE CONFIRMING THE FINDING OF LD . CIT(A) DELETING THE ADDITION FOR UNEXPLAINED CASH CREDIT U /S 68 OF THE ACT AS WELL AS DELETING DISALLOWANCE OF INTEREST EX PENDITURE DISALLOWED AT RS. 61,58,897/- OBSERVING AS FOLLOWS: 21. FROM PERUSAL OF THE ABOVE FINDING OF CO-ORDINA TE BENCH IN THE CASE OF ANOTHER GROUP CONCERN OF ASSESSEE(S) NAMELY AGARWAL COAL CORPORATION PVT. LTD WHEREIN ALSO UNSECURED LOAN TA KEN FROM M/S ADPL AND M/S CTPL WERE IN DISPUTE. WE FIND THAT HONBLE TRIBUNAL AFTER CONSIDERING ALL THE RELEVANT FACTS AND MATERIAL; ON RECORD DECIDED IN FAVOUR OF THE ASSESSEE THEREBY CONFIRMING THE FINDI NG OF LD. CIT(A) HOLDING THAT THE ASSESSEE HAS DULY PROVED THE IDENT ITY OF THE CASH CREDITORS, GENUINENESS OF THE TRANSACTION AND PROVE D CREDITWORTHINESS OF THE LENDER COMPANIES WHICH THUS DO NOT CALL FOR ANY ADDITION U/S 68 OF THE ACT AND THE INTEREST PAID ON SUCH LOANS SHOU LD BE ALLOWED. 22. WE ALSO FIND THAT ASSESSMENT PROCEEDINGS OF THE ALLEGED LENDER COMPANIES NAMELY M/S ADPL & M/S CTPL HAVE BEEN CARR IED OUT FOR MULTIPLE ASSESSMENT YEARS U/S 143(3)/147 OF THE ACT BUT NO ADVERSE INFERENCE OR ACTION HAS BEEN TAKEN BY THE REVENUE A UTHORITIES AND THUS ACCEPTING THAT THE BUSINESS CARRIED OUT BY THESE CO MPANIES ARE GENUINE AND ARE NOT BOGUS COMPANIES INDULGED IN PROVIDING A CCOMMODATION AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 20 ENTRIES. DETAIL OF SUCH ASSESSMENTS CARRIED OUT IN THE CASE OF TWO LENDER COMPANIES ARE SUMMARISED IN THE FOLLOWING CHART:- ASSESSMENT DETAILS OF M/S CHAMAK TEXIM PVT. LTD S. NO AY DATE OF ORDER PASSED U/S INCOME ASSESSED PAGE NO. PB-B-I REMARKS 2004-05 31.05.06 143(3) 40,050 49-59 LAST SHARE CAPITAL AND PREMIUM RECEIVED IS ASSESSED AND ACCEPTED 2009-10 30.12.16 148/147 11,67,510 61-65 REGULAR REOPENING ON OTHER ISSUES 2010-11 29.12.16 148/147 17,40,714 51-55 CASES REOPENED ON INFORMATION OF DDIT(INV), INDORE ON THE BASIS OF SEARCH ON MR. DEEPAK KALANI 2011-12 29.12.16 148/147 NIL 56-60 2011-12 05.12.18 143(3)/1 47 -7,44,953 66-70 2012-13 16.12.18 143(3)/1 47 38,65,530 71-75 ASSESSMENT DETAILS OF M/S AEREO DEALCOMM PVT. LTD S. NO AY DATE OF ORDER PASSED U/S INCOME ASSESSED PAGE NO. PB-B-I REMARKS 1 2003-04 28.06.07 147/143(3) 32,240 142-143 LAST SHA RE CAPITAL ASSESSED WAS ACCEPTED 2 2009-10 30.12.16 147/143(3) 18,42,160 144-148 CASES CONCLUDED AFTER SEARCHING OF DDIT(INV), INDORE AND NO ADVERSE OPINION WAS FORMED 3 2010-11 16.11.17 147 8,86,387 149 23. IT IS ALSO NOTEWORTHY THAT THE LOANS TAKEN BY M /S AGRAWAL COAL CORPORATION PVT. LTD FROM TWO LENDER COMPANIES NAME LY M/S ADCPL & M/S CTPL WHICH WERE HELD TO BE GENUINE BY THE CO-OR DINATE BENCH WERE REPAID BACK AND ON THE VERY SAME DAY OF RECEIV ING THE LOAN WHICH REPAID BY M/S AGRAWAL COAL CORPORATION PVT. LTD TH E LENDER COMPANIES HAVE USED THE SAME FUND FOR ADVANCING LOAN TO M/S A GRAWAL TRANSPORT CORPORATION PVT. LTD. WE HAVE VERIFIED THIS FACT AN D FOUND THAT ON AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 21 23.02.2010 SUM OF RS.2,68,40,000/- WAS REPAID BY M/ S AGRAWAL COAL CORPORATION PVT. LTD TO M/S AEREO DEAL COM PVT. LTD . THIS SUM WAS RECEIVED IN UCO BANK ACCOUNT IN CASE OF M/S AEREO DEAL COM PVT. LTD AND ON THE VERY SAME DAY, THROUGH CHEQUE NO. 111017 SUM OF RS.2,68,00,000/- WAS GIVEN AS LOAN TO M/S. AGRAWAL TRANSPORT CORPORATION PVT. LTD. SIMILARLY IN THE CASE OF M/S CHAMAK TRAXIM PVT. LTD LOAN OF RS.3,42,55,000/-WAS REPAID BY M/S AGRA WAL COAL CORPORATION PVT. LTD ON 23.02.2010 WHICH WAS ALSO C REDITED IN UCO BANK ACCOUNT HELD BY M/S CTPL AND ON THE VERY SAME DAY THROUGH CHEQUE NO.679523 LOAN OF RS.3,42,00,000/- WAS GIVEN TO M/S AGRAWAL TRANSPORT CORPORATION PVT. LTD. SO THE SOURCE OF S OURCE OF ALLEGED LOANS TAKEN FROM TWO LENDER COMPANIES IS PROVED BEYOND DO UBT. IT FURTHER STRENGTHENS THE FINDING OF LD. CIT(A) THAT BOTH THE LENDER NON BANKING FINANCE ARE GENUINE HAVING REGULAR BUSINESS OF FINA NCE AND HAVE SUFFICIENT FUNDS FOR PROVIDING LOANS TO VARIOUS BOR ROWERS FOR EARNING INTEREST AND ONCE THE IDENTITY, GENUINENESS AND CRE DITWORTHINESS OF THE COMPANY FOR THE TRANSACTION CARRIED OUT BY GROUP CO MPANIES IS PROVED BEYOND DOUBT AND DULY ACCEPTED BY THE TRIBUNAL THER E HARDLY REMAIN ANY SCOPE TO QUESTION IT AGAIN IN THE CASE OF OTHER CONCERNS WHERE SUCH TYPE OF UNSECURED LOANS ARE RECEIVED FROM THE SAME LENDER COMPANIES. THUS THE DECISION OF THE CO-ORDINATE BENCH IN THE C ASE OF M/S AGRAWAL COAL CORPORATION PVT. LTD (SUPRA) IS SQUARELY APPLI CABLE ON THE FACTS OF THE INSTANT CASE AND THUS WE HOLD THAT THE LOAN REC EIVED FROM M/S AEREO DEALCOMM PVT. LTD AND M/S CHAMAK TREXIM PVT. LTD BY M/S AGRAWAL TRANSPORT CORPORATION PVT. LTD, ADMANUM FIN ANCE LTD AND AVAILABLE FINANCE LTD ARE GENUINE AND DULY EXPLAINE D BY THE ASSESSEE(S) AND THE INTEREST PAID THEREON AS PROVID ED IN THE CHART IN THE PRECEDING PARAS IS GENUINE BUSINESS EXPENDITURE AND THE ASSESSEE(S) HAVE DULY EXPLAINED THE TRANSACTION OF LOAN TAKEN A ND ALSO PROVED THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE L OAN CREDITORS. WE THUS ARE OF THE VIEW THAT RESPECTIVE ASSESSING OFFI CERS OF THE THREE ASSESSEE(S) IN APPEAL BEFORE US ERRED IN TREATING T HE LOANS TAKEN FROM AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 22 M/S AEREO DEALCOMM PVT. LTD AND M/S. CHAMAK TREXIM PVT. LTD HAS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT AND FURTH ER ERRED IN DISALLOWING THE INTEREST PAID ON SAID LOANS. WE THU S, CONFIRM THE FINDING OF LD. CIT(A) IN THE CASE OF M/S. AGRAWAL TRANSPORT CORPORATION PVT. LTD DELETING THE ADDITION U/S 68 OF THE ACT AT RS. 6,10 ,00,000/- AND ALSO DELETING THE DISALLOWANCE OF INTEREST AT RS. 8,39,4 25/-. WE ALSO CONFIRM THE FINDING OF LD. CIT(A) IN THE CASE OF M/S AVAILA BLE FINANCE LTD DELETING THE ADDITION FOR UNEXPLAINED CASH CREDIT U /S 68 OF THE ACT AT RS. 69,00,000/- AND DELETING THE DISALLOWANCE OF IN TEREST PAID ON SUCH UNSECURED LOANS AT RS.51,93,162/-. WE ALSO SET ASI DE THE FINDING OF LD. CIT(A) IN THE CASE OF M/S ADMANUM FINANCE LTD AND DELETE THE ADDITION OF UNEXPLAINED CASH CREDIT U/S 68 OF THE A CT FOR THE UNSECURED LOAN TAKEN FROM THE ABOVE REFERRED TWO LENDER COMPA NIES TOTALLING TO RS. 1,44,75,000/- AND WE ALSO DIRECT THE REVENUE AUTHOR ITIES TO ALLOW THE CLAIM OF INTEREST EXPENDITURE OF RS.61,58,897/-. W E THUS DISMISS GROUND NO. 1 & 2 OF REVENUES APPEAL IN THE CASE OF M/S AGRAWAL TRANSPORT CORPORATION PVT. LTD FOR ASSESSMENT YEAR 2010-11 ALLOW GROUND NO. 2 & 3 OF THE ASSESSEES APPEAL IN CASE O F M/S ADMANUM FINANCE LTD FOR ASSESSMENT YEAR 2009-10 AND DISMISS GROUND NO.2 OF REVENUES APPEAL IN THE CASE OF M/S AVAILABLE FINA NCE LTD FOR ASSESSMENT YEAR 2014-15. 16. FROM PERUSAL OF ABOVE FINDING OF THIS TRIBUNAL AS WELL AS THE SIMILARITY OF FACTS AND ISSUES IN THE INSTAN T APPEALS WHICH REMAINS UNDISPUTED AT THE END OF LD. DEPARTME NTAL REPRESENTATIVE ALSO, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUES RAISED IN THE INSTANT TWO APPEALS BY THE REV ENUE ARE SQUARELY COVERED AGAINST IT AND IN FAVOUR OF AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 23 ASSESSEE(S), SINCE THIS TRIBUNAL WITH REGARD TO BOT H LENDER COMPANIES NAMELY M/S. AEREO DEALCOMM PRIVATE LIMITED, & M/S CHAMAK TREXIM PRIVATE LIMITED WAS SATISFIED WI TH REGARD TO THEIR IDENTITY, CREDITWORTHINESS TO MAKE INVESTMENT IN THE FORM OF SHARE CAPITAL AND LOANS AND ADVANCES TO THE ASSESSE E(S) AND ALSO SATISFIED WITH THE GENUINENESS OF TRANSACTION BETWE EN THESE TWO LENDER COMPANIES AND THE ASSESSEE(S) NAMELY AD-MANU M FINANCE LTD. & M/S. AVAILABLE FINANCE LTD. WE, THUS, TAKING CONSISTENT VIEW FIND NO REASON TO INTERFERE IN THE FINDING OF LD. CIT(A) IN THE CASE OF AD-MANUM FINANCE LTD. & M/S. AVAILABLE FINA NCE LTD. FOR A.Y. 2011-12 AND ACCORDINGLY DISMISS BOTH THE APPEA LS AT THE INSTANCE OF REVENUE. 17. NOW, WE WILL TAKE UP CROSS OBJECTIONS FILED BY THE ASSESSEE(S) RAISING FOLLOWING GROUNDS OF APPEAL: AD-MANUM FINANCE LTD C.O.NO.01/IND/2020 A.Y. 2011-12 1. THAT THE LEARNED CIT(A) ERRED HOLDING THAT THE R EOPENING PROCEEDINGS WERE PROPERLY AND VALIDLY INITIATED U/S 147 OF THE INCOME TAX ACT, 1961 AND ALSO ERRED IN REJECTING TH E VARIOUS OBJECTIONS RAISED BY THE ASSESSEE IN THIS REGARD BY HOLDING SUCH OBJECTIONS AS NOT ACCEPTABLE. THAT ON THE FACTS AN D IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE REOPENING P ROCEEDINGS INITIATED U/S 147 OF THE I.T. ACT ARE INVALID WITHO UT JURISDICTION AND BAD IN LAW ON VARIOUS ACCOUNTS. AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 24 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE & IN LAW, THE APPELLANT IS ENTITLED TO DEDUCTION OF CESS OF RS.4,67,053/- INCURRED DURING THE YEAR UNDER CONSID ERATION WHICH IS PRAYED TO BE NOW ALLOWED. 3. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, MODIFY, SUBSTITUTE AND/OR WITHDRAW ALL OR ANY OF THE GROUNDS OF APPEAL AT ANY STAGE OF THE APPELLATE PROCEEDINGS. AVAILABLE FINANCE LTD C.O.NO.01/IND/2020 A.Y. 2011-12 1. THAT THE LEARNED CIT(A) ERRED HOLDING THAT THE R EOPENING PROCEEDINGS WERE PROPERLY AND VALIDLY INITIATED U/S 147 OF THE INCOME TAX ACT, 1961 AND ALSO ERRED IN REJECTING TH E VARIOUS OBJECTIONS RAISED BY THE ASSESSEE IN THIS REGARD BY HOLDING SUCH OBJECTIONS AS NOT ACCEPTABLE. THAT ON THE FACTS AN D IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE REOPENING P ROCEEDINGS INITIATED U/S 147 OF THE I.T. ACT ARE INVALID WITHO UT JURISDICTION AND BAD IN LAW ON VARIOUS ACCOUNTS. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE & IN LAW, THE APPELLANT IS ENTITLED TO DEDUCTION OF CESS OF RS.36,804/- INCURRED DURING THE YEAR UNDER CONSIDERATION WHICH IS PRAYED TO BE NOW ALLOWED. 3. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, MODIFY, SUBSTITUTE AND/OR WITHDRAW ALL OR ANY OF THE GROUNDS OF APPEAL AT ANY STAGE OF THE APPELLATE PROCEEDINGS. 18. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE REQ USTED FOR NOT PRESSING THE LEGAL GROUNDS RAISED FOR CHALL ENGING THE VALIDITY OF REOPENING PROCEEDINGS U/S 147 OF TH E ACT. AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 25 ACCORDINGLY SIMILAR GROUND NO.1 RAISED IN C.O. NO.1/IND/2020 & CO.NO.02/IND/2020 ARE DISMISSED AS NOT PRESSED. 19. SECOND COMMON ISSUE RAISED IN BOTH CROSS OBJECT IONS WITH REGARD TO ALLOWING THE DEDUCTION OF EDUCATION CESS OF RS. 4,67,053/- AND RS.36,804/- IN THE CASE OF AD-MANUM FINANCE LTD. & M/S. AVAILABLE FINANCE LTD. RESPECTI VELY. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF THIS TRIBUNAL IN THE CASE OF M/S AGRAWAL FUEL CORPORATION PVT. LTD IN AND AD-MANUM FINANCE LTD IN ITANO.330/IND/2018 & CONO.13/IND/2019 ORDER DATED 13.11.2020. 20. LD. DEPARTMENTAL REPRESENTATIVE (DR) THOUGH SUPPORTED THE ORDERS OF LOWER AUTHORITIES BUT COULD NOT CONTROVERT THIS FACT THAT THE ISSUE RAISED IN CROSS OBJECTION STANDS COVERED BY THE DECISION OF THIS TR IBUNAL AND ALSO COULD NOT BRING ANY OTHER JUDGEMENT IN ITS FAVOUR. 21. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 26 PLACED BEFORE US. COMMON ISSUE RAISED IN THE CROSS OBJECTIONS BY BOTH THE ASSESSEES IN APPEAL IS WITH REGARD TO A LLOWING THE DEDUCTION OF EDUCATION CESS OR EXPENDITURE. WE FIND THAT SIMILAR ISSUE WAS ADJUDICATED BY THIS TRIBUNAL IN THE CASE OF M/S. AGRAWAL FUEL CORPORATION PVT. & AD-MANUM FINANCE LT D. ITANO.330/IND/2018, & CONO.13/IND/2019 ORDER DATED 13.11.2020 WHEREIN OBSERVING AS UNDER: 19. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE JUDGMENTS AND DECISIONS RELIED AND REFERRED BY THE ASSESSEE. THE COMMON IS SUE RAISED IN ADDITIONAL GROUND OF THE ASSESSEES APPEAL VIDE NO. 330/IND/2018 AND GROUND NO.1 IN CROSS OBJECTION NO.13/IND/2019 IS TH AT EDUCATION CESS SHOULD BE ALLOWED AS AN EXPENDITURE U/S 37 OF THE A CT IN VIEW OF THE JUDGMENT OF HON'BLE RAJASTHAN HIGH COURT IN THE CAS E OF CHAMBAL FERTILIZERS AND CHEMICALS LIMITED (SUPRA). 20. WE OBSERVE THAT THE ISSUE WHETHER THE EDUCATION CESS SHOULD BE CLAIMED AS AN EXPENDITURE U/S 37 OF THE ACT CAME FO R ADJUDICATION BEFORE THIS TRIBUNAL IN THE CASE OF ASSESSEES SIS TER CONCERN NAMELY M/S AGRAWAL COAL CORPORATION PVT. LTD (SUPRA) ITA N O.778/IND/2018 ORDER DATED 28.11.2019 AND WAS DECIDED BY US OBSERV ING AS FOLLOWS:- 38. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE JUDGMENTS RELIED BY THE LD. COUNSEL FOR THE ASSESSEE. THE OTHER ISSUE COM MONLY RAISED BY THE ASSESSEE FOR ASSESSMENT YEAR 2013- 14 IS THAT WHETHER THE EDUCATION CESS PAID BY THE ASSESSEE ALO NG WITH THE INCOME TAX AND SURCHARGE IS DEDUCTIBLE AS EXPENDITU RE U/S 37 OR IT IS NOT DEDUCTIBLE AS PER PROVISIONS OF SECTION 40(A)(II) OF THE ACT WHICH REFERS TO THE AMOUNT NOT DEDUCTIBLE. AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 27 39. WE OBSERVE THAT SIMILAR ISSUE CAME UP BEFORE TH E HON'BLE HIGH COURT OF RAJASTHAN IN THE CASE OF CHAMBAL FER TILIZERS AND CHEMICALS LIMITED (SUPRA) WHEREIN HON'BLE HIGH COURT REFERRED TO CIRCULAR NO. NO.91/58/ 66-ITJ(19) DATE D 18.5.1967 AND ALSO VARIOUS JUDGMENTS. THE RELEVANT EXTRACT OF THE JUDGMENT OF THE HONBLE HIGH COURT IN THIS CASE IS MENTIONED BELOW:- (I) HONBLE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH, JAIPUR IN THE CASE OF CIT, KOTA V/S CHAMBAL FERTILIZERS AND C HEMICALS LTD, KOTA D.B. IT NO.52/2018 ORDER DATED 31.7.2018 RAISE D FOLLOWING SUBSTANTIAL QUESTION OF LAW:- 3.WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. ITAT HAS NOT ERRED IN HOLDING THAT THE EDUCATION CE SS IS A DISALLOWABLE EXPENDITURE U/S 40(A)(II) OF THE ACT? REGARDING QUESTION NO.3, MR. JHANWAR HAS TAKEN US TO THE ORDER OF CIT(A) AND TRIBUNAL AND STRONGLY RELIED UPON THE CIRCULAR DT. 18.5.1967 WHICH READS AS UNDER:- CTR ENCYCLOPAEDIA ON INDIAN TAX LAWS CIRCULAR F.NO. 91/58/66-ITJ(19) DT. 18 TH MAY, 1967 BUSINESS EXPENDITURE SECTION 40(A)(II) RECENTLY A CASE HAS COME TO THE NOTICE OF THE BOARD WHERE THE ITO HAS DISALLOWED THE CESS PAID BY THE ASSESSEE ON THE GROUND THAT THERE HAS BEEN NO MATERIAL CHANGE IN THE PROVI SIONS OF S. 10(4) OF THE OLD ACT AND S.40(A)(II) OF THE NEW ACT . 2.THE VIEW OF THE ITO IS NOT CORRECT. CLAUSE 40(A) (II) OF THE IT BILL, AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 28 1961 AS INTRODUCED IN THE PARLIAMENT STOOD AS UNDER : (II) ANY SUM PAID ON ACCOUNT OF ANY CESS, RATE OR TAX LEVIED ON THE PROFITS OR GAINS OF ANY BUSINESS OR PROFESSION OR A SSESSED AT A PROPORTION OF, OR OTHERWISE ON THE BASIS OF, ANY SU CH PROFITS OR GAINS. WHEN THE MATTER CAME UP BEFORE THE SELECT C OMMITTEE, IT WAS DECIDED TO OMIT THE WORD CESS FROM THE CLAUSE . THE EFFECT OF THE OMISSION OF THE WORD CESS IS THAT ONLY TAXES PAID ARE TO BE DISALLOWED IN THE ASSESSMENTS FOR THE YEAR 1962-63 AND ONWARDS. 3.THE BOARD DESIRE THAT THE CHANGED POSITION MAY PL EASE BE BROUGHT TO THE NOTICE OF ALL THE ITOS SO THAT FURTH ER LITIGATION ON THIS ACCOUNT MAY BE AVOIDED. RELIANCE WERE PLACED BY THE LD. COUNSEL FOR THE ASS ESSEE ON THE FOLLOWING JUDGMENTS; IN INSTALMENT SUPPLY (P) LTD & ORS VS/ UNION OF IND IA & ORS (1962) 2 SCR 644, IT HAS BEEN HELD AS UNDER:- 19. THERE IS ANOTHER ANSWER TO THE POINT OF RES JU DICATA RAISED ON BEHALF OF THE PETITIONERS, RELYING UPON THE DECISIO N OF THE PUNJAB HIGH COURT IN INSTALLMENT SUPPLY LTD, NEW DELHI V S TATE OF DELHI MANU/PH/0068/1956. IT IS WELL SETTLED THAT IN MATT ERS OF TAXATION THERE IS NO QUESTION OF RES JUDICATA BECAU SE SUCH YEARS ASSESSMENT IS FINAL ONLY FOR THAT YEAR AND DOES NOT GOVERN LATER YEARS, BECAUSE IT DETERMINES ONLY THE TAX FOR A PAR TICULAR PERIOD. (SEE THE DECISION IN THE HOUSE OF LORDS IN SOCIETY OF MEDICAL OFFICERS OF HEALTH V. HOPE (VALUATION OFFICER) (196 0) A.C. 551 APPROVING AND FOLLOWING THE DECISION OF THE PRIVY C OUNCIL IN BROKEN HILL PROPRIETARY COMPANY LIMITED V MUNICIPAL COUNCIL OF BROKEN HILL (1925) A.C. 94. AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 29 IN GODREJ & BOYCE MANUFACTURING COMPANY LTD VS. DY. COMMISSIONER OF INCOME TAX & ORS (2017) 247 TAXMAN 361 (SC), IT HAS BEEN HELD AS UNDER:- 33.WHILE ANSWERING THE SAID QUESTION THIS COURT CO NSIDERED THE OBJECT OF INSERTION OF SECTION 14A IN THE INCOME TA X ACT BY FINANCE ACT, 2001, DETAILS OF WHICH HAVE ALREADY BE EN NOTICED. NOTICING THE OBJECTS AND REASONS BEHIND INTRODUCTIO N OF SECTION 14A OF THE ACT THIS COURT HELD THAT: EXPENSES ALLOWED CAN ONLY BE IN RESPECT OF EARNING OF TAXABLE INCOME. IN PARAGRAPH 17, THIS COURT WENT ON TO OBSERVE THAT : THEREFORE, ONE NEEDS TO READ THE WORDS EXPENDITURE INCURRED IN SECTION 14A IN THE CONTEXT OF THE SCHEME OF THE ACT AND, IF SO READ, IT IS CLEAR THAT IT DISALLOWS CERTAIN EXPENDI TURE INCURRED TO EARN EXEMPT INCOME FROM BEING DEDUCTED FROM OTHER I NCOME WHICH IS INCLUDIBLE IN THE TOTAL INCOME FOR THE P URPOSE OF CHARGEABILITY TO TAX. THE VIEWS EXPRESSED IN WALFORT SHARE AND STOCK BROK ERS P.LTD (SUPRA), IN OUR CONSIDERED OPINION, YEAR AGAIN MILI TATE AGAINST THE PLEA URGED ON BEHALF OF THE ASSESSEE. 34. FOR THE AFORESAID REASONS, THE FIRST QUESTION F ORMULATED IN THE APPEAL HAS TO BE ANSWERED AGAINST THE APPELLANT-ASS ESSEE BY HOLDING THAT SECTION 14A OF THE ACT WOULD APPLY TO DIVIDEND INCOME ON WHICH TAX IS PAYABLE UNDER SECTION 115-0 OF THE ACT. THE HONBLE HIGH COURT DECIDED THE ISSUE HOLDING TH AT; 12. WE HAVE HEARD COUNSEL FOR THE PARTIES. AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 30 13. ON THE THIRD ISSUE IN APPEAL NO.52/2018, IN VIE W OF THE CIRCULAR OF CBDT WHERE WORD CESS IS DELETED, IN O UR CONSIDERED OPINION, THE TRIBUNAL HAS COMMITTED AN ERROR IN NOT ACCEPTING THE CONTENTION OF THE ASSESSEE. APART FROM THE SUPRE ME COURT DECISION REFERRED THAT ASSESSMENT YEAR IS INDEPENDE NT AND WORD CESS HAS BEEN RIGHTLY INTERPRETED BY THE SUPREME CO URT THAT THE CESS IS NOT TAX IN THAT VIEW OF THE MATTER, WE ARE OF THE CONSIDERED OPINION THAT THE VIEW TAKEN BY THE TRIBU NAL ON ISSUE NO.3 IS REQUIRED TO BE REVERSED AND THE SAID ISSUE IS ANSWERED IN FAVOUR OF THE ASSESSEE 40. WE, THEREFORE RESPECTFULLY FOLLOWING THE JUDGME NT OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT, KOTA V/S C HAMBAL FERTILIZERS AND CHEMICALS LIMITED (SUPRA) FIND THAT THE FACTS OF THE CASE ARE IDENTICAL TO THE FACTS OF THE CASE IN APPE AL BEFORE US AND THUS ARE INCLINED TO HOLD THAT THE EDUCATION CESS I S NOT A TAX AND THUS IS AN EXPENDITURE U/S 37 OF THE ACT WHICH CAN NOT BE CLAIMED AGAINST THE PROFITS AND GAINS OF THE BUSINESS CARRI ED OUT BY THE ASSESSEE. THUS FINDING OF LD. CIT(A) IS REVERSED. THE ADDITIONAL GROUND NO.3 RAISED BY THE ASSESSEE FOR ASSESSMENT Y EAR 2012- 13 AND GROUND NO.1 OF CROSS OBJECTION NOS. 23 & 34/ IND/2019 FOR A.Y. 2013-14 & 2014-15 STANDS ALLOWED. 21. SUBSEQUENT TO THE ABOVE DECISION REVENUE HAS FA ILED TO PLACE ANY OTHER JUDGMENT OR DECISION FAVOURING THE REVENUE AND WE THUS RESPECTFULLY FOLLOWING THE JUDGMENT OF HON BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT, KOTA V/S CHAMBAL FER TILIZERS AND CHEMICALS LIMITED (SUPRA) AND FOLLOWING OUR OWN DEC ISION IN THE CASE OF M/S AGRAWAL COAL CORPORATION PVT. LTD (SUPR A) ARE INCLINED TO HOLD THAT THE ASSESSEE SHOULD BE ALLOWE D THE DEDUCTION FOR EDUCATION CESS OF RS.10,29,182/- AND RS.8,40,007/- U/S 37 OF THE ACT AS AN ELIGIBLE EXPE NDITURE IN THE CASE OF AGRAWAL FUEL CORPORATION PVT. LTD AND ADMAN UM FINANCE AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 31 LIMITED RESPECTIVELY. THUS THE ADDITIONAL GROUNDS RAISED IN ITA NO.330/IND/2018 AND GROUND NO.1 OF THE C.O.NO.13/IN D/2019 ARE ALLOWED. 22. IN THE ABOVE FINDING RELIANCE WAS PLACED ON THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT IN THE CAS E OF CIT VS. CHAMBAL FERTILIZERS AND CHEMICALS LIMITED ( SUPRA) . LD. DR COULD NOT BRING ANY OTHER JUDGMENT OF JURISDICTIONAL HIGH COURT OR HIGH COURT/COMMON HIGH COURT OR HONBLE APEX COURT TO HAVE BEEN DECIDED IN FAVOUR OF REVENUE ON THIS ISSUE. WE, THUS, TAKING CONSISTENT VIEW RESPECTFULLY FOLLOWING THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. CHAMBAL FERTILIZERS AND CHEMICALS LIMITED (SUPRA) DIRECTING THE LD. AO TO ALLOW THE DEDUCTION OF EDU CATION CESS TO THE ASSESSEE(S) CLAIMED AT RS. 4,67,053/- I N CASE OF AD-MANUM FINANCE LTD. AND RS.36,804/- IN CASE OF AVAILABLE FINANCE LTD. THUS, GROUND NO.2 RAISED IN BOTH CROSS OBJECTIONS STANDS ALLOWED. OTHER GROUNDS OF A PPEAL IN CROSS OBJECTIONS ARE GENERAL IN NATURE WHICH NEE DS NO ADJUDICATION. AD-MANUM FINANCE & ANR ITA NO.01 & 03 /IND/2020 & C.O.NO.01&02/IND/2020 32 23. IN THE RESULT, REVENUES APPEAL IN ITANO.01/IND /2020 & ITANO.03/IND/2020 ARE DISMISSED AND CROSS OBJECTI ON NO.01/IND/2020 & CO NO. 02/IND/2020 ARE PARTLY ALLOWED. THE ORDER PRONOUNCED AS PER RULE 34 OF ITAT RULES, 1963 ON 29.06.2021. SD/- SD/- (RAJPAL YADAV) (MANISH BORAD) VICE PRESIDENT ACCOUNTANT ME MBER / DATED : 29.06. 2021 PATEL/PS COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE