M/s Celica Developers Pvt Ltd, Kolkata V. D.C.I.T CC - VI,kolkata, Kolkata

ITA 583/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99929 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 19-03-2013
• Court: TRIBUNAL
• Department Lawyers: P B PRAMANICK
• Keywords: Business expenditure; Earning of tax free income
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO.583/KOL/2013 ASSESSMENT YEAR: 2009-10 M/S. CELICA DEVELOPERS PVT. LTD. VS. DEPUTY COMM ISSIONER OF INCOME-TAX, (PAN: AABCC3820C) CENTRAL CIRCLE-VI, KOLKATA. ( APPELLANT ) ( RESPONDENT ) & I.T.A NO.1208/KOL/2013 ASSESSMENT YEAR: 2009-10 DEPUTY COMMISSIONER OF INCOME-TAX VS. M/S. CELICA DEVELOPERS PVT. LTD. CIRCLE-8, KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 15.10.2015 DATE OF PRONOUNCEMENT: 29.10.2015 FOR THE APPELLANT: SHRI RAVI TULSIYAN, FCA FOR THE RESPONDENT: SHRI P. B. PRAMANICK, JCIT, SR. DR ORDER PER SHRI MAHAVIR SINGH, JM: BOTH THESE CROSS APPEALS BY ASSESSEE AND REVENUE AR E ARISING OUT OF ORDER OF CIT(A), CENTRAL-1, KOLKATA IN APPEAL NO. 153/CC-VI/ CIT(A)C-1/11-12 DATED 05.02.2013. ASSESSMENT WAS FRAMED BY DCIT, CENTRAL CIRCLE-VI, KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT) FOR AY 2009-10 VIDE ITS ORDER DATED 31.12.2011. 2. FIRST, WE TAKE UP ITA NO. 583/K/2013 (ASSESSEES APPEAL). AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE STATED THAT HE HAS INSTRUC TION FROM THE ASSESSEE NOT TO PROSECUTE THIS APPEAL AND SO, HE WANTS TO WITHDRAW THIS APPEA L. ON QUERY FROM THE BENCH, LD. SR. DR HAS NOT OBJECTED TO THE WITHDRAWAL OF THIS APPEA L. ACCORDINGLY, WE PERMIT THE WITHDRAWAL OF THE SAME. THEREFORE, THE APPEAL OF A SSESSEE IS DISMISSED AS WITHDRAWN. 3. NOW, WE TAKE UP ITA NO. 1208.K.2013 (REVENUES A PPEAL). THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT( A) DELETING THE DISALLOWANCE COMPUTED BY THE AO BY INVOKING THE PROVISIONS OF SE CTION 14A OF THE ACT READ WITH RULE 8D OF THE I. T. RULES, 1962. FOR THIS, REVENU E HAS RAISED FOLLOWING GROUND NO.1: 2 ITA NO.583 & 1208/KOL/2013 M/S. CELICA DEVELOPERS PVT. LTD. AY 2009-10 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSESSEE U/S. 14A OF THE I. T. ACT, WHEREAS AO WAS CORRECT IN COMPUTING DISALLOWANCE U/S. 14A OF THE I. T. ACT, 1 961. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE COMPA NY HAS RECEIVED DIVIDEND OF RS.1,10,76,617/- AND CLAIMED THE SAME AS EXEMPT. T HE AO ON PERUSAL OF THE P&L ACCOUNT REQUIRED THE ASSESSEE TO EXPLAIN AS TO WHY EXPENDITURE ATTRIBUTABLE TO EARNING OF EXEMPT INCOME SHOULD NOT BE DISALLOWED IN VIEW O F THE PROVISIONS OF SECTION 14A OF THE ACT READ WITH RULE 8D OF THE I. T. RULES. THE ASSESSEE ALSO EXPLAINED THAT IT HAD ALREADY OFFERED DISALLOWANCE OF RS.1,10,766/- INCLU DING DE MAT CHARGES AMOUNTING TO RS.12,250/-. BUT THE AO COMPUTED THE DISALLOWANCE AT RS.54,66,586/- BY OBSERVING THAT THE ADMINISTRATIVE EXPENDITURE NEEDS TO BE INC URRED FOR MAINTENANCE OF INVESTMENTS FROM WHERE THE ASSESSEE IS EARNING EXEMPT INCOME AN D ACCORDINGLY, HE COMPUTED THE DISALLOWANCE AS UNDER: OPENING VALUE OF INVESTMENT AS ON 1.4.2008 RS.1 09,32,88,110/- CLOSING VALUE OF INVESTMENT AS ON 31.3.2009 RS.1 13,57,48,164/- TOTAL VALUE OF INVESTMENT RS.222,90,36,274/- LESS: INCOME BEARING INVESTMENT RS. 4,24,02, 002/- RS.218,66,34,272/- AVERAGE VALUE OF INVESTMENT RS.109,33,17,136/- 0.5% THEREON COMES TO RS.54,66,586/-. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO FOLLOWING THE ORDER OF EARLIER ASSESSMENT YEAR DELETED THE DISALLOWANCE VIDE PARA 4 AS UNDER: 4. GROUND NO. 2 RELATES TO THE DISALLOWANCE OF RS .54,66,586/- BY APPLYING THE PROVISIONS OF SECTION 14A READ WITH RULE 8D. THIS ISSUE HAS BEEN DECIDED VIDE MY ORDER DATED THE 8 TH JUNE, 2012 IN THE CASE OF THE APPELLANT FOR THE AS SESSMENT YEAR 2008-09 IN APPEAL NO. 204/CC-VI/CIT(A)C-1/10-11. F OLLOWING THE DECISION, THE AO IS DIRECTED TO DELETE THE DISALLOWANCE OF RS.54,66, 586/- AND ACCEPT THAT OF RS.1,10,766/- AS OFFERED BY THE APPELLANT IN COURSE OF THE ASSESSMENT PROCEEDINGS. GROUND NO. 2 IS ALLOWED. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 5. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE TRIBUNALS ORDER IN ASSESSEES OWN CASE IN ITA NO. 1528/KOL/20 12 FOR AY 2008-09 DATED 19.02.2014, WHEREIN SIMILAR DISALLOWANCE WAS DELETE D BY OBSERVING AS UNDER: 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND SEEN T HE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF ASSESSEES BALANCE-SHEET AS ON 31.03.200 8, WHICH HAS BEEN PLACED AT PAGE 5 OF THE PAPER BOOK, SHOW THAT OPENING INVESTMENT AS ON 01.04.2007 WAS RS.110,12,51,839/- AND CLOSING VALUE OF INVESTMENT AS ON 31.03.2008 WA S RS.109,32,88,180/-. SCHEDULE E OF THE SAID BALANCE-SHEET GIVES A BREAK-UP OF INVESTME NT. AS PER THIS SCHEDULE, OUT OF THE ABOVE INVESTMENT, RS.107,35,58,387/- WAS OF SHARES HELD IN MAGMA SHRACHI FINANCE LTD.. THE POSITION WAS SAME BOTH AT THE BEGINNING OF THE RELEVANT PREVIOUS YEAR AND AS AT THE 3 ITA NO.583 & 1208/KOL/2013 M/S. CELICA DEVELOPERS PVT. LTD. AY 2009-10 END OF THE RELEVANT PREVIOUS YEAR. THUS THERE IS SU BSTANTIAL STRENGTH IN THE ARGUMENT OF ASSESSEE THAT OUT OF THE TOTAL INVESTMENT OF RS.109 ,32,88,180/-, MAJOR PART WAS OF SHARES IN M/S. MAGMA SHRACHI FINANCE LTD. IT IS NOT DISPUT ED BY THE REVENUE THAT THESE SHARES CAME TO THE ASSESSEE BY VIRTUE OF A MERGER OF ONE M /S. STRATUS DEVELOPERS (P) LTD. WITH ASSESSEE, THROUGH COMPANY PETITION NO. 492 OF 2005. COMPANY APPLICATION NO. 551 OF 2005 HAS BEEN PLACED AT PAPER BOOK PAGES 203 TO 222 . SUCH SHARES WERE THUS NOT A DIRECT ACQUISITION DONE BY ASSESSEE. THEREFORE, FOR MAKING SUCH INVESTMENT AND FOR HOLDING SUCH SHARES, IT CANNOT BE SAID THAT ASSESSEE WOULD HAVE INCURRED SUBSTANTIAL EXPENDITURE. ASSESSEE HAD NOT PURCHASED OR SOLD ANY OF THE SHARE S OF M/S. MAGMA SHRACHI FINANCE LTD. DURING THE RELEVANT PREVIOUS YEAR. WE ALSO FIN D THAT ASSESSING OFFICER HAD NOT MADE ANY DISALLOWANCE FOR INTEREST. WHILE APPLYING RULE 8D(2) ASSESSING OFFICER HAD ONLY MADE A DISALLOWANCE UNDER CLAUSE (III) THEREOF. THU S HE HAS ACCEPTED THAT NO LOAN FUNDS WERE USED BY ASSESSEE FOR THE PURPOSE OF MAKING THE INVESTMENTS. INVESTMENT MADE BY ASSESSEE DURING THE RELEVANT PREVIOUS YEAR WAS RS.1 ,96,69,793/- ONLY. WHEN VIEWED FROM THIS ANGLE, WE CANNOT SAY THAT THE SUO MOTU DISALLO WANCE OF RS.88,390/- MADE BY ASSESSEE WAS INCORRECT OR UNBELIEVABLE. THE SATISFACTION REC ORDED BY THE ASSESSING OFFICER WITH REGARD TO THE CLAIM OF EXPENDITURE MADE BY THE ASSE SSEE IS REPRODUCED HEREUNDER :- THE SUBMISSIONS OF THE ASSESSEE COMPANY HAVE BEEN CONSI DERED CAREFULLY AND THE SAME IS NOT ACCEPTABLE AT ALL. IN THIS CONTEXT, IT IS TO BE MEN TIONED THAT INVOLVEMENT OF TOP MANAGEMENT IS REQUIRED FOR MAKING DECISION FOR INVE STMENT. IT IS A STRATEGIC DECISION. A QUESTION WHETHER TO INVEST OR NOT TO INVEST IS ALWA YS TAKEN BY THE TOP MANAGEMENT. FURTHER, THE DECISION REGARDING RETENTION OR SALE O F INVESTMENT IS VERY COMPLICATED. THEREFORE, PROPORTIONATE MANAGEMENT AND ADMINISTRAT IVE EXPENSES IS REQUIRED TO BE DEDUCTED WHILE COMPUTING THE EXEMPT INCOME, IN THIS CASE, INCOME FROM DIVIDEND. IN OTHER WORDS, FINANCIAL & ADMINISTRATIVE EXPENSES AR E ALWAYS INTRINSICALLY RELATED TO SUCH INVESTMENTS AND DISALLOWANCES ARE REQUIRED TO BE MA DE ON THE BASIS OF PROVISION OF SEC. 14A READ WITH RULE 8D OF I.T. ACT, 1961. RULE 8D(1 ) SPECIFICALLY STATES THAT DETERMINATION OF DISALLOWANCE UNDER SUB-RULE (2) CA N BE DONE ONLY WHEN ASSESSING OFFICER IS NOT SATISFIED WITH THE CORRECTNESS OF TH E CLAIM OF EXPENDITURE MADE BY THE ASSESSEE. SUCH A SATISFACTION HAS TO BE AN OBJECTIV E ONE BASED ON COGENT REASON AS HELD BY COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF REI AGRO LIMITED (SUPRA), WHICH WAS UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT ON REVENUES APPEAL. THE DECISION TAKEN BY THE ASSESSING OFFICER TO MAKE A PROPORTIONATE DI SALLOWANCE FOR MANAGEMENT AND ADMINISTRATIVE EXPENDITURE WAS SIMPLY BASED ON PRE- ASSUMPTIONS. THERE IS NO COGENT REASON MENTIONED FOR DISREGARDING THE CLAIM OF THE ASSESSEE ESPECIALLY WHEN IT HAD EXPLAINED THE NATURE OF INVESTMENT AND AS TO WHY SU BSTANTIAL EXPENDITURE WAS NOT REQUIRED TO BE INCURRED BY IT. IN SUCH CIRCUMSTANCE S, WE ARE OF THE OPINION THAT LD. CIT(APPEALS) WAS JUSTIFIED IN HOLDING THAT ASSESSIN G OFFICER COULD NOT HAVE APPLIED RULE 8D(2)(III) OF THE ACT AND MADE A DISALLOWANCE OF PERCENT OF AVERAGE VALUE OF INVESTMENT. LD. CIT(APPEALS) WAS, THEREFORE, JUSTIF IED IN DELETING SUCH DISALLOWANCE. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(APPEALS). GROUND NO. 1 OF THE REVENUE STANDS DISMISSED. 6. ON QUERY FROM THE BENCH, LD. SR. DR COULD NOT FI ND FAULT IN THE ORDER OF THE TRIBUNAL AND ALSO COULD NOT DISTINGUISH THE CASE ON FACTS. ACCORDINGLY, WE ARE OF THE CONSIDERED VIEW THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. HENCE, WE CONFIRM THE ORDER OF CIT(A) DELETING THE DISALLOWANCE. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 7. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE OF INTEREST. FOR THIS, REVENUE HA S RAISED FOLLOWING GROUND NO.2: 4 ITA NO.583 & 1208/KOL/2013 M/S. CELICA DEVELOPERS PVT. LTD. AY 2009-10 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNTS OF TREATING INTEREST AS NON-ALLOWABLE EXPENDITURE U/S. 36 OF THE I. T. ACT, 1961. 8. BRIEFLY STATED FACTS ARE THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED FROM THE DETAILS FILED BY ASSESSEE THAT IT HAD DEBITED INTEREST EXPENDITURE OF RS.40,96,878/-. THE AO REQUIRED THE ASSESSEE TO EX PLAIN HOW THIS EXPENDITURE IS ALLOWABLE. ACCORDING TO AO, THE ASSESSEE IS NOT DI SCLOSING ANY INCOME FROM REAL ESTATE BUSINESS AND LOAN IS TAKEN FOR MAKING ADVANCE FOR H OUSE PROPERTY. ACCORDING TO HIM, THIS LOAN IS RELATING TO HOUSE PROPERTY AND NOT ALL OWABLE AS BUSINESS EXPENDITURE U/S. 36 OF THE ACT. ACCORDINGLY, HE DISALLOWED THE INTERES T. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO FOLLOWING THE EARLIER YEA RS ORDER DELETED THE DISALLOWANCE BY OBSERVING IN PARA 6 AS UNDER: 6. IN GROUND NO. 4, IT HAS BEEN CONTENDED THAT TH E AO HAS ERRED IN DISALLOWING SUM OF RS.40,96,878/- OUT OF INTEREST ON THE CAPITAL BORRO WED FOR THE PURPOSES OF THE BUSINESS. THIS ISSUE HAS BEEN DECIDED VIDE MY ORDER DATED THE 8 TH JUNE, 2012 IN THE CASE OF THE APPELLANT FOR THE ASSESSMENT YEAR 2008-09 IN APPEAL NO. 204/CC-VI/CIT(A)C-1/10-11. FOLLOWING THE DECISION, THE DISALLOWANCE OF RS.40,9 6,878/- IS DELETED. GROUND NO. 4 IS ALLOWED. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 9. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THIS ISSUE IS ALSO DEALT WITH B Y TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 1528/KOL/2012 FOR AY 2008-09 DATED 19.02.20 14, WHEREIN TRIBUNAL HAS DELETED THE ADDITION VIDE PARA 17 OF ITS ORDER AS U NDER: 17. WE HAVE HEARD THE RIVAL CONTENTIONS. BUSINESS OF ASSESSEE AS MENTIONED IN THE TAX AUDIT REPORT, COPY OF WHICH HAS BEEN PLACED AT PAPE R BOOK PAGE NOS. 22 TO 40, WAS REAL ESTATE, TRADING IN SHARES AND SECURITIES AND GUEST HOUSE BUSINESS. THERE IS NO CASE FOR THE REVENUE THAT ADVANCE GIVEN BY THE ASSESSEE WAS FOR ANY TRADING ACTIVITIES IN SHARES AND SECURITIES OR IN RELATION TO ITS GUEST HOUSE BU SINESS. CLAIM OF ASSESSEE WAS THAT IT WAS NOT DOING ANY BUSINESS OF CONSTRUCTION OF BUILD INGS BUT ONLY BUYING CONSTRUCTED FLATS AND SPACES AND SELLING IT. THIS CLAIM HAS NOT BEEN FOUND TO BE WRONG BY THE ASSESSING OFFICER. IT MIGHT BE TRUE THAT DURING THE RELEVANT PREVIOUS YEAR OR PRECEDING YEARS, ASSESSEE HAD NOT SHOWN SALE OF ANY REAL ESTA TE. HOWEVER, ITS OPERATIONAL PROFITS WHICH FORMED A MAJOR CHUNK OF ITS INCOME, GIVEN IN SCHEDULE M TO ITS PROFIT & LOSS A/C PLACED AT PAPER BOOK PAGE NO.13 CLEARLY PROVE T HAT IT WAS RECEIVING SUBSTANTIAL RENT AND OCCUPANCY CHARGES. NO BUILDERS ACTIVITY IS TRA CEABLE FROM THE NATURE OF EXPENDITURE SHOWN IN THE PROFIT & LOSS ACCOUNT. ASS ESSEE HAD NOT SHOWN ANY EXPENDITURE FOR ANY CONSTRUCTION. ITS BALANCE-SHEET PLACED AT PAGE 5 OF THE PAPER BOOK DOES NOT CARRY ANY WORK-IN-PROGRESS EXCEPT CAPITAL WORK-IN-PROGRESS OF RS.1,38,53,207/-. SUCH CAPITAL WORK-IN-PROGRESS WAS A PART OF ITS FIXED ASSETS. THEREFORE, THERE IS NOTHING ON RECORD TO SHOW THAT DURING THE RELEVANT PREVIOUS YEAR ASSESSEE WAS DOING ANY BUSINESS AS A BUILDER. IN OU R OPINION, TO FASTEN A COMPLETED CONTRACT METHOD OF ACCOUNTING ON AN ASSESSEE WHO IS NOT DOING ANY CONSTRUCTION OR 5 ITA NO.583 & 1208/KOL/2013 M/S. CELICA DEVELOPERS PVT. LTD. AY 2009-10 UNDERTAKING ANY PROJECT WORK, WILL NOT BE APPROPRIA TE. TAX AUDIT REPORT OF THE ASSESSEE CLEARLY MENTIONED THAT IT WAS FOLLOWING ACCRUAL MET HOD OF ACCOUNTING. IN SUCH A SITUATION ASSERTION OF THE ASSESSEE THAT ITS INTENT ION IN PAYING ADVANCES WAS TO ACQUIRE BUILT UP SPACES AND FLATS, WHICH WOULD EVENTUALLY B E ITS STOCK-IN-TRADE CANNOT BE DISBELIEVED. IN OTHER WORDS, ADVANCES WERE NOT PAID BY THE ASSESSEE FOR ACQUIRING ANY FIXED ASSET. IT WAS A NECESSARY PAYMENT FOR ACQUIRI NG STOCK-IN-TRADE FOR CARRYING ON ITS BUSINESS OF REAL ESTATE. IN THIS REGARD, SECTION 36 (1)(III) WHICH IS RELEVANT IS REPRODUCED HEREUNDER:- THE AMOUNT OF THE INTEREST PAID IN RESPECT OF CAPI TAL BORROWED FOR THE PURPOSES OF THE BUSINESS OR PROFESSION: PROVIDED TH AT ANY AMOUNT OF THE INTEREST PAID, IN RESPECT OF CAPITAL BORROWED FOR ACQUISITIO N OF AN ASSET FOR EXTENSION OF EXISTING BUSINESS OR PROFESSION (WHETHER CAPITALIZE D IN THE BOOKS OF ACCOUNT OR NOT); FOR ANY PERIOD BEGINNING FROM THE DATE ON WHI CH THE CAPITAL WAS BORROWED FOR ACQUISITION OF THE ASSET TILL THE DATE ON WHICH SUCH ASSET WAS FIRST PUT TO USE, SHALL NOT BE ALLOWED AS DEDUCTION. EXPLANATION RECURRING SUBSCRIPTIONS PAID PERIODIC ALLY BY SHAREHOLDERS, OR SUBSCRIBERS IN MUTUAL BENEFIT SOCIETIES WHICH FULFI L SUCH CONDITIONS AS MAY BE PRESCRIBED, SHALL BE DEEMED TO BE CAPITAL BORROWED WITHIN THE MEANING OF THIS CLAUSE. A CLAIM OF INTEREST ON CAPITAL BORROWED FOR THE PUR POSE OF BUSINESS CAN BE DISALLOWED ONLY WHERE THE BORROWING IS FOR ACQUISITION OF AN A SSET INTENDED FOR EXTENSION OF AN EXISTING BUSINESS. IN THE CASE OF THE ASSESSEE HERE , WE CANNOT SAY THAT THE LOAN RAISED BY ASSESSEE FROM ICICI BANK, WHICH WAS UTILIZED FOR PA YING ADVANCES FOR ACQUIRING BUILT UP SPACES, WAS IN RELATION TO EXTENSION OF AN EXIST ING BUSINESS. BUSINESS OF ASSESSEE WAS REAL ESTATE AND THE ASSESESES INTENTION WAS TO TRA DE IN CONSTRUCTED SPACES. IT NEVER CONTEMPLATED TO USE SUCH CONSTRUCTED SPACES FOR ITS OWN USE. IN OUR OPINION, THE DECISION OF THE HONBLE MUMBAI HIGH COURT IN THE CA SE OF LOKHANDWALA CONSTRUCTION INDUSTRIES LTD. (SUPRA) WOULD CLEARLY COME TO THE A ID OF ASSESSEE. AS LONG AS THE PAYMENT OF ADVANCE WAS NOT FOR ACQUISITION OF FIXED ASSETS BUT ONLY FOR ACQUIRING STOCK- IN-TRADE, ASSESSEE WAS ENTITLED FOR DEDUCTION UNDER SECTION 36(1)(III) OF THE ACT. WE ARE, THEREFORE, OF THE OPINION THAT LD. CIT(APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. GROUND NO. 2 OF THE REVENUE STANDS DISMISSED. 10. ON QUERY FROM THE BENCH, LD. SR. DR COULD NOT D ISTINGUISH THE EARLIER YEARS ORDER OF TRIBUNAL ON FACTS OF THE CASE AND RATHER FACTS A RE EXACTLY IDENTICAL AND SAME AMOUNT OF LOAN IS UNDER DISPUTE. RESPECTFULLY FOLLOWING THE TRIBUNALS ORDER IN EARLIER ASSESSMENT YEAR, CITED SUPRA, WE CONFIRM THE ORDER OF CIT(A) D ELETING THE DISALLOWANCE. THIS ISSUE OF REVENUES APPEAL IS ALSO DISMISSED. 11. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE AND REVENUE ARE DISMISSED. 12. ORDER IS PRONOUNCED IN THE OPEN COURT ON 29.10. 2015 SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29TH OCTOBER, 2015 JD. SR. P.S 6 ITA NO.583 & 1208/KOL/2013 M/S. CELICA DEVELOPERS PVT. LTD. AY 2009-10 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. CELICA DEVELOPERS PVT. LTD., 24 PA RK STREET, KOLKATA-700016 2 RESPONDENT DCIT, CIRCLE-VI & DCIT, CIR-8, KOLKATA . 3 . THE CIT(A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .