Deputy Commissioner of Income Tax- 3(1), Indore V. M/s Madhya Pradesh Financial Corporation, Indore

ITA 285/Ind/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5679 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 05-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Proportionate interest
• Section: 143(3)

Judgement Text

[ITA NO.285/IND/2018] [M/S. MADHYA PRADESH FINANCIAL CORPORATION, INDORE] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.285/IND/2018 ASSESSMENT YEAR: 2015-16 DCIT - 3(1) INDORE / VS. M/S. MADHYA PRADESH FINANCIAL CORPORATION FINANCE HOUSE, A.B. ROAD INDORE ( APPELLANT ) ( REVENUE ) P.A. NO. AADCM6480C APPELLANT BY SMT. ASHIMA GUPTA, D.R. RESPONDENT BY SHRI ASHISH GOYAL, A.R. DATE OF HEARING: 10.05.2019 DATE OF PRONOUNCEMENT: 14.05.2019 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST ORDER OF THE CIT(A)-1, INDORE DATED 15.1.2018 PERTAIN ING TO [ITA NO.285/IND/2018] [M/S. MADHYA PRADESH FINANCIAL CORPORATION, INDORE] 2 THE ASSESSMENT YEAR 2015-16. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS.20,62,31,801/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF PROPORTIONATE IN TEREST EVEN WHEN INTEREST FREE FUNDS TRANSFERRED TO M.P. POWER GENER ATING CO. LTD. JABALPUR, WHEREAS COMPANY IS PAYING HEAVY INTEREST ON LOANS. 2. THE APPELLANT CRAVES LEAVE TO ADD TO OR DEDUCT FROM OR OTHERWISE AMEND THE ABOVE GROUNDS OF APPEAL. 2. THE ONLY EFFECTIVE GROUND IN THE REVENUES APPEAL IS AGAINST DELETION OF ADDITION OF RS.20,62,31,801/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF PROPORTIONATE INTEREST IN RESPECT OF INTEREST FREE FUNDS GIVEN TO M.P. GENERATING COMPANY LTD. 3. THE FACTS IN BRIEF ARE THAT CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLE D AS THE ACT) WAS FRAMED VIDE ORDER DATED 30.11.2017. TH E ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT MADE [ITA NO.285/IND/2018] [M/S. MADHYA PRADESH FINANCIAL CORPORATION, INDORE] 3 ADDITION ON ACCOUNT OF DISALLOWANCE OF INTEREST OF RS.20,62,31,801/-. 4. AGGRIEVED BY THIS, THE ASSESSEE FILED AN APPEAL BEFO RE THE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSION S ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITI ON. NOW THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT I SSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECIS ION OF THE TRIBUNAL. HE CONTENDED THAT LD. CIT(A) HAS FOL LOWED THE DECISION OF THIS TRIBUNAL. HE SUBMITTED THAT THE A.O. WAS NOT JUSTIFIED IN MAKING THE ADDITION. 5. ON THE CONTRARY, LD. D.R. SUPPORTED THE ORDER OF THE A.O. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS [ITA NO.285/IND/2018] [M/S. MADHYA PRADESH FINANCIAL CORPORATION, INDORE] 4 OF THE AUTHORITIES BELOW. WE FIND THAT THE A.O. MADE ADDITION BY OBSERVING AS UNDER: [ITA NO.285/IND/2018] [M/S. MADHYA PRADESH FINANCIAL CORPORATION, INDORE] 5 [ITA NO.285/IND/2018] [M/S. MADHYA PRADESH FINANCIAL CORPORATION, INDORE] 6 [ITA NO.285/IND/2018] [M/S. MADHYA PRADESH FINANCIAL CORPORATION, INDORE] 7 7. HOWEVER, THE LD. CIT(A) DELETED THIS ADDITION BY OBSERVING AS UNDER: [ITA NO.285/IND/2018] [M/S. MADHYA PRADESH FINANCIAL CORPORATION, INDORE] 8 8. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO DRAWN OU R ATTENTION TO THE DECISION OF THIS TRIBUNAL IN ITA NO.965/IND/2016 PERTAINING TO THE ASSESSMENT YEAR 2012-13. THE TRIBUNAL IN PARA-7 OF THE ORDER HAS DECI DED THE ISSUE AS UNDER: 7. WE HAVE HEARD BOTH THE SIDES AND CAREFULLY PERU SED THE MATERIAL AVAILABLE ON RECORD OF THE TRIBUNAL, INTER ALIA, IMPUGNED ASSESSMENT ORDER AND THE ORDER OF THE LEARNED CIT(A ) ALONG WITH PAPER BOOK FILED BY THE ASSESSEE. WE FIND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) WHILE DECIDING THE APPEAL HAS FOLLOWED THE CASE OF THE ASSESSEE ITSELF IN ITA NO.430/IND/2010 & ITA NO.460/IND/2010 FOR THE ASSESSMENT YEAR 2007-08. T HE COMMISSIONER OF INCOME TAX (APPEALS) HAS CATEGORICA LLY HELD THAT THE FACTUAL MATRIX FOR THE YEAR THUS REMAINS IDENTI CAL TO THAT PREVAILING IN THE A.Y. 2007-08 AND HENCE THE FINDIN GS OF ITAT REPRODUCED ABOVE ARE VALID FOR THE YEAR UNDER CONSI DERATION ALSO. HE FURTHER OBSERVED THAT THERE IS NO NEXUS BETWEEN THE INTEREST BEARING FUNDS AND THE INTEREST FREE INVESTMENT AND HENCE IT CANNOT BE HELD THAT THE INTEREST EXPENDITURE RELATED TO NO N BUSINESS PURPOSES. WE, THEREFORE, FIND NO FLAW IN THE FINDI NGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND ACCORDINGL Y UPHOLD THE SAME. 9. IT IS FURTHER POINTED OUT THAT THIS TRIBUNAL IN ITA NO.144/IND/2017 PERTAINING TO THE ASSESSMENT YEAR 2013-14 HAS FOLLOWED THE EARLIER ORDER PERTAINING TO THE ASSESSMENT YEAR 2007-08 BY OBSERVING AS UNDER: [ITA NO.285/IND/2018] [M/S. MADHYA PRADESH FINANCIAL CORPORATION, INDORE] 9 13. THIS FINDING ON FACT IS NOT CONTROVERTED BY TH E REVENUE WHILE PLACING ANY MATERIAL ON RECORD WE, THEREFORE, FOLLO WING THE DECISION IN THE ASSESSMENT YEAR 2007-08 IN ASSESSEES OWN CA SE DIRECT THE A.O. TO DELETE THE ADDITION. WE DO NOT SEE ANY INF IRMITY IN THE ORDER OF THE LD. CIT(A), SAME IS HEREBY CONFIRMED. GROUN D RAISED BY THE REVENUE ARE DISMISSED. 10. SINCE THE ISSUE IS SQUARELY COVERED IN FAVOUR OF T HE ASSESSEE, THE REVENUE HAS NOT BROUGHT TO OUR NOTICE AN Y CONTRARY BINDING PRECEDENT. WE THEREFORE, TAKING A CONSISTENT VIEW, AFFIRM THE FINDING OF THE LD. CIT(A ) AND DISMISS THE GROUND RAISED BY THE REVENUE. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 14 . 05.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 14/05/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE