ACIT Circle 1, Namakkal V. PKPN Spinning Mills Pvt. Ltd., Namakkal

ITA 2799/CHNY/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1033 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 21-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NOS.2797,2798 & 2799/CHNY/2017 / ASSESSMENT YEARS:2008-09, 2010-11 & 2011-12 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-I, NAMAKKAL. 637 001. VS. M/S.PKPN SPINNING MILLS PVT LTD ., 6,BYE PASS ROAD, PALLIPALAYAM, NAMAKKAL 638 006. [PAN AABCP 5919 K] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : MRS.S.VIJAYAPRABHA, JCIT,D.R $% ! ' # /RESPONDENT BY : MR.SAROJ KUMAR PARIDA,ADVOCATE & ' ' () / DATE OF HEARING : 11 - 0 9 - 201 8 * ' () / DATE OF PRONOUNCEMENT : 11 - 0 9 - 201 8 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER ITA NOS.2797, 2798 & 2799/CHNY/2017 ARE APPEALS FILED BY REVENUE AGAINST THE SEPARATE ORDERS PASSED BY THE COMMISSIONER OF INCOME TAX, SALEM IN APPEAL NOS.56 /2016-17, & 57/2016-17 & 58/2016-17, ALL DATED 30.08.2017 FOR T HE ASSESSMENT YEARS 2008-09, 2010-11 & 2011-12 RESPECTIVELY. 2. MRS.S.VIJAYAPRABHA REPRESENTED ON BEHALF OF THE REVENUE, AND MR.SAROJ KUMAR PARIDA REPRESENTED ON BEHALF OF THE ASSESSEE. ITA NOS.2797 TO 2799/CHNY./2017 :- 2 -: 3. WHEN THE APPEALS ARE TAKEN UP FOR HEARING, THE REPRESENTATIVE FOR THE REVENUE FAIRLY SUBMITTED THA T THE TAX EFFECT INVOLVED IN THE APPEAL NO.2798/CHNY/2017 FOR ASSESS MENT YEAR 2010- 11 IS BELOW THE PRESCRIBED LIMIT. IT WAS A FURTHER SUBMISSION THAT THE CBDT IN ITS LATEST CIRCULAR NO.3/2018 DATED 11.07.2 018 INSTRUCTED ITS OFFICERS TO WITHDRAW ALL THE APPEALS PENDING BEFORE THE ITAT WHERE THE TAX EFFECT IS LESS THAN ` 20 LAKHS. CONSEQUENTLY, THE APPEAL OF REVENUE IN ITA NO.2798/CHNY/2017 FOR ASSESSMENT YEAR 2010-1 1 IS DISMISSED ON ACCOUNT OF TAX EFFECT. 4. IN RESPECT OF APPEALS IN 2797/CHNY/2017 & 2799 /CHNY/2017, IT WAS SUBMITTED BY LD.D.R THAT THE ISSUE WAS AGAIN ST THE ORDER OF LD.CIT(A) IN DELETING THE ADDITION MADE BY THE LD. ASSESSING OFFICER ON ACCOUNT OF THE DISALLOWANCE OF INTEREST EXPENSES IN RESPECT OF INTEREST ATTRIBUTABLE TO THE INTEREST FREE LOANS ADVANCED BY THE ASSESSEE TO THE SISTER CONCERNS OF THE ASSESSEE. IT WAS A SUBMISSI ON THAT THE LD.CIT(A) HAD DELETED THE ADDITION BY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF S.A. BUILDERS LTD., VS . CIT [288 ITR 1 (SC)]. IT WAS A FURTHER SUBMISSION THAT THE DECISIO N OF HONBLE SUPREME COURT IN S.A. BUILDERS LTD., WAS NOW UNDER REVIEW. IT WAS A SUBMISSION THAT THE BALANCE SHEET AND LEDGER A/CS, WHICH HAD BEEN PRODUCED FIRST TIME BEFORE THE LD.CIT(A), WAS NOT C ONFRONTED TO THE LD. ASSESSING OFFICER AND CONSEQUENTLY, THERE WAS VIOLA TION OF ITA NOS.2797 TO 2799/CHNY./2017 :- 3 -: RULE-46A(3) OF INCOME TAX RULES, 1962. IT WAS A PRA YER THAT THE ORDER OF THE CIT(APPEALS) IS LIABLE TO BE REVERSED. 5. IN REPLY, LD.A.R VEHEMENTLY SUPPORTED THE ORDER OF THE CIT(APPEALS). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMIT TEDLY, THE BALANCE SHEETS AND LEDGER ACCOUNTS IN RESPECT OF TH E ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS AND EARLIER ASSESSMENT YE ARS CANNOT BE CONSIDERED AS FRESH EVIDENCE, AS THE SAME ARE AVAIL ABLE BEFORE THE LD. ASSESSING OFFICER IN VIEW OF THE FACT THAT THE ASSE SSMENT U/S.143(3) OF THE ACT WAS DONE BY THE LD. ASSESSING OFFICER. A PE RUSAL OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF THE ASSESSEE C LEARLY SHOWS THAT THE ASSESSEE HAS ` 22.69 CRORES IN THE FORM OF CAPITAL & RESERVE FOR ASSESSMENT YEAR 2008-09, ` 24.78 CRORES FOR ASSESSMENT YEAR 2009-10, ` 32.31 CRORES FOR ASSESSMENT YEAR 2010-11 AND ` 34.07 CRORES FOR ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS ALSO CASH PROFITS TO AN EXTENT OF ` 5.37 CRORES FOR ASSESSMENT YEAR 2008-09, ` 10.97 CRORES FOR ASSESSMENT YEAR 2009-10, ` 5.08 CRORES FOR ASSESSMENT YEAR 2010-11 AND ` 17.41 CRORES FOR ASSESSMENT YEAR 2011-12. AS AGAINS T THIS, THE LOAN GIVEN TOTALED TO ` 5.39 CRORES FOR ASSESSMENT YEAR 2008-09, ` 7.69 CRORES FOR ASSESSMENT YEAR 2009-10, ` 2.83 CRORES FOR ASSESSMENT YEAR 2010-11 AND ` 09.49 CRORES FOR ASSESSMENT YEAR 2011-12. THIS CLE ARLY ITA NOS.2797 TO 2799/CHNY./2017 :- 4 -: SHOWS THAT THE ASSESSEE HAD ADEQUATE NON-INTEREST B EARING FUNDS AVAILABLE WITH IT FOR GIVING THE ADVANCES TO THE SI STER CONCERNS. THIS BEING SO, AS THE REVENUE HAS NOT BEEN ABLE TO DISPR OVE THESE SPECIFIC FACTS, WE ARE OF THE VIEW THAT THE ORDER OF CIT(APP EALS) FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF S. A. BUILDERS LTD., REFERRED TO SUPRA, AS ALSO THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. HOTEL SAVERA ( 239 ITR 795 (MAD.) ) IS ON THE RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFE RENCE. BOTH THE APPEALS OF THE REVENUE IN ITA NOS.2797/CHNY/2017 & 2799/CHNY/2017 FOR ASSESSMENT YEARS 2008-09 & 2011- 12 STAND DISMISSED. 7. IN THE RESULT, ALL THE THREE APPEALS FILED BY T HE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 11 TH SEPTEMBER, 2018, AT CHENNAI. SD/ - SD/ - ( . ) (A.MOHAN ALANKAMONY) ! '# / ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) $ '# / JUDICIAL MEMBER - ' / CHENNAI . / DATED: 11 TH SEPTEMBER, 2018. K S SUNDARAM / ' $(01 2 1( / COPY TO: 1 . ! / APPELLANT 3. & 3( () / CIT(A) 5. 145 $(6 / DR 2. $% ! / RESPONDENT 4. & 3( / CIT 6. 57 8' / GF