Manish Murlidhar Sabade, Pune V. Deputy Commissioner of Income-tax, Circle - 3, Pune

ITA 412/PUN/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0953 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 12-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: C V DESHPANDE
• Keywords: Commercial expediency

Judgement Text

आयकर अपीलीय अिधकरण “ए” Ɋायपीठ पुणे मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपीलसं. / ITA No.412/PUN/2019 िनधाᭅरणवषᭅ / Assessment Year : 2015-16 Manish Murlidhar Sabade, 101, Chintamani Pride S.No.12/7/8, Kothrud, Pune – 411038. PAN: AIIPS 0527 N Vs . The DCIT, Circle-3, Pune. Appellant/ Assessee Respondent /Revenue Assessee by Shri C V Deshpande – AR Revenue by Shri S P Walimbe – DR Date of hearing 11/08/2022 Date of pronouncement 30/08/2022 आदेश/ ORDER Per S.S.Godara, JM: This assessee’s appeal for Assessment Year 2015-16 is directed against the Commissioner of Income Tax(Appeals), Pune- 3’s order dated 15.01.2019 passed in case no.PN/CIT (A)- 3/cir.3,Pn/347/2017-18, in proceedings u/s.143(3) of the Income Tax Act, 1961 [in short “the Act”]. Heard both the parties. Case file perused. 2. The assessee’s first and foremost substantive ground challenges correctness of both the lower authorities action disallowing / adding suppressed sales of Rs.216125/- in the course of assessment as upheld in the CIT(A)’s order. A perusal of the ITA No.412/PUN/2019 for A.Y. 2015-16 Manish M. Sabade (A) 2 Assessing Officer’s detailed discussion in para 4 page 2 of his assessment order dated 22.12.2017 indicates that he had duly put the assessee on notice on 18.12.2017 for filing the necessary re- conciliation which was never done till the last date. The very factual position continued in the CIT(A)’s order as well. Faced with this situation, we find no merit in the assessee’s instant former substantive grievance. Rejected accordingly. 3. Next comes section 36(1)(iii) interest disallowance of Rs.17574922/- made in both the lower authorities after holding the assessee to have diverted his interest bearing funds for non-business purposes. There is hardly any dispute between the parties that the assessee’s capital account in the relevant previous year was admittedly in negative figures indicating utilisation of interest bearing funds only. 4. Learned counsel reiterated the assessee’s stand adopted throughout that his diversion of interest bearing funds was for business purposes involving commercial expediency. He also quotes hon’ble apex court’s landmark decision in S A Builders 288 ITR 1 (SC) that such a diversion of interest bearing funds involving commercial expediency indeed deserves business deduction under the provisions of the Act. All these arguments fail to evoke our concurrence as it has come on record from a perusal of assessment ITA No.412/PUN/2019 for A.Y. 2015-16 Manish M. Sabade (A) 3 discussion in para 5.2 page 4 that the assessee had not been able to prove the foregoing commercial expediency regarding diversion of interest bearing funds amounting to Rs.26,41,80,892/- involving ten related parties. We thus conclude that both the learned lower authorities have rightly disallowed the impugned interest amounting to Rs.175,74,922/- in these peculiar facts and circumstances. The same stands upheld. No other ground or argument has been pressed before us. 5. This assessee’s appeal is dismissed. Order pronounced in the open Court on 30 th August, 2022. Sd/- Sd/- (DR.DIPAK P.RIPOTE) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 30 th Aug, 2022/ SGR* आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “ए” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.