The ACIT, Circle-2(1)(2), Ahmedabad V. M/s. Megha Futures Pvt. Ltd., Ahmedabad

ITA 3564/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8479 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 18-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE, SHRI N. K. BILLAIYA , ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER ITA NO. 3564/AHD/2015 (ASSESSMENT YEAR : 2012-13) ASST. COMMISSIONER OF INCOME TAX, CIR. 2(1)(2), ABAD, 1 ST FLOOR, NAVJIVAN TRUST BUILDING, AHMEDABAD 380009 APPELLANT VS. M/S. MEGHA FUTURES PVT. LTD., MEGHA HOUSE, NR. GRUH FINANCE, OPP. KOTAK BANK, MITHAKALI LAW GARDEN ROAD, ELLIS BRIDGE, AHMEDABAD - 380009 RESPONDENT PAN: AADCM5460C / BY REVENUE : SHRI MUDIT NAGPAL, SR. D.R. / BY ASSESSEE : NONE /DATE OF HEARING : 11.04.2018 /DATE OF PRONOUNCEMENT : 19.04.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2012-13 A RISES FROM THE CIT(A)-7, AHMEDABADS ORDER DATED 08.10.2015, IN CA SE NO. CIT(A)- 7/404/15-16, IN PROCEEDINGS U/S. 143(3) OF THE INCO ME TAX ACT, 1961; IN SHORT THE ACT. ITA NO. 3564/AHD/15 [ ACIT VS. M/S. MEGHA FUTURES P VT. LTD.] A.Y. 2012-13 - 2 - HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE REVENUES FIRST GRIEVANCE IN THE INSTANT APP EAL IS THAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING SE CTION 36(1)(III) INTEREST DISALLOWANCE OF RS.24,93,531/- AS MADE BY THE ASSES SING OFFICER IN ASSESSMENT ORDER DATED 27.01.2015 AFTER HOLDING THE ASSESSEE TO HAVE DIVERTED ITS INTEREST BEARING FUNDS FOR NON BUSINESS PURPOSE S. WE INVITED LEARNED DEPARTMENTAL REPRESENTATIVES ATTENTION TO THE IMPU GNED DISALLOWANCE FIGURE OF RS.24,93,531/- CALCULATED @ 12% QUA ADVANCES IN QUESTION OF RS.2.64CRORES TO M/S. M.R. COATING PVT. LTD. THERE IS NO DISPUTE THAT THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE ON THE ONE HAND OBTAINED INTEREST BEARING FUNDS FROM BANK AND FINANCIAL INST ITUTIONS WHEREAS ON THE OTHER HAND IT HAD MADE THE IMPUGNED ADVANCES. WE N OTICE FROM THE CASE RECORDS THAT THE ASSESSEE HAD CAPITAL/NON INTEREST BEARING FUNDS OF RS.2CRORES ALONGWITH P&L ACCOUNT BALANCE OF RS.4.41CRORES; TOT ALING TO RS.6,41,09,419/- AS AGAINST THE ADVANCES IN QUESTION OF RS.2.64 CROR ES. HONBLE JURISDICTIONAL HIGH COURT IN ITS CASE LAW CIT VS. RAGHUVIR SYNTHET ICS LIMITED 2013 354 ITR 222 (GUJ) HOLDS IN SUCH A CASE THAT AVAILABILITY OF NON INTEREST BEARING FUNDS LEADS TO A PRESUMPTION THAT AN ASSESSEE HAS MADE IT S ADVANCES OUT OF THE SAID FUNDS ONLY. THE CIT(A) HAS ALREADY APPLIED THIS LE GAL PREPOSITION IN HIS FINDINGS UNDER CHALLENGE. WE THUS REJECT REVENUES FORMER SUBSTANTIVE GROUND SEEKING TO REVIVE IMPUGNED SECTION 36(1)(III ) INTEREST DISALLOWANCE. 3. THE REVENUES SECOND GROUND PLEADS TO RESTORE SE CTION 14A R.W. RULE 8D DISALLOWANCE OF RS.6,78,877/- MADE IN THE COURSE OF ASSESSMENT PROCEEDINGS. WE FIND THAT THERE IS NO EXEMPT INCOM E DERIVED IN THE IMPUGNED ASSESSMENT YEAR. HONBLE JURISDICTIONAL HIGH COURT IN CASE OF COORTECH ENERGY PVT. LTD. 372 ITR 97 (GUJ) HAS ALREADY REJEC TED THE INSTANT STATUTORY ITA NO. 3564/AHD/15 [ ACIT VS. M/S. MEGHA FUTURES P VT. LTD.] A.Y. 2012-13 - 3 - PROVISIONS APPLICABILITY IN ABSENCE OF ANY EXEMPT INCOME. THE CIT(A) HAS FOLLOWED ABOVESTATED CASE LAW ONLY IN DELETING THE IMPUGNED DISALLOWANCE. WE THEREFORE SEE NO REASON TO ACCEPT THE REVENUES INSTANT LATTER SUBSTANTIVE GROUND AS WELL. 4. THIS REVENUES APPEAL IS DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 19 TH DAY OF APRIL, 2018.] SD/- SD/- ( N. K. BILLAIYA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIA L MEMBER AHMEDABAD: DATED 19/04/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . / / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /