UDAI KANT MISHRA, Jaipur V. DCIT, Jaipur

ITA 475/JPR/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2063 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 25-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA CIT DHK
• Keywords: Gift; Earning of tax free income; Deemed dividend; Notional interest
• Section: 14A; 132

Judgement Text

1 ITA NO. 475/JP/2014 SHRI UDAI KANT MISHRA, JAIPUR. 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.475/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09. SHRI UDAI KANT MISHRA, 601, GEETA ENCLAVE, VINOBHA MARG, C-SCHEME, JAIPUR. CUKE VS. THE DCIT, CENTRAL CIRCLE-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ACSPM 8470 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJEEV SOGANI (CA) AND SHRI ROHAN SOGANI (CA JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18.08.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 05/09/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS FILED AGAINST THE OR DER OF LD. CIT (A), CENTRAL, JAIPUR DATED 09.04.2014 PERTAINING TO ASSESSMENT YE AR 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. IN LAW AND IN FACTS AND IN THE CIRCUMSTANCES O F THE APPELLANTS CASE, THE LEARNED CIT (A), CENTRAL, JAIPUR HAVING C ONSIDERED THE VALIDITY OF THE DEPARTMENT CIRCULAR NO. 1916 WHILST DETERMIN ING ANY UNEXPLAINED JEWELLERY IN THE HANDS OF THE APPELLANT HAS GROSSLY ERRED IN ALLOWING PARTIAL RELIEF TO THE APPELLANT INSTEAD OF TOTAL RELIEF AND HENCE THE LD. CIT (A) OUGHT TO HAVE ALLOWED TOTAL CREDIT OF JEWELLERY AVAILABLE TO THE APPELLANT. 2. IN LAW AND IN FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE, THE LEARNED CIT (A), CENTRAL HAS ERRED IN NOT APPRECIATING THE 2 ITA NO. 475/JP/2014 SHRI UDAI KANT MISHRA, JAIPUR. FACTS, AS EVIDENT FROM HIS OWN FINDING, WHILST REJE CTING THE BONAFIDE CLAIM OF THE APPELLANT INTERALIA; (A) THAT SMT. ROSHNI MISHRA BEING MARRIED LADY CREDIT O F JEWELLERY OF 500 GRAMS IS AVAILABLE TO THE APPELLANT AND NOT 250 GRAMS AS HELD BY THE LD. CIT (A). HE THEREFORE OUGHT TO HAVE DIRE CTED TO ALLOW 500 GRAMS OF GOLD JEWELLERY. (B) THAT THE FAMILY CONSISTING OF MINOR CHILDREN AS BON AFIDELY CLAIMED BY THE APPELLANT WHILST EXPLAINING THE TOTAL JEWELL ERY, THE LD. CIT (A) OUGHT TO HAVE THEREFORE ALLOWED THE CLAIM OF THE MI NOR CHILDREN AVAILABLE AS PER THE SAID CIRCULAR WHICH HE HAD GRO SSLY FAILED TO TAKE INTO CONSIDERATION. 3. WITHOUT PREJUDICE, IN LAW AND IN FACTS OF THE CA SE, THE LEARNED CIT (A) SHOULD HAVE ALLOWED THE RELIEF TO THE EXTEN T OF 500 GRAMS OF JEWELLERY AS AVAILABLE TO MARRIED LADY AS PER THE C IRCULAR WHILST DECIDING ANY UNEXPLAINED JEWELLERY. 4. IN LAW AND IN FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE, THE LEARNED CIT (A), CENTRAL, JAIPUR HAS FURT HER FAILED TO CONSIDER THE FACT THAT ADDITIONAL INCOME HAVING BEEN OFFERED BY THE APPELLANT AS SOURCES, ITS CONSEQUENT APPLICATION BY WAY OF JEWEL LERY IF ANY REMAINED UNEXPLAINED, AS TELESCOPING IS REQUIRED TO BE ALLOW ED. 5. IN LAW AND IN FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE, THE LEARNED CIT (A), CENTRAL, JAIPUR HAS ERRE D IN CONFIRMING THE ADDITION OF RS. 1056769/- AS NOTIONAL INTEREST THOU GH IN FACTS OF THE CASE THERE WAS NO JUSTIFICATION FOR CONFIRMING THE SAME. THE LD. CIT (A) SHOULD HAVE DELETED THE SAME. 5.2. WITHOUT PREJUDICE, IN LAW AND IN FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE, THE LEARNED CIT (A), CENTR AL, JAIPUR HAS GROSSLY ERRED IN CONFIRMING THE IMPUGNED ADDITION BY INVOKI NG THE PROVISION OF SECTION 14A OF THE ACT WHEN THE ASSESSING OFFICER H AD NOT INVOKED THE SAID PROVISION. THE IMPUGNED ADDITION IS THEREFORE ULTRA VIRUS, AND BAD IN LAW AS IT BEING NOTIONAL SHOULD HAVE BEEN DELETE D. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEF ORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE SHRI UDAI KANT MISHRA IS A PART OF THE TRIMURTY GROUP, ON WHOM A S EARCH OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERR ED TO AS THE ACT) WAS CONDUCTED 3 ITA NO. 475/JP/2014 SHRI UDAI KANT MISHRA, JAIPUR. ON 03.05.2007 WHEREBY CERTAIN INCRIMINATING DOCUMEN TS WERE FOUND AND SEIZED. THE ASSESSEE FILED HIS E-RETURN DECLARING TOTAL INCOME OF RS. 1,05,32,110/-. THE AO FRAMED THE ASSESSMENT UNDER SECTION 153A/143(3) OF THE ACT VIDE ORDER DATED 24.12.2009 BY MAKING ADDITIONS ON ACCOUNT OF DEEMED DIVIDEND INCOME, UNEXPLAINED JEWELLERY AND ON ACCOUNT OF DISALLOWANC E OF INTEREST AND ASSESSED THE TOTAL INCOME OF RS. 1,26,32,909/-. AGGRIEVED, THE A SSESSEE PREFERRED AN APPEAL BEFORE LD. CIT (A), WHO AFTER CONSIDERING THE SUBMI SSIONS, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. NOW THE ASSESSEE IS IN FURTHER AP PEAL BEFORE THIS TRIBUNAL. 3. GROUND NOS. 1 TO 4 ARE AGAINST NON-GRANTING OF R ELIEF AS PER CBDT CIRCULAR IN RESPECT OF THE JEWELLERY BELONGING TO THE MARRIED F EMALE. 3.1. THE LD. COUNSEL FOR THE ASSESSEE HAS REITERATE D THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED AS UNDER :- 3.1. LOWER AUTHORITIES WERE DUTY BOUND TO GIVE BE NEFIT OF 250 GRAMS OF JEWELLERY EACH IN THE HANDS OF ADITI MISHRA AND ANCHAL MISHRA AND 500 GRAMS OF JEWELLERY IN THE HANDS OF ROSHNI MISHR A IN ACCORDANCE WITH THE CBDT CIRCULAR NO. 1916 AS NO JEWELLERY WAS RECORDED IN THEIR NAMES IN THE BOOKS. THIS IS EVIDENT FROM THE CHART SUBMITTED TO THE LOWER AUTHORITIES, IN THIS REGARD, ALSO REPRODUCED BY THE LD. CIT (A) IN HER ORDER AT PAGE 5. 3.2. IN NOT PROVIDING FULL CREDIT IN THE HANDS OF S MT. ROSHNI MISHRA OF THE JEWELLERY, LOWER AUTHORITIES HAVE WRONGLY TAKEN SHELTER OF THE BELOW MENTIONED POINTS :- 3.2.I. HER STATEMENTS RECORDED DURING SEARCH, WHERE IN SHE MENTIONED THAT SHE DID NOT HAVE ANY SOURCE OF INCOM E. 3.2.II. IN THE STATEMENTS, SHE MENTIONED THAT SHE H AD RECEIVED GIFTS AND DOWRY IN HER MARRIAGE IN FEB2007 IN THE FORM OF JEWELLERY FROM HER FAMILY MEMBERS FOR WHICH NO CONF IRMATION WAS AVAILABLE ON RECORD. 3.3. LOWER AUTHORITIES HAVE IRRELEVANTLY INDULGED I NTO THE ISSUE THAT SMT. ROSHNI MISHRA WAS MARRIED IN FEB 2007 AND WHIC H WAS VERY CLOSE 4 ITA NO. 475/JP/2014 SHRI UDAI KANT MISHRA, JAIPUR. TO THE DATE OF SEARCH, I.E. 03/05/2017. SIMILARLY, THE AGE OF MINOR GRAND-DAUGHTERS WAS IRRELEVANT. 3.4. CBDT CIRCULAR NO. 1916, LOOKING TO THE INDIAN SOCIAL CIRCUMSTANCES, ALLOWS BLANKET BENEFIT OF 500 GRAMS PER MARRIED LADY AND 250 GRAMS PER UNMARRIED LADY, WITHOUT CONSIDERI NG ANY OTHER PARAMETER. 3.5. IT IS SUBMITTED THAT WHERE JEWELLERY FOUND IN POSSESSION OF ASSESSEES FAMILY WAS PERSONAL WEARING OF LADIES AN D IF THE SAME IS WITHIN PERMISSIBLE LIMIT STIPULATED BY CBDT CIRCULA R, NO ADDITION CAN BE MADE BY THE INCOME TAX AUTHORITIES. FOR THIS PROPOS ITION, RELIANCE IS PLACED ON THE JUDGMENT OF THE HONBLE JURISDICTIONA L HIGH COURT IN THE CASE OF SATYA NARAIN PATNI (2014) 46 TAXMANN.COM 44 0 (RAJASTHAN)(COPY ENCLOSED PAGE-1) WHEREIN HONBLE H IGH COURT HELD THAT HEAD NOTES SECTION 69A OF THE INCOME-TAX ACT, 19 61 UNEXPLAINED MONEY (JEWELLERY) ASSESSMENT YEAR 2005-06 ADDIT ION MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED JEWELLE RY FOUND DURING SEARCH PROCEEDING WAS UNDER CHALLENGE IN STATEMEN TS, FAMILY MEMBERS CLEARLY STATED THAT THESE WERE PERSONAL WEA RING JEWELLERY AND SAME WERE RECEIVED BY LADIES/DAUGHTER-IN-LAW ON/OR AT TIME OF THEIR MARRIAGE EITHER FROM PARENTAL SIDE OR IN-LAWS SIDE REVENUE COULD NOT PLACE ANY MATERIAL TO SHOW OTHERWISE THAN THAT STIP ULATED IN CBDT CIRCULAR 1916, DATED 11.5.1994 WHICH STATES THAT IF JEWELLERY FOUND IN POSSESSION OF A MARRIED LADY, UNMARRIED LADY AND MA LE MEMBER OF FAMILY IS TO EXTENT OF 500 GMS., 250 GMS AND 100 GM S. EACH, OFFICIALS WOULD NOT QUESTION SOURCE AND ACQUISITION FURTHER , ASSESSING OFFICER, IN FIRST INSTANCE, DID NOT SEIZE SAID JEWELLERY W HETHER SINCE JEWELLERY WAS FOUND TO BE WITHIN TOLERABLE LIMIT PRESCRIBED B Y CBDT, NO ADDITION WAS JUSTIFIABLE HELD, YES (PARAS 12 TO 14)(IN FAV OUR OF ASSESSEE). IN VIEW OF THE ABOVE, ADDITIONS MADE BY THE LD. AO AND SUSTAINED BY THE LD. CIT (A), ON ACCOUNT OF EXCESS JEWELLERY FOU ND, DURING THE COURSE OF SEARCH AT THE ASSESSEE PREMISES, IS NOT I N CONSONANCE WITH THE CBDT CIRCULAR AND DESERVES TO BE DELETED. 3.2. PER CONTRA, THE LD. D/R OPPOSED THE SUBMISSION S. 3.3. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE LD. CIT (A) HAS NOT GIVEN ANY REASON FOR DENYING THE BENEFIT/SET OFF TO THE E XTENT OF 250 GMS IN CASE OF ADITI 5 ITA NO. 475/JP/2014 SHRI UDAI KANT MISHRA, JAIPUR. MISHRA AND AANCHAL MISHRA (MINOR GRAND-DAUGHTERS) A ND PARTLY ALLOWING THE BENEFIT TO THE EXTENT OF 250 GMS TO SMT. ROSHNI MISHRA. WE FIND THAT THE CASE OF THE ASSESSEE IS COVERED BY THE CBDT CIRCULAR NO. 1916 D ATED 11.05.1994 WHEREBY THE CBDT HAD ISSUED GUIDELINES STATING THAT IN THE CASE OF A PERSON NOT ASSESSED TO WEALTH-TAX GOLD JEWELLERY AND ORNAMENTS TO THE EXTE NT OF 500 GMS PER MARRIED LADY, 250 GMS PER UNMARRIED LADY AND 100 GMS PER MALE MEM BER OF THE FAMILY NEED NOT BE SEIZED. THEREFORE, FOLLOWING THE ABOVE GUIDELINES AND ALS O JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SATYA NARA IN PATNI (2014) 46 TAXMANN.COM 440 (RAJ.), WE DIRECT THE AO TO ALLOW GOLD JEWELLER Y WEIGHING 250 GMS [(500GMS 250 GMS ALLOWED BY CIT (A)] IN THE HANDS OF ROSHNI MISHRA (DAUGHTER-IN-LAW), 250 GMS. EACH IN THE HANDS OF ADITI MISHRA AND AANCHAL MISHRA (MINOR GRAND-DAUGHTER). THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 4. GROUND NOS. 5 & 6 RELATES TO DISALLOWANCE OF INT EREST EXPENSE OF RS. 10,56,769/-. 4.1. THE LD. COUNSEL FOR THE ASSESSEE HAS REITERATE D THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED AS UNDER :- 3.1. IT IS SUBMITTED THAT THE ASSESSEE MADE INVES TMENTS THROUGH HIS PERSONAL BOOKS IN VARIOUS COMPANIES, WHEREAS LD. AO , FOR THE PURPOSE OF DISALLOWANCE, CONSIDERED THE BOOKS OF THE PROPRI ETORSHIP CONCERN, I.E. SURYA PROPERTIES AND INVESTMENTS, IN WHICH INT EREST EXPENSE OF RS. 20,72,096/- WAS INCURRED. 3.2. ATTENTION IS DRAWN TOWARDS THE FACT THAT THE C APITAL ACCOUNT OF THE ASSESSEE, AS PER HIS INDIVIDUAL BOOKS, AS ON 31 .03.2008 AMOUNTED TO RS. 2,01,82,808 (AE PB : 1-6). ENTIRE INVESTMENT S IN THE COMPANIES, WHICH HAD THE POTENTION OF GENERATING EXEMPT INCOME , WAS MADE FROM THE PERSONAL BOOKS IN WHICH BUSINESS LOAN WAS TAKEN BY THE ASSESSEE. INTEREST EXPENSE ON SUCH LOAN AMOUNT, INCURRED DURI NG THE RELEVANT PREVIOUS YEAR, AMOUNTING TO RS. 1,30,061/-. 6 ITA NO. 475/JP/2014 SHRI UDAI KANT MISHRA, JAIPUR. 3.3. THUS ENTIRE INVESTMENT HAD BEEN MADE BY THE AS SESSEE, IN SHARES OF THE COMPANIES, OUT OF HIS OWN FUNDS. DISA LLOWANCE MADE BY THE LOWER AUTHORITIES IS ON COMPLETELY WRONG APPREC IATION OF FACTS. 3.4. HONBLE BOMBAY HIGH COURT IN THE CASE OF RELIA NCE UTILITIES & POWER LTD. (2009) 313 ITR 340 (BOMBAY) HELD THAT .. THE PRINCIPLE THEREFORE WOULD BE THAT IF THERE ARE FUNDS AVAILABL E BOTH INTEREST-FREE AND OVER DRAFT AND/OR LOANS TAKEN, THEN A PRESUMPTI ON WOULD ARISE THAT INVESTMENTS WOULD BE OUT OF THE INTEREST-FREE FUND GENERATED OR AVAILABLE WITH THE COMPANY, IF THE INTEREST-FREE FU NDS WERE SUFFICIENT TO MEET THE INVESTMENTS.. 3.5. RATIO LAID DOWN, IN THE ABOVE MENTIONED JUDGME NT BY THE BOMBAY HIGH COURT HAS ALSO BEEN SUBSEQUENTLY LAID D OWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF HITACHI H OME AND LIFE SOLUTIONS (I) LTD. (2014) 221 TAXMAN 109 (GUJARAT)( MAG.) AND BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF MICROLA BS LTD. (2016) 383 ITR 490 (KARN.)(HC). 3.6. IT IS SUBMIT6TED THAT THE ASSESSEE HIMSELF WAS ENGAGED IN THE BUSINESS OF REAL ESTATE WHEREIN HE ACTED AS A BROKE R FOR EXECUTING REAL ESTATE DEALS. IT IS UNDISPUTED THAT INVESTMENT MADE BY THE ASSESSEE WAS IN TO COMPANIES ALSO ENGAGED IN REAL ESTATE BUS INESS. AS A RESULT, THESE INVESTMENTS WERE NOTHING BUT STRATEGIC INVEST MENTS OF THE ASSESSEE IN ORDER TO GENERATE BUSINESS IN THE FUTUR E. IT IS NOW A SETTLED PROPOSITION THAT SECTION 14A DOES NOT APPLY TO INVE STMENT OF SUCH NATURE. RELIANCE IS PLACED ON THE FOLLOWING JUDICIA L PRONOUNCEMENTS :- CHEMINVEST LTD. VS. CIT (2015) 378 ITR 33 (DELHI HC) SELVEL ADVERTISING P. LTD. (2015) 37 ITR 611 (KOL .TRIB.) 3.7. SECTION 14A DISALLOWANCE CAN BE MADE ONLY IF EXEMPT INCOME IN THE FORM OF DIVIDEND IS RECEIVED. IN THE CASE AT HAND, NO DIVIDEND INCOME HAS BEEN RECEIVED BY THE ASSESSEE D URING THE RELEVANT PREVIOUS YEAR. THE SAID FACT HAS ALSO BEEN ACKNOWLE DGED BY THE LD. CIT (A) IN HER ORDER AT PARA 6.3(II) PAGE 10. UNDER SUC H SCENARIO, NO DISALLOWANCE UNDER SECTION 14A CAN BE MADE. RELIANC E IS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS :- CIT VS. HOLCIM INDIA (P) LTD. (2014) 272 CTR 282 (DELHI) CIT VS. SHIVAM MOTORS (P) LTD. (2014) 272 CTR 277 (ALLAHABAD) CIT VS. LAKHANI MARKETING INC. (2014) 272 CTR 265 ( P&H) CIT VS. CORRTECH ENERGY P. LTD. (2015) 372 ITR 97 (GUJARAT) 3.8. EVEN OTHERWISE, AS THE ASSESSEES OWN FUNDS AR E GREATER THAN THE BORROWED FUND, NO DISALLOWANCE CAN BE MADE UNDE R SECTION 7 ITA NO. 475/JP/2014 SHRI UDAI KANT MISHRA, JAIPUR. 36(1)(III) AS PRESUMPTION CAN BE DRAWN THAT OWN FUN DS WERE USED FOR THE PURPOSE OF SUCH INVESTMENTS. RELIANCE IS PLACE D ON THE BELOW MENTIONED JUDICIAL PRONOUNCEMENTS :- CIT VS. VIJAY SOLVEX LTD. (2015) 59 TAXMANN.COM 2 94 (RAJ.HC) CIT VS. SHARADA ERECTORS P. LTD. (2016) 76 TAXMANN. COM 107 (BOM.HC) CIT VS. R.L. KALTHIA ENGINEERING & AUTOMOBILES P LT D. (2013) 33 TAXMANN.COM 14 (GUJARAT HC). IN VIEW OF THE ABOVE, ADDITIONS OF RS. 10,56,769/- MADE BY THE LD. AO AND SUSTAINED BY THE LD. CIT (A) DESERVES TO BE DEL ETED. 4.2. ON THE CONTRARY, THE LD. D/R OPPOSED THE SUBMI SSIONS. 4.3. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, WE FIND THAT THE ASSESSEE WAS HAVING SUFF ICIENT OWN FUNDS AS REFLECTED IN THE CAPITAL ACCOUNT OF THE ASSESSEE AS ON 31.03.200 8 SO AS TO MAKE INVESTMENT FOR PURCHASE OF SHARES OF OTHER COMPANIES AND GENERATE EXEMPT INCOME. THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE VAR IOUS PRONOUNCEMENTS OF VARIOUS HONBLE HIGH COURTS IN SUPPORT OF HIS CONTENTION. H E ALSO DREW OUR ATTENTION TO THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. VIJAY SOLVEX LTD. (2015) 59 TAXMANN.COM 294 (RAJ.HC) WHEREIN IT HAS B EEN HELD AS UNDER :- IN VIEW OF THE AUTHORITATIVE PRONOUNCEMENT OF T HE APEX COURT AND OTHER JUDGMENTS REFERRED SUPRA, IN OUR VIEW, THE AS SESSEE ADMITTEDLY HAD ITS OWN FUNDS, AS REFERRED TO EARLIER, AND ADMI TTEDLY SUCH FUNDS/RESERVES BEING SUBSTANTIALLY HIGHER THAN, EVE N OTHERWISE, THE ADVANCES TO THE DEBTORS, NO NOTIONAL INTEREST OF HY POTHETICAL INTEREST COULD HAVE BEEN DISALLOWED ON SUCH FACTS. THE REVEN UE HAS FAILED TO PROVE NEXUS. IN OUR VIEW, THE TRIBUNAL HAS CORRECTL Y APPRECIATED THE F ACTS AND LAW. 8 ITA NO. 475/JP/2014 SHRI UDAI KANT MISHRA, JAIPUR. THE LD. D/R COULD NOT BRING ANY CONTRARY MATERIAL T O CONTROVERT THE SUBMISSIONS OF THE ASSESSEE. THEREFORE, IN VIEW OF THE ABOVE DISC USSION AND CASE LAWS, THE ORDER OF LD. CIT (A) IS QUASHED. THE AO IS DIRECTED TO ALLOW THE INTEREST EXPENSES. THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 05.09.2 017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 05/09/2017. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI UDAI KANT MISHRA, JAIPUR. 2. THE RESPONDENT THE DCIT CENTRAL CIRCLE-3, JAIP UR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 475/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 9 ITA NO. 475/JP/2014 SHRI UDAI KANT MISHRA, JAIPUR.