The ACIT, Central Circle-1(2), Ahmedabad V. Gujarat Spices and Oilseeds Growers Co.Op.Union Ltd., Ahmedabad

ITSSA 586/AHD/2010

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0522 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-01-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 09-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIJAY RANJAN
• Keywords: Bogus purchase; Unexplained investment; Depreciation; Corroborative evidences
• Section: 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI N. S. SAINI, ACCOUNTANT MEMBER. IT(SS)A NOS. 586, 587 & 588/AHD/2010 (ASSESSMENT YEARS: 2004-05, 05-06 & 06-07) ACIT, CENTRAL CIRCLE 1(2), ROOM NO.305, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD APPELLANT VS. GUJARAT SPICES AND OILSEEDS GROWERS CO-OP. UNION LTD. 5, NATIONAL CHAMBERS, ASHRAM ROAD, AHMADABAD RESPONDENT PAN: AAAAG2116L / BY REVENUE :SHRI SUBHASH BAINS, CIT DR / BY ASSESSEE : SHRI VIJAY RANJAN, A.R. /DATE OF HEARING :20.01.2015 !'# /DATE OF PRONOUNCEMENT : 23.01.2015 IT(SS)A NOS. 586, 587 & 588/AHD/10 FOR A.Y. 04-05, 05-06 & 06-07 (ACIT VS. GUJARAT SPICES AND OILSEEDS GROWERS CO-OP. UNION LTD.) PAGE 2 ORDER PER SHAILENDRA KUMAR YADAV, J.M: ALL THESE APPEALS FILED BY REVENUE ARE PERTAINED TO SAME ASSESSEE FOR A.Y. 2004-05, 2005-06 & 2006-07 ARISIN G OUT FORM THE CONSOLIDATED ORDER OF CIT(A)-I, AHMEDABAD, DATE D 12.05.2010 ON ALMOST SIMILAR GROUNDS. SO, THEY ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAK E OF CONVENIENCE. 2. IN IT(SS)A NO. 586/AHD/2010 FOR A.Y. 2004-05, RE VENUE HAS FILED THE APPEAL ON THE FOLLOWING GROUND: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE CONCLUSION REACHED BY THE A.O. AS TO THE BOGUS PURCHASE OF M.S.STEEL IN THE ASSESSMENT ORDER FOR A.Y. 2004-05 IS NOT JUSTIFIED. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE TRANSACTION OF PURCHASE OF M.S.STEEL FROM DHRUV STEEL WAS GENUINE BUSINESS TRANSACTION AGAINS T WHICH THE ASSESSEE HAD MADE PAYMENT TO DHRUV STEEL. 3. IN ITA NO. 587/AHD/2010 FOR A.Y. 2005-06, REVENU E HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.38,06,882/- MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.7,72,360/- MADE ON ACCOUNT OF DISALLOWANCE OF INTEREST EXPENSES. IT(SS)A NOS. 586, 587 & 588/AHD/10 FOR A.Y. 04-05, 05-06 & 06-07 (ACIT VS. GUJARAT SPICES AND OILSEEDS GROWERS CO-OP. UNION LTD.) PAGE 3 4. IN ITA NO. 588/AHD/2010 FOR A.Y. 2006-07, REVENU E HAS FILED THE APPEAL ON THE FOLLOWING GROUND: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.79,86,212/- MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.24,36,981/- MADE ON ACCOUNT OF DISALLOWANCE OF INTEREST EXPENSES. 5. THE ONLY ISSUE IN A.Y. 04-05 IS WITH REGARDS TO GENUINENESS OF TRANSACTION OF PURCHASE OF STEEL FRO M M/S. DHRUV STEEL. IN A.Y. 2004-05 ASSESSING OFFICER ISS UED SHOW CAUSE NOTICE TO ASSESSEE WITH REGARDS TO GENUINENES S OF STEEL TRANSACTION WHICH READS AS UNDER: 'ON VERIFICATION OF CASE RECORDS AND SUBMISSION MAD E BY YOU FROM TIME TO TIME, IT IS NOTICED THAT YOU HAVE CLAIMED TO PURCHASE SUBSTANTIAL AMOUNT OF STEEL FROM M/S. DHRU V STEEL, AHMADABAD, WHO IS ENGAGED IN THE BUSINESS OF TRADING IN STEEL. AN INQUIRY WAS CONDUCTED TO VERIF Y THE TRANSACTIONS MADE WITH DHRUV STEEL AND ALSO TO VERI FY THE CAPACITY OF DHRUV STEEL TO SUPPLY THE MATERIAL AS S HOWN BY YOU. ON BEING INQUIRED WITH DHRUV STEEL, IT IS GATH ERED THAT DHRUV STEEL HAS SHOWN TO HAVE PURCHASED MAJOR PORTI ON OF STEEL FROM SANJAY TRADERS, SHYAM STEEL, NEMINATH ST EEL, GAYATRI TRADING CORPORATION, BHAVANI ENTERPRISE AND BHAJRANG TRADERS. THE SAME STEEL IS SHOWN TO BE SOL D TO YOU BY DHRUV STEEL. HOWEVER, ON BEING INQUIRED WITH GAY ATRI TRADING CORPORATION, SHYAM STEEL AND BHAVANI ENTERP RISE, IT IS GATHERED THAT THEY HAVE NOT ENTERED INTO ANY TRANSACTION WITH DHRUV STEEL IN ANY OF THE YEAR. IT MEANS, THE STEEL OF RS.3,47,86,OOO/- SHOWN TO BE PURCHASED BY DHRUV STEEL FROM THESE PARTIES AND IN TURN SOLD TO YOU IS MERELY BOOK ENTRY AND ACTUALLY NO SUCH TRANSACTION HAS TAKEN PLACE. IT(SS)A NOS. 586, 587 & 588/AHD/10 FOR A.Y. 04-05, 05-06 & 06-07 (ACIT VS. GUJARAT SPICES AND OILSEEDS GROWERS CO-OP. UNION LTD.) PAGE 4 IN THIS REGARD, YOU WERE REQUIRED TO SHOW-CAUSE THA T WHY THE TOTAL TRANSACTIONS MADE BY YOU WITH DHRUV STEEL SHOULD NOT BE TREATED AS BOGUS AND ACCORDINGLY, ADDED TO Y OUR TOTAL INCOME AS UNEXPLAINED INVESTMENT.' ASSESSING OFFICER FURTHER OBSERVED THAT ASSESSEE PU RCHASED M.S. STEEL OF RS.3,47,86,000/- FROM M/S. DHRUV STEE L AND THAT PAYMENT OF RS.2,74,35,476/- WAS MADE ON 30.03.2004 FROM ITS TERM LOAN ACCOUNT WITH DENA BANK TO DHRUV STEEL. T HIS CHEQUE WAS DEPOSITED WITH DHRUV STEEL WITH MEHSANA URBAN CO-OP. BANK LTD. AND ON THE SAME DATE THEY HAD ISSU ED CHEQUE OF RS. 2,74,35,000/- IN FAVOUR OF VIMAL MARK ETING WHICH WAS DEPOSITED IN THE SAME BANK IN THE ACCOUN T OF VIMAL MARKETING. ASSESSING OFFICER STATED THAT SAME AMOU NT CAME BACK TO ASSESSEE BY WAY OF DEPOSIT FROM VIMAL MARKE TING. HE HAD ISSUED A SUMMON U/S.131 TO M/S. DHRUV STEEL IN RESPONSE TO WHICH THEY HAD ATTENDED BEFORE HIM AND PRODUCED BOOKS OF ACCOUNT ALSO. ASSESSING OFFICER FOUND THA T DHRUV STEEL HAD MADE PURCHASES FROM LOCAL MARKET AND MADE THE SALES TO ASSESSEE. HE FURTHER ISSUED NOTICE U/S.13 3(6) TO SIX PARTIES FROM WHOM DHRUV STEEL HAD MADE PURCHASES. IT WAS STATED THAT SUCH NOTICES FROM TWO PARTIES CAME BACK . REMAINING PARTIES DID NOT COMPLY WITH THE NOTICES. ASSESSING OFFICER OBSERVED THAT BILLS OF BAJARANG TRADERS, BH AVANI ; ENTERPRISE, GAYATRI TRADING CORPORATION AND NEMINAT H STEELS WERE SIGNED BY THE SAME PERSON THOUGH ADDRESSES WER E DIFFERENT. M/S. DHRUV STEEL HAD EXPLAINED THAT THE PURCHASES FROM SUCH PARTIES WERE GENUINE AND THEY HAD SUPPLIE D MS STEEL TO ASSESSEE FOR CONSTRUCTION OF BUILDING AND PLANT & IT(SS)A NOS. 586, 587 & 588/AHD/10 FOR A.Y. 04-05, 05-06 & 06-07 (ACIT VS. GUJARAT SPICES AND OILSEEDS GROWERS CO-OP. UNION LTD.) PAGE 5 MACHINERY. ASSESSING OFFICER STATED THAT SHRI SHA MALBHAI R. PATEL OF GAYATRI TRADING CORPORATION HAD GIVEN HIM A LETTER THAT THEIR CONCERN HAD NOT ENTERED INTO TRANSACTION WITH M/S. DHRUV STEEL. ASSESSING OFFICER DID NOT ACCEPT THE STAND OF ASSESSEE FOR FOLLOWING REASONS: (A) FOR ANY TRADER BEFORE MAKING SALES, IT IS REQUI RED TO HAVE MADE PURCHASE FIRST. HE STATES THAT PURCHASES BY DHRUV STEEL WAS PROVED TO BE BOGUS. IT IS STATED TH AT DHRUV STEEL HAD NOT MADE ANY PURCHASE AND, THEREFORE, HOW CAN IT MAKE SALES TO THE APPELLANT (B) IT IS STATED BY THE A.O. THAT THE APPELLANT HAD NOT FILED DOCUMENTARY EVIDENCE TO PROVE THE PURCHASE MADE FROM DHRUV STEEL WHICH ACTUALLY HAVE BEEN RECEIVED BY THEM. HE HAS NOT ACCEPTED THAT DHRUV STEEL HAD REMAINED PRESENT BEFORE HIM AND CONFIRMED THE SALES MADE TO THE APPELLANT. (C) IT IS STATED BY THE A.O. THAT THOUGH DHRUV STEE L HAS NOT DENIED SUPPLY OF MATERIAL TO APPELLANT, DHRUV S TEEL HAS NOT SUPPLIED MATERIAL TO THE APPELLANT AND IT C OULD NOT SUBSTANTIATE THE CLAIM WITH SUPPORTING EVIDENCE TO SHOW THAT THEY HAD ACTUALLY MADE SALES. IT IS STATE D THAT DHRUV STEEL HAS NOT PRODUCED CONFIRMATION AND BANK ACCOUNT OF THE PARTIES FROM WHOM THEY MADE . PURCHASES. (D) IT IS STATED THAT BILL DISCOUNTING IS THE NORMA L PRACTICE IN THE MARKET AND IT CANNOT BE IGNORED. (E) AMOUNT GIVEN TO DHRUV STEEL HAD COME BACK TO TH E ASSESSEE THROUGH VIMAL MARKETING BY WAY OF LOAN WHICH IS FOR CLAIMING INTEREST EXPENSES. (F) IN VIEW OF ABOVE CONTENTION OF APPELLANT ARE RE JECTED AND ALSO BOOK RESULT IS REJECTED TO THE EXTENT OF DEPRECIATION CLAIM. IT(SS)A NOS. 586, 587 & 588/AHD/10 FOR A.Y. 04-05, 05-06 & 06-07 (ACIT VS. GUJARAT SPICES AND OILSEEDS GROWERS CO-OP. UNION LTD.) PAGE 6 WITH ABOVE OBSERVATIONS, ASSESSING OFFICER HAS CONC LUDED AS UNDER: '3. ON VERIFICATION OF THE CASE RECORDS AND SUBMISS ION MADE BY THE ASSESSEE, IT IS NOTICED THAT THE ASSESSEE HA S SHOWN TO HAVE BEEN PURCHASED MATERIAL OF RS.3,47,86,000/- DU RING THE A.Y. 2004-05 OUT OF THAT RS. 47,35, 254/- WAS U TILIZED IN BUILDING AND OF RS.3,00,50,746/- WAS USED IN PLANT & MACHINERY. ACCORDINGLY, IN VIEW OF THE ABOVE DISCUS SION MADE, DEPRECIATION CLAIMED ON AMOUNT OF RS.47,35,25 4/- @ 10% AND OF RS.3,00,50,746/- @ 25% IS LIABLE TO BE DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASS ESSEE. SIMILARLY, INTEREST EXPENDITURE CLAIMED ON SO CALLE D UNSECURED LOAN RS.2.74 CRORES, TAKEN FROM VIMAL MARK ETING IS ALSO LIABLE TO BE DISALLOWED. FURTHER, ON VERIFI CATION OF THE CASE RECORDS, IT IS SEEN THAT THE ASSESSEE HAS STAR TED ITS BUSINESS ACTIVITY ONLY ON 307.2004, AND ACCORDINGLY , CAPITALIZED ALL THE EXPENSES, NO DISALLOWANCE CAN B E MADE IN THE A.Y. 2004-05. HOWEVER, SAME WILL BE CONSIDERED IN THE A.Y. 2005-06, WHEREIN DEPRECIATION AS WELL AS INTER EST ON LOAN HAVE BEEN CLAIMED. 5.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE ON THE POINT AND HAVING CONSIDERED THE SAME CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE AS FAR AS GENUINENES S OF PURCHASE OF M.S. STEEL FROM DHRUV STEEL CONCERN. 5.2 BEFORE US, LD. DEPARTMENTAL REPRESENTATIVE SUBM ITTED THAT CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT CONCLUSION REACHED BY ASSESSEE AS TO THE BOGUS PURCHASE IN THE PURCHASE O F M.S. STEEL IN A.Y. 2004-05 WAS NOT JUSTIFIED. CIT(A) ERRED ON THE FACT AND LAW ON HOLDING THAT TRANSACTION OF PURCHASE OF M.S. STEEL FROM DHRUV STEEL WAS GENUINE BUSINESS TRANSACTION. AGAI NST WHICH ASSESSEE HAD MADE PAYMENT TO M/S. DHRUV STEEL. ACC ORDINGLY, REQUESTED TO SET ASIDE THE ORDER OF CIT(A) AND REST ORE THAT OF IT(SS)A NOS. 586, 587 & 588/AHD/10 FOR A.Y. 04-05, 05-06 & 06-07 (ACIT VS. GUJARAT SPICES AND OILSEEDS GROWERS CO-OP. UNION LTD.) PAGE 7 ASSESSING OFFICER. ON OTHER HAND, LD. AUTHORIZED R EPRESENTATIVE SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE. 5.3 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT ASSESSING OFFICER NOTED FROM P OST