System Control and transformors (P) Ltd., Ghaziabad V. ACIT, Ghaziabad

ITA 2038/DEL/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 7129 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 1992-1993
• Appeal Filed On: 03-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G DELHI) BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO. 2038(DEL)2010 ASSESSMENT YEAR: 1992-93 M/S. SYSTEM CONTROL AND TRANSFORMERS ASSTT. COMMISSIONER OF IT, (P) LTD. C-15, INDL.AREA, MEERUT ROAD, V. CIR.2 , IT OFFICE, HAPUR ROAD, GHAZIABAD. GHAZIABAD. (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI R.P. SINGH, SR. DR ORDER PER A.D. JAIN, J.M. THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 1992-93, TAKING THE FOLLOWING GROUNDS:- 1. THAT THE LD. CIT(A) IS NOT JUSTIFIED AND HAS ER RED IN CONFIRMING THE DISALLOWANCE OF ` 10,48,560/- MADE BY THE AO OUT OF INTEREST WITH REFERENCE TO ADVANCES OF ` 58,25,334/- ALLEGED TO BE FOR NON-BUSINESS PURPOSES WHICH BEING UNWARRANTED AND UNCALLED FOR B E KINDLY DELETED. THE LD. CIT(A) HAS NOT APPRECIATED THE ASSESSEES C ONTENTIONS PROPERLY AND HE IS TOTALLY WRONG IN OBSERVING THAT THE FACTS OF THIS YEAR ARE DIFFERENT FROM THAT OF ASSESSMENT YEAR 199 6-97 AND THAT THE DECISION OF HONBLE ITAT IN ASSESSEES OWN CASE FOR ASSTT.YEAR 1996- 97 HAS NO RELEVANCE TO THIS YEAR. ITA 2038(DEL)2010 2 2. THAT ALTERNATIVELY BUT WITHOUT PREJUDICE TO GROU ND NO.1, THE DISALLOWANCE AS MADE AND CONFIRMED BY THE CIT(A) IS VERY EXCESSIVE. 2. THE AO MADE A DISALLOWANCE OF ` 10,48,560/- OUT OF INTEREST, WITH REFERENCE TO ADVANCES OF ` 58,25,334/-, ALLEGING THESE ADVANCES TO BE FOR NON-BUSINESS PURPOSES. IT WAS OBSERVED THAT THOUGH THE ASSESSEE HAD FILED DETAILS OF THE AMOUNT OF ` 58,25,334/-, THE BOOKS OF ACCOUNT HAD NOT BEEN PRODUCED; THAT THE AMOUNT HAD BEEN INVESTED TOWARDS NON-PROFIT MAKING INVESTMENT, WHEREAS THE ASSESSEE HAD TAKEN LOANS AN D ADVANCES, ON WHICH, HUGE INTEREST HAD BEEN PAID. THE LEARNED CIT(A), WHILE CONFIRMING THE DISALLOWANCE, OBSERVED THAT THE ASSESSEE HAD NOT BE EN ABLE TO FURNISH ANY COGENT MATERIAL TO JUSTIFY THE INTEREST FREE ADVANC ES, WHEN HE HAD TAKEN LOANS AND ADVANCES, ON WHICH, HUGE INTEREST HAD BEEN PAID ; THAT AS SUCH, THE AO WAS JUSTIFIED IN MAKING THE DISALLOWANCE OF ` 10,48,560/-, BEING INTEREST AT THE RATE OF 19% ON THE AMOUNT OF ` 58,25,334/-; THAT THOUGH THE ASSESSEE HAD RELIED ON THE TRIBUNAL DECISION IN ITS CASE FOR ASS ESSMENT YEAR 1996-97, THE FACTS IN ASSESSMENT YEAR 1996-97 WERE NOT IDENTICAL TO THE FACTS IN THE ASSESSMENT YEAR UNDER CONSIDERATION, I.E., ASSESSME NT YEAR 1992-93; AND THAT SO, THE TRIBUNAL DECISION FOR ASSESSMENT YEAR 1996- 97 WAS NOT APPLICABLE TO THE FACTS FOR THE YEAR UNDER CONSIDERATION. AGGRI EVED, THE ASSESSEE IS IN APPEAL. ITA 2038(DEL)2010 3 3. AT THE TIME OF HEARING OF THE APPEAL, NONE HAS P UT IN APPEARANCE ON BEHALF OF THE ASSESSEE DESPITE INTIMATION OF DATE OF HEARING OF THE APPEAL. HOWEVER, FINDING THAT THE MATTER CAN BE PROCEEDED I N THE ABSENCE OF THE ASSESSEE, WE ARE DOING SO. 4. THE LEARNED DR HAS STAUNCHLY SUPPORTED THE IMPU GNED ORDER. IT HAS BEEN CONTENDED THAT AS OBSERVED BY THE LEARNED CIT( A), THE FACTS FOR ASSESSMENT YEAR 1996-97 WERE NOT IDENTICAL TO THE F ACTS FOR THE YEAR UNDER CONSIDERATION AND THEREFORE, THE TRIBUNAL ORDER FOR ASSESSMENT YEAR 1996-97 HAD NO RELEVANCE. 5. WE, HOWEVER, ARE NOT IN AGREEMENT WITH THE STAND TAKEN BY THE DEPARTMENT. IT WAS FOR THE LEARNED CIT(A) TO SHOW AS TO HOW THE FACTS FOR THE YEAR UNDER CONSIDERATION ARE AT VARIANCE FROM T HOSE PRESENT BEFORE THE TRIBUNAL FOR ASSESSMENT YEAR 1996-97. THIS, HOWEVE R, HAS NOT BEEN DONE. IN THE ORDER UNDER APPEAL, BESIDES OBSERVING THE FACTS FOR ASSESSMENT YEAR 1996-97 TO BE NOT IDENTICAL WITH THOSE FOR ASSESSME NT YEAR 1992-93, I.E., THE YEAR UNDER CONSIDERATION, NOTHING HAS BEEN ELABORAT ED TO BRING OUT THE STATED DIFFERENCE, IF ANY. IN THESE CIRCUMSTANCES, THE G RIEVANCE OF THE ASSESSEE BY WAY OF GROUND NO.1 IS FOUND TO BE JUSTIFIED AND IS ACCEPTED AS SUCH. ITA 2038(DEL)2010 4 6. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS SET ASIDE ON THIS SCORE AND THE DISALLOWANCE OF ` 10,48,560/- IS DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.09.2010. (G.E. VEERABHADRAPPA) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED: 30.09.2010 *RM COPY FORWARDED TO: 1.M/S. SYSTEM CONTROL AND TRANSFORMERS (P) LTD. C-15, INDL.AREA, MEERUT ROAD, GHAZIABAD. 2. ACIT,CIR.2, IT OFFICE, HAPUR ROAD, GHAZIABAD. 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR