Maruti Koatsu Cylinders Pvt.Ltd., Panchmahal V. The ACIT.,Circle-4, Baroda

ITA 2096/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63219 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 18-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T SHANKAR
• Assessee Lawyers: S N SAPORKAR
• Keywords: Notional interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD D BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT ME MBER ITA NO.2096/AHD/2010 A.Y. 2006-07 MARUTI KOATSU CYLINDERS PVT. LTD., 1402, GIDC INDUSTRIAL ESTATE HALOL-389 350 PAN-AABCM4108P APPELLANT VS. THE A.C.I.T., CIRCLE-4 BARODA RESPONDENT DEPARTMENT BY : SHRI T. SHANKAR, SR. D.R. ASSESSEE BY : SHRI S.N. SAPORKAR, SR. ADVOCATE DATE OF HEARING : 14.12.2012 DATE OF PRONOUNCEMENT : 14.12.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-III, BARODA DATED 12.04.2010. 2. THOUGH THE ASSESSEE HAS TAKEN FIVE GROUNDS OF AP PEAL BUT AT THE TIME OF HEARING ONLY TWO GROUNDS WERE PRESSED. 3. THE FIRST GROUND RELATES TO THE ACTION OF LD. CI T(A) IN CONFIRMING THE DISALLOWANCE OF THE CLAIM OF BAD DEBT WRITTEN OFF B Y THE A.O. OF RS.1,08,06,563/- RELYING ON THE JUDGMENT OF DHALL E NTERPRISE 287 ITR 401 OF HONBLE GUJARAT HIGH COURT. ITA NO.2096/AHD/2010 A.Y. 2006-07 2 4. AT THE TIME OF HEARING LD. COUNSEL OF THE ASSESS EE, PLACING RELIANCE ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF TRF L TD. 323 ITR 397 SUBMITTED THAT THIS DISALLOWANCE OF THE CLAIM OF THE ASSESSEE IS WITHOUT ANY MERITS AND THE A.O. BE DIRECTED TO ALLOW THIS CLAIM OF THE ASSESSE E. LD. D.R., ON THE OTHER HAND, SUBMITTED THAT IN THIS CASE IT IS NOT CLEAR W HETHER THE AMOUNT OF RS.1,08,06,563/- WRITTEN OFF WAS OFFERED TO TAX IN EARLIER YEARS BY THE ASSESSEE. HE, THEREFORE, PRAYED THAT THE MATTER MAY KINDLY BE RESTORED BACK TO THE FILE OF THE A.O. FOR SUCH VERIFICATION. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE ARE OF THE VIEW THAT THE MATTER REQUIRES TO BE SENT BACK TO THE FIL E OF THE A.O. FOR FRESH ADJUDICATION IN THE LIGHT OF HONBLE APEX COURT DEC ISION IN THE CASE OF TRF LTD. 323 ITR 397. THIS GROUND OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. 6. THE SECOND GROUND RELATES TO THE ACTION OF LD. C IT(A) IN CONFIRMING DISALLOWANCE OF RS.2,66,732/- BY THE A.O. OUT OF IN TEREST EXPENSES FOR COMPUTING 12% NOTIONAL INTEREST CHARGEABLE ON INTER EST FREE ADVANCES. 7. THE ASSESSEES CONTENTION BEFORE THE LOWER AUTHO RITIES HAS BEEN THAT THIS ADVANCE WAS MADE TO SISTER CONCERN OUT OF COMMERCIA L EXIGENCY AND THEREFORE IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN T HE CASE OF S.A. BUILDERS 288 ITR 1 NOTIONAL INTEREST SO COMPUTED NEED NOT BE DIS ALLOWED. THE LOWER AUTHORITIES WERE OF THE VIEW THAT THE ADVANCE GIVEN BY THE ASSESSEE TO ITS SISTER CONCERN WAS NOT FOR BUSINESS PURPOSE. 8. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE ARE OF THE CONSIDERED OPINION THAT ASSESSEE BE GIVEN ONE MORE OPPORTUNITY TO SUBSTANTIATE ITA NO.2096/AHD/2010 A.Y. 2006-07 3 HIS CLAIM THAT ADVANCE WAS GIVEN BY HIM TO THE SIST ER CONCERN FOR BUSINESS PURPOSE. THIS GROUND OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSE. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 14.12.2012 SD/- SD/- (ANIL CHATURVEDI) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE BY ORDER AR,ITAT,AHMEDABAD