DCIT, C-5, Ludhiana V. M/s Satyam Auto Components Ltd., Ludhiana

ITA 1500/CHANDI/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8341 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 27-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANJIT SINGH
• Keywords: Business expenditure; Proportionate interest; Capital receipt; Revenue expenditure; Capital expenditure; TDS

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRISANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 1500/CHD/2017 / ASSESSMENT YEAR : 2011-12 THE DCIT, CIRCLE - 5, LUDHIANA VS. M/S SATYAM AUTO COMPONENTS PVT LTD., G.T.ROAD, HERO NAGAR, LUDHIANA ! ' ./ PAN NO: AACCS2689E !#/ APPELLANT %& !# / RESPONDENT ./ ITA NO. 589/CHD/2018 / ASSESSMENT YEAR : 2012-13 THE DCIT, CIRCLE - 5, LUDHIANA VS. M/S SATYAM AUTO COMPONENTS PVT LTD., G.T.ROAD, HERO NAGAR, LUDHIANA ! ' ./ PAN NO: AACCS2689E !#/ APPELLANT %& !# / RESPONDENT '()* /ASSESSEE BY : SH. MANJIT SINGH, CIT DR )* / REVENUE BY : SH. SUBHASH AGGARWAL, ADVOCATE + ,)( -' /DATE OF HEARING : 01.07.2019 ./ )( -' / DATE OF PRONOUNCEMENT : 11.07.2019 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE CAPTIONED APPEALS RELATING TO ASSESSMENT YEAR 2 011-12 AND 2012-13 HAVE BEEN PREFERRED BY THE REVENUE AGAIN ST THE ORDERS DATED ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 2 21.08.2017 AND 14.2.2018 OF THE COMMISSIONER OF INC OME TAX (APPEALS)-2, LUDHIANA [HEREINAFTER REFERRED TO AS C IT(A)] RESPECTIVELY. 2. FIRST, WE SHALL TAKE UP REVENUES APPEAL FOR AS SESSMENT YEAR 2011-12. ITA NO. 1500/CHD/2017 FOR A.Y. 2011-12 : 3. THE DEPARTMENT IN THIS APPEAL HAS TAKEN FOLLOWIN G GROUNDS OF APPEAL:- 1. WHETHER THE LD. CIT(A) WAS RIGHT IN LAW IN TREATING ENDURING NATURE TRAINING EXPENSES DONE ON MANUFACTURING SYST EM AS REVENUE EXPENDITURE ? 2. WHETHER THE LD. CIT(A) WAS RIGHT IN LAW IN TREATING INTEREST INCOME RECEIVED FROM CITIBANK AS CAPITAL RECEIPT ? 3. WHETHER THE LD. CIT(A) WAS RIGHT IN LAW IN TREATING SPOUSE TRAVEL EXPENSES OF DIRECTOR AS BUSINESS EXPENSES ? 4. WHETHER THE LD. CIT(A) WAS RIGHT IN L AW IN DELETING DISALLOWANCE U/S 36(L)(III), WHERE ASSESSEE USED BO RROWED FUNDS FOR ACQUISITION OF FIXED ASSETS ? 4. GROUND NO.1 : THE ISSUES RAISED VIDE GROUND NO.1 IS AS TO WHETH ER THE EXPENDITURE INCURRED ON TRAINING OF THE EMPLOY EES IS TO BE TREATED AS CAPITAL EXPENDITURE OR REVENUE EXPENDITURE. THE AS SESSING OFFICER TREATED THE EXPENDITURE AS CAPITAL IN NATURE OBSERV ING THAT THE EXPENDITURE INCURRED ON TRAINING OF THE EMPLOYEES WAS FOR GETTING ENDURING BENEFIT, HENCE, THE SAME COULD NOT BE CON SIDERED AS REVENUE EXPENDITURE. ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 3 5. IN APPEAL, THE LD. CIT(A), HOWEVER, DID NOT AGRE E WITH THE FINDINGS OF THE ASSESSING OFFICER AND HELD THAT THE EXPENDITURE INCURRED BY THE ASSESSEE ON THE TRAVELLING WAS REVENUE IN NA TURE. THE RELEVANT PART OF THE ORDER OF THE CIT(A) IS REPRODUCED AS UN DER:- 6.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER WHILE MAKING TH E IMPUGNED ADDITION. I HAVE ALSO CONSIDERED WRITTEN SUBMISSION S FILED BY THE ASSESSEE COMPANY THROUGH ITS LEARNED AR VIDE LETTER DATED 17.05.2016 ON THE ISSUE UNDER REFERENCE. I HAVE FURTHER CONSID ERED VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE LEARNED AR OF THE ASSESSEE COMPANY AS WELL AS OTHER MATERIAL PLACED BY HIM ON RECORD. ON CAREFUL CONSIDERATION OF THE ASSESSMENT ORDER, IT H AS BEEN NOTICED THAT THE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITIO N AS THE ASSESSEE COMPANY IN THE OPINION OF THE ASSESSING OFFICER HAS INCURRED THESE EXPENSES FOR GETTING ENDURING BENEFIT AND AS SUCH C ANNOT BE ALLOWED AS REVENUE EXPENSES. ON THE OTHER HAND, THE LEARNED AR OF THE ASSESSEE COMPANY HAS SUBMITTED THAT THE ASSESSEE CO MPANY HAD DEBITED TOTAL TRAINING EXPENSES AT RS.30,10,738/- A S UNDER:- GURGAON UNIT RS. 26,28,441/- HARIDWAR U:NIT RS. 3,82,297/- TOTAL RS. 30,10,738/- IT