Sardar Dairy Ltd., Mehsana V. The ITO, Ward-3, Mehsana

ITA 1606/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5548 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 28-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T SANKAR
• Assessee Lawyers: P M MEHTA
• Keywords: Notional interest
• Section: 143(3)

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 1606/AHD/2017 ( ASSESSMENT YEAR : 2014-15) SARDAR DAIRY LTD. NR. GUJKO MASOL, B/H. RTO, HIGHWAY MEHSANA 384002 / VS. ITO WARD-3, MEHSANA ./ ./ PAN/GIR NO. : AADCS0881M ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI P. M. MEHTA, A.R. / RESPONDENT BY : SHRI T. SANKAR, SR.D.R. DATE OF HEARING 30/01/2019 !'# / DATE OF PRONOUNCEMENT 31/01/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS), GANDHINAGAR (CIT(A) IN SHORT), DATED 0 3.05.2017 ARISING IN THE ASSESSMENT ORDER DATED 01.11.2016 PA SSED BY THE ITA NO. 1606/AHD/17 [SARDAR DAIRY LTD. VS. ITO] A.Y. 2014-15 - 2 - ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOM E TAX ACT, 1961 (THE ACT) CONCERNING AY 2014-15. 2. THE SOLITARY ISSUE IN THE CAPTIONED APPEAL IS DISALLOWANCE OF INTEREST AMOUNT TO RS.3,35,976/- UNDER S. 36(1)(III ) OF THE ACT ON ACCOUNT OF INTEREST FREE ADVANCES OF RS.33,33,105/- LENT BY THE ASSESSEE. 3. WITH THE ASSISTANCE OF THE LEARNED AR FOR THE AS SESSEE, WE HAVE GONE THROUGH THE RECORD CAREFULLY. IT EMERGE S FROM THE RECORD THAT THE ASSESSEE HAS GIVEN ADVANCE OF RS.33 .33 LAKHS WITHOUT CHARGING ANY INTEREST. THE LEARNED AO HAS CALCULATED NOTIONAL INTEREST ON SUCH INTEREST FREE ADVANCE AND DISALLOWED INTEREST EXPENDITURE TO THE EXTENT OF RS.3,35,976/- . AN IDENTICAL DISALLOWANCE WAS MADE IN AY 2012-13 AND AY 2013-14. HOWEVER, ON APPEAL TO THE TRIBUNAL, THE DISALLOWANC E WAS DELETED ON THE GROUND THAT THE ASSESSEE WAS HAVING ITS OWN INTEREST FREE CAPITAL FAR IN EXCESS OF THE CORRESPONDING ADVANCES IN QUESTION. THE ISSUE HAVING BEEN ADJUDICATED IN FAVOUR OF THE ASSESSEE ON THESE FACTS IN THE EARLIER ASSESSMENT YEARS (REFER ITA NO.3082/AHD/2016 AY 2013-14), WHICH IN TURN, IS IN CONFORMITY WITH THE LONG LINE OF JUDICIAL PRECEDENT, WE DO NOT SEE ANY REASON ITA NO. 1606/AHD/17 [SARDAR DAIRY LTD. VS. ITO] A.Y. 2014-15 - 3 - TO DEPART FROM THE AFORESAID VIEW. THE ORDER OF TH E CIT(A) THUS REQUIRES TO BE SET ASIDE AND THE AO IS DIRECTED TO DELETE THE DISALLOWANCE ON THIS SCORE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 31/01/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 31/01/20 19