ACIT, Faridabad v. M/s. The Palwal Co- Op. Sugar Mills Ltd., Palwal

ITA 4050/DEL/2011 | 2007-2008
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 405020114 RSA 2011
Assessee PAN AAAAT0569N
Bench Delhi
Appeal Number ITA 4050/DEL/2011
Duration Of Justice 6 month(s) 24 day(s)
Appellant ACIT, Faridabad
Respondent M/s. The Palwal Co- Op. Sugar Mills Ltd., Palwal
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 30-03-2012
Date Of Final Hearing 19-03-2012
Next Hearing Date 19-03-2012
Assessment Year 2007-2008
Appeal Filed On 06-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H : NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI K.D. RANJAN ACCOUNTANT MEMBER I.T.A.NO.4050/DEL/2011 ASSESSMENT YEAR : 2007-08 ACIT THE PALWAL CO-OP. SUGAR MILLS LTD. CIRCLE-II BLOCK-I-B VS. PALWAL CGO COMPLEX NH-IV AAAAT0569N FARIDABAD (APPELLANT) (RESPONDENT) APPELLANT BY : B.R.R. KUMAR SR. DR RESPONDENT BY : A.K. SACHDEVA O R D E R PER K.D. RANJAN ACCOUNTANT MEMBER THIS APPEAL BY REVENUE FOR ASSTT. YEAR 2007-08 ARISES OU T OF THE CIT(A) FARIDABAD. THE GROUNDS RAISED BY THE REVENUE A RE REPRODUCED AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH ON FACTS AND IN LAW IN DELETING THE ADDITION OF `14 35 200 /- MADE BY AO ON ACCOUNT OF ANNUAL SUBSCRIPTION TO HARYANA STATE FE DERATION OF COOPERATIVE MILLS LTD. EVEN THOUGH THE SAME IS NON- BUSINESS EXPENDITURE OF THE SUGAR MILL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH ON FACTS AND IN LAW IN DELETING THE ADDITION OF `5 30 506/- BY IGNORING THE RATIO OF THE JUDGMENTS IN THE CASES OF (I) CIT VS A BHISHEK INDUSTRIES LTD. 286 ITR 1 (P & H) (II) CIT VS. H.R. SUGAR FACTOR P. LTD. 167 ITR 742 (ALL.) (III) CIT VS SUJANI TEXTILE S PVT. LTD. 151 ITR 653 (MAD.) AND (IV) PHALTON SUGAR WORKS PVT. LTD . VS CIT 216 ITR 479 (BOM.) 2 2. WHEN APPEAL CAME UP FOR HEARING LD. AR OF THE ASSE SSEE SHRI A.K. SACHDEVA THE ACCOUNTANT FILED ADJOURNMENT APP LICATION ON THE GROUND THAT MEMORANDUM OF APPEAL FILED BY THE REVEN UE WAS NOT SERVED UPON THE ASSESSEE. SINCE THE GROUND RAISED BY THE REVENUE ARE COVERED BY THE EARLIER DECISION OF ITAT THE ADJO URNMENT APPLICATION FILED BY THE ASSESSEE WAS REJECTED AND APPEA L WAS HEARD. 3. THE FIRST ISSUE FOR CONSIDERATION RELATES TO DISALLOWA NCE OF ANNUAL SUBSCRIPTION TO HARYANA STATE FEDERATION OF CO OPERATIVE MILLS LTD. AS NON-BUSINESS EXPENDITURE. THE ASSESSEE IS A COOPERAT IVE SUGAR MILL AND HAD PAID A SUM OF ` 14 53 200/- AS ANNU AL SUBSCRIPTION FEE TO HARYANA STATE FED OF COOPERATIVE SUGAR MILL LTD.. THE AO FOLLOWING THE ORDERS FOR ASSTT. YEAR 1992-93 TO 1996-9 7 MADE DISALLOWANCE THOUGH THE ASSESSEE SPECIFICALLY PLEADED THA T ITAT HAD ALLOWED THE APPEAL IN FAVOUR OF THE ASSESSEE. 4. ON APPEAL LD. CIT(A) RELYING ON THE DECISION FOR ASSTT. YEAR 1996-97 AND 1997-98 DELETED THE ADDITION. 5. THE SECOND ISSUE RAISED BY THE REVENUE RELATES TO DISA LLOWING INTEREST OF ` 5 30 506/- @ 8% ON BORROWED FUNDS. DURI NG THE COURSE OF ASSTT. PROCEEDING IT WAS NOTED BY THE AO THAT THE SCHED ULE OF LOANS AND ADVANCES REVEALED THAT LOAN OF ` 66 31 324/-WAS A DVANCED BY THE 3 ASSESSEE TO M/S. BHUNA CO-OPERATIVE SUGAR MILLS LTD. BUT NO INTEREST WAS CHARGED WHEREAS THE ASSESSEE CLAIMED INTEREST EXPENDIT URE OF ` 2.31 CRORES ON UNSECURED LOANS. THE ASSESSEE CONTENDED THA T THE LOAN OF ` 50 LAC WAS ADVANCED IN THE YEAR 1991 OUT OF OWN SURPLUS FUNDS BUT THE LOANEE COULD NOT PAY THE PRINCIPAL OR INTEREST AND THE WHOLE AMOUNT WAS CONTEMPLATED FOR BEING WRITTEN OFF. DISREGARDING THESE CONTENTIONS OF ASSESSEE THE AO HAD MADE DISALLOWANCE OF INTEREST OF ` 5 30 506/- APPLYING THE RATE OF INTERE ST AT 8%. 6. LD. CIT(A) ALSO DELETED THE ADDITION FOLLOWING TH E ORDER OF ITAT IN EARLIER YEARS. 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH T HE MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF HEARING TH E REVENUE COULD NOT DISPUTE THE FACT THAT BOTH THE ISSUES ARE COVERED B Y DECISION OF ITAT IN EARLIER YEARS. LD. CIT(A) WHILE ALLOWING THE RELIEF TO THE ASSESSEE IN RESPECT OF BOTH THE ADDITIONS HAS OBSERVED AS UN DER :- 6. I HAVE CONSIDERED THE SUBMISSIONS OF LEARNED COUNSEL FOR THE APPELLANT AND GONE THROUGH THE DOCUMENTS AND EVI DENCES PLACED ON RECORDS. A PERUSAL OF THE APPELLATE ORDER D ATED 31.12.2007 PASSED BY MY LEARNED PREDECESSOR IN APPEAL N OS. 100/2005-06 28/2006-07 AND 131/2006-07 FOR A.Y. 20 02-03 TO 2004-05 REVEALS THAT IN PARA 3 OF THE ORDER THE DI SALLOWANCES OF ANNUAL CONTRIBUTIONS TO HARYANA STATE FEDERATION OF CO- OPERATIVE SUGAR MILLS LTD. HAVE BEEN DELETED FOLLOWI NG THE DECISION OF HONBLE ITAT IN THE CASE OF APPELLANT FOR A.Y. 1993- 94 WHEREIN THE EXPENDITURE INCURRED AS CONTRIBUTION TO THE PARENT BODY WAS ALLOWED AS BUSINESS EXPENDITURE AS PER TH E PROVISIONS OF SECTION 37(1) OF THE ACT. THUS IT BEING A COVERED 4 ISSUE FOLLOWING THE DECISION OF ITAT IN THE EARLIER Y EARS THE ADDITION OF RS. 14 35 200/- IS NO LONGER SUSTAINABLE AN D STANDS DELETED. SIMILARLY IN PARA 5 OF THE AFORESAID ORDER THE DISALLOWANCES OF NOTIONAL INTEREST HAS BEEN DELETED FOL LOWING THE DECISION OF HONBLE ITAT IN THE CASE OF APPELLANT FOR A.Y. 1996-97 AND 1997-98. THEREFORE FOLLOWING THE DECISI ON OF ITAT IN THE EARLIER YEARS THE ADDITION OF RS. 5 30 506/- IS ALSO DELETED. 8. FROM THE ORDER OF LD. CIT(A) AS REPRODUCED ABOVE IT IS CLEAR THAT BOTH THE ISSUES ARE COVERED IN FAVOUR OF THE ASSESSEE BY T HE DECISION OF ITAT. RESPECTFULLY FOLLOWING THE PRECEDENT IT IS HELD THAT LD. CIT(A) WAS JUSTIFIED IN DELETING BOTH THE ADDITIONS. THEREFOR E IN OUR CONSIDERED OPINION NO INTERFERENCE IS CALLED FOR. 9. IN THE RESULT APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN OPEN COURT ON 30 TH MARCH 2012. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (K.D. RANJAN) ACCOUNTANT MEMBER DATED : 30.3.2012 VEENA COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER DEPUTY REGISTRAR ITAT