HAS ALSO BEEN SUBMITTED THAT THE ASSESSEE COMPAN Y APPOINTED 'Q- SPREAD' TO IMPART TRAINING TO THE MANUFACTURING STA FF TO MAKE IT MORE PRODUCTIVE & QUALITATIVE. IT HAS FURTHER BEEN SUBMI TTED THAT THE PERSONS FROM THAT CONCERN HAD VISITED EVERY MONTH A ND IMPARTED THEIR KNOWLEDGE TO TRAIN THE STAFF. IT HAS FURTHER BEEN S UBMITTED THAT THE PAYMENT WAS MADE EVERY MONTH AFTER DEDUCTING TDS. I T HAS AGAIN BEEN SUBMITTED THAT THE ASSESSING OFFICER HAS TREAT ED THIS EXPENDITURE AS 'LONG TERM BENEFIT' FOR ENHANCEMENT OF MANUFACTURING PROCESS & TREATED THE EXPENSES AS OF CAPITAL EXPENDITURE BY A DDING THE TOTAL AMOUNT OF RS. 19,04,914/- TO THE TOTAL INCOME OF TH E ASSESSEE COMPANY. IT HAS AGAIN BEEN SUBMITTED THAT THE ASSESSEE COMPA NY HAS INCURRED THIS EXPENDITURE 'WHOLLY AND EXCLUSIVELY ' FOR THE PURPOSE OF BUSINESS. IT HAS AGAIN BEEN SUBMITTED THAT THE EXPENDITURE HA S BEEN INCURRED VOLUNTARILY BUT ON THE GROUNDS OF COMMERCIAL EXPEDI ENCY AND IN ORDER TO FACILITATE CARRYING ON BUSINESS MORE EFFICIENTLY AND PRODUCTIVELY AS ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 4 THE ASSESSEE COMPANY IS MANUFACTURER OF PARTS OF AU TOMOTIVE COMPONENTS WHICH IS HIGHLY TECHNICAL IN NATURE. IT HAS AGAIN BEEN SUBMITTED THAT THE EXPENDITURE UNDER CONSIDERATION HAS BEEN INCURRED FOR KEEPING THE TRADE GOING AND MAKING IT PAY. ON T HIS PREPOSITION, THE LEARNED AR OF THE ASSESSEE COMPANY RELIED UPON THE DECISION OF THE HONORABLE APEX COURT IN THE CASE OF HAZI AZIZ AND A BDUL SHAKOOR BROS. VS. CIT 41 ITR 350 (SC). IT HAS AGAIN BEEN SU BMITTED THAT THE ASSESSING OFFICER HAS WRONGLY PRESUMED THAT THE TRA INING IS TO CHANGE THE MANUFACTURING SYSTEM WHEREAS THERE WAS NO CHANG E IN THE MANUFACTURING SYSTEM OR MANUFACTURING PROCESS. IT H AS AGAIN BEEN SUBMITTED THAT THE OBJECTIVE OF TRAINING WAS ONLY T O EDUCATE THE WORKERS BY EXPLAINING THE DIFFERENT PROCESSES FOR I NCREASING THE PRODUCTIVITY AND QUALITY OF THE GOODS MANUFACTURED BY THE ASSESSEE COMPANY. IT HAS AGAIN BEEN SUBMITTED THAT THE ASSES SING OFFICER HAS BROUGHT NOTHING ON RECORD TO PROVE THAT THE EXPENDI TURE INCURRED BY THE ASSESSEE COMPANY ON TRAINING WAS TO BRING AN AS SET INTO EXISTENCE. ON THIS PREPOSITION, THE LEARNED AR OF THE ASSESSEE COMPANY RELIED UPON THE DECISION OF THE HONORABLE APEX COURT IN TH E CASE OF CIT VS. ASSOCIATED CEMENTS COMPANIES LIMITED 172 ITR 257(SC ). APART FROM THIS, RELIANCE HAS ALSO BEEN MADE ON THE FOLLOWING DECISIONS:- (I). ALEMBIC CHEMICAL WORKS CO. LTD. VS. CIT 17 7 ITR 377 (SC) (II). CIT VS. SOUTHERN ROADWAYS LIMITED 304 ITR 88 (MAD)(HC) IT HAS AGAIN BEEN SUBMITTED THAT THE EXPENDITURE IN CURRED IS OF REVENUE IN NATURE AS AGAINST TREATED BY THE ASSESSING OFFIC ER AS CAPITAL EXPENDITURE. ON THIS PREPOSITION, THE LEARNED AR OF THE ASSESSEE COMPANY RELIED UPON THE FOLLOWING JUDICIAL PRONOUNC EMENTS:- (A) HINDUSTAN ALUMINUM CORPORATION LIMITED VS. CIT 159 ITR 673 (CAL.) (B) CIT VS. TATA ENGINEERING & LOCOMOTIVE COMPANY ( P) LIMITED 123 ITR 538 (MUMBAI.) (C) M/S SONY INDIA (P) LIMITED VS. DCIT [ITAT DEL] 315 ITR 150 (DELHI.) (D) CIT VS. INDIAN VISIT.COM(P)LTD (2009)176 TAXMAN 16 4 (DELHI) ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 5 (E) IN VIEW OF THE ABOVE STATED FACTS, IT HAS BEEN REQU ESTED THAT THE EXPENDITURE MAY BE ALLOWED AS REVENUE EXPENDITURE. ALTERNATIVELY, IT HAS BEEN SUBMITTED THAT THE EXPENDITURE ON TRAINING TO THE EXTENT OF RS. 1,55,574/- HAS BEEN INCURRED BY THE HARIDWAR UNIT O F THE ASSESSEE COMPANY AND AS SUCH DEDUCTION TO THIS EXTENT MAY AL SO BE ALLOWED. IN OTHER WORDS, IT HAS BEEN SUBMITTED THAT THE DISALLO WANCE MAY BE REDUCED BY AN AMOUNT OF RS. 1,55,574/- AS THE DEDUC TION UNDER SECTION 80IC OF THE ACT IS AVAILABLE TO THE HARIDWAR UNIT O F THE ASSESSEE COMPANY. ON CAREFUL CONSIDERATION OF THE RIVAL CONT ENTIONS, I AM INCLINED TO AGREE WITH THE CONTENTIONS OF THE LEARN ED AR OF THE ASSESSEE COMPANY. I AM ALSO OF THE OPINION THAT THE EXPENDITURE ON TRAINING HAS BEEN INCURRED TO INCREASE THE SKILL OF THE EMPLOYEES/WORKERS OF THE ASSESSEE COMPANY AND THERE WAS NO CHANGE IN THE PATTERN OF MANUFACTURING OR MANUFACTURING PR OCESSES. NO DOUBT, THE SKILL OF THE EMPLOYEES/WORKERS WILL LONG LAST BUT IT DOES NOT MEAN THAT THE EXPENDITURE IS CAPITAL IN NATURE. MOR EOVER, THE EXPENDITURE ON TRAINING OF EMPLOYEES/ WORKERS HAS B EEN INCURRED FOR THE EXISTING BUSINESS OF THE ASSESSEE COMPANY TO IN CREASE THE EFFICIENCY OF THE EMPLOYEES/WORKERS ENGAGED IN MANU FACTURING PROCESS AND TO INCREASE THE PRODUCTIVITY OF THE ASSESSEE CO MPANY AND AS SUCH CANNOT BE TREATED AS CAPITAL EXPENDITURE UNDER ANY CIRCUMSTANCES. THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE LEARNED AR OF THE CIRCUMSTANCES, THE ACTION OF THE ASSESSING OFFICE R IN MAKING AN ADDITION OF RS. 19,04,914/- IN THIS CASE ON ACCOUN T OF CAPITALIZATION OF TRAINING EXPENSES CANNOT BE SAID TO BE JUSTIFIED. 6.3 IN VIEW OF THE ABOVE STATED FACTS AND IN THE C IRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ASSESSING OFFICE R IS NOT JUSTIFIED IN MAKING AN ADDITION OF RS. 19,04,914/- IN THIS CASE ON ACCOUNT OF CAPITALIZATION OF TRAINING EXPENSES. SO, THE ADDITI ON OF RS. 19,04,914/- MADE BY THE ASSESSING OFFICER IN THIS CASE ON ACCOU NT OF CAPITALIZATION OF TRAINING EXPENSES IS, THEREFORE, DIRECTED TO BE DELETED. IN THE RESULT, THE GROUND NO. 2 OF APPEAL TAKEN BY THE ASSESSEE CO MPANY IS ALLOWED. 6. A PERUSAL OF THE ABOVE FINDINGS OF THE CIT(A) RE VEALS THAT THE LD. CIT(A) WHILE RELYING UPON THE VARIOUS CASE LAWS HAS OBSERVED THAT THE EXPENDITURE ON TRAINING OF THE WORKING EMPLOYEES HA D BEEN INCURRED FOR ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 6 THE EXISTING BUSINESS OF THE ASSESSEE COMPANY TO IN CREASE THE EFFICIENCY OF THE EMPLOYEES / WORKERS ENGAGED IN THE MANUFACTU RING PROCESS AND TO INCREASE THE PRODUCTIVITY OF THE ASSESSEE COMPANY AND, HENCE, AS SUCH, COULD NOT BE TREATED AS CAPITAL EXPENDITURE IN ANY CIRCUMSTANCES. THE FINDINGS OF THE LD. CIT(A) ARE BASED ON VARIOUS CA SE LAWS INCLUDING THAT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS TATA ENGINEERING & LOCOMOTIVE CO. (P) LTD. [123 ITR 538 ]. NO CONTRARY DECISION HAS BEEN CITED BEFORE US BY THE LD. DR. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE LD. CIT(A) AND THE SAME IS ACCORDINGLY UPHELD. 7. GROUND NO.2 : VIDE GROUND NO.2, THE REVENUE IS AGGRIEVED BY TH E ACTION OF THE CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INTEREST INCOME R ECEIVED BY THE ASSESSEE FORM CITI BANK SCHEME. THE ASSESSING OFFIC ER MADE THE ADDITION INTO THE INCOME OF THE ASSESSEE ON THE GRO UND THAT THE ASSESSEE HAD NOT DISCLOSED THE INTEREST INCOME RECEIVED FROM CITI BANK. THE LD. CIT(A), HOWEVER, DELETED THE ADDITIONS SO MADE BY T HE ASSESSING OFFICER OBSERVING AS UNDER:- 7.3 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER WHILE MAKING T HE IMPUGNED ADDITION. I HAVE ALSO CONSIDERED WRITTEN SUBMISSION S FILED BY THE ASSESSEE COMPANY THROUGH ITS LEARNED AR VIDE LETTER DATED 17.05.2016 ON THE ISSUE UNDER REFERENCE. I HAVE FURTHER CONSID ERED VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE LEARNED AR OF THE ASSESSEE COMPANY AS WELL AS OTHER MATERIAL PLACED BY HIM ON RECORD. ON ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 7 CAREFUL CONSIDERATION OF THE ASSESSMENT ORDER, IT H AS BEEN NOTICED THAT THE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITIO N AS THE ASSESSEE COMPANY HAS NOT DISCLOSED INTEREST INCOME RECEIVED BY IT FROM CITIBANK AS PER CITIBANK SCHEME. ON THE OTHER HAND, THE LEARNED AR OF THE ASSESSEE COMPANY HAS SUBMITTED THAT THE IDEN TICAL MATTER CAME BEFORE THE HONORABLE ITAT, CHANDIGARH IN THE CASE O F M/S HERO EXPORTS LUDHIANA AND THE HONORABLE ITAT WAS PLEASED TO DELETE THE ADDITION MADE UNDER IDENTICAL CIRCUMSTANCES IN THE CASE OF M/S HERO EXPORTS VIDE ITS ORDER IN ITA NO. 514/CHD/2015 DATE D 03.08.2016. TO PROVE HIS POINT, THE LEARNED AR OF THE ASSESSEE COM PANY HAS ALSO PLACED THE COPY OF THE ORDER OF HONORABLE ITAT ON R ECORD. IT HAS ALSO BEEN SUBMITTED THAT THE ASSESSEE COMPANY HAS RECEIV ED ONLY PRINCIPLE AMOUNT AND NO INTEREST AMOUNT HAS BEEN RECEIVED FRO M CITIBAK AS ALLEGED BY THE ASSESSING OFFICER WHICH IS CLEAR FRO M THE AGREEMENT OF SETTLEMENT ENTERED INTO BETWEEN THE ASSESSEE COMPAN Y AND THE CITIBANK, THE RELEVANT PARAS OF WHICH ARE ALSO BEEN INCORPORATED IN THE WRITTEN SUBMISSIONS WHICH HAVE ALREADY BEEN REP RODUCED ABOVE. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I FIND THE CONTENTIONS OF THE LEARNED AR OF THE ASSESSEE TO BE TRUE AND CORRECT. MOREOVER, IDENTICAL ADDITION MADE BY THE ASSESSING OFFICER IN A.Y. 2011-12 UNDER IDENTICAL CIRCUMSTANCES IN THE CASE O F M/S HERO EXPORTS STANDS DELETED BY THE HONORABLE ITAT, CHAND IGARH VIDE ITS ORDER IN ITA NO. 514/CHD/2015 DATED 03.08.2016. AS THE FACTS OF THE CASE OF THE ASSESSEE COMPANY ARE IDENTICAL TO THE F ACTS OF THE CASE OF M/S HERO EXPORTS FOR THE A.Y. 2011-12, THE ADDITION MADE BY THE ASSESSING OFFICER UNDER CONSIDERATION ALSO DESERVES TO BE DELETED. UNDER SUCH CIRCUMSTANCES, THE ACTION OF THE ASSESSI NG OFFICER IN MAKING AN ADDITION OF RS. 1,05,00,000/- IN THIS CAS E ON ACCOUNT OF UNDISCLOSED INTEREST INCOME RECEIVED FROM CITIBANK SCHEME CANNOT BE SAID TO BE JUSTIFIED. 7.4 IN VIEW OF THE ABOVE STATED FACTS AND IN THE C IRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ASSESSING OF FICER IS NOT JUSTIFIED IN MAKING AN ADDITION OF RS. 1,05,00,000/- IN THIS CASE ON ACCOUNT OF UNDISCLOSED INTEREST INCOME RECEIVED FROM CITIBANK SCHEME. SO, THE ADDITION OF RS. 1,05,00,000/- MADE BY THE ASSESSING OFFICER IN THIS CASE ON ACCOUNT OF UNDISCLOSED INTEREST INCOME IS, THEREFORE, DIRECTED TO BE DELETED. IN THE RESULT, THE GROUND NO.3 OF AP PEAL TAKEN BY THE ASSESSEE COMPANY IS ALLOWED. ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 8 8. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSU E. THE LD. CIT(A) IN THE IMPUGNED ORDER HAS HELD THAT THE ASSESSEE CO MPANY HAD RECEIVED ONLY PRINCIPLE AMOUNT AND NO INTEREST AMOUNT FROM THE CITI BANK. HE, HAS FURTHER RELIED UPON THE DECISION OF THE TRIBUNA L DATED 3.8.2016 IN THE CASE OF M/S HERO EXPORTS VS CIT ITA NO. 514/C HD/2015 (SUPRA). NO CONTRARY DECISION HAS BEEN CITED BEFORE US BY TH E LD. DR. IN VIEW OF THIS, WE DO NOT FIND ANY MERIT IN THIS GROUND TAKEN BY THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. 9. GROUND NO.3 : VIDE GROUND NO.3, THE REVENUE HAS CONTESTED THE ACTION OF THE CIT(A) IN TREATING THE DISALLOWANCE M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF TRAVELLING EXPENSES OF THE SP OUSE AND CHILDREN OF THE DIRECTOR TO FOREIGN COUNTRIES. THE ASSESSING OF FICER WAS OF THE VIEW THAT THE FOREIGN TRAVELLING EXPENSES INCURRED BY TH E ASSESSEE COMPANY IN THE CASE OF SPOUSE AND CHILDREN OF DIRECTOR COULD N OT BE SAID TO BE FOR BUSINESS PURPOSES. 10. IN APPEAL, THE ASSESSEE EXPLAINED BEFORE THE CI T(A) THAT THE FOREIGN TRAVELLING EXPENSES TOTALING RS. 40,56,279/ - RELATES TO FIVE FOREIGN TOURS. IN CASE OF FIRST TOUR TO HONG KONG, THE TOTAL EXPENDITURE OF RS. 1,31,171/- WAS CONSIDERED AS PERQUISITE IN T HE HANDS OF THE DIRECTOR. FURTHER, FOR THE TRIP TO BANGKOK, AN EXP ENDITURE OF RS. ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 9 5,55,179/- WAS INCURRED, HOWEVER, THE TRIP WAS UN DERTAKEN ONLY BY THE DIRECTOR, HENCE, NO DISALLOWANCE WAS WARRANTED IN R ESPECT OF THE SAID TRIP. FURTHER, TRAVELLING EXPENDITURE OF THE CHILD REN AND SPOUSE OF THE DIRECTOR IN RESPECT OF HONG KONG TRIP HAD ALREADY B EEN INCLUDED AS PERQUISITE IN THE HANDS OF THE DIRECTOR. THAT IN RESPECT OF THE REMAINING TRIPS, FOREIGN TRAVELLING EXPENDITURE OF THE SPOUSE OF THE DIRECTOR SINCE INCURRED FOR BUSINESS PURPOSES WAS ALLOWABLE EXPEND ITURE. FURTHER, THE ASSESSEE RELIED UPON THE DECISION OF THE TRIBUNAL I N THE OWN CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2009-10 VIDE ORDER DA TED 13.12.2012 AND SUBMITTED THAT THE EXPENDITURE ATTRIBUTABLE TO BOAR DING AND LODGING OF THE CHILDREN SHOULD BE TAKEN AS 25% OF THE TOTAL EX PENDITURE ON BOARDING AND LODGING AS AGAINST 50% TAKEN BY THE A SSESSING OFFICER. THE LD. CIT(A) ACCORDINGLY RESTRICTED THE ADDITION TO RS. 4,90,026/- IN RESPECT OF 25% OF THE BOARDING AND LODGING EXPENSES OF THE CHILDREN OF THE DIRECTOR RELATING TO EUROPE & HONG KONG TRIPS. THE RELEVANT PART OF THE ORDER OF THE CIT(A) IS REPRODUCED AS UNDER:- 9.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER WHIL E MAKING THE IMPUGNED ADDITION. I HAVE ALSO CONSIDERE D WRITTEN SUBMISSIONS FILED BY THE ASSESSEE COMPANY T HROUGH ITS LEARNED AR VIDE LETTER DATED 17.05.2016 ON THE ISSUE UNDER REFERENCE. I HAVE FURTHER CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE LEARNED AR OF THE ASSESSEE COMPANY AS WELL AS OTHER MATERIAL PLAC ED BY HIM ON RECORD. ON CAREFUL CONSIDERATION OF THE ASSE SSMENT ORDER, IT HAS BEEN NOTICED THAT THE ASSESSING OFFIC ER HAS MADE THE IMPUGNED ADDITION AS THE FOREIGN TRAVELLIN G EXPENSES INCURRED BY THE ASSESSEE COMPANY IN THE CA SES OF ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 10 WIFE AND CHILDREN OF DIRECTORS CANNOT BE SAID TO BE FOR BUSINESS PURPOSES. ON THE OTHER HAND, THE LEARNED A R OF THE ASSESSEE COMPANY HAS SUBMITTED THAT THE FOREIGN TRAVELING EXPENSES OF RS.40,56,279/- RELATES TO 5 F OREIGN TOURS, THE DETAIL OF WHICH IS GIVEN IN THE WRITTEN SUBMISSIONS AS REPRODUCED ABOVE. IT HAS ALSO BEEN SUBMITTED THAT THE FIRST TOUR TO HONG KONG FOR WHIC H TOTAL EXPENDITURE OF RS.131171/- WAS INCURRED, HAS BEEN T OTALLY CONSIDERED AS PERQUISITE IN THE HANDS OF DIRECTOR OF THE ASSESSEE COMPANY AND ACCORDINGLY NO DISALLOWANCE IS CALLED FOR OUT OF THESE TOUR EXPENSES. IT HAS FURTH ER BEEN SUBMITTED THAT THE TRIP TO BANGKOK FOR WHICH AN EXPENDITURE OF RS.555179/- INCURRED, WAS UNDERTAKEN ONLY BY DIRECTOR AND ACCORDINGLY NO DISALLOWANCE IS CALL ED FOR AS THE SAME HAS BEEN TREATED FOR THE PURPOSE OF THE BUSINESS. IT HAS AGAIN BEEN SUBMITTED THAT THE TRAV ELING EXPENSES OF CHILDREN AND SPOUSE OF THE DIRECTORS ON ANOTHER TRIP TO DELHI/HKG/DELHI HAS ALREADY BEEN IN CLUDED AS 'PERQUISITE' IN THE HANDS OF DIRECTOR. IT HAS AGAIN BEEN SUBMITTED THAT THE TRAVELING EXPENSES INCURRED ON S POUSES HAVE ALSO BEEN CONSIDERED AS PERKS, THOUGH, THE HONORABLE IT AT CHANDIGARH BENCH IN THE ASSESSEE' S OWN CASE FOR THE A.Y. 2008-09 HAS ALLOWED THE TOTAL EXPENDITURE INCURRED ON TRAVELING OF SPOUSES AS BUSINESS EXPENDITURE' . IT HAS AGAIN BEEN SUBMITTED THAT THE ASSESSING OFFICER HAS DISALLOWED EXPENSES OUT OF BO ARDING AND LODGING CHARGES @ 50% BY CONSIDERING THESE EXPE NSES PERTAINING TO SPOUSE AND CHILDREN WHILE ON TOUR WIT H DIRECTORS. IT HAS AGAIN BEEN SUBMITTED THAT MY LEAR NED PREDECESSOR IN OFFICE WHILE DECIDING APPEAL OF THE ASSESSEE COMPANY FOR THE A.Y. 2009-10 HAS HELD VIDE HIS/HER ORDER DATED 13.12.2012 THAT THE EXPENSES AT TRIBUTE ABLE TO BOARDING AND LODGING OF CHILDREN SHOULD BE TAKEN AT 25% OF THE TOTAL EXPENDITURE ON BOARDING AND LOD GING AND NOT AT 50% AND THE EXPENDITURE INCURRED ON SPOU SE OF THE DIRECTORS IS TO BE TREATED AS BUSINESS EXPENDIT URE BY FOLLOWING THE DECISION OF THE HONORABLE ITAT CHANDI GARH IN ITA NO. 183/CHD/2012 IN ASSESSEE' S OWN CASE FOR THE A.Y. 2008-09. IT HAS AGAIN BEEN SUBMITTED THAT THE DISALLOWANCE MAY KINDLY BE RESTRICTED TO RS.4,90,02 6/- ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 11 (WORKING GIVEN IN THE WRITTEN SUBMISSIONS AS REPROD UCED ABOVE) BY FOLLOWING THE DECISION OF MY LEARNED PREDECESSOR IN OFFICE FOR THE A.Y. 2009-10 AS THE C OST OF THE TICKETS OF CHILDREN AND SPOUSES HAVE ALREADY BE EN CONSIDERED AS 'PERK' AT RS.2,58,815/- AND RS.3,30,564/- IN THE HANDS OF DIRECTORS. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I FIND A LOT OF FORCE IN THE SUB MISSIONS OF THE LEARNED AR OF THE ASSESSEE. MOREOVER, IDENTI CAL MATTER HAS BEEN DECIDED BY MY PREDECESSOR IN OFFIC E IN THE CASE OF THE ASSESSEE COMPANY ITSELF FOR THE A.Y . 2009- 10. SO, BY FOLLOWING THE ORDER OF MY LEARNED PREDEC ESSOR IN OFFICE FOR THE A.Y. 2009-10, THE DISALLOWANCE OU T OF FOREIGN TRAVELING EXPENSES IS RESTRICTED TO RS.4,90 ,026/-, THE WORKING OF WHICH IS GIVEN BY THE LEARNED AR OF THE ASSESSEE IN THE WRITTEN SUBMISSIONS AS REPRODUCED A BOVE. THE BOARDING AND LODGING EXPENSES OF THE SPOUSES AR E TREATED FOR BUSINESS PURPOSES AND ALLOWED AS DONE B Y MY LEARNED PREDECESSOR IN OFFICE IN A.Y. 2009-10. IN T HE RESULT, THE GROUND NO. 5 OF APPEAL TAKEN BY THE ASS ESSEE COMPANY IS PARTLY ALLOWED. 11. A PERUSAL OF THE ABOVE FINDINGS OF THE CIT(A) R EVEALS THAT THE LD. CIT(A) HAS FOLLOWED THE DECISION OF THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE OF THE ASSESSEE FOR ASSESSMENT YEAR 2008-0 9 AND RESTRICTED THE FOREIGN TRAVELLING EXPENDITURE IN RELATING TO BOARD ING AND LODGING OF THE CHILDREN TO 25% OF THE EXPENDITURE. THE TRAVEL TICK ETS HAD ALREADY BEEN CONSIDERED AS PERQUISITE IN THE HANDS OF THE DIRECT OR. WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE CIT(A), HEN CE, THE ORDER OF THE CIT(A) ON THIS ISSUE IS UPHELD. 12. GROUND NO.4 : VIDE GROUND NO.4, THE REVENUE HAS AGITATED THE ACTION OF THE CIT(A) IN DELETING THE DISALLOWANCE M ADE BY THE ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 12 ASSESSING OFFICER U/S 36(1)(III) OF THE ACT ON ACCO UNT OF PROPORTIONATE INTEREST EXPENDITURE INCURRED FOR ACQUISITION OF FI XES ASSETS. THIS ISSUE HAS BEEN DEALT WITH BY THE LD. CIT(A) I N PARA 11 OF THE IMPUGNED ORDER. THE LD. CIT(A) DELETED THE DISALLOW ANCE MADE BY THE ASSESSING OFFICER ON THIS ISSUE OBSERVING THAT THE ASSESSEE WAS POSSESSED OF SUFFICIENT OWN FUNDS TO FINANCE THE FI XED ASSETS UNDER CONSIDERATION WHICH WERE YET TO PUT FOR USE FOR BUS INESS PURPOSES. RELEVANT PART OF THE FINDINGS OF THE LD. CIT(A) IS REPRODUCED AS UNDER:- 11.3 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER AS MADE BY HIM IN THE ASSESSMENT ORDER WHILE MAKING THE IMPUGNED ADDITION. I HAVE ALSO CONSIDERED WRITTEN SUBMISSIONS FILED BY THE ASSESSEE COMPANY THROUGH ITS LEARNED AR VIDE LETTER DATED 17.05.2016 ON THE ISSUE UNDER REFERENCE. I HAVE FURTHER CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE LEARNED AR OF THE ASSESSEE COMPANY AS WELL AS OTHER MATERIAL PLACED BY HIM ON RECORD. ON CAREFUL CONSIDERATION OF THE ASSESSMENT ORDER, IT HAS BEEN NOTICED THAT T HE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITION AS THE ASSESSEE COMPANY HAS MADE INVESTMENT IN FIXED ASSETS INCLUDING BUILDINGS ALLEGEDLY OUT OF BORROWED FUNDS WHICH HAVE NOT YET BEEN PUT TO USE FOR BUSINESS PURPOSES. IN THE OPINION OF THE ASSESSING OFFICER, THE INTEREST EXPENSES INCURRED B Y THE ASSESSEE COMPANY FOR CREATION/ACQUISITION OF ASSETS WHICH ARE YET TO BE PUT TO USE FOR BUSINESS PURPOSES CANNOT BE ALLOWED AS REVENUE EXPENSES AND NEEDS TO BE CAPITALIZED IN VIEW OF PROVISIONS OF SECTION 36(L)(III) OF THE ACT. ON THE OTHER HAND, T HE LEARNED AR OF THE ASSESSEE COMPANY HAS SUBMITTED THAT THE ASSESSEE COMPANY WAS HAVING SUFFICIENT INTEREST FREE FUNDS IN THE FORM OF INTERNAL ACCRUAL S AND SHAREHOLDER FUNDS TO FINANCE THE FIXED ASSETS ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 13 WHICH ACCORDING TO THE ASSESSING OFFICER HAVE NOT BEEN PUT TO USE FOR BUSINESS PURPOSES. IT HAS ALSO BEEN SUBMITTED THAT NO NEW TERM LOAN HAS BEEN OBTAINED AND UTILIZED BY THE ASSESSEE COMPANY AND ON THE CONTRARY THE TERM LOAN OUTSTANDING HAS BEEN REDUCED FROM RS.28.22 CRORES TO RS.21.74 CRORES. IT HAS FURTHER BEEN SUBMITTED THAT THE 'CC LOAN' OUTSTANDING AT RS. 23.67 CRORES AS ON 31.03.2010 HAS BEEN REDUCED TO RS.18.53 CRORES ON 31.03.2011. IT HAS AGAIN BEEN SUBMITTED THAT THE MAJOR UTILIZATION OF 'CC LON' ACCOUNT IS FOR GURGAON UNIT WHERE ADDITION TO FIXED ASSETS WERE ONLY AT RS.3.1 CRORES. IT HAS AGAIN BEEN SUBMITTED THAT THE GURGAO N UNIT HAD MADE PROFIT OF RS. 15.82 CRORES WHICH IS SUFFICIENT TO COVER INVESTMENT IN NEW AASETS. IT HA S AGAIN BEEN SUBMITTED THAT THERE WAS NO LOAN BORROWED FOR THE PURPOSE OF LUDHIANA UNIT AS IT WAS ALL FROM INTERNAL ACCRUALS FROM THE COMPANY, AS NO FRESH LOAN WAS RAISED BY THE ASSESSEE COMPANY DURING THE YEAR. IT HAS AGAIN BEEN SUBMITTED THAT A LL THE ADDITIONS MADE TO FIXED ASSETS WAS FOR THE 'PURPOSE OF BUSINESS' . IT HAS AGAIN BEEN SUBMITTED THAT NO SPECIFIC LOAN WAS BORROWED FOR THE ACQUISITION OF FIXED ASSETS DURING THE YEAR UNDER CONSIDERATION NOR ANY NEXUS HAS BEEN ESTABLISHED BY THE ASSESSING OFFICER OF THE AMOUNT BORROWED WITH THE AMOUNT UTILIZED FOR THE PURCHASE OF FIXED ASSET S FOR EXPANSION OF BUSINESS. IT HAS AGAIN BEEN SUBMITTED THAT THE PROVISIONS OF SECTION 36(L)(III) OF THE ACT HAS NO APPLICATION IN THE CASE OF THE ASSESSEE COMPANY. IT HAS AGAIN BEEN SUBMITTED THAT MY LEARNED PREDECESSOR IN OFFICE HAS ALREADY CONSIDERED THIS ISSUE IN THE CASE OF M/S MUNJAL SAL ES CORPORATION IN APPEAL NO. 491/IT/CIT(A)- II/LDH/2014-15 DATED 10.03.2016 AND DELETED THE ADDITION ON ABOVE FACTS. THE COPY OF THE ORDER HAS BEEN PLACED ON RECORD. IT HAS AGAIN BEEN SUBMITTED THAT THE CAPITALIZATION OF INTEREST OF RS.365752/- FOR HARIDWAR UNIT WAS DISALLOWED WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE COMPANY BUT THE SAME ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 14 WAS NOT CONSIDERED FOR THE PURPOSES OF DEDUCTION UNDER SECTION 80IC OF THE ACT. IN SUPPORT OF HIS VARIOUS CONTENTIONS, THE LEARNED AR OF THE ASSESSEE COMPANY HAS ALSO RELIED UPON VARIOUS JUDICIAL PRONOUNCEMENTS WHICH FIND MENTION IN THE WRITTEN SUBMISSIONS AS REPRODUCED ABOVE. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I AM OF THE OPINION THAT THE ASSESSEE COMPANY WAS HAVING SUFFICIENT INTEREST FREE FUNDS TO FINANCE THE FIXED ASSETS UNDER CONSIDERATION WHICH WERE YET TO BE PUT TO USE FOR BUSINESS PURPOSES. I AM ALSO OF THE OPINION THAT IF THE ASSESSEE COMPANY IS HAVING SUFFICIENT INTEREST FREE FUNDS TO FINANCE THE UNDER CONSIDERATION WHICH WERE YET TO BE PUT TO USE FOR BUSINESS PURPOSES THEN THE PRESUMPTION SHOULD BE DRAWN THAT THE FIXED ASSETS UNDER CONSIDERATION WER E FINANCED OUT OF INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE COMPANY IN THE FORM OF SHAREHOLDER FUNDS AND INTERNAL ACCRUALS. AS THE ASSESSEE COMPANY WAS HAVING SUFFICIENT INTEREST FREE FUNDS OF ITS OWN TO FINANCE THE ASSETS UNDER CONSIDERATION, NO DISALLOWANCE OUT OF INTEREST EXPENSES IN MY CONSIDERED OPINION CAN BE MADE IN THE CASE OF THE ASSESSEE COMPANY ON ACCOUNT OF CAPITALIZATION OF INTEREST EXPENSES BY INVOKING PROVISIONS OF SECTION 36(L)(III) OF THE ACT. THE ISSUE UNDER CONSIDERATIO N IS ALSO SQUARELY COVERED BY PLETHORA OF JUDICIAL PRONOUNCEMENTS INCLUDING THAT OF THE HONORABLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF MAX INDIA LIMITED, GURDAS GARG, ABHISHEK INDUSTRIES LIMITED, ' KAPSONS ASSOCIATES ETC. UNDER SUCH CIRCUMSTANCES, THE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITION OF RS.48,83,273/- IN THIS CASE O N ACCOUNT OF CAPITALIZATION OF INTEREST EXPENSES BY INVOKING PROVISIONS OF SECTION 36(L)(III) OF THE AC T ON THE GROUND THAT THE ASSESSEE COMPANY HAS MADE INVESTMENT IN FIXED ASSETS INCLUDING BUILDINGS ALLEGEDLY OUT OF BORROWED FUNDS WHICH HAVE NOT YET BEEN PUT TO USE FOR BUSINESS PURPOSES CANNOT BE SAI D TO BE JUSTIFIED. ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 15 11.4 IN VIEW OF THE ABOVE STATED FACTS AND IN THE CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING AN ADDITION OF RS.48,83,273/-ON ACCOUNT OF CAPITALIZATION OF INTEREST EXPENSES BY INVOKING PROVISIONS OF SECTION 36(L)(III) OF THE ACT ON THE GROUND THAT THE ASSESSEE COMPANY HAS MADE INVESTMENT IN FIXED ASSETS INCLUDING BUILDINGS ALLEGEDLY OUT OF BORROWED FUNDS WHICH HAVE NOT YET BEEN PUT TO USE FOR BUSINESS PURPOSES. SO, THE ADDITION OF RS.48,83,273/- MADE BY THE ASSESSING OFFICER IN THIS CASE ON ACCOUNT OF CAPITALIZATION O F INTEREST EXPENSES BY INVOKING PROVISIONS OF SECTION 36(L)(III) OF THE ACT IS, THEREFORE, DIRECTED TO BE DELETED. IN THE RESULT, THE GROUND NO. 7 OF APPEAL TAKEN BY THE ASSESSEE COMPANY IS ALLOWED. 13. THERE IS NO REBUTTAL TO THE FINDINGS OF THE LD. CIT(A) THAT HE ASSESSEE WAS POSSESSED OF SUFFICIENT OWN FUNDS TO M EET THE EXPENDITURE INCURRED ON THE FIXED ASSETS. THIS ISSUE IS NOW SQUARELY COVERED BY THE RECENT DE CISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT (LTU) VS. RELIANCE INDUSTRIES LTD. [2019] 410 ITR 466 (SC), WHEREIN, THE HON'BLE SUPREME COURT HAS AFFIRMED THE PROPOSITION OF LAW THAT IF THE OWN FUNDS / INTEREST FREE FUNDS ARE AVAILABLE WITH THE ASSESSEE TO MEET THE INVESTMENT, PRESUMPTION WILL BE THAT THE ASSESSEE H AS USED ITS OWN / INTEREST FREE FUNDS FOR THE SAID INVESTMENT. IN VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN TH E ORDER OF THE CIT(A) ON THIS ISSUE AND THE SAME IS ACCORDINGLY UP HELD. THERE IS NOT ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 16 MERIT IN THIS APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. ITA NO.589/CDH/2018 (A.Y. 2012-13): 14. THE REVENUE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- I. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) HAS ERRED IN TREATING THE FOREIGN TRAVEL EXPENSES OF FAMILY MEMBERS OF DIRECTOR AS BUSINESS EXPENSES? II. WHETHER, ON THE FACT AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) HAS ERRED IN DELETING THE DISALLOWANCE U/S 36(1) (III) OF THE ACT WHILE IGNORING THE FACT THAT THE ASSESSEE USED BORROWED FUNDS FOR ACQUISITION OF FIXED ASSETS AND DID NOT CAPITALIZE THE INTEREST ON CAPITAL WORK IN PROGRESS PRIOR TO THE ASSET BEING PUT TO USE? 15. GROUND NO.1 : THE GROUND NO.1 IS RELATING TO THE TRAVELLING EXPENSES OF THE FAMILY MEMBERS OF THE DIRECTOR. THE LD. CIT(A) FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ALSO RESTRICTE D THE DISALLOWANCE ON TRAVELLING EXPENSES OF THE FAMILY MEMBERS TO THE E XTENT OF 25% OF THE BOARDING & LODGING CHARGES IN RESPECT OF THE CHILDR EN OUT OF THE TOTAL FOREIGN TRAVELLING EXPENDITURE OF DIRECTOR AND FAMI LY MEMBERS OF THE ASSESSEE COMPANY AMOUNTING TO RS. 54,65,343/-, AS S UM OF RS. 13,61,012/- HAS ALREADY BEEN CONSIDERED AS PERQUISI TE IN THE HANDS OF THE ASSESSEE; THE ISSUE BEING IDENTICAL AS ADJUDICA TED BY US WHILE DISPOSING OF REVENUES APPEAL FOR ASSESSMENT YEAR 2 011-12 AND IN VIEW ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 17 OF OUR FINDINGS GIVEN ABOVE, WE DO NOT FIND ANY MER IT IN THIS GROUND OF APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY D ISMISSED. 16. GROUND NO.2: VIDE GROUND NO.2, THE REVENUE HAS AGITATED THE ACTION OF THE CIT(A) IN DELETING THE DISALLOWANCE U /S 36(1)(III) OF THE ACT ON ACCOUNT OF EXPENDITURE INCURRED FOR ACQUIS ITION OF FIXES ASSETS. THIS ISSUE IS IDENTICAL AS TAKEN BY THE REVENUE VID E GROUND NO.4 IN THE APPEAL BEARING ITA NO. 1500/CHD/2017 FOR ASSESSMEN T YEAR 2011-12. IT IS UNDISPUTED THAT THE ASSESSEE WAS POSSESSED OF SU FFICIENT OWN FUNDS TO MEET THE INVESTMENT IN QUESTION. IN VIEW OF OUR FIN DINGS GIVEN ABOVE IN ITA NO. 1500/CHD/2017 ON THIS ISSUE, THIS GROUND OF APPEAL HAS NO MERIT AND THE SAME IS ACCORDINGLY DISMISSED. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.07.2019. SD/- SD/- ( . . / N.K. SAINI) ( ! / SANJAY GARG) '#$ / VICE PRESIDENT %& / JUDICIAL MEMBER DATED : 11.07.2019 .. 1)%(2343( / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. %& !# / THE RESPONDENT 3. + 5( / CIT 4. + 5( ( )/ THE CIT(A) 5. 36 %(7 , - 7 , 89:; / DR, ITAT, CHANDIGARH 6. :< , / GUARD FILE ITA NOS. 1500-C-17 & 589-C-2018 M/S SATYAM AUTO COMPONENTS PVT LTD., LUDHIANA 18 1 + / BY ORDER, = / ASSISTANT REGISTRAR