M/s Jayshree Vyapar Ltd., RAJKOT-GUJARAT V. The Additional Commissioner of Income Tax, Range-5, RAJKOT-GUJARAT

ITA 178/RJT/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2775 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 10-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 178/RJT/2014 ASSESSMENT YEAR : 2008-09 M/S. JAYSHREE VYAPAR LTD., AJAY MANSION, MALAVIYA ROAD, OPP. SAURASHTRA COLD STORAGE, RAJKOT-360 002 PAN : AAACJ 7173 J VS THE ADDITIONAL COMMISSIONER OF INCOME-TAX, RANGE-5, RAJKOT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : WRITTEN SUBMISSIONS REVENUE BY : SHRI PRAVEEN VERMA, SR DR / DATE OF HEARING : 28/08/2018 / DATE OF PRONOUNCEMENT: 28/08/2018 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER :- 1. THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE O F THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A)-IV, RAJKOT DATED 17.01. 2014 PASSED FOR ASSESSMENT YEAR 2008-09. 2. THOUGH THE ASSESSEE HAS TAKEN EIGHT GROUNDS OF A PPEAL, BUT ITS GRIEVANCES REVOLVE AROUND ISSUES NAMELY (I) CONFIRM ATION OF DISALLOWANCE OF RS.8,56,712/- OUT OF INTEREST EXPENDITURE AND (II) CONFIRMATION OF ADDITION OF RS.6,395/- IN RESPECT OF PAYMENT MADE TO RTO. IN RESPONSE TO THE NOTICE OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE FILED WRI TTEN SUBMISSIONS. 3. WITH THE ASSISTANCE OF THE LEARNED DEPARTMENTAL REPRESENTATIVE, WE HAVE GONE THROUGH THE WRITTEN SUBMISSIONS FILED BY THE L EARNED COUNSEL FOR THE ASSESSEE. ITA NO. 178/RJT/2014 ACIT VS.JAYSHREE VYAPAR LTD AYS : 2008-09 2 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ON 30.08.2008 DECLARING TOTAL INCOME OF RS.3 ,59,05,128/-. THE ASSESSEE COMPANY, AT THE RELEVANT TIME, WAS ENGAGED IN THE B USINESS OF TRADING OF COAL & COKE, FERRO SILICON, STEEL AND C&F AGENT OF CEMENT. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE ASSESSING OFFICER THAT THE ASSES SEE HAS INCURRED INTEREST EXPENDITURE OF RS.68,82,680/- ON SECURED LOANS OF R S.4,96,89,496/-. THE ASSESSING OFFICER FURTHER FOUND THAT THE ASSESSEE C OMPANY HAS ADVANCED INTEREST FREE LOANS OF RS.2 CRORES TO M/S. FILM WAV ES COMBINE LTD AND RS.15,55,000/-TO DURLABH BHAVAN BUILDING. ACCORDIN G TO THE ASSESSING OFFICER, THE ASSESSEE HAS DIVERTED INTEREST BEARING FUNDS WI THOUT BUSINESS PURPOSE, AND, THEREFORE, HE CALCULATED INTEREST EXPENDITURE ON SU CH ADVANCES AT RS.8,56,712/- @ 12%. HE MADE ADDITION OF THIS AMOUNT TO THE TOTA L INCOME OF THE ASSESSEE. 5. APPEAL TO THE LEARNED CIT(A) DID NOT BRING ANY R ELIEF TO THE ASSESSEE. 6. IN THE WRITTEN SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE PLEADED THAT SUCH ADVANCES WERE GIVEN FOR THE PURPOSES OF B USINESS; HENCE, NO INTEREST EXPENDITURE OUGHT TO BE CALCULATED. ON PERUSAL OF THE RECORD, IT REVEALED THAT, EXCEPT BALD STATEMENT CONTENDING THEREIN THAT SUCH ADVANCES WERE GIVEN FOR THE PURPOSE OF BUSINESS, NO CIRCUMSTANTIAL EVIDENCE HAS BEEN PRODUCED. WHAT BUSINESS THE ASSESSEE INTENDED TO DO WITH THESE TWO CONCERNS? WHETHER ANY PRIMARY WORK FOR ESTABLISHMENT OF ANY BUSINESS WAS CARRIED OUT OR NOT? NOTHING HAS BEEN BROUGHT ON RECORD. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) ON TH IS ISSUE. 7. SO FAR AS THE DISALLOWANCE OF RS.6,395/- IS CONC ERNED, NO ARGUMENT HAS BEEN ADVANCED IN THE WRITTEN SUBMISSIONS. PAYMENT OF RS.6,395/- WAS MADE TO THE RTO ON ACCOUNT OF OVERLOADING OF TRUCKS. IT HAS BEEN TREATED AS A PENAL IN NATURE BY THE ASSESSING OFFICER AND IT WAS DISALLOW ED WITH THE HELP OF ITA NO. 178/RJT/2014 ACIT VS.JAYSHREE VYAPAR LTD AYS : 2008-09 3 EXPLANATION (1) OF SECTION 37 OF THE ACT. THE ASSES SEE FAILED TO GIVE ANY EXPLANATION EITHER BEFORE THE LEARNED CIT(A) OR BEF ORE THE TRIBUNAL RATHER LEARNED COUNSEL FOR THE ASSESSEE DID NOT TOUCH THIS ISSUE IN HIS SUBMISSIONS. THEREFORE, THIS ADDITION IS ALSO CONFIRMED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 28 TH AUGUST, 2018 AT AHMEDABAD. SD/- SD/- ( WASEEM AHMED ) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED 28/08/2018 *BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A) 5. , / DR, ITAT, RAJKOT 6. & / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) ' #, / ITAT, RAJKOT 1. DATE OF DICTATION- 28.08.2018 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.08.2018 OTHER MEMBER 28.08.2018. 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - 28.08.2018 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 28.08.2018.. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK28.0 8.2018 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER 8. DATE OF DESPATCH OF THE ORDER