M/s Gokaldas Images P Ltd, Bangalore V. Additional commissioner of income tax, Bangalore

MA 36/BANG/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 2945 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 27-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y RAJENDRA
• Assessee Lawyers: ASHOK KULKARNI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER M.P. NO.36/BANG/2015 [ IN ITA NO.667/BANG/2015] ASSESSMENT YEAR : 2008-09 M/S. GOKALDAS IMAGES PVT. LTD. 7 & 12, INDUSTRIAL SUBURB, TUMKUR ROAD, YESHWANTHPURA, BENGALURU - 560 022. PAN : AAACG 6637Q VS. THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 11, BENGALURU. APPLICANT RESPONDENT APPLICANT BY : SHRI ASHOK KULKARNI, C.A. RESPONDENT BY : SHRI Y. RAJENDRA, DR DATE OF HEARING : 17.04.2015 DATE OF PRONOUNCEMENT : 08.05.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS A MISCELLANEOUS PETITION FILED BY THE ASS ESSEE PRAYING FOR RECTIFICATION OF CERTAIN APPARENT ERRORS IN THE ORD ER OF THE TRIBUNAL DATED 26.9.2014 PASSED IN THE AFORESAID APPEAL. 2. ONE OF THE ISSUES THAT AROSE FOR CONSIDERATION I N THE AFORESAID APPEAL WAS WITH REGARD TO DISALLOWANCE OF INTEREST PAID ON BORROWED SUM MP NO.36/BANG/2015 PAGE 2 OF 4 WHICH WAS GIVEN TO THE SISTER CONCERN WITHOUT CHARG ING ANY INTEREST. ON THIS ISSUE, THE TRIBUNAL IN PARA 11(A) OF ITS ORDER HELD AS FOLLOWS:- 11. A) GOKALDAS IMAGES INFRASTRUCTURE P. LTD., (GIIPL) - RS.2,01,77,685/- : THE CLAIM OF THE ASSESSEE WAS THAT THE SUM IN QUEST ION WAS PAID NOT AS A LOAN BUT AS REIMBURSEMENT OF EXPENSES INCU RRED BY GIIPL FOR IDENTIFICATION OF PROPERTY FOR DEVELOPMEN T OF TEXTILE SEZ. IT WAS THE CASE OF THE ASSESSEE THAT GIIPL WA S APPOINTED TO IDENTIFY AND ACQUIRE LAND TO AN EXTENT OF 250 AC RES FOR SETTING UP A TEXTILE SEZ. IT IS SEEN THAT THIS CLAIM OF TH E ASSESSEE IS NOT SUPPORTED BY ANY EVIDENCE WHATSOEVER AS TO WHAT WAS THE EXPENSES INCURRED BY GIIPL WHICH WAS CLAIMED TO BE REIMBURSED BY THE ASSESSEE, IS ALSO NOT GIVEN. THE TERMS AND CONDITIONS OF APPOINTMENT OF GIIPL FOR IDENTIFYING AND ACQUIRING LAND HAS ALSO NOT BEEN FILED. IN THESE C IRCUMSTANCES, WE ARE OF THE VIEW THAT THE CONCLUSIONS DRAWN BY TH E CIT (A) DO NOT CALL FOR ANY INTERFERENCE. AT THIS STAGE, WE M AY ALSO CLARIFY THAT THE ASSESSEE DOES NOT DISPUTE THE FACT THAT AL L THE LOANS IN QUESTION WERE GIVEN OUT OF BORROWED FUNDS AND NOT O WN FUNDS. 3. IN THIS PETITION, THE ASSESSEE HAS POINTED OUT T HAT THE OUTSTANDING AMOUNTS DUE TO GIIPL AS ON 31.3.2008 WHICH WAS TAKE N BY THE TRIBUNAL AS RS.2,01,77,685 WAS AN ENTRY APPEARING ON THE LAST D AY OF THE PREVIOUS YEAR AND THEREFORE NO DISALLOWANCE OF INTEREST COULD HAV E BEEN SUSTAINED BY THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE REITERA TED THE STAND TAKEN BY THE ASSESSEE AS REFLECTED IN THE MISCELLANEOUS PETI TION. 4. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION OF TH E STAND TAKEN BY THE ASSESSEE IN THE MISCELLANEOUS PETITION AND WE FIND THAT AS PER THE LEDGER MP NO.36/BANG/2015 PAGE 3 OF 4 ACCOUNT OF GIIPL AS APPEARING IN THE BOOKS OF THE A SSESSEE, THERE WERE CERTAIN OUTSTANDINGS FROM 1 ST JANUARY, 2008 TILL 31 ST MARCH, 2008 AND ON THAT DATE, THE AMOUNTS PAYABLE BY GIIPL BECAME ZERO . THEREAFTER, A SUM OF RS.2,01,77,685 WAS LENT BY THE ASSESSEE. PAGES 5 TO 8 OF THE PAPERBOOK FILED BY THE ASSESSEE WHICH IS LEDGER ACC OUNT OF GIIPL IN THE BOOKS OF THE ASSESSEE IS GIVEN AS ANNEXURE-I TO THIS ORDER . A PERUSAL OF THE SAME SHOWS THAT THE AMOUNT OUTSTANDING AGAINST GIIPL WAS A SUM OF RS.5,83,94,861 AND THERE WERE SEVERAL DEBITS AND CR EDITS. THEREFORE, IT IS NOT CORRECT ON THE PART OF THE ASSESSEE TO CONTEND THAT THE OUTSTANDING AMOUNT WHICH WAS CONSIDERED FOR DISALLOWANCE OF INT EREST WAS GIVEN ON THE LAST DAY OF THE PREVIOUS YEAR AND THEREFORE NO DISA LLOWANCE COULD BE MADE. IN OTHER WORDS, PERUSAL OF THE LEDGER ACCOUNT SHOWS THAT THERE WERE SEVERAL SUMS LENT BY THE ASSESSEE TO GIIPL DURING THE PREVI OUS YEAR AND ALL THESE FUNDS WERE DIVERSION OF BORROWED FUNDS ON WHICH INT EREST WAS PAID BY THE ASSESSEE. THERE IS, THEREFORE, NO APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL. 5. THIS MISCELLANEOUS PETITION IS, THEREFORE, DISMI SSED. PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF MAY 2015. SD/- SD/- ( ABRAHAM P. GEORGE ) ( N.V. VASUD EVAN ) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE, DATED, THE 8 TH MAY, 2015. /D S/ MP NO.36/BANG/2015 PAGE 4 OF 4 COPY TO: 1. APPLICANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.