SEARCH ENQUIRY WITH M/S. DHRUV STEEL AND FURTHER ENQUIRY W ITH SUPPLIERS TO M/S. DHRUV STEEL U/S. 133(6) AND CONCLUDED THAT PURCHASE OF STEEL BY ASSESSEE IS NOT GENUINE. HE RELIED ON THE FACT THAT PAYMENT OF RS.2.74 CRORES BY ASSESSEE WAS MADE TO DHRUV STEEL AND ON THE SAME DATE, M/S. DHRUV STEEL HAD MA DE PAYMENT TO M/S. VIMAL MARKETING. SUBSEQUENTLY ASSE SSEE WAS HAVING DEPOSIT FROM SAID M/S. VIMAL MARKETING. IN VIEW OF THIS PAYMENT MADE BY ASSESSEE HAD COME BACK TO HIM. IN T HIS REGARD THE STAND OF ASSESSEE HAS BEEN THAT STEEL HA S BEEN PURCHASED FROM M/S. DHRUV STEEL. EVEN IN REPLY TO NOTICE U/S. 131 BY THE DEPARTMENT, THEY HAD CONFIRMED SUPPLY OF STEEL TO ASSESSEE. THE TOTAL PURCHASE FROM M/S. DHRUV STEEL DURING THE F.Y. 2003-04 AMOUNTING TO RS.464 LAKH AS AGAINS T WHICH ASSESSING OFFICER HAS CONSIDERED RS.347 LAKH AS NON -GENUINE. IN APPEAL, CIT(A) OBSERVED THAT ASSESSEE HAS MADE P AYMENT OF ENTIRE AMOUNT OF RS.464 LAKH OUT OF WHICH ASSESSING OFFICER HAS ALLEGED COMING BACK OF AMOUNT OF RS.274 LAKH AS DEPOSIT. ASSESSING OFFICER FAILED TO APPRECIATE THE FACT THA T TRANSACTION BETWEEN M/S. DHRUV STEEL AND M/S. VIMAL MARKETING A ND PAYMENT BY ASSESSEE TO M/S. DHRUV STEEL CANNOT BE M IXED UP. ASSESSEE HAD PROVIDED COPIES OF BILLS OF PURCHASES. HE ALSO GAVE EVIDENCE TO ESTABLISH THAT STEEL REACHED ASSES SEE'S FACTORY AT ANJAR BY WAY OF WEIGHBRIDGE RECEIPT. IT SHOWS T HAT STEEL HAS IT(SS)A NOS. 586, 587 & 588/AHD/10 FOR A.Y. 04-05, 05-06 & 06-07 (ACIT VS. GUJARAT SPICES AND OILSEEDS GROWERS CO-OP. UNION LTD.) PAGE 8 ACTUALLY REACHED ASSESSEES FACTORY. THE STAND OF ASSESSEE HAS BEEN THAT SALES MADE BY THEM TO ASSESSEE, SO ASSESS ING OFFICER WAS NOT JUSTIFIED IN PRESUMING THAT PURCHASE MADE B Y ASSESSEE REPRESENT ALLEGED BOGUS PURCHASES OF M/S. DHRUV STE EL UNLESS THERE WAS ANY SPECIFIC EVIDENCE TO THAT EFFECT. IN ABSENCE OF ANY SUCH EXERCISE CARRIED OUT BY ASSESSING OFFICER, THE ADDITION MADE BY PLACING THE RELIANCE ON THE STATEMENT OF SH RI. SHYAMLABHAI R. PATEL. A THIRD PARTY, WAS NOT JUSTIF IED. THE PURCHASES MADE BY ASSESSEE WERE DULY SUPPORTED BY V ARIOUS DOCUMENTARY EVIDENCES SUCH AS INWARD STAMPED BILLS AND WEIGH BRIDGE CHALLANS ETC. ASSESSING OFFICER HAS NO T APPRECIATED SUCH EVIDENCES, PARTICULARLY THE CONFIR MATION OF M/S. DHRUV STEEL FROM WHOM ASSESSEE HAS PURCHASED S TEEL AND THE FACT THAT IF THE PURCHASES MADE BY ASSESSEE WERE NOT GENUINE, IT WOULD NOT HAVE BEEN ABLE TO CONSTRUCT A HUGE PLANT OF OIL, WHICH IS EVIDENT FROM THE EVIDENCES SUBMITT ED ON BEHALF OF ASSESSEE. IN VIEW OF ABOVE, CIT(A) HELD THAT CO NCLUSION REACHED AS TO BOGUS PURCHASE OF M.S.STEEL IN ASSESS MENT ORDER FOR AY. 2004-05 WAS NOT JUSTIFIED. ACCORDINGLY, DIS ALLOWANCE MADE ON THE BASIS OF OBSERVATION IN ASSESSMENT ORDE R FOR A.Y. 2004-05 WAS NOT JUSTIFIED. WE ARE NOT INCLINED TO INTERFERE IN REASONED FINDING OF CIT(A). WE UPHOLD THE SAME. 6. IN A.Y. 2005-06 & 2006-07, ASSESSING OFFICER HAS DISALLOWED THE DEPRECIATION AS BEING UNEXPLAINED FO R A.Y. 2005-06 AT RS.79,86,212/- AND FOR A.Y. 2006-07 AT RS.38,06,882/-. ASSESSING OFFICER RELIED UPON ASSE SSMENT ORDER FOR A.Y. 2004-05 INTER ALIA STATED THAT IN A. Y. 04-05, IT(SS)A NOS. 586, 587 & 588/AHD/10 FOR A.Y. 04-05, 05-06 & 06-07 (ACIT VS. GUJARAT SPICES AND OILSEEDS GROWERS CO-OP. UNION LTD.) PAGE 9 TRANSACTION MADE WITH DHRUV STEEL WAS BOGUS, CONSEQ UENTLY THE DEPRECIATION CLAIMED TO BE DISALLOWED. WE HAVE UPHELD THE ORDER OF CIT(A) ON THE ISSUE OF GENUINENESS OF STEE L TRANSACTION WHEREBY HE HAS HELD THE PURCHASE OF M.S. STEEL FROM M/S. DHRUV STEEL AS GENUINE FOR A.Y. 04-05. ACCORDINGLY, DISALLOWANCE MADE BY ASSESSING OFFICER IN SUBSEQUEN T ORDER ON POINT OF DEPRECIATION WAS NOT JUSTIFIED HELD BY CIT (A). IN VIEW OF THIS, ADDITION MADE IN BOTH YEARS OF DISALLOWING CLAIM OF DEPRECIATION OF BUILDING AND PLANT & MACHINERY WAS RIGHTLY HELD TO BE UNWARRANTED BY CIT(A) AND SAME WAS RIGHT LY DELETED BY HIM. THIS REASONED FINDING OF CIT(A) NEEDS NO I NTERFERENCE FROM OUR SIDE. WE UPHOLD THE ORDER OF CIT(A) ON TH E ISSUE OF DEPRECIATION FOR A.Y. 05-06 & 06-07. 7. NEXT ISSUE INVOLVED IN THESE APPEALS RELATE TO D ISALLOWANCE OF INTEREST EXPENDITURE INCURRED BY ASSESSEE ON LOA N TAKEN FROM M/S. VIMAL MARKETING. ASSESSING OFFICER MADE ADDITION AS UNDER: ASSESMENT YEAR ADDITION 2005-06 RS.24,36,981/- 2006-07 RS.7,72,360/- IN ASSESSMENT ORDER PASSED FOR A.Y. 2004-05 ASSESSI NG OFFICER HAS OBSERVED THAT AMOUNT PAID BY ASSESSEE TO M/S. D HRUV STEEL TOWARDS PURCHASE OF MATERIAL HAS COME BACK TO ASSESSEE ON SAME DAY BY ROUTING THROUGH M/S. VIMAL MARKETING AS UNSECURED LOAN. ASSESSING OFFICER CONTENDED THAT S INCE LOAN FROM M/S. VIMAL MARKETING IS NOTHING BUT THE ASSESS EES OWN FUNDS ROUTED THROUGH DHRUV STEEL INTEREST PAID ON S AID LOAN IT(SS)A NOS. 586, 587 & 588/AHD/10 FOR A.Y. 04-05, 05-06 & 06-07 (ACIT VS. GUJARAT SPICES AND OILSEEDS GROWERS CO-OP. UNION LTD.) PAGE 10 WAS NOT JUSTIFIED AND SAME WAS DISALLOWED IN BOTH A .YS. I.E. A.Y. 2005-06 & 2006-07. 7.1 MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHO RITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) HAS GRANTED RELIEF TO ASSESSEE. SAME HAS BEEN OPPOSED ON BEHALF OF REVEN UE I.E. DELETION OF ADDITION OF RS.24,36,981/- AND RS.7,72, 360/- FOR A.Y. 2005-06 & 06-07 RESPECTIVELY HAS BEEN OPPOSED ON BEHALF OF REVENUE. ON OTHER HAND, LD. AUTHORIZED REPRESEN TATIVE SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE ALLOWABI LITY OF INTEREST IN BOTH YEARS. 7.2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT TRANSACTION ON PURCHASE OF STE EL FROM DHRUV STEEL HAS BEEN HELD GENUINE BY CIT(A) AGAINST WHICH ASSESSEE HAD MADE PAYMENT TO M/S. DHRUV STEEL, WHIC H HAVE BEEN CONFIRMED BY US. FURTHER, THE FACT THAT ASSES SEE HAD TAKEN LOAN FROM M/S. VIMAL MARKETING THROUGH ACCOUN T PAYEE CHEQUE, HAS ALSO DEDUCTED TDS FROM INTEREST PAYMENT MADE TO M/S. VIMAL MARKETING AND ON OTHER HAND, HAS ALSO OF FERED SUCH INTEREST INCOME FOR TAXATION PURPOSE IN ITS RE TURN. THIS FACT HAS NOT BEEN DISPUTED BY REVENUE. IT WAS ALSO NOTED BY CIT(A) THAT M/S. VIMAL MARKETING WAS ALSO ASSESSED WITH SAME INCOME TAX OFFICER WHEREIN ASSESSING OFFICER HAS PA SSED THE ASSESSMENT ORDER WITHOUT DRAWING ANY ADVERSE VIEW. IN SUCH SITUATION, ASSESSEES CLAIM CAN NOT BE NEGATED ON T HE BASIS OF THE GENUINENESS OF LOAN TAKEN FROM M/S. VIMAL MARKE TING. IT(SS)A NOS. 586, 587 & 588/AHD/10 FOR A.Y. 04-05, 05-06 & 06-07 (ACIT VS. GUJARAT SPICES AND OILSEEDS GROWERS CO-OP. UNION LTD.) PAGE 11 ACCORDINGLY, SOURCE OF LOAN TAKEN BY M/S. VIMAL MAR KETING WHO HAS RECEIVED THE SAME FROM M/S. DHRUV STEEL. A SSESSING OFFICER SHOULD NOT GO INTO THE SOURCE OF SOURCE OF LOAN TAKEN BY ASSESSEE. IN THESE CIRCUMSTANCES, CIT(A) WAS JUSTI FIED IN ALLOWING ASSESSEES CLAIM OF INTEREST EXPENDITURE. THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FR OM OUR SIDE. WE UPHOLD THE SAME. 8. IN RESULT, THIS ISSUE IS ALSO DECIDED IN FAVOUR OF ASSESSEE. 9. AS A RESULT, ALL APPEALS FILED BY REVENUE ARE DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 23 RD DAY OF JANUARY, 2015. SD/- SD/- (N. S. SAINI) (SHAILENDR A KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMB ER TRUE COPY S.K.SINHA $ $ $ $ &' &' &' &' ('# ('# ('# ('# / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. -- . / CONCERNED CIT 4. .- / CIT (A) 5. '23 &, , / DR, ITAT, AHMEDABAD 6. 367 89 / GUARD FILE. BY ORDER / $ , :/ - , <