The ACIT, (OSD)Circle-8,, Ahmedabad v. M/s. Saumya Construction Pvt.Ltd.,, Ahmedabad

ITA 1129/AHD/2008 | 2005-2006
Pronouncement Date: 13-08-2010 | Result: Dismissed

Appeal Details

RSA Number 112920514 RSA 2008
Bench Ahmedabad
Appeal Number ITA 1129/AHD/2008
Duration Of Justice 2 year(s) 4 month(s) 12 day(s)
Appellant The ACIT, (OSD)Circle-8,, Ahmedabad
Respondent M/s. Saumya Construction Pvt.Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 13-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 13-08-2010
Date Of Final Hearing 03-08-2010
Next Hearing Date 03-08-2010
Assessment Year 2005-2006
Appeal Filed On 31-03-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH C CC C BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI T.K.SHARMA T.K.SHARMA T.K.SHARMA T.K.SHARMA JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER AND AND AND AND SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER DATE OF HEARING:3-8-2010 DRAFTED ON: 3-8-2010 ITA NO. 1129 /AHD/ 2008 ASSESSMENT YEAR :2005-06 A SSISTANT COMMISSIONER OF INCOME TAX (OSD) CIRCLE-8 AJANTA COMMERCIAL CENTRE ASHRAM ROAD AHMEDABAD. VS. SAUMYA CONSTRUCTION PVT.LTD. 1 ST FLOOR ADITYA NR. KHADAYATA COLONY ELLISBRIDGE AHMEDABAD. PAN NO:AAFCS 3523 G (A PPELLANT ) .. ( RESPONDENT ) B Y REVENUE : SHRI K.M. MAHESH SR. D.R. BY ASSESSEE : SHRI S.N.SOPARKAR SR.ADVOCATE. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XIV A HMEDABAD DATED 22-1-2008. 2. THE SOLE GROUND OF APPEAL OF THE REVENUE READS A S UNDER:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-X IV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF `. 33 35 500/- OUT OF INTEREST PAID TO THE SANDESH LTD. 3. THE BRIEF FACTS OF THE CASE ARE THAT IN THE ACCO UNTS THE ASSESSEE HAS SHOWN THAT IT HAS PAID INTEREST TO THE TUNE OF `.1.6 CRORE AND RECEIVED INTEREST TO THE TUNE OF `. 49 LA KHS. IT WAS FURTHER SEEN THAT THE ASSESSEE HAS PAID INTEREST @ 36% TO T HE SANDESH LTD. AND AMOUNT OF INTEREST PAID WAS `.66 71 000/- . THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE INTEREST HAS BEE N GIVEN TO THE SANDESH LTD. AT SUCH A HIGH RATE. THE ASSESSEE HAS GIVEN ITS - 2 - EXPLANATION VIDE ITS LETTER DATED 20-12-2007 ON THE FOLLOWING REASONS HAVE BEEN CITED :- (A) SANDESH LTD. IS NOT RELATED TO OUR COMPANY. (B) THE BORROWINGS WERE PRUDENT COMMERCIAL NECESSITY (C) THESE ARE TEMPORARY INDISPENSABLE BORROWINGS. (D) THE FUNDS WERE NOT AVAILABLE FROM ANY SOURCE WHATSOEVER (E) THE BANKS FIRSTLY DID NOT ADVANCE ANY FUNDS FOR CONSTRUCTION ACTIVITIES (F) THE FUND OF `.3.48 CRORES WAS RECEIVED WITHOUT ANY SECURITY AND HENCE THE RATE OF INTEREST AS PER THE COMMERCIAL TERMS IS REASONABLE (G) THE FACT THAT IT WAS A TEMPORARY LOAN AND THAT ALSO WITHOUT SECURITY JUSTIFIES THE RATE OF INTEREST. 4. THE ASSESSEE HAS ALSO GIVEN ITS EXPLANATION VIDE ITS LETTER DATED 6-12-2007 ON THE FOLLOWING REASONS HAVE BEEN CITED : KINDLY NOTE THAT THE RATE OF INTEREST PAID ON THE AMOUNT OF UNSECURED LOAN RECEIVED FROM THE SANDESH LTD. DURIN G THE YEAR WAS AT THE RATE OF 36% PER ANNUM WE FURNISH HE REWITH DETAILED LEDGER EXTRACT OF ACCOUNT OF SANDESH LTD. AS APPEARING IN OUR BOOKS FOR ASSESSMENT YEAR 2005-06. DETAILED VERIFICATION OF THE SAID ACCOUNT WOULD REV EAL THAT THE FINANCE OBTAINED FROM THE SAID PARTY WAS FOR VE RY SHORT PERIOD WHICH WAS NECESSITATED TO MEET WITH URGENT B USINESS NEEDS IN ABSENCE OF SUFFICIENT FINANCE AVAILABLE WI TH THE COMPANY TO MEET WITH SUCH BUSINESS NEEDS. FURTHER BANKS AND FINANCIAL INSTITUTION DOES NOT LEND FINANCE TO THE CONCERN ENGAGED IN CONSTRUCTION INDUSTRY AND THEREFORE FOR SUCH FINANCIAL NEEDS WE HAVE TO DEPEND UPON THE PRIVATE FINANCE AND WHEN BORROWING OF SUCH LARGE SUM IS INVOLVED FO R VERY SHORT TERM PERIOD THEN IN THAT CASE NEGOTIATING T HE LOWER INTEREST IS NOT POSSIBLE BUT TO ACCEPT THE RATE OF INTEREST AS INDICATED BY THE LENDER OF MONEY WHICH IS TO BE TRE ATED AS NORMAL PREVAILING MARKET RATE OF INTEREST. FURTHER SANDESH LTD. IS A CORPORATE ENTITY WHEREIN PUBLIC AT LARGE IS INTERESTED. IN OTHER WORDS THE SAID CONCERN IS NOT RELATED TO OUR COMPANY AND AS SUCH PROVISIONS OF SECTION 40A( 2)(B) OF THE I. T. ACT HAS NO APPLICATION IN OUR CASE. 5. IN ADDITION TO THE ABOVE THE ASSESSEE HAS CONTE NDED THAT FINANCE OBTAINED FROM THE SANDESH LTD. WAS FOR VERY SHORT PERIOD AND WAS REQUIRED TO MEET URGENT BUSINESS NEED IN AB SENCE OF - 3 - SUFFICIENT FINANCE WITH THE COMPANY. THE ASSESSEE H AS ALSO CONTENDED THAT IT HAS CHARGED INTEREST AT THE RATE OF 27% ON ADVANCE GIVEN TO KALYANI ENTERPRISES OF `.1.41 CROR ES. 6. THE LEARNED ASSESSING OFFICER OBSERVED THAT THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTABLE. HE OBSERVED THAT LOOKING TO THE FACTS OF THE CASE AND THE MARKET RATE OF INTEREST O N LENDING OF MONEY INTEREST HAS BEEN GIVEN TO THE SANDESH LTD. AT THE EXORBITANT RATE. IN THE BACKGROUND OF THE ABOVE FA CTS THE LEARNED ASSESSING OFFICER ADOPTED THE MARKET RATE OF INTE REST AT 18% AND DISALLOWED THE DIFFERENTIAL RATE OF INTEREST OF 18% AND THEREBY DISALLOWED INTEREST PAYMENT OF `.33 35 500/-. 7. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) THE ASSESSEE SUBMITTED THAT IT HAS TAKEN LOAN FROM THE SANDESH LTD. WHICH WAS SHORT TERM AND UNSECURED I T WAS TAKEN FOR THE BUSINESS PURPOSES AND THE SAME WAS USED FOR ITS BUSINESS. THE LOAN WAS REQUIRED FOR A SHORT TERM AND THERE WAS NO ASSET LEFT FOR GIVING A GUARANTEE AND HENCE THE APPELLANT COULD N OT OBTAIN ANY LOAN FROM THE BANK OR ANY OTHER PARTY FOR A LOWER R ATE OF INTEREST. IT WAS SUBMITTED THAT DUE TO THESE FACTS THE APPELLAN T HAD TO TAKE THE AVAILABLE LOAN @ 36% FROM THE SAID COMPANY WHI CH WAS GENUINE AND WAS USED FOR THE BUSINESS PURPOSES OF T HE APPELLANT. THE SANDESH LTD. IS NOT RELATED TO THE APPELLANT U NDER SECTION 40A(2)(B) OF THE I.T. ACT AND HENCE NO INTEREST CAN BE DISALLOWED ON THIS AMOUNT AS THE LOAN WAS TAKEN WITHOUT OFFERING ANY SECURITY AND THE APPELLANT HAD TO PAY HIGHER RATE OF INTERES T. THEREFORE IT WAS CONTENDED THAT THE DISALLOWANCE MADE IN THIS RE SPECT WAS NOT PROPER AND DESERVES TO BE DELETED. 8. ON APPEAL LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) DELETED THE DISALLOWANCE. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTE D THE ORDERS OF THE LOWER AUTHORITIES. - 4 - 10. THE LEARNED AUTHORISED REPRESENTATIVE OF THE AS SESSEE SUBMITTED THAT THE LENDER COMPANY M/S. SANDESH LTD. IS NOT RELATED TO THE ASSESSEE. THE BORROWINGS WERE PRUDE NT COMMERCIAL NECESSITY. THESE WERE TEMPORARY INDISPENSABLE BORRO WINGS. THE FUNDS WERE NOT AVAILABLE FROM ANY OTHER SOURCE THE BANKS DID NOT ADVANCER ANY FUND FOR CONSTRUCTION ACTIVITY. THE FU NDS OF `.4.38 CR. WAS RECEIVED WITHOUT ANY SECURITY AND HENCE THE RAT E OF INTEREST WAS AS PER COMMERCIAL TERMS WAS REASONABLE. THE MO NEY BORROWED WAS UTILISED FOR THE PURPOSE OF URGENT BUS INESS NEEDS. INTEREST HAS BEEN PAID ON SUCH BORROWED FUNDS. THUS ALL THE REQUISITE CONDITIONS FOR ALLOWABILITY OF INTEREST U NDER SECTION 36(1)(III) OF THE I .T. ACT HAS BEEN FULLY MET WITH AND ALSO SUCH FACTS HAVE BEEN DULY ACCEPTED BY THE LEARNED ASSESSING OF FICER AND ARE NOT IN DISPUTE. THEREFORE THE DISALLOWANCE OF INTER EST @ 18% AMOUNTING TO `.33 35 500/- REQUIRES TO BE DELETED. 11. HE ALSO PLACED RELIANCE ON THE FOLLOWING DECISI ONS :- 1.) EAST INDIA INDUSTRIES(MADRAS) LTD. VS. CIT 31 ITR-8 03(MADRAS) ALL THAT SECTION 10(2)(III) OF THE INDIAN INCOME-TA X ACT REQUIRES TO ENTITLE AN ASSESSEE TO CLAIM AN ALLOWANCE IN RES PECT OF INTEREST PAID ON BORROWED CAPITAL IS: (I) THAT THE MONEY I.E. THE CAPITAL MUST HAVE BEEN BORROWED BY THE ASSESSEE ( II) THE AMOUNT MUST HAVE BEEN BORROWED FOR THE PURPOSE OF T HE BUSINESS OF THE ASSESSEE AND (III) THE ASSESSEE SH OULD HAVE PAID AS INTEREST THE AMOUNT CLAIMED AS AN ALLOWANCE . IF THESE CONDITIONS ARE SATISFIED THE INCOME-TAX AUTHORITIES ARE BOUND TO ALLOW THE AMOUNT WHICH HAS IN FACT BEEN PAID AS INT EREST; THEY HAVE NO POWER TO REDUCE THE QUANTUM PAID AS INTERES T TO ANYTHING CONSIDERED REASONABLE BY THEM ON SUBJECTIV E OR OBJECTIVE STANDARDS. 2.)BANSIDHAR OMKARMAL VS. CIT 58 ITR-462 (ORISSA) HAVING REGARD TO THE PROVISIONS OF SECTION 10(2) (III) THE INCOME- TAX AUTHORITIES HAVE NO POWER TO SCALE DOWN THE RATE OF INTEREST ON BORROWED CAPITAL ON THE GROUND OF REASONABLEN ESS. WHERE THE ASSESSEE A HINDU UNDIVIDED FAMILY CL AIMED PAYMENT OF INTEREST AT 9 PER CENT. ON THE AMOUNT OF CREDIT BALANCES IN ITS BOOKS STANDING IN THE NAME OF THE WIFE OF THE KARTA AND THE INCOME-TAX AUTHORITIES SOUGHT TO SCALE DOWN THE RAT E OF INTEREST TO 6 PER CENT. ON THE GROUND OF REASONABLENESS: _ HELD _ THAT THERE WAS NO SCOPE FOR THE APPLICATION OF TH E TEST OF - 5 - REASONABLENESS TO A CASE OF PAYMENT OF INTEREST U NDER SECTION 10(2)(III). THE RATE OF INTEREST COULD NOT THERE FORE BE SCALED DOWN. 3.)BIRLA GWALIOR PVT. LTD. VS. CIT 44 ITR-847 (MP) THE INTEREST PAID IS NOT SUBJECT TO THE TEST OF REA SONABLENESS LIKE BONUS OR COMMISSION UNDER SECTION 10(2)(X). SECTION 10(2)(III) ALSO DOES NOT PROVIDE THAT THE ALLOWANCE UNDER THAT CLAU SE SHALL BE SUCH SUM AS THE INCOME-TAX OFFICER MAY DETERMINE HAVING REGARD TO THE CIRCUMSTANCES. THEREFORE WHEN THE INCOME-TAX AUTHO RITIES HAVE FOUND THAT THE BORROWING TRANSACTIONS WERE NOT ILLU SORY OR COLORABLE AND THAT THE CAPITAL WAS BORROWED BY THE ASSESSEE FOR THE PURPOSE OF BUSINESS AND THE AMOUNT OF INTEREST WAS PAID THEY HAVE NO JURISDICTION TO DETERMINE WHETHER THE RATE OF INTEREST AGREED TO BE PAID WAS REASONABLE OR NOT AND TO DIS ALLOW A PORTION OF THE INTEREST WHICH HAS BEEN PAID. 4.)CIT VS. GOPALKRISHNA MURLIDHAR 47 ITR 469 (AP) THE ASSESSEE A HINDU UNDIVIDED FAMILY WHICH CARRI ED ON BUSINESS ON AN EXTENSIVE SCALE WITH A CAPITAL OF ABOUT RS. 2 0 LAKHS MADE LARGE BORROWALS DURING THE RELEVANT YEAR FOR THE PU RPOSES OF THE BUSINESS AND PAID INTEREST AMOUNTING TO RS. 93 611. IN THE COURSE OF THE YEAR MONIES AMOUNTING TO RS. 1 77 984 WERE W ITHDRAWN FROM TIME TO TIME FOR HOUSEHOLD EXPENSES. THE QUESTION W AS WHETHER A PART OF THE INTEREST PAID ON BORROWED CAPITAL COULD BE DISALLOWED: _ HELD _ THAT AS THE AMOUNTS WERE BORROWED FOR THE PURPOS ES OF THE BUSINESS OF THE FAMILY AND AS NO PARTICULAR SUM PUR PORTING TO BE BORROWED ON BEHALF OF THE BUSINESS WAS SPENT FOR HO USEHOLD EXPENSES AND THE FAMILY WAS ENTITLED TO WITHDRAW FR OM THE CAPITAL SUPPLIED BY IT THEREBY DEPLETING THE CAPITAL THE F ACT THAT PART OF THE AMOUNTS BORROWED WAS LATER ON USED FOR PERSONAL EXP ENSES DID NOT DEPRIVE THE ASSESSEE OF THE BENEFIT OF DEDUCTION OF THE ENTIRE INTEREST PAID ON BORROWED CAPITAL UNDER SECTION 10( 2)(III) OF THE INDIAN INCOME-TAX ACT 1922 AND A PART OF THE INTE REST COULD NOT THEREFORE BE DISALLOWED. 5.)CIT VS. PUDUKOTTAI COMPANY PVT. LTD. 84 ITR 788 (MADRAS) THE INTEREST PAID BY THE CAPITAL ASSESSEE ON THE AM OUNTS BORROWED BY IT FOR THE PURPOSE OF ITS BUSINESS WAS GREATER T HAN THE INTEREST RECEIVED BY IT ON THE AMOUNTS LENT BY IT TO PERSONS WHO WERE INTIMATELY CONNECTED WITH IT. THE INCOME-TAX OFFICE R DISALLOWED THE CLAIM FOR DEDUCTION OF THE DIFFERENCE BUT THE TRIBU NAL ALLOWED THE CLAIM. ON A REFERENCE TO THE HIGH COURT AT THE INST ANCE OF THE COMMISSIONER: _ HELD _ IN VIEW OF THE FINDING THAT THE AMOUNTS BORROWED WERE CAPITAL AND WERE FOR THE PURPOSE OF THE BUSINESS T HE ENTIRE INTEREST PAID BY THE ASSESSEE THEREON WAS DEDUCTIBLE UNDER S ECTION 10(2)(III) OF THE INDIAN INCOME-TAX ACT 1922. - 6 - 6.)CIT VS. DALMIA CEMENT (B) LTD. 254 ITR 377 (DEL HI) HELD ACCORDINGLY AFFIRMING THE DECISION OF THE APPELLA TE TRIBUNAL THAT THE COMMISSION PAID TO THE SOLE SELLING AGENT WAS INCURRED FOR COMMERCIAL EXPEDIENCY. THE ASSESSEE HAD BORROWED MONEYS FROM FINANCIAL INS TITUTIONS AND PAID INTEREST OF RS. 14 59 816 THEREON. THE ASSESSI NG OFFICER MADE A REDUCTION IN THE ALLOWANCE OF INTEREST ON THE BAS IS THAT DEPOSITS HAD BEEN COLLECTED BY THE SOLE SELLING AGENT TOWARD S DISPUTED SALES TAX AND THE DEPOSITS HAD BEEN ALLOWED BY THE ASSESS EE TO BE RETAINED BY THE SOLE SELLING AGENT. THE COMMISSIONE R (APPEALS) ALLOWED THE CLAIM FOR DEDUCTION OF INTEREST IN FULL ON THE ADMITTED POSITION THAT THE SOLE SELLING AGENT WAS HANDLING T HE SALES TAX MATTERS THE SALES TAX RETURNS WERE FILED BY IT AND SALES TAX ASSESSMENTS WERE MADE ON IT AND THE DEPOSITS COLLE CTED WERE EITHER TO BE REFUNDED TO THE CUSTOMERS OR PAID TO T HE GOVERNMENT. THE APPELLATE TRIBUNAL AFFIRMED THE DECISION OF THE COMMISSIONER (APPEALS). ON A REFERENCE: HELD AFFIRMING THE DECISION OF THE APPELLATE TRIBU NAL THAT IF ALL THE REQUISITE CONDITIONS IN SECTION 36(1) (III) FOR ALL OWANCE OF INTEREST WERE FULFILLED IT WAS NOT POSSIBLE AND OPEN FOR TH E REVENUE TO MAKE A PART DISALLOWANCE UNLESS THERE WAS A POSITI VE FINDING RECORDED THAT A PART OF THE AMOUNT BORROWED WAS NOT USED FOR THE PURPOSES OF THE ASSESSEES BUSINESS. MADHAV PRASAD JATIA V. CIT [1979] 118 ITR 200 (SC) AND CIT V. BOMBAY SAMACHAR LTD. [1969] 74 ITR 723 (BOM) RELIED ON. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE HAS PAID IN TEREST OF `.66 71 000 TO M/S. THE SANDESH LTD. IN RESPECT OF UNSECURED LOAN AVAILED BY THE ASSESSEE AND SUCH INTEREST WORKED OU T TO 36% PER ANNUM. ACCORDING TO THE LEARNED ASSESSING OFFICER THE RATE OF INTEREST WAS EXORBITANT AND HE CONSIDERED RATE OF 1 8% AS REASONABLE AND THEREFORE DISALLOWED `.33 35 000/- I NTEREST EXPENDITURE CLAIMED BY THE ASSESSEE. THE LEARNED CO MMISSIONER OF INCOME TAX (APPEALS) DELETED THE ABOVE DISALLOWA NCE BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE FACTS OF THE CASE AND THE S UBMISSIONS AND I AM IN AGREEMENT WITH THE VIEW OF THE ASSESSEE . IT IS SEEN THAT THE LOAN WAS TAKEN WITHOUT GIVING ANY SECURITY AND THE PARTY FROM WHOM THE UNSECURED LOAN WAS OBTAINED IS IN NO WAY R ELATED TO THE - 7 - ASSESSEE. SINCE THE FUND WAS URGENTLY NEEDED FOR IT S BUSINESS AND THERE WAS NO OPTION LEFT WITH THE ASSESSEE TO OBTAI N A LOAN FROM BANK OR ANY OTHER INSTITUTION BY OFFERING A SECURIT Y AND THE LOAN WAS FULLY UTILISED FOR ITS BUSINESS I AM OF THE VI EW THAT THERE WAS NO JUSTIFICATION IN MAKING A DISALLOWANCE OUT OF INTER EST PAID TO THE SANDESH LTD. THE LEARNED ASSESSING OFFICER IS DIREC TED TO DELETE THE DISALLOWANCE SO MADE. 13. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE LEARNED ASSESSING OFFICER. 14. BEFORE US LEARNED DEPARTMENTAL REPRESENTATIVE C OULD NOT POINTED OUT ANY SPECIFIC ERROR IN THE ORDER OF LEAR NED COMMISSIONER OF INCOME TAX (APPEALS) 15. WE FIND THAT IN THE INSTANT CASE GENUINENESS OF PAYMENT OF INTEREST OF `.66 71 000/- TO M/S. THE SANDESH LTD. IS NOT IN DOUBT. IT IS ALSO NOT IN DISPUTE THAT THE MONEY BORROWED F ROM M/S. THE SANDESH LTD. WAS UTILIZED BY THE ASSESSEE FOR ITS BUSINESS PURPOSES. IT IS ALSO NOT THE CASE OF THE REVENUE T HAT THE SANDESH LTD. WAS A RELATIVE OF THE ASSESSEE AND THEREFORE PROVISIONS OF SECTION 40A(2) WAS APPLICABLE IN THIS CASE. IN THE ABOVE CIRCUMSTANCES IN OUR CONSIDERED VIEW GENUINE BUSINE SS EXPENDITURE CANNOT BE DISALLOWED BY THE LEARNED ASS ESSING OFFICER ONLY BECAUSE IN HIS OPINION SUCH EXPENSE WAS EXCESS IVE AND THE ASSESSEE COULD HAVE MANAGED ITS BUSINESS BY INCURRI NG LESSER EXPENSES ALSO. IN OUR CONSIDERED VIEW THE LAW DOES NOT ENVISAGE THAT AN ASSESSEE SHALL MAKE MAXIMUM PROFIT AND DOES NOT CLOTHE THE LEARNED ASSESSING OFFICER WITH THE POWER TO DET ERMINE A REASONABLENESS OF GENUINE BUSINESS EXPENDITURE. IN THE INSTANT CASE WE FIND THAT THE REVENUE HAS NOT BEEN ABLE TO BRING ANY MATERIAL ON RECORD TO SHOW THAT THE INTEREST EXPEND ITURE INCURRED BY THE ASSESSEE @ 36% WAS FOR SOME OTHER PURPOSE AL SO EXCEPT THE BUSINESS PURPOSE OF THE ASSESSEE. IN THE ABOV E CIRCUMSTANCES WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LEARNE D COMMISSIONER - 8 - OF INCOME TAX (APPEALS). IT IS CONFIRMED. THE GROUN D OF APPEAL OF THE REVENUE IS DISMISSED. 16. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON THIS 13 TH DAY OF AUGUST 2010. SD/- SD/- ( T.K. SHARMA ) ( T.K. SHARMA ) ( T.K. SHARMA ) ( T.K. SHARMA ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER AHMEDABAD: ON THIS 13 TH DAY OF AUGUST 2010 PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XIV AHMEDABAD. 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 3-8-2010 ------------- ------ 2. DRAFT PLACED BEFORE AUTHORITY 6-8-2010 ---- --------------- 3. DRAFT PROPOSED & PLACED 6-8-2010 ---------- --------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 12-8-2010 -------- ----------- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 13-8-2010 --- ----------------- 6. KEPT FOR PRONOUNCEMENT ON 13-8-2010 ----- --------------- 7. FILE SENT TO THE BENCH CLERK 13-8-2010 -- ----------------- 8. DATE ON WHICH FILE GOES TO THE 13-8-2010 --- ---------------- 9. DATE OF DISPATCH OF ORDER ---------------- -- -----------------