M/s Khandelia Mercantile LLP, Chandigarh V. DCIT, C-1(1), Chandigarh

ITA 1186/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6698 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 07-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDER KANTA SR DR
• Keywords: Business expenditure; Opportunity of being heard; Corroborative evidences; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH !', # BEFORE: SMT. DIVA SINGH, JUDICIAL MEMBER ./ ITA NO. 1186/CHD/2018 / ASSESSMENT YEAR : 2013-14 M/S KHANDELIA MERCANTILE LLP. PLOT NO. 23, INDL. AREA, PHASE-II, CHANDIGARH. VS THE DCIT, CIRCLE 1(1), CHANDIGARH. ./ PAN NO: AAJFK9941R / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI VINEET KRISHAN # ! ' / REVENUE BY : SMT. CHANDERKANTA, SR.DR $ % ! &/ DATE OF HEARING : 21.01.2019 '()* ! &/ D ATE OF PRONOUNCEMENT : 28.02.2019 $%/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILIN G THE CORRECTNESS OF THE ORDER DATED 19.06.2018 OF CIT(A)-4, LU DHIANA PERTAINING TO 2013-14 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THAT THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-4, LUDHIANA VIDE APPEAL NO. 37/ROT(333)/CHD/IT/CIT(A)-4/LDH/201 5-16 DATED 19.06.2018 IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ID. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING THE ACTION OF THE ID. ASSESSING OFFICER WHO HAD DISALLOWED INTEREST OF RS. 2,89,722/- UNDER SECTION 36(I)(III) OF THE INCOME TAX ACT ON THE GROUND THAT THE ASSESSEE HAD GIVEN INTEREST FREE ADVANCE OF RS. 24,14,351/- TO M/S PUMA REALORS PVT. LTD. WHEREAS THE ASSESSEE HAD GIVEN IT OUT OF INTEREST FREE FUNDS AND CAPITAL OF THE COMPANY. 3. THAT THE APPELLANT CRAVES TO ADD, AMEND OR ALTER AN Y GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL, WITH THE PERMISSION OF T HE HON'BLE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH. 2. AT THE TIME OF HEARING, NO ONE WAS PRESENT ON BEHALF O F THE ASSESSEE INITIALLY. HOWEVER, CONSIDERING THE ARGUMENTS AD VANCED BY THE LD. SR. DR WHO REFERRED TO THE ARGUMENTS OFFERED B Y THE ASSESSEE BEFORE THE CIT(A) , THE LD. AR MR. VINEET KRISHAN STOOD UP TO SAY THAT IN THE PRESENT APPEAL, HE HAS REPRESENTED THE ISSUE BEFORE THE CIT(A) AND ACCORDINGLY, THE APPEAL MAY BE ADJOURNED. IT WAS HIS SU BMISSION THAT ITA NO. 1186/CHD/2018 PAGE 2 OF 3 HE WOULD FILE THE POWER OF ATTORNEY IN THE COURSE OF DAY ITSELF. CONSIDERING THE RECORD AND THE IMPUGNED ORDER, IT WAS SE EN THAT THE ASSESSEE WAS REPRESENTED BY THE SAID COUNSEL AND AFTER HEARING THE DEPARTMENT IT WAS ALSO EVIDENT THAT THE MATTER MAY NEE D A REMAND. THE LD. AR SUBMITTED THAT ACCORDINGLY, HE WOULD NOT WANT TO SEEK TIME AND HIS PRAYER WAS THAT THE ISSUE OF MUTUALITY WAS ARGUE D BEFORE THE AO AND ALSO BEFORE THE CIT(A). FOR THE SAID PURPOSE, ATTE NTION WAS INVITED TO PARA 4.2 OF THE IMPUGNED ORDER. IT WAS HIS SUBM ISSION THAT THE ASSESSEE IN THE BELIEF THAT THE AMOUNTS HAVE BEEN G IVEN TO A SISTER CONCERN, REMAINED UNDER A BELIEF THAT IT WOULD AMOUNT TO A BUSINESS EXPENDITURE. THE CIT(A) IN PARA 4.2 HAS NOTED THAT NO SU PPORTING EVIDENCE WAS GIVEN. REFERRING TO THE RECORD, IT WAS SUBMIT TED THAT AMOUNTS HAD BEEN ADVANCED TO THE SISTER CONCERN FOR P URCHASE OF LAND AND SINCE THE ISSUES HAVE BEEN DECIDED WITHOUT REFERENCE TO RELEVANT FACTS, A PRAYER FOR REMAND, IT WAS SUBMITTED, MAY BE ALLOWED. 3. THE LD. SR.DR RELIED UPON THE ORDERS. THE SAID PRAYER WAS NOT OBJECTED TO BY HIM. 4. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE RECOR D. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IN THE YEAR UNDER CONSIDERATION IS SHOWN TO BE ENGAGED IN MANUFACTURING OF M USTARD OIL AND OIL CAKE AND THE ASSESSEE WAS REQUIRED TO EXPLAIN TH E INTEREST FREE ADVANCE GIVEN TO M/S PUMA REALTORS PVT. LTD. FOR THE ALLEG ED PURCHASE OF LAND. IT IS SEEN THAT THE SUPPORTING DOCUMENTS HAD NOT BEEN MADE AVAILABLE, HOWEVER THE ARGUMENTS REMAIN UNADDRESSED. ACCO RDINGLY, IN THE LIGHT OF THE SUBMISSIONS BEFORE THE BENCH, IT WAS DEEME D APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER BACK TO TH E FILE OF THE CIT(A) WITH A DIRECTION TO THE ASSESSEE TO MAKE FULL AND PR OPER COMPLIANCE AND PLACE NECESSARY SUPPORTING EVIDENCES BEFOR E THE SAID AUTHORITY IN ORDER TO ENABLE THE CIT(A) TO PASS AN ORDER IN ACCORDANCE WITH LAW. THE CIT(A) CONSIDERING THE PECULIAR FACTS SHALL ENTE RTAIN FRESH EVIDENCES AND PASS AN ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. THE ASSESSEE IN ITS OWN INTEREST IS ADVISED TO ENSURE FULLY AND PROPER PARTIC IPATION AND NOT ABUSE THE TRUST DEPOSED AS FAILING WHICH THE CIT(A) WOULD BE LIBERT Y TO ITA NO. 1186/CHD/2018 PAGE 3 OF 3 PASS AN ORDER ON THE BASIS OF MATERIAL AVAILABLE ON RECORD . SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28.02. 2019. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER ' ( / RAVI KUMAR, PS (HYDERABAD) (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. 2. / THE RESPONDENT 3. 3. $ / / CIT 4. 4. $ / ( )/ THE CIT(A) 5. -01 2 , & 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7% / GUARD FILE (+ $ / BY ORDER, 8 # / ASSISTANT REGISTRAR