DCIT Corporate Circle 1, Coimbatore V. Rajasaayee Fine Linen Pvt. Ltd., Coimbatore

ITA 1163/CHNY/2018

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5622 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 05-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , , ! BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NOS. 1162 & 1163/CHNY/2018 / ASSESSMENT YEARS : 2013-14 & 2014-15 DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE -1, 63-A, RACE COURSE ROAD, COIMBATORE. VS. M/S. RAJASAAYEE FINE LINEN PVT. LTD., 125, PAPPAMPATTI ROAD, CHINTHAMANIPUDUR, COIMBATORE 641 103. [PAN: AACCR 7869P] ( / APPELLANT) ( '#% /RESPONDENT ) REVENUE BY : SHRI. AR V. SREENIVASAN, JCIT ASSESSEE BY : NONE - /DATE OF HEARING : 19.11.2018 - /DATE OF PRONOUNCEMENT : 20.11.2018 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE REVENUE FILED THESE APPEALS AGAINST THE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS)-1, COIMBATORE IN ITA NOS. 74 & 213/2016-17 DATED 22.01.2018 FOR ASSESSMENT YEARS 2 013-14 & 2014- 15, RESPECTIVELY. :-2-: ITA NOS. 1162 & 1163/CHNY/2018 2. M/S. RAJASAYEE FINE LINEN PVT. LTD, THE ASSESSEE , IS ENGAGED IN THE BUSINESS OF TEXTILES, HANDLOOMS & POWER LOOMS. WHILE MAKING THE ASSESSMENTS FOR ASSESSMENT YEARS 2013-14 & 2014-15, THE ASSESSING OFFICER, INTER ALIA, DISALLOWED THE INTEREST ADVANC ED OUT OF ITS INTEREST BEARING LOANS TO M/S. COIMBATORE POPULAR SPINNING M ILLS LTD. AGGRIEVED, THE ASSESSEE FILED APPEALS BEFORE THE LD. CIT(A). THE LD. CIT(A) ALLOWED THE APPEALS. 3. AGGRIEVED AGAINST THOSE ORDERS OF THE LD. CIT(A) , THE REVENUE FILED THESE APPEALS. THE LD. DR INVITING OUT ATTEN TION TO THE ORDER OF THIS TRIBUNAL DECISION IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2012-13 IN ITA NO. 1034/CHNY/2017 DATED 15.02.2018 SUBMITTED THAT THE ISSUE INVOLVED IN THESE APPEALS WERE SUBJECT MA TTER THERE AD IT WAS REMITTED BACK TO THE AO FOR A FRESH EXAMINATION. F URTHER, HE INVITED OUT ATTENTION TO THE ASSESSMENT ORDER AND SUBMITTED THA T THE COMPANY HAD STOPPED ITS OPERATION IN OCTOBER, 2012. THOUGH, TH E LD. CIT(A) DISMISSED THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13, IN SPITE OF THE SAME FACTS AND CIRCUMSTANCES, HE ALLOWED THE APPEALS FOR ASSESSMENT YEARS 2013-14 & 2014-15. THE LD. DR ALS O PLEADED THAT SINCE THE ASSESSEE IS NOT ENGAGED IN THE BUSINESS F ROM ASSESSMENT YEAR 2013-14 ONWARDS, THE LD. CIT(A) ERRED IN HIS DECISI ON AND HENCE THE ORDERS OF THE LD. CIT(A) MAY BE SET ASIDE AND THE I SSUES BE REMITTED :-3-: ITA NOS. 1162 & 1163/CHNY/2018 BACK TO THE AO AS DECIDED IN THE ASSESSEES OWN CAS E FOR ASSESSMENT YEAR 2012-13. NONE WAS PRESENT FOR ASSESSEE. 4. WE HEARD THE LD. DR AND GONE THROUGH THE RELEVAN T MATERIAL. WE FIND MERIT IN THE SUBMISSION OF THE LD. DR, SUPR A. THE RELEVANT PORTION OF THE ORDER OF THIS TRIBUNALS DECISION IN ITA NO. 1034/CHNY/2017, SUPRA, IS EXTRACTED AS UNDER: 5. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH RELEVANT MATERIAL. FROM THE AGREEMENT COPIES, IT IS SEEN M/S . COIMBATORE POPULAR SPINNING MILLS LIMITED (THE MILLS') IS REPRESENTED BY ITS MD, SHRI G. VENKATARAMACHANDRAN AND THE ASSESSEE COMPANY M/S. R AJASAAYEE FINE LINEN PVT. LTD ('THE JOB PARTY') IS REPRESENTED BY ITS DIRECTOR SMT. LAKSHMI RAMACHANDRAN, W/O. SRI G. VENKATARAMACHANDRAN. FROM THE OTHER MATERIALS IN THE PAPER BOOK, IT IS SEEN THAT SHRI G. VENKAT ARAMACHANDRAN IS HOLDING 20.01% SHARES IN THE ASSESSEE COMPANY AND 11.35% S HARES IN M/S. COIMBATORE POPULAR SPINNING MILLS LIMITED. SMT. LAKS HMI RAMACHANDRAN IS HOLDING 20.01% SHARES AND M/S. RAJASAYEE FINE LINE N PVT. LTD IS HOLDING 6.16% SHARESIN M/S. COIMBATORE POPULAR SPINNING MIL LS LIMITED, RESPECTIVELY . IT APPEARS OTHER FAMILY MEMBERS ALSO HOLD SUBSTANTIA L INTEREST. IT IS ALSO SEEN FROM THE P& L ACCOUNT OF THE ASSESSEE COMPANY THAT IT S REVENUE FROM THE OPERATIONS FELL FROM RS. 25,51,83,661/- FROM THE EARLI ER YEAR TO RS 4,89,59,447/- IN THE CURRENT YEAR AND ITS FINANCE CO ST ROSE FROM RS. 43,11,280/- IN THE EARLIER TO RS 2,84,13,585/- IN T HE CURRENT YEAR. IT IS ALSO SEEN FROM THE P& L ACCOUNT OF THE M/S. COIMBATORE PO PULAR SPINNING MILLS LIMITED THAT ITS REVENUE FROM THE OPERATIONS FELL FRO M RS. 66,248,485/- FROM THE EARLIER YEAR TO RS 67,88,983/- IN THE CURRENT Y EAR AND ITS FINANCE COST FELL FROM RS.1,1,54,791/- IN THE EARLIER TO RS 22,31,046/ -IN THE CURRENT YEAR. ALTHOUGH, THERE IS NO AGREEMENT FOR PAYMENT OF ANY A DVANCE AS HELD BY THE CIT (A), FROM THE ORDERS OF THE LOWER AUTHORITIES, I T APPEARS THAT THE RELEVANT FACTS AND CIRCUMSTANCES REQUIRED FOR DECIDING THE C OMMERCIAL EXPEDIENCY OR OTHERWISE , DIVERSION OF INTEREST BEARING FUNDS OR O THERWISE HAVE NOT BEEN PROPERLY EXAMINED. -------------------------------- -------------------------------------- --------------------------------------------------- --------------- :-4-: ITA NOS. 1162 & 1163/CHNY/2018 IN THE FACTS AND CIRCUMSTANCES, WE DEEM IT FIT TO RE MIT THESE ISSUES BACK TO THE AO FOR A FRESH EXAMINATION. THE ASSESSEE SHALL PLACE ALL THE MATERIALS IN ITS SUPPORT BEFORE THE AO AND COMPLY TO THE AOS REQ UIREMENTS AS PER LAW. THE A O IS FREE TO CONDUCT APPROPRIATE ENQUIRY AS D EEMED FIT, BUT HE SHALL FURNISH ADEQUATE OPPORTUNITY TO THE ASSESSEE ON THE MATERIAL ETC TO BE USED AGAINST IT AND DECIDE THE MATTER IN ACCORDANCE WITH LAW . 6. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ON THE FACTS AND CIRCUMSTANCES, SUPRA, AND IN ACCOR DANCE WITH THE ABOVE DECISION, WE SET ASIDE THE ORDERS OF THE LD. CIT(A) AND REMIT THESE ISSUES BACK TO THE AO FOR A FRESH EXAMINATION ON THE LINES IN WHICH THIS TRIBUNAL HAS DECIDED THE ASSESSEES CASE FOR ASSESSMENT YEAR 2012-13, SUPRA. THE REVENUES APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE REVENUES APPEALS ARE TREATED AS ALLOWED AS STATISTICAL PURPOSES. ORDER PRONOUNCED ON TUESDAY, THE 20 TH DAY OF NOVEMBER, 2018 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI, 2 /DATED: 20 TH NOVEMBER, 2018 JPV -'3454 /COPY TO: 1. % / APPELLANT 2. '#% /RESPONDENT 3. 7 ) ( /CIT(A) 4. 7 /CIT 5. 4' /DR 6. : /GF