The ACIT,Vapi Circle, Vapi V. M/s. Deluxe Kraft Board Pvt.Ltd., Vapi

ITA 1347/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1420 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-06-2016
• Assessment Year: 2000-2001
• Appeal Filed On: 21-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Proportionate interest; Tax effect
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 1347/AHD/2012 & C.O. NO. 142/AHD/12 (ASSESSMENT YEAR: 2000-01) ASSTT. COMMISSIONER OF INCOME-TAX, VAPI CIRCLE, VAPI DELUXE KRAFT BOARD PVT. LTD. PLOT NO. 289/1, 288/1 & 2 GIDC, VAPI V/S V/S DELUXE KRAFT BOARD PVT. LTD. PLOT NO. 289/1, 288/1 & 2 GIDC, VAPI ASSTT. COMMISSIONER OF INCOME-TAX, VAPI CIRCLE, VAPI (APPELLANT) (RESPONDENT) PAN: AABFD8288Q APPELLANT BY : SHRI KAMLESH MAKWANA, SR. D.R. RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 07 -06-20 16 DATE OF PRONOUNCEMENT : 08 -06-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: ITA NO. 1347 & C.O. NO. 142/AHD/12 . A.Y. 2000-2 001 2 1. ITA NO. 1347/AHD/2012 & C.O. NO. 142/AHD/12 ARE THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE DIR ECTED AGAINST THE VERY SAME ORDER OF THE LD. CIT(A), VALSAD DATED 12. 03.2012 PERTAINING TO A.Y. 2000-01. 2. IN SPITE OF NOTICE, NONE APPEARED ON BEHALF OF THE ASSESSEE; THEREFORE, WE DECIDED TO PROCEED EX PARTE. WE HAVE HEARD THE L D. D.R. AT LENGTH WHO REITERATED WHAT HAS BEEN STATED BY THE A.O. IN THE ASSESSMENT ORDER MADE U/S. 144 R.W.S. 254 OF THE ACT DATED 18. 12.2009. 3. HAVING HEARD THE DEPARTMENTAL REPRESENTATIVE, WE HA VE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE GR IEVANCE OF THE REVENUE READS AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION ON ACCOUNT OF UNSECURED LOAN OF RS.28,72,274/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION ON ACCOUNT OF LOADING & UNLOADING EXPENSES RS.2,16,069/-. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION ON ACCOUNT OF PROVISIONS FOR TAXATION OF RS.3,51,530/-. 4. IN THE CASE, THE ORIGINAL ASSESSMENT WAS MADE U/S. 144 OF THE ACT VIDE ORDER DATED 22.10.2003, THE MATTER TRAVELLED UP TO THE TRIBUNAL AND THE TRIBUNAL IN ITA NO. 1514/AHD/2005 VIDE ORDER DA TED 17.10.2008 SET ASIDE THE ORDER TO THE FILES OF THE A.O FOR RE- ADJUDICATION. 5. THE ASSESSEE WAS ASKED TO FURNISH EXPLANATION/DETAI LS IN RESPECT OF INTEREST ON UNSECURED LOAN, UNSECURED LOAN, LOADING AND UNLOADING CHARGES AND PROVISION OF TAXATION. ON RECEIVING NO PLAUSIBLE REPLY, THE ITA NO. 1347 & C.O. NO. 142/AHD/12 . A.Y. 2000-2 001 3 A.O. COMPLETED THE ASSESSMENT BY MAKING THE ADDITIO NS MADE IN THE ORIGINAL ASSESSMENT ORDER. 6. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND EXPLAINED ITS CASE IN DETAIL. 7. IN SO FAR AS THE ADDITION OF RS. 38,35,251/- RELATI NG TO THE ADDITION IN RESPECT OF INTEREST CLAIMED ON UNSECURED LOAN IS CO NCERNED, THE LD. CIT(A) FOUND THAT THE A.O. HAS DISALLOWED THE ENTIR E INTEREST DEBITED TO THE PROFIT AND LOSS ACCOUNT. WE FIND THAT THE INTER EST HAS BEEN DEBITED ON UNSECURED LOANS OF RS. 2.94 CRORES. WE FIND THAT OUT OF THIS, THE A.O HAS DISBELIEVED THE UNSECURED LOAN AMOUNTING TO RS. 73.85 LAKHS. THE LD. CIT(A) WAS OF THE FIRM BELIEF THAT THE A.O. SHO ULD HAVE DISALLOWED THE INTEREST ON PROPORTIONATE BASIS I.E. ONLY ON TH AT PART OF UNSECURED LOAN, THE GENUINENESS OF WHICH WAS NOT ACCEPTED. AC CORDINGLY, THE LD. CIT(A) DIRECTED THE A.O. TO ALLOW PROPORTIONATE INT EREST EXPENSES PAID ON THE UNSECURED LOANS WHICH HAVE BEEN ACCEPTED AS GENUINE. WE DO NOT FIND ANY ERROR OR INFIRMITY IN THIS DIRECTION O F THE LD. CIT(A); GROUND NO. 1 IS ACCORDINGLY DISMISSED. 8. THE SECOND ISSUE RELATES TO THE DISALLOWANCE OF EX PENSES OF RS. 2,16,069/- OUT OF LOADING AND UNLOADING EXPENSES CL AIMED AMOUNTING TO RS. 12,96,069/-. WE FIND THAT THE LD. CIT(A) HAS FOUND ALL THESE EXPENSES FULLY SUPPORTED BY BILLS/VOUCHERS WHICH WE RE VERIFIED BY THE AUDITORS AND NO DEFICIENCY OR DEFECTS WAS POINTED O UT. ACCORDINGLY, THE LD. CIT(A) DELETED THE ADDITION OF RS. 2,16,069/-. ITA NO. 1347 & C.O. NO. 142/AHD/12 . A.Y. 2000-2 001 4 9. AS THE LD. CIT(A) WAS CONVINCED THAT ALL THESE EXPE NSES ARE FULLY SUPPORTED BY THE BILLS/VOUCHERS DULY AUDITED , WE D ECLINE TO INTERFERE. GROUND NO. 2 IS ACCORDINGLY DISMISSED. 10. GROUND NO. 3 REATES TO THE ADDITION OF RS. 3,51,530 /- ON ACCOUNT OF PROVISIONS FOR TAXATION. 11. THE FIRST APPELLATE AUTHORITY OBSERVED THAT THIS PR OVISION WAS MADE IN EARLIER YEARS PRECEDING THE YEAR UNDER CONS IDERATION WHICH WAS REFLECTED IN THE BALANCE SHEET. THEREFORE, DELE TED THE ADDITION AS THE SAME CANNOT BE TREATED AS INCOME FOR THE YEAR U NDER CONSIDERATION. 12. BEFORE US ALSO THE LD. D.R. COULD NOT CONTROVERT T HE FINDINGS OF THE LD. CIT(A) THAT THE PROVISION WAS MADE IN EARLI ER YEARS AND ONLY REFLECTED AS A BROUGHT FORWARD BALANCE IN THE BALAN CE SHEET. THEREFORE NO INTERFERENCE IS CALLED FOR. GROUND NO. 3 IS ALSO DISMISSED. 13. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. C.O. NO. 142/AHD/2012 FOR A.Y. 2000-01 14. THE CROSS OBJECTION OF THE ASSESSEE IS TWOFOLD. WIT H GROUND NO. 1, THE ASSESSEE HAS CHALLENGED THE APPEAL OF THE RE VENUE ON THE GROUND THAT IT IS HIT BY THE CIRCULAR OF THE CBDT P RESCRIBING THE MONETARY LIMIT OF TAX EFFECT FOR NOT FILING THE APP EAL BEFORE THE TRIBUNAL. ITA NO. 1347 & C.O. NO. 142/AHD/12 . A.Y. 2000-2 001 5 15. WE DO NOT FIND ANY FORCE IN THIS CLAIM OF THE ASSES SEE SINCE THE TAX EFFECT OF THE IMPUGNED APPEALS EXCEEDS RS. 10 L AKHS AND, THEREFORE, NOT COVERED BY THE CBDT CIRCULAR NO. 21/ 2015 DATED 10.12.2015. GROUND NO. 1 IS ACCORDINGLY DISMISSED. 16. THE SECOND GROUND RELATES TO UPHOLDING THE DISALLOW ANCE OF INTEREST AMOUNTING TO RS. 9,62,980/-. 17. IN REVENUES APPEAL (SUPRA), WE HAVE CATEGORICALLY MENTIONED THAT THE PROPORTIONATE INTEREST ON THAT PART OF THE UNSECURED LOAN HAS TO BE DISALLOWED WHICH HAS NOT BEEN ACCEPTED AS GEN UINE. WE, THEREFORE, DO NOT FIND ANY MERIT IN THIS CLAIM OF T HE ASSESSEE, FINDING OF THE LD. CIT(A) ARE CONFIRMED. GROUND NO. 2 IS ACCOR DINGLY DISMISSED. 18. IN THE RESULT, THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 08 - 06 - 20 16. SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD