ACIT, C-4(1), Chandigarh V. M/s Punjab State Co-op Supply & Marketing Federation Ltd., Chandigarh

ITA 1509/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5169 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 30-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH ABROL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1509/CHD/2017 (ASSESSMENT YEAR : 2014-15) THE A.C.I.T., VS. M/S PUNJAB STATE CO-OP. SUPPLY CIRCLE 4(1), & MARKETING FEDERATION LTD., CHANDIGARH. PLOT NO.4, SECTOR 35-B, CHANDIGARH. PAN: AAAAT3454G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHISH ABROL, CIT DR RESPONDENT BY : SHRI AMAN PARTI, ADV. DATE OF HEARING : 26.02.2018 DATE OF PRONOUNCEMENT : 26.02.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-2, CHANDIGARH (HEREINAFTER REFERRED TO AS CIT(APPEALS )) DATED 24.8.2017 RELATING TO ASSESSMENT YEAR 2014-15. 2. GROUND NO.1 RAISED BY THE REVENUE READS AS UNDER : I) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.22,57,209/- ON ACCOUNT OF ADVERTISEMENT EXPENSES CLAIMED AS SUCH WHEN THERE WAS NO BUSINESS EXIGENCY FOR INCURRING SUCH EXPENDITURE? 3. IT WAS COMMON GROUND BETWEEN THE PARTIES THAT TH E ISSUE RAISED IN GROUND NO.1 IS IDENTICAL TO THAT RA ISED IN GROUND NO.2 IN ITA NOS.1248/CHD/2016 FOR ASSESSMENT YEAR 2012-13 AND THE DECISION RENDERED THEREIN WILL APPLY 2 TO THIS GROUND ALSO MUTATIS MUTANDIS. THE LD.CIT(A PPEALS) WHILE ALLOWING THIS ISSUE HAS FOLLOWED THE DECISION OF THE TRIBUNAL FOR EARLIER ASSESSMENT YEARS. IN VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A PPEALS). THE GROUND NO.1 RAISED BY THE REVENUE IS DISMISSED. 4. GROUND NO.2, 3 & 4 RAISED BY THE REVENUE READ AS UNDER: II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.62,86,60,505/- ON ACCOUNT OF NON-CHARGING OF INTEREST ON AMOUNT RECEIVABLE FROM PUNJAB GOVT. IN THE CONTEXT OF INTEREST PAID ON LOANS RAISED BY THE ASSESSEE TO RUN THE BUSINESS? III) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.5,65,91,15,119/- ON ACCOUNT OF NON-CHARGING OF INTEREST ON AMOUNT RECEIVABLE FROM FCI IN THE CONTEXT OF INTEREST PAID ON LOANS RAISED BY THE ASSESSEE TO RUN THE BUSINESS? IV) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE ON ACCOUNT OF DIVERSION OF FUNDS TO THE PUNJAB GOVT. AND FCI WITHOUT CHARGING INTEREST AND WITHOUT BUSINESS EXIGENCIES WHEREAS THE ASSESSEE IS RAISING INTEREST BEARING LOANS FOR ITS BUSINESS USE? 5. IT WAS COMMON GROUND BETWEEN THE PARTIES THAT TH E ISSUES RAISED IN GROUND NOS.2, 3 & 4 WERE IDENTICAL TO THAT RAISED IN GROUND NO.4 IN ITA NOS.1248/CHD/2016 FOR ASSESSMENT YEAR 2012-13 AND THE DECISION RENDERED T HEREIN WILL APPLY TO THESE GROUNDS ALSO WITH EQUAL FORCE. THE TRIBUNAL HAS ACCEPTED THE CONTENTION OF THE ASSESSE E THAT 3 SUCH RECOVERIES WERE ON ACCOUNT OF TRADING ACTIVITI ES WHICH CANNOT BE EQUATED WITH INTEREST FREE ADVANCES. IN VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN TH E ORDER OF THE CIT(APPEALS) IN ALLOWING THE ABOVE ISS UES IN FAVOUR OF THE ASSESSEE. 6. THE GROUND NOS.2, 3 & 4 RAISED BY THE REVENUE AR E DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON SD/- SD/- (B.R.R. KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 26 FEBRUARY, 2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH