M/s. Star ilk Mills P.Ltd., Amritsar. V. The Deputy Commissioner of Income tax, Amritsar.

ITA 133/ASR/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1432 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 06-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PADAM BAHL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH;(SMC) AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER I.T.A. NO. 133 (ASR)/2014 ASSESSMENT YEAR: 2006-07 PAN: AACCS19111M M/S STAR SILK MILLS (P) LTD., KASHMIR ROAD, VERKA, AMRITSAR. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE IV, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. PADAM BAHL, (ADV.) RESPONDENT BY: SH. TARSEM LAL (DR) DATE OF HEARING: 0 8.09.2015 DATE OF PRONOUNCEM ENT: 08.09.2015 ORDER PER A.D.JAIN (JM): THIS IS ASSESSEES APPEAL FOR ASST. YEAR 2006-07, TAKING THE FOLLOWING EFFECTIVE GROUNDS: (I) THAT THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS), AMRITSAR HAS GROSSLY ERRED IN CONFIRMING THE ACTION OF DEPUT Y COMMISSIONER OF INCOME TAX, CIRCLE 4, AMRITSAR IN MAKING ADDITION O F RS.2,23,200/- ON ACCOUNT OF DISALLOWANCE OF INTEREST. (II) THAT BOTH COMMISSIONER OF INCOME TAX (APPEALS ), AMRITSAR AND DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE IV, AMRIT SAR HAVE FAILED TO APPRECIATE THAT ADVANCE TO SISTER CONCERNS WERE MAD E IN THE PREVIOUS YEARS 2. ITA NO. 133(ASR )/2014 ASST. YEAR 2006-07 AND THAT THE COMPANY HAD INTEREST FREE CAPITAL AND RESERVES OF MORE THAT RS.100 LACS. (III) THAT BOTH COMMISSIONER OF INCOME TAX (APPEAL S), AMRITSAR AND DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE IV, AMRIT SAR HAVE FAILED TO APPRECIATE THAT THE BORROWED FUNDS WERE UTILIZED FO R SPECIFIC PURPOSE I.E. CAR, BUILDING, MACHINERY, EXPORT STOCKS AND EXPORT BILLS. (IV) THAT THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS), AMRITSAR HAS GROSSLY ERRED IN FOLLOWING THE CASE OF ABHISHEK INDUSTRIES REPORTED AT 286 ITR 1 (P&H). 2. AS PER GROUND NO.2, THE LEARNED CIT(A) HAS FAILE D TO APPRECIATE THAT ADVANCES TO SISTER CONCERN WERE MADE IN THE PREVIOU S YEARS (EARLIER YEARS) AND THE ASSESSEE COMPANY HAD INTEREST FREE CAPITAL AND RESERVES OF MORE THAN RS.1,00,000/-. THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THIS ISSUE, HOWEVER, HAS NOT BEEN DECIDED BY THE LEARNED CIT(A). 3. IN THIS REGARD, IT IS SEEN THAT AT PAGE 3, IN PA RA 5 OF THE IMPUGNED ORDER, THE LEARNED CIT(A) HAS OBSERVED, INTER ALIA, AS FOL LOWS: DURING THE APPELLATE PROCEEDINGS.............COUNS EL FOR THE APPELLANT HAS FURNISHED WRITTEN SUBMISSION.............CLAIMING T HAT ADVANCES WERE NOT GIVEN DURING THE YEAR BUT WERE OPENING BALANCE ONLY...... ....... THUS, THE LEARNED CIT(A) HAS CONSCIOUSLY TAKEN NOTE OF THE ASSESSEES CONTENTION BY WAY OF WRITTEN SUBMISSIONS FAILED BEF ORE HIM THAT THE ADVANCES WERE NOT GIVEN DURING THE YEAR, BUT WERE OPENING BA LANCES ONLY. HOWEVER, THE LEARNED CIT(A) HAS OMITTED DECIDING THIS MATERIAL I SSUE, THOUGH SPECIFICALLY 3. ITA NO. 133(ASR )/2014 ASST. YEAR 2006-07 RAISED. THIS HAS VISITED THE ASSESSEE WITH PREJUDIC E, AS MUCH AS A SPECIFIC MATERIAL ISSUE RAISED BY THE ASSESSEE BEFORE THE LE ARNED CIT(A) HAS GONE UNDECIDED. IN CASE THIS CONTENTION OF THE ASSESSEE IS TO BE UPHELD, THE CONSEQUENCE THEREOF WOULD MATERIALLY AFFECT THE FAT E OF THE ADDITION UNDER CHALLENGE. 4. IN VIEW OF THE ABOVE, THIS ISSUE IS REMITTED TO THE FILE OF THE LEARNED CIT(A) TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW ON AFF ORDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE QUESTION OF THE ADD ITION OF RS.2,23,200/- ON ACCOUNT OF DISALLOWANCE OF INTEREST SHALL BE DECIDE D AFRESH ON THE BASIS OF FINDING TO BE ARRIVED AT BY THE LEARNED CIT(A) ON T HE QUESTION BEING REMANDED. THE ASSESSEE SHALL BE OFFERED ADEQUATE OPPORTUNITY OF HEARING AND THE ASSESSEE, NO DOUBT, SHALL COOPERATE IN THE REMAND P ROCEEDINGS. ORDERED ACCORDINGLY. 5. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH SEPTEMBER, 2015. SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 08.09. 2015 /PK/ PS. COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S STAR SILK MILLS (P) LTD. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE IV, A MRITSAR. 3. THE CIT(A), 4. ITA NO. 133(ASR )/2014 ASST. YEAR 2006-07 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.