Balkrishna Textile Pvt.Ltd., Ahmedabad V. The Dy.CIT(OSD),Range-1, Ahmedabad

ITA 1260/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8118 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 11-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH HEARING CONCLUDED ON
• Keywords: Depreciation; Earning of tax free income
• Section: 143(3); 14A; 32

Judgement Text

ITA NOS.1260 & 1309/AHD 2015 ASSESSMENT YEAR: 2010-11 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MAHAVIR PRASAD JM] ITA NO.1260/AHD/2015 ASSESSMENT YEAR: 2010-11 BALKRISHNA TEXTILE PVT. LTD., ..................APPELLANT BOMBAY HIGHWAY, NAROL, AHMEDABAD 382 405. [PAN : AABCB 5213 G] VS. DY. COMMISSIONER OF INCOME TAX (OSD), RANGE-1, AHMEDABAD. ............................RESPONDENT ITA NO.1309/AHD/2015 ASSESSMENT YEAR: 2010-11 DY. COMMISSIONER OF INCOME TAX (OSD), RANGE-1, AHMEDABAD. ..................APPELLANT VS. BALKRISHNA TEXTILE PVT. LTD., ............................RESPONDENT BOMBAY HIGHWAY, NAROL, AHMEDABAD 382 405. [PAN : AABCB 5213 G] APPEARANCES BY ASEEM L. THAKKAR FOR THE ASSESSEE V.K. SINGH FOR THE REVENUE HEARING CONCLUDED ON: 26.03.2018 ORDER PRONOUNCED ON : 15.06.2018 O R D E R PER PRAMOD KUMAR, AM: 1. THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORD ER DATED 26 TH FEBRUARY, 2015 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF ASSES SMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2010- 11. ITA NOS.1260 & 1309/AHD 2015 ASSESSMENT YEAR: 2010-11 PAGE 2 OF 4 2. WE WILL FIRST TAKE UP APPEAL FILED BY THE ASSESS ING OFFICER. 3. IN THE FIRST GROUND OF APPEAL, THE ASSESSING OFF ICER HAS RAISED THE FOLLOWING GRIEVANCE :- (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE DISALLOWANCE OF RS.2,385/- MADE U/S 14A WITHOUT APPRECIATING THE FACT THAT ADMINISTRATIVE EXPENSES MUST HAVE INCURRED FOR EARNING EXEMPT INCO ME. 4. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THE IS SUE IS NOW COVERED BY THE JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT IN T HE CASE OF CIT VS. CORRTECH ENERGY (P) LTD., 372 ITR 97, INASMUCH AS, ONCE THERE IS NO EXEMPT INCOME, THERE CANNOT BE ANY QUESTION OF DISALLOWANCE UNDER SECTION 14A OF T HE ACT AND UNDISPUTEDLY THERE IS NO EXEMPT DIVIDEND INCOME IN THE PRESENT YEAR. IN THI S VIEW OF THE MATTER, WE CONFIRM THE FINDING OF THE LEARNED CIT(A) AND DECLINE TO INTERF ERE IN THE MATTER. 5. GROUND NO.1 IS DISMISSED. 6. IN GROUND NO.2, THE ASSESSING OFFICER HAS RAISED THE FOLLOWING GRIEVANCE: (2) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE DEPRECIATION AND EXPENSES ON MOTOR CAR OF RS.41,21, 817/- AND RS.8,57,777/- WITHOUT CONSIDERING THE FACT THAT CONDITIONS FOR AL LOWING DEPRECIATION AS PER SECTION 32 WERE NOT FULFILLED. 7. ON THIS ISSUE ALSO LEARNED REPRESENTATIVES FAIRL Y AGREE THAT THIS ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE INASMUCH AS IN TH E A.Y. 2009-10 WHEREIN SIMILAR DISALLOWANCES WERE MADE WHICH WAS SET ASIDE BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL VIDE ORDER DATED 25 TH OCTOBER, 2013 AND IN THE SET ASIDE PROCEEDINGS, TH E CLAIM OF THE ASSESSEE NOW STANDS ACCEPTED VIDE ASSESSING OFFICER S ORDER UNDER SECTION 254 READ WITH SECTION 143(3) DATED 30 TH JUNE 2014. RESPECTFULLY FOLLOWING THE STAND TAKEN BY THE CO-ORDINATE BENCH AND TAKING NOTE OF THE SUBSEQUENT ORDER PASSED BY THE ASSESSING OFFICER, WE APPROVE THE CONCLUSIONS ARRIVED AT BY T HE LEARNED CIT(A) IN THIS REGARD AND DECLINE TO INTERFERE IN THE MATTER. 8. GROUND NO.2 IS ALSO DISMISSED. 9. IN GROUND NO.3, THE ASSESSING OFFICER HAS RAISED THE FOLLOWING GRIEVANCE :- (3) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE DISALLOWANCE OF INTEREST OF RS.22,12,685/- TOWARDS INTEREST FREE LOAN AND ADVANCES OUT OF INTEREST BEARING FUND WITHOUT APPRE CIATING THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS.1260 & 1309/AHD 2015 ASSESSMENT YEAR: 2010-11 PAGE 3 OF 4 10. ON THIS ISSUE ALSO LEARNED REPRESENTATIVES FAIR LY AGREE THAT THIS ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE INASMUCH AS IN TH E A.Y. 2009-10 WHEREIN SIMILAR DISALLOWANCES WERE MADE WHICH WAS SET ASIDE BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL VIDE ORDER DATED 25 TH OCTOBER, 2013 AND IN THE SET ASIDE PROCEEDINGS, TH E CLAIM OF THE ASSESSEE NOW STANDS ACCEPTED VIDE ASSESSING OFFICER S ORDER UNDER SECTION 254 READ WITH SECTION 143(3) DATED 30 TH JUNE 2014. RESPECTFULLY FOLLOWING THE STAND TAKEN BY THE CO-ORDINATE BENCH AND TAKING NOTE OF THE SUBSEQUENT ORDER PASSED BY THE ASSESSING OFFICER, WE APPROVE THE CONCLUSIONS ARRIVED AT BY T HE LEARNED CIT(A) IN THIS REGARD AND DECLINE TO INTERFERE IN THE MATTER. 11. APPEAL FILED BY THE ASSESSING OFFICER IS THUS D ISMISSED. 12. WE NOW COME TO THE APPEAL FILED BY THE ASSESSEE WHEREIN THE ONLY GRIEVANCE RAISED BY THE ASSESSEE IS AS FOLLOWS :- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENSES OF RS.5,76,000/- ESTIMATING THE SAME @ 12% ON RS.48,00,000/- AS ALLE GED INTEREST FREE ADVANCES GIVEN TO SHREE AMBICA GEO TECHS PVT. LTD. 13. SO FAR AS THIS GRIEVANCE OF THE ASSESSEE IS CON CERNED, RELEVANT MATERIAL FACTS ARE LIKE THIS. DURING THE COURSE OF ASSESSMENT PROCEED INGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS ADVANCED INTER ALIA A SUM OF RS.48,00,000/- TO SHREE AMBICA GEO TECHS PVT. LTD. IN RESPONSE TO THE ASSESSING OF FICERS REQUISITION, AS TO WHY RELATABLE INTEREST PAYMENT NOT BE DISALLOWED, IT WA S SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE HAS INTEREST-FREE FUNDS AGGREGATING TO RS. 13,96,77,953/- WHEREAS THE TOTAL INTEREST FREE ADVANCES ARE ONLY RS.2,03,30,000/-. THIS PLEA OF THE ASSESSEE I.E. WITH RESPECT TO AVAILABILITY OF INTEREST FREE FUND WAS D ECLINED. 14. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE LEARNED CIT(A) BUT WITHOUT SUCCESS. ASSESSEE IS IN SECOND APPEAL BEFO RE US. 15. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING P ERUSED THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE CONSIDERED VIEW THAT THE IMPU GNED DISALLOWANCE MUST STAND DELETED FOR THE SHORT REASON THAT THE INTEREST FREE FUNDS AVAILABLE TO THE ASSESSEE IS FAR IN EXCESS OF INTEREST-FREE ADVANCE GIVEN BY THE ASS ESSEE. AS THAT IS THE VIEW CONSISTENTLY BEING TAKEN BY THE CO-ORDINATE BENCH O F THIS TRIBUNAL, RESPECTFULLY FOLLOWING ITA NOS.1260 & 1309/AHD 2015 ASSESSMENT YEAR: 2010-11 PAGE 4 OF 4 THE SAME, WE HOLD THAT THE IMPUGNED DISALLOWANCE IS DEVOID OF ANY LEGALLY SUSTAINABLE MERITS AND THUS WE DELETE THE SAME. GRIEVANCE OF T HE ASSESSEE IS THUS UPHELD. 16. APPEAL FILED BY THE ASSESSEE IS ALLOWED. 17. IN THE RESULT, WHILE APPEAL OF THE REVENUE IS D ISMISSED, APPEAL OF THE ASSESSEE IS ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNCED I N THE OPEN COURT ON THIS 15 TH DAY OF JUNE, 2018. SD/- SD/- MAHAVIR PRASAD PR AMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 15 TH JUNE, 2018. PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDE NT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD