Deputy Commissoner of Income Tax, Ludhiana V. M/s Jagannath Alloys Ltd, Ludhiana

ITA 573/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6863 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 03-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Notional interest

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 573/CHD/2017 ASSESSMENT YEAR: 2012-13 THE DCIT, CIRCLE-4, VS. SH. JAGANNATH ALLOYS LTD. , LUDHIANA LUDHIANA PAN NO. AABCJ2960Q (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. ZEENIA HANDA, ADDL. CIT RESPONDENT BY : NONE DATE OF HEARING : 03.10.2017 DATE OF PRONOUNCEMENT : 03.10.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX-2 [HEREINAFTER REFERRED TO AS CIT(A)] LUDHIANA DATED 19.01.2017. 2. NONE HAS COME PRESENT ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE. SINCE IT IS THE APPEAL OF THE REVENUE AND L D. DR IS PRESENT, HENCE, WE PROCEED TO DECIDE THE SAME AFTER HEARING THE LD. DR. 3. THE REVENUE IS AGGRIEVED AGAINST THE ACTION OF T HE CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER U/S 36(1)(III) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') OF RS. 47 ,85,993/- ON ACCOUNT OF NOTIONAL INTEREST CALCULATED ON OUTSTANDING INTERES T FREE ADVANCES. 2 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSI NG OFFICER HAD MADE THE IMPUGNED ADDITION ON ACCOUNT OF INTEREST FREE A DVANCES GIVEN TO CERTAIN PARTIES. THE LD. CIT(A), HOWEVER, DELETED THE ADDIT IONS SO MADE BY THE ASSESSING OFFICER WHILE RELYING UPON THE ORDER OF T HE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2011-12 IN ITA NO. 1144/CHD/2014 DATED 11.8.2016, WHEREIN, THE TRIBUNAL HAS DELETED THE ADDITION ON SIMILAR ISSUE AFTER OBSERVING THAT THE AFORESAID INTEREST FREE ADVANCES WERE MADE BY ERSTWHILE COMPANY M/S TITAN CONFIRE LTD., WHICH NOW STOOD AMALGAMATED TO THE ASSESSEE COMPANY. THE SAID ADVAN CES WERE MADE BY THE SAID COMPANY EITHER OUT OF ITS OWN FUNDS OR SHARE C APITAL OF THE COMPANY. THAT THE INTEREST BEARING FUNDS OF THE ASSESSEE COM PANY HAD NO NEXUS WITH THE INTEREST FREE ADVANCES ADVANCED BY THE PREDECES SOR COMPANY WHICH STOOD AMALGAMATED INTO THE ASSESSEE COMPANY. 5. THE LD. DR THOUGH STRONGLY RELIED UPON THE ORDER OF THE ASSESSING OFFICER, HOWEVER, SHE HAS BEEN FAIR ENOUGH TO ADMIT THAT THE ISSUE IS SQUARELY COVERED BY THE ABOVE DECISION OF THE TRIBU NAL. 6. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRM ITY IN THE ORDER OF CIT(A) WHILE DELEING THE IMPUGNED ADDITION. THERE I S NO MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY D ISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3.10.2017 SD/- SD/- ( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 3 RD OCT, 2017 RKK 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR