Appeal details
Counselvise Citation
[2013] 120 COUNSELVISE.COM (IT) 0920 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-01-2013
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Assessment Year
2009-2010
Appeal Filed On
12-11-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER] I.T.A.NO.2051/MDS/2012 ASSESSMENT YEAR : 2009-10 THE ACIT COMPANY CIRCLE V(1) CHENNAI VS M/S PAN ASIA LOGISTICS INDIA PVT. LTD 46 & 48, EHRLICH LAB BUILDING 2 ND FLOOR MASILAMANI ROAD, BALAJI NAGAR ROYAPETTAH, CHENNAI 600 014 [PAN AADCP 5669E] (APPELLANT) (RESPONDENT) APPELLANT BY : DR. S.MOHARANA, CIT/DR RESPONDENT BY : NONE DATE OF HEARING : 29-01-2013 DATE OF PRONOUNCEMENT : 31-01-2013 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A)-V, CHENNAI, DATED 28.8.2012. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL OF THE REVEN UE IS THAT THE CIT(A) ERRED IN HOLDING THAT PROPORTIONATE DISA LLOWANCE OF INTEREST EXPENDITURE U/S 14A IS NOT WARRANTED. I.T.A.NO. 2051/12 :- 2 -: 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, OBSERV ED THAT THE ASSESSEE HAS ADMITTED DIVIDEND INCOME OF ` 21,87,381/- AND THAT THE ASSESSEE HAS DEBITED BANK CHARGES OF ` 15,85,830/- ON TOTAL SECURED LOANS OF ` 5,86,98,652/-. HE ALSO NOTED THAT TOTAL INVESTMEN TS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE WAS ` 4,08,53,305/-. ACCORDINGLY, THE ASSESSING OFFICER WORKED OUT INTER EST ATTRIBUTABLE TO THIS INVESTMENT OF ` 4,08,53,305/- AT ` 11,03,711/- AND DISALLOWED THE SAME WHILE MAKING THE ASSESSMENT. 4. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND SU BMITTED THAT THE WHOLE OF INTEREST HAS BEEN PAID FOR THE P URPOSES OF BUSINESS AS THE AMOUNT OF LOAN/TERM LOANS WERE DIRECTLY REMI TTED TO THE MANUFACTURERS OF THE CONTAINERS AS PER THE INSTRUCT IONS TO THE ASSESSEES BANK. THIS FACT WAS IGNORED BY THE ASS ESSING OFFICER IN SPITE OF FURNISHING DETAILS IN THIS REGARD. 5. THE CIT(A), AFTER CONSIDERING THE SUBMISSIONS, DIRE CTED THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE OF PRO PORTIONATE INTEREST MADE U/S 14A R.W. RULE 8D AFTER VERIFICATION OF TH E FACT THAT THE AMOUNT OF LOAN/TERM LOANS HAVE BEEN DIRECTLY SENT T O THE MANUFACTURERS OF THE CONTAINERS AS PER THE INSTRUCT IONS TO THE I.T.A.NO. 2051/12 :- 3 -: ASSESSEES BANK AND NO PART OF THE LOAN WAS PAID OR CREDITED IN THE ASSESSEES BANK ACCOUNT. 6. THE CIT/DR RELIED ON THE ORDER OF THE ASSESSING OFF ICER. 7. NOTICE OF HEARING WAS SENT BY REGISTERED POST WITH ACKNOWLEDGEMENT DUE TO THE RESPONDENT-ASSESSEE ON 2 3.11.2012 WHICH WAS SERVED ON THE ASSESSEE ON 27.11.2012 AS EVIDENCED BY THE ACKNOWLEDGEMENT CARD PLACED ON RECORD. NONE APPEA RED ON BEHALF OF THE ASSESSEE WHEN THE CASE WAS CALLED FOR HEARING AND NEITHER ANY ADJOURNMENT PETITION WAS FILED. THE BENCH WAS OF T HE VIEW THAT THE APPEAL CAN BE DISPOSED OF IN THE ABSENCE OF THE R ESPONDENT- ASSESSEE, THEREFORE, THE APPEAL WAS HEARD EX-PARTE QUA THE RESPONDENT-ASSESSEE AND DISPOSED OF AFTER CONSIDERI NG THE SUBMISSIONS OF THE CIT/DR. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE CIT/DR AN D PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MAT ERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER DISALLOWED DEDUCTION OF PROPORTIONATE INTEREST EXPENDITURE OF ` 11,03,711/- ON THE GROUND THAT THE INVESTMENT OF ` 4,08,53,305/- SHOWN BY THE ASSESSEE IN ITS BALANCE SHEET WERE OUT OF THE SECURED LOANS OF ` 5,86,98,652/- ON WHICH ASSESSEE HAD PAID INTEREST OF ` 15,85,830/-. I.T.A.NO. 2051/12 :- 4 -: 9. ON APPEAL, THE CIT(A) DIRECTED THE ASSESSING OFFICE R TO VERIFY THE CONTENTION OF THE ASSESSEE THAT THE AMOUNT OF LOAN/TERM LOANS WERE PAID DIRECTLY TO THE MANUFACTURERS OF CONTAINE RS AS PER THE INSTRUCTION TO THE ASSESSEES BANK AND NO AMOUNT W AS CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE AND IF HE FINDS THAT THE CONTENTION IS TRUE THEN TO DELETE THE DISALLOWANCE, OTHERWISE NOT . 10. THE CIT/DR COULD NOT POINT OUT ANY ERROR IN THE ABO VE FINDING OF THE CIT(A). HE ALSO COULD NOT PRODUCE A NY MATERIAL ON RECORD TO SHOW THAT THE LOANED FUNDS WERE UTILIZED BY THE ASSESSEE IN INVESTMENTS FROM WHICH EXEMPT DIVIDEND INCOME WAS E ARNED BY THE ASSESSEE. IN THE ABSENCE OF ANY SUCH MATERIAL BEIN G BROUGHT ON RECORD, WE DO NOT FIND ANY GOOD AND JUSTIFIABLE REA SON TO INTERFERE WITH THE ORDER OF THE CIT(A). IT IS CONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED ON THURSDAY, THE 31 ST OF JANUARY, 2013, AT CHENNAI. SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER DATED: 31 ST JANUARY, 2013 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR
