DCIT-6, Kanpur V. M/S Shivraj Tobbocco P Ltd., Kanpur

ITA 310/LKW/2011

• Counselvise Citation: 31023714 RSA 2011
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 31-05-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 26-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K M DIXIT
• Keywords: Notional interest; Revenue expenditure
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B : LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A. NO. 310 /LKW/ 2011 ASSESSMENT YEAR: 2003 - 04 DY.C.I.T. - 6, VS. M/S SHIV RAJ TOBACCO PVT. LTD. KANPUR. 62/154, HARBANS MOHAL, KANPUR. PAN:AAFCS5244N (APPELLANT) (RESPONDENT) C.O. NO.22/LKW/2011 ( I.T.A. NO. 310 /LKW/ 2011) ASSESSMENT YEAR: 2003 - 04 M/S SHIV RAJ TOBACCO PVT. LTD. VS. DY.C.I.T. - 6, KANPUR. KANPUR. (OBJEC TOR) (RESPONDENT) REVENUE BY : SHRI K. M. DIXIT, CIT, D.R. ASSESSEE BY : SHRI ABHINAV MEHROTRA, ADVOCATE DATE OF HEARING : 31 /0 5 /201 3 DATE OF PRONOUNCEMENT :07/08/2013 ORDER PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF CIT(A) MAINLY ON TWO GROUNDS, WHICH ARE AS UNDER: 1. THAT THE LD COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF 2 RS.51,68,488/ - MADE ON ACCOUNT OF EXCISE DUTY PAID WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE ITSELF ADMITTED THAT NO EXCISE DUTY IS CHARGEABLE ON THE ITEMS MANUFACTURED BY IT AND FURTHER THE ISSUE IS SUB JUDICE BEFORE THE APPELLATE AUTHORITIES. 2. THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (A)II, KANPUR HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 7,67,437/ - MADE ON ACCOUNT OF DISALLOWANCE OF PAYMENT OF INTEREST TO OTHER PARTIES MADE BY THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD NOT CHARGED ANY INTEREST ON ADVANCES AND LOANS MADE TO THE PARTIES. 2. IN SUPPORT OF THE ORDER OF THE CIT(A), THE ASSESSEE HAS FILED THE CROSS OBJECTION. ACCORDINGLY, THE APPEAL AND THE CROSS OBJECTION ARE BEING ADJUDICAT ED. 3. THE FIRST GROUND R ELATES TO THE DELETION OF ADDITION OF ` 51,68,488/ - . IN THIS REGARD, THE FACTS BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN MANUFACTURING AND TRADING OF FRUITS AND VEGETABLE (POWDER) ITEMS AND AGARBATTI. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER HAS NOTED THAT THE PURCHASES HAVE BEEN DEBITED EXCLUSIVE OF EXCISE DUTY IN PURCHASE ACCOUNT AND THE ASSESSEE HAS NOT CHARGED ANY EXCISE ON SA LES BUT HAS BEEN DEBITED IN THE PROFIT & LOSS ACCOUNT. ACCORDINGLY, THE ASSESSING OFFICER PROPOSED TO MAKE DISALLOWANCE OF EXCISE DUTY AMOUNTING TO ` 51,68,488/ - AND IN RESPONSE TO THE QUESTIONNAIRE RAISED TO THE ASSESSEE, IT WAS STATED THAT PURCHASES HAVE BEEN DEBITED EXCLUSIVE OF EXCISE DUTY IN PURCHASE ACCOUNT . THE ASSESSEE HAS NOT CHARGED ANY EXCISE ON SALES AS PER LEGAL OPINION OF ITS EXCISE CONSULTANTS BUT EXCISE AUTHORITIES ARE IMPOSING EXCISE DUTY WHICH HAVE BEEN PAID BY THE ASSESSEE FROM HIS POCK ET AND THE SAME HAS BEEN DEBITED 3 IN THE PROFIT & LOSS ACCOUNT. IN SUPPORT OF HIS CONTENTION, THE ASSESSEE HAS FILE D THE ORDER OF THE COMMISSIONER , CENTRAL EXCISE (APPEALS) . THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND HE A CCORDINGLY MADE DISALLOWANCE OF ` 51,68,488/ - AFTER HAVING OBSERVED THAT THE ASSESSEE HAS WRONGLY DEBITED THE EXCISE DUTY AMOUNTING TO ` 51,68,488/ - AND ACCORDINGLY IT WAS ADDED BACK TO THE ASSESSEES INCOME. WHILE DOING SO, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE ITSELF HAS STATED THAT THE MATTER IS SUB JUDICE BEFORE THE COMMISSIONER OF CENTRAL EXCISE (APPEALS), THEREFORE, IN NO CASE IT MAY BE REGARDED AS REVENUE EXPENDITURE INCIDENTAL TO BUSINESS LIABLE TO BE DEBITED UNDER PROFIT & LOSS ACCOUNT. SINCE THE MATTER IS IN DISPUTE, THE ASSESSEE SHOULD HAVE PAID THE EXCISE DUTY OUT OF ITS CAPITAL FUNDS AND SHOULD HAVE MENTIONED IT AS A DISPUTED AMOUNT AS ASSET IN THE BALANCE SHEET. 4. AGGRIEVED, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE CIT(A) WITH THE SUBMISSIONS THAT THE ALLEGATION OF THE ASSESSING OFFICER DOES NOT AFFECT THE SUBSTANCE OF THE NET PROFIT RESULT SINCE THE EXCISE DUTY WAS PAID IN THE GIVEN CIRCUMSTANCES OF THE CASE . THEREFORE, IN THE BOOKS OF ACCOUNT OF THE ASSESSEE ENTRIES WERE PASSED AS PER AUDITED BALANCE SHEET. MOREOVER, THESE EXPENSES ARE REVENUE EXPENDITURE U/S 37 OF THE ACT. IT WAS ALSO CONTENDED BE FORE THE CIT(A) THAT THE COMMISSIONER , CENTRAL EXCISE (APPEALS) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BUT DEPARTMENT HAS PREFERRED AN APPEAL BEFORE THE CEGAT AND THE MATTER IS STILL SUB JUDICE. IT WAS ALSO CONTENDED BEFORE THE CIT(A) THAT THE AS SESSEE WAS PAYING THE EXCISE DUTY OVER SALE OF ITEMS , WHICH IN HIS OPINION, WERE EXEMPT . THIS DECISION WAS TAKEN TO RUN THE BUSINESS OF THE ASSESSEE SMOOTHLY AND WITHOUT ANY HURDLE FROM THE EXCISE DEPARTMENT. AFTER WINNING THE CASE BEFORE COMMISSIONER , C ENTRAL EXCISE (APPEALS) , THE 4 ASSESSEE HAS SURRENDERED THE REGISTRATION CERTIFICATE UNDER CENTRAL EXCISE ACT ON 27/02/2004. BUT EVEN THEN THE EXCISE DEPARTMENT WAS PRESSING HARD FOR PAYMENT OF DUTY AND ISSUED DEMAND CUM SHOW CAUSE NOTICE FOR EACH AND EVERY QUARTER FALLING AFTER THAT PERIOD. CONSIDERING THE ENTIRE CIRCUMSTANCES AND THE NATURE OF LIABILITY, IT WAS ALWAYS ADVISABLE AND PRUDENT TO PAY FOR AND CHARGE THE LIABILITY OF EXCISE DUTY FROM PROFIT & LOSS ACCOUNT THOUGH UNDER PROTEST. FINDING FORCE I N THE CONTENTION OF THE ASSESSEE, THE CIT(A) HAS DELETED THE ADDITION FOLLOWING THE JUDGMENT OF THE APEX COURT IN THE CASE OF BHARAT EARTH MOVERS VS. CIT [2000] 245 ITR 428 (SC). 5. AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND PLACED HEAVY RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER. 6. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, BESIDES PLACING RELIANCE UPON THE ORDER OF THE CIT(A) HAS I NVITED OUR ATTENTION THAT AGREEING WITH THE CONTENTION OF THE ASSESSEE THE CIT(A) SHRI B. P. SINGH HAS ACCEPTED THE CONTENTION OF THE ASSESSEE AND DELETED THE ADDITION MADE IN THIS REGARD. BUT AFTER TAKING OVER THE CHARGE AS CIT (ADMINISTRATION), THE SAME OFFICER HAS RECOMMENDED THE CASE FOR FILING AN APPEAL BEFORE THE TRIBUNAL AGAINST HIS OWN ORDER WITHOUT ASSIGNING ANY REASON AS TO UNDER WHAT CIRCUMSTANCES HE HAS CHANGED IS VIEWS. IT WAS FURTHER CONTENDED ON BEHALF OF THE ASSESSEE THAT THOUGH HE WAS NOT REQUIRED TO PAY THE EXCISE DUTY OVER SALE OF ITEMS AS IT WAS EXEMPT BUT IN ORDER TO RUN HIS BUSINESS SMOOTHLY AND WITHOUT ANY HURDLE FROM THE EXCISE DEPARTMENT, A DECISION WAS TAKEN TO PAY THE EXCISE DUTY UNDER PROTEST. SINCE THE ASSESSEE HAS INCURRED RE VENUE EXPENDITURE, IT WAS DEBITED TO PROFIT & LOSS ACCOUNT. 5 7. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE RECORD, WE FIND FORCE IN THE CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE THAT THIS APPEAL WAS RECOMMENDED BY THE CIT (AD MINISTRATION) SHRI B. P. SINGH WHO IN FACT HAS PASSED THE ORDER AS CIT(A) ACCEPTING THE CLAIM OF THE ASSESSEE. NO REASONS HAVE BEEN ASSIGNED FOR WHICH A PARTICULAR OFFICER HAS CHANGED HIS VIEWS AND DECIDED TO CHALLENGE HIS OWN ORDER BEFORE THE TRIBUNAL. THERE MAY BE LITTLE BIT FORCE IN THE ARGUMENTS OF THE REVENUE THAT PARTICULAR OFFICER HAS ACTED IN DIFFERENT CAPACITY. WHEN HE HAS PASSED THE ORDER HE WAS THE FIRST APPELLATE AUTHORITY BUT WHEN HE RECOMMENDED THE MATTER FOR FILING THE APPEAL HE ACTED IN A DMINISTRATIVE CAPACITY, THEREFORE, HE WAS NOT REQUIRED TO RECORD THE REASONS FOR CHANGING HIS VIEWS. BUT WE ARE OF THE VIEW THAT IN SUCH TYPE OF CASE, A PROPER APPLICATION OF MIND IS REQUIRED. ONCE AN OFFICER HAS TAKEN A PARTICULAR VIEW WITH RESPECT TO A PARTICULAR ISSUE AND IF HE WANTS TO TAKE A CONTRARY VIEW FOR CERTAIN REASONS OR WANTS TO CHALLENGE HIS OWN VIEW BEFORE THE APPELLATE FORUM, HE SHOULD RECORD SOME REASONS. LEAVING APART, WE HAVE EXAMINED THIS ISSUE ON MERIT ALSO. 7.1 UNDISPUTEDLY, ACCO RDING TO THE ASSESSEE, THE EXCISE DUTY WAS PAID UNDER PROTEST. HE WAS NOT REQUIRED TO PAY THE EXCISE DUTY BUT WHEN THE EXCISE AUTHORITIES HAVE DEMANDED, THE ASSESSEE HAD PAID THE SAME. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE HAS GONE BEFORE THE COM MISSIONER , CENTRAL EXCISE (APPEALS) AND WON THE CASE BUT THE DEPARTMENT HAS PREFERRED AN APPEAL BEFORE THE CEGAT. SINCE THE ASSESSEE HAS PAID THE EXCISE DUTY UNDER PROTEST, IT IS EXPENDITURE INCIDENTAL TO HIS BUSINESS AND SHOULD BE ALLOWED U/S 37 OF THE A CT. WHILE ADJUDICATING THE ISSUE, THE CIT(A) HAS ALSO EXAMINED VARIOUS JUDICIAL 6 PRONOUNCEMENTS AND IN THE CASE OF KEDARNATH JUTE MANUFACTURE CO. VS. CIT 52 ITR 363 (SC) IT WAS HELD THAT THE LIABILITIES OF THE EXCISE DUTY ACCRUES ON THE TAXABLE EVENT TAKIN G PLACES VIZ. MANUFACTURE OF EXCISABLE GOODS. THE LIABILITY IS ON THE MANUFACTURER AND NOT ULTIMATELY ON SELLERS. IT WAS AN ENFORCEABLE LEGAL LIABILITY ALLOWABLE IRRESPECTIVE LY OF WHETHER SUBSEQUENTLY , EXEMPTION GRANTED OR THE SAME H AS BEEN CONTESTED IN THE APPEAL . THE RELEVANT OBSERVATIONS OF THE CIT(A) ARE EXTRACTED HEREUNDER: 10. I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE AND SUBMISSIONS OF THE APPELLANT. IT IS CLEAR THAT THERE WAS NO DISPUTE THAT THE LIABILITY WHICH HAS BEEN CHARGED TO THE PROFIT & LOSS ACCOUNT HAS BEEN PAID BY THE APPELLANT. I HAVE GONE - THROUGH THE CHALLAN OF PAYMENT OF EXCISE DUTY AND ALSO COPY OF RELEVANT EXCISE RECORD BEARING NO. 104 TO 137 OF THE PAPER BOOK OF THE APPELLANT FILED BEFORE ME. AS AGAINST TH E POSITION TAKEN BY AO OF NOT CHARGING EXCISE DUTY, SAME IS NOT TENABLE BECAUSE THE LIABILITY IS A SETTLED LIABILITY OF THE APPELLANT. IT IS A LIABILITY DULY QUANTIFIABLE AND ASCERTAINED ON EXPERT ACCOUNTING PRINCIPLE. IT WAS NOT A CONTINGENT LIABILITY BUT AFFIRMED AND DETERMINED LIABILITY TO BE DISCHARGED BY THE ASSESSEE. EARLIER ON THE SAME PATTERN THE EXCISE DUTY WAS ALLOWED BY ASSESSEE IN THE CASE OF BHARAT EARTH MOVERS VS. CIT (2000) 245 ITR 428 (SC) AT PAGE 61 OF PAPER BOOK. FOLLOWING THE GUIDELINES A VAILABLE ON THE DIFFERENCE BETWEEN A PROVISION AND RESERVE IN A DECISION IN BONUS LAW IN METAL BOX CO. OF INDIA LTD. V. THEIR WORKMEN, PROVISION FOR ENCASHMENT OF UNAVAILED LEAVE WAS HELD NOT TO BE A CONTINGENT LIABILITY WAS ALLOWED BY THE SUPREME COURT IN BHARAT EARTH MOVERS V. CIT IN FOLLOWING WORDS : 'THE LAW IS SETTLED : IF A BUSINESS LIABILITY HAS DEFINITELY ARISEN IN THE ACCOUNTING YEAR, THE DEDUCTION SHOULD BE ALLOWED ALTHOUGH THE LIABILITY MAY HAVE TO BE QUANTIFIED AND DISCHARGED AT A FUTURE DATE. WHAT SHOULD BE CERTAIN IS THE INCURRING OF THE LIABILITY. IT SHOULD ALSO BE CAPABLE OF BEING ESTIMATED WITH REASONABLE CERTAINTY THOUGH THE ACTUAL QUANTIFICATION MAY NOT BE POSSIBLE. IF THESE 7 REQUIREMENTS ARE SATISFIED THE LIABILITY IS NOT A CONTINGENT ONE . THE LIABILITY IS IN PRAESENTI THOUGH IT WILL BE DISCHARGED AT A FUTURE DATE. IT DOES NOT