Ajita Sil Chem Pvt. Ltd., Gandhinagar V. The ACIT, Mehsana Circle, Mehsana

ITA 2149/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7893 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 21-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained cash credit; Principle of natural justice; Question of law
• Section: 14A; 68

Judgement Text

, LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD LOZJH LOZJH LOZJH LOZJH OLHE OLHE OLHE OLHE VGEN VGEN VGEN VGEN] YS[KK LNL; , ] YS[KK LNL; , ] YS[KK LNL; , ] YS[KK LNL; ,OA OAOA OA EK/ EK/EK/ EK/KQFERK KQFERK KQFERK KQFERK JKW; JKW;JKW; JKW;] U; ] U;] U; ] U;KF KFKF KF;D LNL; ;D LNL; ;D LNL; ;D LNL; DS LE{KA DS LE{KA DS LE{KA DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SMT MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO.2149/AHD/2015 ( / ASSESSMENT YEAR : 2012-13) AJITA SIL CHEM PVT. LTD., 1323, PALYAD VILLAGE, TAL : KALOL, DIST. GANDHINAGAR. / VS. THE ACIT, MEHSANA CIRCLE, 209, APPOLLO ENCLAVE OPP. JAIN TEMPLE, HIGHWAY MEHSANA 384 002 ./ ./ PAN/GIR NO. : AABCA 8214 A ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. N. DIVATIA, A.R. / RESPONDENT BY : SHRI PRASOON KABRA, SR. D.R. / DATE OF HEARING 03/07/2018 !'# / DATE OF PRONOUNCEMENT 11/07/2018 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-GANDHINAGAR, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)/GNR/279/2014-15 DATED 11.05.2015 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961 (HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATED 08.01.2015 RELEVAN T TO ASSESSMENT YEAR (AY) 2012-13. ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER:- 1.1 THE ORDER PASSED U/S.250 ON 11.05.2015 FOR A.Y . 2012-13 BY CIT(A)-GNR, ABAD UPHOLDING THE ADDITION OF RS.4,51, 337/- U/S.68 AND DISALLOWANCE OF INTEREST OF RS.2,60,000/ - MADE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIP LES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR O N FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO T HE IMPUGNED ADDITIONS. 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FA CTS IN CONFIRMING THE UNSECURED LOAN AGGREGATING TO RS.4,5 1,337/- CONSISTING OF RS.2,49,337/- FROM SMT. URMILABEN M P ATEL AND RS.2,02,000/- FROM SHRI RAMANBHAI B PATEL AS UNEXPL AINED CASH CREDIT U/S.68 THOUGH THE APPELLANT HAD FULLY DISCHA RGED THE ONUS CAST UPON IT. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THE UNSECURE D LOAN AGGREGATING TO RS.4,51,337/- CONSISTING OF RS.2,49, 337/- FROM SMT. URMILABEN M PATEL AND RS.2,02,000/- FROM SHRI RAMANBHAI B PATEL AS UNEXPLAINED CASH CREDIT U/S.68. 3.1 THE LD.CIT(A) HAS ERRED IN UPHOLDING THAT THE DISAL LOWANCE OF INTEREST EXP. OF RS.2,60,000/-. 3.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THE DISALLOW ANCE OF INTEREST EXP. OF RS.2,60,000/-. IT IS, THEREFORE, PRAYED THAT THE ADDITIONS UPHELD BY THE CIT(A) MAY KINDLY BE DELETED. 3. THE FIRST ISSUE RAISED BY THE ASSESSEE IN THIS A PPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY SUSTA INING THE DISALLOWANCE OF RS.4,51,337/- ON ACCOUNT OF UNEXPLA INED CASH CREDIT U/S 68 OF THE ACT. ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 3 - 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN TH E PRESENT CASE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE MANUFACT URING OF CERAMICS WALL TILES. THE ASSESSEE DURING THE YEAR INTER ALIA HAS TAKEN A LOAN FROM THE PARTIES AS DETAILED UNDER: SR. NO. NAME OF PARTIES AMOUNT 1. SMT. URMILABEN MAHESHBHAI PATEL RS. 2,49,337/- 2. SHRI RAMANBHAI BHAICHANDDAS PATEL RS.2,02,0 00/- ON BEING QUESTIONED BY THE AO ABOUT THE VERACITY O F THE ABOVE LOANS, THE ASSESSEE SUBMITTED AS UNDER: LOAN FROM SMT. URMILABEN MAHESHBHAI PATEL: I. THE LOAN WAS TAKEN THROUGH THE BANKING CHANNEL, WHI CH WAS CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE DATED 8 TH SEPTEMBER 2011. II. THE AMOUNT WAS RECEIVED BY URMILABEN MAHESHBHAI PAT EL FROM HER PARTNERSHIP FIRM NAMELY SUPER INSULATROS DATED 06.09.2011 AND THE SAME WAS CREDITED IN HER BANK ACCOUNT. III. SMT. URMILABEN MAHESHBHAI PATEL HAS SHOWN AMOUNT RECEIVABLE FROM SUPER INSULATROS PRIOR TO 01.04.201 1. THE ASSESSEE IN SUPPORT OF HIS CLAIM HAS FILED A COPY O F HER LEDGER ACCOUNT IN THE BOOKS OF SUPER INSULATROS ALONG WITH THE COPY OF INCOME TAX RETURN ACKNOWLEDGMENT. LOAN FROM SHRI RAMANBHAI BHAICHANDDAS PATEL: I. THE ASSESSEE SUBMITTED THAT SHRI RAMANBHAI BHAICHAN DDAS PATEL IS HAVING AGRICULTURE LAND OF 4-98-78 AND THE INCOME WAS DERIVED FROM THE SALE OF AGRICULTURE PRODUCTS. THE ASSESSEE IN ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 4 - SUPPORT OF HIS CLAIM PRODUCES THE COPY OF ABSTRACT OF 7-12 & 8- A FOR HOLDING OF AGRICULTURE LAND, COPY OF SALES BI LLS OF AGRICULTURE PRODUCTS. HOWEVER, LD. AO DURING THE PROCEEDINGS MADE CERTAIN OBSERVATIONS AS DETAILED UNDER: LOAN FROM SMT. URMILABEN MAHESHBHAI PATEL: I. THE ACCOUNT OF SMT. URMILABEN MAHESHBHAI PATEL WAS CREDITED JUST TWO DAYS BEFORE TRANSFERRING THE AMOUNT OF LOA N TO THE ASSESSEE. HER BANK ACCOUNT WAS CREDITED ON 06.09.20 11, AND THE AMOUNT WAS TRANSFERRED TO THE ASSESSEE ON 08.09.201 1. II. THERE WAS VERY MEAGER AMOUNT IN THE BANK ACCOUNT OF SMT. URMILABEN MAHESHBHAI PATEL THROUGHOUT THE YEAR. HER ACCOUNT WAS CREDITED FOR THE SUM OF RUPEES MORE THAN 1 LAKH TWO OR THREE TIMES, BUT THE SAME WAS WITHDRAWN EITHER ON T HE SAME DAY OR NEXT DAY. III. THE MODUS OF OPERANDI ADOPTED BY THE ASSESSEE SUGGE STED THAT THE OWN UNACCOUNTED MONEY OF THE ASSESSEE WAS CHANN ELIZED TO BRING IN ACCOUNTING FORM. LOAN FROM SHRI RAMANBHAI BHAICHANDDAS PATEL: I. THERE WAS VERY MEAGER BALANCE IN THE BANK ACCOUNT O F SHRI RAMANBHAI BHAICHANDDAS PATEL THROUGHOUT THE YEAR. II. THERE WAS A DEPOSIT OF CASH IN THE BANK ACCOUNT OF SHRI RAMANBHAI BHAICHANDDAS PATEL BEFORE TRANSFERRING TH E AMOUNT TO THE ASSESSEE AS A LOAN. ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 5 - III. SHRI RAMANBHAI BHAICHANDDAS PATEL HAS DECLARED AN I NCOME OF RS.9,983/- ONLY FOR THE YEAR UNDER CONSIDERATION. T HERE WAS NO AGRICULTURE INCOME SHOWN IN HIS INCOME TAX RETURN. IV. THERE WAS NOT SUFFICIENT LAND, WHICH COULD PRODUCE THE AGRICULTURE PRODUCTS OF RS.2,02,000/-. V. THE SALE BILLS OF AGRICULTURE PRODUCED WERE OF DIFF ERENT LOCATIONS. IN VIEW OF ABOVE, THE AO HELD THAT THE ASSESSEE FAI LED TO FURNISH THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE PARTIES WHO HAVE GIVEN LOAN TO THE ASSESSEE. ACCORDINGLY, THE A O ADDED THE SUM OF RS.4,51,337/- (RS.2,49,337/- + RS.2,02,000/-) AS UN EXPLAINED CASH CREDIT U/S 68 OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD. C IT(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED AS UNDER: IN CASE OF SMT. URMILABEN MAHESHBHAI PATEL: I. SMT. URMILABEN MAHESHBHAI PATEL HAS RECEIVED THE MO NEY FROM THE FIRM ON 06.09.2011, WHICH WAS SUBSEQUENTLY TRAN SFERRED TO THE ASSESSEE. ALL THE DOCUMENTS IN SUPPORT OF SUCH TRANSACTION SUCH AS A COPY OF THE LEDGER ACCOUNT AND INCOME TAX RETURN WERE FURNISHED TO THE AO DURING THE ASSESSMENT PROCEEDIN GS. II. IN THE ASSESSMENT YEAR 2015-16, THE ASSESSEE HAS RE PAID A CERTAIN SUM OF MONEY TO SMT. URMILABEN MAHESHBHAI P ATEL. ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 6 - THE ASSESSEE IN SUPPORT OF ITS CLAIM FILED A COPY O F BANK STATEMENT AS WELL AS A COPY OF THE LEDGER. III. THE AMOUNT RECEIVABLE FROM SUPER INSULATROS WAS NOT HELD AS IN-GENUINE. IV. ALL THE DETAILS OF THE PARTIES FROM WHOM THE LOAN W AS TAKEN WERE FURNISHED DURING THE ASSESSMENT PROCEEDINGS, B UT THE AO FAILED TO MAKE ANY INQUIRY BY ISSUING NOTICE U/S 13 3(6)/131 OF THE ACT. IN CASE OF SHRI RAMANBHAI BHAICHANDDAS PATEL: I. THE EXTRACT OF THE LAND HELD BY THE SHRI RAMANBHAI BHAICHANDDAS PATEL WAS DULY FURNISHED TO THE AO. IN FACT, THE AGRICULTURE LAND BELONGS TO THE HUF OF SHRI RAMANBH AI BHAICHANDDAS PATEL. THEREFORE, THE INCOME FROM AGRI CULTURE PRODUCE WAS NOT DISCLOSED IN THE RETURN OF SHRI RAM ANBHAI BHAICHANDDAS PATEL. MOREOVER, THE HUF WAS HAVING ON LY AGRICULTURE INCOME, THEREFORE, NO RETURN WAS FILED. IN THE ASSESSMENT YEAR 2015-16, THE ENTIRE AMOUNT WAS REPA ID BY THE ASSESSEE TO SHRI RAMANBHAI BHAICHANDDAS PATEL. II. THE NECESSARY DETAILS OF THE PARTY WERE DULY FURNIS HED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S, BUT THE AO HAS NOT EXERCISED HIS POWER TO VERIFY THE VERACI TY OF LOAN AMOUNT BY ISSUING NOTICE U/S 133(6)/131 OF THE ACT. HOWEVER, THE LD. CIT(A) DISREGARDED THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER : A. SMT. URMILABEN M. PATEL-RS.2,49,337/- SMT. URMILABEN M. PATEL HAD GIVEN AMOUNT OF RS.2,49 ,337/- AS UNSECURED LOAN TO THE APPELLANT ON 8/9/2011 AND JUS T TWO DAYS BEFORE ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 7 - ADVANCING THE LOAN, EQUAL AMOUNT WAS CREDITED TO HE R ACCOUNT ON 6/2/2011. BEFORE SUCH CREDIT, SHE WAS HAVING BANK B ALANCE OF ONLY RS.10,175/-, FURTHER, THERE WAS ONLY 2 OR 3 ENTRIES ABOVE RS.L LAC WHICH WERE ALSO WITHDRAWN ON THE DAY OF CREDIT FOR WHICH THE AR OF THE APPELLANT WAS UNABLE TO PROPERLY EXPLAIN. IT WAS AL SO PERUSED BY THE AO THAT ON VARIOUS OCCASIONS SMT. URMILABEN HAD RECEIV ED TOTAL AMOUNT OF RS.5,30,523/- IN HER BANK ACCOUNT IN SMALL INSTALLM ENTS OF RS.2,49,337/-, RS.2,00,000/- RS.81,186/- ON VARIOUS DATES AND THE SAME WAS TRANSFERRED ON THE VERY NEXT DAY OF ITS DEPOSIT IN THE BANK ACCOUNT TO VARIOUS PERSONS, FIRMS AND COMPANIES DURING THE FIN ANCIAL YEAR. AO HAD REASONS TO BELIEVE THAT SMT. URMILABEN RECEIVED THE SAID AMOUNTS FROM M/S AJITA SIL CHEM PVT LTD AND APPELLANT IS TRYING TO INTRODUCE ITS UNACCOUNTED MONEY THROUGH SMT. URMILABEN. THE AR OF THE APPELLANT HAS CLAIMED THAT SMT. URMIL ABEN HAD RECEIVED THE AMOUNT FROM SUPER INSULATORS, HIMMATNA GAR, AND FILED COPY OF ACCOUNT OF THE DEPOSITOR AND CLAIMED THAT T HE AMOUNT RECEIVED WAS DEPOSITED IN THE BANK ACCOUNT AND TRIED TO PROV E THE GENUINENESS OF THE DEPOSIT GIVEN TO THE APPELLANT, WHICH CANNOT BE ACCEPTED BECAUSE THE APPELLANT HAS NOT PRODUCED PERSONAL BOOKS OF AC COUNTS OF SMT. URMILABEN. APPELLANT HAS ALSO NOT PRODUCED BEFORE M E THE COPY OF LEDGER ACCOUNT OF SMT. URMILABEN CLAIMED TO HAVE BE EN PARTNER OF SUPER INSULATOR FROM WHOM MONEY WAS CLAIMED TRANSFERRED ON DISSOLUTION OF FIRM. THEREFORE, IT IS HELD THAT APP ELLANT HAS TRIED TO INTRODUCE ITS UNACCOUNTED CASH THROUGH THE SMT. URM ILABEN PATEL AND THE AMOUNT ADDED BY THE AO OF RS.2,49,337/- AS DEPO SIT IS TREATED AS UNEXPLAINED AND THE ACTION OF THE AO IN MAKING THE ADDITION TO THE TOTAL INCOME U/S 68 OF THE ACT IS CONFIRMED. B. SHRI RAMANBHAI BECHARBHAI PATEL-RS.2,02,000/- IN THIS CASE ALSO, FACTS ARE SIMILAR TO THAT OF SMT . URMILABEN PATEL. AMOUNT WAS DEPOSITED IN THE BANK ACCOUNT AND ON CRE DIT EQUAL AMOUNT WAS TRANSFERRED TO THE APPELLANT. THERE WAS ONLY A MEAGER BALANCE IN THIS ACCOUNT ALSO. FURTHER, THERE WAS ONLY 2 OR 3 E NTRIES ABOVE RS.1 LAC WHICH WERE DEPOSITED IN CASH AND WERE ALSO WITHDRAW N ON THE DAY OF CREDIT FOR WHICH THE AR OF THE APPELLANT WAS UNABLE TO PROPERLY EXPLAIN. IT IS ALSO NOTED THAT SHRI RAMANBHAI HAD RETURNED I NCOME OF RS.9,983/- FROM AGRICULTURE ONLY DURING THE RELEVANT ASSESSMEN T YEAR. NO OTHER ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 8 - SOURCE OF INCOME HAS BEEN REPORTED. THE LANDHOLDING OF SHRI RAMANBHAI PATEL WAS ALSO VERY SMALL AND THE CLAIMED LAND WAS ALSO HELD JOINTLY WITH SHRI RAJESH PATEL. EVEN THE SATE BILLS FURNISHED WERE OF DIFFERENT ORDERS OF DIFFERENT TOWS I.E. HIMMATNAGAR & SIDPHUR WHEREAS THE LAND IS LOCATED AT VILLAGE GORAL, TAL: IDAR, WH ICH IS FAR OFF. AR OF THE APPELLANT HAS FILED BEFORE ME COPIES OF B ILLS IN THE NAME OF THE DEPOSITOR FOR SALE OF AGRICULTURAL PRODUCE, COPY OF ACCOUNT OF DEPOSITOR FOR AY 2015-16, COPY OF RETURN FOR AY 2012-13. ALL THESE DETAILS HAVE ALREADY BEEN VERIFIED BY THE AO AT THE TIME OF ASSE SSMENT PROCEEDINGS. NO NEW MATERIALS HAVE BEEN ADDUCED IN SUPPORT OF TH E CONTENTION MADE BEFORE ME. FROM THE DETAILS FILED THE CAPACITY OF T HE DEPOSITOR TO ADVANCE SUCH HUGE AMOUNT IS NOT PROVED BY THE APPEL LANT. THE GENUINENESS OF THE TRANSACTION IS ALSO QUESTIONABLE AND THEREFORE, THE AMOUNT OF RS.2,02,000/- TAKEN AS DEPOSIT IN THE NAM E OF SHRI RAMANBHAI B. PATEL IS RIGHTLY TREATED AS UNEXPLAINE D BY THE AO. THE ADDITION OF RS.2,02,000/- TO THE TOTAL INCOME U/S 6 8 OF THE ACT IS CONFIRMED. FROM THE FACTS DISCUSSED ABOVE, IT REVEALS THAT APP ELLANT HAS INTRODUCED ITS UNACCOUNTED CASH IN THE BANK ACCOUNT OF SMT. URMILABEN PATEL AND SHRI RAMANBHAI PATEL TOTALING TO RS.4,51, 337/- AND DEPOSITS WERE OBTAINED. THEREFORE, THE AMOUNT OF RS.4,51,337 /- TAKEN AS DEPOSIT IS TREATED AS UNEXPLAINED AND THE ACTION OF THE AO IN MAKING THE ADDITION RS.4,51,337/- TO THE TOTAL INCOME U/S 68 O F THE ACT IS CONFIRMED. BEING AGGRIEVED BY ORDER OF LD.CIT(A) ASSESSEE IS I N APPEAL BEFORE US. THE LD. AR BEFORE US FILED THE PAPER BOOK, WHICH IS RUNNING FROM PAGES 1 TO 66 AND SUBMITTED THAT ALL THE DETAILS WITH REG ARD TO THE IDENTITY, GENUINENESS, AND CREDITWORTHINESS OF THE PARTIES WE RE DULY FURNISHED BEFORE THE AUTHORITIES BELOW. THE LD. AR IN SUPPORT OF ASSESSEES CLAIM DREW OUR ATTENTION ON PAGE 17 AND 18 OF THE PAPER B OOK, WHERE THE COPY OF THE LEDGER OF SMT. URMILABEN MAHESHBHAI PATEL IN THE BOOKS OF SUPER INSULATORS WAS PLACED. ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 9 - THE LD. AR ALSO SUBMITTED THAT COPIES THAT COPIES O F ITR OF M/S SUPER INSULATOR WERE AVAILABLE WITH THE AO, BUT HE DID NO T VERIFY WHETHER SMT. URMILABEN MAHESHBHAI PATEL IS A PARTNER IN THE FIRM OR NOT. THE LD. AR ALSO CLAIMED THAT PART OF THE LOAN WAS R EPAID TO SMT. URMILABEN MAHESHBHAI PATEL IN THE A.Y. 2015-16 AND ENTIRE AMOUNT OF LOAN WAS REPAID TO SHRI RAMANBHAI BHAICHANDDAS PATE L IN A.Y. 2015-16. THE LD. AR IN SUPPORT OF HIS CLAIM DREW OUR ATTENTI ON ON THE COPIES OF THE LEDGER OF BOTH THE PARTIES PERTAINING TO THE A.Y. 2 015-16 PLACED ON PAGE 18 AND 19 OF THE PAPER BOOK. ON THE OTHER HAND, LD DR SUBMITTED THAT PREPONDERAN CE OF PROBABILITY THAT THE LOAN TAKEN BY THE ASSESSEE IS NOT GENUINE AS WELL AS THEIR CREDITWORTHINESS IS DOUBTFUL. THE ASSESSEE HAS NOT JUSTIFIED THE REASONS FOR GIVING LOAN TO IT BY THE AFORESAID PARTIES DESP ITE THE FACT THERE WAS MEAGER BALANCE IN THEIR BANK ACCOUNTS. THE LD. DR FURTHER RELIED ON THE ORDER OF HIS HONB LE ITAT IN THE CASE OF ITO VS. MERAL FINANCE LIMITED IN ITA NO.1316/AHD/20 12 ORDER DATED 18-08-2016 FOR THE ASSESSMENT YEAR 1997-98. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE PRESENT CASE RELATES TO THE AMOUNT OF ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 10 - LOAN TAKEN BY THE ASSESSEE FROM THE PARTIES AS DISC USSED ABOVE. SUCH TRANSACTION OF THE LOAN WAS TREATED AS UNEXPLAINED CASH CREDIT BY THE AO AFTER HAVING DOUBT ON THE GENUINENESS AS WELL AS TH E CREDITWORTHINESS OF THE LOAN CREDITORS. THE VIEW TAKEN BY THE AO WAS SU BSEQUENTLY CONFIRMED BY THE LD. CIT(A). HOWEVER, WE NOTE THAT THE ASSESSEE IN SUPPORT OF TH E LOAN TRANSACTION HAS FURNISHED THE NECESSARY DETAILS SUCH AS BANK STATEM ENT, COPIES OF THE LEDGER AND INCOME TAX RETURN. NONE OF THE LOWER AUT HORITY HAS EXERCISED THEIR POWER BY CALLING THE LOAN CREDITORS TO JUSTIF Y THE LOAN GIVEN TO THE ASSESSEE UNDER SECTION 133(6)/131 OF THE ACT. WE ALSO NOTE THAT THE ASSESSEE IN THE CASE OF SMT. URMILABEN MAHESHBHAI PATEL HAS STATED THAT SHE WAS THE PARTNER OF M/S SU PER INSULATOR AND THE MONEY WAS DRAWN ON THE DISSOLUTION OF THE FIRM. THE COPY OF INCOME TAX RETURN OF THE FIRM M/S SUPER INSULATOR WAS AVAILABL E ON RECORD. IN THIS CONNECTION, WE NOTE THAT THE ASSESSEE HAS JUSTIFIED THE SOURCE OF CASH FOR THE LOAN TAKEN FROM SMT. URMILABEN MAHESHBHAI PATEL . SIMILARLY, WE NOTE THAT THE ASSESSEE HAS FURNISHED THE BILLS OF AGRICULTURE PRODUCE AND ABSTRACT OF AGRICULTURE LAND IN CASE OF SHRI RAMANBHAI BHAICHANDDAS PATEL, BUT NO DEFECT WAS POINTED OUT I N THESE DETAILS. SUCH DETAILS WERE REJECTED ON THE PREMISE AND JUNCTURE B Y THE AO. ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 11 - IN THE IDENTICAL FACTS AND CIRCUMSTANCES, THE COURT S HAVE DECIDED THE ISSUE IN FAVOR OF THE ASSESSEE. IN THIS CASE, WE RELY ON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS. ROHINI B UILDERS REPORTED IN 256 ITR 360, WHERE THE HEAD-NOTE READS AS UNDER: SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CRED ITS - ASSESSING OFFICER MADE ADDITION OF RS. 12,85,000 AS UNEXPLAIN ED CASH CREDITS IN RESPECT OF LOANS TAKEN BY ASSESSEE FROM 21 PARTIES - ASSESSEE HAD DISCHARGED INITIAL ONUS BY PROVIDING IDENTITY OF AL L CREDITORS BY GIVING THEIR COMPLETE ADDRESSES, GIR NUMBERS/PERMANENT ACC OUNT NUMBERS AND COPIES OF ASSESSMENT ORDERS WHEREVER READILY AV AILABLE - ASSESSEE HAD ALSO PROVED CAPACITY OF CREDITORS BY SHOWING TH AT AMOUNTS WERE RECEIVED BY ACCOUNT PAYEE CHEQUES DRAWN FROM BANK A CCOUNTS OF CREDITORS - REPAYMENT OF LOANS AND INTEREST THEREON WAS ALSO MADE BY ACCOUNT PAYEE CHEQUES BY ASSESSEE AND TAX ALSO HAD BEEN DEDUCTED AT SOURCE ON INTEREST PAYMENTS AND REMITTED - WHETHER ASSESSEE WAS NOT EXPECTED TO PROVE GENUINENESS OF CASH DEPOSITED IN BANK ACCOUNTS OF CREDITORS, BECAUSE UNDER LAW, ASSESSEE CAN BE ASKED TO PROVE SOURCE OF CREDITS IN ITS BOOKS OF ACCOUNT BUT NOT SOURCE OF S OURCE - HELD, YES - WHETHER MERELY BECAUSE SUMMONS ISSUED TO SOME OF CR EDITORS COULD NOT BE SERVED OR THEY FAILED TO APPEAR BEFORE ASSESSING OFFICER, COULD NOT BE GROUND TO TREAT THOSE CREDITS AS NON-GENUINE - HELD , YES - WHETHER CONSIDERING TOTALITY OF FACTS AND CIRCUMSTANCES OF CASE, ESPECIALLY FACT THAT ASSESSING OFFICER HAD NOT DISALLOWED INTEREST CLAIMED/PAID IN RELATION TO THOSE CREDITS IN ASSESSMENT YEAR UNDER CONSIDERATION OR EVEN IN SUBSEQUENT ASSESSMENT YEARS, AND TAX AT SOURCE H AD BEEN DEDUCTED OUT OF INTEREST PAID/CREDITED TO CREDITORS, TRIBUNA L WAS JUSTIFIED IN DELETING ADDITION MADE - HELD, YES - WHETHER AS THE RE WAS NO SUBSTANCE IN APPEAL AND NO SUBSTANTIAL QUESTION OF LAW AROSE, APPEAL WAS LIABLE TO BE DISMISSED AS THE ASSESSEE HAS DISCHARGED HIS ONUS BY FURNISHI NG THE NECESSARY DETAILS OF THE LOAN PARTIES, ACCORDINGLY, THE ONUS GOT SHIFTED THE REVENUE TO PROVE OTHERWISE. THE REVENUE HAS NOT ISSUED ANY NOTICE U/S 133(6)/131 OF THE ACT TO VERIFY THE VERACITY OF LOA N TRANSACTION. THEREFORE ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 12 - WE ARE NOT INCLINED TO UPHOLD THE ORDER OF LOWER AU THORITIES THEREFORE THE GROUNDS OF APPEAL OF THE ASSESSEE IS ALLOWED. 7. THE NEXT ISSUE RAISED BY THE ASSESSEE IN THIS AP PEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY SUSTA INING THE DISALLOWANCE OF RS.2,60,000/- ON ACCOUNT OF INTERES T EXPENSES. THE ASSESSEE DURING THE YEAR HAS CLAIMED INTEREST E XPENSES FOR RS.14,97,996/- ON THE BORROWED FUND. SIMULTANEOUSLY , THE ASSESSEE HAS ALSO SHOWN AN ADVANCE OF RS.20,00,000/- TO CENTURY TILES LTD. AS PER THE ASSESSEE, THIS AMOUNT WAS INVESTED IN CENTURY T ILES LTD. HOWEVER, THE AO OBSERVED THAT THE ASSESSEE NEITHER RECEIVED ANY DIVIDEND INCOME NOR ANY INTEREST INCOME FROM SUCH I NVESTMENTS. THEREFORE, HE WAS OF THE VIEW THAT THE ASSESSEE HAS DIVERTED INTEREST- BEARING FUND TO NON-INTEREST BEARING LOAN AND ADVAN CES. ACCORDINGLY, THE AO WORKED OUT THE INTEREST ON SUCH ADVANCE @ 13% FO R RS.2,60,000/- AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 8. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD. C IT(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT THE O WN FUND OF IT EXCEEDS THE AMOUNT OF INVESTMENT MADE IN CENTURY TILES LTD. THEREFORE, NO DISALLOWANCE CAN BE MADE ON ACCOUNT OF INTEREST EXP ENSES. HOWEVER, THE ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 13 - LD. CIT(A) DISREGARDED THE CONTENTION OF THE ASSESS EE AND CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER: 5.3 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSES SMENT ORDER AND THE SUBMISSION MADE BY THE APPELLANT. AO HAS CONTENDED THAT ON VERIFICATION OF THE BALANC E SHEET, IT WAS NOTICED THAT THERE WAS A BALANCE OF ADVANCE OF RS.20,00,000/- RECEIVABLE FROM CENTURY TILES LTD. W HEN DURING THE COURSE OF HEARING, APPELLANT WAS ASKED IN THIS REGARD, IT WAS CONTENDED THAT THE IMPUGNED AMOUNT WAS INVESTED TO CENTURY TILES LTD IN EARLIER YEARS, NO ANY DIVIDED, ETC. SH OWN TO HAVE RECEIVED. AGAINST THIS, THE APPELLANT HAD BORROWED INTEREST BEARING FUND FROM VARIOUS PERSONS TO WHOM INTEREST TO THE TUNE OF RS.14,97,996/- WAS PAID DURING THE YEAR. THUS, A O CONTENDED THAT APPELLANT HAD DIVERTED ITS INTEREST BEARING FU ND TO INTEREST FREE/INCOME FREE ADVANCES/INVESTMENT. APPELLANT CON TENDED THAT THERE IS NO SUCH PROVISION THAT APPELLANT CAN UTILI ZE ITS RESERVE FUND FOR SUCH INTEREST FREE ADVANCE. IT IS SEEN THA T APPELLANT HAD ALSO FAILED TO SUBSTANTIATE ITS CLAM FOR SUCH SUBST ANTIAL AMOUNT ADVANCED WITHOUT CHARGING INTEREST. AO HAS ALSO NOT ED THAT SIMILAR DISALLOWANCE MADE IN CASE OF APPELLANT IN A .Y.2010-11, WHICH HAD BEEN CONFIRMED BY THE LD. CIT(A) AND APPE LLANT HAD NOT PREFERRED FURTHER APPEAL ON THIS ISSUE. AO CONT ENDING THAT APPELLANT HAD DIVERTED ITS INTEREST BEARING FUND TO INTEREST FREE ADVANCES AND ACCORDINGLY WORKED OUT INTEREST @13% A T RS.2,60,000/- WHICH IS DISALLOWED OUT OF INTEREST E XPENSES AND ADDED TO THE TOTAL INCOME OF THE APPELLANT. APPELLANT ON THE OTHER HAND HAS CONTENDED THAT IF I NTEREST FREE ADVANCES ARE GIVEN TO THE EXTENT OF INTEREST F REE DEPOSITS, NO ADDITION IS PERMISSIBLE AND THIS LEGAL ISSUE IS SET TLED BY VARIOUS COURTS. THIS DISALLOWANCE OF RS.260000/- WAS MAD E BECAUSE SIMILAR AMOUNT WAS DISALLOWED IN A.Y.2010-11 AND NO FURTHER APPEAL WAS PREFERRED BY THE APPELLANT. ON EXAMINATION OF THE ENTIRE FACTS, THE ISSUE IN HA ND IS SIMILAR TO THAT DECIDED BY THE UNDERSIGNED FOR AY 2 010-11. THE ISSUE WAS DISCUSSED AND DECIDED IN THE FOLLOWING WO RDS: ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 14 - 4.2 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSES SMENT ORDER AND SUBMISSION FILED BY APPELLANT. THE APPELLANT HA S GIVEN RS.20,00,000/- FOR ACQUISITION OF EQUITY SHARES OF CENTURY TILES LIMITED IN OCTOBER 2007 ON WHICH AO HAS MADE DISALLOWANCE OF RS.2,60,000/- APPLYING INTEREST RAT E 13%. THE APPELLANT HAS NOT DISPUTED THE APPLICATION OF INTER EST RATE @ 13% BY AO BUT ONLY CONTENDED THAT SUCH INVESTMENTS WERE OUT OF INTEREST FREE FUNDS AVAILABLE WITH IT, HENCE, NO DISALLOWANCE SHOULD BE MADE, THE APPELLANT HAS NOT ESTABLISHED A NY DIRECT NEXUS BETWEEN UTILIZATION OF OWN FUND AND INVESTMEN T MADE IN EQUITY SHARE WHEN FUNDS WERE TRANSMITTED FOR MAKING INVESTMENT HENCE APPELLANT'S ARGUMENT THAT OVERALL OWN FUNDS WERE IN EXCESS OF INVESTMENTS MADE IN EQUITY SHARES CANNOT TOE ACCEPTED MORE PARTICULARLY FROM A.Y. 2008 2009 AS R ULE 3D R.W.S 14A HAS BEEN SPECIFICALLY INSERTED IN STATUTE , THE ONUS IS CAST UPON APPELLANT FOR ESTABLISHING THAT WHEN FUND S WERE INVESTED IN EQUITY SHARES OF OTHER COMPANY, SUCH IN VESTMENTS WERE MADE OUT OF OWN FUNDS AVAILABLE WITH APPELLANT . EVEN THOUGH AO HAS NOT SPECIFICALLY MADE DISALLOWAN CE OF INTEREST U/S 14A OR RULE 3D BUT SUCH PROVISIONS ARE EQUALLY APPLICABLE TO APPELLANT'S CASE FOR MAKING PROPORTIO NATE DISALLOWANCE OF INTEREST WHEN APPELLANT HAS MADE IN VESTMENT IN EQUITY SHARES. IN THE PRESENT CASE, AO HAS ADOPT ED REASONABLE METHOD FOR DISALLOWING INTEREST EXPENDIT URE AS INVESTMENTS MADE BY APPELLANT WOULD FETCH TAX FREE INCOME IN FORM OF DIVIDEND TO APPELLANT. IN ANY CASE, PROPORT IONATE INTEREST EXPENDITURE CANNOT BE ALLOWED TO APPELLANT AS THERE IS DIVERSION OF BORROWED FUNDS TO INVESTMENTS RESULTIN G INTO TAX FREE INCOME. CONSIDERING THE ENTIRE FACTS OF PRESEN T CASE, DISALLOWANCE OF INTEREST EXPENDITURE MADE BY AO FOR RS.2,60,000/ IS CONFIRMED. THIS GROUND OF APPEAL IS THEREFORE, REJECTED. SINCE THE ISSUE INVOLVED AND THE SUBMISSION MADE IS ON SIMILAR LINES. HOWEVER, DURING THE YEAR UNDER APPEAL HAS TRIED TO PROVE THE NEXUS OF INVESTMENT BY CONTENDING THAT IT HAD SHARE CAPITAL OF RS. 1,84,82,000/- AND RESERVE OF RS.2,48,56,739/-. FROM THE CHART PRO DUCED BEFORE ME AND REPRODUCED IN APPELLANT'S SUBMISSION SHOWS THAT RS.20 LAC WAS INVESTED ON 12/10/2007 WITH CENTURY TILES WHICH PER TAINED TO AY 2008- 09. ON THE OTHER HAND IT IS NOTICED FROM THE: ACCOU NTS THAT THE ADVANCES ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 15 - HAVE BEEN MADE OUT OF TRADE ADVANCES. THEREFORE, TH E CONTENTION OF THE APPELLANT THAT ADVANCES WERE MADE OUT OF SURPLUS FU NDS DOES NOT HOLD GOOD. IN SUCH FACTS, I DO NOT FIND ANY REASON TO DE VIATE FROM THE DECISION TAKEN AS ABOVE FOR AY 2010-11. THEREFORE, THE DISAL LOWANCE MADE OF INTEREST EXPENDITURE OF RS.2,60 ,000/- IS HELD JUST IFIED AND ADDITION MADE IS CONFIRMED. THE RELEVANT GROUND OF APPEAL IS REJE CTED. BEING AGGRIEVED BY ORDER OF LD. CIT(A) THE ASSESSEE IS IN THE SECOND APPEAL BEFORE US. THE LD. AR BEFORE US SUBMITTED TH AT THE AMOUNT WAS INVESTED IN CENTURY TAX LTD. ON 12.10.2007 AND THAT RELEVANT TIME THERE WAS SUFFICIENT FUND FOR RS.83,50,000/- AVAILABLE WI TH IT FOR MAKING THE INVESTMENTS. THEREFORE, NO DISALLOWANCE CAN BE MADE . ON THE OTHER HAND, LD. DR SUBMITTED THAT SIMILAR DI SALLOWANCE WAS MADE IN THE ASSESSMENT YEAR 2011-12, WHICH WAS ALSO CONF IRMED BY THE LD. CIT(A) BUT NO APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE HONBLE ITAT. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE IN THE INSTANCE CASE RELATES TO THE DISALLOWANCE OF INTEREST EXPENSES MADE BY THE AO ON ACCOUNT OF DIVERSION OF THE FUND. THE ASSESSEE HAS GIVEN AN AD VANCE OF RS.20,00,000/- TO M/S. CENTURY TILES LTD. AND AT TH E SAME TIME THE ASSESSEE WAS INCURRING THE INTEREST EXPENSES. THERE FORE, THE AO WAS OF THE VIEW THAT INTEREST-BEARING FUND HAS BEEN DIVERT ED TO NON-INTEREST BEARING LOAN. THEREFORE, THE ADDITION WAS MADE FOR RS.2,60,000/- ON ACCOUNT OF INTEREST EXPENSES ON THE AMOUNT DIVERTED TOWARDS NON-INTEREST ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 16 - BEARING ADVANCE. THE VIEW TAKEN BY THE AO WAS SUBS EQUENTLY CONFIRMED BY THE LD. CIT(A). NOW THE ISSUE BEFORE US ARISES SO AS TO WHETHER THE DISALLOWANCE MADE BY THE LOWER AUTHORITIES ON ACCOUNT OF INTEREST EXPENS ES IS CORRECT IN THE GIVEN FACTS AND CIRCUMSTANCES. AT THE OUTSET, WE NO TE THAT THE ASSESSEE IN ITS BALANCE SHEET IN THE ASSESSMENT YEAR UNDER CONS IDERATION HAS SHOWN SHARE CAPITAL OF RS.1,84,82,000/- AND RESERVE AND S URPLUS OF RS.2,48,56,739/-, WHICH IS SUFFICIENT ENOUGH TO COV ER THE AMOUNT OF ADVANCES GIVEN TO CENTURY TILES LTD. THEREFORE A PR ESUMPTION CAN BE DRAWN THAT THE MONEY HAS BEEN ADVANCED BY THE ASSES SEE OUT OF ITS OWN FUND. ACCORDINGLY, THERE IS NO QUESTION OF MAKING A NY DISALLOWANCE ON ACCOUNT OF INTEREST EXPENSES. IN THIS REGARD, WE FI ND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RAGHUVIR SYNTHETICS LIMITED 354 ITR 222 WHEREIN IT WAS HELD AS UNDER : IT FOUND HUGE FUNDS WERE AVAILABLE WITHOUT ANY IN TEREST LIABILITY WITH THE ASSESSEE AND THAT THERE WAS NO EVIDENCE TO HOLD THAT THE BORROWED MONEY WAS UTILIZED FOR THE PURPOSE OF ADVANCE TO TH E SISTER CONCERNS. ALL THESE ASPECTS CUMULATIVELY LED THE TRIBUNAL TO HOLD THAT THE DISALLOWANCE MADE ONLY ON THE GROUND THAT ADVANCES WERE GIVEN OUT OF THE BORROWED FUNDS, HOLDING THE ASSESSEE INELIGIBLE FOR ALLOWANCE OF INTEREST BY THE ASSESSING OFFICER OF THE SUM OF RS. 18.66 LAKHS WAS NOT SUSTAINABLE. SIMILARLY, WE FIND SUPPORT AND GUIDANCE FROM THE JU DGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. KAJAL EXP ORTS REPORTED IN 362 ITR 328 WHEREIN IT WAS HELD AS UNDER: ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 17 - 9. ON THE FIRST ASPECT, THE TRIBUNAL AFTER HAVING EXA MINED IN DETAIL THE PATTERN OF INVESTMENT, LOANS AND ADVANCES AS ALSO C ONSIDERING THE FIXED ASSETS AND CASH NOTED THAT THERE WAS NO FRESH BORRO WING IN THE YEAR UNDER CONSIDERATION AND ALREADY BORROWED FUNDS HAD REDUCED FROM RS. 1,953 LAKHS TO RS. 1,239 LAKHS. THIS SUBSTANTIAL RE DUCTION LED THE TRIBUNAL TO NOTE THAT IT WOULD NOT BE POSSIBLE TO H OLD THAT THE BORROWED FUNDS WERE NOT USED FOR BUSINESS PURPOSE MERELY BEC AUSE THE INVESTMENT, LOANS AND ADVANCES GIVEN TO THE PARTNER S AND THE DEBIT BALANCE OF THE PARTNERS' CAPITAL ACCOUNT HAD GONE U P. 10. THE ASSESSEE HAD ADVANCED LOAN OF RS. 540.97 LAKHS TO THE PARTNERS AND RELATIVES, ASSOCIATE CONCERNS AND OTHERS, AND O N SUCH LOAN TO THE EXTENT OF RS. 446.92 LAKHS, INTEREST WAS CHARGED BY THE ASSESSEE. THIS INTEREST-FREE LOAN AVAILABLE TO THE ASSESSEE WAS TO THE TUNE OF RS. 97.26 LAKHS. OUT OF THE TOTAL UNSECURED LOANS AVAILABLE W ITH THE ASSESSEE IN RESPECT OF A SUM OF RS. 34.84 LAKHS FROM DESIGN SOL UTIONS LTD. AND RS. 60.97 LAKHS FROM STHAPATYA CONSULTANCY, MAKING TOTA L OF RS. 95.80 LAKHS, NO INTEREST HAD BEEN PAID BY THE ASSESSEE IN RESPECT OF SUCH LOANS. SUCH INTEREST-FREE BORROWED FUNDS WERE AVAILABLE WI TH THE ASSESSEE. 11. WE COULD ALSO NOTICE THAT WITH RESPECT TO THE INTE REST-FREE ADVANCES MADE AVAILABLE TO THE PARTNERS, THE TRIBUNAL HAS RI GHTLY HELD THAT RS. 97.26 LAKHS INTEREST-FREE ADVANCE WERE MADE WHEREAS THE ASSESSEE HAD INTEREST-FREE FUND TO THE TUNE OF RS. 95.80 LAKHS A VAILABLE WITH IT AND, THEREFORE, ONLY FOR THE REMAINING SUM OF RS. 1.46 L AKHS, IT HAD CONFIRMED THE DISALLOWANCE OF THE INTEREST. 12. ON BOTH THE ASPECTS, BASED ON THE MATERIALS AVAILA BLE WHEN THE TRIBUNAL HAS APPROPRIATELY HELD IN FAVOUR OF THE AS SESSEE, NOTING THE AVAILABILITY OF INTEREST-FREE FUNDS, AS ALSO WITH R EGARD TO THE UTILISATION OF FUNDS AVAILABLE WITH THE ASSESSEE, FOR THE BUSIN ESS PURPOSE, WE DO NOT SEE ANY REASON TO INTERFERE IN THE REASONINGS IN TH E ABSENCE OF ANY PERVERSITY. IN THE ABSENCE OF ANY FRESH BORROWINGS IN THE ASSESSMENT YEAR 2003-04, REDUCTION OF BORROWED FUNDS COULD NOT BE ASSUMED TO BE FOR NON-BUSINESS PURPOSE WITH CORRESPONDING ADVANCE S TO THE PARTNERS IN THE WAKE OF APPRECIATION OF ENTIRE GAMUT OF FACT S AND DETAILS PRESENTED BEFORE THE REVENUE AUTHORITIES AND THUS T HE REVENUE NOT HAVING RAISED ANY SUBSTANTIAL QUESTION OF LAW IN TH IS REGARD, THE TAX APPEALS, RESULTANTLY, ARE DISMISSED. ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 18 - IT IS AN UNDISPUTED FACT THAT SIMILAR DISALLOWANCES WERE MADE BY THE AO IN THE IMMEDIATELY PRECEDING YEAR, I.E. A.Y. 2011-1 2, WHICH WAS ALSO CONFIRMED BY THE LD. CIT(A) BUT THE ASSESSEE PREFER RED NO APPEAL TO HONBLE ITAT. ACCORDINGLY, IT WAS ARGUED BY THE LD. DR SIMILARLY DISALLOWANCE SHOULD BE MADE IN THE YEAR UNDER CONSI DERATION. HOWEVER, WE DISAGREE WITH THE ARGUMENT OF LD. D.R. FOR THE R EVENUE. IT IS BECAUSE EACH YEAR IS A SEPARATE YEAR. THERE CAN BE SEVERAL REASONS FOR NOT FILING AN APPEAL BEFORE THE HONBLE ITAT. THEREFORE, THERE CA NNOT BE GROUND FOR CONFIRMING THE DISALLOWANCE OF INTEREST EXPENSES ON SUCH BASIS. HENCE WE ARE NOT INCLINED TO UPHOLD THE ORDER OF AUTHORIT IES BELOW. HENCE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 11/07/2018 SD/- SD/- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LN L; L; L; L; (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 11/07/2018 PRITI YADAV, SR.PS ITA NO.2149/AHD/2015 AJITA SIL CHEM PVT. LTD. VS. ACIT ASST.YEAR 2012-13 - 19 - !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-GANDHINAGAR, AHMEDABAD. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD