Takshashila Gruh Nirman Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-8(1), Ahmedabad

ITA 2821/AHD/2013

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2492 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 03-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Section: 143(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD [CONDUCTED THROUGH VIRTUAL AT AHMEDABAD] BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 2821/AHD/2013 (ASSESSMENT YEAR: 2010-11) TAKSHASHILA GRUH NIRMAN P. LTD. GROUND FLOOR, BLOCK-A, MANAV MANDIR, OPP. RAMAN NAGAR SOCIETY, NR. OLD ARADHANA VIDYALAY, CROSS ROAD, MANINAGAR, AHMEDABAD VS. THE ITO, WARD-8(1), AHMEDABAD [ PAN NO. AAACY1535D ] ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI M. K. PATEL , A R REVENUE BY : SHRI PURUSHOTTAM KUMAR, SR. DR DATE OF HEARING 26.10.2021 DATE OF PRONOUNCEMENT 29.10.2021 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 23.09.2013 PASSED BY THE LD. CIT(A)-XIV, AHME DABAD ARISING OUT OF THE ORDER DATED 06.02.2013 PASSED BY THE ITO, WARD- 8(1), AHMEDABAD UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961(HEREINAF TER REFERRED AS TO THE ACT) FOR A.Y. 2010-11WITH THE FOLLOWING GROUNDS:- 1. THAT ON FACTS, AND IN LAW, THE LEARNED CIT(A) H AS GRIEVOUSLY ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST OF RS. 9,14 ,000/- U/S. 36(I)(III). 2. THAT ON FACTS, AND IN LAW IT OUGHT TO HAVE BEEN HELD THAT NO DISALLOWANCE IS CALLED FOR AS ALL ADVANCES ARE FOR BUSINESS PURPOSE ONLY. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY GROUND OF APPEAL. ITA NO.2821/AHD/2013 TAKSHASHILA GRUH NIRMAN PVT. LTD. VS. ITO ASST.YEAR 2010-11 - 2 - 2. THE ASSESSEES CONTENTION IS THIS THAT NO DISALL OWANCE IS CALLED FOR AS ALL THE ADVANCES ARE FOR BUSINESS PURPOSE ONLY. 3. WE HAVE HEARD THE RESPECTIVE PARTIES AND WE HAVE ALSO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. 4. THE LD. COUNSEL APPEARING FOR THE ASSESSEE DREW OUT ATTENTION TO THE ORDER PASSED BY THE LD. CIT(A) FROM WHICH IT APPEAR S THAT THE LOAN AND ADVANCES GIVEN TO CHANAKYA BUILDCON PVT. LTD., CHAN AKYA INFRACON PVT. LTD., TAKSHASHILA PROPERTIES PVT. LTD. AND ADVANCES TO TH E SUPPLIER OF MATERIAL AND LABOUR WERE ACCEPTED BY THE LD. CIT(A), AS THIS WER E MADE FOR BUSINESS PURPOSES. HOWEVER, THE LOANS AND ADVANCES MADE TO THE SISTER CONCERN/ASSOCIATED CONCERN NAMELY TAKSHASHILA INFRA STRUCTURE PVT. LTD., YOUNGSTAR INFRASTRUCTURE, KAMLESH K. GONDALIA (HUF) AND THE RELATIVES AND THE FRIENDS OF THE ASSESSEE ALTOGETHER TO THE TUNE OF RS. 6,80,51,184/- HAS NOT BEEN ACCEPTED BY THE LD. CIT(A). IT ALSO BROUGHT T O OUR NOTICE THAT OUT OF THE TOTAL LOAN AND ADVANCES OF RS. 11,59,51,927/- THE I NTEREST FREE AND OWN FUND AVAILABLE WITH THE ASSESSEE WAS RS. 10,68,11,665/- AND THE DIFFERENCE OF RS. 91,40,272/- WAS CONSIDERED BY THE LD. CIT(A). IN FACT, THE DISALLOWANCE WAS WORKED OUT BY TAKING 10% OF THE AVERAGE RATE OF INTEREST ON THE DIFFERENCE AMOUNT OF RS. 91 ,40,272/- AMOUNTING TO RS. 9,14,000/-. THE ASSESSEE JOINTS ISSUES HERE. ACCO RDING TO THE ASSESSEE THE LD. CIT(A) DID NOT ACCEPT THE ADVANCES TO THE SISTER CO NCERN/ASSOCIATED CONCERN ON THE GROUND OF NON-UTILIZATION BY THEM FOR BUSINESS PURPOSES TOTALING TO RS. 6,80,51,184/- AS MENTIONED AT PARAGRAPH 8 OF PAGE 2 2 OF THE ORDER PASSED BY THE LD. CIT(A). IN THAT VIEW OF THE MATTER IT WAS CONTENDED BY THE LD. AR THAT INSTEAD OF RS. 11,59,51,927/- THE LOAN AND ADVANCES GIVEN TO THE PARTIES RS. ITA NO.2821/AHD/2013 TAKSHASHILA GRUH NIRMAN PVT. LTD. VS. ITO ASST.YEAR 2010-11 - 3 - 6,80,51,184/- WHICH WAS NOT ACCEPTED BY THE LD. CIT (A) TO BE CONSIDERED FOR DETERMINATION OF DISALLOWANCE. FINALLY THE ASSESSE E IS HAVING INTEREST FREE AND OWN FUND MORE THAN THE SAID AMOUNT OF RS. 6,80,51,1 84/- THE IMPUGNED DISALLOWANCE IS NOT SUSTAINABLE. ON THIS ASPECT THE ASSESSEE DREW OUR ATTENTION TO THE ADDITIONAL SUBMISSION DATED 03.09.2019 FILED BY THE APPELLANT BEFORE THE LD. CIT(A) WHEREIN RS. 10,68,11,665/- IS SHOWN AS THE OWN FUND AND INTEREST FREE FUND AVAILABLE AS ON 31.03.2010. 5. UPON PERUSAL OF THE RECORDS OF THE MATTER INCLUD ING THE ORDER PASSED BY THE AUTHORITIES BELOW WE FIND SUBSTANCE IN SUCH SUB MISSIONS MADE BY THE LD. AR. WE ALSO NOTE THAT LD. DR ALSO FAILED TO CONTRO VERT SUCH CONTENTION MADE BY THE LD. AR. SINCE THE ASSESSEES OWN FUND AND I NTEREST BEARING FUND IS RS. 10,68,11,665/- WHICH IS MORE THAN THE NON-ACCEPTANC E OF THE AMOUNT OF LOAN AND ADVANCES MADE TO THE PARTIES AS MENTIONED AT PA GE 22 OF THE ORDER PASSED BY THE LD. CIT(A) TO THE TUNE OF RS. 6,80,51,184/- THE IMPUGNED DISALLOWANCE UNDER SECTION 36(I)(III) OF THE ACT IS NOT SUSTAINA BLE IN THE EYE OF LAW AND HENCE THE SAME IS LIABLE TO BE QUASHED. WE, THUS, ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL PREFERRED BY THE ASSES SEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 29 / 1 0 /20 2 1 SD/- SD/- (WASEEM AHMED) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 29/10/2021 TANMAY, SR. PS TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. ITA NO.2821/AHD/2013 TAKSHASHILA GRUH NIRMAN PVT. LTD. VS. ITO ASST.YEAR 2010-11 - 4 - 3. / CONCERNED CIT 4. ( ) / THE CIT(A)- 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 26.10.2021 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27.10.2021 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 29.10.2021 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .10.2021 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 29 .10.2021 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 29 .10.2021 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER