The DCIT, Circle-5, Ahmedabad V. Paras Pharmaceuticals Ltd., Ahmedabad

ITA 1685/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0075 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 19-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Notional interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D.C. AGRAWAL, AM) ITA NO.1685/AHD/2010 A. Y.: 2007-08 THE D. C. I. T., CIRCLE-5, 2 ND FLOOR, CU SHAH COLLEGE BUILDING, ASHRAM ROAD, AHMEDABAD VS PARAS PHARMACEUTICALS LTD., 6-B, PARAS HOUSE, SATTAR TALUKA SOCIETY, ASHRAM ROAD, AHMEDABAD PA NO. AAACP 9268J (APPELLANT) (RESPONDENT) APPELLANT BY SHRI BHUVNESH KULSHRESTHA, DR RESPONDENT BY SHRI ASHWIN SHAH, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XVI, AHMEDA BAD DATED 08-03- 2010 FOR THE ASSESSMENT YEAR 2007-08 ON THE FOLLOW ING GROUNDS: 1. THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHME DABAD HAS ERRED IN LAW AND ON FACTS IN DELETING DISALLOWA NCE OF INTEREST OF RS.21,72,000/- ON DOUBTFUL ADVANCES OF RS.1,21 CRORES GIVEN TO M/S. MADHAVDAS TULSIDAS & COMPANY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (A) - XI, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 2. THE LEARNED CIT(A) NOTED THAT IN EARLIER YEARS I TAT, AHMEDABAD BENCH IN THE CASE OF THE ASSESSEE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND ACCORDINGLY DELETED THE ADDITION. THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT ON THE SAME MATTER IN ISSUE ITAT AHMEDABAD BENCH IN ASSESSMENT YEAR 2005- 06 IN ITA NO.3565/AHD/2007 HAS DISMISSED THE DEPARTMENTAL APP EAL VIDE ORDER DATED 20-08-2010. ON CONSIDERATION OF THE ABOVE FAC TS, WE FIND THAT THE ITA NOS. 1685/AHD/2010 DCIT, CIR-5 AHD VS PARAS PHARMACEUTICALS LTD. 2 DEPARTMENTAL APPEAL IN ASSESSMENT YEAR 2005-06 HAS BEEN DISMISSED BY US VIDE ORDER OF THE EVEN DATE IN WHICH IT WAS HELD AS UNDER: 7. ON CONSIDERATION OF THE ABOVE FACTS IN THE LIGH T OF THE ORDER OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE M ENTIONED ABOVE, WE DO NOT FIND ANY MERIT IN THE APPEAL OF TH E REVENUE. THE LEARNED CIT(A) DELETED THE ADDITION BY FOLLOWIN G THE ORDER OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE AS WELL AS FOLLOWING HIS ORDER IN PRECEDING ASSESSMENT YEAR 2004-05. THE ORDER OF THE LEARNED CIT(A) FOR ASSESSMENT YEAR 2004-05 HAS BEEN CONFIRMED BY THE TRIBUNAL ON THE IDENTICAL FACTS. THEREFORE, THERE IS NO ERROR IN THE ORDER OF THE LEARNED CIT(A ) IN DELETING THE ADDITION. EVEN OTHERWISE, IT IS SETTLED LAW WHE N THE RECOVERY OF THE PRINCIPAL AMOUNT ITSELF IS IN DOUBT DUE TO VARIOUS DIFFICULTIES; THERE IS NO QUESTION OF ACCRU AL OF INTEREST IN FAVOUR OF THE ASSESSEE. IT IS ALSO SETTLED LAW T HAT UNDER INCOME TAX ACT WHAT IS TAXABLE IS THE REAL INCOME. NO NOTIONAL INTEREST CAN BE CHARGED TO TAX. SINCE IN THE EARLIE R YEAR, SIMILAR ADDITIONS HAVE BEEN DELETED IN THE CASE OF THE ASSESSEE BY THE LEARNED CIT(A) AND HIS VIEW HAS BEE N UPHELD BY THE TRIBUNAL, THEREFORE, BY FOLLOWING THE SAME, WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. SAME IS ACCORDINGLY DISMISSED . 3. BY FOLLOWING THE SAME ORDER, WE DISMISS THE DE PARTMENTAL APPEAL. 4. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED ON 20-08-2010 SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 20-08-2010 LAKSHMIKANT/- ITA NOS. 1685/AHD/2010 DCIT, CIR-5 AHD VS PARAS PHARMACEUTICALS LTD. 3 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD