Ashwani Kumar Prabhakar, Ludhiana V. ACIT, Ludhiana

ITA 914/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9008 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 17-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Commercial expediency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 914/CHD/2016 ASSESSMENT YEAR: 2012-13 SHRI ASHWANI KUMAR PRABHAKAR, VS THE ACIT, 726, INDUSTRIAL AREA-B, CIRCLE-V, LUDHIANA. LUDHIANA. PAN: AAUPP4121B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGA L RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 27.10.2016 DATE OF PRONOUNCEMENT : 04.11.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS)-2 LUDHIANA DATED 24.05.20 16 FOR ASSESSMENT YEAR 2012-13, CHALLENGING THE DISALLOWAN CE OF RS. 12 LACS UNDER SECTION 36(1)(III) OF THE INCOME TAX ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE WAS ENGAGED IN BUSINESS OF MANUFACTURING OF CYCLE PARTS DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICE R OBSERVED FROM THE BALANCE SHEET OF THE BUSINESS CON CERN M/S PRABHAKAR CYCLE INDUSTRIES THAT THE ASSESSEE HAD SH OWN ADVANCES OF RS. 1 CRORE TO HIMSELF AND AT THE SAME TIME IN THE PROFIT & LOSS ACCOUNT THE ASSESSEE HAD CLAIMED BANK INTEREST OF RS. 43,40,037/-. THE ASSESSING OFFICER ASKED TH E ASSESSEE AS TO WHY THE INTEREST BE NOT DISALLOWED UNDER SECT ION 36(1)(III) OF THE ACT ON THIS OUTSTANDING BALANCE O F 2 RS. 1 CRORE. THE ASSESSEE EXPLAINED THAT HE OWNED THE PREMISES AT 725, INDUSTRIAL AREA-B LUDHIANA IN THE JOINT NAME WITH HIS WIFE AND THE SAID PREMISES WERE USED BY M/S PRABHAKAR CYCLE INDUSTRIES FOR ITS BUSINESS. IT WA S AGREED BETWEEN THE PARTIES THAT OWNER WILL SELL PROPERTY T O M/S PRABHAKAR CYCLE INDUSTRIES FOR CONSIDERATION OF RS. 1.10 CR. ADVANCE OF RS. 1 CRORE WAS PAID TO THE ABOVE C ONCERN FOR PURCHASE OF THE SAID PREMISES. THE ASSESSING O FFICER WAS, HOWEVER, NOT SATISFIED WITH EXPLANATION OF THE ASSESSEE BECAUSE ASSESSEE HAS NOT SUBMITTED ANY DOCUMENT TO SUBSTANTIATE ITS CLAIM OR TO PROVE THAT ASSET WAS ACTUALLY TRANSFERRED. THE PROPERTY WAS IN THE NAME OF ASSESSEE TILL DATE. THE ASSESSING OFFICER, ACCORDIN GLY, DISALLOWED THE ABOVE AMOUNT. 3. THE ASSESSEE REITERATED THE SAME FACTS BEFORE LD . CIT(APPEALS), HOWEVER, LD. CIT(APPEALS) WAS NOT SAT ISFIED WITH THE EXPLANATION OF THE ASSESSEE AND NOTED THAT ASSESSEE HAS NOT SUBMITTED ANY DOCUMENT TO SUBSTANT IATE IF PROPERTY WAS TRANSFERRED TO THE FIRM TO WHOM ADV ANCE HAS BEEN GIVEN THEREFORE, NO COMMERCIAL EXPEDIENCY HAS BEEN PROVED FOR GIVING ADVANCE OF RS. 1 CRORE. IT IS FOR NON-BUSINESS PURPOSES. THE APPEAL OF THE ASSESSEE WAS ACCORDINGLY, DISMISSED. 4. AFTER CONSIDERING RIVAL SUBMISSIONS, I DO NOT FI ND ANY MERIT IN APPEAL OF THE ASSESSEE. THE ASSESSEE CLAIM ED COMMERCIAL EXPEDIENCY FOR GIVING HUGE ADVANCE TO M/ S PRABHAKAR CYCLE INDUSTRIES AND CLAIMED HUGE INTERES T IN 3 THE PROFIT & LOSS ACCOUNT, HOWEVER, ASSESSEE DID NO T PROVE ANY COMMERCIAL EXPEDIENCY FOR GIVING HUGE ADVANCE T O THIS CONCERN. PROPERTY WAS STILL IN THE NAME OF THE ASS ESSEE AND HIS WIFE. NO EVIDENCE OR MATERIAL HAVE BEEN PR ODUCED BEFORE ME TO SUBSTANTIATE CONTENTION OF THE ASSESSE E. THE LD. COUNSEL FOR THE ASSESSEE HAVE NOT BEEN ABLE TO POINT OUT ANY ERROR IN THE ORDER OF THE AUTHORITIES BELOW. T HEREFORE, IN THE ABSENCE OF ANY MATERIAL ON RECORD AND IN THE ABSENCE OF ANY SPECIFIC CHALLENGE TO THE ORDERS OF AUTHORITIES BELOW, I AM UNABLE TO PERSUADE MYSELF T O TAKE A CONTRARY VIEW. THE AUTHORITIES BELOW, THEREFORE RI GHTLY HELD THAT ASSESSEE HAS FAILED TO PROVE ANY BUSINESS EXPE DIENCY AND HAVE ALSO RIGHTLY HELD THAT FUNDS HAVE BEEN DIV ERTED FOR NON BUSINESS PURPOSE. THE APPEAL OF THE ASSESS EE HAS NO MERIT, SAME IS ACCORDINGLY DISMISSED. CHARGING OF INTEREST IS CONSEQUENTIAL AND MANDATORY. 5. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 4 TH NOVEMBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH