Shri Davariya Brothers, Surat V. The ACIT., Circle-9, Surat

ITA 2134/AHD/2007

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57165 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 06-02-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 21-05-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: M K PATEL
• Keywords: Proportionate interest; Notional interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND SHRI A. MOHAN A LANKAMONY, AM) ITA NO.2134/AHD/2007 A. Y.: 2004-05 DAVARIYA BROTHERS, 15-D, HOUSE NO.175, 4 TH FLOOR, PATEL FALIA, GOTALAWADI, KATARGAM, SURAT PA NO. AACFD 0230 F VS THE A. C. I. T., CIRCLE -9 , INCOME TAX OFFICE, SURAT (APPELLANT) (RESPONDENT) ITA NO.3127/AHD/2007 A.Y.: 2004-05 THE A. C. I. T., CIRCLE -9 , INCOME TAX OFFICE, SURAT VS DAVARIYA BROTHERS, 15-D, HOUSE NO.175, 4 TH FLOOR, PATEL FALIA, GOTALAWADI, KATARGAM, SURAT PA NO. AACFD 0230 F (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI M. K. PATEL, AR DEPARTMENT BY SHRI B. L. YADAV, SR. DR DATE OF HEARING: 06-02-2012 DATE OF PRONOUNCEMENT: 07-02-2012 O R D E R PER BHAVNESH SAINI: BOTH THE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-V, SURAT DA TED 12-04-2007, FOR ASSESSMENT YEAR 2004-05. ITA NO.2137 AND 3127/AHD/2007 DAVARIYA BROTHERS, SURAT 2 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL ON RECORD. 3. ON GROUND NO.1 OF THE APPEAL OF THE ASSESSEE, TH E ASSESSEE CHALLENGED THE ADDITION IN RESPECT OF CLOSING STOC K OF RS.18,32,053/-. THE AO MADE THE ABOVE ADDITION IN RESPECT OF SUPPRE SSION OF CLOSING STOCK VALUATION. IT WAS FOUND BY THE AO THAT THE AS SESSEE FIRM IMPORTED ROUGH DIAMONDS FROM FOREIGN COUNTRIES ESPE CIALLY FROM BELGIUM AND PIECES OF IMPORTED DIAMOND LOTS VARIED FROM ONE ANOTHER DEPENDING UPON THE QUALITY OF ROUGH DIAMONDS CONTAI NED IN SUCH LOTS AND FURTHER SUCH LOTS WERE SUBJECTED TO A PROCESS C ALLED ASSORTMENT WHICH WERE DONE MAINLY BE SKILLED PERSONS. ACCORDIN G TO THE AO, BY PROCESS OF ASSORTMENT, THE MAKEABLE DIAMONDS WERE S EGREGATED AND THE REMAINING ONES WERE GROUPED TOGETHER AND THEY W ERE CALLED REJECTION LOTS. THE AO HAS FURTHER POINTED OUT THAT THERE WAS NO CONTROL OVER THE QUANTITY OF REJECTION OF ROUGH DIA MONDS AND THE PERCENTAGE OF REJECTION VARIED FROM LOT TO LOT AND FURTHER, THE DEPARTMENT WAS HELPLESS TO KNOW AS TO WHAT WAS THE CORRECT METHOD TO BE ADOPTED FOR FINDING OUT THE REAL QUANTITY OF SUCH DIAMONDS. THE AO HAS FURTHER DEALT WITH THE PROCEDURE OF ASSORTED DIAMONDS GIVEN TO THE LABOURERS IN PACKETS FOR MANUFACTURING OF PO LISHED DIAMONDS AND POINTED OUT THAT SUCH MANUFACTURED PIECES OF DI AMONDS VARIED FROM EACH OTHER IN TERMS OF DIFFERENT ATTRIBUTES SU CH AS CUT, COLOUR, CLARITY AND CARAT ETC. THE AO, THEREFORE, POINTED O UT THAT IT WAS NOT THE QUANTITY BUT THE QUALITY OF REACH PIECE MATTERED MO RE IN DETERMINING THE PIECE OF DIAMONDS AND ACCORDINGLY ASKED THE ASS ESSEE TO SUBMIT ITA NO.2137 AND 3127/AHD/2007 DAVARIYA BROTHERS, SURAT 3 DETAILS OF MANUFACTURED DIAMONDS PIECES IN TERMS OF QUANTITY AS WELL AS QUALITY. THE ASSESSEE FILED GENERAL REPLY TO SHO W THAT IT WAS NOT POSSIBLE TO GIVE THE DETAILS AS THOUSANDS OF DIAMON D PIECES WERE MANUFACTURED DURING THE YEAR AND WHILE RECEIVING SU CH PIECES FROM LABOUR CONTRACTORS, QUANTITATIVE ANALYSES OF EACH P IECE WAS NOT POSSIBLE. THE AO, THEREFORE, NOTED THAT IT IS DIFFI CULT TO FIND OUT CORRECTNESS OF THE VALUATION OF THE CLOSING STOCK A ND THE ASSESSEE HAS NOT FURNISHED THE DETAILS TO THE SATISFACTION O F THE AO. THEREFORE, THE AO REJECTED THE BOOK RESULTS OF THE ASSESSEE AN D ESTIMATED THE VALUE OF CLOSING STOCK AND MADE THE ABOVE ADDITION. THE LEARNED CIT(A) AFTER ANALYZING EACH AND EVERY ASPECT OF THE MATTER CONFIRMED THE ADDITION AND DISMISSED THE APPEAL OF THE ASSESS EE ON THIS ISSUE. 4. THE LEARNED COUNSEL FOR THE ASSESSEE ONLY SUBMIT TED THAT IT IS SETTLED LAW THAT THE CLOSING STOCK OF ONE YEAR WOUL D BE OPENING STOCK OF NEXT YEAR AND SUCH BENEFIT MAY BE GIVEN IN THE N EXT ASSESSMENT YEAR. HE HAS RELIED UPON THE ORDER OF ITAT AHMEDABA D BENCH IN THE CASE OF M/S. DHAMI BROTHERS VS ACIT IN ITA NO.2309/ AHD/2008 COPY OF WHICH IS PLACED ON RECORD AND SUBMITTED THAT THE ISSUE IS SAME AS IS CONSIDERED IN THE CASE OF THE PRESENT ASSESSEE A ND IN PARA 10 OF THE ORDER IT WAS HELD AS UNDER: 10. .AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AND THE FACTS OF THE CASE, WE ARE OF THE OPIN ION THAT SINCE THE ASSESSEE WAS UNABLE TO FURNISH THE DETAILS OF THE CLOSING STOCK AND VALUATION THEREOF, THE AO WAS JUSTIFIED IN WORKING OUT THE VALUE OF CLOSIN G STOCK. NO MISTAKE IN THE VALUATION OF THE CLOSING STOCK BY THE AO WAS POINTED OUT BY THE LEARNED COUNSEL. WE THEREFORE ACCEPT THE VALUE OF THE CLOSI NG ITA NO.2137 AND 3127/AHD/2007 DAVARIYA BROTHERS, SURAT 4 STOCK DETERMINED BY THE AO. HOWEVER, ACCEPTING THE ALTERNATE PLEA OF THE LEARNED COUNSEL, WE DIRECT TH AT THE VALUE OF THE CLOSING STOCK WILL BE TAKEN AS VAL UE OF OPENING STOCK OF THE NEXT YEAR. 5. THE LEARNED DR HAS NO OBJECTION TO THE ABOVE SUB MISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE. 6. ON CONSIDERATION OF THE FACTS NOTED IN THE IMPUG NED ORDERS, WE ARE OF THE OPINION THAT SINCE THE ASSESSEE WAS UNAB LE TO FURNISH THE DETAILS OF CLOSING STOCK AND VALUATION THEREOF AND THE ASSESSEE HAS NOT CHALLENGED THE FINDINGS OF THE AUTHORITIES BELO W ON MERIT BEFORE THE TRIBUNAL, THEREFORE, WE ARE OF THE VIEW THAT TH E AO WAS JUSTIFIED IN MAKING OUT THE VALUE OF THE CLOSING STOCK. NO MISTA KE IN THE SAME IS POINTED OUT DURING THE COURSE OF HEARING. HOWEVER, WE ACCEPT THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT IF THE AO INCREASES THE VALUE OF THE CLOSING STOCK IN THIS YE AR, AUTOMATICALLY THE OPENING STOCK OF THE NEXT YEAR HAS TO BE INCREASED. WE FIND THAT THE ISSUE IS COVERED BY THE ORDER OF ITAT AHMEDABAD BEN CH IN THE CASE OF M/S. DHAMI BROTHERS (SUPRA). WE ACCORDINGLY CONF IRM THE FINDING OF FACT RECORDED BY THE AUTHORITIES BELOW, HOWEVER, DI RECT THE AO THAT THE VALUE OF THE CLOSING STOCK WILL BE TAKEN AS VAL UE OF THE OPENING STOCK OF THE NEXT YEAR AND RESULTANTLY BENEFIT SHOU LD BE GIVEN TO THE ASSESSEE IN THE NEXT YEAR. IN THE RESULT, PART OF T HIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED AS INDICATED ABOVE. 7. ON GROUND NO.2 OF THE APPEAL OF THE ASSESSEE, TH E ASSESSEE CHALLENGED THE ADDITION OF RS.1.25,000/- BEING FORE IGN TRAVEL ITA NO.2137 AND 3127/AHD/2007 DAVARIYA BROTHERS, SURAT 5 EXPENSES. THE REVENUE IS ALSO IN APPEAL CHALLENGING THE DELETION OF PART OF THE ADDITION ON THE SAME ISSUE ON GROUND NO .1. 8. THE AO DISALLOWED RS.2,50,000/- OUT OF FOREIGN T RAVEL EXPENSES. THE AO FOUND THAT THE ASSESSEE WAS DIRECT ED TO GIVE DETAILS OF TRAVELING EXPENSES BY FILING THE NAME OF PERSONS WHO HAVE TRAVELED ABROAD, PURPOSE OF VISIT, NUMBER OF ITS ST AY IN FOREIGN COUNTRIES AND EVIDENCES REGARDING PURCHASE OF FOREI GN EXCHANGE AND TICKETS ETC. AND THE OUTCOME OF THE FOREIGN VISIT. THE ASSESSEE MADE PART COMPLIANCE BEFORE THE AO AND THE PURPOSE OF FO REIGN VISIT, DETAILS OF ULTIMATE RESULT WERE NOT FILED, THEREFOR E, THE ASSESSEE COULD NOT PROVE THAT THE FOREIGN TRIPS WERE UNDERTAKEN WH OLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS ACTIVITIES. 10% OF THE EXPENSES WERE ACCORDINGLY DISALLOWED. IT WAS SUBMIT TED BEFORE THE LEARNED CIT(A) THAT PARTNERS AND EMPLOYEES OF THE A SSESSEE FIRM VISITED FOREIGN COUNTRY FOR PURCHASE OF ROUGH DIAMO NDS AND ON THE SAME ONLY 0.17% OF THE TOTAL EXPORT TURNOVER WAS SP ENT, THEREFORE, ADDITION MAY BE DELETED. THE LEARNED CIT(A) CONSIDE RING THE EXPLANATION OF THE ASSESSEE IN THE LIGHT OF THE FIN DING OF THE AO CONFIRMED THE DISALLOWANCE TO 5% AND RESTRICTED THE ADDITION TO RS.1,25,000/-. THE REVENUE AS WELL AS THE ASSESSEE BOTH ARE IN APPEAL. 9. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN BOTH THE APPEALS OF THE REVENUE AND THE AS SESSEE. THE ASSESSEE COULD NOT FILE COMPLETE DETAILS BEFORE THE AO AND ONLY PART COMPLIANCE HAD BEEN MADE. THE LEARNED CIT(A) CONSID ERING THE ITA NO.2137 AND 3127/AHD/2007 DAVARIYA BROTHERS, SURAT 6 EXPENDITURE INCURRED IN ONLY 0.17% OF THE TOTAL EXP ORTS RIGHTLY RESTRICTED THE ADDITION TO 5%. GROUND NO.2 OF THE A PPEAL OF THE ASSESSEE AND GROUND NO.1 OF THE APPEAL OF THE REVEN UE ARE ACCORDINGLY DISMISSED. 10. ON GROUND NO.3 OF THE APPEAL, DISALLOWANCE OF R S.33,500/- ON ACCOUNT OF TELEPHONE EXPENSES HAS BEEN CHALLENGED B Y THE ASSESSEE. THE REVENUE SIMILARLY CHALLENGED THE DELE TION OF ADDITION OF RS.33,500/- ON THE SAME ISSUE ON GROUND NO.2 OF THE APPEAL. THE ASSESSEE IS A FIRM. IT WAS FOUND THAT THE AO DISALL OWED 10% OF THE EXPENSES BEING EXPENDITURE RELATING TO PERSONAL USE R. THE LEARNED CIT(A) REDUCED THE ADDITION TO 5%. ON CONSIDERATION OF THE ABOVE FACTS, WE ARE NOT INCLINED TO INTERFERE IN THE ORDE R OF THE LEARNED CIT(A). SINCE THE ASSESSEE IS A FIRM AND NO LOG BOO K ETC. HAS BEEN PRODUCED TO THE SATISFACTION OF THE AO TO SHOW THAT TELEPHONE EXPENSES WERE INCURRED ONLY FOR THE BUSINESS PURPOS E, THEREFORE, 5% DISALLOWANCE ON ACCOUNT OF PERSONAL USER OF THE TEL EPHONE IS JUSTIFIED. GROUND NO.3 OF THE APPEAL OF THE ASSESSEE AND GROUN D NO.2 OF THE APPEAL OF THE REVENUE ARE ACCORDINGLY DISMISSED. 11. ON GROUND NO.3, REVENUE CHALLENGED THE DELETION OF RS.5,65,090/- ON ACCOUNT OF NOTIONAL CHARGING OF IN TEREST ON THE DEBIT BALANCE OF THE PARTNERS. THE AO FOUND THAT DURING T HE YEAR UNDER CONSIDERATION AGAINST THE NAME OF ONE OF ITS PARTNE RS SHRI CHANDUBHAI DAVARIA AND IN THE CASE OF SHRI BIPUL DA VARIA AN AMOUNT OF RS.1,10,03,765/- WAS SHOWN AS OUTSTANDING. HOWEV ER, WHILE ANALYZING THE FACTS OF THE CASE IN THIS REGARD, THE AO HAD OBSERVED ITA NO.2137 AND 3127/AHD/2007 DAVARIYA BROTHERS, SURAT 7 THAT ON SUCH AMOUNT, THE ASSESSEE FIRM DID NOT CHAR GE ANY INTEREST WHEREAS IT HAD INCURRED EXPENDITURE TO THE EXTENT O F RS.1,36,64,468/- BY WAY OF PAYING INTEREST ON THE OVER DRAFT AMOUNTS AVAILED BY IT FROM ITS BANKERS. THUS, IT WAS SEEN THAT IN VIEW OF THE ABOVE MENTIONED FACTS, THE AO HAS ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE PROPORTIONATE INTEREST OF RS.5,65,090/- BE NOT DISA LLOWED, WITH REGARD TO DEBIT BALANCE SHOWN BY THE ASSESSEE IN THE NAME OF ITS PARTNERS, BECAUSE THE SAID FUNDS WAS NOT USED BY IT FOR BUSIN ESS PURPOSES. THE ASSESSEE SUBMITTED BEFORE THE AO THAT THERE WAS NO DIVERSIFICATION OF FUNDS WHICH IT HAD BORROWED FROM THE BANKERS. AC CORDING TO THE STATISTICS SUBMITTED BY THE ASSESSEE BEFORE THE AO, IT HAD STATED THAT DURING THE YEAR, IT HAD AVAILED TOTAL CREDIT FACILI TIES TO THE TUNE OF RS.35.00 CRORES (RS.27.50 CRORES WAS AVAILED AGAINS T EXPORT BILLS OF RS.52.64 CRORES AND RS.7.50 CRORES WAS AVAILED AGAI NST STOCK OF RS.41.69 CRORES) AND THUS ACCORDINGLY IT WAS EMPHAS IZED THAT NO ADVANCES WERE GIVEN TO THE PARTNERS OUT OF SUCH FUN DS WHICH WAS AVAILED BY IT AS CREDIT FACILITIES FROM ITS BANKERS . IT WAS FURTHER SUBMITTED THAT REMAINING PARTNERS WERE HAVING SUFFI CIENT CREDITS IN THE BOOKS OF ACCOUNTS WHICH PERMITTED THE ABOVE PARTNER TO HAVE DEBIT BALANCES IN THE BOOKS ASSESSEE FIRM. THE AO DID NOT AGREE WITH THE SUBMISSION OF THE ASSESSEE AND HELD THAT AS A MATTE R OF FACT MERE AVAILABILITY OF INTEREST FREE FUNDS DO NOT NECESSAR ILY NEEDED THAT THEY WERE WHOLLY AND EXCLUSIVELY UTILIZED FOR BUSINESS P URPOSES. THE AO ACCORDINGLY, DISALLOWED THE ABOVE AMOUNT. 12. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT WITHDRAWALS MADE BY THE ABOVE REFERRED PARTNERS DID NOT EFFECT THE BUSINESS ITA NO.2137 AND 3127/AHD/2007 DAVARIYA BROTHERS, SURAT 8 ACTIVITIES OF THE ASSESSEE SO FAR AS ITS BORROWED C APITAL ON CREDIT BASIS IS CONCERN, BECAUSE SUCH BORROWINGS WERE MADE AGAIN ST EXPORT BILLS. (DEBTORS AND STOCK). FURTHER, THE TOTAL CREDIT BAL ANCE OF THE REMAINING PARTNERS WAS SUFFICIENT AS AGAINST BORROWINGS MADE BY THE PARTNERS. THEREFORE, IT WAS INSIGNIFICANT AMOUNT. IT WAS FURT HER SUBMITTED THAT THE ASSESSEE FIRM DID NOT PAY INTEREST @18% ON ITS CREDIT BALANCE TAKEN AS LOAN FROM ITS BANKERS AND SIMILARLY NO INT EREST WAS CHARGED ON THE DEBIT BALANCE OF THE PARTNERS BECAUSE IT CAN NOT BE DENIED THAT IT WAS ALWAYS A PREROGATIVE OF THE ASSESSEE FIRM TO CHARGE INTEREST ON DEEMED BALANCE OR NOT AS PER THE TERMS OF THE PARTN ERSHIP DEED. THE ASSESSEE ALSO RELIED UPON THE DECISION OF ITAT AHME DABAD BENCH IN THE CASE OF UNIT4ED AGENCIES VS ITO, 37 TTJ 374. TH E LEARNED CIT(A) CONSIDERING THE EXPLANATION OF THE ASSESSEE AND MATERIAL ON RECORD DELETED THE ADDITION. HIS FINDINGS IN PARA 7 .3 OF THE IMPUGNED ORDER ARE REPRODUCED AS UNDER: 7.3 I HAVE PERUSED THE FACTS OF THE CASE AS DISCUSS ED BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER AN D ALSO CAREFULLY WENT THROUGH THE SUBMISSIONS AS MADE BY T HE A. R. AND THE JUDICIAL ANALYSIS OF THE ISSUES AS DECID ED IN THE CASES RELIED UPON BY HIM (THE ASSESSING OFFICER). AFTER ANALYZING THE FACTS, IT IS SEEN THAT THE DEBIT BALA NCE AS SHOWN IN THE CAPITAL ACCOUNT OF THE ABOVE REFERRED PARTNER WAS NOWHERE FOUND AFFECTING THE CREDIT FACILITIES O F THE APPELLANT FIRM AS TAKEN BY IT FROM ITS BANKER. IT I S FURTHER FOUND THAT THE OTHER PARTNERS HAD HUGE CREDIT BALAN CES IN THE BOOKS OF THE FIRM AND BESIDES THAT THE CREDIT F ACILITIES AVAILED BY IT WERE MAINLY AGAINST ITS DEBTORS AND S TOCK. FURTHER, ACCORDING TO THE A. R., THE BORROWINGS AS MADE BY SHRI CHANDUBHAI DAVARIYA WAS UTILIZED TOWARDS BU YING OF A FLAT AT MUMBAI AND THE SAID FLAT WAS PLEDGED T O ITS BANKER IN THE FORM OF A COLLATERAL SECURITY ALONG W ITH OTHER ITA NO.2137 AND 3127/AHD/2007 DAVARIYA BROTHERS, SURAT 9 SECURITIES AND THUS, ACCORDING TO THE A. R., THOUGH THE SAID BORROWING WAS MADE BY SHRI CHANDUBHAI DAVARIYA IN HIS INDIVIDUAL CAPACITY BUT THE GENERATED ASSET WAS UTILIZED FOR RAISING CREDIT FACILITIES TO THE APPE LLANT FIRM AND THUS, INDIRECTLY, ACCORDING TO THE A. R., THE BORRO WING WAS NOT MEANT FOR PERSONAL PURPOSES BUT THE SAME WAS US ED FOR BUSINESS PURPOSES ONLY, HAS MERIT IN IT. IT IS ALSO SEEN THAT THE CASE LAWS AS RELIED UPON BY THE A. R. COVE RS THE ISSUE INVOLVED IN THE PRESENT CASE UNDER CONSIDERAT ION. I, THEREFORE, ACCORDINGLY, DELETE THE ADDITION AS MADE BY THE ASSESSING OFFICER OF RS.5,65,090/- ON ACCOUNT OF BORROWED FUNDS DIVERTED FOR NON-BUSINESS PURPOSES. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED. 13. THE LEARNED DR RELIED UPON THE ORDER OF THE AO. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. 14. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE LEARNED CIT(A) FOUND THAT THE CAPITAL ACCOUNT OF THE PARTNER WOULD NOT AFFECT THE CREDIT FACILITIES OF THE ASSESSEE FIRM. IT WAS FURT HER FOUND THAT THE OTHER PARTNERS HAD HUGE CREDIT BALANCES IN THE BOOKS OF A CCOUNTS OF THE ASSESSEE FIRM AND IT WAS FURTHER FOUND THAT CREDIT FACILITIES AVAILED BY THE ASSESSEE FIRM WAS MAINLY AGAINST ITS DEBTORS AN D STOCK. IT IS WELL SETTLED LAW THAT NO ADDITION COULD BE MADE AGAINST NON- CHARGING OF NOTIONAL INTEREST. THE ASSESSEE FURTHER PRODUCED THE MATERIAL BEFORE THE LEARNED CIT(A) THAT BORROWINGS BY THE PARTNERS WERE UTILIZED FOR BUYING PROPERTY AND THE SAME PROP ERTY WAS PLEDGED WITH THE BANKER IN THE FORM OF COLLATERAL SECURITIE S. IT WAS, THEREFORE, FOUND THAT THE PROPERTY IN QUESTION WAS UTILIZED FO R CREDIT FACILITIES FOR THE ASSESSEE FIRM. WE, THEREFORE, FOUND THAT THE LE ARNED CIT(A) ON ITA NO.2137 AND 3127/AHD/2007 DAVARIYA BROTHERS, SURAT 10 PROPER APPRECIATION OF THE FACTS AND MATERIAL ON RE CORD RIGHTLY DELETED THE NOTIONAL INTEREST CHARGED BY THE AO. WE, THEREF ORE, DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE SAME IS ACCORDINGLY DISMISSED. 15. NO OTHER POINT IS ARGUED OR PRESSED. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AS INDICATED ABOVE AND THE DEPARTMENTAL APPEAL IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ABOVE. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD