M/s. Chhattisgarh Auto Care, Raipur(CG) V. Deputy Commissioner of Income-Tax,Circle-2(1), Raipur(CG)

ITA 243/BIL/2011

• Counselvise Citation: 24324714 RSA 2011
• Duration Of Justice: 3 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 21-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MEENA
• Assessee Lawyers: R B DOSHI
• Keywords: Deemed to accrue or arise in india

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI MUKUL K. SHRAWAT , JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER . IT A NO. 243 / BLPR./2011 ( ASSESSMENT YEAR : 20 08 09 ) M/S. CHHATTISGARH AUTO CARE SHOP NO.44, M.G. ROAD, RAIP UR PAN AABFT4947Q APPELLANT V/S DY. COMMISSIONER OF INCOME TAX 2(1) CENTRAL REVENUE BUILDING CIVIL LINES, RAIPUR (C.G) .... RESPONDENT REVENUE BY : SHRI S.K. MEENA ASSESSEE BY : SHRI R.B. DOSHI DATE OF HEARING 17 .06.2015 DATE OF ORDER 19. 06.2015 O R D E R PER SHAMIM YA H YA, A .M. T HIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 10 TH NOVEMBER 2011 , PASSED BY THE LEARNED CIT(A), RAIPUR, FOR THE ASSESSMENT YEAR 20 08 09 . THE GROUND RAISED BY THE ASSESSEE IS AS UNDER: M/S. CHHATTISGARH AUTO CARE 2 THE LEARNED CIT( A) GROSSLY ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST TO THE EXTENT OF ` 2,00,000 OUT OF ` 3,46,390 ERRONEOUSLY AND UNWARRANTEDLY DISALLOWED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND. 2. IN THIS CASE, THE ASSESSING OFFICER NOTED THAT THE A SSESSEE HAS ADVANCED A SUM OF ` 1,68,51,045, TO ONE OF THE PARTNERS AS IMPREST BUT HAS NOT CHARGED ANY INTEREST. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS PAID BANK INTEREST ON LOAN FOR ` 23,08,074, ONLY ONE SIDE AND HAS PAID INTEREST FREE ADVANCE TO PARTNERS. THE ASSESSING OFFICER CONCLUDED AS UNDER ON THIS ISSUE: 3 . AFTER CONSIDERING THE CAPITALS OF THE PERSONS ON WHICH NO INTEREST HAS BEEN PAID AND UNSECURED LOAN ON WHICH ALSO NO INTEREST IS PAID THE NET AMOUNT IN IMPERST ACCOUNT OF SHRI SU BHASH DUPPAD WORKS OUT TO ` 28,86,588, ON WHICH INTEREST IS CHARGEABLE AND TREATED AS DEEMED INCOME OF THE FIRM @ 12% FOR THE FUND NOT UTILIZED FOR BUSINESS PURPOSE FOR ` 28,86,588 I.E., ` 3,46,390 OF THE FIRM AND IS ADDED BACK TO THE INCOME OF THE FIRM. 3. BEFORE THE LEARNED CIT(A), THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD SUFFICIENT INTEREST FREE FUNDS WHICH HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER. CONSIDERING THE SUBMISSIONS, THE LEARNED CIT(A) HELD THAT THE ADDITION @ 12% MADE BY THE ASSESSI NG OFFICER CAN BE CONSTRUED AS INTEREST COST, HE RESTRICTED THE SAME TO ` 2 LAKH. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. M/S. CHHATTISGARH AUTO CARE 3 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSING OF FICER HAS CLEARLY MENTIONED IN HIS ORDER THAT HE HAS ARRIVED AT THE FIGURE OF DISALLOWANCE AFTER CONSIDERING THE INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE. HOWEVER, THE LEARNED CIT(A) HAS NOT DISPUTED THE FINDINGS OF THE ASSESSING OFFICER BUT HAS GIV EN RELIEF TO THE ASSESSEE AND MADE AD HOC DISALLOWANCE OF ` 2 LAKH. UNDER THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THE MATTER NEEDS TO BE REMITTED TO THE FILE OF THE LEARNED CIT(A). ACCORDINGLY, WE REMIT THE ISSUE TO THE FILE OF THE LEARNED CIT(A) A ND DIRECT HIM TO COGENTLY BRING ABOUT THE FACTS AND FIGURES CONSIDERED BY HIM IN GRANTING RELIEF TO THE ASSESSEE. THIS, IN OUR CONSIDERED OPINION, IS NECESSARY FOR FURTHER ADJUDICATION ON THIS MATTER. TH IS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN TH E RESULT, ASSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT O N 19 TH JUNE 2015 SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER RAI PUR , DATED : 19 TH JUNE 2015 M/S. CHHATTISGARH AUTO CARE 4 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE ; (2) THE REVENUE; (3) THE CIT(A ) ; (4) THE CIT, BILASPUR CITY CONCERNED ; (5) THE DR, ITAT, RAIPUR (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY SR. PRIVATE SECRETARY / ASSISTANT REGISTRAR ITAT, RAIPUR