M/s. Bramhacorp Limited, Pune V. Deputy Commissioner of Income-tax,

ITA 410/PUN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1155 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 31-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 04-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAVE
• Keywords: Depreciation; Proportionate interest
• Section: 43B

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.410/PN/2014 '% % / ASSESSMENT YEAR : 2010-11 M/S. BRAMHACORP. LTD., (EARLIER BRAMHACORP HOTELS & RESORTS LTD., AMALGAMATING COMPANY) C/O. THE RESIDENCY CLUB, 3, QUEENS GARDEN ROAD, CAMP ROAD, PUNE 411 001 PAN NO.AAACB7054L . / APPELLANT V/S DCIT, CENTRAL CIRCLE-1(1), PUNE . / RESPONDENT / ASSESSEE BY : SHRI KISHOR PHADKE / DEPARTMENT BY : SHRI HITENDRA NINAVE / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER DATED 31-10-2013 OF THE CIT(A)-I, PUNE RELATING TO ASSE SSMENT YEAR 2010-11. 2. GROUND OF APPEAL NO.1 BY THE ASSESSEE READS AS UNDER : 1. THE LD.CIT(A)-I, PUNE ERRED IN LAW AND ON FACTS IN CONFIRMING DCIT-CIRCLE-1(1) DECISION OF DISALLOWING CLAIM OF DED UCTION U/S.36(1)(VA), OF THE I.T.ACT, 1961, AMOUNTING TO RS. 1,20,765/-; ON / DATE OF HEARING :03.09.2015 / DATE OF PRONOUNCEMENT:04.09.2015 2 ITA NO.410/PN/2014 ACCOUNT OF LATE PAYMENT OF EMPLOYEES CONTRIBUTION T OWARDS ESIC THOUGH THE SAME WAS PAID BEFORE THE DUE DATE OF THE RETURN O F INCOME. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE CONTRIBUTION COLLE CTED FROM THE EMPLOYEES ON ACCOUNT OF ESIC WERE NOT REMITTED TO THE ESIC FUND ON OR BEFORE THE DUE DATE AS PRESCRIBED U/S.36(1)(VA) OF TH E I.T. ACT, THE DETAILS OF SUCH LATE PAYMENTS ARE AS UNDER : MONTH EMPLOYEES SHARE EMPLOYER SHARE TOTAL AMOUNT COLLECTED TOTAL AMOUNT PAID DATE OF PAYMENT DUE DATE APR-09 24,743 66,961 91,704 91,704 27-MAY-09 21-MAY-09 JUN-09 24,444 66,179 90,623 90,623 23-JUL-09 21-JUL-09 JUL-09 24,126 65,287 89,413 89,413 24-AUG-09 21-AUG-09 AUG-09 24,000 64,981 88,981 88,981 23-SEP-09 21-SEP-09 SEP - 09 23,452 63,492 86,944 86,944 23 - 0CT - 09 21 - 0CT - 09 TOTAL 120,765 326,900 447,665 447,665 4. ACCORDING TO THE AO IT IS MANDATORY FOR THE EMPLOYER TO MAKE PAYMENTS OF CONTRIBUTION RECEIVED FROM EMPLOYEES TOWARDS ESIC FUND WITHIN THE DUE DATE FOR DEDUCTION U/S.36(1)(VA) OF THE ACT. R EJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND DISTIN GUISHING THE VARIOUS DECISIONS CITED BEFORE HIM THE AO MADE ADDITION OF RS.1,20,765/- U/S. 36(1)(VA) TO THE TOTAL INCOME OF THE ASSESS EE HOLDING THAT PROVISIONS SECTION 43B WILL NOT COME INTO PICTURE. 5. IN APPEAL THE LD.CIT(A) DISTINGUISHING THE VARIOUS DECISIO NS CITED BEFORE HIM UPHELD THE ACTION OF THE AO. AGGRIEVED W ITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED T HE VARIOUS DECISIONS CITED BEFORE US. IT IS AN ADMITTED FACT THAT THE ASSESSEE IN 3 ITA NO.410/PN/2014 THE INSTANT CASE HAS DEPOSITED THE EMPLOYEES CONTRIBUTIO N TO ESIC AFTER THE DUE DATES AS PER PROVISIONS OF THE ESIC ACT, THE DETAILS OF WHICH ARE ALREADY GIVEN AT PARA 3 OF THIS ORDER. HOWEVER , IT IS VERY CLEAR FROM THE ABOVE CHART THAT THE EMPLOYEES CONTRIBUT ION TO ESIC FUND WERE MADE MUCH PRIOR TO THE DUE DATE OF FILING OF THE RETURN OF INCOME. WE FIND THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GHATGE PATIL TRANSPORT LTD. REPORTED IN 368 ITR 749 WH EREIN IT HAS BEEN HELD THAT THE DECISION OF THE SUPREME COURT IN ALOM EXTRUSIONS LTD. APPLIES TO EMPLOYEES CONTRIBUTION AS WELL AS EMPLOYER S CONTRIBUTION AND THEREFORE ARE COVERED UNDER THE AMEND MENT TO SECTION 43B OF THE I.T. ACT, 1961. SINCE THE ASSESSEE IN THE INSTANT CASE HAS ADMITTEDLY DEPOSITED THE CONTRIBUTIONS BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME, THEREFORE, IN VIEW OF THE DEC ISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GHATGE PAT IL TRANSPORT LTD. (SUPRA) NO DISALLOWANCE IS CALLED FOR U/S.36(1)(VA) R.W.S. 2(24 )(X). THE ORDER OF THE CIT(A) IS ACCORDINGLY SET ASIDE AND THE G ROUND RAISED BY THE ASSESSEE IS ALLOWED. 7. GROUND OF APPEAL NO.2 BY THE ASSESSEE READS AS UNDER : 2. THE LD.CIT(A)-I, PUNE ERRED IN LAW AND ON FACTS IN CONFIRMING DCIT-CIRCLE-1(1) DECISION OF DISALLOWING CLAIM PROPOR TIONATE INTEREST AMOUNTING TO RS.14,29,048/- ON THE BELIEF THAT INTER EST BEARING FUNDS WERE USED FOR EXTENDING INTEREST FREE LOANS AND ADVANC ES FOR OTHER THAN BUSINESS PURPOSE. 8. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A DOMESTIC COMPANY ENGAGED IN THE BUSINESS OF HOTEL AND HOSPITALITY INDUSTRY. IT FILED ITS RETURN OF INCOME ON 27-09-2010 DECLARING TOTAL INCOME OF RS.1,37,01,141/-. DURING THE COURSE OF ASSESSMENT PROCEED INGS THE AO OBSERVED THAT ASSESSEE IS HAVING HUGE INTEREST BEAR ING FUNDS AND 4 ITA NO.410/PN/2014 PAYING HEAVY INTEREST ON THE SAME. AT THE SAME TIME, THE ASSESSEE HAS GIVEN INTEREST FREE LOANS AND ADVANCES WITHOUT ANY B USINESS PURPOSES TO 4 PERSONS AMOUNTING TO RS.2,02,89,180/-, THE DETAILS OF WHICH ARE AS UNDER : A) S.K. AGARWAL RS.57,89,180/- B) INVESTMENT:RITZ FARM SHELTERS RS.25,00,000/- C) RAJESH PATEL RS.1,00,00,000/- D) VISHWA BHARATI RS.20,00,000/- -------------------- TOTAL RS.2,02,89,180/- -------------------- (IN THE ASSESSMENT ORDER THE AMOUNT OF RS.57,89,180/- WRO NGLY TAKEN BY THE AO AS RS.25,00,000/- IN CASE OF MR. S.K. AGARWAL. SIM ILARLY, THE FIGURE OF RS.25,00,000/- IN CASE OF RITZ FARM SHELTERS WRONGLY TAKEN AS RS.57,89,180/-) 9. HE THEREFORE ASKED THE ASSESSEE TO EXPLAIN AS TO WH Y PROPORTIONATE INTEREST SHOULD NOT BE DISALLOWED. IT WAS E XPLAINED BY THE ASSESSEE THAT IT HAS NOT EXTENDED ANY BUSINESS FUN DS FOR NON- BUSINESS PURPOSES. IT WAS EXPLAINED THAT THE COMPANY H AS ADEQUATE OWN FUNDS. THE TOTAL NON-INTEREST BEARING OWN FUNDS ARE TO THE TUNE OF RS.87.16 CRORES. RELYING ON VARIOUS DECISIONS IT WAS SUB MITTED THAT NO DISALLOWANCE IS CALLED FOR. THE ASSESSEE FURTHER S UBMITTED THAT ALL THE LOANS ARE STRICTLY MONITORED BY THE LENDING B ANK AND THE LOANS CANNOT BE DIVERTED FOR ANY NON-BUSINESS PURPOSES . IT WAS FURTHER SUBMITTED THAT THERE ARE NO NON-BUSINESS INVEST MENTS EXISTING AND THERE IS NO DIRECT LINK BETWEEN THE BORROWED FUNDS AGAINST NON-BUSINESS INVESTMENTS. IT WAS FURTHER ARGUED THAT EVEN IF THE ADVANCES ARE IDENTIFIED NOTIONALLY FOR NON-BUSINESS PUR POSES THEN THE DISALLOWANCE COMES TO RS.14,29,048/- ONLY. HOWEVER, IN VIEW OF FACTS NARRATED ABOVE, NO DISALLOWANCE IS CALLED FOR. 5 ITA NO.410/PN/2014 10. HOWEVER, THE AO WAS NOT SATISFIED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE. ACCORDING TO HIM THE ASSESS EE DOES NOT HAVE SUFFICIENT INTEREST FREE FUNDS TO MEET THE INTEREST FR EE LOANS AND ADVANCES. FURTHER, THERE IS ALSO NO BUSINESS EXPEDIENCY FOR EXTENDING SUCH LOANS. DISTINGUISHING THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF RELIANCE UTILITIES AND PO WER LTD. REPORTED IN 313 ITR 340 AND HOLDING THAT THE ASSESSEE HAS NOT ADVANCED THE FUNDS TO SISTER CONCERNS AND THE ASSESSE E DOES NOT HAVE SUFFICIENT INTEREST FREE FUNDS TO MEET THE INTEREST FREE LO ANS AND ADVANCES GIVEN TO THE 4 PARTIES, THE AO DISALLOWED AN AMO UNT OF RS. 14,29,048/- TO THE TOTAL INCOME OF THE ASSESSEE. 11. BEFORE CIT(A) THE ASSESSEE MORE OR LESS REITERATED TH E SAME SUBMISSIONS AS MADE BEFORE THE AO. IT WAS SUBMITTED TH AT THE FUNDS WERE UTILIZED FROM THE COMPANYS OWN FUND. REFERRING TO TH E FINANCIAL POSITION OF THE COMPANY THE ASSSESSEE FURNISHED THE FOLLOWING DETAILS : PARTICULARS A.Y. 10 - 11 A.Y. 09 - 10 PAT 2.04 15.73 ADD DEPRECIATION 8.03 7.41 CASH PROFIT 10.07 23.14 12. IT WAS ARGUED THAT AS ON 31-03-2010 NON-INTEREST BEARING FU NDS WERE FAR IN EXCESS THAN THE INTEREST FREE LOANS AND ADVA NCES AND HENCE DISALLOWANCE OF INTEREST IS NOT CALLED FOR. IT WAS AR GUED THAT ALL INTEREST BEARING LOANS FROM THE SISTER CONCERNS HAVE BEE N USED FOR NORMAL WORKING CAPITAL PURPOSE ONLY AND DURING THE CURRE NT YEAR THERE IS REDUCTION IN SECURED AND UNSECURED LOAN OF ABO UT RS.3.05 CRORES. RELYING ON VARIOUS DECISIONS IT WAS SUBMITTED THA T NO DISALLOWANCE IS CALLED FOR. 6 ITA NO.410/PN/2014 13. HOWEVER, THE LD.CIT(A) WAS ALSO NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD THE ACTION OF THE AO FOR WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 14. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AMOUNT OF RS.57,89,180/- GIVEN TO SHRI S.K. AGARWAL IS CONTINUING FROM 31-03-2008. REFERRING TO PAGE 46 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENCH TO THE LEDGER ACCOUNT OF SHRI S.K. AGARWAL FROM 01-04-2007 TO 31-03-2008. REFERRING TO PAGE 46A OF THE PAPER BOOK HE SUBMITTED THAT THE OPENING BALANCE AND CLOSING BALANCE AS ON 01-04-2008 TO 31-03-2009 IS RS.57,89,180/-. HE SUBMITTE D THAT THE SAME FIGURE IS CONTINUING FOR THE CURRENT ASSESSMENT YEA R. REFERRING TO PAGE 47 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENCH TO TH E AMOUNT GIVEN TO RITZ FARM SHARES AMOUNTING TO RS.25 LAK HS. REFERRING TO PAGE 47A OF THE PAPER BOOK HE SUBMITTED TH AT AS ON 01-04-2008 TO 31-03-2009 THE SAME FIGURE OF RS.25 LAKHS IS CONTINUING. REFERRING TO PAGE 48 OF THE PAPER BOOK THE L D. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO TH E LEDGER ACCOUNT OF SHRI RAJESH PATEL ACCORDING TO WHICH AN AMOUNT OF RS.1 CRORE GIVEN ON 24-07-2007 IS CONTINUING FOR THE PERIOD FROM 01-04-200 8 TO 31-03-2009. HE SUBMITTED THAT THE SAME FIGURE IS CONTINU ING FOR THE CURRENT ASSESSMENT YEAR. REFERRING TO PAGE 49 OF THE P APER BOOK HE SUBMITTED THAT THE AMOUNT OF RS.20 LAKHS GIVEN TO VISHWA BHARTI ACADEMY ON 18-04-2007 IS CONTINUING IN A.Y. 2009-10 WITHOU T ANY CHANGE. 15. REFERRING TO THE ASSESSMENT ORDERS FOR A.YRS. 2007-08 TO 2009- 10 PASSED U/S.143(3) HE SUBMITTED THAT NO DISALLOWANCE OF ANY SUCH INTEREST ON THIS ACCOUNT HAS BEEN MADE BY THE AO ON A CCOUNT OF 7 ITA NO.410/PN/2014 ADVANCES GIVEN TO THE ABOVE 4 PERSONS. REFERRING TO T HE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS . SRIDEV ENTERPRISES REPORTED IN 192 ITR 165 HE SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT CONSISTENCY AND DEFINITENESS OF APPROACH BY THE REVENUE IS NECESSARY IN T HE MATTER OF RECOGNIZING THE NATURE OF AN ACCOUNT MAINTAINED BY THE A SSESSEE SO THAT THE BASIS OF CONCLUDED ASSESSMENT COULD NOT BE IGNO RED WITHOUT ACTUALLY REOPENING THE ASSESSMENT. IT WAS ACCORDINGLY H ELD THAT WHEN IN THE PAST YEARS THE CLAIM OF THE ASSESSEE FOR DEDUCTION OF INTEREST PAID WAS ALLOWED ON THE ASSUMPTION THAT THOSE ADVANCES W ERE NOT OUT OF BORROWED FUNDS IT WILL NOT BE EQUITABLE TO PERMIT THE REV ENUE TO TAKE A DIFFERENT STAND NOW IN RESPECT OF THE AMOUNTS WHIC H WERE THE SUBJECT MATTER OF PREVIOUS YEARS ASSESSMENT. HE ACCO RDINGLY SUBMITTED THAT IN VIEW OF THE DECISION OF THE HONBLE KARN ATAKA HIGH COURT NO DISALLOWANCE IS CALLED FOR SINCE ALL THE LOANS AND AD VANCES ARE BROUGHT FORWARD FIGURES FROM THE EARLIER YEARS AND NO DISALLOWANCE WAS MADE BY THE AO IN THE ASSESSMENTS COM PLETED U/S.143(3). 16. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 17. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. FROM THE PAPER BOOK FILED BY T HE ASSESSEE WE FIND FROM THE LEDGER ACCOUNTS OF THE 4 PARTIES THAT TH E ASSESSEE HAS ADVANCED AN AMOUNT OF RS.57,89,180/- TO SHRI S.K. AGAR WAL DURING A.Y. 2008-09 WHICH IS CONTINUING TILL A.Y. 2010-11. SIMILA RLY, 8 ITA NO.410/PN/2014 THE ADVANCE OF RS.25 LAKHS GIVEN TO RITZ FARM SHARES ON 16-08-2007 IS CONTINUING TILL A.Y. 2010-11. THE ADVANCE OF RS.1 CRORE G IVEN TO SHRI RAJESH PATEL DURING A.Y. 2008-09 IS CONTINUING TILL A.Y. 2 010-11. THE LOAN OF RS.20 LAKHS GIVEN TO VISHWA BHARTI ACADEMY ON 18-04- 2007 IS CONTINUING DURING A.Y. 2010-11. THERE IS NO FURTHE R ADDITION OR SUBTRACTION IN RESPECT OF THE ABOVE 4 PARTIES. FROM THE COPY OF THE ASSESSMENT ORDERS PASSED U/S.143(3) FOR A.Y. 2008-09 TILL 2 010-11 IN CASE OF THE ASSESSEE REVEAL THAT NO SUCH DISALLOWANCE U/ S.36(1)(III) HAS BEEN MADE BY THE AO. THEREFORE, WE FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT IN VIEW OF THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF SRIDEV ENTER PRISES (SUPRA) NO DISALLOWANCE IS CALLED FOR. 18. IN THE CASE OF SRIDEV ENTERPRISES (SUPRA) THE ACCOU NTING YEAR OF THE ASSESSEE FIRM ENDED ON 31-03-1978. DURING THIS ACCO UNTING YEAR, THE ASSESSEE HAD ADVANCED CERTAIN SUMS TO A FIRM, N. TH E BALANCE OUTSTANDING FROM THE FIRM, N, WAS RS. 2,55,750/- AS ON MARCH 31, 1978. NO INTEREST WAS CHARGED AGAINST THIS ADVANCE. THE ASSESSEE HAD BORROWED FROM THIRD PARTIES AND HAD BEEN PAYING INTE REST THEREON. THIS INTEREST WAS CLAIMED AS A DEDUCTION OUT OF T HE ASSESSEE'S INCOME. SOME OF THE PARTNERS OF THE ASSESSEE AND THE FIRM, N, WERE COMMON AND THEY HAD BUSINESS LINKS INTER SE. IN T HESE CIRCUMSTANCES, THE ASSESSING AUTHORITY DISALLOWED THE DEDU CTION CLAIMED BY THE ASSESSEE TO THE EXTENT OF INTEREST-FREE A DVANCES STANDING IN THE NAME OF N ON THE GROUND THAT THE AMOUN TS BORROWED BY THE ASSESSEE WERE NOT UTILISED BY THE ASSESSEE FOR IT S OWN BUSINESS BUT WERE DIVERTED AS ADVANCE TO N FREE OF INTEREST. HOWE VER, TO THE EXTENT OF ADVANCE SHOWN AS EXISTING AGAINST N ON THE FIRS T DAY OF THE ACCOUNTING YEAR, WHICH WAS THE NET BALANCE OF ADVANCES M ADE DURING 9 ITA NO.410/PN/2014 THE PREVIOUS ACCOUNTING YEAR, THE SAME WAS EXCLUDED FOR THE PURPOSE OF COMPUTING DISALLOWANCE OF DEDUCTION. THE TRIBUNAL HELD TH AT SINCE THERE WERE NO DISALLOWANCES IN THE PAST YEARS WHEN MONE YS HAD BEEN ADVANCED TO N, THE OPENING BALANCES COULD NOT BE CONSIDE RED IN THIS YEAR. IN RESPECT OF ADVANCES MADE DURING THE ACCOUNTING YEAR, THE MATTER HAD TO BE REMITTED TO FIND OUT WHETHER THEY CAM E OUT OF BORROWED FUNDS OR NOT AND IF IT WAS SHOWN TO BE OUT OF FUNDS NOT BORROWED, THEN NO DISALLOWANCE COULD BE MADE. ON A REFEREN CE, THE REVENUE CONTENDED THAT THE REMAND SHOULD COMPRISE THE QUESTION PERTAINING TO THE OPENING BALANCE ADVANCED TO N. THE HON BLE HIGH COURT AT PAGE 168 HELD AS UNDER : WE ARE IN AGREEMENT WITH THE VIEW EXPRESSED BY THE APPELLATE TRIBUNAL. THE STATUS OF THE AMOUNT OUTSTANDING FROM NALANDA ON T HE FIRST DAY OF THE ACCOUNTING YEAR IS THE AMOUNT THAT STOOD OUTSTA NDING ON THE LAST DAY OF THE PREVIOUS ACCOUNTING YEAR AND, THEREFORE, ITS NATURE AND STATUS CANNOT BE DIFFERENT ON THE FIRST DAY OF THE CURRENT ACCOUNTING YEAR FROM ITS NATURE AND STATUS AS ON THE LAST DAY OF THE PREVIOUS ACCOUNTING YEAR. REGARDING THE PAST YEARS, THE ASSESSEE'S CLAIMS FOR DEDUCTI ON WERE ALLOWED IN RESPECT OF THE SUMS ADVANCED DURING THOSE YE ARS; THIS COULD BE ONLY ON THE ASSUMPTION THAT THOSE ADVANCES WERE NOT OUT OF BORROWED FUNDS OF THE ASSESSEE. THIS FINDING DURING THE PREVIOUS YE ARS IS THE VERY BASIS OF THE DEDUCTIONS PERMITTED DURING THE PAST YEARS, WHETHER A SPECIFIC FINDING WAS RECORDED OR NOT. A DEPARTURE FRO M THAT FINDING IN RESPECT OF THE SAID AMOUNTS ADVANCED DURING THE PREVIO US YEAR WOULD RESULT IN A CONTRADICTORY FINDING; IT WILL NOT BE EQ UITABLE TO PERMIT THE REVENUE TO TAKE A DIFFERENT STAND NOW IN RESPECT OF T HE AMOUNTS WHICH WERE THE SUBJECT-MATTER OF PREVIOUS YEARS' ASSESSMENTS; CON SISTENCY AND DEFINITENESS OF APPROACH BY THE REVENUE IS NECESSARY IN THE MATTER OF RECOGNISING THE NATURE OF AN ACCOUNT MAINTAINED BY T HE ASSESSEE SO THAT THE BASIS OF A CONCLUDED ASSESSMENT WOULD NOT BE IGNORED WITHOUT ACTUALLY REOPENING THE ASSESSMENT. THE PRINCIPLE IS SIMIL AR TO THE CASES WHERE IT HAS BEEN HELD THAT A DEBT WHICH HAD BEEN TR EATED BY THE REVENUE AS A GOOD DEBT IN A PARTICULAR YEAR CANNOT SU BSEQUENTLY BE HELD BY IT TO HAVE BECOME BAD PRIOR TO THAT YEAR. 19. SINCE IN THE INSTANT CASE IT IS AN ADMITTED FACT THAT N O DISALLOWANCE WAS MADE BY THE AO ON ACCOUNT OF SUCH INTER EST FREE ADVANCE TO THE ABOVE 4 PARTIES, THEREFORE, IT WILL NOT BE E QUITABLE ON THE PART OF THE REVENUE TO TAKE A DIFFERENT STAND NOW IN RESPECT OF THE AMOUNTS WHICH WERE THE SUBJECT MATTER OF PREVIOUS YEAR S 10 ITA NO.410/PN/2014 ASSESSMENT. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO DELETE THE DISALLOWANCE MADE. GROUND OF A PPEAL NO.2 IS ACCORDINGLY ALLOWED. 20. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04-09-2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) ' / JUDICIAL MEMBER / ACCOUNTANT MEMBER IQ.KS PUNE ; # DATED : 04 TH SEPTEMBER, 2015. LRH'K ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ( ) S / THE CIT(A)-I, PUNE 4. ( S / THE CIT- I , PUNE 5. 6. + ., ., IQ.KS / DR, ITAT, B PUNE; / GUARD FILE. / BY ORDER , + + //TRUE COPY// + //TRUE COPY// 2 . / SR. PRIVATE SECRETARY ., IQ.KS / ITAT, PUNE