M/s Bellad & Co, Hubli V. DCIT, Hubli

ITA 225/BANG/2011

• Counselvise Citation: 22521114 RSA 2011
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 04-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G V GOPALA RAO CITI
• Assessee Lawyers: C R NULVI

Judgement Text

ITA.225/BANG/2011 PA GE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A', BANGALORE BEFORE SHRI. N. BARATHVAJA SANKAR, VICE PRESIDENT AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER I.T.A NO.225/BANG/2011 (ASSESSMENT YEAR : 2007-08) M/S. BELLAD & CO., VIDYANAGAR, HUBLI .. APPELLANT PAN : AABFB6457D V. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 1(1), BANGALORE .. RESPONDENT APPELLANT BY : SHRI. C. R NULVI, CA RESPONDENT BY : SHRI. G. V. GOPALA RAO, CIT I DATE OF HEARING : DATE OF PRONOUNCEMENT : O R D E R PER N. BARATHVAJA SANKAR, VICE PRESIDENT : THIS IS AN APPEAL FILED BY THE ASSESSEE, M/S. BELL AD & CO., HUBLI, AGAINST THE ORDER OF THE COMMISSIONER OF INC OME-TAX (APPEALS), HUBLI, DATED.22.12.2010, FOR THE ASSESSM ENT YEAR 2007-08. 02. THE ONLY ISSUE BROUGHT BEFORE US FOR ADJUDICATI ON IS WHETHER THE AUTHORITIES BELOW ERRED IN DISALLOWING THE INTEREST OF RS.13,82,005/- IN RESPECT OF CLOSING DEBIT BALANCE IN THE NAME OF BEL LAD KISHO ITA.225/BANG/2011 PA GE - 2 CONSTRUCTION COMPANY ON THE GROUND THAT THE AMOUNT WAS ADVANCED WITHOUT INTEREST. THE RELEVANT GROUNDS READ AS UND ER : I) THE AUTHORITIES BELOW ERRED IN DISALLOWING THE I NTEREST OF RS.13,82,005/- IN RESPECT OF CLOSING DEBIT BALANCE IN THE NAME OF M/S. BELLAD KISHO CONSTRUCTION COMPANY, ON THE GROUND TH AT THE AMOUNT WAS ADVANCED WITHOUT INTEREST TO THE SISTER CONCERN , FROM THE BORROWED FUND, WITHOUT ESTABLISHING THE NEXUS BETWEEN BORROW ED FUND AND AMOUNT ADVANCED ; II) THE AUTHORITIES BELOW ERRED IN CHARGING INTERES T ON ENTIRE DEBIT BALANCE OF RS.1,20,17,434/- OUT OF WHICH RS.1,15,16 ,212/- IS THE OPENING DEBIT BALANCES, BY NOT FOLLOWING THE JURIS DICTIONAL HIGH COURT JUDGEMENTS IN CASE OF CIT V. SRIDEV ENTERPRIS ES 192 ITR 165. III) THE AUTHORITIES BELOW ERRED IN NOT CONSIDERING THE TIME FACTOR FOR WHICH THE AMOUNT WAS ADVANCED TO SISTER CONCERN M/S . BELLAD KISHO CONSTRUCTION CO., 02. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE POINT AT ISSUE CAME UP FOR CONSI DERATION BY THE TRIBUNAL IN THE ASSESSEE'S OWN CASE AND THE TRIBUNA L VIDE ITS ORDER DATED.25.03.2009 IN ITA.986/BANG/2008 HAS RESTORED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER. ITA.225/BANG/2011 PA GE - 3 03. WE HAVE ALSO HEARD THE LEARNED DR AND CONSIDERE D THE FACTS AND MATERIALS ON RECORD. THE TRIBUNAL IN ITS EARLIER O RDER CITED SUPRA, AFTER REFERRING TO THE HON'BLE KARNATAKA HIGH COURT DECIS ION IN CIT V. SRIDEVA ENTERPRISES (1991) 192 ITR 165, HAS OBSERVE D AS UNDER : 'HOWEVER, THE ASSESSING OFFICER WILL EXCLUDE THE OP ENING BALANCE AND FOR OTHER ADVANCES, THE ASSESSING OFFICER WILL RECOMPUTE THE DISALLOWABLE INTEREST CONSIDERING THE TIME FACTOR F OR WHICH AN AMOUNT REMAINED OUTSTANDING. THE APPELLANT WILL SU BMIT THE DETAILS OF SUCH DISALLOWANCE AND THE ASSESSING OFFI CER WILL VERIFY IT. WITH THE ABOVE FINDINGS, THIS GROUND OF APPEAL RELATING TO DISALLOWANCE OF INTEREST IS DISPOSED OFF.' THUS, FOLLOWING THE ABOVE DECISION OF THIS TRIBUNAL , WE RESTORE THE APPEAL FOR THE ASSESSMENT YEAR 2007-08 ALSO TO THE FILE OF THE ASSESSING OFFICER WITH SIMILAR DIRECTION. 05. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE ONLY. ORDER PRONOUNCED IN OPEN COURT AT THE END OF HEARIN G ON 25.01.2012. SD/- SD/- (SMT. P. MADHAVI DEVI) (N. BARATHVAJA SANKAR) JUDICIAL MEMBER VICE PRESIDENT