Appeal details
Counselvise Citation
[2010] 136 COUNSELVISE.COM (IT) 8026 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 4 month(s) 3 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-03-2010
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
11-03-2010
Assessment Year
2005-2006
Appeal Filed On
07-11-2008
Judgement Text
1 IN THE INCOME TAX APPELATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH AND SHRI V.K. GUPTA, AM ITA NO. 459/IND/08 A.YS. 2005-06 M/S HANUMAN KELA GROUP BURHANPUR APPELLANT PAN ADFH 7346 F VS INCOMETAX OFFICER BURHANPUR RESPONDENT ITA NO.460/IND/08 A.Y. 2005-06 M/S VISHNU KELA GROUP BURHANPUR APPELLANT PAN AABFV1589N VS INCOMETAX OFFICER BURHANPUR APPELLANT APPELLANTS BY SHRI R. TARWALA, CA RESPONDENT BY SMT. APARNA KARAN, SR. DR O R D E R PER JOGINDER SINGH, JM BOTH THESE APPEALS ARE BY DIFFERENT ASSESSEES AGAIN ST THE RESPECTIVE ORDER OF THE LEARNED LD. FIRST APPELLATE AUTHORITY DATED 19.8.2008 AND 20.8.2008 FOR THE ASSESSMENT YEAR 2005-06 RESPECTIVELY ALMOST ON IDEN TICAL GROUNDS. FIRST WE 2 SHALL TAKE UP APPEAL IN ITA NO. 459/IND/2008 (A.Y. 2005-06) WHEREIN FIRST GROUND RAISED IS THAT THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACTS AND REASONS FOR NOT CHARGING INTEREST ON ADVANCES MADE TO THREE PARTIES AND THE AO HAS FAILED TO ESTABLISH THE NEXUS BETWEEN THE INTER EST BEARING FUNDS AND THE INTEREST FREE ADVANCES/LOANS WITHOUT APPRECIATING T HE TRUE FACTS. 2. DURING HEARING WE HAVE HEARD THE LEARNED RESPECT IVE COUNSELS AND CONSIDERED THE ARGUMENTS ADVANCED BY THEM. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE FUNDS TAKEN FROM THE BA NK WERE USED FOR BUSINESS PURPOSES, NO DISALLOWANCE WAS MADE IN EARLIER YEARS AND THERE WERE NO BORROWED FUNDS IN THOSE YEARS. ON A QUERY FROM THE BENCH IT WAS STATED AT BAR BY THE LD. COUNSEL FOR THE ASSESSEE SHRI R. TARWALA THAT NO BORROWED FUNDS WERE DIVERTED FOR NON-BUSINESS PURPOSES IN EARLIER YEARS . OUR ATTENTION WAS INVITED TO PAGES 13 AND 14 OF THE PAPER BOOK. MR. TARWALA CHA LLENGED THE FINDINGS OF THE LEARNED AO THAT ADVANCES WERE GIVEN BY THE ASSESSEE WHICH WAS CLAIMED TO BE FACTUALLY INCORRECT. ON THE OTHER HAND, THE LEARNED SR. DR MRS. APARNA KARAN, DEFENDED THE IMPUGNED ORDER BY CONTENDING THAT THER E IS DIVERSION OF FUNDS FOR NON-BUSINESS PURPOSES. ON PERUSAL OF RECORD AND AFTER HEARING THE RIVAL S UBMISSIONS, WE FIND THAT THERE IS FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE BECAUSE FIRSTLY HOW THE AO CAN GUIDE AS TO HOW THE ASSESSEE IS TO D O HIS BUSINESS AND SECONDLY NO EXERCISE HAS BEEN MADE BY THE AO TO KNOW THE COR RECT POSITION AS IS EVIDENT FROM PAGES 13 AND 14 OF THE PAPER BOOK AND ASSERTIO N OF THE LD. COUNSEL FOR THE 3 ASSESSEE. THE CLAIM OF THE ASSESSEE IS THAT NECESS ARY DETAILS WERE FURNISHED DURING ASSESSMENT PROCEEDINGS WHEREAS THE STAND OF THE REVENUE IS THAT SUCH DETAILS WERE NOT FURNISHED. WE, THEREFORE, IN THE INTEREST OF JUSTICE, REMAND THIS ISSUE TO THE FILE OF THE AO WITH THE DIRECTION TO E XAMINE THE CLAIM OF THE ASSESSEE AFRESH FOR WHICH DUE OPPORTUNITY OF HEARIN G BE PROVIDED. THE ASSESSEES ARE ALSO AT LIBERTY TO FURNISH EVIDENCE, IF ANY, BE FORE THE AO TO SUBSTANTIATE ITS CLAIM. CONSEQUENTLY, THIS GROUND OF THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES ONLY. THIS OBSERVATION/DIRECTION WILL ALS O COVER GROUND NOS. 3 TO 6 OF THE APPEAL OF THE ASSESSEE IN ITA NO. 460/IND/2008. THEREFORE, GROUND NOS. 3 TO 6 OF ITA NO. 460/IND/2008 ARE ALSO ALLOWED FOR STAT ISTICAL PURPOSES. 3. THE NEXT GROUND PERTAINS TO CONFIRMING AND MAINT AINING THE DISALLOWANCE OF VEHICLE EXPENSES TO THE EXTENT OF RS.35,000/-. THE CLAIM OF THE ASSESSEE IS THAT THE EXPENSES WERE INCURRED EXCLUSIVELY FOR BU SINESS PURPOSES AND THESE ARE MERELY AD HOC ADDITIONS. ALTERNATIVELY, IT WAS CLAI MED THAT IT MAY BE REDUCED SUBSTANTIALLY. ON A QUERY FROM THE BENCH, THE LEARN ED REPRESENTATIVES OF BOTH THE SIDES FAIRLY AGREED THAT THE DISALLOWANCE MAY BE RE DUCED TO RS.20,000/- IN PLACE TO RS.35,000/-. CONSEQUENTLY, WE DO SO. THIS GROUN D IS, THEREFORE, PARTLY ALLOWED. 4 IN IDENTICAL GROUND (GROUND NO. 7 OF ITA NO. 460/ IND/08) ON ACCOUNT OF VEHICLE EXPENSES, THE DISALLOWANCE OF RS.20,000/- I S REDUCED TO RS. 15,000/-, CONSEQUENTLY, THIS GROUND IS ALSO PARTLY ALLOWED. 4 RESULTANTLY, BOTH THESE APPEALS OF THE ASSESSEES A RE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 11 TH MARCH, 2010. SD SD (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MARCH 11, 2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR *DBN/
