ACIT, CHENNAI V. M/s. Shriram Chits Tamilnadu Pvt Ltd., CHENNAI

ITA 1383/CHNY/2011

• Counselvise Citation: 138321714 RSA 2011
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 01-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K GOPALAKRISHNAN SR
• Assessee Lawyers: R SIVARAMAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.A. NO. 1383/MDS/2011 (ASSESSMENT YEAR : 2004-05) THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE VI(2), CHENNAI 600 034. (APPELLANT) V. M/S SHRIRAM CHITS TAMILNADU PVT. LTD., GREAMS DUGAR, 4 TH FLOOR, 149, GREAMS ROAD, CHENNAI 600 006. PAN : AABCS0167N (RESPONDENT) APPELLANT BY : SHRI K. GOPALAKRISHNAN , SR.AR RESPONDENT BY : SHRI R. SIVARAMAN DATE OF HEARING : 17.10.2011 DATE OF PRONOUNCEMENT : 17.10.2011 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE, ITS GRIEVANC E IS THAT CIT(APPEALS) DELETED INTEREST DISALLOWANCE MADE ON BORROWED FUNDS BY THE ASSESSING OFFICER. AS PER THE REVENUE, LD. CIT(APPEALS) HAD I.T.A. NO. 1383/MDS/11 2 RELIED ON THE ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 AND THIS HAD NOT BECOME FIN AL. 2. SHORT FACTS APROPOS ARE THAT INTEREST OF ` 8,53,244/- WAS DISALLOWED BY THE ASSESSING OFFICER FOR A REASON TH AT ASSESSEE COULD NOT PROVE FUNDS TO HAVE BEEN GIVEN TO ITS SISTER CO NCERN AS FROM ITS SURPLUS FUND AVAILABILITY. THE MATTER HAD TRAVELLE D UPTO THIS TRIBUNAL AND THIS TRIBUNAL IN ITS ORDER DATED 26.6.2009 IN I .T.A. NO. 2117/MDS/2008 HAD REMITTED THE ISSUE BACK TO LD. CI T(APPEALS) FOR CONSIDERATION. THIS TRIBUNAL HAD NOTED THAT LD. CI T(APPEALS) HAD NOT DISCUSSED AS TO HOW THE CLAIM OF COMMERCIAL EXPEDIE NCY WAS ESTABLISHED BY THE ASSESSEE FOR APPLICATION OF THE DECISION OF HON'BLE APEX COURT IN THE CASE OF S.A. BUILDERS LTD. V. CIT (288 ITR 1) (SC). PURSUANT TO THIS, THE ISSUE WAS ONCE AGAIN CONSIDER ED BY LD. CIT(APPEALS). THE FINDING OF THE LD. CIT(APPEALS) IN FRESH PROCEEDINGS WAS THAT NO OVERDRAFT MONEY WAS USED FO R FUNDING THE GROUP CONCERNS OF THE ASSESSEE. AS PER THE LD. CIT (APPEALS), ASSESSEE COULD SHOW THAT THE OPENING BALANCE IN THE OVERDRAFT ACCOUNT WHICH WAS ` 2.27 CRORES HAD COME DOWN TO ` 22,97,207/- BY I.T.A. NO. 1383/MDS/11 3 THE END OF RELEVANT PREVIOUS YEAR AND THERE WAS SUB STANTIAL ADDITION TO THE RESERVES AND SURPLUS OF THE ASSESSEE. THERE FORE, AS PER THE LD. CIT(APPEALS), ASSESSEE COULD SHOW THAT OVERDRAFT FA CILITIES WERE NOT USED FOR GIVING LOANS TO THE GROUP CONCERNS. 3. NOW BEFORE US, LEARNED D.R. STRONGLY ARGUED FOR OVERTURNING THE DECISION OF LD. CIT(APPEALS), WHEREAS LEARNED A.R. ONCE AGAIN RELIED ON THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04. 4. WE HAVE PERUSED THE ORDERS AND HEARD THE CONTENT IONS OF THE RIVAL PARTIES. WE FIND THAT THE ISSUE STANDS COVER ED BY THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 IN I.T.A. NO. 1512/MDS/2010. NOTHING WAS SHOWN BY THE REVENUE TO PROVE THAT THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2003-04 WHICH SUSTAINED THE ORDER O F THE LD. CIT(APPEALS) DELETING DISALLOWANCE OF INTEREST FOR THAT YEAR HAS BEEN OVERTURNED BY ANY HIGHER JUDICIAL FORUM. FURTHER, NOTHING WAS ALSO BROUGHT ON RECORD TO SHOW THAT THE FINDING OF LD. C IT(APPEALS) WITH REGARD TO SUBSTANTIAL SCALING DOWN OF OVERDRAFT AMO UNT AND I.T.A. NO. 1383/MDS/11 4 SUBSTANTIAL INCREASE IN RESERVES AND SURPLUS, WAS W RONG OR INCORRECT. THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE ORD ER OF LD. CIT(APPEALS) DELETING THE ADDITION MADE ON INTEREST ON BORROWED FUNDS. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 17.10.2011. SD/- SD/- (HARI OM MARATHA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 17 TH OCTOBER, 2011. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-V, CHENNAI-34 (4) CIT, CHENNAI-III, CHENNAI (5) D.R. (6) GUARD FILE