M/s. Akshar Finance Ltd., Ahmedabad V. The Income tax Officer,Ward-1(1), Ahmedabad

ITA 224/AHD/2011

• Counselvise Citation: 22420514 RSA 2011
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 28-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Assessee Lawyers: SAMIR JANI

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %& #$ %& #$ %& #$ %& , , , , &' ( & &' ( & &' ( & &' ( & ' ' ' ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND TEJ RAM MEENA, ACCOUNTANT MEMBER) ITA NO.224/AHD/2011 [ASSTT.YEAR : 2007-2008] M/S.AKSHAR FINANCE LTD. B-2, ASHOKA APARTMENT BESIDES ORIENT CLUB NR. GUJARAT COLLEGE ELLISBRIDGE, AHMEDABAD. PAN : AABCA 6184 H /VS. ITO, WARD-1(1) AHMEDABAD. ( (( ( *+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) .% / 0 &/ ASSESSEE BY : SHRI SAMIR JANI ( / 0 &/ REVENUE BY : SHRI J.P. JHANGID, SR.DR 2 / %3'/ DATE OF HEARING : 24 TH MARCH, 2014 456 / %3'/ DATE OF PRONOUNCEMENT : 04/04/2014 &7 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) DATED 13.1 .2011 FOR THE ASSESSMENT YEAR 2007-08. 2. THE EFFECTIVE GROUNDS OF THE APPEAL OF THE ASSES EE ARE AS UNDER: ITA NO.224/AHD/2011 -2- 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISA LLOWANCE OF RS.11,90,717/- MADE BY THE AO ON ACCOUNT OF DIFFERE NCE IN RATE OF INTEREST IN LENDING AND BORROWING OF LOANS. 2. THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ABOVE DISALLOWANCE OF RS.11,90,717/- MADE BY THE AO U/S.40A(2)(B) ALTH OUGH THE AO HAS NOT PROVED THAT THE RATE OF INTEREST OF 15% IS HIGH ER THAN THE MARKET RATE OF INTEREST PREVAILING IN THE BUSINESS COMMUNI TY AT THE RELEVANT TIME. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT IDENTICAL ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESS EE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2006-07 IN ITA NO.3215/AH D/2010 DATED 5.12.2013, AND THEREFORE, THE ISSUE IS COVERED IN F AVOUR OF THE ASSESSEE. THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE L EARNED COUNSEL FOR THE ASSESSEE. HE REFERRED TO PAGE NO.12 OF THE IMP UGNED ORDER OF THE CIT(A) IN SUPPORT OF THE ACTION OF THE AO IN DISALL OWING 5% EXCESS INTEREST CLAIMED BY THE ASSESSEE IN THE ARRANGED TR ANSACTIONS, FOLLOWING THE ITAT ORDER AND THE FACTS MENTIONED IN THE ASSESSMEN T ORDER. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ISSUE BEFORE U S REGARDING THE DISALLOWANCE MADE UNDER SECTION 40A(2)(B) OF THE AC T, OUT OF THE EXCESS PAYMENT OF INTEREST AT 15% PER ANNUM, IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE CO-ORDINATE BENCH OF THE T RIBUNAL IN ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR 2006-07 DA TED 5.12.2013 (SUPRA). THE FACTS OF THE CASE FOR THE PRESENT YEAR BEING ID ENTICAL WITH THE FACTS OF THE EARLIER ASSESSMENT YEARS 2006-07, AND WE BEING IN AGREEMENT WITH THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL F OR THE EARLIER ASSESSMENT YEAR, DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND HOLD THAT ITA NO.224/AHD/2011 -3- INTEREST PAYMENT MADE BY THE ASSESSEE ARE NOT EXCES SIVE OR UNREASONABLE, AND THEREFORE, THE GROUNDS OF THE APPEAL OF THE ASS ESSEE ARE ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %& %& %& %& /T.R. MEENA) &' ( /ACCOUNTANT MEMBER ( .. /G.C. GUPTA ) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD