DCIT CEN CIR 8(3), MUMBAI V. ABHUSHAN ORNAMENTS P.LTD, MUMBAI

ITA 2605/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1729 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 10-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Assessee Lawyers: VALABHADAS PA RMAR
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM ITA NO. 2605 / MUM/20 17 ( ASSESSMENT YEAR : 2012 - 13 ) DCIT - 8(3) MUMBAI CENTRAL RANGE 8(3) R.NO.659, 6 TH FLOOR AAYAKAR BHAVAN M.K.ROAD, MUMBAI 20 VS. M/S. ABHUSHAN ORNAMENTS PVT. LTD., 96/106, 2 ND FLOOR, SHEKH MENON STREET, ZAVERI BAZAR MUMBAI 400 002 PAN/GIR NO. AAHCA5665K APPELLANT ) .. RESPONDENT ) REVENUE BY SHRI CHAITANYA ANJARIA ASSESSEE BY SHRI VALABHADAS PA RMAR DATE OF HEARING 29 / 08 /201 8 DATE OF PRONOUNCEMENT 30 / 08 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 50 MUMBAI DATED 28/04/2017 FOR A.Y.2012 - 13 IN THE MATTER OF O RDER PASSED U/S.143(3) OF THE IT ACT. 2. THE FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE: - 1. 'WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) JUSTIFIED IN DELETING THE ADDITION ON ACCOUNT OF DISALLOWNACE OF THE INTEREST CLAIM OF THE ASSESSEE IN RELATION TO CASH CREDIT FACILITY AMOUNTING TO RS. 89,99,334/ - WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO FURNISH ANY SUPPORTING EVIDENCES FOR THE CLAIM BEING EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURP OSES OF THE BUSINESS, EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE FIRST APPELLATE STAGE.' ITA NO. 2605/MUM/2017 M/S. ABHUSHAN ORNAMENTS PVT. LTD., 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. IN THIS APPEAL REVENUE IS AGGRIEVED FOR DELETING DISALLOWANCE OF INTEREST. FROM THE RECORD, WE FOUND THAT IN THE ASSESSMENT ORDER, ASSESSING OFFICER STATED THAT THE ASSESSEE HAS ONLY SUBMITTED MONTH WISE INTEREST PAYMENT SCHEDULE. BUT ACTUALLY THE ASSESSEE SUBMITTED BANK STATEMENTS, SANCTION COME RENEWAL LETTER FOR CASH CREDIT FACILITY AND MONTH WIS E INTEREST PAYMENT STATEMENT BEFORE ASSESSING OFFICER IN RELATION TO THE SAME. IT WAS ALSO SUBMITTED BEFORE THE AO THAT T HE CASH CREDIT ACCOUNT WAS ENTIRELY USED FOR THE PURPOSE OF BUSINESS ONLY. THE INTEREST IN A DEDUCTIBLE EXPENDITURE AS PER SECTION 36(L )(III) OF THE AC T. HOWEVER, AO DID NOT AGREE AND DISALLOWED THE INTEREST PAID TO THE BANK. 5. IN THE COURSE OF THE APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED COPIES OF BANK STATEMENTS, SANCTION COME RENEWAL LETTER FOR CASH CREDIT FACILITY AND MONTH WISE INTEREST PAYMENT STATEMENT. 6. BY THE IMPUGNED ORDER, CIT(A) DELETED THE DISALLOWANCE AFTER OBSERVING AS UNDER: - I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. I FIND THAT THE AO HAS NOT GIVEN ANY FINDING THAT INTEREST - BEA RING FUND WAS DIVERTED FOR NON BUSINESS PURPOSE BY THE APPELLANT. ON EXAMINING THE BALANCE SHEET, I DID NOT FIND ANY DIVERSION OF INTEREST - BEARING FUND. THEREFORE, IN MY VIEW, THE AO WAS NOT JUSTIFIED IN DISALLOWING THE INTEREST CLAIM BY THE APPELLANT. THE REFORE, I ALLOW THE FIRST GROUND OF APPEAL. 7. WE HAD CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS BALANCE SHEET FILED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES ITA NO. 2605/MUM/2017 M/S. ABHUSHAN ORNAMENTS PVT. LTD., 3 AND FOUND THAT THERE IS NO DIVERSION OF INTEREST BEARING FUNDS FO R NON - BUSINESS PURPOSES. THE ASSESSEE HAD AVAILED CASH CREDIT FACILITY FROM SARASWAT BANK TO FUND ITS STOCK AND DEBTORS. GOING THROUGH THE AUDITED FINANCIALS OF THE ASSESSEE, IT IS CLEAR THAT ALL THE INVESTMENTS MADE F OR THE PURPOSE OF BUSINESS ONLY, ACCOR DINGLY THERE IS NO INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE DISALLOWANCE OF INTEREST. 8 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 30 / 08 /201 8 SD/ - ( AMARJIT SINGH ) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 30 / 08 /201 8 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//