ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, JALANDHAR V. M/S MAX INDIA LTD, NAWANSHEHAR

ITA 685/ASR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3339 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 20-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-06-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 31-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP C HAUHAN LD
• Assessee Lawyers: GAURAV JAIN LD
• Keywords: Commercial expediency
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NOS.574 & 575 (ASR)/2015 ASSESSMENT YEARS:2008-09 & 2 009-10 ASST. CIT CIRCLE-II, JALANDHAR VS. M/S. MAX INDIA LTD. BHAI MOHAN SINGH NAGAR RAIL MAJRA, TEH. BALACHAUR DISTT. NAWANSHAHR PAN:AABCM1204G (APPELLANT) (RESPONDENT) ITA NOS.431 & 432 (ASR)/2016 ASSESSMENT YEARS:2011-12 & 20 12-13 DY. CIT CIRCLE-II, JALANDHAR VS. M/S. MAX INDIA LTD. BHAI MOHAN SINGH NAGAR RAIL MAJRA, TEH. BALACHAUR DISTT. NAWANSHAHR PAN:AABCM1204G (APPELLANT) (RESPONDENT) ITA NO.685 (ASR)/2017 ASSESSMENT YEAR:2013-1 4 ASST. CIT CIRCLE-II, JALANDHAR VS. M/S. MAX INDIA LTD. BHAI MOHAN SINGH NAGAR RAIL MAJRA, TEH. BALACHAUR DISTT. NAWANSHAHR PAN:AABCM1204G (APPELLANT) (RESPONDENT) ITA NOS.574 & 575 (ASR)/2015 ITA NOS.431& 432 (ASR)/ 2016 & 685(ASR)/2017 ACIT/ DCIT/ACIT VS. MS. MAX INDIA LTD., NAWANSHAH 2 APPELLANT BY: SH. SANDEEP CHAUHAN (LD. D R) RESPONDENT BY: SH. GAURAV JAIN (LD. CA) DATE OF HEARING: 26.06.2018 DATE OF PRONOUNCEMENT: 29.06.2018 ORDER PER N.K.CHOUDHRY, JM: THE AFORESAID APPEALS HAVE BEEN PREFERRED BY THE REV ENUE DEPARTMENT, ON FEELING AGGRIEVED AGAINST THE SEPARATE ORDERS DATED 18.08.2015, 17.08.2015, 13.06.2016, 17.06.201 6 & 16.08.2017 RELEVANT TO THE ASST. YEARS: 2008-09 & 2009 -10, 2011-12 & 2012-13 & 2013-14 RESPECTIVELY. 2. FACTUALLY THERE IS SLIGHT DIFFERENCE BETWEEN THE FACTS OF ITA NO.574(ASR)/2015 AND REST APPEALS, AS IN ITA NO.574(ASR) /2015 THE ASSESSING OFFICER PASSED THE ORDER U/S 154 OF THE I.T. ACT WHEREAS IN REMAINING APPEALS, ORDERS HAVE BEEN PASSED U/ S 143(3) OF THE ACT. HOWEVER THE ISSUE INVOLVED IN ALL TH E APPEALS IS SIMILAR AND IDENTICAL, THEREFORE, FOR THE SAKE OF CON VENIENCE AND BREVITY, ALL THE APPEAL HAVE BEEN TAKEN SIMULTAN EOUSLY FOR ADJUDICATION. 3. MORE OR LESS ISSUE INVOLVED RELATES TO DISALLOWANCE OF INTEREST U/S 36(1)(III) OF THE ACT, MADE BY THE ASSESSIN G OFFICER WHICH WAS DELETED BY THE LD. CIT(A) WHILE RELYING UPO N THE ORDER DATED 19 TH MARCH, 2013 PASSED BY THE ITAT AMRITSAR BENCH IN ITA NO.274(ASR)/2012 RELEVANT TO ASST. YEAR: 2008-09 W HEREBY ITA NOS.574 & 575 (ASR)/2015 ITA NOS.431& 432 (ASR)/ 2016 & 685(ASR)/2017 ACIT/ DCIT/ACIT VS. MS. MAX INDIA LTD., NAWANSHAH 3 THE CO-ORDINATE BENCH AT AMRITSAR WHILE RELYING UPON ITS OWN ORDERS RELEVANT TO THE ASST. YEAR:2001-02 TO 2006-07 D ATED 08.03.2013, DELETED THE DISALLOWANCE U/S 36(1)(III) OF THE ACT, ON THE GROUNDS THAT THE COMPANY HAD SUFFICIENT SURPLUS I NTEREST FREE FUNDS AND THE LOANS HAVE BEEN GIVEN OUT OF THE SURPLU S INTEREST FREE FUNDS AVAILABLE AND THE LOAN WAS GIVEN ON ACCOUNT OF COMMERCIAL EXPEDIENCY, THEREFORE, NO PART OF INTEREST EXPENDITURE WARRANTED DISALLOWANCE U/S 36(1)(III) OF THE ACT. FURTHER. 4. IT IS UNDISPUTED FACT THAT THE ORDERS OF THE ITAT REL ATES TO ASST. YEAR 2008-09, AND 2010-11 & 2002-03 HAVE BEEN SUBJECTED TO THE JURISDICTIONAL HIGH COURT AND THE JURI SDICTIONAL HIGH COURT VIDE ITS ORDERS DATED 8 TH MARCH, 2017 RELEVANT TO THE ASST. YEARS: 2008-09 & 2010-11 AND DATED 6 TH SEP.2016 RELEVANT TO THE ASST. YEAR: 2002-03 UPHOLD THE ORDER S OF THE ITAT. THE LD. CIT(A) WHILE RELYING UPON THE ORDERS PASSED BY THE ITAT, DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFI CER BY REWORKING U/S 154 OF THE I.T. ACT RELEVANT TO THE ASST . YEAR:2008-09. FOR THE SAKE OF CONVENIENCE AND BREVITY THE CONCLUDING PART OF THE ORDER PASSED BY THE LD. CIT(A) I N ITA NO.574(ASR)/2015 FOR ASST. YEAR:2008-09 IS REPRODUCED HE REIN BELOW. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS, ORDER U/S 154 OF INCOME TAX ACT AND THE ORDER OF HONBLE ITAT IN ITA NO.274(ASR)/2012 FOR A.Y.2008-09 IN CASE OF ASSESSE E. THE DISALLOWANCE OF RS.1,45,91,805 MADE IN ORIGINAL ASS ESSMENT ORDER HAS BEEN DELETED BY HONBLE ITAT BY OBSERVING AS REPRODUCED ABOVE, ALONG WITH SUBMISSIONS OF ASSESSE E, GIVING ITA NOS.574 & 575 (ASR)/2015 ITA NOS.431& 432 (ASR)/ 2016 & 685(ASR)/2017 ACIT/ DCIT/ACIT VS. MS. MAX INDIA LTD., NAWANSHAH 4 REASONS FOR THE SAME, WHICH IS NOT REPEATED HERE FO R THE SAKE OF BREVITY. SINCE THE ORIGINAL DISALLOWANCES HAVE B EEN DELETED BY HONBLE ITAT, THE REWORKING OF DISALLOWANCE DONE U/S 154 OF INCOME TAX ACT BY AO ALSO DOESNT SURVIVE, AND T HIS APPEAL IS RENDERED INFRUCTUOUS AND IS DISPOSED OFF ACCORDI NGLY. ALL THE GROUNDS ARE THUS DISPOSED. 5. THE REVENUE EXCEPT RELYING UPON THE ORDERS PASSED BY T HE ASSESSING OFFICER DO NOT BRING ANY MATERIAL CONTRARY TO T HE CLAIM OF THE ASSESSEE ON WHICH BASIS THE RELIEFS HAVE BEEN GRANTE D BY THE LD. CIT(A). ON THE OTHER HAND, THE LD. AR HAD D RAWN OUR ATTENTION TO THE ORDERS PASSED BY THE CO-ORDINATE BENCH AT AMRITSAR AS WELL AS THE JURISDICTIONAL HIGH COURT AND A LSO TO THE CASH FLOW STATEMENT AND OTHER DOCUMENTS ON RECORD IN SUPP ORT OF ITS CLAIM TO STRENGTHEN THE ORDERS PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS PASSE D BY THE ITAT AS WELL AS HONBLE JURISDICTIONAL HIGH COURT AND ALSO INDEPENDENTLY REAFFIRMED THAT THE INTEREST FREE FUN DS AVAILABLE WITH THE ASSESSEE WERE SUFFICIENT AND MUCH MORE THAN INTER EST FREE ADVANCES, FOR ADVANCING INTEREST FREE LOANS TO ITS SUBSIDIARIES COMPANIES WHICH CLEARLY REFLECTS FROM THE CASH FLOW STATEMENT OF THE ASSESSEE COMPANY AS WELL AS FROM THE OBSERVATIONS MADE BY THE ITAT AND JURISDICTIONAL HIGH CO URT IN ITS ORDERS , THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTAN CES OF THE CASES IN HAND AND THE ORDERS AS STATED ABOVE, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDERS PASSED BY THE LD. CIT(A) AS THE SAME DOES NOT SUFFER FROM ANY ILLEGALITY, PERVERSIT Y AND/OR IMPROPRIETY AND THEREFORE UPHELD . ITA NOS.574 & 575 (ASR)/2015 ITA NOS.431& 432 (ASR)/ 2016 & 685(ASR)/2017 ACIT/ DCIT/ACIT VS. MS. MAX INDIA LTD., NAWANSHAH 5 3. IN THE RESULT, AS IN ALL THE APPEALS UNDER CONSIDERATIO N, THE ISSUE RELATES ONLY TO THE DELETION OF ADDITIONS MADE BY THE AO AS DISALLOWANCES U/S 36(1)(III) OF THE ACT, HENCE, AS PER OBSERVATIONS MADE ABOVE, ALL THE APPEALS STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 .06.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED:29.06.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) M/S MAX INDIA LTD., NAWANSHAHR (2) THE ACIT/DCIT/ACIT, JALANDHAR (3) THE CIT(A)-1, JALANDHAR (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER