ACIT, CHITTORGARH V. M/s. C.K. Motors, CHITTORGARH

ITA 122/JODH/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82966 (ITAT-JODHPUR)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 27-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Corroborative evidences; Notional interest
• Section: 43B; 40A(3); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA , JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 1 22 / JU/ 20 1 4 ASSESSMENT YEAR: 200 9 - 1 0 THE A.C.I.T VS. M/S C.K. MOTORS CIRCLE 10 - A, OLD INDUSTRIAL AREA CHITTORGARH BYE PASS ROAD, CHITTORGARH PAN NO. AADFC 8845 L (APPELLANT) (RESPONDENT) A SSESSEE B Y : SHRI SANDEEP JHANWAR DEPARTMENT B Y : SHRI JAI SINGH , DR DATE OF H EARING : 2 2 . 0 9 .201 4 D ATE OF PRONOUNCEMENT : 25 . 0 9 . 201 4 ORDER PER HARI OM MARATHA , J .M. TH IS APPEAL BY THE REVENUE IS DIRECTED A GAINST THE ORDER OF THE CIT (A) , UDAIPUR DATED 06 . 1 2 .20 1 3 PERTAINING TO A.Y 20 09 - 10 . 2 2. GROUND N O. 1 IS AGAINST THE DELETION OF DISALLOWANCE OF RS. 12,28,478/ - MADE BY APPLYING PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME - TAX ACT, 1961 ['THE ACT' FOR SHORT] . 2.1 THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS MADE CERTAIN PAYMENTS FOR REPAIRING WORK OVER THE MONTHS DURING THE YEAR UNDER C ONSIDERATION HOWEVER, TAX WAS DEDUCTED ONLY AT THE END OF THE YEAR AND DEPOSITED AFTER THE YEAR END BUT BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. THE AO FOUND THAT AS PER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT APPLICABLE FOR THE YEAR UNDER CONSIDERATION, THE EXPENDITURE WHICH WERE PAYABLE/PAID DURING THE YEAR BEFORE THE MONTH OF MARCH, 2009 (I.E. FROM APRIL, 2008 TO FEB, 2009) THE TAX WAS REQUIRED TO BE DEDUCTED AND DEPOSITED IN THE RESPECTIVE SUCCEEDING MONTH AS PER THE PROVISION OF CHAPTE R XVII - B OTHERWISE THE EXPENDITURE DOES NOT QUALIFY FOR DEDUCTION DURING THE YEAR UNDER CONSIDERATION. ONLY FOR THE PAYMENTS/CREDITS IN THE MONTH OF MARCH, 2009, THE ASSESSEE COULD HAVE DEPOSITED THE TDS BY THE DUE DATE OF FILING RETURN U/S 139(1). THE AO ACCORDINGLY DISALLOWED THE ENTIRE EXPENDITURE OF RS. 12,28,478/ - THOUGH THE TAX WAS DEDUCTED ON 31.03.2009 AND DEPOSITED IN THE MONTH OF MAY/JUNE, 2009 IN RESPECT OF THESE PAYMENTS. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). 3 2.2 AFTER CON SIDERING THE SUBMISSIONS OF THE ASSESSEE, THE L D. CIT (A) HAS FOUND THE CLAIM OF THE ASSESSEE ALLOWABLE DURING THE YEAR UNDER CONSIDERATION ITSELF IN VIEW OF AMENDMENT IN SECTION 40 (A)(IA) MADE BY THE FINANCE ACT, 2010. HE RELIED ON JUDGEMENTS OF CALCUTTA H IGH COURT IN THE CASE OF CIT VS. VIRGIN CREATION AND JUDGEMENT OF ITAT, BANGALORE IN THE CASE OF ACIT VS. M. K. GURUMURTHY, (2012) 32CCH49 AND S. S. WARD VS. ADDL. CIT (2012) 19 ITR (TRIB) 35. HE ALSO RELIED ON JUDGEMENT OF ITAT, JAIPUR BENCH IN THE CASE O F JAIPUR VIDYUT VITRAN NIGAM LTD. VS. DCIT (2009) - 123 TTH 88 (JP) AND SPECIAL BENCH VISHAKHAPATNAM IN CASE OF MERLYN SHIPPING & TRANSPORT VS. ADDL. CIT, 136 ITD 23 AND ALSO ITAT BANGALORE IN CASE OF S S WARD (SUPRA) TO HOLD THAT THE PROVISION OF SECTION 40 (A)(IA) IS NOT APPLICABLE IN THE CASE WHERE THE AMOUNT OF EXPENDITURE HAS BEEN ACTUALLY PAID DURING THE YEAR AND IT DOES NOT REMAIN UNPAID OR PAYABLE AT THE END OF THE YEAR. HE ACCORDINGLY DELETED THE DISALLOWANCE. 2.3 BEFORE US THE L D. D.R POINTED OUT TH AT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ARE CLEAR AND UNAMBIGUOUS. THE AMENDMENT MADE BY THE FINANCE ACT, 2010 IS PROSPECTIVE IN NATURE. HE FURTHER RELIED ON THE D EPARTMENTAL CIRCULAR DATED 16.12.2013 WHERE IN THE CONTROVERSY REGARDING APPLICABILI TY OF PROVISION OF SECTION 40(A)(IA) OF THE ACT ON 4 THE AMOUNT OF EXPENDITURE PAID DURING THE YEAR HAS BEEN DISCUSSED. IN VIEW OF THE JUDGEMENT CITED IN THE C IRCULAR, HE REQUESTED TO REVERSE THE ORDER OF CIT(A). 2.4 ON THE OTHER HAND, T HE L D. A . R SUPPORTE D THE ORDER OF CIT(A) ON BOTH THE ASPECTS. HE DREW OUR ATTENTION TO THE ORDER OF THIS BENCH DATED 05.06.2013 IN THE CASE OF DCIT VS. RAJASTHAN ART EMPORIUM WHEREIN IN ITA NO. 161/JDH/2011 WHEREIN, THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2014 HAS BEEN CONSIDERED AS RETROSPECTIVE IN NATURE CONSIDERING THE VARIOUS JUDGEMENTS AS ALSO RELIED BY THE CIT (A). HE ALSO BROUGHT TO OUR NOTICE THAT SPECIAL LEAVE PETITION (SLP) AGAINST THE ORDER OF ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVIC ES PVT. LTD. 357ITR642 HAS RECENTLY BEEN DISMISSED ON 6 TH JULY 2014. THE ALLAHABAD HIGH COURT HAD HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT DOES NOT APPLY TO THE CASES WHERE THE ENTIRE EXPENDITURE HAS BEEN PAID TO THE PARTY AND NOTHING REMA INS PAYABLE AS ON THE END OF THE YEAR. HE ACCORDINGLY SUBMITTED THAT THE ORDER CIT (A) BE CONFIRMED ON THIS GROUND. 2.5 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE MATERIAL ON RECORD. AS THE ASSESSEE HAS DEDUCTED THE TAX AT SOURCE 5 O N 31.03.2009 AND DEPOSITED IT IN MAY/JUNE, 2009, WE FIND THAT THE ISSUE IS SQUARELY COVERED BY VIEW TAKEN BY US IN THE CASE OF DCIT VS. RAJASTHAN ART EMPORIUM (SUPRA). IN OUR CONSIDERED OPINION THE AMENDMENT BROUGHT IN BY FINANCE ACT, 2010 IN THE PROVISION S OF SECTION 40(A)(IA) SHOULD BE READ AS CLARIFICATORY IN NATURE AND APPLIED RETROSPECTIVELY. ACCORDINGLY FOLLOWING OUR OWN JUDGEMENT WE UPHOLD THE ORDER OF THE CIT (A)ON THIS ISSUE. WE ALSO FIND THAT THE ENTIRE EXPENDITURE IN QUESTION HAS BEEN PAID BY THE ASSESSEE AND NOTHING REMAINS PAYABLE AS ON THE END OF THE YEAR. THE SPECIAL BENCH, VISHAKHAPATNAM IN THE CASE OF MERILYN SHIPPING & TRANSPORT VS. ADDL. CIT, 136 ITD 23 HAS DECIDED THIS ISSUE IN ASSESSEES FAVOUR. HOWEVER THE ANDHRA PRADESH HIGH COURT HAS PUT THIS ORDER UNDER INTERIM SUSPENSION. ON THE OTHER HAND GUJRAT HIGH COURT IN CIT VS. SIKANDAR KHAN N TUNVAR, 33 TAXMAN.COM 133 AND CALCUTTA HIGH COURT IN CIT VS. CRESCENT EXPORTS SYNDICATE, 33 TAXMAN.COM HAS DECIDED THE MATTER AGAINST THE ASSESSEE. ON THE CONTRARY ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES (P) LTD. (SUPRA) HAS GIVEN DECISION IN FAVOUR OF THE ASSESSEE AND SLP AGAINST THE SAME HAS BEEN DISMISSED ON 6 TH JULY 2014. GIVING PREFERENCE TO THE LATEST UPDATE OF DISMISSA L OF SLP AGAINST THE FAVOURABLE DECISION, WE ARE INCLINED TO UPHOLD THE FINDING OF LD. CIT (A) ON THIS ALTERNATIVE REASON FOR DECIDING THE APPEAL 6 IN ASSESSEES FAVOUR. WE ALSO TAKE SUPPORT FROM THE DECISION OF ITAT CHENNAI IN THE CASE OF ITO VS. THEEKATHIR PRESS, ITA NO. 2076(MDS)/2012 (ORDER DATED 18 TH SEPTEMBER, 2013) AND ALSO ACIT VS. M/S ESKAY DESIGNS, ITA NO. 1951/MDS/12 WHEREIN THE MATTER WAS DECIDED IN FAVOUR OF THE ASSESSEE ON THE SAME ISSUE AFTER TAKING INTO CONSIDERING THE CONTROVERSY CREATED FROM DIFFERENT DECISIONS OF GUJARAT, CALCUTTA AND ALLAHABAD HIGH COURTS. THE CHENNAI BENCH RELIED ON THE DECISION OF SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD., 88 ITR 192 WHEREIN IT WAS HELD THAT IN CASE OF JUDICIAL CONTROVERSY, THE VIEW FA VOURABLE TO THE ASSESSEE SHOULD BE ADOPTED. TH US G ROUND NO. 1 OF APPEAL IS DISMISSED. 3. GROUND NO. 2 IS AGAINST DELETION OF ALLOWANCE OF RS. 19,932/ - IN RESPECT OF DELAYED DEPOSITION OF EMPLOYEES CONTRIBUTION TO PF & ESI. THE AO FOUND THAT CERTAIN PAYM ENTS TOWARDS EMPLOYEES CONTRIBUTION TO PF & ESI WERE MADE BEYOND THE DATES PRESCRIBED UNDER THE RESPECTIVE ACTS. THOUGH THE SAME HAVE BEEN PAID BEFORE THE DUE DATE OF FILING RETURN U/S 139(1) IT CANT BE ALLOWED IN VIEW OF PROVISIO N OF SECTION 36(1)(VA). T HE CIT (A) DELETED THE DISALLOWANCE HOLD ING THAT PROVISIONS OF SECTION 43B ARE APPLICABLE IN SUCH CASES. 7 3.1 THE L D. D/R RELIED ON THE ASSESSMENT ORDER AND SUBMITTED T HAT THE PROVISION OF SECTION 36 (1)(VA) OF THE ACT ARE APPLICABLE ON EMPLOYEES CONTRIBUT ION TOWARDS PF & ESI AND NOT SECTION 43B. THE LD. A/R ON THE OTHER HAND RELIED ON JUDGEMENT OF MUMBAI HIGH COURT IN THE CASE OF CIT VS. HINDUSTAN ORGANICS CHEMICALS LTD., 107 DTR 105 WHEREIN THE EMPLOYEES CONTRIBUTION TO PF & ESI HAS BEEN FOUND ALLOWABLE IF THE SAME IS PAID TILL THE DUE DATE OF FILING RETURN OF INCOME U/S 139 (1). 3.2 ON CAREFUL CONSIDERATION OF MATTER WE FIND THAT ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE JUDGEMENT OF MUMBAI HIGH COURT IN THE CASE OF CIT VS. HINDUSTAN ORGANI CS CHEMICAL LTD. (SUPRA) WHEREIN EVEN THE EMPLOYEES CONTRIBUTION TO PF AND ESI HAS BEEN FOUND ALLOWABLE IF PAID PRIOR TO THE DUE DATE OF FILING RETURN U/S 139 (1). THE HIGH COURT HAS REFERRED THE DECISION OF SUPREME COURT IN THE CASE OF CIT VS. ALOM EXTRUS ION LTD. 319 ITR 306(SC). WE ACCORDINGLY DISMISS THIS GROUND OF APPEAL ALSO. 3.3 THE NEXT GROUND NUMBER 3 HAS BEEN TAKEN AGAINST DELETION OF DISALLOWANCE OF RS. 2,00,000/ - MADE OUT OF ADVERTISEMENT AND PUBLICITY EXPENDITURE. THE ASSESSEE CLAIMED TOTAL EXP ENDITURE OF RS. 8 4,48,727/ - UNDER THIS HEAD OF WHICH CERTAIN PAYMENTS TO 14 PARTIES RANGING BETWEEN 10,000 TO 18,000 (TOTAL RS. 2,00,000/ - ) WERE MADE FOR WALL PRINTING CHARGES. THE LD. AO ALLEGED THAT THE ASSESSEE DID NOT PRODUCE ANY VOUCHER IN THIS RESPECT . HE FURTHER MENTIONED THAT ALL THESE PAYMENTS ARE MADE IN CASH AND THEREFORE THE SAME IS NOT ALLOWABLE ACCORDING TO PROVISIONS OF SECTION 40A(3). ON THE CONTRARY LD. CIT (A) IN PARA 4.3 OF HIS ORDER OBSERVED THAT IT APPEARS THAT AO HAS MADE THE DISALLOWAN CE ON THE BASIS ONE ENTRY MADE IN THE BOOKS OF ACCOUNT AND WITHOUT ASKING FOR ANY SUPPORTING EVIDENCE IN THE FORM OF VOUCHERS OBTAINED FROM THE RECIPIENTS. IF SUCH DETAILS WERE CALLED FOR AND EXAMINED, THE AO WILL NOT MAKE THE OBSERVATION THAT THESE PAYMEN TS ARE COVERED BY THE PROVISIONS OF SECTION 40A(3) BECAUSE AS PER THE DETAILS AND PHOTO COPY OF THE VOUCHERS FILED, THESE PAYMENTS HAVE BEEN MADE TO FOURTEEN PERSONS AND ALL ARE BELOW THE LIMIT PRESCRIBED UNDER THE PROVISION OF SECTION 40A(3) OF THE ACT. T HE PAYMENTS OF RS. 2,00,000/ - HAVE BEEN MADE TO FOURTEEN PERSONS FOR WALL PAINTING. THEY HAVE MENTIONED THE RATE AT WHICH THEY CHARGED PER SQ. METER FOR WALL PAINTING. IT IS NOT A CASE OF THE AO THAT HE EXAMINED THE RECIPIENTS OF THE PAYMENT AND THEY HAVE DENIED OF HAVING DONE ANY WORK AND RECEIVED ANY PAYMENT 9 FROM THE APPELLANT. IN VIEW OF ABOVE HE FOUND THE DISALLOWANCE WITHOUT ANY BASIS AND DELETED THE SAME. 3.4 BEFORE US THE LD. D/R SUPPORTED THE ORDER OF ASSESSMENT WHEREAS THE L D. A . R SUPPORTED THE O RDER OF CIT(A). 3.5 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT COMPLETE DETAILS OF PAYMENT TO EACH INDIVIDUAL IS AVAILABLE WITH THE ASSESSEE ALONG WITH THE DETAILS OF WORK DONE. IT APPEARS THAT THE AO WITHOUT GOING INTO DETAILS OF THE ISSUE HAS MADE THE DISALLOWANCE AS HE HAS APPLIED PROVISIONS OF SECTION 40A(3) WITHOUT CONSIDERING THE FACT THAT MANY PARTIES ARE INVOLVED AND PAYMENT TO NONE OF THEM EXCEEDS RS. 20,00 0/ - . IN THIS VIEW OF THE MATTER WE ARE INCLINED TO UPHOLD THE FINDINGS OF CIT(A) A ND DISMISS THIS GROUND OF APPEAL. 4. THE NEXT GROUND NO. 4 IS AGAINST DELETION OF DISALLOWANCE OF RS. 23,000/ - OUT OF DISCOUNT EXPENSES. 4.1 THE ASSESSEE HAS CLAIMED TOTAL DISCOUNTS OF RS. 6,55,644/ - OF WHICH THE LD. ASSESSING OFFICER FOUND THAT A SUM OF RS. 23,000/ - WAS PAID IN CASH ON 01.11.2008. HE OBSERVED THAT SINCE THE PAYMENT 10 WAS MADE IN CASH, THE SAME IS NOT ALLOWABLE U/S 40A(3) OF THE ACT. IN FIRST APPEAL LD. CIT(A) IN PARA 6.3 OF THE ORDER HAS FOUND THAT THE AO MADE THE ADDITION/DISALLOWANCE O F RS. 23,000/ - ON TWO GROUNDS I.E. ONE FOR NOT FILING THE DETAILS OF THESE PAYMENTS AND SECOND SUCH PAYMENTS HAVE BEEN MADE IN CASH IN VIOLATION OF PROVISIONS OF SECTION 40A(3A). AS PER THE DETAILS FILED, BOTH THE GROUNDS ARE AGAINST THE FACTS OF THE CASE OF THE APPELLANT BECAUSE THE APPELLANT HAS PAID THE DISCOUNT OF RS. 1,500/ - EACH FOR FOURTEEN PARTIES VIDE SEPARATE BILLS AND THE APPELLANT HAS GOT THE SIGNATURE ON THE DOCUMENTS. LOOKING AT THE DETAILS AS PER THE BOOKS OF ACCOUNTS, THE LD. CIT(A) OBSERVED THAT THERE IS NO VIOLATION OF PROVISIONS OF SECTION 40A(3A) AS ALLEGED BY THE AO AND THE PAYMENTS HAVE BEEN SUPPORTED BY BILLS/VOUCHERS. HE ACCORDINGLY HELD THAT THERE WAS NO REASON TO MAKE THIS DISALLOWANCE. HE ACCORDINGLY DELETED THE DISALLOWANCE. 4.2 BEFORE US THE LD. D.R SUPPORTED THE ASSESSMENT ORDER WHEREAS THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A) . 4.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. APPARENTLY THE ASSESSING 11 OFFICER APPEARS TO HAVE NOT APPLIED HIS MIND AND NOT GONE INTO DETAILED ENQUIRY OF THE MATTER . THE L D. CIT(A) HAS PERUSED THE MATERIAL MADE AVAILABLE BEFORE HIM WHICH IS PART OF REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE. ON THAT BASIS LD. CIT(A) FOUND THAT AS THERE ARE MA NY PARTIES INVOLVED IN TOTAL DISCOUNT OF RS. 23,000/ - PROVISION OF SECTION 40A(3) DOES NOT APPLY. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE WE FIND N O REASONS TO DISAGREE WITH THE L D. CIT(A) AND ACCORDINGLY UPHOLD HIS ORDER ON THIS ISSUE. THIS GROUND OF APPEAL OF THE REVENUE FAILS. 4.4 T HE LAST GROUND NO. 5 IS AGAINST DELETION OF DISALLOWANCE OF INTEREST EXPENSES OF RS. 1,55,246/ - IS RESPECT OF INTEREST FREE ADVANCE OF RS. 12,93,724/ - GIVEN TO THE SISTER CONCERNS. THE FACT RELATING TO THE ABOVE GROUND O F APPEAL AS EMERGE FROM THE ASSESSMENT ORDER ARE THAT THE ASSESSEE HAS ADVANCED SUM OF RS. 12,93,724/ - TO ITS SISTER CONCERNS AND IS OUTSTANDING AS IT IS ON 31.03.2009. NO INTEREST ON THIS AMOUNT HAS BEEN CHARGED WHEREAS THE ASSESSEE HAS PAID INTEREST AT T HE RATE OF 14% AMOUNTING TO RS. 25,69,598/ - . ACCORDING TO THE AO, IF THE ASSESSEE DID NOT GIVE THE ABOVE SUM WITHOUT INTEREST AND REPAID THE LOANS TAKEN BY IT, THE ASSESSEE WOULD HAVE INCURRED INTEREST EXPENSES LESS BY RS. 12 1,55,246/ - . AS THE ASSESSEE FAILE D TO FILE ANY SATISFACTORY EXPLANATION FOR NOT CHARGING THE INTEREST, THE AO HELD THE INTEREST OF RS. 1,55,246/ - AS UNREASONABLE AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. AS AGAINST THIS THE CIT(A) IN PARA 9.3 OF HIS ORDER HAS FOUND THAT IT IS NOT A C ASE OF ASSESSING OFFICER THAT THE APPELLANT HAS USED THE INTEREST BEARING LOANS TAKEN BY IT FOR GIVING INTEREST FREE LOAN TO ITS SISTER CONCERN. BUT THE AO HAS MADE THE DISALLOWANCE OF INTEREST ON THE PRESUMPTION THAT IF THE APPELLANT USED THE INTEREST FRE E LOAN TAKEN BY IT, IT COULD HAVE PAID LESS INTEREST TO THE EXTENT OF RS. 1,55,246/ - . ADMITTEDLY, THE AO FAILED TO ESTABLISH DIRECT NEXUS BETWEEN THE INTEREST BEARING LOAN AND INTEREST FREE LOAN GIVEN BY IT TO ITS SISTER CONCERNS. HE FURTHER FOUND THAT, AS PER THE COPY OF BALANCE SHEET FILED, THE APPELLANT HAD INTEREST FREE FUNDS OF RS. 42,33,148/ - AVAILABLE IN THE CURRENT ACCOUNT OF THE PARTNERS AND THEREFORE, IT CAN BE SAID THAT THE APPELLANT HAS ADVANCED THE INTEREST FREE LOANS TO ITS SISTER CONCERN OUT OF THIS FUNDS AND THEREFORE, NO INTEREST IS REQUIRED TO BE DISALLOWED. ON THE BASIS OF THESE FINDINGS, THE LD. CIT(A) DELETED THE DISALLOWANCE. 13 4.5 BEFORE US THE LD. DR SUPPORTED THE ASSESSMENT ORDER AND ON THE OTHER HAND LD. A/R SUPPORTED THE ORDER OF CIT (A). THE LD. A/R ALSO RELIED ON JUDGEMENT OF GUJARAT HIGH COURT IN THE CASE OF CIT VS. ARIHANT AVENUE & CREDIT LTD., 36 TAXMAN.COM 14, WHEREIN IT HAS BEEN HELD THAT WHEN ASSESSEE HAD GIVEN INTEREST FREE ADVANCE TO SISTER CONCERN BUT REVENUE HAS NOT SHO WN THAT INTEREST BEARING FUNDS HAVE BEEN GIVEN AS INTEREST FREE ADVANCE, NO ADDITION ON ACCOUNT OF DISALLOWANCE OF INTEREST AS NOTIONAL INTEREST CAN BE MADE. 4.6 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECOR D. WE FIND THE A.O HAS OBSERVED ABOUT REDUCING THE INTEREST COST WITHOUT FINDING ANY NEXUS OF ADVANCE TO SISTER CONCERN WITH THE INTEREST BEARING FUNDS. ASSESSEE HAS AMPLE INTEREST FREE FUNDS AS CAPITAL OF PARTNERS. THE CASE OF THE ASSESSEE IS THAT THE PAR TNERS FUND HAS BEEN GIVEN TO SISTER CONCERN. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW LAID DOWN BY THE GUJARAT HIGH COURT IN THE CASE OF CIT VS. ARIHANT AVENUE & CREDIT LIMITED, 36 TAXMAN.COM 14, WE ARE INCLINED TO AGREE WITH THE VIEW OF CI T (A). THE GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 14 5 . IN THE RESU LT, THE APPEAL OF THE REVENUE IN ITA NO. 1 22 /JU/2014 FOR A.Y. 2009 - 10 STANDS DISMISSED. ORDER PRON OUNCED IN THE COURT ON 25 TH SEPTEMBER , 2014. SD/ - SD/ - (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEM B ER DATED : 25 TH SEPTEMBER , 201 4 VL/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR SENIOR PRIVATE SECRETARY ITAT, JODHPUR