Sushee Infra Pvt.Ltd.,(formerly Sushee Hi-tech Constructions Ltd), Hyderabad V. DCIT, Circle-3(2), Hyderabad

MA 64/HYD/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9383 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 16-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: S RAMA RAO
• Keywords: Commercial expediency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER MA NO. 64/HYD/2012 ARISING OUT OF I.T.A. NO. 1171/HYD/2010 ASSESSMENT YEAR : 2007-08 M/S. SUSHEE INFRA PVT. LTD. (FORMERLY SUSHEE HI TECH CONSTRUCTIONS PVT. LTD. HYDERABAD PAN: AACCS8560Q V S. DY. COMMISSIONER OF INCOME - TAX, CIRCLE-3(2) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SHRI S. RAMA RAO RESPONDENT BY: SMT. AMISHA S. GUPT DATE OF HEARING: 05 . 10 .201 2 DATE OF PRONOUNCEMENT: 05 . 10 .201 2 O R D E R PER CHANDRA POOJARI, AM: THIS MISCELLANEOUS APPLICATION BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF THE TRIBUNAL DATED 16.3.2012 IN ITA NO . 1171/HYD/2010 FOR A.Y. 2007-08. 2. THE LEARNED AR SUBMITTED THAT IN THE ABOVE APPEAL T HE ASSESSEE RAISED A GROUND WITH REGARD TO DISALLOWANC E OF INTEREST MADE BY THE ASSESSING OFFICER. THE TRIBUNAL CONFIR MED ORDERS OF THE LOWER AUTHORITIES AND REJECTED THE GROUND TAKEN BY THE ASSESSEE HOLDING THAT THE ASSESSEE HAS NOT SHOWN ANY COMMERC IAL EXPEDIENCY REGARDING INCURRING OF THIS EXPENDITURE. ACCORDING TO THE AR THE ORDER OF THE CIT(A) IS AND EX-PARTE ORDER AND THERE WAS NO OCCASION FOR THE ASSESSEE TO EXPLAIN ITS CASE AT THE TIME OF HEARING ON EARLIER OCCASION. IT WAS ALSO SUBMITTED BY THE AR THAT THE CIT(A) DID NOT PROVIDE OPPORTUNITY FOR THE ASSESSEE AND PRAYED FOR RESTORATION OF THE GROUND TO THE LOWER AUTHORITIES. AT THAT TIME THE LEARNED DR ALSO MA NO. 64/HYD/2012 M/S. SUSHEE HITECH CONSTRUCTIONS PVT. LTD. ================================= 2 NOT PUT ANY OBJECTION FOR THE REQUEST OF THE AR. H OWEVER, THE TRIBUNAL WITHOUT CONSIDERING THESE FACTS DISMISSED THE GROUND TAKEN BY THE ASSESSEE AND HE SUBMITTED THAT THE ISSUE MAY BE REMITTED BACK TO THE FILE OF THE LOWER AUTHORITIES WITH A SU ITABLE DIRECTION IN THE INTEREST OF JUSTICE BY PASSING NECESSARY RECTIF ICATION TO THE ORDER CITED SUPRA. 3. THE LEARNED DR NOT RAISED ANY SERIOUS OBJECTION FOR THIS PROPOSITION OF THE AR. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. WE FIND MERIT IN THE ARGUMENT OF THE ASSES SEE'S COUNSEL. ADMITTEDLY, THE ORDER PASSED BY THE CIT(A) DATED 11 .8.2010 FOR THE A.Y. 2007-08 IS AN EX-PARTE ORDER. THE ASSESSEE HA S NO OCCASION TO EXPLAIN ITS CASE AS IS EVIDENT FROM PARA 9 OF THE O RDER OF THE CIT(A). IN VIEW OF THIS, WE ARE OF THE OPINION THAT IT IS A PPROPRIATE TO REMIT THE ISSUE WITH REGARD TO DISALLOWANCE OF INTEREST T O THE FILE OF THE AO WITH A DIRECTION TO THE ASSESSEE TO PLACE NECESSARY EVIDENCE BEFORE THE AO. ACCORDINGLY PARA 42 OF THE TRIBUNAL ORDER DATED 16 TH MARCH, 2012 (CITED SUPRA) WILL BE READ AS FOLLOWS AFTER DE LETING THE EARLIER PARA: '42. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. THE LEARNED AR RELIED ON THE JUDGEMENT OF SUPREME COURT IN THE CASE OF SA BUILDERS VS. CIT (288 ITR 1) WHEREIN HELD THAT WHEN THE AMOUNT ADVANCED TO THE SISTER CONCERN S FREE OF INTEREST ON ACCOUNT OF COMMERCIAL EXPEDIENC Y, INTEREST ON SUCH BORROWINGS IS ALLOWABLE AS BUSINES S EXPENDITURE. HOWEVER, IN THE PRESENT CASE THE ASSE SSEE IS NOT ABLE TO EXPLAIN WHAT WERE THE BUSINESS ADVAN TAGES ASSESSEE DERIVED FROM THESE INTEREST FREE ADVANCES TO SISTER CONCERNS AND ALSO NOT ABLE TO EXPLAIN WHETHE R THE AMOUNT ADVANCED TO SISTER CONCERN WAS ACTUALLY USED FOR THE BUSINESS PURPOSES OR NOT. AS PER THE ORDER PAS SED BY THE CIT(A) IT IS AN EX-PARTE ORDER AND THE ASSESSEE DID NOT GET ANY OPPORTUNITY TO EXPLAIN THE NECESSITY OF ADV ANCING LOANS TO SUBSIDIARIES/SISTER CONCERNS. IT IS APPRO PRIATE ON OUR PART TO REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO EXPLAIN THE COMMERCIAL EXPEDIENCY IN ADV ANCING THESE LOANS TO SUBSIDIARIES/SISTER CONCERNS.' MA NO. 64/HYD/2012 M/S. SUSHEE HITECH CONSTRUCTIONS PVT. LTD. ================================= 3 5. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE WITH REGARD TO DISALLOWANCE OF INTEREST IS PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. HOWEVER, THERE IS NO CHANGE IN FINAL RESULT OF THE APPEAL IN ITA NO. 1171/HYD/2010 I.E., ASSESSEE'S APPEAL PARTLY ALLOWE D. 6. IN THE RESULT, THE MA FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH OCTOBER, 2012. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 5 TH OCTOBER, 2012 COPY FORWARDED TO: 1. M/S. SUSHEE INFRA PVT. LTD. (FORMERLY SUSHEE HI TECH CONSTRUCTIONS PVT. LTD.) , C/O. SRI S. RAMA RAO, ADVOCATE, SHRIYA'S ELEGANCE, D. NO. 3-6-643, ST. NO. 9, HIMAYATNAGAR, HYDERABAD 2. DY. COMMISSIONER OF I NCOME - TAX, CIRCLE - 3(2), HYDERABAD. 3. THE CIT(A) - IV, HYDERABAD. 4 . THE CIT - III, HYDERABAD 5 . THE DR B BENCH, ITAT, HYDERABAD TPRAO