ALLEN CAREER INSTITUTE, Jaipur V. JCIT, Kota

ITA 10/JPR/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2039 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 02-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: HEMANG GARGIEYA
• Keywords: Capital asset; Business income; Question of law; Notional interest; Commercial expediency; Capital expenditure
• Section: 143(3); 244A; 14A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA. NO. 10 /JP/13 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 M/S ALLEN CAREER INSTITUTE, CP-6, INDRA VIHAR, KOTA. CUKE VS. THE J CIT, RANGE-2, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAEFA3972B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADV) & : SHRI HEMANG GARGIEYA (ADV) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30/ 06/2017 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/09/2017 VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), KOTA DATED 26.11.2012 FOR A.Y. 2009-10 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL ARE AS UNDER:- 1. THE IMPUGNED ADDITIONS AND DISALLOWANCE MADE IN THE ORDER DATED 29.12.2011 U/S 143(3) OF THE ACT, BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHER REASONS AND HENCE THE SAME KINDLY BE DELETED. 2. RS. 20,45,751/-: THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE OF RS. 20,4 5,751/- OUT OF INTEREST EXPENSES ALLEGING NOT FOR BUSINESS PURPOSE AND FURTHER ERRED IN ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 2 ALSO INVOKING SEC. 14A OF THE ACT. THE DISALLOWANCE SO MADE AND CONFIRMED BY THE LD. CIT(A), IS CONTRARY TO THE PRO VISIONS OF LAW AND FACTS HENCE, KINDLY BE DELETED IN FULL. 3. RS. 11,57,453/-: THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE OF RS. 11,5 7,453/- OUT OF INTEREST EXPENSES ALLEGING INCURRED ON CAPITAL EXPE NDITURE. THE DISALLOWANCE SO MADE AND CONFIRMED BY THE LD. CIT ( A), IS CONTRARY TO THE PROVISIONS OF LAW AND FACTS HENCE, KINDLY BE DE LETED IN FULL. 4. RS. 4,920/-: THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE OF RS. 4,920/- OUT OF INTEREST PAYMENT ON ACCOUNT OF ALLEGED NOTIONAL INTEREST ON INTEREST FREE ADVANCE. THE DISALLOWANCE SO MADE AND CONFIRMED BY THE LD. CIT (A), IS CONTRARY TO THE PROVISIONS OF LAW AND FACTS HENCE, KINDLY BE DELETED IN FULL. 5. THE LD. AO FURTHER ERRED IN LAW AS WELL AS ON TH E FACTS OF THE CASE IN CHARGING INTEREST U/S 234A, 234B, 234C & 234D OF TH E ACT AND AS ALSO IN WITHDRAWING OF INTEREST U/S 244A OF THE ACT. THE APPELLANT TOTALLY DENIES ITS LIABILITY OF CHARGING AND WITHDRAWAL OF ANY SUCH INTEREST. THE INTEREST SO CHARGED/WITHDRAWN, BEING CONTRARY TO TH E PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN FULL. 2. FIRSTLY, REGARDING GROUND NO. 1 AND GROUND NO. 4 , THE SAME WERE NOT PRESSED DURING THE COURSE OF HEARING. HENCE, THE S AME ARE DISMISSED AS NOT PRESSED. 3. REGARDING GROUND NO. 5 RELATING TO CHARGING OF INTEREST U/S 234A, 234B, 234C & 234D AND WITHDRAWAL OF INTEREST U/S 244A OF THE ACT, NO ARGUMENTS HAVE BEEN ADVANCED BY THE LD. AR DURING THE COURSE OF HEARING AND THE LEVY AND WITHDRAWAL OF INTEREST BEING CONSEQUENTIAL IN N ATURE, THE SAID GROUND TAKEN BY THE ASSESSEE IS DISMISSED. ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 3 4. NOW COMING TO GROUND NO. 2 WHERE THE ASSESSEE HA S CHALLENGED THE DISALLOWANCE OF RS. 20,45,751/- OUT OF INTEREST EX PENSES INCURRED BY THE ASSESSEE ON AVAILING THE BANK OVERDRAFT FACILITY WH ICH WAS DEBITED IN THE PROFIT AND LOSS ACCOUNT AND CLAIMED IN THE RETURN OF INCOM E. FACTS AND FINDINGS OF THE ASSESSING OFFICER 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE FOLLOWING INVES TMENTS TOWARDS PURCHASE OF MUTUAL FUNDS UNITS IN FIXED MATURITY PLANS OUT O F THE FUNDS WITHDRAWN FROM THE BANK OVERDRAFT ACCOUNT: DATE MUTUAL FUND UNITS AMOUNT (RS) 12.06.2008 UTI MUTUAL FUND-FMP 1.00 CRORE 20.06.2008 HDFC MUTUAL FUND-FMP 1.00 CRORE 05.09.2008 SBI MUTUAL FUND-FMP 1.00 CRORE A SHOW CAUSE NOTICE WAS ISSUED BY THE ASSESSING OFF ICER TO THE ASSESSEE TO EXPLAIN WHY DISALLOWANCE OF RS. 20,45,751/- BEING I NTEREST @ 9.5% PAID ON THE BORROWED FUNDS WHICH ARE USED FOR MAKING THE INVESTMENT IN THE MUTUAL FUNDS UNITS SHOULD NOT BE DISALLOWED. 6. IN RESPONSE, THE ASSESSEE SUBMITTED THAT IT IS E NGAGED IN PROVIDING COACHING TO STUDENTS PREPARING FOR THE COMPETITIVE EXAMINATIONS AND COACHING FEES ARE RECEIVED THROUGH THE BANK DRAFTS AT THE BE GINNING OF THE COURSE FROM THE STUDENTS. IT WAS FURTHER SUBMITTED THAT THE ASS ESSEE FIRM DOES NOT MAINTAIN A CURRENT ACCOUNT WITH ANY BANK RATHER IT DEPOSITS THE FEES RECEIVED FROM THE STUDENTS IN BANK FDR ACCOUNTS AND FOR MEET ING MONTHLY RECURRING EXPENSES, AVAIL OVERDRAFT FACILITY ON SUCH FDRS. I T WAS FURTHER SUBMITTED THAT ALL TYPES OF RECEIPTS INCLUDING FEES AND ALL TYPES OF PAYMENTS WHETHER CAPITAL OR REVENUE ARE MADE THROUGH THE BANK OVERDRAFT ACCO UNT. ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 4 7. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE FIRM DID NOT BORROW ANY FRESH FUNDS DURING THE YEAR AND THERE IS NO OPENING BALANCE OF BORROWED FUNDS AT THE BEGINNING OF THE YEAR WHICH HAS BEEN B ROUGHT FORWARD FROM PREVIOUS FINANCIAL YEAR. IT WAS SUBMITTED THAT THE BANK OVERDRAFT ACCOUNT IS NOT BORROWED MONEY, BECAUSE OVERDRAFT ACCOUNT IS AG AINST THE ASSESSEE OWN BANK FDRS AND IT IS ASSESSEE OWN MONEY TAKEN OUT OF FDR ACCOUNT TEMPORARILY. 8. IT WAS FURTHER SUBMITTED THAT FROM THE PERUSAL O F THE BALANCE SHEET, IT CAN BE NOTED THAT THE ASSESSEE FIRM HAS SUFFICIENT FUNDS OF ITS OWN AND NEED NOT TO BORROW ANY FUNDS. THE CURRENT YEAR PROFIT BE FORE ALLOCATION BETWEEN PARTNERS IS RS. 41.5 CR. AND INVESTMENT IN MUTUAL FUNDS FIXED TERM DEBT FUND SCHEME WAS MADE FOR JUST RS 3 CR. THE BANK OVERDRA FT AGAINST FDR IS JUST FOR BETTER UTILIZATION OF FUNDS OF THE BUSINESS. THERE IS NO DIRECT NEXUS BETWEEN THE AMOUNT BORROWED AND INVESTMENT IN THE MUTUAL FU NDS, AS NO AMOUNT WAS INVESTED BY RAISING AN INTEREST BEARING LOAN. INVES TMENT IN MUTUAL FUND WAS MADE OUT OF CAPITAL AND RESERVES (RETAINED EARNINGS AND CURRENT YEAR EARNINGS). THEREFORE NO DISALLOWANCE ON ACCOUNT OF INTEREST ON BORROWED MONEY SHOULD BE MADE. 9. IN SUPPORT, THE ASSESSEE RELIED UPON THE DECISI ON OF CIT VS. DALMIA CEMENT (BHARAT) LTD.(2002) 254 ITR 377 (DEL), S.A. BUILDERS LTD. VS. CIT(APPEAL) (2007) 288 ITR 1 (SC) , CIT VS. PREM H EAVY ENGG. WORKS PVT. LTD. 285 ITR 554 (ALL) AND CIT VS. RADICO KHAITAN L TD. (2005) 142 TAXMAN 681 (ALL). 10. ALTERNATIVELY, THE ASSESSEE SUBMITTED THAT HAD THE INVESTMENT IN MUTUAL FUND WAS MADE NOT FROM THE OVERDRAFT ACCOUNT , THEN FDR WOULD BE BREAK FOR INVESTMENT IN MUTUAL FUND AND TOTAL INTER EST INCOME ON THAT MUCH OF AMOUNT WOULD BE LESSER. THE ASSESSEE IS HAVING OVER DRAFT FACILITY @ 0.25% ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 5 AGAINST ITS BANK DEPOSITS. THE BANK CHARGED 9.5% ON BANK OVERDRAFT ACCOUNT DURING THE YEAR AND THE ASSESSEE EARNED 9.25% ON IT S FDR ACCOUNTS. IF THE ASSESSEE INCURRED INTEREST ON OVERDRAFT ON ACCOUNT OF INVESTMENT IN MUTUAL FUND, THE ASSESSEE EARNED INTEREST ON FDRS AT THE S AME TIME FOR NON-BREAKING THE SAME FOR INVESTMENT IN MUTUAL FUND. AT THE MOST , ONE MAY SAY THAT THE ASSESSEE INCURRED INTEREST @ 0.25% (NOT 9.5%) ON OV ERDRAFT. THEREFORE DISALLOWANCE ON ACCOUNT OF INTEREST ON BORROWED MON EY SHOULD BE RESTRICTED TO NET INTEREST OUTGO CALCULATED @ 0.25%. 11. THE ASSESSING OFFICER HOWEVER DID NOT FIND ANY OF THE CONTENTIONS OF THE ASSESSEE ACCEPTABLE AND RELYING ON THE DECISION OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. ABHISHEK INDUSTRIES LTD. 286 ITR 1, HELD THAT ONUS IS ON THE ASSESSEE TO PROVE THAT WHA TEVER LOANS WERE RAISED BY THE ASSESSEE, THE SAME WERE USED FOR BUSINESS PURPO SES. IT WAS FURTHER HELD THAT THE BUSINESS OF THE ASSESSEE IS RUNNING OF COA CHING CLASSES FOR STUDENTS AND NOT PURCHASE & SALE OF MUTUAL FUNDS UNITS. IT W AS FURTHER HELD THAT THE ASSESSEE HAS FAILED TO PROVE ANY BUSINESS EXPEDIENC Y TO MAKE AFORESAID INVESTMENTS IN MUTUAL FUNDS UNITS. THE ASSESSING OF FICER DISTINGUISHED THE DECISIONS RELIED UPON BY THE ASSESSEE AND THEREAFTE R CONCLUDED THE MATTER WITH THE FOLLOWING FINAL FINDINGS WHICH ARE REPRODU CED AS UNDER:- IT IS OBSERVED THAT INTEREST @ 9.5% PER ANNUM HAS BEEN PAID BY THE ASSESSEE ON BANK OVER DRAFT ACCOUNT. THEREFORE, INT EREST RELATED TO INVESTMENT IN MUTUAL FUNDS UNITS IS WORKED OUT AS U NDER:- ON RS. 1.00 CRORE FROM 12.06.08 TO 19.06.08 RS. 20, 821/- ON RS. 1.00 CRORE FROM 20.06.08 TO 04.09.08 RS. 4,0 0,821/- ON RS. 1.00 CRORE FROM 05.09.08 TO 31.03.09 RS. 16, 24,109/- RS. 20,45,751/- ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 6 THEREFORE, DISALLOWANCE OF RS. 20,45,751/- BEING IN TEREST @ 9.50% ON BANK OVER DRAFT ACCOUNT IN RESPECT OF INVESTMENTS TOTALL ING RS. 3.00 CRORE IN MUTUAL FUND UNITS WILL BE MADE OUT OF INTEREST PAI D ON BANK OVER DRAFT ACCOUNT. 12. ON PERUSAL OF THE ABOVE, IT IS NOTED THAT THE C ONTENTION OF THE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THE BANK OVERDRAFT FACILITY IS NOT IN THE NATURE OF BORROWING OF FUNDS RATHER IT IS ASSESSEE S OWN MONEY TAKEN OUT OF FDR ACCOUNT TEMPORARILY. IT WAS FURTHER CONTENDED T HAT ALL TYPE OF PAYMENTS AND RECEIPTS ARE ROUTED THROUGH THE BANK OVERDRAFT ACCOUNT AND BY VIRTUE OF THAT, IT CANNOT BE HELD THAT EVERY PAYMENT MADE OUT OF THE OVERDRAFT ACCOUNT IS OUT OF THE BORROWED FUNDS. THIRDLY, THE ASSESSEE CONTENDED THAT IT HAS SUFFICIENT INTERNAL RESERVES WHICH FAR EXCEED THE V ALUE OF INVESTMENT WHICH HAS BEEN MADE DURING THE YEAR AND THERE ARE NO BORR OWING AND IN TURN, NO DIRECT NEXUS IN TERMS OF ANY BORROWINGS AND INVESTM ENT IN THE MUTUAL FUNDS. THE ASSESSEE ALSO CONTENDED THAT IT HAS INCURRED NE T INTEREST COST OF 0.25%, AND IF THE DISALLOWANCE HAS TO BE MADE, THE SAME HA S TO BE RESTRICTED TO 0.25% AND NOT THE WHOLE OF 9.5%. PER CONTRA, THE CO NTENTION OF THE ASSESSING OFFICER IS THAT FUNDS WITHDRAWN FROM THE BANK OVERDRAFT ACCOUNT HAVE BEEN UTILISED FOR MAKING THE INVESTMENT IN THE MUTUAL FUND UNITS AND ACCORDINGLY, THE BORROWED FUNDS HAVE BEEN UTILISED FOR MAKING THE SAID INVESTMENTS. IT WAS FURTHER HELD BY THE ASSESSING OFFICER THAT THE BUSINESS OF THE ASSESSEE IS RUNNING OF COACHING CLASSES FOR STU DENTS AND NOT PURCHASE & SALE OF MUTUAL FUNDS UNITS AND THE ASSESSEE HAS FAI LED TO PROVE ANY BUSINESS EXPEDIENCY TO MAKE AFORESAID INVESTMENTS IN MUTUAL FUNDS UNITS. FINDINGS OF THE LD CIT(A) 13. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL AND REITERATED ITS SUBMISSION MADE DURING THE ASSESSMEN T PROCEEDINGS BEFORE THE ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 7 THE LD CIT(A). IT WAS FURTHER SUBMITTED BY THE ASSE SSEE THAT FIXED TERM MATURITY PLANS OF MUTUAL FUNDS IN WHICH THE ASSESSE E HAS MADE INVESTMENT DURING THE YEAR WERE SIMPLY AN ALTERNATIVE OF BANK FDRS. IT WAS SUBMITTED THAT BANK FDRS ARE MANAGED BY BANKS WHILE FIXED MAT URITY PLANS (FMP) ARE ISSUED AND MANAGED BY MUTUAL FUNDS. BOTH ARE DEBT INSTRUMENTS WHEREIN THE MUTUAL FUNDS INVEST IN GOVERNMENT SECURITY AND CORP ORATE DEBT AND THE OBJECT BEHIND MAKING SUCH INVESTMENT IS GETTING BETTER POS T TAX RETURNS THAN BANK FDRS DUE TO INDEXATION BENEFIT WHERE MUTUAL FUNDS U NITS ARE HELD FOR A PERIOD OF GREATER THAN ONE YEAR. 14. THE ASSESSEE FURTHER RELIED ON THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS. RELIANCE UTILITIES AND POWER LT D. 313 ITR 340 AND THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. BHARTI TELEVENTURE LTD. 51 DTR 98. THE ASSESSEE HAS RELIED UPON THE DECISION OF COORDINATE BENCH IN CASE OF ACIT VS. SH. RAM KISHAN VERMA PROP . M/S RESONANCE, KOTA STATING THAT THE FACTS OF THE SAID CASE ARE EXACTLY IDENTICAL TO THE FACTS OF THE ASSESSEE. 15. THE LD. CIT(A) HOWEVER DID NOT ACCEPT THE ASSES SEES CONTENTIONS AND CONFIRMED THE DISALLOWANCE OF INTEREST WITH THE FOL LOWING FINDINGS WHICH ARE REPRODUCED AS UNDER:- IT WAS SEEN THAT THE SURPLUS FUNDS OF ASSESSEE WER E KEPT IN THE FORM OF FDRS AND THE INCOME FROM SAME WAS TO BE TAXED AS INCOME FROM OTHER SOURCES. ON THE SECURITY OF THESE FDRS THE ASSESSEE AVAILED OVERDRAFT FACILITY AND PART OF THE FUNDS OUT OF OVER DRAFT WERE USED FOR P URCHASING MUTUAL FUND UNITS. AS THE INCOME FROM MUTUAL FUNDS WERE EXEMPT, ANY EX PENDITURE RELATED TO SAME HAS TO BE DISALLOWED IN VIEW OF SPECIFIC PR OVISIONS OF SECTION 14A OF THE I.T. ACT. ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 8 THE ASSESSEES PLEA THAT OVERDRAFT IS ITS OWN MONE Y IS NOT ACCEPTABLE AS FDRS WERE USED AS SECURITY FOR OVER DRAFT AND TH E SOURCE OF INVESTMENT WAS OVER DRAFT AND NOT ITS OWN MONEY. T HIS WILL BE CLEAR FROM FOLLOWING EXAMPLE:- IF AN ASSESSEE HAS PLACED HOUSE PROPERTY AS SECURIT Y FOR TAKING OVERDRAFT WOULD WE ALLOW INTEREST EXPENSES AGAINST INCOME FROM HOUSE PROPERTY? THE ANSWER IS CLEAR NO. THE CASE LAWS SITED BY ASSESSEE ARE NOT RELEVANT AS IN THE CASE OF ASSESSEE NEXUS BETWEEN BORROWED FUNDS AND INVESTM ENT WAS CLEARLY ESTABLISHED. THE PAYMENTS WERE DIRECTLY MADE FROM O VERDRAFT ACCOUNT ONLY AND ALSO ADMITTED BY ASSESSEE. CONSIDERING THE ABOVE DISALLOWANCE OF INTEREST OF R S. 20,45,751/- IS CONFIRMED. THIS GROUND OF APPEAL IS, THEREFORE, DISMISSED. 16. DURING THE COURSE OF HEARING, THE LD AR VEHEME NTLY ARGUED THE MATTER AND RAISED VARIOUS CONTENTIONS AS PER THE WRITTEN S UBMISSIONS WHICH ARE REPRODUCED AS UNDER. 1. INVOKING OF SEC. 14A WITHOUT JURISDICTION: AT T HE OUTSET, IT IS SUBMITTED THAT THE AO PROCEEDED ON COMPLETE MISCONCEPTION OF LAW I N AS MUCH AS SEC. 14A CAN BE INVOKED ONLY WHEN THE AO FINDS THAT SOME EXP ENDITURE HAS BEEN INCURRED IN RELATION TO SOME EXEMPTED INCOME. IN OT HER WORDS, ANY INCOME WHICH IS EXEMPTED E.G. U/S 10, IS AN EXEMPTED INCOM E. TO TAKE AN EXAMPLE, THE SHARE OF PROFIT RECEIVED BY A PARTNER U/S 10(2A ), DIVIDEND INCOME U/S 10(34) ETC., ARE COMPLETELY EXEMPTED FROM INCOME TA X HENCE, THE EXPENDITURE INCURRED IN RELATION TO SUCH INCOME CAN BE DISALLOW ED. HOWEVER, HERE IN THIS CASE THE FACTUAL MATRIX IS DIFFERENT AND THE AO HAS WRONGLY UNDERSTOOD THAT THE EARNING ON ACCOUNT OF THE SUBJECTED INVESTMENT MADE IN THE MUTUAL FUNDS WAS AN EXEMPTED INCOME. IT IS SUBMITTED THAT THE AS SESSEE MADE INVESTMENT ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 9 IN THE FIXED TERM DEBT FUND SCHEME- FMP (FIXED MATU RITY PLAN) [WHEREIN, THE ASSESSEE PROVIDED OPTIONS FOR THE PERIOD OF MOSTLY 380/390 DAYS] WAS UNDER THE PROVISIONS OF INCOME TAX ACT I.E. SEC. 112, IT IS SUBMITTED THAT SUCH MUTUAL FUNDS ARE TAKEN LESS THAN 1 YEAR, THE INTERE ST EARNING THEREON SHALL BE TREATED AS SHORT TERM CAPITAL GAIN AND TAX @ 30% FL AT SHALL BE LEVIED THEREON. HOWEVER, IF THE INTEREST EARNING OCCURS AF TER A PERIOD OF 1 YEAR SHALL BE TREATED AS LONG TERM CAPITAL GAIN AND TAX @ 10% FLAT IT SHALL BE LEVIED THEREON (WHERE INDEXATION BENEFIT IS CLAIMED) AND @ 20% WHEREIN, IT IS NOT CLAIMED. THUS, SUCH INTEREST EARNINGS ARE TAXABLE A ND CANNOT BE SAID TO BE EXEMPTED INCOME. IN VIEW OF THIS FACTUAL MATRIX, SE C. 14A COULD AND SHOULD NOT HAVE BEEN INVOKED AND CONFIRMED. INTERESTINGLY, THE AO THOUGH MADE DISALLOWANCE INVO KING SEC. 14A THIS YEAR, HOWEVER, IN THE SAME CIRCUMSTANCES IN A.Y. 2010-11, NO SUCH DISALLOWANCE WAS MADE U/S 14A (ALTHOUGH IT WAS DISALLOWED U/S 36 (I)(III) OF THE ACT). THIS SPEAKS OF THE FALLACY IN THE CASE MADE OUT BY THE A O. 2. FURTHER THE WRITTEN SUBMISSIONS FILED BEFORE THE LD. CIT(A), ARE REPRODUCED HEREUNDER:- 1. M/S ALLEN CAREER INSTITUTE IS A PARTNERSHIP FIR M ENGAGED IN THE COACHING OF COMPETITIVE EXAMINATION. THE COACHING FEES FOR THE YEAR ARE RECEIVED ONLY THROUGH BANK DRAFTS AT THE BEGINNING OF THE COURSES , WHILE MOSTLY EXPENSES ARE INCURRED MONTHLY THROUGHOUT THE YEAR. ALL TYPES OF RECEIPTS AND PAYMENTS ARE MADE THROUGH BANK OVERDRAFT ACCOUNT AND THE ASS ESSEE DO NOT HAVE CURRENT ACCOUNT IN THE BANK. 2. IF THE FIRM KEPT FEE RECEIVED IN BANK CURRENT AC COUNT AND MAKE PAYMENT OF EXPENSES FROM THAT ACCOUNT, NO INTEREST INCOME COUL D BE EARNED AND A HANDSOME AMOUNT REMAIN IDLE IN BANK CURRENT ACCOUNT EARNING NO INCOME. THEREFORE THE ASSESSEE FIRM DO NOT HAVE CURRENT ACC OUNT WITH BANK AND HAS ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 10 ONLY OVERDRAFT ACCOUNT AGAINST FDRS, AT A NOMINALLY HIGHER RATE OF INTEREST (.25 EXTRA). ACCORDINGLY AS A PRUDENT BUSINESSMAN A ND TO MAXIMIZE ITS EARNING, ASSESSEE FIRM IS IN THE REGULAR PRACTICE T O KEEP THE FEE RECEIVED FROM THE STUDENTS IN BANK IN FDRS ACCOUNT AND AVAILING OVERDRAFT FACILITY ON THE FDRS. ALL TYPES OF RECEIPTS (INCLUDING FEES) AND ALL TYPE S OF PAYMENTS (WHETHER CAPITAL OR REVENUE) ARE MADE THROUGH OVERDRAFT ACCO UNT. BUT IT DOES NOT MEAN THAT EVERY PAYMENT MADE OUT OF BARROWED MONEY. THIS IS TOTALLY A PART OF THE ASSESSEES BUSINESS FINANCIAL MANAGEMENT PLANNING. NEEDLESS TO SAY BY NOT INVESTING IN FDRS THE ASSESSEE OF COURSE WOULD NOT HAVE INCURRED INTEREST COST BUT AT THE SAME TIME WOULD NOT HAVE EARNED INTEREST . THE NET RESULT WOULD HAVE BEEN LOSS TO THE REVENUE. HERE IT SHOULD BE CLEAR THAT FIXED TERM DEBT FUND S CHEME FMP (FIXED MATURITY PLAN) OF MUTUAL FUND IS SIMPLY AN ALTERNAT IVE OF BANK FDRS. BANK FIXED DEPOSITS ARE MANAGED BY BANKS WHILE FMPS ARE ISSUED AND MANAGED BY MUTUAL FUNDS. BANK FIXED DEPOSITS (FDS) ARE DEPOSIT S IN BANK DEBT INSTRUMENTS, FMPS ARE ALSO DEBT INSTRUMENTS MANAGED BY MUTUAL FUNDS IN GOVT. SECURITIES, AND CORPORATE DEBT. THAT MEANS TH AT FIXED MATURITY PLANS, TYPICALLY HAVE NO EQUITY COMPONENT. THE OBJECT BEHIND MAKING INVESTMENT IS GETTING TAX EFFICIENT INCOME SIMILAR TO BANK INTEREST. FMP OFFER BETTER POST TAX RETURN THA N BANK FDS DUE TO INDEXATION BENEFIT FOR A PERIOD OF GREATER THAN ONE YEAR. 3. THE ASSESSEE FIRM DID NOT BORROW ANY FRESH MONEY DURING THE YEAR AND EVEN HAVE NO OPENING BORROWED MONEY. BANK OVERDRAFT ACCOUNT IS NOT BORROWED MONEY, BECAUSE OVERDRAFT ACCOUNT IS AGAINS T THE ASSESSEE OWN BANK FDRS. IT MEANS BANK OVERDRAFT IS ASSESSEE OWN MOENY TAKEN OUT OF FDR ACCOUNT TEMPORARILY. ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 11 EXTRACT OF BALANCE SHEET AND PROFIT AND LOSS ACCOUN T FOR THE CURRENT YEAR : OPENING CAPITAL 47.57 CR. CLOSING CAPITAL 70.6 5 CR. OPENING FIXED ASSETS 19.92 CR. CLOSING FIXED ASSET S 22.43 CR. OPENING INVESTMENTS 0.00 CR. CLOSING INVESTMENTS 3.00CR. OPENING BANK FDRS 62.98 CR. CLOSING BANK FDRS 98. 04 CR. OPENING BANK OVERDRAFT 29.81 CR. CLOSING BANK O/D 41.12 CR. INTEREST ON BANK FDRS 8.30 CR. INTEREST TO BANK O/ D 1.73 CR. NET INTEREST INCOME 6.57 CR. THE CURRENT YEAR PROFIT (BEFORE ALLOCATION BETWEEN PARTNERS) IS 41.5 CR. AND INVESTMENT IN MUTUAL FUND FIXED TERM DEBT FUND SCHE ME WAS MADE FOR JUST 3 CR. INVESTMENT IN MUTUAL FUND WAS MADE OUT OF CAPIT AL AND RESERVES (INCLUDING CURRENT YEAR PROFIT). IT IS VERY CLEAR FROM THE BALANCE SHEET THAT THE AS SESSEE FIRM HAS SUFFICIENT FUND OF ITS OWN AND NEED NOT TO BORROW ANY MONEY. B ANK OVERDRAFT AGAINST FDRS IS JUST FOR BETTER UTILIZATION OF FUNDS OF THE BUSINESS. THERE IS NO NEXUS BETWEEN THE ANY AMOUNT BORROWED AND INVESTMENT IN T HE MUTUAL FUND MADE, AS NO AMOUNT WAS INVESTED BY RAISING AN INTEREST BE ARING LOAN. THEREFORE NO DISALLOWANCE ON ACCOUNT OF INTEREST ON BORROWED MON EY SHOULD BE MADE. 4. WE BELIEVE IN THE VIEW TAKEN BY THE DELHI HIGH C OURT IN CIT V. DALMIA CEMENT (BHARAT) LTD. (2002) 254 ITR 377 (DEL) THAT ONCE IT IS ESTABLISHED THAT THERE WAS NEXUS BETWEEN THE EXPENDITURE AND THE PUR POSE OF THE BUSINESS (WHICH NEED NOT NECESSARILY BE THE BUSINESS OF THE ASSESSEE ITSELF), THE REVENUE CANNOT JUSTIFIABLY CLAIM TO PUT ITSELF IN T HE ARMCHAIR OF THE BUSINESSMAN OR IN THE POSITION OF THE BOARD OF DIRE CTORS AND ASSUME THE ROLE TO DECIDE HOW MUCH IS REASONABLE EXPENDITURE HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE. NO BUSINESSMAN CAN BE CO MPELLED TO MAXIMIZE ITS PROFIT. THE IT AUTHORITIES MUST PUT THEMSELVES IN T HE SHOES OF THE ASSESSEE ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 12 AND SEE HOW A PRUDENT BUSINESSMAN WOULD ACT. THE AU THORITIES MUST NOT LOOK AT THE MATTER FROM THEIR OWN VIEWPOINT BUT THAT OF A PRUDENT BUSINESSMAN. IN ANOTHER CASE, WHERE THE ASSESSEE ARGUED THAT (A) THE ADVANCE HAS BEEN MADE TO SISTER COMPANY OUT OF BANK ACCOUNT ACCOUNT WHEREIN BOTH ITS OWN AND BORROWED FUNDS WER E MIXED UP, SO THAT THERE WAS NO DIRECT NEXUS BETWEEN BORROWING AND ADV ANCE: AND (B) THE LOAN TO A SISTER COMPANY WHICH IN THIS CASE WAS A SUBSIDIARY COMPANY IS ONE WHICH SHOULD BE TREATED AS PROMOTED BY COMMERCIAL EXPEDIENCY, THE SUPREME COURT UPHELD THE ARGUMENT OF THE ASSESS EE AND INTEREST WAS NOT DISALLOWED IN THE CASE OF S.A. BUILDERS LTD. VS. CI T(APPEAL) (2007) 288 ITR 1 (SC) ALSO SEE CIT VS. PREM HEAVY ENGG. WORKS PVT. L TD. (2006) 285 ITR 554 (ALL), CIT VS. RADICO KHAITAN LTD. (2005) 142 TAXMA N 681 (ALL.). RELIANCE IS ALSO PLACED ON THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OD CIT V. RELIANCE UTILITIES AND POWER LTD . 313 AND HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. BHARTI TELEVENTURE LTD. WE ARE ALSO ENCLOSING HEREWITH THE COPY OF ITAT, JA IPUR CASE OF A.C.I.T V. SH. RAM KISHAN VERMA PROP. M/S RESONANCE, KOTA. THE FAC TS OF THE ABOVE CASE ARE IDENTICAL TO THE CASE OF ASSESSEE. 3.1 IN ADDITION TO BE ABOVE, IT IS SUBMITTED THAT T HE FOLLOWING DECISIONS STRONGLY SUPPORTS THE CONTENTIONS RAISED BY THE ASS ESSEE IN THE ABOVE SUBMISSION. THESE DECISIONS RELATE TO DISALLOWANCE OF ANY EXPENDITURE INCURRED IN CONNECTION TO THE PAYMENT OF ANY INCOME TAX. IN THESE CASES WHERE SOME INTEREST EXPENDITURE WAS INCURRED BECAUS E OF THE PAYMENT OF THE TAXES MADE OUT OF THE LOAN/OD A/C, THE HONBLE COUR TS IN SIMILAR FACTUAL MATRIX (AS AVAILABLE IN THIS CASE) HAS TAKEN A VIEW IN FAVOUR OF THE ASSESSEE. ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 13 3.2 FOR THIS PROPOSITION, RELIANCE IS PLACED ON WOL LCOMBERS OF INDIA LTD. V/S CIT (1982) 134 ITR 219 (CAL), WHEREIN IT WAS HELD T HE ASSESSEE HAVING OVERDRAFT ACCOUNT IN BANK ENTIRE PROFITS IN RELEVAN T YEAR DEPOSITED IN OVERDRAFT ACCOUNT AMOUNT OF PROFITS FAR EXCEEDING ADVANCE TAX LIABILITY MONIES WITHDRAWN FROM OVERDRAFT ACCOUNT BOTH FOR BUSINESS PURPOSES AND ALSO FOR PAYMENT OF ADVANCE TAX THERE IS PRESUMPTION THAT AD VANCE TAX WAS PAID OUT OF PROFITS AND NOT OUT OF OVERDRAFT ACCOUNT DISALLO WANCE OF INTEREST ON OVERDRAFT AS BEING RELATABLE TO PAYMENT OF ADVANCE TAX IS NOT JUSTIFIED. 3.3 IN EAST INDIA PHARMACEUTICAL WORKS LD. V/S CIT (1997) 224 ITR 627 (SC), PROVIDED A GUIDELINE IN SUCH CASE IN THESE WO RDS (II) ..........., THE QUESTION WHETHER A PRESUMPTION COULD BE DRAWN THAT THE TAXES WERE PAID OUT OF THE PROFITS OF THE RELEVANT YEAR AND NOT OUT OF THE OVERDRAFT ACCOUNT FOR THE RUNNING OF THE BUSINESS, WOULD ESSENTIALLY DEPEND U PON WHETHER THE ENTIRE PROFITS HAD BEEN PUMPED INTO THE OVERDRAFT ACCOUNT, WHETHER SUCH PROFITS WERE MORE THAN THE TAX AMOUNT PAID FOR THE RELEVANT YEAR AND OTHER GERMANE FACTORS................. 3.4 IN BRITISH PAINTS (INDIA) LTD. V/S CIT 190 ITR 196 (CAL) HELD (I) THAT THE TRIBUNAL WAS NOT RIGHT IN PRESUMING THAT PAYMENTS O F THE ASSESSEE-COMPANYS INCOME-TAX LIABILITY WERE MADE DURING THE PREVIOUS YEAR OUT OF ITS OVERDRAFT FROM THE BANK WHEN ALL THE COMPANYS SALE PROCEEDS AND RECEIPTS DURING THE YEAR COVERING ITS PROFITS FAR IN EXCESS OF SUCH TAX LIABILITY WERE BEING DEPOSITED IN THAT OVERDRAFT ACCOUNT AND AS SUCH IN HOLDING TH AT A PROPORTIONATE PART OF THE INTEREST ON THE SAID OVERDRAFT WAS REFERABLE TO THE TAX PAYMENTS. (II) THAT THE ENTIRE INTEREST PAID BY THE ASSESSEE ON THE OVE RDRAFT ACCOUNT WAS AN ALLOWABLE DEDUCTION. IT WAS HELD THAT IF THE AMOUNT OF THE PROFIT GENERATED WERE HIGHER THAN THE AMOUNT OF THE ADVANCE TAX PAID , IT SHOULD BE PRESUMED THAT THE PROFIT ITSELF WERE INVESTED/DIVERTED IN TH E PAYMENT OF THE ADVANCE TAX ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 14 AND THEREFORE, THE DEDUCTION CLAIMED ON ACCOUNT OF THE INTEREST ON LOAN EVEN FOR THE PURPOSE OF PAYMENT OF TAX IS ALLOWANCE. 3.5 RECENTLY THIS VIEW HAS BEEN TAKEN BY THE HONBL E ITAT M/S MADHU SILICA PVT. LTD. V/S ACIT IN ITA NO. 2230/AHD/2010 VIDE OR DER DATED 20.09.2013 (DPB 38-43) FOLLOWING THE DECISION IN THE CASE OF M UNJAL SALES CORPORATION V/S CIT (2008) 298 ITR 298 (SC). 3.6 ON THIS ASPECT ALSO KINDLY REFER DECISION ACIT V/S RAMKISHAN VERMA (2012) 143 TTJ (JP) (UO) 1 (DPB 10-22) WHEREIN, PAR A 9.5 THE RELEVANT PORTION IS AS UNDER: WE HAVE HEARD BOTH THE PARTIES. THE ASSESSEE IS HA VING SUFFICIENT CAPITAL. IF THERE ARE MIXED FUNDS THEN NON-INTEREST-BEARING FUN DS ARE TO BE CONSIDERED S UTILIZED FOR NON-INTEREST-BEARING ADVANCES. IT IS T HE ASSESSEE WHO HAS TO TAKE A BUSINESS DECISION. FEES IS GENERALLY RECEIVED AT THE BEGINNING AND SURPLUS FUNDS ARE USED FOR MAKING FIXED DEPOSITS AS RECEIPT S ARE IN ADVANCES WHILE EXPENSES ARE SPREAD OUT THROUGHOUT THE YEAR. SINCE INTEREST-FREE ADVANCES ARE LESS THAN THE CAPITAL AND THE AO HAS NOT BROUGH T ON RECORD ANY NEXUS OF INTEREST-BEARING LOANS BEING USED THE AO COULD NOT HAVE DISALLOWED THE INTEREST. THERE IS NO ONUS ON THE ASSESSEE TO ESTAB LISH THAT INTEREST-FREE ADVANCES ARE OUT OF INTEREST-BEARING ADVANCES IF NO N-INTEREST-BEARING FUNDS ARE MORE. RELIANCE IS PLACED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. RELIANCE UTILITIES & P OWER LTD. (2009) 221 CTR (BOM) 435 : (2009) 18 DTR (BOM) 1 : (2009) 313 ITR 340 (BOM) AND HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. BHARTI TELE VENTURE LTD. (2011) 51 DTR (DEL) 98 : 2010 TIOL-51-HC-DEL. THERE IS NO PROVISI ON IN THE ACT WHICH MAY COMPEL AN ASSESSEE TO EARN INCOME. THE ASSESSEE IN THE CROSS-OBJECTION IS AGGRIEVED AG AINST CONFIRMING OF ADDITION. ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 15 AFTER CONSIDERING THE FACTS AS ABOVE, WE FEEL THAT THE AO WAS NOT JUSTIFIED IN MAKING ANY DISALLOWANCE. HENCE, DISALLOWANCE IS DEL ETED. 3.7 IT WAS SUBMITTED THAT THE ABOVE CITED DECISIONS STRONGLY SUPPORTS THE CONTENTIONS RAISED BY THE ASSESSEE. THESE DECISIONS RELATE TO DISALLOWANCE OF THE INTEREST EXPENDITURE INCURRED ON THE LOAN AMOUN T USED FOR PAYMENT OF INCOME TAX/INVESTMENT IN THE SECURITIES/CAPITAL EXP ENDITURE ETC. OR FOR GIVING INTEREST FREE ADVANCES TO IS SISTER CONCERNS ETC. S OURCED OUT OF THE LOAN/OD A/C. THE HONBLE COURTS IN SIMILAR FACTUAL MATRIX ( AS AVAILABLE IN THIS CASE) HAS TAKEN A VIEW IN FAVOUR OF THE ASSESSEE. 4. THE LAW IS WELL SETTLED THAT WHERE ASSESSEE IS H AVING MIXED I.E. INTEREST FREE/INTEREST BEARING FUNDS BOTH, BUT THE INTEREST FREE FUNDS ARE LARGER THAN THE INTEREST FREE ADVANCES THAN THERE WILL BE A PRE SUMPTION THAT THE INTEREST FREE ADVANCES WERE GIVEN OUT OF THE INTEREST FREE F UNDS (BUT NOT OUT OF INTEREST BEARING FUND/OD) AND HENCE, NO INTEREST CAN BE DISALLOWED (AS WAS NOT CLAIMED). 5. IT WAS SUBMITTED THAT THE CONTROVERSY INVOLVED IN THE PRESENT CASE IS DIRECTLY COVERED BY THE CASE OF ACIT V/S RAM KISHAN VERMA (2012) 143 TTJ 1 (JP), WHEREIN THE FACTUAL MATRIX IS ALSO THE SAME. IN FAC T, THE CITED CASE ALSO OF A COACHING INSTITUTE OF KOTA ITSELF AN D THERE ALSO THE ASSESSEE USED TO RECEIVE THE ENTIRE FEES AT THE BEGINNING OF THE YEAR/SESSION WHEREAS IT HAD TO INCUR RECURRING EXPENDITURE ON MONTHLY BASIS . AS A PART OF FINANCIAL MANAGEMENT/PLANNING AND TO MAXIMIZE ITS INCOME, THA T ASSESSEE ALSO USED TO DEPOSIT THE ENTIRE FEES IN THE FDRS AND GOT OD A/C FROM WHICH FUNDS WERE UTILIZED AS PER NEED. THIS WAY, IT WAS CLAIMED THAT IT WAS ASSESSEES OWN MONEY ONLY WHO DID NOT BORROW ANY FRESH MONEY. THE DISALLOWANCE MADE BY THE AO U/S 36(I)(III) WAS FULLY DELETED BY HOLDING THAT ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 16 10.4 WE HAVE HEARD BOTH THE PARTIES. THE ASSESSEE I S HAVING SUFFICIENT CAPITAL. IF THERE ARE MIXED FUNDS THEN NON-INTEREST -BEARING FUNDS ARE TO BE CONSIDERED AS UTILIZED FOR NON-INTEREST-BEARING ADVANCES. IT IS THE ASSESSEE WHO HAS TO TAKE A BUSINESS DECISION. FEES IS GENERALLY RECEIVED AT THE BEGINNING AND SURPLUSES ARE USED FO R MAKING FIXED DEPOSITS AS RECEIPTS ARE IN ADVANCES WHILE EXPENSES ARE SPREAD OUT THROUGHOUT THE YEAR. SINCE INTEREST-FREE ADVANCES A RE LESS THAN THE CAPITAL AND THE AO HAS NOT BROUGHT ON RECORD ANY NE XUS OF INTEREST- BEARING LOANS USED THE AO COULD NOT HAVE DISALLOWED THE INTEREST. THERE IS NO ONUS ON THE ASSESSEE TO ESTABLISH THAT INTERE ST-FREE ADVANCES ARE OUT OF INTEREST-BEARING ADVANCES IF NON-INTEREST-BE ARING FUNDS ARE MORE. RELIANCE IS PLACED ON THE DECISION OF THE HONBLE B OMBAY HIGH COURT IN THE CASE OF CIT VS. RELIANCE UTILITIES & POWER LTD. (2009) 221 CTR (BOM) 435 : (2009) 18 DTR (BOM) 1 : (2009) 313 ITR 340 (BOM) AND HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. BHA RTI TELEVENTURE LTD. (2011) 51 DTR (DEL) 98 : 2010-TIOL-51-HC-DEL. THERE IS NO PROVISION IN THE ACT WHICH MAY COMPEL AN ASSESSEE TO EARN INC OME. 11.2 AFTER CONSIDERING THE FACTS AS ABOVE, WE FEEL THAT THE AO WAS NOT JUSTIFIED IN MAKING ANY DISALLOWANCE. HENCE, DISAL LOWANCE IS DELETED. 6. THE HON`BLE RAJASTHAN HIGH COURT HAS ALSO AFFIRM ED THE ABOVE ORDERS VIDE PARA 12 & 14 IN THE CASE OF CIT V/S RAM KISHAN VERM A (2016) 132 DTR 107 (RAJ.) HOLDING AS UNDER: 12. AS FAR AS THE DISALLOWANCE OF INTEREST IS CONC ERNED, ADMITTEDLY THE ASSESSEE HAD AN OPENING CAPITAL OF RS. 5,70,74,967/ - OF HIS OWN AND THE ADVANCES, IF AT ALL, BEING INTEREST FREE, IS TO THE EXTENT OF RS. 98,93,950/- WHICH IS FAR BELOW THE CAPITAL OF THE A SSESSEE AND, THEREFORE, THE TRIBUNAL HAS RIGHTLY COME TO THE CON CLUSION THAT TO THE EXTENT OF HIS OWN CAPITAL THE ASSESSEE COULD ADVANC E MONEY WITHOUT INTEREST FOR BUSINESS EXPEDIENCY OR/AND RELATIVES, AND NONE CAN BE FORCED TO CHARGE INTEREST. IT IS ALSO NOTICED BY TH E LOWER AUTHORITIES THAT ASSESSEE EARNED BANK INTEREST TO THE EXTENT OF RS. 24,48,843/- OUT OF WHICH HE PAID TOTAL AMOUNT OF RS. 10,99,099/- TO TH E BANK AGAINST LOAN ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 17 AND OVER DRAFT, AND IT IS OUT OF THE AMOUNT WHICH H AS BEEN PAID BY THE ASSESSEE AT 10,99,099/- THAT THE AO HAS DISALLOWED THE INTEREST. 13. TAKING INTO CONSIDERATION THE FACT AS NOTICED H EREINABOVE, IN OUR VIEW AS WELL, WHEN THERE WAS NO AGREEMENT TO CHARGE INTEREST FROM THE PERSONS TO WHOM THE ASSESSEE ADVANCE SHORT TERM LOA N/ADVANCE, THE AO COULD NOT DISALLOW PART OF INTEREST. IT IS ALSO AN ADMITTED FACT, AS OBSERVED BY THE TRIBUNAL, THAT THE AO WAS NOT ABLE TO PIN POINTEDLY COME TO A DEFINITE CONCLUSION THAT HOW INTEREST BEA RING LOANS HAS BEEN DIVERTED TOWARDS INTEREST FREE ADVANCES AND SINCE T HE AO WAS NOT ABLE TO PROVE NEXUS BETWEEN INTEREST BEARING LOANS VIS- -VIS INTEREST FREE LOANS/ADVANCES, THEREFORE, IN OUR VIEW AS WELL, ONC E THE AO WAS NOT ABLE TO COME TO A DEFINITE CONCLUSION AS TO NEXUS H AVING BEEN ESTABLISHED ABOUT INTEREST BEARING LOANS HAVING BEE N DIVERTED TOWARDS INTEREST FREE LOANS/ADVANCES, AND SUCH BEING A FIND ING OF FACT BASED ON APPLICATION OF EVIDENCE, IN OUR VIEW NO SUBSTANTIAL QUESTION OF LAW ARISE ON THIS QUESTION AS WELL. IT CAN BE OBSERVED THAT T HIS COURT IN SIMILAR CIRCUMSTANCES AND ON IDENTICAL FACTS, WHEN THE CAPI TAL OF THE PARTNER/PROPRIETOR BEING MORE THAN THE INTEREST FRE E SHORT TERM ADVANCES, HAS IN THE CASE OF CIT V/S M/S. VIJAY SOL VEX LTD. (2015) 274 CRT (RAJ.) 384 WHILE RELYING ON THE JUDGMENTS RENDE RED IN (A) S.A. BUILDERS LTD. V/S CIT (2007) 288 ITR 0001 (SC); (B ) MUNJAL SALES CORPORATION V/S CIT (2008) 298 ITR 298 (SC) ; (C) C IT V/S RADICO KHAITAN LTD. (2005) 274 ITR 354; (D) CIT V/S DALMIA CEMENT (PVT.) LTD. (2002) 254 ITR 377; (E) CIT V/S BRITANNIA INDUSTRIE S LTD. (2006) 280 ITR 525; AND (F) CIT V/S MOTORS SALES LTD. (2008) 3 04 ITR 123 (ALLAHABAD), HELD AS UNDER:- 14. THEREFORE, THE FINDING REACHED BY THE TRIBUNAL IS ESSENTIALLY A FINDING OF FACT BASED ON THE APPRECIATION OF THE EV IDENCE, AND WE FIND NO PERVERSITY OR INFIRMITY IN THE ORDER IMPUGNED, A ND NO QUESTION OF LAW ARISES OUT OF THE ORDER OF ITAT. 7. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) PR OCEEDED ON MISCONCEPTION & MISREADING OF THE JUDICIAL GUIDELIN ES PROVIDED THROUGH VARIOUS DECISIONS WHICH WERE IN THE CONTEXT THAT WH ERE THERE ARE BORROWED ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 18 FUNDS AND ALSO INTEREST FREE FUNDS BOTH, DISCRETION LIES WITH THE ASSESSEE FOR THE UTILIZATION OF THE FUNDS IN WHATEVER MANNER IT WANTS. WHAT HAS BEEN HELD IS THAT WHERE THERE ARE FUNDS AVAILABLE BOTH INTERE ST-FREE AND OVERDRAFT AND/OR LOANS TAKEN, THEN A PRESUMPTION WOULD ARISE THAT IN TEREST FREE LOANS & ADVANCES WOULD BE OUT OF INTEREST FREE FUND GENERAT ED OR AVAILABLE WITH THE ASSESSEE, IF THE INTEREST-FREE FUNDS WERE SUFFICIEN T TO MEET THE INVESTMENTS AND IN SUCH SITUATION THE SPECIFIC NEXUS BETWEEN UT ILIZATION BEING OF INTEREST BEARING BANK OVERDRAFT TOWARDS INTEREST FREE ADVANC ES, LOOSES SIGNIFICANCE/RELEVANCE. 17. THE LD. DR IS HEARD WHO HAS VEHEMENTLY ARGUED T HE MATTER, TOOK US THROUGH THE FINDINGS OF THE AO AND THE LD CIT(A) AN D SUPPORTED THE ORDER OF THE LOWER AUTHORITIES. OUR FINDINGS 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE ABOVE FACTUAL MATRIX, THE ISSUES THAT ARISE FOR CONSIDERATION ARE FIRSTLY, WHETHER THE BANK OVERDRAFT ACCOUNT, OU T OF WHICH THE FUNDS HAVE BEEN WITHDRAWN AND INVESTED IN THE MUTUAL FUND UNIT S DURING THE YEAR, IS IN THE NATURE OF LOAN ACCOUNT OR NOT. ALTERNATIVELY, W HETHER IT IS ASSESSEES OWN MONEY WHICH HAS BEEN TAKEN OUT OF THE FDR ACCOUNT T EMPORARILY AND INVESTED IN THE MUTUAL FUND UNITS AS CONTENDED BY THE LD. AR . THE SECOND ISSUE WHICH ARISE FOR CONSIDERATION IS WHETHER THE TRANSACTIONS IN THE BANK OVERDRAFT ACCOUNT ARE LIMITED TO THE BORROWINGS AND SUBSEQUEN T WITHDRAWAL FOR MEETING EXPENDITURE AND MAKING THE INVESTMENTS OR IT ALSO I NCLUDES OTHER TRANSACTIONS IN FORM OF DEPOSIT OF VARIOUS BUSINESS RECEIPTS INC LUDING COURSE FEES AS CONTENDED BY THE LD. AR. IN OTHER WORDS, WHETHER IN VESTMENT HAS BEEN MADE OUT OF MIXED FUNDS OR SOLELY FROM THE BORROWED FUND S. THE THIRD ISSUE WHICH ARISE FOR CONSIDERATION IS WHERE ASSESSEE IS HAVING MIXED FUNDS AND INTEREST ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 19 FREE FUNDS ARE LARGER THAN THE AMOUNT OF INVESTMENT S MADE DURING THE YEAR, CAN A PRESUMPTION BE DRAWN THAT THE INVESTMENTS IN THE MUTUAL FUND UNITS HAVE BEEN MADE OUT OF INTEREST- FREE FUNDS AND NOT OUT OF INTEREST BEARING FUNDS. THE FOURTH ISSUE IS WHETHER THE PROVISIONS O F SECTION 14A ARE ATTRACTED IN THE INSTANT CASE. 19. REGARDING THE FIRST ISSUE REGARDING THE NATURE OF THE BANK OVERDRAFT ACCOUNT, THE LD AR HAS SUBMITTED A COPY OF CERTIFIC ATE DATED 27.01.2017 ISSUED BY THE BRANCH MANAGER, CENTRAL BANK OF INDIA IN SUPPORT OF ITS CONTENTIONS AND IT WOULD BE RELEVANT TO REPRODUCE T HE SAME IN VERBATIM AS UNDER: THIS IS TO CERTIFY THAT M/S ALLEN CAREER INSTITUTE HAS BEEN GIVEN OVERDRAFT FACILITY UPTO 90% OF FDRS AMOUNT DURING THE FINANCI AL YEAR 2009-10, 2010-11 & 2011-12. THIS IS NOT A CC FACILITY. THE CUSTOMER WAS NOT ENTITLED TO TAKE LOAN OR ADVANCE OVER AND ABOVE 90% AMOUNT OF THE FD R. 20. DRAWING SUPPORT FROM THE SAID CERTIFICATE, THE LD AR HAS CONTENDED THAT IT WAS A NORMAL OVERDRAFT A/C WHICH WAS AGAINST THE FDRS OF THE ASSESSEE PLEDGED WITH THE BANK AND THE ASSESSEE WAS ENTITLED TO WITHDRAW ONLY UP TO 90% OF THE FDR. IN OTHER WORDS, THERE WAS A MARGIN OF 10%. THE ASSESSEE WAS NOT ENTITLED TO WITHDRAW MORE THAN 90%. ALSO IT WAS NOT A CC A/C. THUS, THERE WAS NO POSSIBILITY FOR THE ASSESSEE TO HAVE B ORROWED FUNDS MORE THAN THE FDR AMOUNTS. THUS, EFFECTIVELY IT WAS NOTHING B UT ASSESSEES OWN MONEY WHICH WAS PUT INTO THE FDRS TO EARN HANDSOME AMOUNT OF INTEREST THEREON AND AT THE TIME OF NEED OF FUNDS, THE SAME COULD BE MADE AVAILABLE BY PAYING A MARGINALLY EXTRA AMOUNT OF INTEREST THEREON BEING 0.25 AND WAS A PART OF ITS FINANCIAL MANAGEMENT. 21. ON REVIEW OF THE ABOVE CERTIFICATE AND CONTENTI ONS SO ADVANCED BY THE LD. AR, WE FIND THAT THE LD AR HAS TRIED TO MAKE A DISTINCTION BETWEEN A BANK ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 20 OVERDRAFT ACCOUNT AGAINST PLEDGE OF THE FDRS AND CA SH CREDIT ACCOUNT AND IT HAS BEEN CONTENDED THAT IN CASE OF FORMER, IT IS AS SESSEES OWN MONEY WHILE THE LATTER RESULTS IN BORROWING OF BANK FUNDS. WE H AVE GIVEN A CAREFUL CONSIDERATION AND ARE UNABLE TO ACCEPT THE SAID CON TENTION ADVANCED BY THE LD AR. IN OUR VIEW, BOTH THE OVERDRAFT ACCOUNT AND CA SH CREDIT ACCOUNTS ARE CLEARLY IN THE NATURE OF BORROWINGS ADVANCED BY THE BANKS HOWEVER CARRYING THEIR INDIVIDUAL CHARACTERISTICS IN TERMS OF TENURE , RATE OF INTEREST, QUANTUM OF BORROWING, REPAYMENT TERMS, UTILIZATION OF SUCH BOR ROWINGS AND THE UNDERLYING SECURITY AGAINST WHICH THE BORROWING HAV E BEEN SO ADVANCED. BOTH THESE FACILITIES ARE WELL-RECOGNISED LINE OF C REDIT/FINANCE IN THE BANKING INDUSTRY. IN THE INSTANT CASE, THE CERTIFICATE OF THE CENTRAL BANK OF INDIA ITSELF SUGGESTS THAT THE ASSESSEE HAS BEEN GRANTED AN OVER DRAFT FACILITY WHEREBY THE ASSESSEE IS ENTITLED TO TAKE LOAN OR ADVANCE UP TO 90% VALUE OF THE FDRS. THE FDRS ARE BASICALLY UNDERLINE SECURITY WHICH ARE PLA CED WITH THE BANKS PROVIDING THE OVERDRAFT FACILITY AND PROVIDES NECES SARY SECURITY TO THE BANK TO OFFER A BETTER RATE OF INTEREST AS COMPARED TO ANY OTHER UNSECURED LOANS WITHOUT UNDERLYING SECURITY WHICH CARRIED A HIGHER RATE OF INTEREST. THE ASSESSEE ON BASIS OF SUCH PLEDGE OF FDR HAS BEEN GR ANTED FACILITY TO BORROW UPTO 90% OF VALUE OF FDRS SO PLEDGED. IN CASE OF C ASH CREDIT FACILITY WHICH IS AGAIN A LINE OF CREDIT PROVIDED BY THE BANKS TO ITS CUSTOMERS FOR WORKING CAPITAL PURPOSES, THE PRINCIPLE DISTINCTION IS THE UNDERLYING SECURITY WHICH IS TYPICALLY STOCK, TRADE RECEIVABLES, ETC AS AGAINST PLEDGE OF FDRS IN CASE OF OVERDRAFT FACILITY. 22. THE PLACING OF FIXED DEPOSITS BY THE ASSESSEE W ITH THE BANK AND SUBSEQUENT BORROWING OR OVERDRAFT FACILITY BASED ON THE PLEDGE OF THE FDRS ARE TWO INDEPENDENT TRANSACTIONS AND HAS BEEN SO TR EATED BY THE BANKS. IN THE CASE OF BANKS, THE DEPOSITS ARE BASICALLY THE L IABILITIES OF THE BANK TOWARDS ITS CUSTOMERS AND THE AMOUNT ADVANCED IN FORM OF BO RROWINGS ARE BASICALLY ITS ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 21 ASSETS AND ARE REFLECTED ACCORDINGLY IN THE FINANCI AL STATEMENTS. SIMILARLY, THE CUSTOMERS INVESTING IN FDRS TREAT IT AS THEIR INVES TMENTS AND THE BORROWINGS AGAINST THE PLEDGE OF SUCH FDRS ARE CLEARLY IN THE NATURE OF ITS LIABILITIES. IN THE INSTANT CASE, THE ASSESEE HAS NOT BROUGHT ON RE CORD ANY VERIFIABLE EVIDENCE WHICH IS CONTRARY TO ABOVE UNDERSTANDING. INFACT, THE ASSESSEE HAS SHOWN INTEREST ON FIXED DEPOSITS IN HIS RETURN OF I NCOME AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AND INTEREST PAID ON BANK OVERDRAFT FACILITY HAS BEEN CLAIMED AS EXPENDITURE UNDER THE HEAD BUS INESS INCOME. THE SAID TREATMENT IN THE FINANCIAL STATEMENTS DOESNT MEREL Y SHOW THE ACCOUNTING TREATMENT AND REFLECTION THEREOF BUT ALSO UNDERSCOR E THE BASIC ESSENCE AND CHARACTER OF BOTH THE TRANSACTIONS BEING INDEPENDEN T OF EACH OTHER. THEREFORE, WE ARE UNABLE TO ACCEPT THE CONTENTION O F THE LD AR THAT THE ASSESSEE HAS INCURRED NET INTEREST COST OF 0.25% AN D NOT 9.5% AT WHICH OVERDRAFT FACILITY WAS AVAILED FROM THE BANK. 23. IN LIGHT OF ABOVE DISCUSSIONS, WE ARE OF THE C ONSIDERED VIEW THAT THE BANK OVERDRAFT ACCOUNT, OUT OF WHICH THE FUNDS HAVE BEEN WITHDRAWN AND INVESTED IN THE MUTUAL FUND UNITS DURING THE YEAR, IS CLEARLY IN THE NATURE OF LOAN ACCOUNT AND CERTIFICATE ISSUED BY THE CENTRAL BANK OF INDIA SUPPORTS THE CASE OF THE REVENUE. ACCORDINGLY, WE ARE UNABLE TO ACCEDE TO THE CONTENTION OF THE LD AR THAT IT IS ASSESSEES OWN MONEY WHICH HAS BEEN TAKEN OUT OF THE FDR ACCOUNT TEMPORARILY AND INVESTED IN THE MUTUAL FUND UNITS. 24. REGARDING SECOND ISSUE AS TO WHETHER THE TRANSA CTIONS IN THE BANK OVERDRAFT ACCOUNT ARE LIMITED TO THE BORROWINGS AND SUBSEQUENT WITHDRAWAL FOR MEETING EXPENDITURE AND MAKING THE INVESTMENTS OR IT ALSO INCLUDES OTHER TRANSACTIONS IN FORM OF DEPOSIT OF VARIOUS BUSINESS RECEIPTS INCLUDING COURSE FEES AS CONTENDED BY THE LD. AR, WE FIND, ON REVIEW OF BANK OVERDRAFT ACCOUNTS SUMMARY DETAILS AVAILABLE AT APB 45, THAT THE ASSESSEE HAS AN OVERDRAFT ACCOUNT WITH THE CENTRAL BANK OF INDIA, T ALWANDI BRANCH, KOTA ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 22 WHEREIN THE OPENING CREDIT BALANCE IS RS. 28 CR. AN D CLOSING CREDIT BALANCE IS RS. 33 CR AND DURING THE YEAR, WE FIND THAT THERE A RE DEPOSITS OF RS. 115.53 CR AND WITHDRAWAL OF RS. 120.85 CR. THE SAID NUMB ERS THEREFORE SUPPORTS THE CONTENTION ADVANCED BY THE LD. AR DURING THE CO URSE OF THE ASSESSMENT PROCEEDINGS THAT ALL TYPES OF BUSINESS RECEIPTS AND ALL TYPE OF PAYMENTS ARE ROUTED THROUGH THE BANK OVERDRAFT ACCOUNT. IT ALSO PROVES THE FACT THAT THE ASSESSEE WAS HAVING MIXED FUNDS BOTH IN FORM OF BUS INESS RECEIPTS AND BORROWINGS IN THE FORM OF OVERDRAFT FROM THE BANK F ROM TIME TO TIME. HOWEVER, THERE IS NOTHING WHICH HAS BEEN BROUGHT ON RECORD TO PROVE THAT THE INVESTMENTS HAVE BEEN MADE AT THE RELEVANT POINT IN TIME OUT OF THE BORROWED FUNDS. IN ABSENCE OF ESTABLISHING THE NEC ESSARY NEXUS BEING BETWEEN THE BORROWINGS AND THE INVESTMENTS IN THE M UTUAL FUNDS, IT CAN SAFELY BE CONCLUDED THAT THE INVESTMENTS IN THE MUT UAL FUND UNITS HAVE BEEN MADE OUT OF MIXED FUNDS. 25. NOW COMING TO THE THIRD ISSUE AS TO WHERE ASSES SEE IS HAVING MIXED FUNDS AND INTEREST FREE FUNDS ARE LARGER THAN THE A MOUNT OF INVESTMENTS MADE DURING THE YEAR, CAN A PRESUMPTION BE DRAWN THAT TH E INVESTMENTS IN THE MUTUAL FUND UNITS HAVE BEEN MADE OUT OF INTEREST- F REE FUNDS AND NOT OUT OF INTEREST BEARING FUNDS. IN THIS REGARD, WE FIND THA T THE ASSESSEE IS HAVING OPENING BANK BALANCE IN THEIR FDR ACCOUNT AT THE BE GINNING OF THE YEAR AMOUNTING TO RS. 62.99 CR. AND CLOSING BALANCE OF R S. 98.03 CR WITH FRESH FDRS MADE DURING THE YEAR AMOUNTING TO RS 58.03 CR AND FDRS MATURED DURING THE YEAR AMOUNTING TO RS 22.99 CR. THE FUND S IN THE FDRS ACCOUNTS CLEARLY REFLECT THE INTEREST FREE FUNDS WHICH ARE A VAILABLE WITH THE ASSESSEE WHICH IS FAR IN EXCESS OF THE AMOUNT OF INVESTMENTS WHICH HAS BEEN MADE IN THE MUTUAL FUNDS UNITS AMOUNTING TO RS. 3 CR. ACCOR DINGLY, ON APPRECIATION OF THE SAID FACTS AND IN ABSENCE OF ANYTHING TO THE CO NTRARY, AS PER THE SETTLED LEGAL PROPOSITION, A PRESUMPTION CAN BE DRAWN THAT THE INVESTMENTS IN THE ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 23 MUTUAL FUND UNITS HAVE BEEN MADE OUT OF INTEREST- F REE FUNDS AND NOT OUT OF INTEREST BEARING FUNDS. 26. LASTLY COMING TO THE CONTENTION OF THE LD.CIT(A ) THAT PROVISIONS OF SECTION 14A ARE APPLICABLE AS INCOME FROM THE MUTUA L FUNDS ARE EXEMPT, WE FIND THAT THE SAID FINDING IS CONTRARY TO THE FACTS ON RECORD. THE APPELLANT HAS INVESTED IN THE FIXED MATURITY PLANS OF THE VARIOUS MUTUAL FUNDS WHICH ARE BASICALLY FIXED TERM DEBT FUNDS SCHEMES. WHERE THE AMOUNT IS INVESTED IN SUCH FUNDS FOR LESS THAN A YEAR, THE MATURITY PROCE EDS ARE TAXABLE AS SHORT TERM CAPITAL GAIN @ 30% AND WHERE THE AMOUNT IS INV ESTED IN SUCH FUNDS FOR THE PERIOD EXCEEDING ONE YEAR, THE MATURITY PROCEED S ARE TAXABLE @ 10% WITH THE INDEXATION BENEFIT AND @ 20% WITHOUT INDEXATION BENEFITS. IN OTHER WORDS THE INVESTMENT IN MUTUAL FUNDS SCHEMES ARE NOT TAX FREE INVESTMENTS. IN SUPPORT OF ITS CONTENTIONS, THE LD. AR HAS ALSO SUB MITTED A COPY OF THE COMPUTATION OF INCOME FOR THE SUBSEQUENT ASSESSMENT YEAR 2010-11 WHEREIN THE MATURITY PROCEEDS AMOUNTING TO RS 3,32,35,500 O F ALL THESE MUTUAL FUNDS UNITS WHEREIN THE ASSESSEE HAS INVESTED RS 3,00,00, 000 DURING THE IMPUNGED ASSESSMENT YEAR HAVE BEEN OFFERED TO TAX AS LONG T ERM CAPITAL GAINS. IN LIGHT OF THE SAME, WE DO NOT THINK THAT THE LD. CIT(A) WA S CORRECT IN INVOKING PROVISIONS OF SECTION 14A OF THE ACT. 27. IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIR ETY FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER WAS NOT CORRECT IN DISALLOWING INTEREST EXPENSE OF RS. 20,45,751/- IN THE HANDS OF THE ASSESSEE AND GROUND NO. 2 OF THE ASSESSEES APPEAL IS ACCORD INGLY ALLOWED. GROUND NO. 4 28. IN RESPECT OF GROUND NO. 4, BRIEFLY THE FACTS O F THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT TH E ASSESSEE HAD USED ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 24 BORROWED FUNDS OUT OF BANK OVER DRAFT ACCOUNT FOR A CQUISITION OF THE FOLLOWING CAPITAL ASSETS DURING THE YEAR:- I) ADVANCE GIVEN FOR PURCHASE OF LAND THE ASSESSEE HAS GIVEN ADVANCE OF RS. 1.00 CRORE ON 20.12.2008, RS. 1.00 CRORE ON 23.01.2009 AND RS. 2.00 CRORE ON 04.03.200 9 TO M/S TRAFCO AGENCIES P. LTD., KOTA FOR PURCHASE OF PLOT OF LAND . THIS PLOT WAS SUBSEQUENTLY PURCHASED ON 22.05.2009 AND CONSTRUCTION OF THE BUI LDING KNOWN AS CP-7 WAS STARTED ON THIS PLOT. II) CONSTRUCTION OF SHED IN THE BUILDING CP-14 AS PER THE FIXED ASSETS CHART, THE ASSESSEE HAS MAD E ADDITION TO BUILDING KNOWN AS CP-14 TO THE TUNE OF RS. 1,18,66,163/-. TH E CONSTRUCTION CONTINUED DURING THE YEAR. THE ASSESSEE CONSTRUCTED A SHED WI TH PLOYCARBONATED ROOF WHICH WAS PUT TO USE IN MARCH, 2009. THE ASSESSEE M ADE WITHDRAWALS OF VARIOUS AMOUNTS FROM BANK OVER DRAFT ACCOUNT FOR CO NSTRUCTION OF THE SHED DURING THE YEAR. III) WORKED-IN-PROGRESS REGARDING BUILDING AT RAGIV GHANDHI NAGAR THE FIXED ASSETS CHART ALSO SHOWS THAT THE ASSESSEE HAS SHOWN CONSTRUCTION WORK-IN-PROGRESS AMOUNTING TO RS. 1,45,52,709/-. TH E ASSESSEE EXPLAINED THAT THIS RELATED TO CONSTRUCTION OF A NEW BUILDING AT R AJIV GANDHI NAGAR WHICH WAS COMPLETED NEXT YEAR. 29. THE ASSESSEE WAS ASKED TO EXPLAIN THE AMOUNT O F INTEREST PAID ON BORROWED FUNDS WHICH WERE UTILIZED FOR ACQUISITION OF FIXED ASSETS AND ALSO TO EXPLAIN WHY THE INTEREST SHOULD NOT BE DISALLOWED A S PER PROVISO TO SECTION 36(1)(III). IN RESPONSE, THE ASSESSEE REPLIED AS UN DER: ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 25 THE ASSESSEE FIRM HAS NO CURRENT ACCOUNT IN THE BA NK, IT HAS ONLY OVERDRAFT ACCOUNT. IT DOES NOT BEEN UNDERSTOOD THAT EVERY PAY MENT MADE OUT OF BORROWED MONEY. THE ADVANCE PAYMENT MADE FOR PLOT W AS OUT OF CURRENT YEAR PROFIT. THE CURRENT PROFIT (BEFORE ALLOCATION BETWEEN PARTNERS) IS 41.5 CRORE AND ADVANCE MADE FOR PLOT WAS JUST 4.00 CRORE . THE ASSESSEE WAS AGAIN ASKED TO EXPLAIN WHY INTERES T OF RS. 5,77,808/-, RS. 1,94,863/- AND RS. 3,84,782/- CALCULATED @ 9.5% PER ANNUM ON THE BORROWED FUNDS USED FOR PAYING ADVANCE OF RS. 4.00 CRORE FOR PURCHASE OF LAND, CONSTRUCTION WORK-IN-PROGRESS AND CONSTRUCTION OF S HED IN CP-14 BE NOT DISALLOWED IN VIEW OF PROVISO TO SECTION 36(1)(III) SINCE WHILE LAND AND CONSTRUCTION WORK-IN-PROGRESS WERE NOT PUT TO USE DURING THE YEAR, THE SHED WAS PUT TO USE ONLY AT THE FAG END OF THE YEAR. IN RESPONSE, THE ASSESSEE CONTENDED AS UNDER:- SECTION 36(1)(III) READS AS UNDER: THE AMOUNT OF THE INTEREST PAID IN RESPECT OF CAPI TAL BORROWED FOR THE PURPOSE OF THE BUSINESS OR PROFESSION: PROVIDED THAT ANY AMOUNT OF THE INTEREST PAID, IN R ESPECT OF CAPITAL BORROWED FOR ACQUISITION OF AN ASSET FOR EXTENSION OF EXISTI NG BUSINESS OR PROFESSION (WHETHER CAPITALISED IN THE BOOKS OF ACCOUNT OR NOT ); FOR ANY PERIOD BEGINNING FROM THE DATE ON WHICH THE CAPITAL WAS BORROWED FOR ACQUISITION OF THE ASSET TILL THE DATE ON WHICH SUCH ASSET WAS FIRST PUT TO USE, SHALL NOT BE ALLOWED AS DEDUCTION SECTION 36(1)(III) IS APPLICABLE ONLY IN CASE OF CA PITAL BORROWED. AS EXPLAINED IN EARLIER PARA, THERE WAS NO BORROWED MONEY IN THE CA SE OF THE ASSESSEE. SIMPLY PAYMENT THROUGH BANK OVERDRAFT ACCOUNT AGAIN ST FDRS, WHERE THE ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 26 ASSESSEE HAVE NO BANK CURRENT ACCOUNT AND SUFFICIEN T OWN FUNDS, COULD NOT BE MEAN AS CAPITAL BORROWED FOR THE APPLICABILITY OF S ECTION 36(1)(III). THE ASSESSEES CONTENTIONS WERE NOT FOUND ACCEPTABL E TO THE AO AND HE HELD THAT THE ASSESSEE HAS MET THE EXPENDITURE MENTIONED ABOVE BUT OF BANK OVER DRAFT ACCOUNT I.E. OUT OF BANK LOAN TAKEN AGAINST I TS FDRS, WHICH CONSTITUTES BORROWED MONEY. THE ASSESSEE HAS ALSO CLAIMED DEDUC TION IN RESPECT OF INTEREST PAID ON BANK OVER DRAFT ACCOUNT. THEREFORE , PROVISO TO SECTION 36(1)(III) IS SQUARELY APPLICABLE TO THE CASE OF AS SESSEE. ACCORDINGLY, DISALLOWANCE OF RS. 11,57,453/- ( 577808-194863+384 7827) WAS MADE OUT OF INTEREST PAID ON BANK OVER DRAFT ACCOUNT. 30. THE RELEVANT FINDINGS OF THE LD. CIT(A) IS REPR ODUCED AS UNDER:- IN VIEW OF SPECIFIC PROVISIONS OF SECTION 36(1)(II I) (PROVISO), NO INTEREST CAN BE ALLOWED ON BORROWED CAPITAL TILL THE DATE SU CH ASSET IS NOT PUT TO USE. THE ASSESSING OFFICER HAS CLEARLY ESTABLISHED THAT MONEY FROM OVERDRAFT ACCOUNT WAS PAID FOR CAPITAL WORK IN PROG RESS. IN VIEW OF ABOVE THE DISALLOWANCE OF RS. 11,57,453/- IS UPHELD . THIS GROUND OF APPEAL IS, THEREFORE, DISMISSED. 31. DURING THE COURSE OF HEARING, LD. AR REITERATED ITS SUBMISSIONS AS MADE IN RESPECT OF GROUND NO. 2 AS DISCUSSED SUPRA. IT WAS FURTHER SUBMITTED THAT THE DISALLOWANCES MADE OF INTEREST ON THE ALLEGED B ORROWINGS UTILIZED FOR CAPITAL INVESTMENT, OUR CONTENTIONS CAN BETTER BE U NDERSTOOD BY REFERRING TO THE FACTS INVOLVED AND THE DECISION RENDERED IN THE CASE OF CIT V/S RELIANCE UTILITIES & POWER LTD. (2009) 313 ITR 340 (MUM), WH ICH IS ALSO A CASE WHERE FOR MAKING CAPITAL INVESTMENT IN THE SHARES OF TWO COMPANIES, DISALLOWANCE WAS MADE. IT WAS HELD THAT THE FACTS OF THAT CASE WERE THAT THE ASSESSEE VIZ. M/S RELIANCE UTILITIES AND POWER LTD. HAD INVESTED CERTAIN AMOUNTS IN RELI ANCE GAS LTD. AND RELIANCE STRATEGIC INVESTMENTS LTD. IT WAS THE CASE OF THE ASSESSEE THAT ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 27 THEY THEMSELVES WERE IN THE BUSINESS OF GENERATION OF POWER AND THEY HAD EARNED REGULAR BUSINESS INCOME THEREFROM. THE I NVESTMENTS MADE BY THE ASSESSEE IN M/S RELIANCE GAS LTD. AND M/S RE LIANCE STRATEGIC INVESTMENTS LTD. WERE DONE OUT OF THEIR OWN FUNDS A ND WERE IN THE REGULAR COURSE OF BUSINESS AND THEREFORE NO PART OF THE INTEREST COULD BE DISALLOWED. IT WAS ALSO POINTED OUT THAT THE ASS ESSEE HAD BORROWED RS.43.62 CRORES BY WAY OF ISSUE OF DEBENTURES AND T HE SAID AMOUNT WAS UTILISED AS CAPITAL EXPENDITURE AND INTER-CORPORATE DEPOSIT. IT WAS THE ASSESSEE'S SUBMISSION THAT NO PART OF THE INTEREST BEARING FUNDS (VIZ. ISSUE OF DEBENTURES) HAD GONE INTO MAKING INVESTMEN TS IN THE SAID TWO COMPANIES. IT WAS POINTED OUT THAT THE INCOME FROM THE OPERATIONS OF THE ASSESSEE WAS RS.313.53 CRORES AND WITH THE AVAI LABILITY OF OTHER INTEREST FREE FUNDS WITH THE ASSESSEE THE AMOUNT AV AILABLE FOR INVESTMENTS OUT OF ITS OWN FUNDS WERE TO THE TUNE O F RS.398.19 CRORES. IN VIEW THEREOF, IT WAS SUBMITTED THAT FROM THE ANA LYSIS OF THE BALANCE- SHEET, THE ASSESSEE HAD ENOUGH INTEREST FREE FUNDS AT ITS DISPOSAL FOR MAKING THE INVESTMENTS. THE CIT (APPEALS) ON EXAMIN ING THE SAID MATERIAL, AGREED WITH THE CONTENTION OF THE ASSESSE E AND ACCORDINGLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER AND DIRECTED HIM TO ALLOW THE SAME UNDER THE PROVISIONS OF THE INCOME T AX ACT, 1961. THE REVENUE BEING AGGRIEVED BY THE ORDER PREFERRED AN A PPEAL BEFORE THE ITAT WHO UPHELD THE ORDER OF THE CIT (APPEALS) AND DISMISSED THE APPEAL OF THE REVENUE. FROM THE ORDER OF THE ITAT, THE REVENUE APPROACHED THIS COURT BY WAY OF AN APPEAL. ON THE ABOVE FACTUAL MATRIX, THE HONBLE COURT HELD AS UNDER: 10. IF THERE BE INTEREST-FREE FUNDS AVAILABLE TO AN ASSESSEE SUFFICIENT TO MEET ITS INVESTMENTS AND AT THE SAME TIME THE AS SESSEE HAD RAISED A LOAN IT CAN BE PRESUMED THAT THE INVESTMENTS WERE F ROM THE INTEREST- FREE FUNDS AVAILABLE. IN OUR OPINION THE SUPREME CO URT IN EAST INDIA PHARMACEUTICAL WORKS LTD. (SUPRA) HAD THE OCCASION TO CONSIDER THE DECISION OF THE CALCUTTA HIGH COURT IN WOOLCOMBERS OF INDIA LTD. (SUPRA) WHERE A SIMILAR ISSUE HAD ARISEN. BEFORE TH E SUPREME COURT IT WAS ARGUED THAT IT SHOULD HAVE BEEN PRESUMED THAT I N ESSENCE AND TRUE CHARACTER THE TAXES WERE PAID OUT OF THE PROFITS OF THE RELEVANT YEAR AND NOT OUT OF THE OVERDRAFT ACCOUNT FOR THE RUNNING OF THE BUSINESS AND IN ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 28 THESE CIRCUMSTANCES THE APPELLANT WAS ENTITLED TO C LAIM THE DEDUCTIONS. THE SUPREME COURT NOTED THAT THE ARGUMENT HAD CONSI DERABLE FORCE, BUT CONSIDERING THE FACT THAT THE CONTENTION HAD NO T BEEN ADVANCED EARLIER IT DID NOT REQUIRE TO BE ANSWERED. IT THEN NOTED THAT IN WOOLCOMBERS CASE (SUPRA) THE CALCUTTA HIGH COURT H AD COME TO THE CONCLUSION THAT THE PROFITS WERE SUFFICIENT TO MEET THE ADVANCE TAX LIABILITY AND THE PROFITS WERE DEPOSITED IN THE OVE RDRAFT ACCOUNT OF THE ASSESSEE AND IN SUCH A CASE IT SHOULD BE PRESUMED T HAT THE TAXES WERE PAID OUT OF THE PROFITS OF THE YEAR AND NOT OUT OF THE OVERDRAFT ACCOUNT FOR THE RUNNING OF THE BUSINESS. IT NOTED THAT TO R AISE THE PRESUMPTION, THERE WAS SUFFICIENT MATERIAL AND THE ASSESSEE HAD URGED THE CONTENTION BEFORE THE HIGH COURT. THE PRINCIPLE THEREFORE WOUL D BE THAT IF THERE ARE FUNDS AVAILABLE BOTH INTEREST-FREE AND OVERDRAFT AN D/OR LOANS TAKEN, THEN A PRESUMPTION WOULD ARISE THAT INVESTMENTS WOU LD BE OUT OF THE INTEREST-FREE FUND GENERATED OR AVAILABLE WITH THE COMPANY, IF THE INTEREST-FREE FUNDS WERE SUFFICIENT TO MEET THE INV ESTMENTS. IN THIS CASE THIS PRESUMPTION IS ESTABLISHED CONSIDERING THE FIN DING OF FACT BOTH BY THE CIT(A) AND TRIBUNAL. 32. IT WAS SUBMITTED THAT IN THE INSTANT CASE ALSO THE FACTS ARE THE SAME AS WERE OBTAINING IN THE CASE OF RELIANCE UTILITIES (S UPRA) IN AS MUCH AS IN BOTH THE CASES, THE INVESTMENTS WERE MADE IN CAPITAL ASS ET (WHETHER IN THE SHARES OF THE TWO COMPANIES AS WAS THE CASE WITH RELIANCE UTILITIES (SUPRA) OR INVESTMENT IN THE CAPITAL ASSET I.E. PLOT PURCHASE, CONSTRUCTION ETC WHICH MAKES NO DIFFERENCE BUT AT BOTH THE PLACES, THE COM MON CONTENTIONS OF THE ASSESSEE ARE THAT THERE WERE NO BORROWING MADE AS S UCH IN AS MUCH AS THE ASSESSEE WAS ALREADY HAVING SUFFICIENT INTEREST FRE E FUNDS AT ITS DISPOSAL THEREFORE, SUCH INVESTMENT/OUTGOING ON CAPITAL ACCO UNT SHOULD BE TREATED TO HAVE GONE OUT OF THE AVAILABILITY OF INTEREST FREE FUNDS BUT NOT FROM THE INTEREST BEARING FUNDS, IF ANY. THIS WAY, THERE WAS NO OCCASION FOR THE ASSESSEE TO MAKE A CLAIM OF DEDUCTION NOR FOR THE A O TO HAVE MADE DISALLOWANCE U/S 36(1)(III) OF THE ACT. ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 29 33. IN THE CASE OF CIT VS. HDFC BANK LTD. (2016) 2 84 CTR 0409 (BOM), IT WAS HELD THAT WHERE ASSESSEE'S CAPITAL, PROFIT RESERVES, SURPLUS AND CURRENT ACCOUNT DEPOSITS WERE HIGHER THAN THE INVESTMENT IN TAX-FRE E SECURITIES, IT WOULD HAVE TO BE PRESUMED THAT INVESTMENT MADE BY THE ASS ESSEE WOULD BE OUT OF THE INTEREST-FREE FUNDS AVAILABLE WITH ASSES SEE AND NO DISALLOWANCE WAS WARRANTED U/S 14A. 34. IT IS FURTHER SUBMITTED THAT A COMPARATIVELY RECENT DECISION IN THE CASE OF HERO CYCLE P. LTD VS CIT (2015) 128 DTR 0001 / 3 79 ITR 347 (SC) ALSO DIRECTLY SUPPORTS THE CASE OF THE ASSESSEE. IN THAT CASE, THE COMPANY HAD GIVEN LOANS & ADVANCE S OF RS.34 LACS TO ITS DIRECTORS AND CHARGED INTEREST @ 10% ONLY, WHEREAS IT AVAILED THE LOAN @ 18% HENCE, DISALLOWANCE WAS MADE BY THE AO SAYING T HAT THE MONEY BORROWED BY THE ASSESSEE CANT BE TREATED FOR THE P URPOSES OF THE BUSINESS OF ASSESSEE. BEFORE THE CIT(A), THE ASSESSEE DEMONSTRA TED THAT THERE WAS A SUFFICIENT CREDIT BALANCE, WHILE ADVANCING LOAN TO THE DIRECTORS AND EVEN THAT STILL THERE WAS A CREDIT BALANCE OF RS.4.95 LACS L EFT. THE CIT(A) THEREFORE HELD THAT SUCH LOAN WAS NOT GIVEN OUT OF THE BORROWED FU NDS AND THE INTEREST LIABILITY IN RELATION TO THE BANKS BORROWING, HAD NO BEARING BECAUSE THE ASSESSEE HAD ITS OWN SUFFICIENT FUNDS, WHICH THE AS SESSEE COULD ADVANCE AND THE AO SHOULD HAVE ESTABLISHED A NEXUS BETWEEN THE BORROWING AND THE ADVANCING FOR NON-BUSINESS PURPOSES HOWEVER, THE AO FAILED TO DO SO. FURTHER APPEAL OF THE REVENUE WAS DISMISSED BY THE ITAT ALS O. IN FURTHER APPEAL, THE HIGH COURT MERELY QUOTED ITS EARLIER JUDGEMENT IN C IT VS ABHISHEK INDUSTRIES LTD DATED 04.08.16. IN THIS FACTUAL BACKGROUND, IT WAS HELD: INSOFAR AS THE LOANS TO DIRECTORS ARE CONCERNED, I T COULD NOT BE DISPUTED BY THE REVENUE THAT THE ASSESSEE HAD A CRE DIT BALANCE IN THE BANK ACCOUNT WHEN THE SAID ADVANCE OF RS. 34 LAKHS WAS GIVEN. ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 30 REMARKABLY, AS OBSERVED BY THE CIT (APPEAL) IN HIS ORDER, THE COMPANY HAD RESERVE/SURPLUS TO THE TUNE OF ALMOST 15 CRORES AND, THEREFORE, THE ASSESSEE COMPANY COULD IN ANY CASE, UTILISE THOSE F UNDS FOR GIVING ADVANCE TO ITS DIRECTORS. THE RATIO LAID IN THE SAID DECISION SQUARELY APPLY ON THE FACTS OF THE PRESENT CASE, HENCE THE IMPUGNED DISALLOWANCE KINDLY BE DEL ETED IN FULL. 35. ALSO KINDLY REFER ALKALI & CHEMICAL CORPORATIO N OF INDIA LTD. VS. CIT (1986) 50 CTR 0139(KOL HC) (DPB 71-74) AND CIT V/S M/S. VIJAY SOLVEX LTD. (2015) 274 CTR 384 (RAJ.) (DPB 75-80). 36. IT WAS SUBMITTED THAT THE AO STRESSED OVER TH E ALLEGED ABSENCE OF THE COMMERCIAL EXPEDIENCY BEHIND GIVING OF THE SUBJECTE D LOANS & ADVANCES IN AS MUCH AS, SUCH A CONSIDERATION WAS RELEVANT ONLY IN A CASE WHERE THE INTEREST FREE FUNDS WERE GIVEN OUT OF THE INTEREST BEARING F UNDS ONLY AND THERE WAS ADMITTEDLY NO AVAILABILITY OF THE INTEREST FREE FUN DS. IN OUR CASE, SUCH FACTS ARE NOT AVAILABLE AND EVEN OTHERWISE THE UTILIZATION OF THE FUNDS WAS FOR COMMERCIAL EXPEDIENCY IN AS MUCH AS THE MAJOR UTILI ZATION OF THE FUNDS WAS TOWARDS CAPITAL INVESTMENT IN BUILDING FOR COACHING , AND PARTLY IN THE MUTUAL FUNDS BUT INCOME FROM BOTH WERE DULY TAXED. IT WAS NOT THE CASE OF AO THAT ASSESSEE DIVERTED THE FUNDS TO RELATIVES ETC. FOR P ERSONAL PURPOSES. IN THE CASE OF SA BUILDERS ALSO, THE DECISION WAS R ENDERED IN THE CONTEXT OF DIVERSION OF THE INTEREST BEARING FUNDS TO THE INTE REST FREE ADVANCES. THE HONBLE RAJASTHAN HIGH COURT IN RAM KISHAN VERMA (S UPRA) HAS ALSO TAKEN A NOTE AND INTERPRETED THE DECISION OF SA BUILDER (SU PRA) IN THE SAME MANNER AND THEREFORE, HELD THAT TO THE CONCLUSION THAT TO THE EXTENT OF HIS OWN CAP ITAL THE ASSESSEE COULD ADVANCE MONEY WITHOUT INTEREST F OR BUSINESS EXPEDIENCY OR/AND RELATIVES, AND NONE CAN BE FORCED TO CHARGE INTEREST. ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 31 37. IN DCIT V/S GUJARAT NARMADA VALLEY FERTILIZERS CO. LTD. (2014) 31 ITR TRIB) 668 (AHD) AT PAGE 671, IT IS HELD THAT .., THE DECISION OF THE SUPREME COURT IN THE C ASE OF S.A. BUILDERS LTD. V. CIT(APPEALS) [2007] 288 ITR 1 (SC) WOULD NOT BE APPLICABLE TO THE FACTS OF THE PRESENT CASE. 38. FURTHER THE CASE OF ABHISHEK INDUSTRIES HAS AL READY BEEN IMPLIEDLY OVERRULED IN MUNJAL SALES (SUPRA) AND WAS ALSO SO C ONSIDERED IN THE CASE OF RAM KISHAN VERMA BY ITAT JAIPUR. THE AO WRONGLY IGN ORED THE DECISIONS IN THE CASE OF DALMIA CEMENT (SUPRA) AND RADICO KHAITA N (SUPRA), MERELY ON MISCONCEPTION AND MIS-READING THEREOF AND WITHOUT A NY VALID REASON. 39. THE LD.AO COMPLETELY FAILED TO DENY AND DISPROV E THE FACTS AS ARGUED ALTHOUGH VIDE FIRST PARA AT PG 9, HE ALLEGED THAT T HE ASSESSEE HAD USED A PART OF THE BORROWED FUNDS AVAILABLE IN THE OD A/C AND W ORKED OUT THE DISALLOWABLE AMOUNT OF THE INTEREST YET HOWEVER, HE COMPLETELY FAILED TO PROVE/ TO BRING CONTRARY MATERIAL TO DISPROVE THAT THE ASSESSEE WAS HAVING SUFFICIENT INTEREST FREE FUNDS, AS AFORESAID. HE WR ONGLY CONFUSED THE OD A/C WITH AN INTEREST BEARING LOAN/BORROWINGS. ADMITTEDL Y THE ASSESSEE NEITHER TOOK ANY SUCH LOAN IN THE PAST NOR IN THIS YEAR, AS EVIDENT FROM THE AUDITED BALANCE SHEET AS ON 31.03.2009. 40. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSE D THE MATERIAL AVAILABLE ON RECORD. THE FACTS AND CIRCUMSTANCES OF THE CASE ARE SIMILAR TO THE ONE WHICH WE HAVE EXAMINED IN DETAIL IN GROUND NO. 2 AB OVE. OUR FINDINGS AND DIRECTIONS CONTAINED IN GROUND NO. 2 SHALL MUTATIS MUTANDIS TO THIS GROUND OF APPEAL AS WELL. IN THE RESULT, THE GROUND NO. 3 OF THE ASSESSEES APPEAL IS ALLOWED. ITA NO. 10/JP/13 M/S ALLEN CAREER INSTITUTE VS. JCIT, KOTA 32 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED WITH ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 27/09/2017. SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 27 /09/2017 SANTOSH* VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S ALLEN CAREER INSTITUTE, CP-6, INDRA VIHAR, KOTA. 2. IZR;FKHZ@ THE RESPONDENT- J CIT, RANGE -2, KOTA. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 10/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT REGISTRAR.