Sh. Lal Singh Lamba, Chandigarh V. ITO, W-5(1), Chandigarh

ITA 725/CHANDI/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5599 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 17-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Commercial expediency; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH !', # BEFORE: SMT. DIVA SINGH, JM ./ ITA NO. 725/CHD/2018 / ASSESSMENT YEAR : 2013-14 SHRI LAL SINGH LAMBA, SHOP NO. 8, SECTOR 26, SABJI MANDI, CHANDIGARH. VS THE ITO, WARD 5(1), CHANDIGARH. ./ PAN NO: AANPL7931J / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI TEJ MOHAN SINGH, ADVOCATE # ! ' / REVENUE BY : SHRI MANJIT SINGH, CIT-DR $ % ! &/ DATE OF HEARING : 02.09.2019 '()* ! &/ D ATE OF PRONOUNCEMENT : 13.09.2019 $%/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE WHEREIN THE CORRECTNESS OF THE ORDER DATED 02.04.20 18 OF CIT(A), CHANDIGARH IS ASSAILED ON THE FOLLOWING GRO UNDS : 1. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION OF RS. 15,92403/- M ADE ON ACCOUNT OF DISALLOWANCE OF INTEREST APPLYING THE PROVISIONS OF SECTION 36(L )(III) WHICH IS ARBITRARY AND UNJUSTIFIED. 2. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S WITHOUT APPRECIATING THE FACTS AS PLACED BEFORE HIM IN THE RIGHT PERSPECTIVE UPHELD THE ADDITION WHICH IS ARBITRARY AND UNJUSTIFIED. 3. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TA X (APPEALS) IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE. ITA 725/CHD/2018 A.Y. 2013-14 PAGE 2 OF 5 2. THE LD. AR INVITING ATTENTION TO THE WRITTEN SUB MISSIONS AVAILABLE ON RECORD PLEADING SUFFICIENCY OF FUNDS A ND COMMERCIAL EXPEDIENCY AS HAS BEEN PARTLY EXTRACTED AT PAGE 2 AND 3 OF THE IMPUGNED ORDER SUBMITTED THAT THE CI T(A) HAS DISMISSED THE ASSESSEE'S APPEAL WITHOUT REFERRING T O THE SPECIFIC FACTS AND AFTER CARRYING OUT A DISCUSSION IN PARA 6.3.1 AT PAGES 6 TO 13 HAS INCORRECTLY DISMISSED TH E ASSESSEE'S APPEAL VIDE PARA 6.4.5 WITHOUT REFERRING TO THE FACTS. INVITING ATTENTION TO THE SUBMISSIONS EXTRA CTED IN THE ORDER ITSELF, IT WAS SUBMITTED THAT COMMERCIAL EXPE DIENCY WAS ARGUED. THE SPECIFIC PURPOSE FOR ADVANCING THE LOAN OF ABOUT RS. 79 LAKH ODD TO GURBACHAN SINGH COLD STORA GE PVT. LTD. REFERRING TO RECORD, IT WAS SUBMITTED, IT HAD BEEN ARGUED WAS FOR THE BUSINESS INTERESTS OF THE ASSESSEE. TH E LOAN HAD BEEN ADVANCED SOMETIME IN 2003 AND SUBSEQUENTLY THE SPECIFIC COLD STORAGE FACILITIES ON THE COMPLETION OF THE CONSTRUCTION HAS ALSO BEEN USED FOR THE BUSINESS OF THE ASSESSEE'S PURPOSE. THESE FACTS, IT WAS SUBMITTED, ARE BORNE OUT FROM THE RECORD THOUGH IT WAS NOT PART OF THE R ECORD AVAILABLE TO THE CIT(A) AS SUCH, ON COMMERCIAL EXPE DIENCY, THESE RECORDS ARE NOT READILY AVAILABLE WITH HIM TO DAY. 2.1. HOWEVER, ON THE AVAILABILITY OF SUFFICIENT FUN DS, REFERENCE WAS MADE TO PAPER BOOK PAGE 8 WHICH IS TH E DETAILS OF INTEREST FREE FUNDS AVAILABLE TO THE ASSESSEE OV ER THE ITA 725/CHD/2018 A.Y. 2013-14 PAGE 3 OF 5 YEARS. THE PAPER BOOK, IT WAS SUBMITTED, HAD BEEN FILED BEFORE THE CIT(A) AND HAS BEEN LEFT UNADDRESSED. 3. THE LD. CIT-DR INVITING ATTENTION TO PARA 4.3 AN D 4.4 OF THE ASSESSMENT ORDER SUBMITTED THAT THE AO HAS ESTA BLISHED THAT THE ASSESSEE DID NOT HAVE SUFFICIENT FUNDS AVA ILABLE. SINCE THE ORDER OF THE ASSESSING OFFICER WAS UNDER CHALLENGE, THE LD. CIT-DR WAS REQUIRED TO ADDRESS FROM THE IMP UGNED ORDER AND POINT OUT WHERE THE DISCUSSION ON FACTS O N NON AVAILABILITY OF SUFFICIENT FUNDS HAS BEEN CARRIED O UT BY THE CIT(A), SPECIFICALLY IN THE LINE OF THE DETAILED SU BMISSIONS ADDRESSED BEFORE THE SAID AUTHORITY, COPIES OF WHIC H ARE AVAILABLE AT PAPER BOOK PAGE 6 TO 14 IN THE LETTER DATED 07.03.2018. ON GOING THROUGH THE SAME, LD. CIT-DR AGREED THAT IN THE FINDING OF THE AO CHALLENGED BEFORE THE CIT(A) REFERENCE TO THESE FACTS HAS NOT BEEN MADE IN THE I MPUGNED ORDER. IT WAS HIS SUBMISSION THAT THE CIT(A) MAY H AVE BEEN SATISFIED BY THE FINDINGS OF THE AO ON FACTS. 4. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MAT ERIAL ON RECORD. NO DOUBT THE LD. CIT- DR IS CORRECT ON HIS SUBMISSIONS THAT THE AO HAS NOT AGREED WITH THE ASS ESSEES CLAIM OF AVAILABLE FUNDS. HOWEVER, THE FACT REMAINS THAT THE SAID FINDING WAS CHALLENGED BY THE ASSESSEE BEFORE CIT(A). IN THE FACTS OF THE PRESENT CASE THE ASSESSEE HAS B EEN REQUIRED TO JUSTIFY BY THE AO WHY DISALLOWANCE FOR THE ITA 725/CHD/2018 A.Y. 2013-14 PAGE 4 OF 5 FOLLOWING INTEREST FREE LOANS/ADVANCES BE NOT MADE AS THESE WERE HELD TO BE NON-BUSINESS USES OF FUNDS: S.NO. NAME AMO UNT (RS.) 1. GURBACHAN SINGH COLD STORAGE PVT.LTD. 79,05,768/- 2. -DO- 27,40,000/- 3. HOUSING BOARD, HP 40,000/- 4. KISSAN AGRO FRESH 1,00,000/- 4.1. IT IS SEEN THAT THE FINDINGS OF THE AO IN PARA S 4.4 AND 4.5 OF THE ORDER WERE CHALLENGED BEFORE THE CIT(A). ON A PERUSAL OF THE WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A) AND ON A READING OF THE IMPUGNED ORDER, IT IS SEEN THAT THESE SUBMISSIONS ON FACTS HAVE REMAINED UNADDRESSE D. IN THE ABSENCE OF ANY RELEVANT DISCUSSION ON THE ISSUE , THE FINDING ARRIVED AFTER HEARING THE PARTIES, IT WAS P ROPOSED SHOULD BE SET ASIDE. 5. THE LD. AR IN THE ALTERNATE SUBMITTED THAT THE O RDER PASSED IS A NON-SPEAKING ORDER AND MAY BE REMANDED . THE LD. CIT-DR AGREED IN THE CIRCUMSTANCES TO THE REMAN D, HIS ONLY OBJECTION WAS THAT ON THIS GROUND, RELIEF SHOU LD NOT BE GRANTED AT THIS STAGE AND THE ISSUE BE REMANDED. 6. ACCORDINGLY, IN VIEW OF THE DETAILED REASONS AS DISCUSSED HEREINABOVE, IT IS DEEMED APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER BACK TO THE FILE OF THE CIT(A) W ITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WI TH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING ITA 725/CHD/2018 A.Y. 2013-14 PAGE 5 OF 5 HEARD. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPT.,2019. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER POONAM (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ / / CIT 4. $ / ( )/ THE CIT(A) 5. -01 2 , & 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7% / GUARD FILE (+ $ / BY ORDER, 8 # / ASSISTANT REGISTRAR