M/s Samra International (P) Ltd., Ludhiana V. ACIT, Ludhiana

ITA 919/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6540 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 18-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Additional evidence

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, B CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 918 & 919/CHD/2016 ASSESSMENT YEARS: 2011-12 & 2012-13 M/S SAMRA INTERNATIONAL (P) LTD., VS. THE ACIT, G.T. ROAD, SAHNEWAL, LUDHIANA CIRCLE V, LUDHIANA PAN NO. AACCS16737G (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEHGAL RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 12.12.2017 DATE OF PRONOUNCEMENT : 12.12.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEALS HAVE BEEN PREFERRED BY THE SAME ASSESSEE FOR THE DIFFERENT ASSESSMENT YEARS AGAINST THE SEPARATE ORD ERS DATED 17.06.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFT ER REFERRED TO AS CIT(A)]-2,LUDHIANA. 2. THE COMMON ISSUE RAISED IN BOTH THE APPEALS RELA TE TO DISALLOWANCE OF INTEREST U/S 36(1)(III) OF THE ACT. FOR THE SAK E OF CONVENIENCE, ITA NO. 918, FOR ASSESSMENT YEAR 2011-12 IS TAKEN AS LEAD C ASE. THE ASSESSEE IN THIS APPEAL FOR ASSESSMENT YEAR 2011-12 HAS TAKEN SIX GR OUNDS OF APPEAL. GROUND NOS. 1 TO 3 ARE RELATED TO DISALLOWANCE U/S 36(1)(III) OF THE ACT AND 2 GROUND NO.4 FOR ADMISSION OF ADDITIONAL EVIDENCE. GROUND NOS. 5 & 6 ARE GENERAL IN NATURE. 3. AT THE OUTSET, THE LD. AR OF THE ASSESSEE HAS SU BMITTED THAT FOR ASSESSMENT YEAR 2011-12 AND ADVANCE OF RS. 10.50 LA CS WAS MADE TO M/S VENUS COUNTY DEVELOPERS PVT LTD AND FURTHER A SUM OF RS. 53.10 LACS TO M/S SAMRA STEEL PRODUCTS PVT LTD. HE HAS FU RTHER SUBMITTED THAT SO FAR AS THE ADVANCES TO VENUS COUNTY DEVELOP ERS LTD. IS CONCERNED, THE SAME WAS MADE OUT OF BUSINESS EXPEDI ENCY AS THE ASSESSEE IS IN THE BUSINESS OF REAL ESTATE AND THE SAID AMOUNT WAS PAID AS AN ADVANCE FOR PURCHASE OF PROPERTY. SO FAR AS T HE ADVANCE OF RS. 53.10 LACS TO M/S SAMRA INTERNATIONAL PVT LTD IS CO RNERED, THE LD. AR HAS SUBMITTED THAT THE SAID AMOUNT WAS OUTSTANDING FOR THE PAST SO MANY YEARS AND NO FRESH ADVANCE WAS GIVEN TO THIS P ARTY DURING THE YEAR UNDER CONSIDERATION. HE HAS FURTHER SUBMITTED THAT EVEN IN THE EARLIER ASSESSMENT YEARS NO ADDITION U/S 36(1)(III) HAD BEEN MADE BY THE ASSESSING OFFICER. HE FURTHER SUBMITTED THAT EV EN OTHERWISE THE ASSESSEE HAS ITS OWN RESERVES AND SURPLUSES MUCH MO RE THAN THE AFORESAID ADVANCES. HE IN THIS RESPECT HAS RELIED U PON THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF BRIGHT ENTERPRISES PVT LTD VS. CIT, 381 ITR 107 AND OF H ON'BLE SUPREME COURT IN THE CASE OF HERO CYCLES P. LTD VS. CIT, 379 ITR 347 (SC) AND OF THE HON'BLE BOMBAY HIGH COURT ON IN THE CASE OF CIT VS. RELIANCE UTILITIES & POWER LTD. 313 ITR 340. THE LD. DR, ON THE OTHER HAND, HAS HEAVILY RELIED O N THE FINDINGS OF THE LOWER AUTHORITIES. 3 3. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD. AR HAS DEMONSTRATED BEFORE US THAT FOR THE YEARS UNDER CON SIDERATION THE RESERVES AND SURPLUS OF THE ASSESSEE WERE AT 5.06 C RORES WHEREAS THE TOTAL ADVANCES MADE DURING THE YEAR WAS RS. 64 LACS ONLY. THE CASE OF THE ASSESSEE IS THUS SQUARELY COVERED BY THE AFORES AID DECISIONS OF THE HON'BLE SUPREME COURT IN THE CASE OF HERO CYCL ES P. LTD V CIT (SC) AND OF HON'BLE PUNJAB & HARYANA HIGH COURT I N THE CASE OF BRIGHT ENTERPRISES PVT LTD VS. CIT (SUPRA) AND OF THE BOMBAY HIGH COURT IN THE CASE OF CIT VS. RELIANCE UTILITIES AN D POWER LTD. (SUPRA), WHEREIN THE HON'BLE COURTS HAVE HELD THAT WHERE THE OWN FUNDS OF THE ASSESSEE ARE SUFFICIENT TO MEET THE I NTEREST FREE ADVANCES GIVEN DURING THE YEAR, THEN THE PRESUMPTIO N WOULD ARISE THAT SUCH ADVANCES OR INVESTMENTS HAVE BEEN MADE OUT OF THE OWN FUNDS OF THE ASSESSEE. HENCE, RESPECTFULLY FOLLOWING THE AF ORESAID DECISIONS, THESE GROUNDS OF APPEAL ARE DECIDED IN FAVOUR OF TH E ASSESSEE. 4. THE ADDITIONAL GROUND, AS GROUND NO. 4, FOR ASSE SSMENT YEAR 2011-12 TAKEN BY THE ASSESSEE AT THIS STAGE IS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE AND THE SAME IS, THEREFORE , DISMISSED AS NOT PRESSED. 5. GROUNDS NOS. 5 & 6 ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY ADJUDICATION. 6. THE FACTS AND THE ISSUE INVOLVED IN THE SUBSEQUE NT YEAR I.E. ASSESSMENT YEAR 2012-13 ARE ALSO IDENTICAL. THE LD. COUNSEL HAS DEMONSTRATED THAT DURING THE YEAR THE TOTAL ADVANC ES MADE WERE AT RS. 82.62 LACS WHEREAS THE OWN FUNDS OF THE ASSESSE E AT THE END OF THE 4 YEAR STOOD AT RS. 6.15 CRORES INCLUDING SHARE CAPIT AL AND RESERVE SURPLUS. IN VIEW OF THE FINDINGS GIVEN ABOVE, THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 7. IN THE RESULT, BOTH THE APPEALS ARE HEREBY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.12.2017_ SD/- SD/- ( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12 TH DEC. 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR