The DCIT, Circle-4, Surat V. M/s. Sahajanand Technologies Pvt. Ltd, Surat

ITA 2528/AHD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0896 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K MADHUSUDHAN

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA NO. 2528/AHD/2011 / ASSESSMENT YEAR: 2008-09 DCIT, CIRCLE-4, SURAT VS M/S. SAHAJANAND TECHNOLOGIES PVT LTD, 304, SAHAJANAND HOUSE, PARSI STREET, SAIYEDPURA, SURAT-395003 PAN : AADCS 4343 N / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI K. MADHUSUDHAN, SR DR ASSESSEE BY : WRITTEN SUBMISSIONS (NONE) / DATE OF HEARING : 02/08/2016 / DATE OF PRONOUNCEMENT: 03/08/2016 / O R D E R PER R.P. TOLANI, JUDICIAL MEMBER:- THIS IS THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-IV, SU RAT DATED 14.06.2011 PASSED FOR ASSESSMENT YEAR 2008-09. 2. FOLLOWING GROUNDS ARE RAISED:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A)- IV, SURAT HAS ERRED IN DELETING THE ADDITION OF RS. 67,22,302/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF PROP ORTIONATE INTEREST. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A)-IV, SURAT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSIN G OFFICER. 3. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE; HOWEVER, WRITTEN SUBMISSIONS WERE FILED. THEREFORE, IT WAS CONSIDERED ITA NO. 2528/AHD/2011 DCIT VS. M/S.SAHAJANAND TECHNOLOGIES PVT LTD AY : 2008-09 2 APPROPRIATE TO PROCEED WITH THE PRESENT APPEAL EX- PARTE QUA THE ASSESSEE- APPELLANT, AFTER CONSIDERING THE WRITTEN SUBMISSION S FILED BY THE ASSESSEE AND THE SUBMISSIONS OF THE LD. DR. 4. LD. DR CONTENDS THAT SIMILAR ISSUE AROSE IN AY 2 006-07 BEFORE ITAT IN THE ASSESSEES OWN CASE, WHERE THE TRIBUNAL HAS RES TORED THE MATTER BACK TO THE FILE OF THE LD. ASSESSING OFFICER, BY FOLLOWING OBSERVATIONS:- 4.1. LIKEWISE, FOR ASSESSMENT YEAR 2004-05 IN ASSES SEE'S OWN CASE, THERE WAS DISALLOWANCE OF INTEREST AND IN THAT YEAR TOO I TAT 'A' BENCH AHMEDABAD IN ITA NO.3189/AHD/2007 TITLED AS ASSISTANT CIT VS. SAHAJANAND TECHNOLOGY PVT. LTD., ORDER DATED 09/04/ 2010, FOLLOWED THE ABOVE REFERRED DECISION OF THE TRIBUNAL AND DISMISS ED THE APPEAL OF THE REVENUE. THE SAME RECOURSE WAS FOLLOWED FOR ASSESSME NT YEAR 2005-06 BY THE RESPECTED CO-ORDINATE BENCH 'D' AHMEDABAD (SURAT CAMP) IN ITA NO.2066/AHD/2008, ORDER DATED 11/06/2010, WHEREIN A SSESSEE'S APPEAL WAS ALLOWED WITH THE OBSERVATION THAT SINCE THE FACTS W ERE IDENTICAL AND THE ASSESSEE HAD SUFFICIENT INTEREST-FREE CAPITAL, THER EFORE, FOLLOWING THE ORDERS PRONOUNCED IN THE PAST FOR ASSESSMENT YEARS 2003- 0 4 AND 2004-05, THE ADDITION OF DISALLOWANCE OF INTEREST WAS DELETED. AS PER ABOVE BACKGROUND, IT IS NOW SETTLED THAT IF THE ASSESSEE HAS SUFFICIENT INTEREST-FREE CAPITAL OR HAS SURPLUS RESERVES OR EVEN IF THE ASSESSEE HAS EARNED SUFFICIENT PROFITS DURING THE YEAR AND THOSE FUNDS HAVE BEEN UTILIZED TOWARDS INTEREST-FREE ADVANCES TO SISTER-CONCERNS, THEN THERE WAS NO QUESTION OF SUCH DISALLOWANCE. THE RESPECTED CO-ORDINATE BENCHES HAVE GIVEN THE FINDIN G IN FAVOUR OF THE ASSESSEE ONLY ON APPRECIATION OF THE FACTS THAT THE ASSESSEE HAD SUFFICIENT NON- INTEREST BEARING FUNDS, HENCE, THE PRESUMPTION WAS THAT OUT OF THOSE INTEREST- FREE FUNDS THE ASSESSEE WOULD HAVE ADVANCED THE INT EREST-FREE LOANS TO SISTER- CONCERNS. HOWEVER, IN THE PRESENT CASE, WE ARE UNAB LE TO EXAMINE WHETHER THE ASSESSEE HAD SUFFICIENT INTEREST-FREE FUNDS DUR ING THE YEAR. FOR THIS LIMITED PURPOSE, WE HEREBY RESTORE THIS GROUND BACK TO THE STAGE OF THE ASSESSING OFFICER TO EXAMINE THE SAID FACTS AND IF I T IS FOUND CORRECT, THEN THE NATURAL CONSEQUENCE SHOULD BE TO FOLLOW THE PAST HI STORY OF THE CASE AND ALLOW THE CLAIM AS PER THE SETTLED LEGAL POSITION. WE ORD ER ACCORDINGLY. THIS GROUND OF THE ASSESSEE MAY BE TREATED AS ALLOWED BUT FOR S TATISTICAL PURPOSES. 5. WE HAVE HEARD LD. DR, PERUSED ASSESSEES WRITTEN SUBMISSIONS AND OTHER MATERIAL AVAILABLE ON RECORD. WE FIND THAT SIMILAR ISSUE AROSE BEFORE THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2006-07 (SUPRA), WHEREIN THE CO- ITA NO. 2528/AHD/2011 DCIT VS. M/S.SAHAJANAND TECHNOLOGIES PVT LTD AY : 2008-09 3 ORDINATE BENCH OF THIS TRIBUNAL HAS SET ASIDE THE M ATTER BACK TO THE FILE OF LD. AO AS NARRATED ABOVE. RESPECTFULLY FOLLOWING THE S AME, WE SET ASIDE AND RESTORED BACK THIS ISSUE TO THE FILE OF LD. ASSESSI NG OFFICER ON SAME REASONING. ACCORDINGLY, THE REVENUES APPEAL IS AL LOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 3 RD AUGUST, 2016 AT AHMEDABAD. SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (R.P. TOLANI) JUDICIAL MEMBER AHMEDABAD; DATED 03/08/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD