M/s Himachal Salt Suppliers, Manimajra V. ITO, W-3(4), Chandigarh

ITA 1106/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 5983 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 28-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Business expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 1106/CHD/2018 / ASSESSMENT YEAR : 2012-13 M/S HIMACHAL SALT SUPPLIERS, SCF NO. 427, 2 ND FLOOR, MOTOR MARKET, MANIMAJRA VS. THE ITO, WARD 3(4), CHANDIGARH ./PAN NO: AAAFH4968E / APPELLANT /RESPONDENT ! /ASSESSEE BY : SH. VINEET KRISHAN, ADVOCATE ' ! / REVENUE BY : SH. MANJIT SINGH, SR. DR # $ % /DATE OF HEARING : 02.01.2019 &'() % / DATE OF PRONOUNCEMENT : 02.01.2019 / ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 19.6.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. IN THIS APPEAL, THE ASSESSEE HAS AGITATED THE AD DITION OF RS. 2,68,800/- ON ACCOUNT OF DISALLOWANCE OF INTEREST EXPENDITURE. THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE HAD ADVANCED RS. 30 LACS AS LOAN TO CERTAIN PARTIES WITHOUT CHAR GING OF ANY INTEREST. HOWEVER, ON THE OTHER HAND, THE ASSESSEE HAD INCURR ED INTEREST EXPENDITURE AND CLAIMED THE SAME AS BUSINESS EXPENDITURE. THE A SSESSING OFFICER, THEREFORE, NOTICED THAT ASSESSEE HAS USED INTEREST BEARING FUNDS FOR NON- ITA NO. 1106-CHD-2018- HIMACHAL SALT SUPPLIERS, MANIMAJRA 2 BUSINESS PURPOSES. HE, THEREFORE, MADE THE IMPUGNE D NOTIONAL DISALLOWANCE OF INTEREST EXPENDITURE AND ADDED THE SAME INTO THE TAXABLE INCOME OF THE ASSESSEE. THE ASSESSEE UNSUCCESSFULLY CONTESTED THE ABOVE ADDITION BEFORE THE CIT(A). 3. BEFORE THIS BENCH, THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ORDERS OF THE LOWER AUTHORITIES, WHEREIN, IT IS FOUND THAT THE ASSESSEE HAD TAKEN A PLEA THAT THE ASSESSEE HAD ALSO RECEIVED CERTAIN I NTEREST FREE ADVANCES FROM SIX PARTIES TOTALLING OF RS. 32 LACS. THE PLEA OF T HE ASSESSEE HAS BEEN THAT THE ASSESSEE HAS USED THOSE INTEREST FREE ADVANCES FOR MAKING THE FURTHER ADVANCES TO THE PARTIES. THE LD. COUNSEL HAS ALSO P LACED RELIANCE ON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT OF PUNJAB AND HARYANA IN THE CASE OF CIT VS. KAPSONS ASSOCIATES (2016) 381 ITR 204 (P&H ) IN THIS RESPECT, WHEREIN, IT HAS BEEN HELD THAT IF THE ASSESSEE SHOWS THAT HE HAS THE AVAILABILITY OF OWN FUNDS / INTEREST FREE FUNDS TO MEET THE INVESTMENTS / INTEREST FREE ADVANCES, THEN THE PRESUMPTION WILL B E THAT THE ASSESSEE HAS USED HIS OWN FUNDS / INTEREST FREE FUNDS AVAILABLE WITH HIM FOR MAKING THE INVESTMENTS / LOANS. THE ASSESSEE HAS FURNISHED THE DETAILS BEFORE THE LOWER AUTHORITIES OF THE AVAILABILITY OF THE INTEREST FRE E AMOUNT OF RS. 32 LACS WHICH WAS SUFFICIENT TO MEET THE INTEREST FREE ADVA NCES OF RS. 30 LACS. IN VIEW OF THIS, ABOVE ADDITION MADE BY THE ASSESSING OFFICER U/S 36(1)(III) OF THE ACT IS THEREFORE, ORDERED TO BE DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ITA NO. 1106-CHD-2018- HIMACHAL SALT SUPPLIERS, MANIMAJRA 3 ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT IMM EDIATELY ON COMPLETION OF HEARING. SD/- ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 02.1.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR