Sh. Vikas Vinaik, Yamunanagar V. Pr. CIT, Panchkula

ITA 197/CHANDI/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5321 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 09-01-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 08-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S PHANI KISHORE
• Keywords: Assessment record
• Section: 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B CHANDIGARH , ! '# $ % & '# , () BEFORE: SH. SANJAY GARG, JUDICIAL MEMBER & SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.197/CHD/2016 / ASSESSMENT YEAR : 2011-12 SHRI VIKAS VINAIK, HOUSE NO. 307-R, MODEL TIOWN, YAMUNA NAGAR. THE PR. CIT, PANCHKULA. ./ PAN NO: AAHPV4876G / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI T.N. SINGLA # ! ' / REVENUE BY : SHRI G.S.PHANI KISHORE, CIT-DR $ % ! &/ DATE OF HEARING : 09.01.2019 '()* ! &/ DATE OF PRONOUNCEMENT : 29.01.2019 (*/ ORDER PER SANJAY GARG, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 25.01.2016 OF THE COMMISSIONER OF I NCOME TAX [HEREINAFTER REFERRED TO AS CIT], PANCHKULA U/S 263 OF THE INCOME TAX ACT,1961 REVISING THE ORDER OF THE AO. 2. THE BRIEF FACTS RELEVANT TO THE ISSUE ARE THAT T HE LD. CIT ON PERUSAL OF ASSESSMENT RECORDS NOTICED THAT THE ASSE SSEE HAD MADE CERTAIN INTEREST FREE ADVANCES/INVESTMENTS AND FURT HER THAT THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT HAD CLAIMED I NTEREST EXPENDITURE TO THE TUNE OF RS. 1,00,242/-. HE, THEREFORE, OBSE RVED THAT AS PER THE JUDGEMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COUR T IN THE CASE OF M/S ABHISHEK INDUSTRIES 286 ITR 1, THE PROPORTIONAT E INTEREST EXPENDITURE ON THE INTEREST FREE ADVANCES/INVESTMEN TS MADE BY THE ASSESSEE WAS REQUIRED TO BE DISALLOWED. HE, THERE FORE, INVOKED THE ITA 197/CHD/2016 PAGE 2 OF 3 PROVISIONS OF SECTION 263 OF THE INCOME TAX ACT AND SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE AO TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE DECISION OF THE HON'BLE PUNJAB & HARYA NA HIGH COURT IN THE CASE OF M/S ABHISHEK INDUSTRIES (SUPRA). 3. BEING AGGRIEVED BY THE ABOVE ORDER OF THE LD. CI T, THE ASSESSEE HAS COME IN APPEAL BEFORE US. A PERUSAL OF THE REC ORD REVEALS THAT THE ASSESSEE HAD SPECIFICALLY PLEADED BEFORE THE LD. CI T THAT OUT OF THE TOTAL CLAIM OF INTEREST EXPENDITURE OF RS. 1,00,242 /-, THE ASSESSEE HAD CLAIMED INTEREST ON CAR LOAN AMOUNTING TO RS. 36,69 7/- WHICH HAD NO RELATION WITH THE INTEREST FREE ADVANCES/INVESTMENT S MADE BY THE ASSESSEE. FURTHER, IT WAS ALSO DEMONSTRATED BEFORE THE LD. CIT THAT ASSESSEE HAD PAID AN AMOUNT OF RS. 53,840/- ON CASH CREDIT LIMIT AND BANK CHARGES AMOUNTING TO RS. 9705/- AND IT WAS ALS O PLEADED THAT THE SAID PAYMENT OF INTEREST HAD NOTHING TO DO WITH THE INVESTMENTS MADE. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF HERO CYCLES PVT. LTD. VS CIT, LUDHIANA CIVIL APPEAL NO. 514 OF 2008 DATED 05.11.2015 AND I T WAS SUBMITTED THAT THE ASSESSEE WAS POSSESSED OF SUFFICIENT OWN F UNDS/INTEREST FREE FUNDS TO MEET THE INVESTMENTS MADE AND HENCE AS PER THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF HE RO CYCLES (SUPRA). THE PRESUMPTION IN THAT EVENT WILL BE THAT THE ASSE SSEE HAD USED HIS OWN FUNDS/INTEREST FREE FUNDS AVAILABLE WITH HIM TO MAKE THE INVESTMENT. RELIANCE HAD ALSO BEEN PLACED ON THE D ECISION OF THE JURISDICTIONAL HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF BRIGHT ENTERPRISES PVT. LTD. VS CIT ITA NO. 224 OF 2013 DATED 24.07.2015. HOWEVER, A PERUSAL OF THE IMPUGNED ORDE R REVEALS THAT THE LD. CIT HAS IGNORED THE PROPOSITION OF LAW LAID DOW N BY THE HON'BLE SUPREME COURT IN THE CASE OF HERO CYCLES (SUPRA) AN D BY THE HON'BLE ITA 197/CHD/2016 PAGE 3 OF 3 PUNJAB & HARYANA HIGH COURT IN THE CASE OF BRIGHT E NTERPRISES (SUPRA) THAT IN CASE THE ASSESSEE PROVES THAT OWN FUNDS/INT EREST FREE FUNDS AVAILABLE WITH HIM WERE SUFFICIENT TO MEET THE INVE STMENTS MADE, THEN THE PRESUMPTION WILL ARISE THAT THE ASSESSEE HAS US ED HIS OWN FUNDS. THIS VIEW HAS BEEN FURTHER AFFIRMED BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. KAPSONS ASSOCIATES, 381 ITR 204(P&H). THEREFORE, SIMPLY RELYING ON THE DECISION I N THE CASE OF M/S ABHISHEK INDUSTRIES (SUPRA) AND WITHOUT CONSIDERING THE OTHER DECISION OF THE HON'BLE SUPREME COURT AND THE HON'B LE HIGH COURT AS DISCUSSED ABOVE, THE LD. CIT SET ASIDE THE ORDER OF THE AO. WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE AO CANNOT BE SAID TO BE ERRONEOUS AS THE VIEW TAKEN BY THE AO WAS PERMISSIB LE VIEW. THEREFORE, EXERCISING OF POWER U/S 263 OF THE ACT B Y THE CIT WAS NOT WARRANTED IN THIS CASE. THE ORDER PASSED BY THE LD . CIT, THEREFORE, IS NOT SUSTAINABLE IN THE EYES OF LAW AND THE SAME IS HEREBY QUASHED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.01. 2019. SD/- SD/- ( $ % & '# ) ( ) (ANNAPURNA GUPTA) (SANJAY GARG ) () / ACCOUNTANT MEMBER / JUDICIAL MEMBER (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ / / CIT 4. $ / ( )/ THE CIT(A) 5. -01 2 , & 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7% / GUARD FILE (+ $ / BY ORDER, 8 # / ASSISTANT REGISTRAR