DCIT, Chandigarh V. M/s Punjab State Cooperative Supply & Marketing Federation Ltd., Chandigarh

ITA 755/CHANDI/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90232 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 27-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR AMA RVEER SINGH
• Assessee Lawyers: AMAN PARTI
• Keywords: Proportionate interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 755/CHD/2014 ASSESSMENT YEAR: 2008-09 THE DCIT, VS M/S PUNJAB STATE COOP. CIRC LE 4(1), SUPPLY & MARKETING FED.LTD. CHANDIGARH. PLOT NO. 4, SECTOR 35-B, CHANDIGARH. PAN: AAAAT3454G (APPELLANT) (RESPONDENT) APPELLANT BY : DR. AMARVEER SINGH, CIT-DR RESPONDENT BY : SHRI AMAN PARTI DATE OF HEARING : 13.07.2015 DATE OF PRONOUNCEMENT : 13.07.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDE R OF LD. CIT(APPEALS) CHANDIGARH DATED 12.06.2014 FOR ASSESSMENT YEAR 2008-09, CHALLENGING THE DELETION O F THE PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT ON DISALLOWANCE OF INTEREST UNDER SECTION 36(1)(III) O F THE ACT 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA D DEBITED INTEREST TO THE PROFIT & LOSS ACCOUNT ON AC COUNT OF LOANS TAKEN FROM BANKS AND HAD MADE INTEREST FREE A DVANCE OF RS. 17.01 CR TO M/S SUGAR FED. THE ASSESSING OF FICER HAD DISALLOWED PROPORTIONATE INTEREST OF RS. 1.23 C R BY APPLYING THE RATIO OF JUDGEMENT OF THE HON'BLE PUNJ AB & 2 HARYANA HIGH COURT IN THIS CASE OF ABHISHEK INDUSTR IES LTD. 286 ITR 1 (P&H). THE ITAT, CHANDIGARH BENCH HELD T HAT BENEFIT OF CREDIT OF RS. 10 CR PROVIDED BY PUNJAB GOVERNMENT COULD BE ALLOWED. THE TRIBUNAL RESTRICT ED THE DISALLOWANCE OF PROPORTIONATE INTEREST ON ADVANCES OF RS. 7.01 CR AND DISALLOWANCE WAS WORKED OUT TO RS. 49,0 7,000/- THE ASSESSING OFFICER LEVIED PENALTY ON THIS AMOUNT . 3. THE LD. CIT(APPEALS) FOUND THAT ON THE SIMILAR I SSUE, PENALTY WAS LEVIED IN PRECEDING ASSESSMENT YEAR 200 7-08 AND HE HAS CANCELLED THE PENALTY VIDE ORDER DATED 13.08.2013 AND FOLLOWING THE SAME ORDER, LD. CIT(AP PEALS) CANCELLED THE PENALTY UNDER SECTION 271(1)(C) OF TH E ACT. 4. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET SUBMITTED THAT THE ORDER OF THE LD. CIT(APPEALS) DA TED 13.08.20P13 IN PRECEDING ASSESSMENT YEAR 2007-08 IN ITA 1023/2013 HAS BEEN CONFIRMED BY THE TRIBUNAL BY DISMISSING THE DEPARTMENTAL APPEAL VIDE ORDER DATED 09.06.2014. COPY OF THE ORDER IS PLACED ON RECORD. HE HAS ALSO SUBMITTED THAT QUANTUM MATTER HAS REACHED FINA LITY BY DISMISSING DEPARTMENTAL APPEAL BY THE TRIBUNAL IN I TA 307/2012 FOR ASSESSMENT YEAR 2008-09 VIDE ORDER DAT ED 22.05.2013. THE CIT-DR DID NOT DISPUTE THE ABOVE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE. 5. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F THE EARLIER ORDERS OF THE TRIBUNAL, REFERRED TO ABOVE, IT IS CLEAR THAT QUANTUM MATTER HAS REACHED FINALITY BY DISMISS ING DEPARTMENTAL APPEAL BY THE TRIBUNAL VIDE ORDER DATE D 3 22.05.2013 IN ITA NO. 307/2012 ON THE PART ADDITION SO MAINTAINED PARTLY. THE ITAT CHANDIGARH BENCH ALSO ON THE IDENTICAL MATTER, DISMISSED THE DEPARTMENTAL APPEAL CANCELING THE PENALTY VIDE ORDER DATED 09.06.2014 ( SUPRA). SINCE THE ORDER OF THE LD. CIT(APPEALS) DATED 13.08 .2013 FOR ASSESSMENT YEAR 2007-08 HAS BEEN CONFIRMED BY THE TRIBUNAL BY DISMISSING THE DEPARTMENTAL APPEAL VIDE ORDER DATED 09.06.2014, THEREFORE, LD. CIT(APPEALS) WAS J USTIFIED IN CANCELING THE PENALTY ON THE IDENTICAL ISSUE. T HE ISSUE IS, THEREFORE, COVERED IN FAVOUR OF THE ASSESSEE AN D AGAINST THE REVENUE BY ORDER OF THE TRIBUNAL DATED 09.06.20 14. THUS, DEPARTMENTAL APPEAL HAS NO MERIT AND IS ACCOR DINGLY, DISMISSED. 6. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JULY,2015. SD/- SD/- (ANNAPURNA MEHROTRA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH JULY,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH