Oswal Kirti Ratanchand, Pune V. ITO, Wd.2(3), Pune

ITA 34/PUN/2007

• Counselvise Citation: 3424514 RSA 2007
• Duration Of Justice: 4 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-06-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 08-01-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJAY SINGH
• Keywords: Condonation of delay
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER I.T.A. NO. 1853/PN/2005 AND 34/PN/2007 A.Y. 2002-03 & 2003-04 SHRI OSWAL KIRTI RATANCHAND PROP. A ONE OIL INDUSTRIES GAT NO. 2328 UBALENAGAR, GANGA RESORT ROAD WAGHOLI, PUNE-14 PAN AADPO 9268 K APPELLANT VS. I.T.O. WARD 2(3) PUNE. RESPONDENT APPELLANT BY: SMT. DEEPA KHARE RESPONDENT BY: SHRI SANJAY SINGH ORDER PER SHAILENDRA KUMAR YADAV, JM BOTH THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST SEPARATE ORDERS OF THE CIT(A)-II PUNE DATED 1-9- 2005 AND 8-9-2006 FOR A.Y. 2002-03 AND 2003-04 ON T HE GROUND THAT THE CIT(A) ERRED IN CONFIRMING THE DISA LLOWANCE ON ACCOUNT OF INTEREST ON LOANS. SINCE THE ISSUE R AISED IN BOTH THESE APPEALS IS COMMON, THEY WERE HEARD TOGET HER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORD ER FOR PAGE 2 OF 5 ITA NO. 1853 AND 34/PN/2007 OSWAL GROUP A.Y. 2002-03 & 2003-04 THE SAKE OF CONVENIENCE. AS FAR AS APPEAL IN I.T.A . NO. 34/PN/2007, THERE IS A DELAY OF 20 DAYS IN FILING T HE APPEAL BEFORE THE TRIBUNAL. AFTER CONSIDERING THE APPLICA TION FOR CONDONATION OF DELAY ON ACCOUNT OF ILLNESS OF FAMIL Y MEMBERS AS WELL AS FINANCIAL DIFFICULTIES FOR A LON G VERY TIME, WE CONDONE THE DELAY AND DECIDE THE MATTER ON MERITS. ITA NO. 1853/PN/2005 FOR A.Y. 2002-03 2. THE RELEVANT FACTS ARE THAT THE ASSESSEE IS A PR OPRIETOR OF M/S. A-1 OIL INDUSTRIES. THE ASSESSEE FILED ITS RETURN OF INCOME ON 31-10-2002 DECLARING TOTAL INCOME OF RS. 3,68,500/- WHICH WAS PROCESSED U/S 143(3) READ WITH SECTION 147 OF THE ACT DETERMINING THE INCOME AT RS . 21,38,891/- AND MAKING AN ADDITION OF RS. 17,70,391 /- ON ACCOUNT OF INTEREST PAID ON LOAN AMOUNTS BORROWED F ROM FAMILY MEMBERS ON THE GROUND THAT THE LOAN TAKEN FR OM THEM WAS NOT UTILIZED FOR THE PURPOSE OF ASSESSEES OWN BUSINESS. ON APPEAL, THE CIT(A) CONFIRMED THE ACTI ON OF THE ASSESSING OFFICER. THE SAME HAS BEEN OPPOSED B Y THE ASSESSEE BEFORE US. PAGE 3 OF 5 ITA NO. 1853 AND 34/PN/2007 OSWAL GROUP A.Y. 2002-03 & 2003-04 3. THE LEARNED COUNSEL FOR THE ASSESSEE HAS REITERA TED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW WHILE THE LEARNED DR APPEARING FOR THE REVENUE HAS SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND PERU SING THE MATERIAL ON RECORD, WE FIND THAT UNDISPUTEDLY T HE ASSESSEE HAD TAKEN A LOAN OF RS. 1.15 CRORES ON 29- 3-2001 AND ON THE SAME DATE I.E. 29-3-2001, THE ASSESSEE ADVANCED AN AMOUNT OF RS. 1.05 CRORES TO OSWAL OIL PRODUCTS. THE ASSESSEE CLAIMED THAT THIS AMOUNT WAS A TRADE ADVANCE WHICH IS NOT FACTUALLY CORRECT. ASSES SEE COULD SNOT SUBSTANTIATE THE SAME. IN FACT, NO TRAN SACTIONS TOOK PLACE BETWEEN THE PARTIES AFTER ABOVE ADVANCES . IT IS ALSO STRANGE TO NOTE THAT THE AMOUNT IN QUESTION WE RE FOLLOWED FROM FAMILY MEMBERS AND ADVANCED TO SISTER CONCERN. THE FAMILY MEMBERS COULD HAVE ADVANCED TH E AMOUNT TO SISTER CONCERN DIRECTLY. THE CIT(A) WHILE CONFIRMING THE ACTION OF THE ASSESSING OFFICER OBSE RVED THAT THE INTEREST BEARING FUNDS HAVE BEEN DIVERTED FOR A PURPOSE OTHER THAN BUSINESS AND THEREFORE, IN RESPECT OF SU CH AMOUNT IT CANNOT BE SAID THAT THE AMOUNT HAS BEEN U TILIZED PAGE 4 OF 5 ITA NO. 1853 AND 34/PN/2007 OSWAL GROUP A.Y. 2002-03 & 2003-04 FOR THE BUSINESS OF THE ASSESSEE. THEREFORE, THE DISALLOWANCE WAS RIGHTLY MADE BY THE ASSESSING OFFI CER. THE CIT(A) WAS ALSO JUSTIFIED IN UPHOLDING THE DISA LLOWANCE MADE BY THE ASSESSING OFFICER. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CI T(A) IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING O FFICER. SIMILAR ISSUE WAS RAISED BY THE ASSESSEE FOR A.Y. 2 003-04. FACTS BEING SIMILAR, SO FOLLOWING THE REASONING GIV EN IN THE PRECEDING PARAGRAPHS, THE DISALLOWANCE CONFIRMED BY THE CIT(A) IS UPHELD. 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE 2011 SD/- (G.S. PANNU) ACCOUNTANT MEMBER SD/- (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 15 TH JUNE 2011 ANKAM PAGE 5 OF 5 ITA NO. 1853 AND 34/PN/2007 OSWAL GROUP A.Y. 2002-03 & 2003-04 COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (A) II PUNE 4. THE CIT II PUNE 4. THE D.R, A BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE