Mr.K.Sathyashankar , Mangalore V. Assistant Commissioner of Income Tax Circle-1(1), Mangalore

ITA 479/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4094 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 20-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SMARAH SWAIN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE SHRI N. V. VASUDEVANV, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO. 479/BANG/2018 (ASSESSMENT YEAR: 2011 - 12) MR. K. SATHYASHANKAR, PROP. M/S. PRAVEEN TYRES, SRI GANESH COMPLEX, DARBE, PUTTUR, D. K. 574202. PAN AELPS6369D APPELLANT VS. ACIT, CIRCLE 1 (1), MANGALORE. RESPONDENT ASSESSEE BY : NONE RE VENUE BY : S HRI SMARAH SWAIN , JC IT ( DR ) DATE OF HEARING : 07.08.2018 DATE OF PRONOUNCEMENT : 1 0.08.2018 O R D E R PER SHRI A. K. GARODIA, A.M. : THIS APPEAL IS FILED BY THE ASSESSEE AND THIS IS DI RECTED AGAINST THE ORDER OF THE CIT (A) - MANGALURU DATED 20.12.2017 FOR A. Y. 2011 - 12. 2. THIS APPEAL WAS FIXED FOR HEARING FOR THE FIRST TIME ON 07.06.2018 BUT NONE APPEARED ON BEHALF OF THE ASSESSEE AND THERE WAS NO REQUEST FOR ADJOURNMENT. IN THE INTEREST OF JUSTICE AND TO PROVIDE ONE MORE OPPORTUNITY, HEARING WAS ADJOURNED TO 07.08.2018 AND NOTICE OF HEARING WAS S ENT TO THE ASSESSEE BY RPAD AND IT IS DULY SERVED ON THE ASSESSEE AS PER A CKNOWLEDGEMENT AVAILABLE ON RECORD. ON THIS DATE ALSO, NONE APPEARED ON BEHA LF OF THE ASSESSEE AND THERE IS NO REQUEST FOR ADJOURNMENT. HENCE, THE APP EAL WAS HEARD EX PARTE QUA THE ASSESSEE. LEARNED DR OF THE REVENUE SUPPORTED T HE ORDERS OF THE LOWER AUTHORITIES. 2 ITA NO.479/BANG/2018 3. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR OF THE REVENUE AND GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. W E FIND THAT THERE ARE TWO ISSUES IN DISPUTE. FIRST ISSUE IS ABOUT QUANTUM OF AGRICULTURAL INCOME. IN THE PRESENT YEAR, THE ASSESSEE CLAIMED AGRICULTURAL INC OME OF RS. 47,75,512/-. THE AO NOTED IN PARA 4.8 OF THE ASSESSMENT ORDER THAT I N THE PRECEDING YEAR I.E. A. Y. 2010 11, THE ASSESSEE CLAIMED AGRICULTURAL INC OME OF RS. 51,01,510/- BUT I WAS ACCEPTED TO THE EXTENT OF RS. 37,01,610/-. IN T HE PRESENT YEAR, THE AO HELD THAT THE CLAIM ABOUT AGRICULTURAL INCOME IS DISALLO WED TO THE EXTENT OF RS. 10 LACS AND THIS AMOUNT IS ADDED TO INCOME FROM OTHER SOURCES. LEARNED CIT (A) RESTRICTED THE DISALLOWANCE TO RS. 2 LACS IN VIEW O F THE ORDER OF HIS PREDECESSOR IN PRECEDING YEAR. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT (A) ON THIS ISSUE. 4. THE SECOND ISSUE IN DISPUTE IS ABOUT DISALLOWANC E OUT OF INTEREST EXPENDITURE. THE AO NOTED IN PARA 5 OF THE ASSESSMENT ORDER THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF AUTO FINANCE AND THE ASSESSEE AC CEPTS DEPOSIT FROM PUBLIC AND GIVES LOAN TO THE PUBLIC. THE AO ALSO NOTED THA T THE ASSESSEE HAS INVESTED A PORTION OF DEPOSITS ACCEPTED FROM PUBLIC IN THE S HARE CAPITAL OF VARIOUS COMPANIES FLOATED BY HIM. ON PAGE 13 OF THE ASSESS MENT ORDER, THE AO NOTED THAT THERE IS INCREASE IN CAPITAL OF RS. 62,37,462/ - INCLUDING PROFIT FOR THE PRESENT YEAR BUT THERE IS INCREASE OF RS. 362,37,132/- IN I NVESTMENTS. HE ALSO NOTED THAT THERE IS INCREASE IN LOANS & DEPOSITS TAKEN FR OM PUBLIC OF RS. 174,93,466/- WHICH HAS GONE UP TO RS. 754,82,189/- AS ON 31.03.2 011 AS AGAINST RS. 581,91,390/- AS ON 31.03.2010. THE AO REDUCED THE A MOUNT OF RS. 62,37,462/- BEING INCREASE IN CAPITAL FROM THIS INCREASE IN LOA NS & DEPOSITS TAKEN FROM PUBLIC AND ON THE BALANCE AMOUNT OF RS. 112,56,004/ -, HE COMPUTED INTEREST PAYABLE AT RS. 11,25,600/- @ 10% AND DISALLOWED THE SAME. LEARNED CIT (A) CONFIRMED THIS DISALLOWANCE IN FULL WITH A CATEGORI CAL FINDING THAT THE AO HAS ESTABLISHED DIRECT NEXUS BETWEEN INTEREST BEARING F UNDS WITH THE INVESTMENTS. HE HAS ALSO NOTED THAT THE ASSESSEE HAS ACCEPTED SI MILAR DISALLOWANCE UNDER SAME SET OF FACTS IN A. Y. 2013 14 & 2015 16. H ENCE, WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT 9A) ON THIS ISSUE ALS O. 3 ITA NO.479/BANG/2018 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DA TE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (N. V. VASUDEVAN) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 10.08.2018. MS* COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.