MAKE ANY DIFFERENCE IF THE FUTURE DATE ON WHICH THE LIABILITY SHALL HAVE TO BE DISCHARGED IS NOT CERTAIN.' IN THE LIGHT OF ABOVE LAW BASED REASONING IN BHARAT EARTH MOVERS CASE (SUPRA), WARRANTY LIABILITY DETERMINED ON A REASONABLE BASIS IS ALLOWABLE. IT IS ALSO ON RECORD THAT THIS EXPENDITURE HAS BEEN ALLOWED IN THE PREVIOUS YEAR. IN THE RESULT UNDER THE CIRCUMSTANCES AND FOR THE REASON ABOVE AND THE DECISION IN THE VARIOUS CASE LAW RELIED UPON BY THE APPELLANT, THE ADDITION IS DELETED. 7.2 SINCE NO SPECIFIC INFIRMITY HAS BEEN POINTED OUT IN THE ORDER OF CIT(A) EXCEPT PLACING HEAVY RELIANCE UPON THE ASSESSMENT ORDER, WE CONFIRM THE ORDER OF CIT(A) AS HE HAS DEALT WITH THE ISSUE IN RIGHT PERSPECTIVE. ACCORDINGLY, THIS GROUND OF THE REVENUE IS REJECTED. 8 . SO FAR AS THE OTHER GROUND IN RELATION TO DELETION OF ADDITION OF ` 7,67,437/ - IS CONCERNED, WE FIND THAT THE ASSESSING OFFICER HAS MADE THE ADDITION ON ACCOUNT O F INTEREST ON ADVANCES AND LOANS AND IN THIS REGARD IT IS NOTICED THAT THE ASSESSEE HAS GIVEN ADVANCE OF ` 53,79,247/ - TO OTHERS AND ` 3,56,821/ - TO STAFF MEMBERS BUT NO INTEREST HAS BEEN CHARGES ON THESE ADVANCES. THE ASSESSING OFFICER HAS DISALLOWED THE C ORRESPONDING INTEREST PAID ON THE BORROWED FUNDS. 9 . IN APPEAL, THE ASSESSEE HAS CONTENDED THAT THE ASSESSEE WAS HAVING HUGE INTEREST FREE FUNDS WHICH WAS UTILIZED IN INTEREST FREE ADVANCES. IN SUPPORT OF HIS CONTENTION THAT IN CASE THERE WAS INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE AND INTEREST FREE ADVANCES WERE MADE BY IT , NO DISALLOWANCE OF INTEREST CAN BE MADE , T HE ASSESSEE HAS PLACED THE RELIANCE ON VARIOUS JUDICIAL PRONOUNCEMENTS. HE HAS ALSO FURNISHED THE DETAILS OF 8 INTEREST FREE FUNDS A VAILABLE WITH THE ASSESSEE. HAVING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE CIT(A) HAS DELETED THE ADDITION. THE RELEVANT OBSERVATIONS OF THE CIT(A) ARE EXTRACTED HEREUNDER: 14. I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE AND SUBMISSIONS OF THE APPELLANT. IT IS ON RECORD THAT ( A ) THE ASSESSEE WAS HAVING SHARE CAPITAL WHICH IS AT RS.3 , 01 , 000/ - . RESERVE AND SURPLUS WHICH IS AT RS.5 , 983/ - . V ALUE OF CLOSING STOCK AT RS.82 , 53 , 955/ - AS WELL AS AMOUNT AVAILABLE AGAINST TURNOVER OF RS.4 , 21 , 52 , 959/ - . ( B ) CO - RELATION BETWEEN ADVANCES AND THE LOAN, FEEDING FUND IS ESSENTIAL FOR THE PURPOSE OF ESTABLISHING THAT LIABILITY OF INTEREST ON LOAN HAS BEEN UNDERTAKEN FOR NON BUSINESS PURPOSE, WHICH IS NOT THE CASE HERE. ( C ) ADVANCES IN QUESTION TO THE PARTIES WERE FOR THE PURCHASE OF INDUSTRIAL ITEM. THE TRANSACTIONS WERE GENUINE AND BONAFIDE. THE LUCKNOW BENCH OF ITAT IN THE CASE OF MEENAKSHI SYNTHETICS PVT. LTD. VS. ACIT 84 ITD 563 HAS HELD THAT NON CHARGING OF INTEREST ON LOAN GIVEN BY AN ASSESSEE C OMPANY BY ITSELF IS NOT A SUFFICIENT GROUND FOR DISALLOWING INTEREST PAID BY THE ASSESSEE ON THE LOANS TAKEN BY IT IN THE ABSENCE OF ANY NEXUS, BROUGHT ON RECORD BETWEEN THE BORROWED CAPITAL AND THE INTEREST FREE ADVANCES OR IN THE ABSENCE OF FINDING THAT BORROWED FUNDS OR PART THEREOF WAS DIVERTED TOWARDS INTEREST FREE ADVANCES MADE BY THE ASSESSEE. 15. FURTHER, WHERE THE AO ADDED THE INTEREST ON NOTIONAL BASIS, THE HON'BLE M . P . HIGH COURT HAS HELD IN THE CASE OF CIT VS. PREMIER INDUSTRIES (I) LTD. (SUPRA) THAT THE NOTIONAL INTEREST ON THE ADVANCES MADE CANNOT BE ASSESSED AS INCOME OF THE ASSESSEE. IT IS IMPORTANT TO MENTION THAT - ( I ) SOME OF THE ADVANCES DO NOT PERTAIN TO THE YEAR UNDER CONSIDERATION. 9 ( II ) THE APPELLANT HAS SUFFICIENT FUNDS AS INTEREST FREE FUNDS. ( III ) THE AO HAS NOT BROUGHT ON RECORD MATERIAL TO ESTABLISH THE NEXUS BETWEEN MONEY BORROWED AND INTEREST FREE ADVANCES. FOR THE REASON NOTED ABOVE AND FOLLOWING THE DECISION IN VARIOUS CASE LAWS PLACED AND SUBMITTED BEFORE ME AS IN FORGOING PARAGRAPH S, THE ADDITION OF RS.7,67,437/ - MADE BY AO IS DELETED, AS DISCUSSED. THUS, GROUND NO. 3 OF APPEAL IS ALLOWED. 1 0 . AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND PLACED HEAVY RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER. 1 1 . THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS SUBMITTED THAT THE INTEREST FREE FUNDS WERE AVAILABLE WITH THE ASSESSEE WHICH WERE UTILIZED FOR INTEREST FREE ADVANCES, THEREFORE, NO CORRESPONDING DISALLOWANCE OF INTEREST CAN BE MADE. 1 2 . HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE RECORD WE FIND THAT THE ASSESSEE HAS FURNISHED THE DETAILS OF INTEREST FREE FUNDS AVAILABLE WITH IT. AS PER THE DETAILS, THE ASSESSEE WAS HAVING GENERAL RESERVE OF ` 58 LAKHS BESIDES S HAR E CAPITAL OF ` 3,01,000/ - , WHICH WAS UTILIZED FOR INTEREST FREE ADVANCES. THE REVENUE HAS NOT PLACED ANY EVIDENCE ON RECORD TO ESTABLISH THAT THE BORROWED FUNDS WERE UTILIZED FOR INTEREST FREE ADVANCES. THEREFORE, NO CORRESPONDING DISALLOWANCE CAN BE MADE . ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) WHO HAS RIGHTLY ADJUDICATED THE ISSUE. 10 1 3 . THE CROSS OBJECTION IS FILED IN SUPPORT OF THE ORDER OF CIT(A). SINCE THE ORDER OF CIT(A) IS CONFIRMED, THE CROSS OBJECTION HAS BECOME INFRUCTUOUS. ACC ORDINGLY, WE DISMISS THE SAME. 1 4 . IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 07/08/2013 ) SD/. SD/. ( PRAMOD KUMAR) ( SUNIL KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:07/08/2013 *SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR