DCIT (LTU), New Delhi V. M/s. Hero Motors Ltd., New Delhi

ITA 1608/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82043 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-11-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 19-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI R. S. SYAL , ACCOUNTANT MEMBER AND SHRI C. M. GARG, JUDICIAL MEMBER I.T.A .NO. - 1608 /DEL/2013 (ASSESSMENT YEAR - 200 6 - 0 7 ) DCIT (LTU) VS. M/S HERO MOTORS LTD. NBBC PLAZA, PUSHP VIHAR, SECTOR - III, 601, INTERNATIONAL TRADE NEW DELHI - 17 TOWER, NEHRU PLACE NEW DELHI - 110014 PAN: AAACH8459F (APPELLANT) (RESPONDENT) REVENUE BY: - SH. SATPAL SINGH, SR. DR. ASSESSEE BY: - SH. SUMIT BANSAL , CA ORDER PER C. M. GARG, JM. THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT (APPEALS) - X NEW DELHI DATED 16 / 11 /201 2 IN APPEAL NO. 319 / 09 - 1 0 FOR THE ASSESSMENT YEAR 200 6 - 0 7. 2. THE SOLE GROUND RAISED BY THE REVENUE IN THIS APPEAL READS AS UNDER: 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.29,47,897/ - MADE ON ACCOUNT OF DISALLOWANCE OF INTEREST EXPENDITURE BEING INCURRED FOR NON BUSINESS PURPOSE. 2 3. APROPOS AFOREMENTIONED GROUND OF THE REVENUE, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT THE LD. CIT(A) HAS GROSSLY ERRED IN DELETING THE ADDITION OF RS.29,47,897/ - MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF INTEREST EX PENDITURE BEING INCURRED FOR NON - BUSINESS PURPOSE. THE LD. DR SUPPORTED THE ASSESSMENT ORDER AND SUBMITTED THAT THE IMPUGNED ORDER MAY BE SET ASIDE BY RESTORING THAT OF THE AO. 4. REPLYING TO THE ABOVE THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED COPIES OF THE ORDER OF ITAT C BENCH IN ASSESSEE S OWN CASE ITA NO.1847/DEL/2012 FOR AY 2007 - 08 DATED 06.07.2012 AND ITA NO. 2919/ DEL/2012 & 2920/DEL/2012 FOR AY 2005 - 06 AND 2008 - 09 RESPECTIVELY VIDE DATED 17.5.2013 AND SUBMITTED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE A SSESSEE AND AGAINST THE REVENUE, B Y DISMISSING THE ABOVE APPEAL OF THE REVENUE IN ASSESSEE S OWN CASE FOR EARLIER AND SUBSEQUENT ASSESSMENT YEARS. 5. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS. AT THE OUTSET, WE OBSERVE THAT THIS CASE IS PERTAINING TO AY 2006 - 07 AND FROM THE ORDERS OF THE TRIBUNAL FOR AY 2007 - 08 (SUPRA) AND FOR AY 2005 - 06 AND 2008 - 09 (SUPRA), WE OBSERVED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE RELEVANT OPERATIVE PART OF THE O RDER OF THE TRIBUNAL FOR AY 2007 - 08, WHICH WAS FOLLOWED BY THE TRIBUNAL IN THE SUBSEQUENT ORDER VIDE DATED 17.5.2013 (SUPRA) . WE OBSERVE THAT THE TRIBUNAL HAS UPHELD THE FINDING OF THE CIT(A) POINTING OUT SPECIFIC CIRCUMSTANCES AS TO WHY NO DISALLOWANCE DESERVE 3 TO BE MADE IN THE CASE OF ASSESSEE. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE TRIBUNAL VIDE DATED 06.07.2012 (SUPRA) READS AS UNDER: 6. WITH THE ASSISTANCE OF LEARNED DEPARTMENTAL REPRESENTATIVE, WE HAVE GONE THROUGH THE RECORD CAREFULLY. O N PERUSAL OF THE FINDINGS OF THE LEARNED CIT(APPEALS), EXTRACTED SUPRA, WE ARE CONVINCED THAT NO CASE IS MADE OUT FOR DISALLOWANCE OF INTEREST EXPENSES. LEARNED FIRST APPELLATE AUTHORITY HAS RECORDED THE FINDINGS OF FACT POINTING OUT SPECIFIC CIRCUMSTANCE AS TO WHY NO DISALLOWANCE DESERVES TO BE MADE IN THIS CASE. ACCORDING TO THE LEARNED CIT(APPEALS), THERE IS NO NEXUS BETWEEN THE BORROWINGS MADE BY THE ASSESSEE COMPANY AND ADVANCE GIVEN TO M/S. HERO GLOBAL DESIGNS LTD. SIMILARLY, THE OUTSTANDING SUMS EXTR ACTED SUPRA, REPRESENTS THE SALES CONSIDERATION OF ASSETS, TECHNICAL KNOW - HOW, RENT ETC. WHICH ARE NOT THE ADVANCE GIVEN BY THE ASSESSEE OUT OF THE BORROWED FUNDS. IN SUCH CIRCUMSTANCES, NO DISALLOWANCE CAN BE MADE. LEARNED FIRST APPELLATE AUTHORITY HAS AP PRECIATED THE CONTROVERSY IN RIGHT PERSPECTIVE AND NO INTERFERENCE IS CALLED FOR IN HER ORDER. 6. THE LD. DR FAIRLY ACCEPTED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND APPEALS OF THE REVENUE HAVE BEEN DISMISSED FOR EARLIER AND SUBSEQUEN T ASSESSMENT YEAR. 7. IN VIEW OF ABOVE, WE ARE INCLINED TO HOLD THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ABOVE ORDERS OF THE TRIBUNAL. HENCE, 4 THE PRESENT APPEAL OF THE REVENUE BEING DEVOID OF MERITS, DESERVES TO BE DISMISSED AND BE DISMISSED THE SAME. ACCORDINGLY SOLE GROUND OF THE REVENUE AS WELL AS APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01 /1 2 /2014. SD/ - SD/ - ( R. S. SYAL ) (C. M. GARG) A CCOUNTANT MEMBER JUDICIAL MEMBER DATED: 01 /1 2 /2014 *AK VERMA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR