The ITO, Ward-11(4), Ahmedabad V. Agencies (India) Corporation, Ahmedabad

ITA 2459/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85779 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 29-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTAN T MEMBER INCOME-TAX OFFICER, WARD-11(4), AHMEDABAD (APPELLANT) VS AGENCIES (INDIA) CORPORATION, 75, NEW CLOTH MARKET, O/S RAIPUR GATE, AHMEDABAD-380002 (RESPONDENT) PAN: AADFA 2955 K REVENUE BY: SHRI M.K. SINGH, SR. D.R. ASSESSEE BY: SHRI GAURAV NAHTA, A.R. DATE OF HEARING : 13-03-2015 DATE OF PRONOUNCEMENT : 20-03- 2015 / ORDER PER : ANIL CHATURVEDI, ACCOUNTANT MEMBER:- THIS IS THE REVENUES APPEAL AGAINST THE ORDER OF LD. CIT(A)-XVI, AHMEDABAD DATED 22-07-2011 FOR A.Y. 2005-06. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI AL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGA GED IN THE BUSINESS OF TRADING IN DYES AND CHEMICALS. ASSESSEE FILED I TS RETURN OF INCOME FOR ITA NO. 2459/AHD/2011 ASSESSMENT YEAR 2005-06 I.T.A NO. 2459/AHD/2011 A.Y. 2005-06 PAGE NO ITO VS. AGENCIES (INDIA) CORPORATION 2 A.Y. 2005-06 ON 30-11-2005 DECLARING TOTAL INCOME O F RS. 29,520/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE A SSESSMENT WAS FRAMED U/S. 143(3) VIDE ORDER DATED 24-12-2007 AND THE TOT AL INCOME WAS DETERMINED AT RS. 16,87,350/- BY INTER ALIA MAKING VARIOUS ADDITIONS INCLUDING DISALLOWANCE OF INTEREST EXPENSES OF RS. 16,04,717/-. AGAINST THE QUANTUM ADDITION MADE BY AO, ASSESSEE PREFERRED APPEAL BEFORE CIT(A) WHO GRANTED PARTIAL RELIEF TO THE ASSESSEE A ND RESTRICTED THE INTEREST DISALLOWANCE TO RS. 8,73,700/-. ON THE AFORESAID D ISALLOWANCE CONFIRMED BY CIT(A), AO VIDE ORDER DATED 23-03-2010 LEVIED PE NALTY OF RS. 3,19,910/- U/S. 271(1)(C) OF THE ACT. AGGRIEVED BY THE AFORESAID PENALTY LEVIED BY AO, ASSESSEE CARRIED THE MATTER BEFORE CI T(A) WHO VIDE ORDER DATED 22-07-11 DELETED THE PENALTY. AGGRIEVED BY T HE AFORESAID ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUND:- 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DEL ETING THE PENALTY OF RS. 3,19,910/- LEVIED U/S. 271(1)(C) OF THE ACT. 4. BEFORE US, LD. DR SUBMITTED THAT WHEN THE PARTIA L DISALLOWANCE ON ACCOUNT OF INTEREST HAS BEEN CONFIRMED BY LD. CIT(A ) THEN IN THAT CASE PROPORTIONATE PENALTY SHOULD BE CONFIRMED. LD. AR ON THE OTHER HAND SUBMITTED THAT ASSESSEE HAD FURNISHED THE NECESSARY EXPLANATION AND HAD NOT FURNISHED ANY INACCURATE PARTICULARS OF INCOME. HE FURTHER SUBMITTED THAT MERELY BECAUSE THE CLAIM OF ASSESSEE HAS NOT B EEN ACCEPTED THAT BY ITSELF WOULD NOT ATTRACT PENALTY U/S. 271(1)(C). H E THUS SUPPORTED THE ORDER OF CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED T HE MATERIAL ON RECORD. IN THE PRESENT CASE DISALLOWANCE OF INTERE ST OF RS. 16,04,717/- WAS MADE BY AO WHICH WAS RESTRICTED TO RS. 8,73,700/- B Y CIT(A). ON THE ADDITION CONFIRMED BY CIT(A), PENALTY U/S. 271(1)(C ) HAS BEEN LEVIED BY I.T.A NO. 2459/AHD/2011 A.Y. 2005-06 PAGE NO ITO VS. AGENCIES (INDIA) CORPORATION 3 AO. WE FIND THAT CIT(A) WHILE DELETING THE PENALTY U/S. 271(1)(C) HAD NOTED THAT THERE IS NO FINDING OF THE AO ABOUT THE LOAN FUNDS RAISED BEING USED FOR NON-BUSINESS PURPOSES AND HAS FURTHER NOTED THA T AO HAD NOT DISALLOWED THE INTEREST EXPENSES BY ESTABLISHING NE XUS WITH THE LOAN RAISED TO THE ADVANCES GIVEN BUT MADE THE DISALLOWANCES ON PURE ESTIMATE BASIS. CIT(A) WHILE DELETING THE ADDITIONS HAD ALSO RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SUBHASH T RADING COMPANY 221 ITR 110 (GUJ) AND THE DECISION OF AMHEDABAD TRIBUNA L IN THE CASE OF SUREN ARVINDBHAI VAKIL VS. ITO 137 TTJ (AHD) 613. B EFORE US, REVENUE HAS NOT BROUGHT ANY CONTRARY BINDING DECISION IN IT S SUPPORT NOR COULD CONTROVERT THE FINDINGS OF CIT(A). IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AN D THUS THIS GROUND OF REVENUE IS DISMISSED. 6. THUS, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (MUKUL KR. SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 20/03/2015 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,