M/s. National Builders, Baroda V. The ACIT., Circle-2, Baroda

ITA 3390/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0009 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-08-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 13-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Proportionate interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABA D (BEFORE HON'BLE SHRI G.D. AGRAWAL, V.P.(AZ) & HON BLE SHRI T.K. SHARMA, J.M. ) I.T.A. NO. 3390/AHD./2008 ASSESSMENT YEAR : 2005-2006 M/S. NATIONAL BUILDERS, VADODARA -VS.- ASS ISTANT COMMISSIONER OF INCOME TAX, (PAN : AAEFN 8804 F) CIRCLE-2(2), BARODA (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI BANDISH SOPARK AR RESPONDENT BY : SHRI K. MADHUSUDAN, SR . D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 13.08.2008 OF LEARNED COMMISSIONER OF INCOME TAX-II, BARODA FOR THE ASSES SMENT YEAR 2005-06. 2. THE ONLY GROUND RAISED BY THE ASSESSEE IN ITS AP PEAL IS AS UNDER :- THE LEARNED COMMISSIONER (APPEALS) ERRED IN CONFIR MING DISALLOWANCE OF PROPORTIONATE INTEREST OF RS.1,87,1 70/- OUT OF INTEREST EXPENSES ON ACCOUNT OF DIVERSION OF FUND W ITHOUT CONSIDERING THE FACT THAT INVESTMENT WAS MADE FOR T HE PURPOSE OF BUSINESS ONLY. 3. AT THE TIME OF HEARING, ON BEHALF OF ASSESSEE SH RI BANDISH SOPARKAR, LD. COUNSEL APPEARED AND CONTENDED THAT IN THE EARLIER THREE ASSESSMENT YEARS, I.E. ASSESSMENT YEARS 2000-01, 2001-02 & 2003-04, INTEREST WAS DISALLOWED ON ACCOUNT OF DI VERSION OF FUND. ITAT, D BENCH, AHMEDABAD VIDE ORDER DATED 14.09.2007 IN ASSESSEES OWN CASE IN ITA NOS. 1128, 1524/AHD/2005 &2467/AHD/2008 FOR THE ASSESSMENT YEA RS 2000-01, 2001-02 & 2003-04 RESPECTIVELY RESTORED THE ISSUE TO THE FILE OF ASSE SSING OFFICER. IN THIS VIEW OF THE MATTER, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT FOR THIS YEA R ALSO, THE MATTER BE RESTORED TO THE FILE OF ASSESSING OFFICER, WHO WILL RE-ADJUDICATE THE DISAL LOWANCE OF INTEREST AMOUNTING TO RS.1,87,170/- KEEPING IN VIEW THE DECISION/ DIRECTI ON OF TRIBUNAL FOR THE ASSESSMENT YEARS 2000- 01, 2001-02 & 2003-04. 4. ON THE OTHER HAND, SHRI K. MADHUSUDAN, LD. SR. D .R. APPEARING ON BEHALF OF THE REVENUE COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS MADE BY THE LD. COUNSEL OF THE ASSESSEE. 2 ITA NO. 3390/AHD/2008 5. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW AS WELL AS THE DECISION OF THE TRIBUNAL DATED 14.09.2007 IN ASSESSEES OWN CASE IN ITA NOS. 1128, 1524/AHD/2005 &2467/AHD/2008 FOR THE ASS ESSMENT YEARS 2000-01, 2001-02 & 2003-04 RESPECTIVELY RELIED BY THE LD. COUNSEL OF T HE ASSESSEE. ADMITTEDLY, IN EARLIER ASSESSMENT YEARS ALSO, INTEREST WAS DISALLOWED AND ITAT RESTOR ED THE MATTER TO THE FILE OF ASSESSING OFFICER. THE RELEVANT DIRECTION OF THE TRIBUNAL IS CONTAINED IN PARA 6, WHICH IS REPRODUCED HEREUNDER :- 6. AFTER CAREFUL CONSIDERATION OF THE RIVAL SUBMIS SIONS, FACTS AND CIRCUMSTANCES OF THE CASE AND VARIOUS DECISIONS REL IED UPON BY THE PARTIES, WE ARE OF THE OPINION THAT IT WILL BE IN T HE INTEREST OF SUBSTANTIAL JUSTICE, THE ISSUE REQUIRES RE-CONSIDERATION AT THE END OF THE ASSESSING OFFICER IN VIEW OF VARIOUS DECISIONS RELIED UPON BY THE PARTIES. CONSEQUENTLY, WE REMAND THE ISSUE RELATING TO DISAL LOWANCE OF INTEREST ON BORROWED FUNDS FOR ALL THE THREE ASSESSMENT YEAR S BACK TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTIONS THAT THE SAME MAY BE DECIDED AFRESH IN ACCORDANCE WITH LAW AND THE DECISIONS (SU PRA) RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE, AFTER ALLOWING TH E ASSESSEE A PROPER OPPORTUNITY OF BEING HEARD. 5.1. WE, THEREFORE, FOLLOWING THE DECISION DATED 14 .09.2007 OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2000-01, 2001-02 & 20 03-04 (SUPRA), RESTORE THE ISSUE RELATING TO THE DISALLOWANCE OF INTEREST OF RS.1,87,170/- TO T HE FILE OF ASSESSING OFFICER, WHO WILL RE- ADJUDICATE THIS ISSUE AFTER GIVING OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. 6. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 31.08.20 10 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 31/ 08 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT CONCERNED, (4) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGIS TRAR, ITAT, AHMEDABAD LAHA/SR.P.S.