Aabhar Holdings (P) Ltd., Ahmedabad V. The Income Tax Officer, Ward-1(1), Ahmedabad

ITA 1060/AHD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9349 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 10-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B
• Section: 143(3)

Judgement Text

I.T.A. NO.: 1060/AHD/2014 ASSESSMENT YEAR: 2009 - 10 PAGE 1 OF 2 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD B BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR AM AND KUL BHARAT JM] I.T.A. NO. : 1060/AHD/2014 ASSESSMENT YEAR : 2009 - 10 AABHAR HOLDINGS PVT LTD .APPELLANT 4 TH FLOOR, NAVDEEP HOUSE ASHRAM ROAD, AHMEDAB AD 380 015 [PAN: AAACA9709M ] VS. INCOME TAX OFFICER WARD 1(1), AHMEDABAD . RESPONDENT APPEARANCES BY: NITESH THAKKAR , FOR THE APPELLANT B PANDA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : FEBRUARY 11, 2016 DATE OF PRONOUNC ING THE ORDER : FEBRUARY 29, 201 6 O R D E R PER PRAMOD KUMAR AM : 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 3 RD JANUARY 2014 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF ASSESSMENT UND ER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2010 - 11. 2. GRIEVANCE OF THE ASSESSEE, IN SHORT, IS THAT THE LEARNED CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE OF RS 3,67,896, BEING 50% OF THE EXPENDITURE INCURRED BY THE ASSESSEE ON INTEREST PAYMENT, ON ADHOC BASIS. 3. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE OF RS 3,67,896, BEING 50% OF THE EXPENDITURE INCURRED BY THE ASSESSEE ON I NTEREST PAYM ENT, ON ADHOC BASIS AND ON THE GROUND THAT THE ASSESSEE HAS INVESTED HIS MONIES IN NON I.T.A. NO.: 1060/AHD/2014 ASSESSMENT YEAR: 2009 - 10 PAGE 2 OF 2 INTEREST EARNING ADVANCES AND THE INVESTMENTS WHICH HAVE NOT YIELDED ANY INCOME. THE CONTENTION THAT THE ASSESSE HAD SUFFICIENT NON INTEREST BEARING FUNDS TO MEET THESE NON INTEREST EARNING INVESTMENTS WAS NOT ACCEPTED. IN APPEAL, LEARNED CIT(A) HAS CONFIRMED THE DISALLOWANCE. THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL PO SITION. 5. WE FIND THAT WHILE THE ASSESSEE HAS INTEREST FREE FUNDS AVAILABLE AT RS 4.39 CRORES, THE ENTIRE INVESTMENTS OF THE ASSESSEE IN NON INCOME YIELDING ASSETS IS RS 2.41 CRORE. ON THESE FACTS, AND IN THE LIGHT OF THE SETTLED LEGAL POSITION AS CLARIFIED IN CIT VS RELIANCE UTILITIES & POWER LIMITED [(2009) 313 ITR 340 (BOM)], THE PRESUMPTION HAS TO BE THAT THE NON INCOME YIELDING INVESTMENTS HAVE BEEN MADE OUT OF THE INTEREST FREE FUNDS. IN THIS VIEW OF THE MATTER, THE AUTHORITIES BELOW WERE INDEED IN ERROR SO FAR AS THE IMPUGNED DISALLOWANCE IS CONCERNED. WE, ACCORDINGLY, DELETE THE IMPUGNED DISALLOWANCE OF RS 3,67,386. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 6. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON 29 TH DAY OF FEBRUARY, 2016. SD/ - SD/ - KUL BHARAT PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: THE 29 TH DAY OF FEBRUARY ,2016 . COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD