M/s. Swastik Textile Engg.Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-8(2), Ahmedabad

ITA 1322/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94627 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 19-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAMES KURIEN SR DR
• Keywords: Earning of tax free income; Commercial expediency
• Section: 143(3); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , , BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. ./ I.T.A. NO.2358/AHD/2011 AY 2008-09 2. ./ I.T.A. NO.1322/AHD/2013 AY 2009-10 1.SWASTIK TEXTILE ENGINEERS PVT.LTD. SWASTIK PREMISES AMRAIWADI, AHMEDABAD-380 026 2. DO- / VS. 1. THE ASST.CIT(OSD) CIRCLE-8 AHMEDABAD 2. THE ITO WARD-8(2) AHMEDABAD ./ ./ PAN/GIR NO(S). : AABCS 5522 K ( ' / APPELLANT ) .. ( #' / RESPONDENTS ) ASSESSEE BY : SHRI SANJAY R.SHAH, AR RE VENUE BY : SHRI JAMES KURIEN, SR.DR $%& ' ( / DATE OF HEARING 19/10/2015 )*+ ' ( / DATE OF PRONOUNCEMENT 06/11/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : BOTH THE APPEALS BY THE ASSESSEE ARE DIRECTED AGAIN ST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS )-XIV, AHMEDABAD [CIT(A) IN SHORT] DATED 14/07/2011 & 25/03/2013 PERTAINING TO ASSESSMENT YEARS (AYS) 2008-09 & 2009 -10 RESPECTIVELY. ITA NO S.2358 /AHD/11 AND ITA NO.1322/AHD/2013 SWASTIK TEXTILE ENGINEERS PVT.LTD. VS. ACIT/ITO ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 2 - SINCE IDENTICAL GROUNDS ARE INVOLVED IN BOTH THE AP PEALS, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO NSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE ASSESSEES APPEAL IN ITA N O.2358/AHD/2011 FOR AY 2008-09. THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL:- YOUR APPELLANT BEING AGGRIEVED BY THE ORDER PASSED DATED 14/07/2011 U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE 'ACT') BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, A HMEDABAD (HEREINAFTER REFERRED TO AS THE 'CIT(A)') PRESENTS THIS APPEAL A GAINST THE SAME ON THE FOLLOWING GROUNDS WHICH ARE WITHOUT PREJUDICE TO EA CH OTHER:. 1. THE ORDER PASSED BY THE LEARNED CIT(A) IS ERRONE OUS AND CONTRARY TO PROVISIONS OF LAW AND FACTS AND THEREFORE REQUIRES TO BE SUITABLY MODIFIED. IT IS SUBMITTED THAT IT BE SO DONE NOW. 2. THE LEARNED CIT(A) ERRED IN LAW AND IN FACTS IN CONFIRMING THE DISALLOWANCE OF RS.87,304/- BY INVOKING THE PROVISIONS OF SECTIO N 14 A R.W.R. 8 D. IT IS SUBMITTED THAT INVESTMENT MADE BY THE APPELLANT WAS NOT FOR THE PURPOSE OF EARNING EXEMPT INCOME BUT WITH THE PURPOSE OF COMME RCIAL EXPEDIENCY. IT IS SUBMITTED THAT IT BE SO HELD NOW. IN ANY EVENT IT I S SUBMITTED THAT SINCE APPELLANT WAS HAVING SUFFICIENT INTEREST FREE FUNDS , NO AMOUNT OF INTEREST SHOULD HAVE BEEN DISALLOWED U/S 14 A INVOKING RULE 8 D. 3. THE LEARNED CIT (A) HAS ERRED IN LAW AND FACTS I N CONFIRMING THE DISALLOWANCE OF 14 % INTEREST ON RS.7,50,000/- [I. E. RS.1,05,000/-] BEING AMOUNT ADVANCED TO SHREENIDHI TEXTILES BY HOLDING T HAT THERE IS DIFFERENCE BETWEEN COMMERCIAL EXPEDIENCY AND HUMANITARIAN CONS IDERATION OR HELP AND THAT THERE WAS NO APPARENT BUSINESS EXPEDIENCY IN G IVING SUCH ADVANCE. IT IS SUBMITTED THAT ADVANCE GIVEN WAS FOR THE PURPOSE OF BUSINESS AND IN ANY CASE ITA NO S.2358 /AHD/11 AND ITA NO.1322/AHD/2013 SWASTIK TEXTILE ENGINEERS PVT.LTD. VS. ACIT/ITO ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 3 - NO INTEREST-BEARING FUNDS HAVE BEEN UTILIZED FOR SU CH ADVANCES MADE. IT IS SUBMITTED THAT IT BE SO HELD NOW AND DISALLOWANCE M ADE BE DELETED. YOUR APPELLANT PRAYS FOR LEAVE TO ADD, TO ALTER AND / OR TO AMEND ALL OR ANY OF THE GROUNDS BEFORE THE FINAL HEARING OF APPEAL. 2.1. FIRST GROUND IS GENERAL IN NATURE WHICH REQUIR ES NO INDEPENDENT ADJUDICATION. 2.2. APROPOS TO GROUND NOS.2 & 3, THE BRIEFLY STAT ED FACTS ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASS ESSMENT AND THE ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT,1961 (H EREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 26/11/ 2010, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE DISALLOWANCE B Y INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT OF RS.1,91,188 /-, DISALLOWANCE OF INTEREST EXPENSES OF RS.10,37,260/- AND DISALLOWANC E U/S.41(1) OF THE ACT OF RS.3,71,897/-. THE AO ALSO MADE ADDITION ON ACC OUNT OF GP RATE OF RS.24,92,246/-. THE ASSESSEE BEING AGGRIEVED BY TH E ASSESSMENT ORDER, PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE PARTLY ALLOWED THE APPE AL; THEREBY THE LD.CIT(A) DELETED THE ADDITION OF RS.24,92,246/-, C ONFIRMED THE DISALLOWANCE OF RS.87,304/- WHICH WAS MADE BY INV OKING THE PROVISION OF SECTION 14A OF THE ACT, RESTRICTED THE DISALLOW ANCE TO THE EXTENT OF RS.7,50,000/- MADE IN RESPECT OF INTEREST EXPENDIT URE AND FINALLY THE LD.CIT(A) ALSO DELETED THE ADDITION OF RS.3,71,897/ - MADE BY INVOKING ITA NO S.2358 /AHD/11 AND ITA NO.1322/AHD/2013 SWASTIK TEXTILE ENGINEERS PVT.LTD. VS. ACIT/ITO ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 4 - THE PROVISIONS OF SECTION 41(1) OF THE ACT. AGG RIEVED BY THE ORDER OF THE LD.CIT(A), NOW THE ASSESSEE IS IN FURTHER APPEA L BEFORE US. 3. GROUND NO.2 IS AGAINST CONFIRMING THE DISALLOWAN CE OF RS.87,304/- BY INVOKING THE PROVISIONS OF SECTION 14A OF THE I. T. ACT, 1961 READ WITH RULE 8D OF THE I.T.RULES, 1962. THE LD.COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE LD.CIT(A) A ND SUBMITTED THAT IN THE EARLIER YEARS, THE ASSESSEE HAD INVESTED RS.27, 62,500/- IN SHARES OF FORTUNE PLASTOMAC P.LTD. IT IS A SUBSIDIARY COMPAN Y OF THE ASSESSEE. THE ASSESSEE IS HAVING 83.33% SHAREHOLDING IN FORTU NE PLASTOMAC PVT.LTD. HE SUBMITTED THAT THE PURPOSE BEHIND MAKI NG INVESTMENT IS NOT EARNING DIVIDEND OR CAPITAL GAIN, BUT ON THE GROUND S OF COMMERCIAL EXPEDIENCY. THE LD.COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE SUBSIDIARY COMPANY IS MANUFACTURING PLASTIC TROLLEY S, DOFFING BOXES, PALLETS AND DOZING AND CHEMICAL TANKS WHICH ARE REQ UIRED TO BE SUPPLIED WITH THE PRODUCTS OF ASSESSEES COMPANY WH ICH IN TURN ARE HELPFUL TO INCREASE THE BUSINESS OF THE COMPANY. T HEREFORE, IN A WAY THIS INVESTMENT WAS MADE TO SUBSIDIARY COMPANY KEEPING I N MIND LONG TERM INTEREST OF THE ASSESSEE-COMPANY. 3.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THERE IS NO ILLEGALITY IN THE ORDER OF THE LD.CIT(A). HE SUBMITTED THAT THERE IS NO DISPUTE W ITH REGARD TO FACT THAT ITA NO S.2358 /AHD/11 AND ITA NO.1322/AHD/2013 SWASTIK TEXTILE ENGINEERS PVT.LTD. VS. ACIT/ITO ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 5 - THE ASSESSEE HAS EARNED EXEMPT INCOME. THEREFORE, THE EXPENDITURE RELATED TO SUCH EXEMPT INCOME DESERVES TO BE DIALLO WED ON THE BASIS OF PROVISIONS OF SECTION 14A OF THE ACT READ WITH RULE 8D OF THE INCOME TAX RULES, 1962. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ARGUMENT OF THE ASSESSEE IS THAT THE AUTHORITIE S BELOW WERE NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT AS THE INVESTMENTS WERE MADE FOR THE COMMERCIAL EXPEDIENCY AND THE ASSESSEE WAS HAVING SUFFICIENT INTEREST-FREE FUND. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE WAS HAVING SUFFICIENT INTEREST-BEARING FUND. ONLY OBJECTION OF THE AUTHORITIES BELOW IS THAT THE ASSESSEE HAS NOT DEMONSTRATED THE NEXUS BETWEEN THE INTEREST-FREE FU ND AND THE INVESTMENTS OUT OF WHICH THE EXEMPT INCOME HAS BEEN EARNED. AS PER THE PROVISIONS OF SECTION 14A READ WITH RULE 8D, THE AO IS EMPOWERED TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN REL ATION TO SUCH INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT IN ACCORDANCE WITH SUCH METHOD PRESCRIBED UNDER RULE 8D, IF THE A O HAVING REGARD TO THE ACCOUNTS OF THE ASSESSEE, IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENDITUR E IN RELATION TO INCOME WHICH DO NOT FORM PART OF THE TOTAL INCOME. ONE OF THE CONTENTIONS OF THE ASSESSEE IS THAT THE ASSESSEE HAD RECEIVED DIVIDEND INCOME OF RS.360/- FROM KALUPUR COMMERCIAL CO-OP.BANK LTD. AND THE SAM E HAS BEEN ITA NO S.2358 /AHD/11 AND ITA NO.1322/AHD/2013 SWASTIK TEXTILE ENGINEERS PVT.LTD. VS. ACIT/ITO ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 6 - OFFERED FOR TAX. FURTHER, IT CONTENDED THAT THE AS SESSEE WAS HAVING SUFFICIENT INTEREST-FREE FUND TO MEET THE INVESTMEN T WHEREFROM TAX EXEMPT INCOME IS EARNED. WE FIND THAT THE LD.CIT(A ) HAS UPHELD THE DISALLOWANCE ON THE BASIS THAT THE PROVISIONS OF RU LE 8D ARE APPLICABLE FROM AY 2008-09. IN OUR CONSIDERED VIEW, THIS IS N OT THE CORRECT APPROACH, THE DISALLOWANCE U/S.14A OF THE ACT CAN B E MADE ONLY, IF THE EXPENDITURE IS RELATED TO INVESTMENT WHEREFROM THE EXEMPT INCOME IS EARNED. IN THE PRESENT CASE, THE LD.CIT(A) HAS NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE THAT INVESTMENTS HAVE B EEN OUT OF INTEREST- FREE FUND, FOR COMMERCIAL EXPEDIENCY AND THE DIVIDE ND INCOME HAS BEEN OFFERED FOR TAX. THEREFORE, WE ARE UNABLE TO CONFI RM THE FINDING OF LD.CIT(A). IN THE LIGHT OF ABOVE DISCUSSION, WE HE REBY DIRECT THE AO TO DELETE THE ADDITION OF RS.84,304/-. ACCORDINGLY, T HIS GROUND ASSESSEES APPEAL IS ALLOWED. 5. GROUND NO.3 IS AGAINST CONFIRMING THE DISALLOWAN CE OF RS.7,50,000/-. THE LD.COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE AUTHORITIES BELOW FAILED TO APPRECIATE THE FACT THA T THE ASSESSEE WAS HAVING SUFFICIENT INTEREST-FREE FUNDS TO ADVANCE SU CH MONEY. HE SUBMITTED THAT NO BORROWED FUNDS WERE UTILIZED FOR THE PURPOSE OF ADVANCING TO SHREENIDHI TEXTILES. HE SUBMITTED THA T EVEN OTHERWISE ALSO ADVANCES WERE GIVEN FOR COMMERCIAL EXPEDIENCY. ITA NO S.2358 /AHD/11 AND ITA NO.1322/AHD/2013 SWASTIK TEXTILE ENGINEERS PVT.LTD. VS. ACIT/ITO ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 7 - 5.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND OPPOSED THE SUBMISSION MADE BY THE LD.COU NSEL FOR THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE AO OBSERVED THAT THE ASSESSEE HAD TAKEN A LOANS OF RS.2,11,05,468/- ON WHICH HE HAD PAID INTEREST TO THE EXTENT OF RS.1 8,42,189/-. THE AO OBSERVED THAT THERE IS AN INCREASE INTO THE INTERES T EXPENDITURE FROM RS.5,40,119/- TO RS.18,42,189/-. THE AO OBSERVED T HAT THE ASSESSEE HAD NOT CHARGED INTEREST IN RESPECT OF THE ADVANCES GIV EN TO M/S.FORTUNE PLASTOMAC PVT.LTD., NATIONAL TEXTILE CORPORATION AN D SHREENIDHI TEXTILES. THE AO, AFTER CONSIDERING THE SUBMISSION S, PROCEEDED TO MAKE DISALLOWANCE OF RS.10,37,260/- WHICH IS @14% OF THE ADVANCES GIVEN TO THE SUBSIDIARY-CONCERN. HOWEVER, LD.CIT(A) IN RESP ECT OF ADVANCES GIVEN TO M/S.FORTUNE PLASTOMAC PVT.LTD. FOLLOWING H IS PREDECESSORS ORDER PASSED IN THE AY 2007-08, DELETED THE DISALLO WANCE AND ALSO IN THE CASE OF NATIONAL TEXTILE CORPORATION. THE LD.CIT( A) HAS OBSERVED THAT THE AMOUNT WAS GIVEN AS EARNEST MONEY DEPOSIT AND P URCHASE PRICE OF TENDER DOCUMENT AND, ACCORDINGLY, DELETED THE DISAL LOWANCE. HOWEVER, LD.CIT(A) CONFIRMED THE DISALLOWANCE MADE IN RESPEC T OF ADVANCE GIVEN TO SHREENIDHI TEXTILES. THE CONTENTION OF THE ASSE SSEE IS THAT THE ADVANCE WAS GIVEN OUT OF INTEREST-FREE FUNDS. IT IS ALSO C ONTENDED THAT SIMILAR ITA NO S.2358 /AHD/11 AND ITA NO.1322/AHD/2013 SWASTIK TEXTILE ENGINEERS PVT.LTD. VS. ACIT/ITO ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 8 - ADVANCES WERE MADE DURING THE AY 2007-08, IN THAT Y EAR NO SUCH DISALLOWANCE WAS MADE. THIS CONTENTION WAS NOT MAD E BEFORE THE LD.CIT(A). THEREFORE, IN OUR CONSIDERED VIEW, THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE THAT HAD IT SUFFICIENT INTEREST-FREE FUNDS AND THE ADVANCE WAS GIVEN OUT OF INTEREST-FREE FUNDS RE QUIRES VERIFICATION AT THE END OF THE AO AND, ACCORDINGLY, WE HEREBY SET A SIDE THE ORDER OF THE AUTHORITIES BELOW AND RESTORE THIS ISSUE TO THE FIL E OF AO TO VERIFY WHETHER THE ADVANCE WAS OUT OF INTEREST-FREE FUNDS AVAILABL E WITH THE ASSESSEE OR NOT. IN CASE, THE AO FINDS THAT THE ASSESSEE WAS H AVING SUFFICIENT INTEREST-FREE FUNDS, HE SHOULD ALSO DELETE THE DISA LLOWANCE MADE. IN RESPECT OF ADVANCES GIVEN TO SHREE NIDHI TEXTILES. THUS, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOS ES. 6.1. AS A RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.2358/AHD/2011 FOR AY 2008-09 IS PARTLY ALLOWED FOR STATISTICAL PU RPOSES. 7. NOW, WE TAKE UP THE ASSESSEES APPEAL IN ITA NO. 1322/AHD/2013 FOR AY 2009-10, WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED:- YOUR APPELLANT BEING AGGRIEVED BY THE ORDER PASSED DATED 25/03/2013 U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE 'ACT') BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XTV, A HMEDABAD (HEREINAFTER REFERRED TO AS THE 'CIT(A)') PRESENTS THIS APPEAL A GAINST THE SAME ON THE FOLLOWING GROUNDS WHICH ARE WITHOUT PREJUDICE TO EA CH OTHER: ITA NO S.2358 /AHD/11 AND ITA NO.1322/AHD/2013 SWASTIK TEXTILE ENGINEERS PVT.LTD. VS. ACIT/ITO ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 9 - 1. THE ORDER PASSED BY THE LEARNED CIT(A) IS ERRONE OUS AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS AND THEREFORE REQUIRES TO BE SUITABLY MODIFIED. IT IS SUBMITTED THAT IT BE SO DONE NOW. 2. THE LEARNED CIT(A) ERRED IN LAW AND FACTS IN C ONFIRMING THE DISALLOWANCE OF RS.78,715/- BY INVOKING THE PROVISIONS OF SECTIO N 14A R.W.R. 8 D. IT IS SUBMITTED THAT INVESTMENT MADE BY THE APPELLANT WAS NOT FOR THE PURPOSE OF EARNING THE EXEMPT INCOME BUT WITH THE PURPOSE OF C OMMERCIAL EXPEDIENCY. IT IS SUBMITTED THAT IT BE SO HELD NOW. IN ANY EVENT I T IS SUBMITTED THAT SINCE APPELLANT WAS HAVING SUFFICIENT INTEREST FREE FUNDS , NO AMOUNT OF INTEREST SHOULD HAVE BEEN DISALLOWED U/S 14A INVOKING RULE 8 D. 3. THE LEARNED CIT (A) HAS ERRED IN LAW AND FACT S IN CONFIRMING THE DISALLOWANCE OF 14% INTEREST ON RS.7,50,000/- [I.E. RS.1,05,000/-] BEING AMOUNT ADVANCE TO SHREENIDHI TEXTILES BY HOLDING TH AT THERE IS DIFFERENCE BETWEEN COMMERCIAL EXPEDIENCY AND HUMANITARIAN CONS IDERATION AND THAT THERE WAS NO APPARENT BUSINESS EXPEDIENCY IN GIVING SUCH ADVANCE. IT IS SUBMITTED THAT IT BE SO HELD NOW. 4. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED TH AT NO INTEREST-BEARING FUNDS HAVE BEEN UTILIZED FOR SUCH ADVANCES MADE. TH EREFORE, NO INTEREST AMOUNT SHOULD BE DISALLOWED. IT IS SUBMITTED THAT I T BE SO HELD NOW. 5. WITHOUT PREJUDICE TO ABOVE, THE AO HAS ERRED IN TAKING THE INTEREST RATE @ 14% WHICH IS CONFIRMED BY THE CIT(A). IT IS SUBMITT ED THAT IT BE SO HELD NOW. YOUR APPELLANT PRAYS FOR LEAVE TO ADD, TO ALTER AND /OR TO AMEND ALL OR ANY OF THE GROUNDS BEFORE THE FINAL HEARING OF APPEAL. 7.1. FIRST GROUND IS GENERAL IN NATURE WHICH RE QUIRES NO INDEPENDENT ADJUDICATION. 7.2. APROPOS TO GROUND NOS.2 TO 5, THE LD.REPRESE NTATIVES OF THE RESPECTIVE PARTIES HAVE ADOPTED THEIR ARGUMENTS AS WERE MADE IN ITA NO.2358/AHD/2011 PERTAINING TO THE AY 2008-09(SUPRA ). WE HAVE HEARD ITA NO S.2358 /AHD/11 AND ITA NO.1322/AHD/2013 SWASTIK TEXTILE ENGINEERS PVT.LTD. VS. ACIT/ITO ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 10 - BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE F ACTS ARE IDENTICAL TO THE FACTS AS ARE RAISED IN THE ITA NO.2358/AHD/2011 FOR AY 2008-09 IN ASSESSEES OWN CASE-SUPRA, WHEREIN WE HAVE ALLOWED THE GROUND NO.2 AND GROUND NO.3 IS RESTORED TO THE FILE OF AO TO VE RIFY WHETHER THE AMOUNT HAS BEEN GIVEN FROM INTEREST-FREE FUND AVAIL ABLE WITH THE ASSESSEE AND IF IT IS FOUND THAT THE ADVANCES WERE MADE OUT OF NON-INTEREST BEARING FUND, IN THAT EVENT, THE AO TO DELETE THE ADDITION. TAKING A CONSISTENT VIEW IN THE PRESENT CASE ALSO, FOR THE SAME REASONI NG GROUND NO.2 IS ALLOWED, HOWEVER, FOR GROUND NOS.3 TO 5 (INTER-CONN ECTED) THE AO IS DIRECTED TO VERIFY WHETHER THE ADVANCES HAVE BEEN M ADE OUT OF NON- INTEREST BEARING FUND AND IF HE FINDS SO, THE ADDIT ION BE DELETED IN THE PRESENT YEAR AS WELL. THUS, GROUND NOS.3 TO 5 RA ISED IN AY 2009-10 ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE FOR AYS 2008-09 AND 2009-10 ARE PARTLY ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 06 TH DAY OF NOVEMBER, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 06/ 11 /2015 /(..$ , %.$../ T.C. NAIR, SR. PS ITA NO S.2358 /AHD/11 AND ITA NO.1322/AHD/2013 SWASTIK TEXTILE ENGINEERS PVT.LTD. VS. ACIT/ITO ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 11 - !'#$%$&' / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012 3 / CONCERNED CIT 4. 3 ( ) / THE CIT(A)-XIV, AHMEDABAD 5. 4%5 $12 , ( 12 + , 0 / DR, ITAT, AHMEDABAD 6. 578 9& / GUARD FILE. / BY ORDER, #4 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 19.10.15 (DICTATION-PAD 11 -PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 28.10.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 06.XI.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 06.XI.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER