The DCIT(OSD)Range-1, Ahmedabad V. M/s. Corrtech Energy Pvt.Ltd., Ahmedabad

ITA 1650/AHD/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67887 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-10-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 30-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Assessee Lawyers: G C PIPARA
• Keywords: Earning of tax free income; Deemed dividend
• Section: 14A

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BENCH, AHMEDABAD .., ! ! ! ! ' #$, BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ I.T.A. NO.1650/AHD/2012 ( & '& & '& & '& & '& / / / / ASSESSMENT YEAR : 2009-10) DCIT (OSD) RANGE-1 AHMEDABAD / VS. M/S.CORRTECH ENERGY PVT.LTD. (FORMERLY KNOWN AS MJB INDIA GAS TURBINE PVT. LTD.) 22, DHARA CENTRE, VIJAY CHAR RASTA NAVRANGPURA, AHMEDABAD ( !./)* !./ PAN/GIR NO. : AAACI 8838F ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) AND CO NO.208/AHD/2012 AY 2009-10 (IN ITA NO.1650/AHD/2012) M/S.CORRTECH ENERGY PVT.LTD. VS. THE ACIT (OSD) AHMEDABAD RANGE-1 , AHMEDABAD (CROSS OBJECTOR) .. (RESPOND ENT) REVENUE BY : SHRI D.K.MISHRA, SR.DR ASSESSEE BY : SHRI G.C. PIPARA, AR ' . / $0 / / / / DATE OF HEARING : 24/10/2013 12' / $0 / DATE OF PRONOUNCEMENT : 31/10/2013 3 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THE REVENUE AND THE ASSESSEE HAVE CHALLENGED THE O RDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-6, AHMEDABAD (CIT(A) FOR SHORT) DATED 14/05/2012 PERTAINING TO ASSESSMENT Y EAR (AY) 2009-10 BY ITA NO.1650 /AHD/2012 (BY REVENUE) & CO NO.208/AHD/2012 (BY ASSESSEE) CORRTECH ENERGY PVT. LTD. VS. DCIT ASST.YEAR 2009-10 - 2 - WAY OF APPEAL AND CROSS-OBJECTION RESPECTIVELY. BO TH THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF A CONS OLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE REVENUES APPEAL, I.E. ITA NO.1650/AHD/2012. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL. 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING DEDUCTION OF RS.5,16,132/- TOWARDS EMPLOYEES CONTR IBUTION OF PF/ESI DESPITE THE FACT THAT THE AMOUNT WAS DEPOSIT ED AFTER DUE DATE. THE SAME WAS OUGHT TO BE TREATED AS INCOME U /S.2(24)(X) R.W.S. 36(1)(VA) OF THE ACT. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.26 LACS U/S.2(22)(E) OF THE ACT DESP ITE THE FACT THAT THE ASSESSEE WHICH IS A SUBSIDIARY OF CORRTECH INTE RNATIONAL LTD., HAD RECEIVED LOAN/ADVANCE FROM CONTROL PLUS OIL & G AS SOLUTION PVT.LTD., WHICH IS ALSO A SUBSIDIARY OF CO RRTECH INTERNATIONAL LTD. 3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE ADDITION OF RS.12,21,393/- U/S.2(22)(E) OF THE ACT DESPITE THE FACT THAT MJB INDIA TECHNICAL SERVICE PVT.LTD., POSSESSE D ACCUMULATED PROFITS IN THE FORM OF RESERVES AND SUR PLUS. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASS ESSING OFFICER TO THE EXTENT MENTIONED ABOVE SINCE THE ASSESSEE HAS FAILE D TO DISCLOSE HIS TRUE INCOME/BOOK PROFIT. THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED TO THE ABOVE EXTENT. THE APPELLANT CRAVES, TO LEAVE TO AM END OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FINALIZED, THEREBY THE ITA NO.1650 /AHD/2012 (BY REVENUE) & CO NO.208/AHD/2012 (BY ASSESSEE) CORRTECH ENERGY PVT. LTD. VS. DCIT ASST.YEAR 2009-10 - 3 - ASSESSING OFFICER(AO) MADE DISALLOWANCE ON ACCOUNT OF LATE PAYMENT OF PF, DISALLOWANCE U/S.14A R.W.RULE 8D, INTEREST DISA LLOWANCE AND ADDITION U/S.2(22)(E) OF THE ACT. AGAINST THIS, ASSESSEE FI LED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, PARTLY ALLOWED THE APPEAL. NOW, THE REVENUE IS IN APPEAL AND ASSESSEE IS IN CROSS-OBJECTION. 3. FIRST GROUND IS WITH REGARD TO ADDITION MADE ON ACCOUNT OF LATE PAYMENT OF EMPLOYEES CONTRIBUTION OF PF/ESI OF RS. 5,16,132/-. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO AND SUBMITTE D THAT THE LD.CIT(A) OUGHT NOT TO HAVE DELETED THE ADDITION. ON THE CON TRARY, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY C OVERED BY VARIOUS JUDICIAL PRONOUNCEMENTS IN FAVOUR OF ASSESSEE. HE PLACED RELIANCE ON THE DECISION(S) OF THE COORDINATE BENCH (ITAT AHMEDABAD ) IN ITA NO.1545/AHD/2005 DATED 23/01/2009 RENDERED IN THE C ASE OF DYNAMIC INDUSTRIES LTD., AND DECISION IN ITA NO.2609/AHD/20 09 DATED 03/03/2009 RENDERED IN THE CASE OF GUJARAT CONTAINERS LTD. AND ALSO THE DECISION OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF ALEMBIC GLASS INDUSTRIES LTD. REPORTED AT 149 TAXMAN 15 (GUJ.). 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS DECIDED THIS ISSUE FOLLOWING THE DECISIONS RELIED UPON BY THE LD.COUNSEL FOR THE ASSESSEE. THE SR.DR HAS NOT DEMONSTRATED AS TO HOW THESE DECISIONS WHICH HAVE BEEN RELIED UP ON BY THE LD.CIT(A) ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE . THEREFORE, WE DO NOT ITA NO.1650 /AHD/2012 (BY REVENUE) & CO NO.208/AHD/2012 (BY ASSESSEE) CORRTECH ENERGY PVT. LTD. VS. DCIT ASST.YEAR 2009-10 - 4 - FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), T HE SAME IS HEREBY UPHELD. THIS GROUND OF THE REVENUES APPEAL IS REJ ECTED. 5. SECOND GROUND IS WITH REGARD TO DELETION OF ADDI TION OF RS.26 LACS MADE U/S.2(22)(E) OF THE ACT ON ACCOUNT OF RECEIVED LOAN/ADVANCE. LD.SR.DR SUPPORTED THE ORDER OF THE AO, WHEREAS LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A) AND S UBMITTED THAT THE ASSESSEE-COMPANY IS NOT REGISTERED SHARE-HOLDER OF CONTROL PLUS OIL & GAS SOLUTION PVT.LTD. AND, THEREFORE, THE PROVISION OF SECTION 2 (22)(E) WILL NOT BE APPLICABLE. HE PLACED RELIANCE ON THE DECISION OF HONBLE SPECIAL BENCH OF MUMBAI IN THE CASE OF ACIT VS. BHA UMIK COLOUR PVT.LTD. REPORTED AT (2009) 120 TTJ 865 (MUM.) 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN FINDING ON A FACT THAT THE ASSESSEE IS NOT A SHARE-HOLDER IN THE LENDER COMPANY, HOWEVER ASSESSI NG OFFICER TREATED THE SAME AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESS EE-COMPANY. LD.CIT(A) HAS FOLLOWED THE DECISION OF THE SPECIAL BENCH OF ITAT MUMBAI RENDERED IN THE CASE OF ACIT VS. BHAUMIK COL OUR PVT.LTD.(SUPRA). THE LD.SR.DR COULD NOT CONTROVERT THE SAME AND NOTHING HAS BEEN BROUGHT ON RECORD SUGGESTING THAT THE DECI SION OF THE HONBLE ITAT SPECIAL BENCH MUMBAI IN THE CASE OF ACIT VS. BHAUMIK COLOUR PVT.LTD.(SUPRA) IS NOT APPLICABLE. THEREFORE, WE D O NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CTI(A), THE SAME IS HEREBY U PHELD. THIS GROUND OF REVENUES APPEAL IS REJECTED. ITA NO.1650 /AHD/2012 (BY REVENUE) & CO NO.208/AHD/2012 (BY ASSESSEE) CORRTECH ENERGY PVT. LTD. VS. DCIT ASST.YEAR 2009-10 - 5 - 7. THIRD GROUND IS WITH REGARD TO DELETION OF ADDIT ION OF RS.12,21,393/- MADE U/S.2(22)(E) OF THE ACT ON ACCO UNT OF ACCUMULATED PROFITS IN THE FORM OF RESERVES AND SURPLUS. LD.SR .DR SUPPORTED THE ORDERS OF THE AO. HE SUBMITTED THAT THE AO HAS GIV EN A FINDING THAT THE LOANS AND ADVANCES TAKEN TO THE EXTENT OF RESERVE A ND SURPLUS. ON THE CONTRARY, THE LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A) AND HE SUBMITTED THAT THE ASSESSEE-COMPAN Y HAD RECEIVED LOAN OF RS.52,00,000/- FROM MJB INDIA TECHNICAL SERVICES PVT.LTD. HE SUBMITTED THAT THERE ARE NO ACCUMULATED PROFIT IN T HE CASE OF MJB INDIA TECHNICAL SERVICES PVT.LTD., CONSIDERING NET OF GEN ERAL RESERVE AND DEBIT BALANCE IN PROFIT & LOSS ACCOUNT AND, THEREFORE, NO AMOUNT CAN BE CONSIDERED U/S.2(22)(E) OF THE ACT. 8. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN FINDING ON A FACT THAT THERE WAS NO ACCUMULATED PROFIT IN THE COMPANY WHICH CAN BE TREA TED AS DEEMED DIVIDEND. THIS FINDING OF LD.CIT(A) HAS NOT BEEN C ONTROVERTED BY THE LD.SR.DR BY PLACING ANY CONTRARY MATERIAL ON RECORD . THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A ), THE SAME IS HEREBY UPHELD. THIS GROUND OF THE REVENUES APPEAL IS REJ ECTED. 9. REMAINING GROUNDS ARE GENERAL IN NATURE WHICH RE QUIRE NO INDEPENDENT ADJUDICATION. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ITA NO.1650 /AHD/2012 (BY REVENUE) & CO NO.208/AHD/2012 (BY ASSESSEE) CORRTECH ENERGY PVT. LTD. VS. DCIT ASST.YEAR 2009-10 - 6 - 11. NOW, WE TAKE UP THE ASSESSEES CROSS-OBJECTION NO.208/AHD/2012 (ARISING OUT OF ITA NO.1650/AHD/201 2) FOR AY 2009-10. 11.1 THE ASSESSEE HAS RAISED THE FOLLOWING GROUND S IN ITS CROSS- OBJECTION:- 1. THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN CONFIRMIN G THE DISALLOWANCE OF RS.12,33,628/- MADE BY THE AO U/S.1 4A R.W.R.8D WITHOUT CONSIDERING/FOLLOWING THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF CIT VS. WALFORT SHARE & STOCK BROKERS (P.) LTD. 326 ITR 1 (SC), WHEREIN INTERALIA IT IS HELD THAT SECTION 14A CANNOT BE APPLIED UNLESS THERE IS A PRO XIMATE CAUSE FOR DISALLOWANCE. THE AO IN THE INSTANT CASE HAVIN G NOT ESTABLISHED ANY SUCH PROXIMATE CAUSE, THE IMPUGNED ADDITION OUGHT TO HAVE BEEN DELETED BY THE LD.CIT(A). 1.1. THE LEARNED CIT(A) ALSO ERRED IN NOT APPRECIATING T HE FACT THAT DURING THE YEAR UNDER CONSIDERATION NEITHER ANY EXE MPT INCOME HAS BEEN EARNED OR CLAIMED NOR THE INVESTMENT HAS B EEN MADE OUT OF BORROWED FUNDS, NO DISALLOWANCE IS WARRANTED U/S.14A AS HELD IN THE CASE OF CIT VS. WINSOME TEXTILE INDUSTR IES LTD. (2009) 319 ITR 204 (P&H). 1.2. THE LEARNED CIT(A) FURTHER ERRED IN NOT APPRECIATIN G THE FACT THAT ON IDENTICAL FACTS, THE DISALLOWANCE U/S.14A M ADE IN PREVIOUS YEAR I.E. A.Y. 2008-09 HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT BY THE LD.CIT(A) VIDE APPELLATE ORDER DAT ED 20/01/2012 AND THE DISALLOWANCE WAS RESTRICTED TO THE AMOUNT A S PER PROVISIONS OF RULE 8D(2)(III). IN ABSENCE OF ANY C HANGE OF FACTS DURING THE YEAR UNDER CONSIDERATION VIS--VIS PREVI OUS YEAR, THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDIT ION OF RS.12,33,628/-. 2. THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN DIREC TING THE AO TO WORK OUT THE INTEREST DISALLOWABLE TO THAT EXTENT O UT OF THE TOTAL ADDITION OF RS.3,94,950/- MADE BY THE AO. IN VIEW OF ELABORATE SUBMISSIONS ON FACTS AS WELL AS IN LAW, THE ENTIRE ADDITION OUGHT TO HAVE BEEN DELETED. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, MO DIFY OR DELETE ANY OF THE ABOVE GROUNDS AS WELL AS TO SUBMIT ADDITIONAL G ROUNDS AT THE TIME OF HEARING OF THE APPEAL. ITA NO.1650 /AHD/2012 (BY REVENUE) & CO NO.208/AHD/2012 (BY ASSESSEE) CORRTECH ENERGY PVT. LTD. VS. DCIT ASST.YEAR 2009-10 - 7 - 12. GROUND NOS.1 TO 1.2 ARE AGAINST THE ORDER OF LD .CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS.12,33,628/- MADE BY THE AO U/S.14A R.W.R.8D. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE ASSESSEE- COMPANY HAS MADE INVESTMENT INTO THE SHARES, BUT EA RNED NO EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION. HE PLA CED RELIANCE ON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT REN DERED IN THE CASE OF CIT VS. WINSOME TEXTILE INDUSTRIES LTD. REPORTE D AT (2009) 319 ITR 204 (P&H) AND DECISION OF HONBLE MUMBAI HIGH COURT RENDERED IN THE CASE OF GODREJ & BOYCE MFG.CO.LTD. VS. DY.CIT REPOR TED AT 328 ITR 81 (BOM.). HE SUBMITTED THAT THE DECISION OF HONBLE MUMBAI HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG.CO.LTD. HAS BEEN FOLLOWED BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SINTEX INDUSTRIES LTD. REPORTED AS 33 TAXMAN.COM 240. THE LD.DR COULD NOT CONTROVERT THE SUBMISSIONS MADE BY THE LD.COUNSEL FOR THE ASSESSEE . 13. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS DECIDED THIS ISSUE AS UNDER: - 3.2.. AS REGARDS INTEREST, APPELLANT HAD BORROW ED FUNDS ON WHICH INTEREST WAS PAID. WHILE MAKING INVESTMENTS, BOTH BORROWED FUNDS AS WELL AS OWN FUNDS WERE USED HENCE ONE CANNOT SAY THAT BORROWED FUNDS WERE USED ONLY FOR BUSINESS PURPOSE AND OWNED CAPITAL WAS ONLY USED FOR INVESTMENT. ADMITT EDLY NO SEPARATE ACCOUNTS ARE MAINTAINED FOR BUSINESS AND I NVESTMENT ACTIVITIES THEREFORE APPELLANTS CLAIM IS NOT JUSTI FIED THAT BORROWED FUNDS WERE NOT USED IN MAKING INVESTMENT. IN VIEW OF THIS, I DO NOT AGREE WITH MY PREDECESSOR THAT SINCE APPELLANT HAD SUFFICIENT INTEREST FREE FUNDS, NO PART OF BORROWED FUNDS CAN BE ATTRIBUTED TO ITA NO.1650 /AHD/2012 (BY REVENUE) & CO NO.208/AHD/2012 (BY ASSESSEE) CORRTECH ENERGY PVT. LTD. VS. DCIT ASST.YEAR 2009-10 - 8 - INVESTMENTS. FURTHER, APPELLANTS ARGUMENT THAT IT DID NOT EARN ANY EXEMPT INCOME DURING THE YEAR AND THEREFORE NO DISALLOWANCE OF SECTION 14A CAN BE MADE IS WITHOUT ANY BASIS. S INCE APPELLANT MADE INVESTMENT IN SHARES WHICH WILL RESULT ONLY IN DIVIDENDS WHICH ARE EXEMPT FROM TAX, NOT RECEIVING ANY EXEMPT INCOME DURING THE YEAR WILL NOT ENTITLE APPELLANT TO CLAIM EXPENSES RELATING TO INVESTMENTS WHICH WILL RESULT ONLY IN EXEMPT INC OME. THEREFORE IN THE ABSENCE OF CLEAR CUT DETAILS OF UTILIZATION OF FUNDS, THE FORMULA GIVEN IN RULE 8D WHICH IS MANDATORY THIS YE AR IS TO BE APPLIED. SINCE ASSESSING OFFICER WORKED OUT INTERE ST DISALLOWANCE AS PER RULE 8D, THE INTEREST DISALLOWANCE IS CONFIR MED. THE LD.AR SUBMITTED THAT THIS FINDING OF LD.CIT(A) IS CONTAINING TO THE LAW SETTLED BY VARIOUS JUDICIAL PRONOUNCEMENTS. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE FACTS AND THE DECIS ION RELIED UPON BY THE LD.AR. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. WINSOME TEXTILE INDUSTRIES LTD. REPORTED AT (2009) 319 ITR 204 (P&H) HAS HELD THAT IN THE PRESENT CASE, ADMITTEDLY, THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPTION. IN SUCH A SITUATION, SECT ION 14A COULD HAVE NO APPLICATION. IN THIS CASE ALSO, THE ASSESSEE HAS N OT CLAIMED ANY EXEMPT INCOME IN THIS YEAR. THEREFORE, RESPECTFULLY FOLLO WING THE JUDGEMENT OF HONBLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT VS. WINSOME TEXTILE INDUSTRIES LTD.(SUPRA), WE HEREBY A LLOW THIS GROUND AND DIRECT THE AO TO DELETE THE ADDITION. THEREFORE, G ROUND NOS.1 TO 1.2 RAISED BY THE ASSESSEE IN ITS CROSS-OBJECTION ARE A LLOWED. 14. GROUND NO.2 IS AGAINST THE ORDER OF LD.CIT(A) I N DIRECTING THE AO TO WORK OUT THE INTEREST DISALLOWABLE ON INTEREST-F REE FUNDS ON THE BASIS OF HIS OWN FORMULA AND CONFIRMING THE DISALLOWANCE TO THAT EXTENT OUT OF THE ITA NO.1650 /AHD/2012 (BY REVENUE) & CO NO.208/AHD/2012 (BY ASSESSEE) CORRTECH ENERGY PVT. LTD. VS. DCIT ASST.YEAR 2009-10 - 9 - TOTAL ADDITION OF RS.3,94,950/-. THE LD.COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE-COMPANY HAS SUFFICIENT INTEREST-F REE FUNDS AVAILABLE. HE SUBMITTED THAT LD.CIT(A) ERRED IN GIVING FINDING TH AT IN THE ABSENCE OF CLEAR-CUT DETAILS OF UTILIZATION OF FUNDS AVAILABLE WITH THE ASSESSEE INCLUDING OWNED FUNDS AND BORROWED WERE USED FOR AL L PURPOSES INCLUDING PROVIDING INTEREST-FREE LOANS. ON THE CO NTRARY, LD.SR.DR SUPPORTED THE ORDER OF LD.CIT(A). 15. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT THE ASSESSEE-COMPANY HAS SUFFICIENT INTEREST-F REE FUNDS. THE LD.COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE O N THE DECISION OF HONBLE COORDINATE BENCH (ITAT AHMEDABAD) IN THE C ASE OF TORRENT FINANCIERS (2001) 73 TTJ 624 WHEREIN THE TRIBUNAL H AS HELD AS UNDER:- ENTIRE INTEREST-FREE FUNDS AVAILABLE WITH THE ASSE SSEE IS TO BE CONSIDERED. THE ENTIRE INTEREST-FREE FUNDS INCLUDE OWNERS OWN CAPITAL, ACCUMULATED PROFITS AND OTHER INTEREST-FREE CREDITO RS AND LOANS, IF TOTAL INTEREST-FREE ADVANCES INCLUDING DEBIT BALANCES OF PARTNERS DO NOT EXCEED THE TOTAL INTEREST-FREE FUNDS AVAILABLE WITH THE ASSESSEE, NO INTEREST IS DISALLOWABLE ON ACCOUNT OF UTILISATION OF FUND FOR NON- BUSINESS PURPOSES AND IF IT EXCEEDS, THE PROPORTION ATE DISALLOWANCE CAN BE MADE. THE AO IS REQUIRED TO RECALCULATE THE FIGU RES OF DISALLOWANCE OF INTEREST PAID ON BORROWED FUNDS, THEREFORE, THE ORDER OF CIT(A) ON THIS ISSUE IS SET ASIDE AND THE ISSUE IS RESTORED B ACK TO THE FILE OF AO FOR THE LIMITED PURPOSE TO RECALCULATE DISALLOWANCE OF INTEREST PAID ON BORROWED FUNDS, IF ANY, IN ACCORDANCE WITH THE ABOV E OBSERVATIONS AND AS PER PROVISIONS OF IT ACT. CIT VS. TINGRI TEA CO. LTD. (1971) 79 ITR 294 (CAL) RELIED ON. ITA NO.1650 /AHD/2012 (BY REVENUE) & CO NO.208/AHD/2012 (BY ASSESSEE) CORRTECH ENERGY PVT. LTD. VS. DCIT ASST.YEAR 2009-10 - 10 - 15.1. THE LD.SR.DR COULD NOT CONTROVERT THE FINDING OF THE HONBLE COORDINATE BENCH AND NOTHING HAS BEEN BROUGHT ON RE CORD SUGGESTING THAT THE DECISION OF THE HONBLE TRIBUNAL IN THE CASE OF TORRENT FINANCIERS(SUPRA) IS NOT APPLICABLE. THEREFORE, RE SPECTFULLY FOLLOWING THE DECISION OF HONBLE COORDINATE BENCH, WE HEREBY SET ASIDE THE ORDER OF THE LD.CIT(A) AND THE AO IS DIRECTED TO DELETE THE ADDITION. THUS, THIS GROUND RAISED BY THE ASSESSEE IN ITS CROSS-OBJECTIO N IS ALLOWED. 16. IN THE RESULT, REVENUES APPEAL IS DISMISSED, W HEREAS CROSS- OBJECTION FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31/ 10 /2013 .., .../ T.C. NAIR, SR. PS 3 / ,$6 76'$ 3 / ,$6 76'$ 3 / ,$6 76'$ 3 / ,$6 76'$/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. !! $ '8 / CONCERNED CIT 4. '8() / THE CIT(A)-6, AHMEDABAD 5. 6 #9 ,$ , , / DR, ITAT, AHMEDABAD 6. 9:& ;. / GUARD FILE. 3' 3' 3' 3' / BY ORDER, -6$ ,$ //TRUE COPY// < <<