Asst. CIT, Circle-7, Pune V. Western Maharashtra Development Corporation, Pune

ITA 884/PUN/2013

• Counselvise Citation: 88424514 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 18-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.884/PN/2013 (ASSESSMENT YEAR 2009-10) ACIT, CIRCLE-7, PUNE .. APPELLANT VS. WESTERN MAHARASHTRA DEVELOPMENT CORPN., 2 ND FLOOR, KUBERA CHAMBERS, SHIVAJINAGAR, PUNE 411005 PAN NO.AAACW1864B .. RESPONDENT ASSESSEE BY : SHRI SHARAD VAZE REVENUE BY : SHRI B.C. MALAKAR DATE OF HEARING : 23-07-2014 DATE OF PRONOUNCEMENT : 24-07-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 10-10-2012 OF THE CIT(A)-III, PUNE RELATING T O ASSESSMENT YEAR 2009-10. 2. THE ONLY GROUND RAISED BY THE REVENUE READS AS U NDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE LAW, THE LD.CIT(A) HAS ERRED IN DISALLOWING INTEREST ACCRUED ON SEED MONEY LOAN AMOUNTING TO RS.2,88,24,000/-. 2.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE COMPANY IS A GOVT. OF MAHARASHTRA UNDERTAKING AND ITS MAIN BUSINESS IS TO ENSURE THE DEVELOPMENT OF INDUSTRIES AND TO PROMOTE INDUSTRIAL ISATION OF THE WESTERN MAHARASHTRA REGION BY UNDERTAKING, PREPARIN G AND EXECUTING THE INDUSTRIAL SCHEMES EITHER SOLELY OR JOINTLY WIT H THE GOVT. OF MAHARASHTRA OR ANY OTHER CORPORATION, COMPANY, ASSO CIATION, INSTITUTION 2 OR INDIVIDUALS. THE COMPANY WAS INCORPORATED ON 03 -12-1970. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED FROM THE VARIOUS DETAILS FILED BEFORE HIM THAT THE ASSESSEE HAD MAINTAINED ITS BOOKS OF ACCOUNT ON ACCRUAL BASIS IN RESPECT OF ALL ITEMS OF AMOUNTS EXCEPT THE AMOUNT RECEIVED BY IT ON SEED MONEY LOAN S/ASSISTANCE. FROM THE VARIOUS DETAILS FILED BY THE ASSESSEE HE NOTED THAT THE ACCRUED INTEREST UPON SUCH SEED MONEY LOANS UNDER EDUCATED UNEMPLOYM ENT SCHEME FOR THIS YEAR IS AT 2,88,24,000/-. HAD THE SAID INTERE ST BEEN ACCOUNTED FOR ON ACCRUAL BASIS, PROFIT TO THE EXTENT OF THE AFORESAI D AMOUNT OF RS.288,24,000/- WOULD HAVE INCREASED. ACCORDING TO HIM, WHEN ALL THE ITEMS OF ACCOUNTS WERE MAINTAINED ON MERCANTILE SYS TEM OF ACCOUNTING ON ACCRUAL BASIS, THERE WAS NO BASIS FOR ACCOUNTING INTEREST ON SEED MONEY LOANS ON CASH BASIS. HE, THEREFORE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE SAME AMOUNT SHOULD NOT BE ADDED TO TH E TOTAL INCOME OF THE ASSESSEE. REJECTING THE EXPLANATION GIVEN BY THE A SSESSEE AND FOLLOWING HIS ORDER FOR A.Y. 2008-09 THE ASSESSING OFFICER D ISALLOWED THE AMOUNT OF RS.2,88,24,000/- BEING ACCRUED INTEREST ON SEED MONEY LOAN. 3. IN APPEAL THE LD.CIT(A) FOLLOWING THE ORDER OF T HE TRIBUNAL FOR A.Y. 2002-03 WHICH HAS BEEN FOLLOWED IN A.Y. 2008-0 9 BY THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITA NO.773/PN/2006 ORDE R DATED 31-03- 2008 DELETED THE ADDITION MADE BY THE ASSESSING OFF ICER. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APP EAL BEFORE US. 4. AFTER HEARING BOTH THE SIDES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). WE FIND THE TRIBUNAL IN ASSES SEES OWN CASE FOR A.YRS. 1999-2000, 2001-02, 2003-04, 2004-05 AND 200 9-10 HAS DELETED SUCH ADDITION BY FOLLOWING THE ORDER OF THE TRIBUNA L IN ASSESSEES OWN 3 CASE. NOTHING CONTRARY WAS BROUGHT TO OUR NOTICE A GAINST THE ORDER OF THE TRIBUNAL. UNDER THESE CIRCUMSTANCES AND SINCE THE CIT(A) WHILE DELETING THE ADDITION HAS FOLLOWED THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, THEREFORE, IN ABSENCE OF ANY CONTRARY MAT ERIAL WE DO NOT FIND ANY INFIRMITY IN THE SAME. ACCORDINGLY, THE SAME I S UPHELD AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON 24-07-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PA NDA) JUDICIAL MEMBER ACCOUNTAN T MEMBER PUNE DATED: 24 TH JULY, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-III, PUNE 4. THE CIT-III, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE