Ananjay Construction & Contracts, Bhopal V. Income Tax Officer 1(2), Bhopal, Bhopal

ITA 586/Ind/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6132 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 21-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Keywords: Opportunity of being heard; Commercial expediency; Set aside
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.586/IND/2017 ASSESSMENT YEAR: 2013-14 M/S. ANANJAY CONSTRUCTION & CONTRACTS PVT. LTD. 13, GOMANTIKA PARISAR, SHOPPING COMPLEX, JAWAHAR CHOWK, BHOPAL / VS. ITO-1(2) BHOPAL ( APPELLANT ) ( RE VENUE) PAN: AAKCA6996J APPELLANT BY SHRI HITESH CHIMNANI , C A REVENUE BY SHRI K.G. GOYAL, SR. DR DATE OF HEARING: 15.01.2019 DATE OF PRONOUNCEMENT: 16.01.2019 / O R D E R PER MANISH BORAD, A.M: THIS APPEAL BY ASSESSEE PERTAINING TO A.Y. 2003-04 IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INC OME TAX(APPEALS)-1 BHOPAL, (IN SHORT CIT(A)), DATED 30.0 6.2017 WHICH IS ARISING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(HEREINAFTER CALLED AS THE ACT) FRAMED ON ANANJAY CONSTRUCTION & CONTRACTS PVT. LTD. ITANO.586/IND/2017 2 22.02.2016 BY ITO, 1(2) BHOPAL. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE AND IN LAW, THE LD. CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF RS.8,75,043/- OUT OF INTEREST EXPEN SES OF RS.15,84,500/- MADE BY THE LD. AO IN THE ASSESSMENT ORDER. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT SOLE GRIEVANCE RELATES TO DISALLOWANCE OF INTEREST EXPENSES AT RS.8,75,043/- AND LD. CIT(A) DID NOT APPRECIATE THE FACT THAT THE ASSESSEE POSSESSED SUFFICIE NT CAPITAL AND ACCUMULATED RESERVES TO COVER UP THE ALLEGED INTEREST FREE ADVANCES. HE FURTHER PRAYED THAT ONE MO RE OPPORTUNITY MAY BE PROVIDED TO GO BEFORE THE LD. CI T(A) TO PRESENT NECESSARY FACTS SO AS TO PROVE THAT NO INTERE ST BEARING FUNDS WERE APPLIED FOR GIVING THE INTEREST FREE LOANS AND ADVANCES. 3. LEARNED DEPARTMENTAL REPRESENTATIVE (LD. DR) THOUGH SUPPORTED THE ORDER OF BOTH THE LOWER AUTHORITIES CONFIRMING THE DISALLOWANCE OF INTEREST EXPENDITURE HOWEVER HE DID NOT OPPOSED THE REQUEST FOR THE LD. C OUNSEL FOR THE ASSESSEE OF SETTING ASIDE THE ISSUE TO THE FI LE OF LD. CIT(A) FOR AFRESH ADJUDICATION. ANANJAY CONSTRUCTION & CONTRACTS PVT. LTD. ITANO.586/IND/2017 3 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. ASSESSEEES SOLE GRIEVANCE RELATES TO DISALLOWANCE OF INTEREST EXPENDITURE AT RS.8,75,043 /-. REQUEST HAS BEEN MADE BY THE LD. COUNSEL FOR THE ASSESS EE FOR SETTING ASIDE THE ISSUE RAISED IN THIS APPEAL TO TH E FILE OF LD. CIT(A) FOR AFRESH ADJUDICATION BY SUBMITTING THAT AT THE CLOSE OF THE YEAR UNDER APPEAL ASSESSEES SHARE CAPITAL STOOD AT RS.80,00,000/- AND ACCUMULATED RESERVES AND SURPLUS ARE AT RS.446.80 LACS, WHICH CUMULATIVELY ARE SUFFICIENT TO COVER THE ALLEGED INTEREST FREE LOANS AN D ADVANCES WHICH WERE CLAIMED TO HAVE GIVEN FOR COMMERCIAL EXPEDIENCY. LD. AUTHORIZED REPRESENTATIVE (AR) ALSO CONTENDED THAT LD. CIT(A) HAS NOT CONSIDERED THIS FAC T WHILE GIVING THE FINDINGS. 5. WE THEREFORE IN THE GIVEN FACTS AND IN THE INTERES T OF JUSTICE ACCEPT THE REQUEST OF THE LD. COUNSEL FOR THE ASSESSEE WHICH GOES UNOPPOSED BY LD. DR AND ACCORDING LY SET ASIDE THE ISSUE RAISED IN THIS APPEAL TO LD. CIT(A) FOR AFRESH ADJUDICATION. NEEDLESS TO MENTION THAT PROPER OPPORTUNITY OF BEING HEARD SHOULD BE PROVIDED TO THE ASSESSEE FOR PLACING ON RECORD NECESSARY MATERIAL AND FINANCIAL STATEMENT IN ORDER TO SATISFY THE LD. CIT(A) THAT NO INTEREST BEARING FUNDS WERE UTILIZED TO GIVE INTERES T FREE ANANJAY CONSTRUCTION & CONTRACTS PVT. LTD. ITANO.586/IND/2017 4 LOANS AND ADVANCES AND THE ALLEGED LOANS AND ADVANCES ARE GIVEN FOR COMMERCIAL EXPEDIENCY. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 16 .01.20 19. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 16/01/2019 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR