Smt. Manjri Bhargava, Mohali V. DCIT, Mohali

ITA 1098/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63947 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 11-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gross profit estimation; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI H.L. KARWA, VP AND SHRI T.R. SOOD, A.M ITA NO. 1098/CHD/2011 ASSESSMENT YEAR : 2008-09 SMT. MANJRI BHARGAVA V. D.C.I.T. PROP. SILVER OAKS MEDICOS CIRCLE 6(1) C/O SILVER OAKS HOSPITAL MOHALI PHASE 9, MOHALI AAPPB 5561 I (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINEET KRISHAN RESPONDENT BY : SHRI AKHILESH GUPTA DATE OF HEARING : 30.08.2012 DATE OF PRONOUNCEMENT : 24.09.2012 O R D E R PER T.R.SOOD, A.M IN THIS APPEAL VARIOUS GROUNDS HAVE BEEN RAISED BY THE ASSESSEE OUT OF WHICH GROUND NO. 5 WAS NOT PRESSED, THEREFORE, SAME IS DISMISSED AS NOT PRESSED. OTHER EFFECTIVE GROUNDS ARE AS UNDER:- 2 THAT IN THE PRESENCE OF PROPERLY MAINTAINED BOOK S OF ACCOUNT AND EXPLANATION, THE LD. CIT(A) GRAVELLY ER RED IN SUSTAINING THE ADDITION OF RS. 15,37,789/- ON ACCOU NT OF SUPPRESSION OF SALES AND LOW GP RATE. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) GRAVELY ERRED IN SUSTAINING THE ADDITION OFR S. 4,82,120/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF SALARY. 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) GRAVELLY ERRED IN SUSTAINING THE ADDITION OF RS. 1,85,756/- ON ACCOUNT OF INTEREST ON ADVANCES/INVE STMENTS. 2. GROUND NO. 2 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THERE WAS SUBSTANTIAL FALL IN GP RATE IN THE MEDICI NE SHOP WHICH WAS BEING RUN AS SOLE PROPRIETARY CONCERN IN THE NA ME OF SILVER OAKS MEDICOS BY THE ASSESSEE. THEREFORE, THE ASSE SSEE WAS REQUIRED TO FURNISH THE DETAILS OF VARIOUS EXPENSES ALONG WITH REASONS FOR FALL IN GROSS PROFIT . IN RESPONSE IT WAS SUBMITTED THAT 2 THERE WAS FALL IN GROSS PROFIT RATE OF MEDICINES BE CAUSE RATES WERE REDUCED. EARLIER THE PATIENTS USED TO BUY THE MEDI CINES FROM OUTSIDE THE HOSPITAL AS THE OUTSIDE CHEMISTS WERE O FFERING DISCOUNTS BUT AFTER REDUCTION IN RATES THE SALES TU RN OVER WENT UP AND OVERALL GROSS PROFIT INCREASED THOUGH THE RAT E OF GROSS PROFIT DECREASED. THE ASSESSING OFFICER AFTER EXAMINING T HE SUBMISSIONS OBSERVED THAT COMMON PRACTICE IN MEDICINES BUSINES S WAS THAT MEDICINES WERE BEING SOLD AT MRPS. THE DISCOUNTS A RE OFFERED ONLY IN A VERY RARE SITUATION. THE SHOP OF THE ASSESSEE WAS LOCATED IN THE PREMISES OF THE SILVER OAKS MEDICOS AND WAS BEING M ANAGED BY THE EMPLOYEES. IT SEEMS THAT THE ASSESSING OFFICER HAS CONDUCTED CERTAIN ENQUIRIES AND IT W AS OBSERVED THAT INDEPEN DENT ENQUIRIES REVEAL THAT THESE EMPLOYEES WERE NOT AUTHORIZED TO OFFER ANY DISCOUNT. THESE EMPLOYEES HAD FURTHER STATED THAT NO MEDICINE WAS SOLD AT DISCOUNT. THEREFORE, THE CONTENTION OF THE ASSESSEE REGARDING DISCOUNT WERE NOT CORRECT AND THE ASSESSI NG OFFICER OBSERVED THAT HE WAS NOT SATISFIED WITH THE TRADING RESULTS. ACCORDINGLY HE WORKED OUT THE OVER ALL GP RATE FOR LAST THREE YEARS AND APPLIED THE SAME TO THE CURRENT YEAR BY CALCULA TING THE OVERALL GROSS PROFIT AS UNDER:- FINANCIAL YEAR 2005-06 22.00 FINANCIAL YEAR 2006-07 21.71 FINANCIAL YEAR 2007-08 15.60 AVERAGE GROSS PROFIT RATIO 19.77 BY APPLICATION OF ABOVE GP RATE THE GROSS PROFIT ON THE TURN OVER OF RS. 3,69,14,217/-WORKED OUT TO RS. 72,97,940/- W HEREAS THE ASSESSEE HAD SHOWN GROSS PROFIT OF RS. 57,60,151/ -. THE DIFFERENCE OF RS. 15,37,789/- WAS ADDED TO THE INCO ME OF THE ASSESSEE. 3. BEFORE THE LD. CIT(A), SIMILAR CONTENTIONS WERE RAISED AND IT 3 WAS EMPHASIZED THAT SALES TURN OVER HAS INCREASED B ECAUSE OF DISCOUNT OFFERED BY THE ASSESSEE. 4. THE LD. CIT(A) DID NOT FIND FORCE IN THE SUBMISS IONS AND OBSERVED THAT THEORY OF DISCOUNT WAS NOT CONVINCIN G BECAUSE THE SHOP WAS MANAGED BY THE EMPLOYEES AND IF THE BUSINE SS PREMISES WERE MANNED BY THE EMPLOYEES THEN DISCOUNTS ARE GE NERALLY NOT GIVEN BECAUSE IF THE EMPLOYEES ARE AUTHORIZED TO GI VE DISCOUNTS THEY WILL THEMSELVES POCKET SUCH DISCOUNTS BY TELLI NG THE OWNERS THAT THE DISCOUNTS WERE NOT GIVEN TO THE CUSTOMERS. FURTHER SILVER OAKS WAS A PRESTIGIOUS HOSPITAL AND VARIOUS FACILIT IES OF SURGERIES WERE AVAILABLE AND PATIENTS ARE ADMITTED FOR VARIOU S OTHER AILMENTS, IN ADDITION TO THE OPD. IN SUCH A SITUATION THE PA TIENTS WOULD BE IN A HURRY TO PURCHASE THE MEDICINES FROM NEAREST MEDI CAL SHOP AND THERE CANNOT BE CASE FOR THE DISCOUNT. ACCORDINGLY HE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMI TTED THAT GENERALLY OUTSIDE THE HOSPITALS VARIOUS CHEMISTS SH OPS ARE SET UP AND THEY GENERALLY OFFER DISCOUNT. THEREFORE, THE CUSTOMERS OF THE ASSESSEES HOSPITAL WERE GOING OUTSIDE TO BUY MEDIC INES AND IN ORDER TO ATTRACT MORE CUSTOMERS, THE ASSESSEE HAS A LSO STARTED OFFERING DISCOUNTS. IN THIS REGARD HE REFERRED TO SAMPLE INVOICES FILED AT PAGES 15 TO 22 WHERE THE DISCOUNTS @ 15% H AVE BEEN OFFERED. HE ALSO POINTED OUT THAT THE ASSESSING OF FICER HAS REFERRED TO VARIOUS ENQUIRES CONDUCTED BY HIM TO BUT SUCH EN QUIRIES WERE NEVER CONFRONTED TO THE ASSESSEE AND THEREFORE, SU CH ENQUIRIES CANNOT BE MADE BASIS FOR REJECTING THE TRADING RESU LTS OF THE ASSESSEE. 6. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SU BMITTED THAT IT IS A COMMON KNOWLEDGE THAT NO MEDICAL SHOP WOULD GI VE DISCOUNT TO ANY KIND OF PATIENTS AND THIS THEORY HAS BEEN USED BY THE ASSESSEE 4 ONLY TO REDUCE THE PROFITS. 7 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AND FIND SOME FORCE IN THE CONTENTIONS OF THE ASSESSEE. HOWEVER, WE DO NOT AGREE WITH THE SUBMISSIONS THAT ENQUIRIES CONDUCTED BY TH E ASSESSING OFFICER WERE NOT CONFRONTED TO THE ASSESSEE. BEFOR E THE LD. CIT(A) IN THE WRITTEN SUBMISSIONS IT HAD BEEN ADMITTED THA T SOME ENQUIRIES WERE CONDUCTED WHICH ARE NOT RELIABLE. THE LAST PA RA OF THE WRITTEN SUBMISSIONS EXTRACTED BY THE LD. CIT(A) READS AS UN DER:- THE ASSESSING OFFICER HAS ALSO RELIED UPON INDEPEN DENT ENQUIRY CONDUCTED BY THE DEPARTMENT AFTER 2.5 EARS OF CLOSE OF YEAR TO JUSTIFY ALTERATION IN THE GROSS PROFIT . OUT SUBMISSION IN THIS REGARD IS THAT DURING THE AFORESAID ENQUIRY MEDICINES OF MEAGER AM OUNT (LIKE RS. 25 OR RS. 100) WERE PURCHASED BUT DISCOUNTS ARE NORMALLY GIVEN EITHER ON PURCHASE OF MEDICINES RUNNING INTO THOUSANDS OR TO PATIENTS ADMITTED IN THE HOSPITAL WHOSE CUMULATIVE PURCHASES RUN INTO TH OUSANDS. THE ABOVE CLEARLY SHOWS THAT ENQUIRY MUST HAVE BEEN CONFRONTED TO THE ASSESSEE OTHERWISE HE WOULD HAVE NOT GIVEN THE REPLY. HOWEVER, AT THE SAME TIME THERE SEEMS TO BE SOME TR UTH IN THE THEORY OF DISCOUNT BECAUSE THE SALES HAVE INCREASED BY 335% AND 222% AS COMPARED TO FINANCIAL YEAR 2005-06 AND 2006 -07. OVERALL GROSS PROFIT HAS INCREASED THOUGH THE RATES HAVE FA LLEN. IN THESE CIRCUMSTANCES NORMALLY WE WOULD REMIT THE MATTER BA CK TO THE FILE OF ASSESSING OFFICER FOR FRESH ENQUIRIES AND BUT IT WA S STATED DURING THE HEARING THAT THE BUSINESS HAD ALREADY BEEN CLO SED, THEREFORE, KEEPING THE OVER ALL CIRCUMSTANCES OF THE CASE AND THE UNIQUE FACTS OF THE CASE, WE ARE OF THE VIEW THAT REASONABLE ADD ITION SHOULD BE MADE TO THE GROSS PROFIT . AFTER CONSIDERING ALL THE FACTS WE PROPOSED THE ADDITION TO RS. 4.00 LAKHS WHICH WAS A GREED TO BY THE LD. COUNSEL OF THE ASSESSEE. ACCORDINGLY WE SET A SIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO MAKE AN ADDITION OF RS. 4.00 LAKHS TOWARDS LOWER GROSS PROFIT . 8 GROUND NO. 3 DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD CLA IMED SALARY AMOUNTING TO RS. 9,64,241/- ON ACCOUNT OF SALARY. TE DETAILS OF THE 5 EMPLOYEES TO WHOM THE SALARY WAS PAID WERE FURNISHE D AND IT WAS STATED THAT OUT OF 20 EMPLOYEES 14 WERE SALE PERSON S. IT HAD ALSO BEEN STATED THAT MINIMUM THREE SALES EMPLOYEES WERE WORKING PER SHIFT AND ONE SALESMAN WAS KEPT AS RESERVE. THE ASS ESSING OFFICER OBSERVED THAT AS PER THIS CALCULATION THERE WOULD B E ONLY 10 SALESMEN WHEREAS THE ASSESSEE HAD EMPLOYED 14 SALES MEN. THE ASSESSING OFFICER HAD MADE FURTHER ENQUIRY THROUGH WHICH IT WAS FOUND THAT IN THE SAME PREMISES ANOTHER MEDICAL SHO P NAMED M/S ANVIT ENTERPRISES WAS ALSO RUNNING HAVING SAME TELE PHONE NUMBERS THAT ARE BEING USED BY SILVER OAKS MEDICOS. THEREF ORE, IT CAN NOT BE RULED OUT THAT SOME PEOPLE WERE WORKING THERE. ACCORDINGLY HE ESTIMATED THE SALARY AT 50% AND DISALLOWED THE SAME TO RS. 4,82,120/-. 9 BEFORE THE LD. CIT(A) IT WAS MAINLY SUBMITTED THA T ALL PARTICULARS REGARDING SALARY HAVE BEEN FURNISHED. IT WAS FURTHER CONTENDED THAT EVEN IF THREE PERSONS WERE ADDITIONA L PERSONS THAT WOULD NOT JUSTIFY DISALLOWANCE OF 50% OF SALARY EXP ENSES. IT WAS ALSO CONTENDED THAT ENQUIRY WAS MADE BY THE ASSESSI NG OFFICER AFTER 2 AND HALF YEARS AND IN FACT BY THAT TIME, TH E PRESENT SHOP ITSELF HAD BEEN RENAMED AS ANVIT ENTERPRISES AND AT NO POINT OF TIMES THERE WERE TWO SHOPS. 10 THE LD. CIT(A) DID NOT FIND FORCE IN THE SUBMISS IONS AND CONFIRMED THE ACTION OF THE ASSESSING OFFICER VIDE PARA 4.3 AND 4.3.1 AS UNDER:- 4.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. C OUNSEL OF THE ASSESSEE FOR THE APPELLANT. ALONGWITH THE SUBM ISSIONS, THE APPELLANT HAS ALSO SUBMITTED A CHART GIVING THE DETAILS OF SALARY PAID TO VARIOUS SALES PERSONS. A PERUSAL OF THE LIST OF THE SALES PERSONS REVEALS THAT SOME SALES PERSONS H AVE LEFT IN THE MIDDLE OF THE YEAR, WHEREAS SOME OTHERS HAVE JO INED DURING THE YEAR, BUT THE APPELLANT HAS NOT PRODUCED ANY ATTENDANCE REGISTER OR ANY OTHER PRIMARY DOCUMENT T O PROVE THE ACTUAL NUMBER OF SALES PERSONS WORKING IN THE S HOP AND AMOUNT OF SALARY PAID TO THEM. THE CONTENTION OF T HE APPELLANT THAT THE ENQUIRIES HAD BEEN MADE BY THE ASSESSING O FFICER AFTER MORE THAN TWO YEARS AND THE SAME SHOP HAD BEE N 6 RENAMED AS M/S ANVIT ENTERPRISES MAY BE CORRECT BUT IT DOES NOT EXPLAIN THE GENUINENESS AND JUSTIFICATION OF TH E SALARY PAID TO SO MANY EMPLOYEES FOR RUNNING A SMALL MEDICAL SH OP. 4.3.1 IT IS ALSO SEEN FROM THE SALARY DETAILS GIVE N BY THE APPELLANT THAT ONE OF THE SALES PERSONS ATTI SHARMA WAS BEING PAID SALARY OF RS. 6500/- FOR FIRST THREE MONTHS, W HICH WAS INCREASED TO RS. 12,000/- IN JULY I.E. JUST AFTER T HREE MONTHS AND TO RS. 16,500/- IN NOVEMBER I.E. AFTER FOUR MON THS, WHICH IS NOT POSSIBLE BECAUSE NO EMPLOYER GIVES SUCH A HI GH JUMP THAT THE SALARY OF AN EMPLOYEE BECOMES MORE THAN TH REE TIMES IN ONE YEAR. HENCE, THE SALARY DETAILS GIVEN ARE N OT REALISTIC /GENUINE. IN VIEW OF THIS DISCUSSION, IT IS HELD T HAT ASSESSING OFFICER WAS RIGHT IN DISALLOWING 50% OF SALARY EXPE NSES AND THE ADDITION MADE ON THIS ACCOUNT IS CONFIRMED. GR OUND OF APPEAL NO. 3 IS DISMISSED. 11 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE REITE RATED SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AND F URTHER SUBMITTED THAT THE ASSESSEE WAS NOT CONFRONTED WITH THE ENQUIRIES. THEREFORE, THE ADDITION WAS NOT JUSTIFIED. 12 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE ST RONGLY RELIED ON THE ORDER OF THE LD. CIT(A). 13 AFTER HEARING BOTH THE PARTIES WE FIND BEFORE TH E LD. CIT(A) THE ASSESSEE HAS HERSELF ADMITTED THAT AT BEST THE SALA RY OF THREE EMPLOYEES COULD HAVE BEEN DISALLOWED. THIS CLEARLY SHOWS THAT CLAIM OF THE ASSESSEE FOR SALARY IS NOT TOTALLY COR RECT. AS STATED EARLIER SINCE THE BUSINESS OF THESE SHOPS HAS AS B EEN CLOSED, THEREFORE, NO PURPOSE WOULD BE SERVED IF THE MATTER IS REMITTED FOR FRESH ENQUIRIES. IN THESE CIRCUMSTANCES, WE PROPOS E TO ESTIMATE THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN RESPE CT OF SALARY AND AFTER CONSIDERING THE OVERALL CIRCUMSTANCES, TH E ADDITION WAS PROPOSED AT RS. 1.00 LAKH WHICH HAS BEEN ACCEPTED B Y THE LD. COUNSEL OF THE ASSESSEE. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO MAKE THE ADDITION OF RS. 1.00 LAKH IN RESPECT OF SALARY. 14 GROUND NO. 4 AFTER HEARING BOTH THE PARTIES WE FIND THAT THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD MAD E CERTAIN INVESTMENTS IN PURCHASE OF IMPACT PROJECTS PVT LTD, M/S SILVER OAKS 7 FOUNDATION AND M/S RELIANT INFRASTRUCTURE AMOUNTING TO RS. 5,62,368/- RS. 2.00 LAKH AND RS. 12,40,300/- RESPE CTIVELY. THE ASSESSEE HAD NOT CHARGED ANY INTEREST ON THE ABOVE ADVANCES WHEREAS THE ASSESSEE HAD PAID INTEREST AMOUNTING TO RS. 7,29,148/- TO THE BANK. THEREFORE, IT WAS HELD BY THE ASSESS ING OFFICER THAT THE ASSESSEE HAD DIVERTED THE INTEREST BEARING FUND S TOWARDS NON- BUSINESS PURPOSES AND ACCORDINGLY PROPORTIONATE IN TEREST CALCULATED @ 11% AMOUNTING TO RS. 1,85,756/- WAS DI SALLOWED. 15 THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER IN VIEW OF THE DECISION OF HON'BLE PUNJAB & HARYANA HI GH COURT IN CIT V. ABHISHEK INDUSTRIES, 286 ITR 1. 16. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBM ITTED THAT ADVANCE IS SAME IN THE PRESENT YEAR AND THE TRIBUNA L HAS REMITTED THIS MATTER TO THE FILE OF ASSESSING OFFICER FOR AS SESSMENT YEAR 2007-08. HE FURTHER SUBMITTED THAT ALL INTEREST BEA RING FUNDS HAD ALREADY BEEN UTILIZED FOR THE PROJECT THEREFORE, IT CAN NOT BE SAID THAT INTEREST BEARING FUNDS HAVE BEEN GIVEN FOR INT EREST FREE ADVANCES. 17 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE R ELIED ON THE DECISION OF ABHISHEK INDUSTRIES (SUPRA). 18 AFTER HEARING BOTH THE PARTIES WE FIND THAT IN A SSESSEES OWN CASE IDENTICAL ISSUE CAME UP FOR CONSIDERATION IN A SSESSMENT YEAR 2007-08 IN ITA NO. 1097/CHD/2011 AND THE SAME WAS A DJUDICATED VIDE PARAS 6 & 7 WHICH ARE AS UNDER:- 6 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI VI NEET KRISHAN, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION DID N OT ADVANCE MONEY TO M/S RELIANCE INFRASTRUCTURE, M/S IMPACT PR OJECT PVT LTD. AND M/S SILVER OAK FOUNDATION, OUT OF TERM LOA N TAKEN FROM THE COOPERATIVE BANK ON WHICH INTEREST AMOUNTI NG TO RS. 5,45,718/- WAS PAID. ACCORDING TO SHRI VINEET KRI SHAN, THE LD. COUNSEL OF THE ASSESSEE, THE TERM LOAN WAS UTIL IZED BY THE ASSESSEE FOR THE PURPOSES FOR WHICH THE SAME WAS TA KEN BY THE ASSESSEE. NO DISALLOWANCE OF INTEREST CAN BE M ADE WHEN THE ADVANCE WAS NOT OUT OF INTEREST BEARING LOAN BU T OUT OF 8 SAVING AND INCOME OF THE ASSESSEE. SHRI VINEET KRI SHAN, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE JUDG MENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. MARK AUTO INDUSTRIES LTD. REPORTED IN (2011) 57 DTR (PH) 113: (2011) 201 TAXMAN 137 IS SQUARELY APPLICABLE TO THE CASE OF THE ASSESSEE. HE THEREFORE, SUBMITTED THAT NO DIS ALLOWANCE OF INTEREST OF RS. 80,894/- IS REQUIRED TO THE MADE . 7 AFTER PERUSING THE ENTIRE MATERIAL AVAILABLE ON R ECORD, WE ARE OF THE VIEW THAT THE AUTHORITIES BELOW HAVE NOT CORRECTLY APPRECIATED THE FACTS OF THE PRESENT CASE. THE MAI N CONTENTION OF THE ASSESSEE IS THAT SHE DID NOT ADVA NCED MONEY TO ABOVE THREE CONCERTS OUT OF TERM LOAN TAKEN FROM THE COOPERATIVE BANK. THE TERM LOAN WAS UTILIZED BY TH E ASSESSEE FOR THE PURPOSE FOR WHICH THE SAME WAS TAKEN BY THE ASSESSEE. IN OUR OPINION, NO DISALLOWANCE OF INTER EST CAN BE MADE WHEN THE ADVANCES WAS NOT OUT OF INTEREST BEAR ING LOAN BUT WAS OUT OF SAVINGS AND INCOME OF THE ASSESSEE. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND REMAND THE SAME TO ASSESSING OFFICER WITH A DIR ECTION TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW KEEP ING IN VIEW THE ARGUMENTS ADVANCED BEFORE US ON BEHALF OF THE A SSESSEE AND THE OBSERVATIONS GIVEN HERE-IN-ABOVE. THE ASSE SSING OFFICER SHOULD GIVE AN OPPORTUNITY OF BEING HEARD T O THE ASSESSEE. FOR STATISTICAL PURPOSES, THIS GROUND OF APPEAL IS ALLOWED. THEREFORE, IN THE LIGHT OF ABOVE IN THIS YEAR ALSO WE REMIT BACK THE ISSUE TO THE FILE OF ASSESSING OFFICER FOR RE-EXAMI NATION IN THE LIGHT OF DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN CIT V. ABHISHEK INDUSTRIES (SUPRA) AND CIT V. MARK AUTO IN DUSTRIES LTD (SUPRA). 20 IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 24.09.2012 SD/- SD/- (H.L. KARWA) (T.R. SOOD) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 24 .09. 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 9