SHRI RAHUL AGRITECH PRIVATE LIMITED (Priviously Known As Rahul Developers P Ltd.), Burhanpur V. THE DCIT, Khandwa

ITA 851/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5710 (ITAT-INDORE)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 06-10-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 12-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S N AGRAWAL
• Assessee Lawyers: R P MOURYA

Judgement Text

M/S RAHUL AGRITECH ITA NO. 851/IND/2016 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., ..!', #$ # !% BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER I.T.A. NO. 851/IND/2016 ASSESSMENT YEAR: 2011-12 M/S RAHUL AGRITECH PVT. LTD. BURHANPUR PAN AAECA 4445J :: APPELLANT VS DCIT KHANDWA :: RESPONDENT REVENUE BY SHRI SN AGRAWAL & PANKAJ MOGRA ASSESSEE BY SHRI R.P. MOURYA ! ' #$ DATE OF HEARING 6.10.2016 %&'( #$ DATE OF PRONOUNCEMENT 6.10.2016 * O R D E R PER SHRI D.T. GARASIA, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A)-22,NEW DELHI, CAMP AT INDO RE, DATED 15.6.2016. M/S RAHUL AGRITECH ITA NO. 851/IND/2016 2 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY DOING THE BUSINESS OF SOYA OIO , F.P. COTTON BALES, TOOR, MUSTARD, COTTON SEED AND COMMODITIES FUTURE BUSINESS. THE ASSESSEE FILED THE RETURN OF INCOME ON 27.9.2011. DURING THE YEAR, THE ASSESS ING OFFICER FOUND AS UNDER :- 3.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT IS NOTICED THAT THE ASSESSEE HAS ADVANCED INTEREST BEARING FUNDS TO SOME OF THE PERSONS FROM WHICH EIT HER THE INTEREST IS CHARGED ON LESSER RATE THAN THE INT EREST PAID BY THE ASSESSEE ON THE LOANS TAKEN I.E. @ 12%. THEREFORE, THIS IS THE CLEAR CUT CASE OF DIVERTING THE INTEREST BEARING FUNDS FOR ADVANCING THE SAME ON LE SSER RATE OF INTEREST OR WITHOUT INTEREST I.E. UTILIZATI ON OF FUND FOR OTHER THAN BUSINESS PURPOSES. THE TABLE GIVING THE DETAILS WHERE INTEREST EITHER NOT CHARGED OR CHARGE D ON M/S RAHUL AGRITECH ITA NO. 851/IND/2016 3 LESSER RATE AND WORKING OF DISALLOWANCE IS GIVEN AS UNDER : NAME OF CONCERNED PERIOD INT. 12% INT. CHARTED @ 9% LESS INTT. CHARTED NAYASA WORLD, MUMBAI 365 DAYS 23,53,150 17,64,863 5,88,287 AAR ESS COMMODITIES PVT. LTD., DELHI 365 DAYS 1,81,478 1,36,110 45,370 BHANDARI HOSPITAL & RESEARCH CENTRE 365 DAYS 2,07,743 NOT CHARGED 2,07,743 KAMAL KRISHNA AGROTECH 365 DAYS 33,544 NOT CHARGED 33,544 ASTHLAXMI POWER COMPANY PVT. LTD. 90 DAYS 1,530 NOT CHARGED 1,530 RESURGENT INDIA PVT. LTD., NEW DELHI 365 DAYS 1,92,000 NOT CHARGED 1,92,000 M/S SHRI OMKAR ENTERPRISES COAL COMPANY 365 DAYS 2,79,620 2,09,715 69,905 ARVINDO INS.MANAGEMENT 365 DAYS 2,2,9,142 1,90,952 38,190 K.K.OIL REFINERY 365 DAYS 8,89,963 5,56,068 3,33,63 5 TOTAL 15,10,204 3.2 THEREFORE, IT IS DEEMED THAT THE ASSESSEE HAS DIVERTED INTEREST BEARING FUNDS FOR ADVANCING THE S AME WITHOUT INTEREST OR INTEREST ON LESSER SIDE. THEREF ORE, M/S RAHUL AGRITECH ITA NO. 851/IND/2016 4 INTEREST OF RS.15,10,204/- AS ABOVE IS DISALLOWANCE AND SHALL BE ADDED TO THE INCOME OF THE ASSESSEE. PENAL TY PROCEEDINGS U/S 271(1) ARE INITIATED FOR FURNISHIN G INACCURATE PARTICULARS OF HER INCOME. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LEARNED CIT( A) AND THE LEARNED CIT(A) PARTLY ALLOWED THE SAME. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SUBSTANTIAL INTEREST FREE FUND IN THE FORM OF SHARE CAPITAL, RESERVE AND SURPLUS AND UNSECURED LOAN FROM THE CURRENT LIABILITIES. THE ASSESSEE HAS PAID IN TEREST ON WORKING CAPITAL LOAN BORROWED FOR NON-BUSINESS PURPOSES. 4. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. M/S RAHUL AGRITECH ITA NO. 851/IND/2016 5 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES . WE FIND THAT THE ASSESSEE HAS CHARGED AND PAID INTEREST @ 9% AND ALSO 15%. THERE CANNOT BE UNIFORM RATE OF INTERE ST IN CASE OF ALL LOANS AND ADVANCES. THE TOTAL ADVANCE IN RESPECT OF FOUR PERSONS COMES TO RS.4,34,817/-. THE TOTAL BORROWED FUNDS ARE RS.26.44 CRORES AND SHARE CAPITAL AND RESERVE CONSTITUTES 11.75%. THEREFORE, THE BORROWED FUNDS CONSTITUTE 69% OF TOTAL FUND. IN THE ABSENCE OF SPECI FIC FUND FLOW FROM ALL THE FIRMS OF A COMMON HOTCHPOTCH, FUNDS IN THE INDIVIDUAL CAPACITY IS LOST. THE LEARNED CIT(A) PRESUMED THAT THE INTEREST FREE ADVANCE HAS 69% COMPONENT INTEREST BEARING FUND. THEREFORE, THE DISALLOWANCE WAS RIGHTLY REDUCED TO 69% OF RS.4,34,817 /- I.E. RS.3,00,024/-. OUR INTERFERENCE IS, THEREFORE , NOT CALLED FOR. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED . M/S RAHUL AGRITECH ITA NO. 851/IND/2016 6 THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 6 TH OCTOBER, 2016. ( ..!') (..) #$ (O.P.MEENA) (D.T.GARASIA) ACCOUNTANT MEMBER J UDICIAL MEMBER (') / DATED : OCTOBER, 2016. DN/ M/S RAHUL AGRITECH ITA NO. 851/IND/2016 7 THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 6 TH OCTOBER, 2016. SD SD ( ..!') (..) #$ (O.P.MEENA) (D.T.GARASIA) ACCOUNTANT MEMBER J UDICIAL MEMBER (') / DATED : 6 TH OCTOBER, 2016. DN/