AZOFEN P. LTD, MUMBAI V. DCIT CIR 5(1), MUMBAI

ITA 5162/MUM/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3476 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-03-2016
• Assessment Year: 1996-1997
• Appeal Filed On: 22-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M MURLI

Judgement Text

, ' INCOME TAX APPELLATE TRIBUNAL,MUMBAI- A,BENCH , , BEFORE S/SHJOGINDERSINGH,JUDICIAL MEMBER & RAJENDRA,ACCOUNTANT MEMBER ./ITA/5162/MUM/2010 , / ASSESSMENT YEARS: 1996-97 M/S. AZOFEN PVT. LTD. 37/38, L.K. ARCADE MAROL NAKA, MAROL, ANDHERI(E) MUMBAI-400 059. PAN:AAACA 5098 F. VS. THE DCIT-CIR.5(1) AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI M. MURLI ASSESSEE BY: NONE / DATE OF HEARING: 22.03.2016 / DATE OF PRONOUNCEMENT: 22.03.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA A.M. - CHALLENGING THE ORDER DATED 20.04.2010 OF THE CIT( A)-16,MUMBAI THE ASSESSEE HAS FILED THE PRESENT APPEAL.VIDE ITS ORDER,DATED 2.12.2005(ITA/3 661/MUM/2010),THE TRIBUNAL HAD SET ASIDE THE ORDER OF THE FIRST APPELLATE AUTHORITY(FA A).THE TRIBUNAL HAD OBSERVED AS UNDER :- WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDERED THE FACTS AND MATERIAL ON RECORD.WE ARE OF THE VIEW THAT CIT(A) HAS FOUND A NEXUS BETWEEN T HE FUNDS BORROWED FROM LFC AND INVESTMENT IN SHARES THEN CLAIM OF INTEREST IS RIGH TY ALLOWABLE U/S. 57 (III).TO THIS EXTENT THE DECISION OF THE CIT(A) IS CORRECT.WE DECLINE TO INT ERFERE IN THIS PART OF THE DECISION.HOWEVER, WE ARE OF THE VIEW THAT THERE IS NO CATEGORICAL FIN DING BY THE CIT(A) THAT FUNDS BORROWED AS UNSECURED LOANS WERE ALSO INVESTED IN SHARES AND NO T IN THE PROJECT LOK UPVAN AS FOUND BY THE ASSESSING OFFICER. WE , THEREFORE RESTORE THI S ISSUE TO THE FILE OF THE CIT(A) TO EXAMINE LOK UPVAN PROJECT AND GIVE A CATEGORICAL FINDING AS TO WHETHER FUNDS BORROWED AS UNSECURED LOANS TOTALLING TO RS.53,50,000/- AS PER SCHEDULE-C OF THE BALANCE SHEET AS ON 31.3.1995 WERE INVESTED IN SHARES OR THEY WERE INVE STED IN LOK UPVAN. IN THE FORMER CASE, THE INTEREST PAYMENT WOULD BE ALLOWED U/S.57(III) A ND IN THE LATER CASE, IT WOULD BE DISALLOWED AND CAPITALISED AND THE ORDER OF THE ASSESSING OFFI CER TO THAT EXTENT WOULD BE UPHELD. FOR THIS LIMITED PURPOSE THE MATTER IS RESTORED TO THE FILE OF THE CIT(A). 2. THE FAA,AFTER CONSIDERING THE SUBMISSION OF THE ASS ESSEE,HELD THAT TRIBUNAL HAD RESTORED THE ISSUE TO EXAMINE LOK UPVAN PROJECT AND TO GIV E A CATEGORICAL FINDING AS TO WHETHER THE FUNDS BORROWED AS UNSECURED LOANS OF RS.53.50 LAKHS WERE INVESTED IN SHARES OR IN LOK UPVANPROJECT,THAT THE AO HAD,IN THE ASSESSMENT ORD ER,HELD THAT LOANS WERE USED FOR LOK UPVAN PROJECT THAT THE ASSESSEE HAD SUBMITTED THE EXTRACT OF BANK OF INDIA, THAT IT HAD TRIED TO EXPLAIN THAT THE LOAN AMOUNT (RS.53.50 LAKHS) WA S INVESTED IN THE SHARES, THAT NO EVIDENCE TO SUBSTANTIATE ITS CLAIM WAS FILED DURING THE APPE LLATE PROCEEDINGS, THAT THE ASSESSEE ITSELF HAD ADMITTED BEFORE THE AO THAT THE LOANS RECEIVED WERE INVESTED IN THE HOUSING PROJECT, THAT THE SAID ADMISSION WAS MADE DURING THE ASSESSMENT PROCE EDINGS DURING AY 1995-96, THAT THE ASSESSEE HAD FAILED TO REBUT THE FINDINGS OF THE A O BY FILING ANY EVIDENCE, THAT THE ONUS WAS ON THE ASSESSEE,THAT IT HAD FAILED TO DISCHARGE THE ONUS AND TO SUBSTANTIATE ITS CLAIM.FINALLY, 5162/M/10-AZOFEN PVT. LTD. 2 THE FAA HELD THAT LOANS OF RS.53.50 LAKHS WERE INVE STED IN LOK UPVAN PROJECT, THAT THE DISALLOWANCE MADE BY AO WAS JUSTIFIED. 3. AS STATED EARLIER NONE APPEARED BEFORE US.THE ASSES SEE HAD SOUGHT ADJOURNMENT ON 21.9. 2011,21.11.2011,16.01.2012,01.9.2014.EVEN TODAY NON E OF THE AUTHORISED PERSONS APPEARED BEFORE US.THEREFORE, WE ARE CONSTRAINED TO DECIDE T HE ISSUE ON THE AVAILABLE MATERIAL. 4. WE FIND THAT THE TRIBUNAL HAD SET ASIDE THE ORDER O F THE FAA TO DECIDE THE ISSUE OF UTILISATION OF LOANS I.E. WHETHER THE LOAN AMOUNT W AS USED FOR PURCHASING THE SHARES OR WAS USED TO COMPLETE THE LOK UPVAN PROJECT.THE ASSESS EE DID NOT PRODUCE ANY EVIDENCE BEFORE THE FAA THAT COULD PROVE THAT IT HAD MADE INVESTMEN T IN SHARES.NOT ONLY THIS, DURING THE ASSESSMENT PROCEEDINGS FOR AY 1995-96, IT HAD ADMIT TED BEFORE THE AO THAT LOANS TAKEN BY IT WERE USED FOR HOUSING PROJECT.CONSIDERING THESE FAC TS AND CIRCUMSTANCES WE ARE OF THE OPINION THAT THE ORDER OF THE FAA DOES NOT SUFFER F ROM ANY LEGAL OR FACTUAL INFIRMITY. THEREFORE, CONFIRMING HIS ORDER WE DECIDE THE EFFEC TIVE GROUND OF APPEAL AGAINST THE ASSESSEE. AS A RESULT, APPEA L FILED BY THE ASSESSEE STANDS DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH, 2016. ! 22, '# 2016 SD/- SD/- /JOGINDERSINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; ! DATED : 22.03.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.