ITO, Khanna V. M/s Tripple V Timber Sales Corpn., Doraha

ITA 813/CHANDI/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86157 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 26-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Unexplained investment; Business income; Proportionate interest; Assessment record
• Section: 133(6); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 813/CHD/2014 ASSESSMENT YEAR: 2008-09 THE INCOME TAX OFFICER, VS M/S TRIPLE V TIMBER SA LES WARD IV, KHANNA CORPN., DORAHA, PUNJAB PAN NO.AACFT9753F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. MITTAL RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 03.02.2015 DATE OF PRONOUNCEMENT : 10.02.2015 ORDER PER T.R.SOOD, A.M. THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 15.07.2014 OF CIT(A)-II, LUDHIANA. 2. IN THIS APPEAL ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. (A) THAT THE LD. CIT(A) II, LUDHIANA HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS. 13,06,9 46/- MADE BY ASSESSING OFFICER U/S 69 OF THE INCOME-TAX ACT, 196 1 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN STOCK. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS. 1,28,757/- MADE BY ASSESSING OF FICER ON ACCOUNT OF DISALLOWANCE OF PROPORTIONATE INTEREST WITH REGA RD TO DEBIT BALANCE OF RS. 8,58,383/- IN THE NAME OF ITS RELATE D CONCERN, M/S VIBHOR SOOD & OTHERS. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS TAK EN A LIMIT FROM THE BANK, 2 THEREFORE, HE OBTAINED INFORMATION U/S 133(6) FROM ALLAHABAD BANK, LUDHIANA REGARDING THE STOCK WHICH WAS SUPPLIED BY THE BANK. IN THE SAID STOCK STATEMENT THE VALUE OF THE STOCK AS ON 30.9.2007 WAS SHOWN AT RS. 76,60,229/-. IT SEEMS THE ASSESSING OFFICER HAD ASKED THE ASSESSEE TO PRE PARE CHART SHOWING MONTHLY PURCHASES & SALES AND POSITION OF STOCK AT THE END OF EVERY MONTH. FROM THAT CHART IT WAS SEEN THAT ASSESSEE HAD SHOWN STOCK OF RS. 63,53,283/- ON 30.09.2007 AND, THEREFORE, THERE WAS A VARIATION OF RS. 13,06,946/-. IN RESPONSE TO QUERY, NO REPLY WAS FILED AND IT WAS ONLY CONCED ED THAT THIS WAS DONE FOR OBTAINING HIGHER LOANS. THE ASSESSING OFFICER DID N OT FIND ANY FORCE IN THESE CONTENTIONS AND OBSERVED THAT ASSESSEE HAD MADE INV ESTMENT IN UNEXPLAINED STOCK. HE FURTHER OBSERVED THAT THIS OBSERVATION WA S SUPPORTED BY THE VIEW OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF B.T. STEELS LTD V CIT IN ITA NO. 186 OF 2004 DATED 6.10.2010. 4. ON APPEAL, IT WAS MAINLY SUBMITTED THAT IN RESPO NSE TO SPECIFIC QUERY THAT ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH DET AILS OF OPENING AND CLOSING STOCK IN TERMS OF QUANTITY AND METHOD OF VALUATION, MONTH WISE AND ALONGWITH DETAILS OF THE PURCHASES I.E. MONTH WISE STATEMENT WAS PREPARED. THIS STATEMENT WAS ON ESTIMATED BASIS BY APPLYING THE GP RATE. TH E ASSESSING OFFICER HAD NOT DETECTED ANY UNDISCLOSED SALES. THE ASSESSEE WAS AL SO FILING VAT RETURNS TO SALES TAX AUTHORITIES, COPY OF WHICH WERE ALSO FILE D AND NO ADVERSE COMMENT WAS GIVEN ON THE SAME. FURTHER ACCOUNTS OF THE ASSE SSEE ARE AUDITED. IN ANY CASE THE ASSESSING OFFICER HAS NOT DETECTED ANY VARIATIO N IN THE STOCK AT THE END OF THE YEAR I.E. 31.3.2008 AND THE VARIATION NOTED IN THE MIDDLE OF THE YEAR ON THE BASIS OF STATEMENT FILED BY THE ASSESSEE ON ESTIMAT ED BASIS CANNOT BE RELIED ON. FURTHER, GP IN THIS YEAR WAS BETTER THAN EARLIER YEAR. FURTHER, RELIANCE WAS ALSO PLACED ON THE VARIOUS CASE LAWS INCLUDING CIT V SID HU RICE AND GENERAL MILLS 281 ITR 428 (P&H) 3 5. IT WAS ALSO POINTED OUT THAT DECISION OF B.T. ST EELS LTD V CIT (SUPRA) WAS DISTINGUISHABLE BECAUSE IN THAT CASE BANK HAD VERIF IED THE STOCK WHICH IS NOT A FACT IN THE PRESENT CASE. 6. THE LD. CIT(A) AFTER EXAMINING THESE SUBMISSIONS FOUND FORCE IN THE SAME AND DELETED THE ADDITION. 7. BEFORE US LD. DR STRONGLY RELIED ON THE ORDER OF ASSESSING OFFICER. HE FURTHER SUBMITTED THAT DETAILS OF STOCK WERE FURNIS HED BY THE ASSESSEE HIMSELF DURING THE ASSESSMENT PROCEEDINGS AND NOW ASSESSEE CANNOT SAY THAT SAME WERE ON ESTIMATE BASIS. 8. ON THE OTHER HAND LD. COUNSEL FOR THE ASSESSEE R EITERATED THE SUBMISSIONS MADE BEFORE THE CIT(A). HE FURTHER SUBMITTED THAT STOCK STATEMENT GIVEN TO THE BANK CANNOT BE BASIS OF MAKING ADDITION U/S 69 BEC AUSE IN SUCH STATEMENT STOCK IS GENERALLY VALUED AT HIGHER RATE. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. THIS ISSUE HAS BEEN DECIDED BY LD. CIT(A) VIDE PARA 3.4 TO 3.10 OF CIT( A), WHICH ARE AS UNDER:- 3.4 I HAVE CAREFULLY CONSIDERED THE APPELLANTS SU BMISSIONS. I HAVE ALSO PERUSED THE DOCUMENTS FILED BY THE APPELLANT A ND ALSO THE ASSESSMENT RECORD. THE TWO DOCUMENTS ON THE BASIS O F WHICH THE DIFFERENCE OF RS. 13,06,946/- WAS WORKED OUT BY THE AO WERE ALSO PERUSED BY ME. THESE DOCUMENTS ARE: (I) COPY OF THE STOCK STATEMENT GIVEN TO THE BANK AS ON 30.09.2007. (II) COPY OF THE STOCK AS PER THE BOOKS OF ACCOUNTS FILE D BY HE APPELLANT BEFORE THE A.O. 4 COPIES OF BOTH THESE DOCUMENTS ARE ENCLOSED WITH TH IS ORDER AS ANNEXURE A- 1 AND A-2 3.4 IT IS SEEN FROM BOTH THESE DOCUMENTS THAT BOTH THE AFORESAID STATEMENT WERE PREPARED ON AN ESTIMATED BASIS AND N ONE OF THE TWO DOCUMENTS REFLECTED THE ACTUAL PHYSICAL INVENTO RY OF STOCK DRAWN ON 30.09.2007. 3.5 IT IS SEEN FROM THE STOCK STATEMENT SUBMITTED TO TH E BANK WHICH HAS BEEN ENCLOSED AS ANNEXURE A-1 TO THIS ORDER THA T THE STOCK AT DORAHA LYING WITH THE APPELLANT WAS VALUED AT THE U NIFORM RATE OF RS. 11,500/- PER CUBIC METER AND THE STOCK AT GANDH I DHAM WAS VALUED AT A UNIFORM RATE OF RS. 11,980/- PER CUBIC METER. THE APPELLANT IS TRADING IN TIMBER AND THE VALUE OF STO CK OF TIMBER AT ANY POINT OF TIME CANNOT BE UNIFORM FOR ALL THE STO CK ITEMS. THE STOCK NORMALLY COMPRISES NUMBER OF ITEMS AND THE ST OCK OF EACH OF THE ITEMS WOULD DEPEND ON A NUMBER OF FACTORS LI KE THE QUALITY OF TIMBER ETC. APPARENTLY THE STOCK STATEMENT GIVEN TO THE BANK WAS ON AN ESTIMATED BASIS WITHOUT ANY PHYSICAL INVE NTORY OF STOCK HAVING BEEN PREPARED. IT IS FURTHER SEEN FROM THE S TATEMENT GIVEN TO THE BANK THAT THERE IS NO MENTION OF THE STOCK H AVING BEEN VERIFIED BY ANY OF THE BANK OFFICIALS. 3.6 FURTHER, FROM THE MONTH WISE STOCK STATEMENT PREPAR ED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDIN GS AND FILE BEFORE THE AO WHICH HAS BEEN ENCLOSED AS ANNEXURE A -2 TO THIS ORDER IT IS SEEN THAT THE MONTH WISE STOCK HAD BEEN COMPUTED BY DOING THE CALCULATION ON THE BASIS OF GROSS PROFIT SHOWN BY THE APPELLANT. OPENING STOCK FOR EACH MONTH WAS TAKEN T O WHICH THE FIGURE OF PURCHASES WAS ADDED. THE COST OF SALE WAS COMPUTED BY REDUCING THE GROSS PROFIT OUT OF TOTAL SALES AND TH IS COST OF SALES WAS REDUCED FROM THE STOCK TO ESTIMATE THE CLOSING STOCK AT THE END OF EACH MONTH. IT IS APPARENT FROM THE AFORESAI D TWO DOCUMENTS THAT NEITHER OF THESE TWO DOCUMENTS REFLE CTED THE ACTUAL PHYSICAL STOCK OF THE APPELLANT AT ANY POINT OF TIME. THE STATEMENTS PERTAINING TO MONTHWISE STOCK ARE ESTIMA TED STATEMENTS AS IS THE STATEMENT GIVEN TO THE BANK. I N VIEW OF THE FACT THAT THE MONTHWISE STOCK STATEMENT FILED BY TH E APPELLANT BEFORE THE AO WAS PREPARED ON THE BASIS OF FIGURES OF PURCHASE, 5 SALE AND GROSS PROFIT AND AND IN VIEW OF THE FACT T HAT NO DEFECT HAS BEEN POINTED OUT BY THE AO REGARDING THE PURCHA SES AND SALES SHOWN BY THE APPELLANT, THE STOCK STATEMENT FURNISH ED BY THE APPELLANT TO THE AO CANNOT BE HELD TO BE INCORRECT. 3.7 MOREOVER, THE STOCK STATEMENT REFERRED TO BY THE AO PERTAINED TO THE MONTH OF SEPTEMBER 2007. NO DIFFERENCE HAS BEEN POINTED OUT BY THE AO PERTAINING TO THE STOCK STATEMENT FOR THE MONTH OF MARCH 2008. 3.8 IN VIEW OF THE AFOREMENTIONED FACTS, THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE DIFFERENCE IN THE STOCK STATEMENT FILED BEFORE THE BANK AND THE MONTHWISE STOCK STATEMENT FILED BEFORE THE AO REPRESENTED THE UNACCOUNTED INVESTMENT OF THE APPEL LANT. IF AT ALL, THIS DIFFERENCE COULD RAISE THE SUSPICION REGARDING THE ACCURACY OF THE BOOKS OF THE ACCOUNT OF THE APPELLANT. THIS COULD HAVE BEEN A STARTING POINT OF INVESTIGATION FOR THE AO TO PRO VE THAT THE BOOK RESULT OF THE APPELLANT WAS NOT CORRECT. THIS IS BY ITSELF, HOWEVER, COULD NOT BE THE BASIS FOR MAKING THE ADDITION U/S 69 OF THE I.T. ACT. FROM THE TWO DOCUMENTS REFERRED TO ABOVE IT IS EVIDENT THAT NO DIFFERENCE IN THE QUANTITATIVE TALLY OF THE STOC K LYING WITH THE APPELLANT AS ON 30.09.2007 CAN BE ESTABLISHED. 3.9 WHETHER DIFFERENCE IN STOCK STATEMENT GIVEN TO THE BANK AND THE STOCK AS PER THE BOOKS OF ACCOUNT CAN BE ADDED AS T OTAL INCOME OF THE ASSESSEE U/S 69 OF THE IT ACT WOULD DEPEND UPON THE FACTS OF EACH CASE. THERE ARE A NUMBER OF JUDICIAL PRONOUNCE MENT ON THIS ISSUE. THE APPELLANT HAS REFERRED TO A NUMBER OF DE CISIONS WHERE IT HAS BEEN HELD THAT THE ADDITION TO THE TOTAL INC OME ON ACCOUNT OF DIFFERENCE IN STOCK STATEMENT GIVEN TO THE BANK AND THE STOCK AS PER THE BOOKS OF ACCOUNT WAS NOT JUSTIFIED. THE AO HAS REFERRED TO THE DECISION OF THE HONBLE P&H HIGH COURT IN THE C ASE OF B.T. STEELS WHERE IT HAS BEEN HELD THAT THE ADDITION TO THE TOTAL INCOME ON ACCOUNT OF DIFFERENCE IN STOCK STATEMENT GIVEN T O THE BANK AND THE STOCK AS PER THE BOOKS OF ACCOUNT WAS JUSTIFIED . 6 3.9 KEEPING IN VIEW THE FACTUAL AND LEGAL POSITION THE DECISION OF THE HONBLE P&H HIGH COURT IN THE CASE OF B.T. STEELS ( SUPRA) IS DISTINGUISHABLE FROM THE APPELLANTS CASE ON FACTS. IN THE CASE IT WAS CONFIRMED BY THE REGIONAL OFFICER OF THE BANK T HAT STOCK AS PER THE STATEMENT GIVEN TO THE BANK WAS ACTUALLY LY ING WITH THE ASSESSEE. IN THE APPELLANTS CASE THERE IS NO EVIDE NCE OF ANY VERIFICATION OF PHYSICAL STOCK LYING WITH THE APPEL LANT OR ANY EVIDENCE OF ANY VERIFICATION OF PHYSICAL STOCK LYIN G WITH THE APPELLANT OR ANY EVIDENCE OF ANY VISIT BY THE BANK OFFICIALS. MOREOVER, AS DISCUSSED ABOVE THE STOCK STATEMENT RE FERRED TO BY THE AO PERTAINED TO THE MONTH OF SEPTEMBER 2007. NO DIFFERENCE HAS BEEN POINTED OUT BY THE AO PERTAINING TO THE ST OCK STATEMENT FOR THE MONTH OF MARCH 2008. IN VIEW OF THE FACT TH AT THE MONTHWISE STOCK STATEMENT FILED BY THE APPELLANT BE FORE THE AO WAS PREPARED ON THE BASIS OF FIGURES OF PURCHASE, S ALE AND GROSS PROFIT AND NOT BY TAKING ACTUAL PHYSICAL INVENTORY, AND IN VIEW OF THE FACT THAT NO DEFECT HAS BEEN POINTED OUT BY THE AO REGARDING THE PURCHASES AND SALES SHOWN BY THE APPELLANT, I A GREE WITH THE APPELLANTS CONTENTION THAT THE APPELLANTS CASE IS MORE COMPARABLE TO THE FACTS OF THE CASE OF CHAUHAN PAPE RS PVT. LTD. ITA NO. 358 OF 2006 DATED 12.10.2006 (HON'BLE HIGH COURT OF PUNJAB & HARYANA). 3.10 KEEPING IN VIEW THE AFORESAID FACTS AND LEGAL POSIT ION THE ADDITION MADE BY THE AO IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 10. IN OUR OPINION THE LD. CIT(A) HAS CORRECTLY DEC IDED THE ISSUE BECAUSE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD WHETHER STOCK AS SHOWN BY THE BANK ON 30.9.2007 WAS SAME AS SHOWN IN THE STOCK REGISTE R BY THE ASSESSEE. IF ASSESSEE HAD FILED ONLY AN ESTIMATED STOCK BEFORE T HE ASSESSING OFFICER ON THE BASIS OF GP RATE, THEN THE SAME CANNOT BE MADE THE BASIS OF THE ADDITION. 11. THE LD. CIT(A) HAS PARTICULARLY REFERRED TO THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CHAUHAN PAPERS PVT LTD ITA NO. 358 WHEREIN IT IS HELD THAT IF STOCK STATEMENT IS M ADE ON ESTIMATE BASIS THEN 7 ADDITION IS NOT CALLED FOR. AS OBSERVED EARLIER TH E ASSESSEE HAS MERELY GIVEN STATEMENT OF MONTHLY STOCK ON THE BASIS OF A ROUGH ESTIMATE BY INCORPORATING MONTHLY PURCHASES AND SALES AND, THEREFORE, THAT S TATEMENT CANNOT BE MADE THE BASIS OF ADDITION. IF THERE WAS A DIFFERENCE IN ST OCK, THE DIFFERENCES SHOULD HAVE BEEN ASCERTAINED AS AT THE END OF THE YEAR THEN POS SIBLY THE ASSESSING OFFICER COULD HAVE MADE ADDITION WHICH HAS NOT BEEN DONE. T HEREFORE, WE FIND NOTHING WRONG WITH THE ORDER OF CIT(A) AND WE CONFIRM THE S AME. 12. GROUND NO.2: AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICE D THAT ASSESSEE HAS SHOWN A DEBTOR IN THE BALANCE SHEET IN THE NAME OF VIHOR SO OD & BROS. AMOUNTING TO RS. 8,58,380/-. IT WAS FURTHER NOTICED THAT DURING THE YEAR THERE WAS NO MOVEMENT IN THE ACCOUNT. WHEN THIS ISSUED WAS RAISED BY THE ASSESSING OFFICER, IT WAS SUBMITTED THAT THIS ACCOUNT PERTAIN TO A FIRM WHERE ONE SMT. KIRAN SOOD IS ALSO PARTNER WHO HAD GIVEN UNSECURED LOANS TO THE ASSESS EE FIRM AND THAT IS WHY NO INTEREST HAS BEEN CHARGED. HOWEVER, ASSESSING OFFIC ER DID NOT AGREE WITH THESE SUBMISSIONS BECASAE ASSESSEE WAS NOT PAYING INTERES T ON ANY OF THE UNSECURED LOANS. HE INVOKED THE PRINCIPLES LAID DOWN BY THE H ON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ABHISHEK INDUSTRIES LTD 286 ITR 1 AND DISALLOWED PROPORTIONATE INTEREST AMOUNTING TO RS. 1,28,757/-. 13. ON APPEAL IT WAS SUBMITTED THAT ASSESSEE HAS SOLD GOODS TO THESE PARTIES AND, THEREFORE, THESE TRANSACTIONS REPRESENTED A TR ANSACTION IN THE REGULAR COURSE OF BUSINESS AND IT IS NOT A CASE OF INTEREST FREE A DVANCE. THE ASSESSEE HAD DULY CHARGED VAT ETC. ON THE SALES. THE LD. CIT(A) FOUND FORCE IN THE SUBMISSIONS AND DELETED THE ADDITION. 14. BEFORE US LD. DR RELIED ON THE ORDER OF ASSESSI NG OFFICER. 8 15. ON THE OTHER HAND LD. COUNSEL OF THE ASSESSEE R EITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AND CIT(A). HE AL SO REFERRED TO PAGES 1 TO 4 OF THE PAPER BOOK WHICH IS COPY OF THE ACCOUNT AND POINTED OUT THAT ALL THE AMOUNTS REPRESENT SALES MADE BY THE ASSESSEE. CERT AIN PAYMENTS HAVE ALSO BEEN MADE TO THAT PARTY AND THERE IT IS A PURE BUSINESS TRANSACTION, HENCE THERE WAS NO JUSTIFICATION FOR PROPORTIONATE DISALLOWANCE OF THE INTEREST. 16. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THIS ISSUE HAS BEEN ADJUDICATED BY LD. CIT(A) VIDE PARAS 5.3 & 5.4, WHI CH ARE AS UNDER:- 5.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. I T IS AN UNDISPUTED FACT ON RECORD THAT THE AMOUNT OF RS. 8, 58,383/- REPRESENTS THE DEBIT BALANCE IN THE NAME OF M/S VIB HOR SOOD & ORS. , THE PROPRIETARY CONCERN OF SMT. KIRAN SOOD . THE APPELLANT HAS CONTENDED THAT THIS DEBIT BALANCE WAS ON ACCOUNT OF REGULAR PURCHASE AND SALE TRANSACTIONS W ITH THIS PROPRIETARY CONCERN MADE DURING THE ASSESSMENT YEAR 2006- 07 AND ASSESSMENT YEAR 2007-08. THERE IS NOTHING IN THE ASSESSMENT ORDER TO SUGGEST THAT THIS AMOUNT OF RS. 8,58,380/- WAS IN THE FORM OF AN INTEREST FREE ADVA NCE GIVEN BY THE APPELLANT TO M/S VIBHOR SOOD & ORS. FURTHER, IT IS ALSO SEEN FROM THE ASSESSMENT ORDER AND FROM THE APPELLA NTS SUBMISSION THAT SMT. KIRAN SOOD, THE PROPRIETOR OF M/S VIBHOR SOOD & ORS. HAD ADVANCED AN AMOUNT OF RS. 10 LACS TO THE APPELLANT AS AN INTEREST FREE LOAN. FROM THESE FACTS IT IS APPARENT THAT THE APPELLANT HAD TO RECEIVE AN AMOUN T OF RS. 8,58,380/- FROM THE PROPRIETY CONCERN OF SMT. KIRAN SOOD ON WHICH NO INTEREST HAD BEEN CHARGED BY THE APPELLANT AND THE APPELLANT HAD TO PAY RS. 10 LACS TO SMT. KIRAN SOOD ON WHICH NO INTEREST HAD BEEN PAID BY THE APPELLANT. 5.3 KEEPING IN VIEW THE AFORESAID FACTS, THERE BEING CO MMERCIAL EXPEDIENCY IN THE TRANSACTION OF DEBIT BALANCE AND THERE BEING INTEREST FREE ADVANCE RECEIVED FROM SMT. KIRA N SOOD OF AN AMOUNT HIGHER THAN AMOUNT OUTSTANDING, THERE WAS NO JUSTIFICATION IN DISALLOWING THE PROPORTIONATE EXPE NDITURE OUT 9 OF INTEREST EXPENDITURE CLAIMED BY THE APPELLANT. T HE ADDITION MADE BY THE AO IS ACCORDINGLY DELETED. THIS GROUND OF APPEAL IS ALLOWED. 17. IN OUR OPINION THE LD. CIT(A) HAS CORRECTLY NO TED THE FACT THAT ONCE IT IS A CASE A SALES THEN EVEN IF THE AMOUNT HAS NOT BEEN RECEIVED IT CANNOT BE CONSTRUED AS A CASE OF DIVERSION OF FUNDS. IN ANY C ASE ONE OF THE PARTNER OF M/S VIBHOR SOOD AND BROS. I.E SMT. KIRAN SOOD HAS ALSO GIVEN A LOAN OF RS. 10 LAKHS TO THE ASSESSEE FIRM. THEREFORE, WE FIND NOT HING WRONG WITH THE ORDER OF LD. CIT(A) AND WE CONFIRM THE SAME. 18. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.02.2015. SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10 TH FEBRUARY,2015 RKK COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR