Suryanagari Finlease Ltd., Ahmedabad V. The Income tax Officer, Com.Ward-8(2), Ahmedabad

ITA 149/AHD/2006

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9083 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-09-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 17-01-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C
• Section: 143(3)

Judgement Text

IN THE INCOME_TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI H.L.KARWA AND SHRI N.S.SAINI ITA NO.149/AHD/2006 (ASSESSMENT YEAR : 2002-03) SURYANAGARI FINLEASE LTD. 2 ND FLOOR, SARTHIK ANNEXE, NEAR FUN REPUBLIC, SATELLITE, ISCON CROSS ROAD, AHMEDABAD. VS. I.T.O. COMPANY WARD 8(2), AHMEDABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DHIREN SHAH, A.R. RESPONDENT BY : SHRI M.C.PANDIT, SR. D.R. ( (( ( )/ )/)/ )/ ORDER PER KARWA, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-XIV, AHMEDABAD DATED 01.8.2005 RELATING TO A SSESSMENT YEAR 2002-03. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE READS AS UNDER: THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND ON FA CTS OF THE CASE BY DISALLOWING INTEREST OF RS.46,96,541/- OUT OF IN TEREST CLAIMED FOR BUSINESS PURPOSE. 3. IN THIS CASE, THE ASSESSING OFFICER DISALLOWED A SUM OF RS.46,96,541/- ON THE GROUND THAT THE INTEREST BEARIN G FUND HAS REMAINED INVESTED IN THE INTEREST FREE ADVANCES TO THE PERSONS MENTIONED IN THE ASSESSMENT ORDER. WHILE MAKING THE DISALLOWANCE, T HE ASSESSING OFFICER HAS FOLLOWED THE ORDER PASSED U/S 143(3) OF THE ACT DATED 27.3.2003 FOR THE ASSESSMENT YEAR 2000-01. THE ASSESSING O FFICER FURTHER OBSERVED THAT THERE WAS NO CHANGE IN FACTS AS CO MPARED TO 2 ASSESSMENT YEARS 2000-01 AND 2001-02. THE RELEVANT OBSERV ATIONS OF THE ASSESSING OFFICER ARE AS UNDER: THE ISSUE OF ALLOW ABILITY OF INTEREST ATTRIBUTABL E TO INTEREST RREE ADVANCES BEEN DISCUSSED IN DETAIL IN THE ORDER PASS ED U/S. 143(3) DATED 27- 03-2003 FOR A.Y.00-01.THERE IS NO FURTHER CHANGE IN ACCOUNTS OF THESE PERSONS AS COMPARED TO A.Y.2000-01 AS APPEARING FRO M THE COPY OF ACCOUNTS SUBMITTED BY ASSESSEE. AFTER DETAILED VERIFICATION IT HAS BEEN HELD IN A.Y.2000-01 THAT THE ADVANCES TO V?NOUS SAHAKARI MA NDALIES WERE MADE OUT OF INTEREST BEARING FUNDS OF THE ASSESSEE COMPANY A ND THEREFORE INTEREST COST INCURRED BY THE ASSESSEE ATTRIBUTABLE TO SUCH ADVAN CE WAS DISALLOWED. AS THERE IS NO CHANGE IN FACTS AS COMPARED TO A.Y.2000 -01 AND A.Y.2001-02 INTEREST ATTRIBUTABLE TO INTEREST BEARING FUNDS IS TREATED AS INCURRED NOT WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSE AND THEREF ORE IT IS DISALLOWED. THE SUBMISSION MADE BY ASSESSEE ARE ALMOST SAME WHICH W ERE GIVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y.2000-01 AN D A.Y.2001-02 AND THE DISALLOWANCE WAS MADE IN THAT YEAR AFTER CONSIDERIN G ALL THESE DETAILS AND SUBMISSION. THEREFORE NO FRESH DISCUSSION IS REQUIR ED ON THIS ISSUE. FROM THE ABOVE, IT IS CLEAR THAT WHILE MAKING THE DIS ALLOWANCE, THE ASSESSING OFFICER HAS FOLLOWED HIS ORDER PASSED IN ASSESSEES CASE FOR THE ASSESSMENT YEARS 2000-01 AND 20001-02. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION. 5. BEFORE US, SHRI DHIREN SHAH, THE LEARNED COUNSEL FO R THE ASSESSEE SUBMITTED THAT IN ASSESSMENT YEARS 2000-01 AND 2001-02, T HE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE. IN FURTHER APPEAL BY THE REVENUE, THE TRIBUNAL AHMEDABAD BENCH-B DATED 10-8-2007 IN ITA NO .3373/AHD/2003 FOR THE ASSESSMENT YEAR 2000-01 AND AHMEDABAD BENCH-C VI DE ITS ORDER DATED 17.10.2008 IN ITA NO.3872/AHD/2002 RELATING T O ASSESSMENT YEAR 2001-02 HAVE CONFIRMED THE ORDERS OF THE CIT(A) IN DE LETING THE DISALLOWANCES OF RS.52,34,864/- AND RS.73,79,838/-. THE RELEVANT FINDINGS OF THE TRIBUNAL GIVEN FOR THE ASSESSMENT YEAR 2000-01 ARE AS UNDER: 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE UNDISPUTED FACTS OF THE CASE ARE THAT THE 3 ASSESSEE HAS ADVANCED INTEREST FREE SECURITY DEPOSITS TO VARIOUS SAHAKARI MANDALIS AMOUNTING TO RS.3,48,99,100. THE ADVANCES WERE GIVEN IN THE FYS 1997-98 AND 1998-99 RELEVANT TO THE AYS 1998-99 AND 1999-2000. THE LEARN ED CIT(A) HAS FURTHER GIVEN A FINDING THAT THE ASSESSMENTS FOR THE AYS 1998-99 AND 1999-2000 WERE FRAMED U/S. 143(3) OF THE ACT BY THE ASSESSING OFFICER AND NO DISALLOWANCE OF INTEREST WAS MADE. NO MATERIAL WAS BROUGHT ON RECORD BY THE REVENUE TO CONTROVERT THE FINDINGS OF THE CIT(A). IN THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT SINCE THE ADVANCES WERE MADE IN FYS 1997-9 8 AND 1998-99 AND NOT DURING THE YEAR UNDER CONSIDERATI ON AND IN THOSE YEARS IN THE ASSESSMENTS MADE U/S.!43(3) OF THE ACT IT HAS BEEN ACCEPTED AS A FACT BY THE ASSESSING OFFICER THA T THE ADVANCES WERE FOR THE BUSINESS OF THE ASSESSEE AND NO DISALLOWANCE OF INTEREST WAS MADE IN THOSE YEARS. THEREFO RE, IN THE YEAR UNDER APPEAL, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TURNING ROUND AND SAYING THAT THE AMOUNT ADVANCED IN THE EARLIER YEARS WAS NOT FOR THE BUSINESS PURPOSES OF THE ASSESSEE. IN THE CASE OF RADHASOAMI SATSANG V. CIT (193 ITR 321 (SC), WHERE HON'BLE SUPREME COUR T HAS 0BSERVED THAT STRICTLY SPEAKING, RES JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS. AGAIN, EACH ASSESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APP LY IN THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT THROUG H THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION T O BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT B E AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. HENCE, WE CONFIRM THE ORDER OF THE CIT( A) AND DISMISS THE REVENUE'S APPEAL. IT IS SEEN THAT WHILE MAKING DISALLOWANCE FOR THE ASSESSM ENT YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER HAS FOLLOWED HIS ORDER PASSED IN ASSESSEES CASE IN ASSESSMENT YEAR 2000-01. SHRI DHIREN SHAH, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE FACTS OF THE PRESENT YEAR ARE SIMILAR TO THAT OF ASSESSMENT YEAR 2000-2001. HE , THEREFORE, SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSE SSEE. SHRI M.C.PANDIT, THE LD. D.R. COULD NOT CONTROVERT THE ABO VE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. THUS, IN VIEW OF THE ORD ER OF THE 4 TRIBUNAL PASSED IN ASSESSEES CASE FOR ASSESSMENT YEAR 2000-01, WE ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11.9 .2009. SD/- (N.S.SAINI) ACCOUNTANT MEMBER SD/- (H.L.KARWA) JUDICIAL MEMBER AHMEDABAD, DATED:11.9.2009 PSP* COPY TO : (1) THE ASSESSEE (2) THE ASSESSING OFFICER (3) THE CIT(A) CONCERNED, (4) THE CIT, CONCERNED, (5) THE DR, ITAT, AHMEDABAD, (6) GUARD FILE. BY ORDER ASSTT. REGISTRAR / D EPUTY REGISTRAR ITAT, AHMEDABAD BENCHES AHMEDABAD.