M/s PRS Rolling Mills Pvt. Ltd., Rajpura V. JCIT, Mandi Gobindgarh

ITA 844/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6957 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 09-02-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 07-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Assessee Lawyers: RAJIV DATTA
• Keywords: Unexplained investment; Depreciation; Opportunity of being heard; Capital expenditure
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR.B.R.R.KUMAR, ACCOUNTANT MEMBER ITA NO. 844/CHD/2016 ASSESSMENT YEAR: 2010-11 M/S RPS ROLLING MILLS PVT.LTD. VS. THE JCIT GAU SHALA ROAD, RAJPURA RANGE, MANDI GOBINDGARH PAN NO. AABCP7828F ITA NO. 115/CHD/2016 ASSESSMENT YEAR: 2010-11 THE ACIT VS. M/S RPS ROLLING MILLS PVT.LTD. CIRCLE, MANDI GOBINDGARH GAU SHALA ROAD, RAJPURA (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJIV DATTA REVENUE BY : SH. RAVI SARANGAL DATE OF HEARING : 27/07/2017 DATE OF PRONOUNCEMENT : 30/08/2017 ORDER PER BENCH BOTH THESE APPEAL HAS BEEN FILED BY THE ASSESSEE AN D THE REVENUE AGAINST THE COMMON ORDER OF LD. CIT(A), PATIALA DT. 30/12/2015. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER OF THE LD. CIT(A) IS AGAINST LAW AND FACTS OF THE CASE IN AS MUCH AS THE LEARNED CIT(A) WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LD. AO IN REJECTING THE BOOKS OF ACCOUNTS. 2. THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE SPEC IFIC CONSUMPTION OF POWER APPLICABLE TO THE ENTIRE PERIOD BY CONSIDERING THE UNIFORM PRODUCTION CONDITIONS OVER THE PERIODS, WHEREAS THE ASSESSEE WAS NOT RUNN ING AN AUTOMATIC PRODUCTION UNIT. 3. THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED TO ARBITR ARILY UPHOLD THE ADDITION OF RS. 150,04,760/- AS AGAINST THE TOTAL ADDITION OF RS. 1 50,04,760/- AS AGAINST THE TOTAL ADDITION OF RS. 3,41,63,820/- ON ACCOUNT OF ALLEGED INVESTMENT REQUIRED FOR ALLEGED UNACCOUNTED PRODUCTION BY APPLYING THE SPECIFIC POW ER CONSUMPTION AT 134.42 UNITS PMT OF PRODUCTION AGAINST 131.81 UNITS APPLIE D BY LD. A.O. 4. THAT THE LD. CIT(A) WAS NOT JUSTIFIED TO UPHOLD THE ADDITION OF RS. 95,32,540/- AGAINST RS. 97,25,413/- MADE BY LEARNED AO ON ACCOU NT OF ALLEGED UNACCOUNTED PROFIT ON ALLEGED UNACCOUNTED SALE OF 6514.70 M.T. 5. WITHOUT PREJUDICE TO GROUND NO. 3 & 4 ABOVE, THE LD . CIT(A) HAS ERRED IN NOT TELESCOPING THE ADDITION ON ACCOUNT OF G.P. WHILE C ONFIRMING THE ADDITION OF INVESTMENT IN UNACCOUNTED PRODUCTION 6. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF RS. 4,77,648/- ON ACCOUNT DEFERRED EXPENSES. 2 7. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OUT OF INTEREST AT 14,06,717/- ON ACCOUNT FOR INVESTMENT IN PLANT & MACHINERY, WHEREAS, THE ASSESSEE HAS NOT RAISED LOAN FOR MAKING THE INVESTM ENT. 8. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF DEPRECIATION ON VEHICLE AMOUNTING TO RS. 1,05,075/-. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION OF RS. 3,41,63,820/- TO TH E EXTENT OF RS. 1,50,04,760/- MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT IN UNACCOUNTED PR ODUCTION. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN ESTIMATING WITHOUT ANY BASIS THE TOTAL UNDISCLOSED INVESTMENT IN RESPECT OF UNACCOUNTED PRODUCTION TO HALF OF THAT ESTIMATED BY THE AO ON C ONSIDERATIONS LIKE CREDIT PURCHASE / SALE, WHICH ARE NOT RELEVANT FOR ADDITION U/S 69/69 B, IGNORING THE FACT BASED COMPUTATION OF REASONABLE HOLDING PERIOD COMPUTED BY THE AO IN THE ASSESSMENT ORDER. 3. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF THE AO RESTORED. 4. FIRSTLY WE SHALL DEAL WITH THE APPEAL OF THE ASS ESSEE IN ITA NO844/CHD/2016 FOR ASSESSMENT YEAR 2010-11 5. THE BRIEF FACTS RELATING TO THE ISSUES UNDER CON SIDERATION ARE THAT THE ASSESSEE COMPANY IS A STEEL RE-ROLLING MILL ENGAGED IN MANUFACTURING OF IRON AND STEEL PRODUCTS VIZ STRUCTURAL STEEL LIKE A NGLES, CHANNELS, FLATS, JOISTS, BEAMS ETC. DURING THE ASSESSMENT PROCEEDING S, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH DETAILS OF DA ILY PRODUCTION OF FINISHED GOODS AS WELL AS THE DETAILS OF THE MANUFACTURING P ROCESS INVOLVED. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE AMOUNT OF ELECTRICITY CONSUMED WAS DIRECTLY RELATED TO THE PRODUCTION OF FINISHED GOODS. IN ORDER TO CO-RELATE THE CONSUMPTION OF ELECTRICITY V IS--VIS PRODUCTION SHOWN, THE ASSESSING OFFICER GATHERED INFORMATION R EGARDING THE CONSUMPTION OF ELECTRICITY FROM THE ELECTRICITY BOA RD. THE ASSESSING OFFICER ANALYZED THE CONSUMPTION DATA OF ELECTRICITY VIS-A VIS THE PRODUCTION OF FINISHED GOODS AND OBSERVED THAT THERE WERE WIDE VA RIATION IN RATIO OF ELECTRICITY UNITS CONSUMED TO PER METRIC TONS OF FI NISHED GOODS PRODUCED DURING THE YEAR. HE OBSERVED THAT THE ELECTRICITY CONSUMPTION PMT OF FINISHED GOODS VARIES FROM 64.32 UNITS TO 114.06 UN ITS WHILE THE AVERAGE FOR THE ENTIRE YEAR IS 84.16 UNITS. HE FURTHER OBSERVE D THAT ON SOME DAYS, ELECTRIC UNITS CONSUMED WERE VERY LOW WHEREAS FINIS HED GOODS PRODUCED WERE VERY HIGH GIVING A VERY LOW VALUE OF ELECTRIC UNITS CONSUMED TO PER TON OF FINISHED GOODS, WHEREAS ON SOME OTHER DAYS, ELECTRIC UNITS CONSUMED WERE VERY HIGH WHEREAS THE FINISHED GOODS PRODUCED WERE VERY LESS GIVING A VERY HIGH VALUE OF ELECTRIC UNIT S CONSUMED PER METRIC UNIT OF FINISHED GOODS. HE FURTHER OBSERVED THAT EV EN ON SOME DAYS THOUGH THERE WAS ELECTRICITY CONSUMPTION YET NO PRO DUCTION WAS SHOWN. HE FURTHER NOTED THAT OTHERWISE ON OTHER DAYS, THER E WAS ALSO A BALANCE AND CONSISTENCY IN CONSUMPTION OF ELECTRIC UNITS VI S-A-VIS PRODUCTION OF FINISHED GOODS. HE, THEREFORE, OBSERVED THAT IT IND ICATED THAT THE DAILY PRODUCTION RECORDED BY THE ASSESSEE OF THE FINISHED GOODS WAS NOT 3 CORRECT AND, HENCE, NOT RELIABLE. HE OBSERVED THAT THE DATA RELATING TO THE DAILY PRODUCTION HAD BEEN MAINTAINED AS PER ACT UAL PRODUCTION. WHEN CONFRONTED IN THIS RESPECT, THE ASSESSEE EXPLA INED THAT THE CONSUMPTION OF ELECTRICITY WAS DEPENDENT ON VARIOUS FACTORS AS DETAILED IN HIS REPLY WHICH HAS BEEN REPRODUCED BY THE ASSES SING OFFICER IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER, HOWEVER, WAS NOT SATISFIED WITH THE ABOVE REPLY OF THE ASSESSEE. HE ULTIMATELY HELD THAT THE ASSESSEE COMPANY WAS INVOLVED IN UNACCOUNTED PRODUCTION OF F INISHED GOODS WHICH RESULTED IN UNACCOUNTED SALES AND PURCHASES. HE, THEREFORE, HELD THAT THE SALE AND PURCHASE FIGURES IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE NOT CORRECT AND HE ACCORDINGLY REJECT ED THE BOOKS OF ACCOUNT OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') AND PROCE EDED TO FRAME THE ASSESSMENT IN THE MANNER AS PROVIDED U/S 144 OF THE ACT. HE THEREAFTER ESTIMATED THE INCOME OF THE ASSESSEE ON THE BASIS O F ELECTRIC UNITS CONSUMED FOR 12 MONTHS AS PER CHART REPRODUCED IN T HE ASSESSMENT ORDER. HE COMPARED THE SAME WITH THAT SHOWN IN THE BOOKS O F ACCOUNT OF THE ASSESSEE AND ESTIMATED THE UNACCOUNTED PRODUCTION F OR EACH MONTH. THEREAFTER, ON THE BASIS OF AVERAGE SALES RATE, THE VALUE OF TOTAL UNACCOUNTED PRODUCTION WAS ESTIMATED IN MONETARY TE RMS AND THEN ADOPTING THE GROSS PROFIT RATE SHOWN BY THE ASSESSE E, THE UNACCOUNTED PROFIT OUT OF THE UNACCOUNTED PRODUCTION WAS WORKED OUT. SECONDLY, THE PEAK UNACCOUNTED PRODUCTION FOR THE RELEVANT MONTH WAS DETERMINED AND BY MULTIPLYING THE AVERAGE SALE RATE OF FINISHE D GOODS, THE UNACCOUNTED INVESTMENT WAS WORKED OUT. THE ASSESSI NG OFFICER IN THIS WAY WORKED OUT THE TOTAL UNACCOUNTED INVESTMENT OF THE ASSESSEE IN THE UNACCOUNTED PRODUCTION AT RS. 3,41,63,820/- AND RS. 97,25,613/-ON ACCOUNT OF PROFIT OUT OF UNACCOUNTED PRODUCTION AND ADDED BACK THE SAME TO THE INCOME OF THE ASSESSEE. 6. BEING AGGRIEVED FROM THE ABOVE ORDER OF THE ASSE SSING OFFICER THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE LD . CIT(A) AFTER GOING THROUGH THE SUBMISSIONS OF THE ASSESSEE HELD THAT A N AMOUNT OF RS. 150,04,760/- MAY BE TREATED AS UNACCOUNTED INVESTME NTS. 7. THE REVENUE FILED APPEAL BEFORE US FOR THE AMOUN T OF RELIEF OF RS. 1,91,59,060/- GRANTED BY THE CIT(A) AND THE ASSESSE E FILED PPEAL FOR THE AMOUNT OF RS. 150,04,760/- CONFIRMED BY THE CIT(A) ON ACCOUNT OF ALLEGED PRODUCTION OUTSIDE THE BOOKS OF ACCOUNT AND FOR RS. 95,32,540/- BY APPLYING GP RATIO @6.49% ON THE SALE OUTSIDE BOOKS OF ACCOUNT. 8. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES. 4 9. IT WAS ALSO BROUGHT TO THE NOTICE THAT SUBSEQUE NT TO THE PASSING OF THE ABOVE STATED IMPUGNED ASSESSMENT ORDER, A DETAI LED STUDY WAS CARRIED OUT BY A COMMITTEE HEADED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE, MANDI, GOBINDGARH HAVING ALL THE ASSESSING OFFICERS OF THE RANGE AS ITS MEMBERS. THE COMMITTEE WAS ASSI STED BY THE EXPERTS FROM THE NISST (NATIONAL INSTITUTE OF THE SECONDARY STEEL TECHNOLOGY) AND ALSO THE INDUSTRY REPRESENTATIVES. ON THE BASIS OF THE REPORT OF THE COMMITTEE, IT WAS DECIDED THAT IF THE VARIATION IN THE CONSUMPTION OF THE ELECTRICITY IS WITHIN THE RANGE OF 15% OF THE YEARL Y AVERAGE CONSUMPTION OF POWER, THE BOOK RESULTS SHOULD BE ACCEPTED. 10. LD. COUNSEL FOR THE ASSESSEE, RELYING UPON THE REPORT OF THE COMMITTEE CONSTITUTED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX, PATIALA ARGUED THAT HE WAS COVERED ON THE ISSUE OF PRODUCTION AS DECIDED BY THE COMMITTEE. THE ASSESSEE WAS ENTITLED TO BENEFIT OF 15% VARIATION IN CONSUMPTION OF ELECTRICITY PER METRIC TON OF FINISHED GOODS PRODUCED FROM THE AVERAGE WORKED OUT ON YEARLY BASI S AND THE VARIATION UP TO 15% WOULD NOT WARRANT ANY ADVERSE COGNIZANCE. HE ACCORDINGLY ARGUED THAT SINCE PURSUANT TO THE REPORT OF THE COM MITTEE, THE ASSESSING OFFICERS HAVE BEEN ALREADY FOLLOWING THESE NORMS WH ILE MAKING THE ASSESSMENT IN SIMILAR CASES AND IN SAME SET OF CIRC UMSTANCES AND HAS ACCEPTED THE BOOKS RESULTS SHOWN BY THE DIFFERENT A SSESSES. THE LD. AR HAS SUBMITTED THE CHART OF PER METRIC TON ELECTRIC UNIT CONSUMPTION WHICH IS MENTIONED HERE UNDER: (I) PRODUCT MANUFACTURED- FLATS OF DIFFERENT SIZES & SECTIONS. (II) YEARLY AVERAGE AS PER ANNEXURE A; TO THE ASSE SSMENT ORDER. 178.74 (III) 15% VARIATION AS ALLOWED BY THE DEPARTMENT IN SUBSEQUENT YEARS. MAXIMUM 205.55 MINIMUM 152.00 (IV) MAXIMUM AVERAGE IN BLOCK OF 30 DAYS AS PER ANN EXURE E TO THE ASTT. ORDER FROM 15.05.2009 TO 25.06.2009 280.30 (V) MINIMUM AVERAGE IN BLOCK OF 30 DAYS AS PER ANNE XURE E TO THE ASSTT. ORDER FROM 06.02.2010 TO 14/03/2010. 133.81 (VI) REMARKS NO DAY WISE ELECTRIC CONSUMPTION AVAI LABLE FOR 11 DAYS IN THE BLOCK OF HIGHER CONSUMPTION. THE NEXT HIGHER CONSU MPTION IS AT 211.84, WHICH GIVES VARIATION OF ABOUT 18% TO THE AVERAGE. THE MI NIMUM VARIATION IS ABOUT 25% TO THE AVERAGE CONSUMPTION. THE UNIT OF THE ASS ESSEE DID NOT RUN CONTINUOUSLY AND THIS AFFECTED THE DAY TO DAY POWER CONSUMPTION. 11. THIS TRIBUNAL VIDE ITS COMMON ORDER DATED 14.2 .2017, PASSED IN THE CASE OF M/S MODI OIL & GENERAL MILL, MANDI GOBINDG RH AND OTHERS IN ITA NO. 149/CHD/2016 AND IN ITA NO. 662/CHD/2016IN THE CASE OF M/S.UNIPEARL ALLOYS, OBSERVING THAT CONSEQUENT TO THE REPORT OF THE COMMITTEE CONSTITUTED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX, PATIALA CERTAIN 5 INTERNAL GUIDELINES REGARDING ACCEPTABILITY OF VARI ATION UPTO 15% HAVE BEEN ISSUED AND FURTHER THAT NO ADDITIONS HAVE BEEN MADE ON SIMILAR ISSUE IN SUBSEQUENT YEARS BY THE ASSESSING OFFICER, HAS REMANDED THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW IN THE LIGHT OF THE INTERNAL GUIDELINES ISSUED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX, PATIALA. 12. IN OUR VIEW THIS MATTER NEEDS TO BE RESTORED TO THE ASSESSING OFFICER IN THE PRESENT APPEALS, AS THE LD. CIT(A) DIDNT HA VE THE BENEFIT OF COMMITTEE REPORT WHILE DECIDING THE ABOVE APPEALS A S IN OTHER SIMILAR CASES WHERE IN THE INTERNAL GUIDELINES OF THE COMMI TTEE CONSTITUTED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX, PATIALA W ERE FOLLOWED. THE COMMITTEE SO CONSTITUTED WAS A BROAD BASED MULTI ME MBER BODY HAVING ADDITIONAL COMMISSIONER OF INCOME TAX, MANDI GOBIND GARH AS ITS HEAD AND ALL THE ASSESSING OFFICERS OF THE RANGE AS ITS MEMBERS. IT WAS ALSO ASSISTED BY THE EXPERTS OF THE NATIONAL INSTITUTE O F THE SECONDARY STEEL TECHNOLOGY (NISST) AND THE INDUSTRY REPRESENTATIVES . THE DEPARTMENT HAS ACCEPTED THE VARIATION OF 15% IN CONSUMPTION OF ELE CTRICITY PER METRIC TON OF FINISHED GOODS AS PER THE REPORT OF THE COMM ITTEE. 13. CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES A ND SINCE THE FACTS AND ISSUE INVOLVED IN ALL THE OTHER CAPTIONED APPEA LS ARE IDENTICAL, AND IN VIEW OF OUR FINDINGS GIVEN ABOVE, FOLLOWING THE PRI NCIPLE OF CONSISTENCY LAID DOWN BY THE HON'BLE PUNJAB & HARYANA HIGH COUR T IN THE CASE OF CIT VS. RIETA BISCUITS CO. (P) LTD [2009] 309 ITR 154 ( P&H)WHERE IN IT WAS HELD THAT THE BOOK RESULTS SHOWN BY THE ASSESSEE COMPANY FOR THE YEAR UNDER CONSIDERATION NEED TO BE ACCEPTED, AS WELL. 14. WE THEREFORE, SET ASIDE THE ACTION OF THE ASSES SING OFFICER IN REJECTING THE BOOKS OF ACCOUNT AND WITH DIRECTIONS TO FOLLOW THE GUIDELINES FORMULATED BY THE COMMITTEE CONSTITUTED BY THE PR. CIT(A), PATIALA AND THE INTERNAL GUIDELINES ISSUED REGARDIN G ACCEPTABILITY OF VARIATION UPTO 15%. THE ASSESSING OFFICER SHALL GIV E REASONABLE, SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ASSE SSES SHALL BE AT LIBERTY TO RAISE ANY CONTENTION BEFORE ASSESSING OFFICER FO R COMPLETION OF THE ASSESSMENT IN ACCORDANCE WITH LAW. 15. IN THE RESULT, CROSS APPEALS ARE HEREBY ALLOWED FOR STATISTICAL PURPOSES. 16. GROUND NO. 6 STANDS WITHDRAWN. 17. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS CLAIMED DEFERRED EXPENSES OF RS. 4,77,648/- IN THE P&L ACCO UNT PERTAINING TO ADVERTISEMENT, COMMISSION AND INTEREST 6 18. GROUND NO. 7 IS THAT THE LD. CIT(A) WAS NOT JUS TIFIED TO UPHOLD THE ADDITION OF RS. 14,06,717/- UNDER SECTION 36(1) (III) ON ACCOUNT OF INTEREST ON CAPITAL WORK IN PROGRESS. 19. THE ASSESSING OFFICER OBSERVED THAT THERE IS CA PITAL WORK IN PROGRESS RELATING TO BUILDING AND SHED UNDER CONSTR UCTION, PLANT & MACHINERY UNDER INSTALLATION. THE ASSESSEE HAS CLAI MED INTEREST EXPENDITURE OF 1,06,83,272/-. THE ASSESSING OFFICER HAS DISALLOWED INTEREST ON THE CAPITAL WORK IN PROGRESS TO THE TUN E OF RS. 14,06,717/- ON ACCOUNT OF INTEREST FOLLOWING THE ORDER OF HONB LE PUNJAB & HARYANA HIGH COURT IN CASE OF M/S ABHISHEK INDUSTRI ES LTD. VS. CIT (286 ITR 1). 20. THE LD. CIT(A) UPHELD THE ADDITION ON THE GROUN DS THAT THE APPELLANT HAS MIXED TYPE OF FUNDS AND COULD NOT GIV E NECESSARY EVIDENCE REGARDING THE INTEREST BEARING AND NON INT EREST BEARING FUND VIS--VIS APPLICATION OF THE SAME AND HELD THA T INTEREST PERTAINING TO CAPITAL WORK IN PROGRESS WAS NOT CAPI TALIZED AS PER EXPLANATION 8 OF SECTION 43 (I) PROVISO TO SECTION 36(1)(III). 21. LD. DR RELIED ON THE ORDER OF THE CIT(A) , WHIL E LD. DR RELIED ON THE SUBMISSIONS TAKEN BEFORE THE CIT(A). 22. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 23. BEFORE US, THE LD. AR SUBMITTED THAT WORK IN PR OGRESS FOR PLANT & MACHINERY WAS RS. 2,33,81,230/-. THE ACCUMULATIVE P ROFITS WERE TO THE TUNE OF 2,05,36,384/- AND THE CAPITAL WAS RS. 2 ,14,98,00/- WHEREAS THE UNSECURED LOANS WERE TO THE TUNE OF 2.8 6 CRORES. THIS PROVES THAT THE ASSESSEE HAS GOT SUFFICIENT OWN FUN DS AVAILABLE FOR UTILIZATION FOR CAPITAL EXPENDITURE. THE JUDGMENT O F VARIOUS COURTS IN THE CASE OF HERO CYCLES (P) LTD. VS. CIT, LUDHIANA C.A. NO. 514 OF 2008 DT. 05/11/2015, BRIGHT ENTERPRISES PVT. LTD. V S. CIT, JALANDHAR (2016) 381 ITR 107 (P&H) HELD THAT NO DISALLOWANCE OF INTEREST IS CALLED FOR WHERE THE ASSESSEE HAS GOT SUFFICIENT OW N FUNDS. THE ASSESSEE SUCCEEDS ON THIS GROUND. 24. GROUND NO. 8 RELATES TO UPHOLDING OF DISALLOWAN CE OF DEPRECIATION ON VEHICLE AMOUNTING TO RS. 1,05,075/- . THE DEPRECIATION WAS DISALLOWED AS THE ASSESSEE COMPANY FAILED TO FURNISH THE EVIDENCE OF OWNERSHIP OF VEHICLES. THE ASSESSING OFFICER IS 7 DIRECTED TO ALLOW THE DEPRECIATION ON PRODUCTION OF RELEVANT DOCUMENTS PERTAINING TO OWNERSHIP OF THE VEHICLES B Y THE ASSESSEE. 25. IN THE RESULT BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30/08/2017. SD/- SD/- (DIVA SINGH) (B.R.R.KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30/08/2017 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR