DCIT, New Delhi V. M/s. Texla Enterprises, New Delhi

ITA 508/DEL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74161 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 30-01-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 28-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Keywords: Opportunity of being heard; Commercial expediency

Judgement Text

ITA NO.508/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : H : NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.508/DEL/2011 ASSESSMENT YEAR : 2005-06 DCIT, CIRCLE-22(1), NEW DELHI. VS. TEXLA ENTERPRISES, A-72, OKHLA INDL. AREA, PHASE II, NEW DELHI. PAN : AAAFT3816F ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : NONE DEPARTMENT BY : S HRI SA MEER SHARMA, S R. DR ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF THE CIT (A) DATED 11.11.2010 AND PERTAINS TO ASSESSMENT YEAR 2005-0 6. 2. THE ISSUE RAISED IS THAT CIT (A) ERRED IN DELETING THE ADDITION OF ` 13,46,080/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST EXPENSES. ON THIS ISSUE, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE H AS INCURRED FINANCIAL EXPENSES OF ` 13,46,080/- ON THE SUM BORROWE D FROM BANKS. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT THE ASSESSEE HAS G IVEN LOAN TO FAMILY MEMBERS OF PARTNERS AND SISTER CONCERNS ON WHICH NO INTEREST HAS BEEN CHARGED. THE ASSESSING OFFICER PROPOSED TO DISALLOW THE INTEREST IN THIS REGARD. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE ASSESSEES REPLY. HE HELD THAT HAD THE ASSESSEE NOT GIVEN INTEREST FREE LOAN TO THE FAMILY ITA NO.508/DEL/2011 2 MEMBERS OR SISTER CONCERNS, THERE WOULD HAVE BEEN NO NE ED TO BORROW AND PAY INTEREST ON LOAN. ACCORDINGLY, HE DISALLOWED THE INTEREST EXPENSE AMOUNTING TO ` 13,46,080/-. 3. AGAINST THE ABOVE ORDER, THE ASSESSEE APPEALED BEFOR E THE LD. CIT (A). THE LD. CIT (A) OBSERVED THAT FACTS PLACED ON RECORD SHOW THAT ASSESSEES FIRM HAD SUFFICIENT NON-INTEREST BEARING FUNDS IN EXCE SS OF THE AMOUNTS ADVANCED TO SISTER CONCERNS. FURTHER, HE OBSERVED THAT COMMERCIAL EXPEDIENCY OF ADVANCES MADE TO SISTER CONCERNS HAS BEEN BROUGHT ON RECORD BY THE AUTHORIZED REPRESENTATIVE. IN THESE CIRCUMSTANC ES, THE LD. CIT (A) DELETED THE ADDITION VIDE THE ABOVE ORDER. THE REV ENUE HAS FILED THIS APPEAL BEFORE US AGAINST THE SAID ORDER OF THE CIT (A). 4. WE HAVE HEARD THE LD. DR. NONE APPEARED ON BEHAL F OF THE ASSESSEE DESPITE SEVERAL NOTICES. IN OUR CONSIDERED OPINION, THE MATTER CAN BE DISPOSED OF BY HEARING THE LD. DR. UPON CAREFUL PERUSA L OF THE RECORD, WE FIND THAT THE ASSESSEE HAS NOT GIVEN ANY COGENT EXPLANAT ION BEFORE THE ASSESSING OFFICER. HOWEVER, VARIOUS EXPLANATIONS WERE GIV EN BEFORE THE LD. CIT (A). WE NOTE THAT NO REMAND REPORT HAS BEEN OBT AINED BY THE LD. CIT (A). HENCE, IN OUR CONSIDERED OPINION, THE ASSESSING OFF ICER HAS NOT BEEN GIVEN OPPORTUNITY TO GO THROUGH THE FRESH SUBMISSIONS MA DE AT THE APPELLATE STAGE. ACCORDINGLY, WE REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE SUBMISSIONS M ADE BEFORE THE LD. CIT (A). NEEDLESS TO ADD, THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT, THE APPEAL BY THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSES ONLY. THE ORDER PRONOUNCED IN THE OPEN COURT ON 31.01.201 4. SD/- SD/- [ RAJPAL YADAV ] [ SHAMIM YAHYA ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 31 ST JANUARY, 2014. ITA NO.508/DEL/2011 3 DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.