Income Tax Officer, Ward-2(1), Hyderabad V. KLR Industries Limited, Hyderabad

ITA 1155/Hyd/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6033 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-04-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 06-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Assessee Lawyers: T CHAITANYA KUMAR

Judgement Text

ITA NOS 1155 AND 1156 OF 2017 K LR INDUSTRIES LTD HYDERABAD. PAGE 1 OF 2 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NOS.1155 & 1156/HYD/2017 (ASSESSMENT YEARS: 2012-13 & 2013-14) INCOME TAX OFFICER WARD 2(1) HYDERABAD VS KLR INDUSTRIES LIMITED HYDERABAD PAN: AABCK 7920 K (APPELLANT) (RESPONDENT) FOR REVENUE : SMT. U. MINI CHANDRAN, DR FOR ASSESSEE : SHRI T. CHAITANYA KUMAR O R D E R PER SMT. P. MADHAVI DEVI, J.M. BOTH ARE REVENUES APPEALS FOR THE A.YS 2012-13 & 2013-14 RESPECTIVELY AGAINST THE COMMON AND CONSOLI DATED ORDER OF THE CIT (A)-9, HYDERABAD, DATED 27.02.2017. 2. IN BOTH THE APPEALS, EXCEPT FOR THE QUANTUM, GRO UNDS OF APPEALS RAISED BY THE REVENUE ARE THE SAME I.E. AGAINST THE DELETION BY THE CIT (A) OF THE DISALLOWANCE OF INTE REST ON INTEREST FREE ADVANCES GIVEN BY THE AO TO ITS SISTER CONCERN MADE BY THE AO U/S 36(1)(III) OF THE ACT. 3. ON GOING THROUGH THE ORDER OF THE CIT (A), WE FI ND THAT THE CIT (A) OBSERVED AS UNDER: 4.1. DISALLOWANCE OF INTEREST U/S 36(1)(III) DATE OF HEARING: 05.04 . 201 8 DATE OF PRONOUNCEMENT: 05.04.2018 ITA NOS 1155 AND 1156 OF 2017 K LR INDUSTRIES LTD HYDERABAD. PAGE 2 OF 2 I HAVE CONSIDERED THE ARGUMENTS OF THE ASSESSEE AND HAVE GONE THROUGH THE HON'BLE ITAT DECISION RELIED UPON BY THE ASSESSEE IN ITS OWN CASE. IN VIEW OF THE HON'BLE IT AT DECISION AND IN VIEW OF THE ASSESSMENT ORDER PASSED BY THE ITO WARD-2(1) FOR A.Y 2007-08 IN CONSEQUENCE OF ITA T ORDER, I HOLD THAT THE MATTER NEEDS FRESH CONSIDERATION BY THE AO FOR THIS YEAR ALSO. ON VERIFICATION OF BALANCE SHEET IT IS SEEN THAT EVEN DURING YEAR UNDER CONSIDERATION THE RESERVES A ND SURPLUS ARE MORE THAN THE AMOUNTS GIVEN TO SISTER C ONCERN. HOWEVER, AS THIS ASPECT IS NOT VERIFIED BY THE AO, THE MATTER IS RESTORED TO THE FILE OF THE AO FOR RECONSIDERATI ON AND EXAMINATION OF THE FACTS AND DECISION ACCORDINGLY K EEPING IN VIEW THE HON'BLE ITAT DIRECTIONS. IF THE RESERVES A ND SURPLUS ARE MORE THAN THE LOANS GIVEN, NATURAL PRESUMPTION WOULD BE THAT THE AMOUNTS ARE GIVEN OUT OF RESERVES AND SURP LUS AND NO PROPORTIONATE DISALLOWANCE OF INTEREST WOULD BE MADE. THEREFORE, THE MATTER IS RESTORED TO THE FILE OF TH E AO FOR RECONSIDERATION OF THE DISALLOWANCE OF INTEREST ACC ORDINGLY. IN THE RESULT, THE GROUNDS RELATED TO THIS ADDITION AR E TREATED AS PARTLY ALLOWED. 4. AS SEEN FROM THE ABOVE, THE CIT (A) HAS NOT GRAN TED RELIEF TO THE ASSESSEE BUT HAS RESTORED THE MATTER TO THE FILE OF THE AO FOR RECONSIDERATION AND EXAMINATION OF THE FACTS . THEREFORE, THERE CAN BE NO GRIEVANCE TO THE REVENUE. THEREFORE , THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH APRIL, 2018. SD/- SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 5 TH APRIL 2018. VINODAN/SPS COPY TO: 1 ITO WARD 2(1), 5 TH FLOOR, ROOM NO.506, SIGNATURE TOWERS, OPP: BOTANICAL GARDENS, KONDAPUR, HYDERABAD 500084 2 KLR INDUSTRIES LTD, SURVEY NO.221/1, CHERLAPALLY ROAD, ECIL HYDERABAD 500062 3 CIT (A)-9 HYDERABAD 4 PR. CIT 2 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUAR D FILE BY ORDER