TRILOK CHAND, Kota V. ACIT, Jaipur

ITA 342/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1942 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 22-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 07-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA CIT DHK
• Assessee Lawyers: B L BHOJWANICA
• Section: 143(3); 153A; 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 342/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. SHRI TRILOK CHAND, KOTA, RAJASTHAN. CUKE VS. ASST. CIT, CIRCLE-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AARPC 1160 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI B.L. BHOJWANI(CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12.10.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 23/10/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD. CIT(A)-4, JAIPUR, DATED 21-01-2016 PERTAINING TO TH E ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1.(A) THAT THE LD. CIT(A) HAS ERRED IN LAW IN UPHO LDING THE ACTION OF THE LD. ASSESSING OFFICER IN NOT DROPPING THE PROCEEDINGS U NDER SECTION 153A/143(3) OF THE INCOME TAX ACT, 1961, SINCE NO S EARCH WAS CONDUCTED IN THE CASE THE ASSESSEE, WHO WAS NOT AVA ILABLE AT THE ADDRESS SEARCHED UPON. (B) WITHOUT PREJUDICE TO GROUND NO. 1(A): THAT THE LD. CIT(A) HAS ERRED IN LAW IN CONFIRMING THE ACTION OF THE LD. ASSESSING OFFICER IN DISTURBING THE PAST ASSESSMENT EVEN THOUGH NOTHING INCRIMINATING WAS FOUND DURING THE COURSE O F SEARCH. (C) WITHOUT PREJUDICE TO GROUND NOS. (A) AND 1 (B): THAT THE LD. CIT(A) HAS ERRED IN LAW IN UPHOLDING T HE ACTION OF THE LD. ASSESSING OFFICER IN PROCEEDING WITH THE ASSESSMENT UNDER SECTION 2 ITA NO. 342/JP/2016. SHRI TRILOK CHAND, KOTA. 153A/143(3) OF THE ACT, 1961, WITHOUT FIRST MEETING THE OBJECTIONS RAISED BY THE ASSESSEE. 2. DURING THE COURSE OF HEARING, LD. COUNSEL FOR TH E ASSESSEE FILED AN ADDITIONAL GROUND THAT READS AS UNDER:- WITHOUT PREJUDICE TO GROUND NO. 1: THAT THE LD. CIT(A) HAS ERRED ON FACTS ;AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW IN UPHOLDING THE DISALLOWANCE OF INTERES T TO THE EXTENT OF RS. 1,79,990/- OUT OF THE DISALLOWANCE OF RS. 2,16,500/ - MADE BY THE LD. AO DUE TO INTEREST-FREE ADVANCES GIVEN BY THE ASSESSEE TO M/S SHUBH PACKERS, A PARTNERSHIP FIRM IN WHICH THE ASSESSEE IS A PARTNER . 3. BRIEFLY STATED THE FACTS ARE THAT A SEARCH WAS C ONDUCTED ON 12.10.2011 IN THE CASE OF LILA RAM GROUP, KOTA. SUBSEQUENTLY, A NOTI CE U/S 153A OF THE ACT WAS ISSUED ON 15.01.2013 FOR THE ASSESSMENT YEAR 2011-1 2. IN RESPONSE THERETO THE ASSESSEE FILED A RETURN DECLARING TOTAL INCOME OF R S.3,08,010/-. SUBSEQUENTLY, THE ASSESSMENT WAS FRAMED U/S 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961. WHILE FRAMING THE ASSESSMENT, THE AO MADE ADDITION ON ACC OUNT OF OUT OF INTEREST EXPENSES OF RS. 2,16,500/- AND ASSESSED INCOME OF R S. 5,24,510/- AS AGAINST RS. 3,08,010/-. AGAINST THIS, THE ASSESSEE PREFERRED A N APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, PARTLY ALLOWED T HE APPEAL. THEREBY, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE OF RS. 1,79,990/- AND DELETED THE REST OF THE DISALLOWANCE. 4. AGAINST THIS, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 5. GROUND NO. 1(A) TO (C) ARE AGAINST LEGALITY OF T HE ASSESSMENTS FRAMED U/S 153A R.W.S. 143(3) OF THE INCOME TAX ACT, ON GROUND THAT, SINCE NO SEARCH WAS CONDUCTED IN THE CASE THE ASSESSEE, WHO WAS NOT AVA ILABLE AT THE ADDRESS SEARCHED 3 ITA NO. 342/JP/2016. SHRI TRILOK CHAND, KOTA. UPON, NO INCRIMINATING MATERIAL WAS FOUND DURING TH E COURSE OF SEARCH AND THE WITHOUT FIRST MEETING THE OBJECTIONS RAISED BY THE ASSESSEE. 5.1 LD. COUNSEL FOR THE ASSESSEE IN RESPECT OF ALL THESE GROUNDS REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. TH E WRITTEN SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED AS UNDER:- IN THE ASSESSMENT ORDER PASSED UNDER SECTION 153A, READ WITH SECTION 143(3) OF THE INCOME TAX ACT, 1961, THE LD. AO HAS DISALLOWED INTEREST TO THE EXTENT OF RS. 2,16,500/-. THIS DISALLOWANCE HAS BEE N MADE DUE TO INTEREST- FREE ADVANCES GIVEN BY THE ASSESSEE TO M/S SHUBH PA CKERS, A PARTNERSHIP FIRM IN WHICH THE ASSESSEE IS A PARTNER. THE LD. CIT (APPEALS) HAS DELETED THE DISALLOWANCE TO THE EXTENT OF RS. 36,510/- AND HAS CONFIRMED THE REMAINING SUM OF RS. 1,79,990/-. THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE LD. AO, VIDE LETTER, DATED 05.04.2013, AND WERE BRUSHED ASIDE BY THE LD. AO ON AN ERRONEOUS REASONING. SIMILARLY, THE SUBMISSIONS MADE BY THE ASSESSEE BEF ORE THE LD. CIT (A) ON 06.12.2015 WERE REJECTED, BASED ON AN IMPROPER APPR ECIATION OF LAW/ FACTS. A PERUSAL OF THE MATERIAL REFERRED TO ABOVE WILL CL EARLY SHOW THE DISALLOWANCE OF INTEREST WAS NOT CALLED FOR. IT IS, THEREFORE, PRAYED THAT THE DISALLOWANCE OF I NTEREST CONFIRMED TO THE EXTENT OF RS. 1,79,990/- BY THE LD. CIT(A) MAY KIND LY BE DELETED. 5.2 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIV ES SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 4 ITA NO. 342/JP/2016. SHRI TRILOK CHAND, KOTA. 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESEEE, WE ARE OF THE VIEW THA T GROUND RAISED IN THE PRESENT APPEAL ARE DEVOID OF ANY MERIT AS THE ASSESSEE WAS PROVIDED SUFFICIENT OPPORTUNITY, EVEN LAW DOES NOT ENVISAGE THAT NO SEARCH CAN BE CA RRIED OUT IN THE ABSENCE OF THE ASSESSEE. WE THEREFORE, DISMISSED ALL THESE GROUNDS . 6. NOW, WE TAKE UP ADDITIONAL GROUND BY THE LD. COUNSEL FOR THE ASSESSEE. THE ADDITION GROUND IS ON MERIT AGAINST THE CONFIRM ING THE DISALLOWANCE OF INTEREST TO THE EXTENT OF RS. 1,79,990/-. 6.1 LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AUT HORITIES BELOW FAILED TO APPRECIATE THE FACT IN RIGHT PERSPECTIVE. THEREFOR E, HE SUBMITTED THAT THE ADDITION SO SUSTAINED MAY BE DELETED. 6.2 PER CONTRA LD. D/R SUPPORTED THE ORDER OF THE A SSESSING OFFICER. 6.3 WE HAVE HEARD THE RIVAL CONTENTIONS, WE FIND TH AT LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS AS GIVEN FINDING ON FACT IN PARA 3. 2.2 AS UNDER:- 3.2.2 I HAVE DULY CONSIDERED ASSESSEES SUBMISSIO N AND CAREFULLY GONE THROUGH ASSESSMENT ORDER PASSED BY THE AO. LD. AR O F THE ASSESSEE HAS NOT CONTROVERTED THE FINDINGS GIVEN BY THE AO THAT INTE REST FREE ADVANCES TO M/S SUBH PACKERS WERE GIVEN OUT OF INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE. HOWEVER, ON PERUSAL OF ASSESSEES ALTERN ATIVE PEAL/SUBMISSION, IT IS ALSO SEEN THAT ASSESSEE HAS GOT INTEREST FREE FUND OF RS. 3,30,000/= IN 2 ACCOUNTS (ASHOK TEJWANI & SHEELA DEVI MUKHIJA), ACC ORDINGLY, ASSESSEE IS ENTITLED FOR ALLOWANCE OF PROPORTIONATE INTERST TO BE CALCULATED @ 12% PA ON THIS WHICH WILL TRANSLATE INTO RS. 36,510/=. IN VI EW OF THESE FACTS AND ALSO RESPECTFULLY FOLLOWING THE DECISION OF HONBLE GUJA RAT HIGH COURT IN CASE OF KAJAL EXPORT (SUPRA), AO IS DIRECTED TO ALLOW INTER EST OF RS. 36,510/=. 5 ITA NO. 342/JP/2016. SHRI TRILOK CHAND, KOTA. ACCORDINGLY, INTEREST DISALLOWANCE OF RS. 179,990/= U/S 40A(2)(B) OF THE ACT IS HEREBY CONFIRMED. ASSESSEES APPEAL IN GR NO 2 IS PARTLY ALLOWED. THE CONTENTION, OF THE ASSESSEE IS THAT THE ADVANCE S WERE MADE OUT OF BUSINESS EXPEDIENCY. WE ARE OF THE VIEW THAT MERELY STATING THAT ADVANCES WERE GIVEN FOR BUSINESS EXPEDIENCY WOULD NOT MAKE THE EXPENSES ALL OWABLE. THE ASSESSEE IS REQUIRED TO DEMONSTRATE THE NEXUS BETWEEN THE BUSIN ESS AND ADVANCES SO GIVEN. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE IN TO THE FINDING OF THE LD. CIT(A) SAME IS HEREBY AFFIRMED. THUS, ADDITIONAL GR OUND RAISED IN THIS APPEAL IS REJECTED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 342/JP/2016 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 23TH DAY OF OCTOBER 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 23/10/2017. POOJA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI TRILOK CHAND, KOTA, RAJASTH AN. 2. THE RESPONDENT ACIT, CIRCLE-3, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 342/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 6 ITA NO. 342/JP/2016. SHRI TRILOK CHAND, KOTA.