The DCIT(OSD), Circle-8, Ahmedabad V. Vadilal Dairy International Ltd., Maharashtra

ITA 2581/AHD/2012

• Counselvise Citation: 258120514 RSA 2012
• Duration Of Justice: 2 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-09-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 09-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: S N SOPARKAR
• Keywords: Commercial expediency

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NOS. 2580 & 2581/AHD/2012 / ASSESSMENT YEAR: 2003-04 & 2004-05 D.C.I.T. (OSD), CIRCLE-8, AHMEDABAD VS. M/S. VADILAL DAIRY INTERNATIONAL LTD., PLOT NO.M-13, MIDC INDUSTRIAL AREA, TARAPUR BOISAR, THANE, MAHARASTRA PAN : AABCV 0520 A / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI NARENDRA SINGH, SR DR ASSESSEE(S) BY : SHRI S. N. SOPARKAR, AR !'#$ / DATE OF HEARING : 09/09/2015 %& '#$ / DATE OF PRONOUNCEMENT: 11/09/2015 / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THESE ARE THE APPEALS FILED BY THE REVENUE AGAINST A COMMON ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS)-XIV, AHMEDABAD DATED 06.08.2012 FOR ASSESSMENT YEARS 2003-04 AND 2004-05. 2. THE ONLY COMMON GROUND RAISED IN THESE APPEALS B Y THE REVENUE FOR BOTH THE ASSESSMENT YEARS READS AS UNDE R:- ITA NOS. 2580 & 2581/AHD/2012 DCIT VS. VADILAL DAIRY INTERNATIONAL LTD AY 2003-2004& 2004-05 2 THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, A HMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWA NCES AMOUNTING TO RS.27,04,865/- & OF RS.28,51,740/- ON ACCOUNT OF IN TEREST FOR A.Y. 2003-04 & 2004-05, RESPECTIVELY. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THIS ISSUE TO BE SETTLED IN FAV OUR OF THE ASSESSEE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR ASS ESSMENT YEARS 2001- 02 AND 2002-03 VIDE ITA NOS. 2467 & 2468/AHD/2011, WHEREIN THE ITAT UPHELD THE ORDER OF THE CIT(A) WITH THE FOLLOW ING FINDING:- 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS DISALLOWA NCE OF INTEREST EXPENSES HOLDING ADVANCES GRANTED BY THE ASSESSEE T O BE NOT OUT OF COMMERCIAL EXPEDIENCY. WE FIND THAT THE CIT(A), WH ILE GRANTING RELIEF TO THE ASSESSEE, HAS NOTED THAT THE ASSESSEE HAS GI VEN INTEREST FREE ADVANCES TO THOSE PARTIES WITH WHOM THE ASSESSEE WA S HAVING REGULAR BUSINESS TRANSACTIONS AND SOME OF THEM WERE SUPPLIE RS OF RAW-MATERIAL AND PACKING MATERIAL AND THE ADVANCE WAS MADE FOR P URCHASE OF MATERIAL. HE ALSO NOTICED THAT MOST OF THE ADVANCES WERE GIVEN IN EARLIER YEARS AND THERE WERE FEW TRANSACTIONS DONE DURING THE YEAR UNDER CONSIDERATION. THE LD. CIT(A) HAS FURTHER GIV EN A FINDING THAT THE ASSESSEE HAD NO LIQUID FUNDS FOR ITS DAY TO DAY BUSINESS TRANSACTIONS AND DID NOT MAKE ANY BORROWING DURING THE YEAR NOR ANY NEW ADVANCES WERE GRANTED BY THE ASSESSEE AND THE ADVANCES, WHIC H WERE GRANTED IN EARLIER YEARS, WERE IN CONNECTION WITH THE BUSINESS OF THE ASSESSEE. THE LD. CIT(A) HAS ALSO NOTED THAT NO DISALLOWANCE ON AC COUNT OF INTEREST WAS MADE BY THE ASSESSING OFFICER IN EARLIER YEARS AND AFTER EXAMINING THE VARIOUS LOANS AND ADVANCES IN THE LIGHT OF THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF S.A. BUILDER LTD . (SUPRA) HAS GIVEN A CATEGORICAL FINDING THAT THE LOANS AND ADVANCES G IVEN BY THE ASSESSEE WERE FOR BUSINESS PURPOSES. BEFORE US, THE REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS O F THE LD. CIT(A). IN VIEW OF THESE FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) FOR BOTH THE YEARS UNDER CONSIDERATION. T HEREFORE, THESE APPEALS OF THE REVENUE FOR BOTH THE YEARS ARE DISMI SSED. ITA NOS. 2580 & 2581/AHD/2012 DCIT VS. VADILAL DAIRY INTERNATIONAL LTD AY 2003-2004& 2004-05 3 4. ADMITTEDLY, THE FACTS OF THE YEARS UNDER CONSIDE RATION ARE IDENTICAL. WE, THEREFORE, RESPECTFULLY FOLLOWING T HE ABOVE DECISION OF ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 20 01-02 AND 2002- 04, UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE APPEALS FILED BY THE REVENUE. 5. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 11 TH SEPTEMBER, 2015 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 11/09/2015 BIJU T., PS / COPY OF THE ORDER FORWARDED TO : 1. '( / THE APPELLANT 2. )*'( / THE RESPONDENT. 3. # +# / CONCERNED CIT 4. +# ( ) / THE CIT(A) 5. ./0 )# , , / DR, I TAT, AHMEDABAD 6. 012! / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) ! '#$, / ITAT, AHMEDABAD